Mr. Speaker, I am glad to have the opportunity to participate in the budget debate.
In my 10 minutes I will make three points. First, I will talk about the impact Reform has had on the government's fiscal agenda. Second, I will illustrate the impact by comparing the taxpayers budget which is talked about in this House to the Liberal government's actions and what has happened. Third, I will look at what lies ahead.
The first thing to look at is the dramatic change in the direction of the Liberal government since coming to power in 1993 and the role of the Reform Party in influencing the direction of that government. Let me explain.
In the 1993 campaign the Reform Party warned that job creation would be weak until the deficit was eliminated and taxes were lowered. We argued that the country's poor economic performance was directly related to its poor economic fundamentals. Our prescription was very straightforward and quite logical: eliminate the deficit, pay down the debt and lower the taxes. On the other hand, the Liberals told Canadians that the deficit and interest rates were high because the economy was so weak. The economy was weak because the government was not creating enough jobs.
What does that translate into? The deficit was not the problem. The economic fundamentals were not the problem. Government cutbacks were the problem. All that was needed was for some good old-fashioned Liberal government to come along and prime the fiscal pump. The jobs would start flowing, the economy would start growing and the deficit would go away.
The Liberals followed through with that pump priming when they came to power. What did we have in February 1994? They spent $2 billion of borrowed money, asked the municipalities and asked the provinces to borrow another $4 billion, to build things like boccie courts in Toronto and canoe museums in Shawinigan. They raised a few taxes, trimmed a little spending and waited for the jobs to roll in. But the jobs did not roll in. In fact they slowed to a trickle. Interest rates did not come down, they went up. Bluntly the Liberals' plan did not work.
Being the pragmatists that they are, the Liberals looked around to see what other solutions were before them. The option there was the message being preached and talked about by the Reform Party in 1993, a message of spending reduction, deficit reduction and fiscal restraint. The about face which followed is unprecedented in the history of Canadian politics.
Starting with last year's budget the Liberals have transformed themselves from traditional Keynesian pump primers to orthodox fiscal conservatives which is quite a transition in Canada. In the wake of this conversion the new Liberal gospel which we heard from the lips of our Minister of Finance not too long ago reads as follows: First, governments no longer create jobs, the private sector does. What a realization. Second, spending no longer stimulates the economy, lower interest rates do. Third, deficits no longer keep the economy afloat, they sink it. Most important, it was said by the finance minister that job creation is dependent on low taxes, low deficits and low interest rates rather than the other way around. What a conversion.
If asked to comment on this transformation I would make two observations. First, it is good. The change is good. Second, the Reform Party of Canada impacted and got through to the government to change the circumstances, which is a bonus in itself.
Actions speak louder than words so let us look at the Liberals' budget to see how far they have come.
Last year my party estimated that to balance the budget by 1998 without increasing taxes, spending would have to be reduced by some $25 billion. How have the Liberals done? To date they have proposed spending reductions of $15 billion. In other words, they are 60 per cent of the way there. They have also raised taxes which has narrowed the gap somewhat. They have promised to continue their work which means we are conceivably on the track to a balanced budget sometime around the year 2001 which is also good.
To break it down further, the taxpayers budget recommended reducing departmental spending by $10 billion. The Liberals have now done that. They reduced it by $10 billion and are counting and it seems to increase.
The taxpayers budget recommended reducing transfers to provinces by 24 per cent. Despite increasing equalization payments spending under the Liberals has been reduced by more than 21 per cent. Health, education and welfare have been cut far deeper.
The taxpayers budget recommended downsizing the UI program by some $3.4 billion. With the latest UI proposals, the government will surpass that goal.
As we can see, progress has been made and for that I applaud the government. I also applaud my own colleagues, for these numbers make it clear that Reformers have had a significant impact on the direction of the Liberal government. However, much more can be done.
For example, Quebec is the fourth richest province in Canada yet it is the largest beneficiary of equalization dollars. By putting a priority on the poorest provinces we can save another $3 billion annually. Eliminating all subsidies to businesses would save at least another $2 billion a year. I could go on. The federal government today is closer to fiscal stability than at any other point in 15 years. I certainly applaud the government for that direction.
The major criticism I and my colleagues have is that in dealing with the deficit the Liberals have not moved quickly enough. This is not being picky. The Liberals' inaction carries a cost which comes in the form of interest payments on the debt. To illustrate, by 1997-98 with the latest Liberal budget we will be $42 billion further in debt than we would have been if the Liberals had followed the taxpayers budget. By my calculation the interest cost price tag associated with this additional debt is an accumulated $5.3 billion over the first three years alone.
Sadly, this has forced the Liberals to do the one thing they sought most to avoid: to make deeper cuts to the programs Canadians value most. Let us look at that. My hon. colleague commented on it a few moments ago.
The taxpayers budget called for health care reductions of just $800 million. The Liberal cuts so far are $3.4 billion and counting. Compare that. The taxpayers budget asked to reduce funding for education by only $200 million. The Liberals have now cut seven times that amount.
Third, going even further back to the 1993 election, we proposed to limit old age security payments to those earning less than $54,000. The Liberals now plan to place the threshold at $45,000. Who is slash and burn and who is really cutting? I think that has to be laid on the table so that people know about it.
These are the costs associated with what the finance minister likes to call a moderate deficit reduction pace, even faster than the Reform Party in some of the social areas.
However, as I stated earlier, the end is now within sight. While we may differ on the pace of our efforts, members of all parties realize the importance of building on what progress has been made.
What is the end result? What are the fruits of our efforts? They are many. Once our fiscal problems are behind us we can focus on new, more pleasant decisions. Instead of finding new areas to cut, we can debate the matter of lower taxes. We can decide how to pay down our debt. We can opt to bolster health care and pensions if that is what Canadians want to do. Balancing the budget will also result in more permanent lower interest rates. As the finance minister points out, rates have come down already but we expect that to continue.
This brings us the real rewards. Tax breaks mean Canadians will have more in their pockets at the end of the day. Lower interest rates mean more Canadians can afford a car. A healthy economy means more Canadians will have the confidence and ability to buy a home. In short, we will all see a real and perceptible rise in our standard of living. This will bring about the very thing the Liberals promised three years ago but could not deliver: a healthy economy, a positive growth climate and jobs, jobs, jobs.