Debates of March 21st, 1996

Borrowing Authority Act, 1996-97

[Jean-Guy Chrétien, Bloc, Frontenac, QC]

Now, there is a friend of mine.

[Don Boudria, Liberal, Glengarry—Prescott—Russell, ON]

Mr. Speaker, I wish the member would listen carefully and with all due respect. I am asking him to listen.

This is what Mr. Dufour said: "From a consolidation and continuity standpoint, it seems like a good budget". That was said by Mr. Dufour.

I can quote a few more. Bernard Derome, who does not frequently praise the Liberal Party, especially not during a referendum campaign, but that is another matter. Mr. Derome said: "Basically, the business community is satisfied. At least, it seems to be reassured. It feels that the Minister of Finance, since last year, has regained control over public finance". I must say that I expected some praise, but not from him.

There are many more people. Claude Edwards, president of the seniors' coalition for social equality. People talk about social justice, as do certain members of the Bloc Quebecois-of course, some of them talk of something else, but others do talk about it. I tell them: "That was in the Globe and Mail dated March 7''. Mr. Edwards said, and I quote: ``A number of things that we appreciate and that we had asked for were done''. He speaks for the coalition of seniors.

You see, the budget is supported almost unanimously, except, of course, for some members on the other side. Our world is not perfect. But besides them, most Canadians, be they business people, seniors, private citizens or prominent Canadians, have good things to say about the budget.

Of course, we succeeded in putting public finance in order. Our government achieved that. People are almost unanimous in admitting it. We will continue on the right track, manage well, avoid wasting public funds and restore respect among the population for government, not only for our government but also for future governments. Moreover, we will give Canadians the ray of hope that we want so dearly to give them.

I say to the hon. members on the other side that if they want jobs created for their constituents, if they seriously want jobs, they only have to co-operate with us for the wellbeing of all the Canadians who hope for a better future.

[Maurice Godin, Bloc, Châteauguay, QC]

Mr. Speaker, I will be brief enough to allow my colleagues to speak. I simply want to point out to our colleague from the Liberal Party that there is a subject he completely forgot to talk about, and it is our $600 billion debt.

When he talks about the good things, he always shows only one side of the coin. When he talks about the deficit, he says that it is being reduced. Well, the deficit is not being reduced through good management and certainly not through spending cuts because, next year, there will be no cuts in government spending. The government is reducing the deficit by using the unemployment insurance fund, by shirking its responsibilities, by cutting its transfers to provinces, by laying off employees. That is how the deficit is being reduced.

We hear constantly about the referendum. We hear that Quebecers voted no in the last referendum. But everybody forgets to say that the yes side is now up to 49.5 or 49.6 per cent and that it will win the next time.

I would like the member to tell us about the programs he has proposed to eliminate the debt.

[Don Boudria, Liberal, Glengarry—Prescott—Russell, ON]

Mr. Speaker, I do not want to give my colleague a lecture on economics but, before eliminating the debt, we have to get rid of the deficit.

I think most Canadians who listen to this speech or who will read it in Hansard tomorrow will know that. The comparison that nees to be made is this: What is the point of discussing old debts if we still have not paid off the new debt? The first thing to do is to eliminate the deficit. We have reduced it, and we have done this

well. The next step is to eliminate it. After that, of course, we will start paying off the debt.

The hon. member raised an issue I had forgotten to mention. We have been told in recent days that beginning next year the deficit of Canada will be, in terms of its gross domestic product, the lowest of the seven most industrialised countries in the world. The lowest. In other words, we have a better record than the other six members of the G-7.

[Dick Harris, Reform, Prince George—Bulkley Valley, BC]

Mr. Speaker, the hon. member for Glengarry-Prescott-Russell never fails to astound me as he stands up in this House and blames the country's problems on everyone else except the Liberal government.

Surely the hon. member realizes that over the last 35 years the Liberal government has held power in this country more than the Tories, far more than the Tories. All the things that have caused discontent in the province of Quebec could have been sorted out a long time ago by previous Liberal governments. Sure, the Bloc party has to take some credit for whipping up the current separatist feeling within Quebec, but the things the province of Quebec is asking for, such as devolution of powers and more control over things the province of Quebec could do better itself are the same things the other provinces in Canada have been asking for all these years.

Why did it take bringing the country to the very brink of separation which was caused by the Liberals' inept handling of the referendum campaign in Quebec? Why did it take coming so close to breaking up the country of Canada to wake the Liberals up to the point that finally after 35 years they are starting to talk about devolving some of the powers of the federal government to the provinces?

[Don Boudria, Liberal, Glengarry—Prescott—Russell, ON]

Mr. Speaker, I cannot believe what I am hearing.

[Myron Thompson, Reform, Wild Rose, AB]

I can.

[Dick Harris, Reform, Prince George—Bulkley Valley, BC]

I can. You do not listen to the people.

[Don Boudria, Liberal, Glengarry—Prescott—Russell, ON]

Maybe that is the difference between us and what I just heard across the way.

We just heard two things. First, the way to save this country is to emasculate it and second, this government here today should have done something 35 years ago.

[Dick Harris, Reform, Prince George—Bulkley Valley, BC]

They have the same philosophy today.

[Don Boudria, Liberal, Glengarry—Prescott—Russell, ON]

The member across may think, and I am not one of them, that all of us should stand for splitting the spoils among provinces and having no country left. That is not the Canada I see. I see a strong and united Canada and I intend to do my share to keep this country together.

I do not stand with that kind of nonsense that the member across believes in, which is to totally emasculate the country. It is nearly as bad as what the Bloc Quebecois-

[The Deputy Speaker]

Resuming debate. The hon. member for Lincoln.

[Tony Valeri, Liberal, Lincoln, ON]

Mr. Speaker, I am pleased to have the opportunity to speak on Bill C-10. In concert with the 1994-95 budget, the 1996 budget continues a comprehensive strategy for federal finances that is determined, measured and responsible.

Jobs and economic growth are the priority of every G-7 nation and certainly are the priority in Canada. Our government was elected on a jobs and growth platform and it has spent the last two and one-half years trying to meet those goals. To meet the objectives of jobs and growth we had to make some tough decisions. The 1996 budget stays the course on deficit fighting and we have made those tough decisions.

As a federal government we need to strike a balance between reducing those deficits in a prudent and measured way while not hurting those most in need. One only has to look at the reaction of the people of Ontario recently to understand that the Tories' slash and burn approach does not work and it is an approach that this government will never emulate.

Listen to some of the comments. John McCallum, chief economist at the Royal Bank said that the Minister of Finance "has struck a good balance between on the one hand having to get the deficit down and on the other hand not inflicting real damage on a struggling economy. I think the course is being steered quite well".

The president of the Quebec Chamber of Commerce stated that the budget gives a positive signal to financial markets and it is felt that the minister will deliver what he promised by cutting the deficit. This is quite contrary to what is being said by the Bloc members across the way who say: "Please, please let us go". Let us remember that Canadians live in Quebec and they have said: "We want to stay in Canada and we will do everything possible to ensure that this country remains united".

In the past 27 months the most common theme I have heard is action. Action is needed. Canadians know that government cannot be all things to all people. They do expect government to spend taxpayers' dollars prudently and to ensure a better future for their children. We will provide that future. We will achieve this through our determination. We are not letting up.

As the Minister of Finance stated, the attack on the deficit is irrevocable and irreversible. We will balance the books. Furthermore we will put the debt to GDP ratio on a constant downward track year after year after year.

Our fiscal action plan is measured; it is not indiscriminate, it is not mindless but it is structured by a pace that is conducive to adaptation. It is not designed to be a quick fix, but it is designed to achieve long term and permanent progress. It is also responsible because it is a strategy that involves carefully weighing the needs of our economy and our society, and equally carefully designing the policy options to meet those needs. Clearly our fiscal house is getting in order. We need to do that to sustain jobs and growth over the long term.

Many in my riding of Lincoln are involved in the small business community. I believe that this budget sends very strong signals, a signal that this government is committed to promoting and enhancing small business. The economic recovery of this country is based on the growth of that small and medium size business sector.

We need to get the fundamentals right. The lethal combination of high interest rates and deficit borrowing meant a growing share of government resources were going to servicing interest payments on our growing debt. This year those charges will cost the government some $47 billion, money that cannot go to lowering the taxes, aiding those in need or helping the economy create those new jobs.

The first budget in 1994 set the course for our fiscal house so that we could create that environment for jobs and growth. In 1995-96 we stayed the course.

It is worth looking at what signals this budget is sending to small business in my community of Lincoln and across the country. The budget recognizes that the role of government is to provide the private sector with a framework for growth. Our budget to date has reflected our fiscal and economic policies of getting interest rates down, of keeping inflation low and of cutting the burden of deficits in order to create that climate.

The budget also announced initiatives to encourage technology and innovation. The Minister of Industry recently released the science and technology package which will form the basis of Canada's global competitiveness in the 21st century.

Again no one is suggesting that this budget or the last two budgets are the panacea for the Canadian economy. However, I think we can all agree that we are certainly on the right track. I can say that with full confidence because just last week I had the pleasure of participating in the opening of the Cosella Dorken plant, a joint venture between Canadian and German companies in Beamsville. It is an innovative company that is poised for growth and export.

Locally, I see the impact of getting the fundamentals right, of getting lower interest rates, of getting low inflation and of cutting the deficits. At the end of the day, tackling Canada's fiscal problem is not the goal in and of itself. Rather it is a fundamental component of our objectives of national growth, new jobs and economic security.

We will continue to set credible, two year rolling deficit targets by using prudent economic assumptions for fiscal planning purposes and by establishing contingency reserves. Credibility is being restored to the nation's finances. We have maintained our focus on reducing program spending because the debt is a problem created by government. We all know that. The solution should focus on cutting in our own backyard.

There are no new tax increases in this budget, not in personal taxes, corporate taxes or excise taxes. Constituents of Lincoln feel confident that this government is listening when they say they are overtaxed and it does not increase taxes.

My constituents are pleased with the direction our government has taken. They are confident that by staying the course and continuing to be sensitive to those most in need Canada can continue to be a model to all the world as a country where fiscal soundness, a competitive environment and social responsibility are not mutually exclusive but rather are all interconnected.

The job before us is clear. It is to build on the progress we have made, to see it translated into good jobs, sustained growth and social programs suited to the millennium that lies ahead.

[Jean-Guy Chrétien, Bloc, Frontenac, QC]

Mr. Speaker, I wish to congratulate the member for Lincoln for his great speech. Of course, his speech was typical of Liberal supporters who, of course, will fully approve, whatever the content of the Minister of Finance's budget.

A recent opinion poll suggested that barely four per cent of Canadians trusted their politicians. Unfortunately, the quality of our members of Parliament and ministers, the present Minister of Finance in particular, is no help in improving this meagre four per cent our constituents are giving us. With four per cent, we might just as well say we are in the basement. Since the margin of error is plus or minus three per cent, one might wonder whether it is one per cent or seven per cent. If it really is one per cent, it could mean only their friends.

Speaking of credibility, Mr. Mulroney, on taking office in 1984, said: "Let me run this country for 20 years, and you will not recognize the country". We put our trust in him for nine years and, in fact, after nine years, Canada-or Quebec-is almost unrecognizable.

When Mr. Mulroney took office, the Liberals had accumulated a $250 billion debt. Oddly enough, this morning, not one member opposite mentioned that fact. Yet, these Liberals are the ones who created this outrageous deficit of $250 billion.

Mr. Mulroney took over the government with a deficit of $250 billion and brought it to $500 billion. Two years and a few months after the Liberals came back in office, the amount is over $600 billion-from $500 to $600 billion. It seems that the bigger the deficit, the less scary it is.

The member for Lincoln should also understand that these Liberals are ruining our reputations as politicians. The Deputy Prime Minister, the member for Hamilton, promised to resign if, after twelve months, the GST had not been scrapped. What did she do? Yesterday, she did not hesitate to vote against a motion, a silly motion, I must say.

In this budget-and I would like the member for Lincoln to tell us why-the Minister of Finance did absolutely nothing to reform the tax system in order to eliminate the numerous tax shelters that allow people to pay less taxes, something he himself is an expert at. On the contrary, he targeted the unemployed, farmers, women and young people. This is the future the Liberal Party is preparing for us.

[Tony Valeri, Liberal, Lincoln, ON]

Mr. Speaker, I have to dispute the polling that was done. Certainly the polling I am doing in Lincoln states that the credibility of members of Parliament is increasing. Read the commentary that is out there.

I would be interested in seeing the poll, its sample and its size. Better still, I would like to see the question that was posed in order to get the response which the hon. member was looking for. I know there is always some doubt when we talk about the question here in the House.

The hon. member asked what we were doing with respect to the debt. Again, let us talk basic economics. We need to tackle the deficit before we can talk about the debt. We need to put the fundamentals in place.

It is astonishing to me when I hear comments which suggest that the party opposite or the member opposite is not concerned about the debt. No one in the House is supportive of putting a burden on our future generations.

We are committed to getting our fiscal house in order. We are committed to putting the fundamentals in place. We are committed to dealing with the debt. However, we have to deal with the deficit first.

[Dick Harris, Reform, Prince George—Bulkley Valley, BC]

Mr. Speaker, I am astounded to hear the remark about putting a burden on future generations from the hon. member for Lincoln.

Using the Liberals' own numbers, they are going to add a minimum of another $100 billion to the national debt and another $10 billion to the interest payments. If that is not a burden, I do not know what it is. It is a burden which was created by the Liberal Party.

The hon. member talked about there being no tax increases in the recent budget. I would like to refer to the de-taxing of child support payments for custodial parents. While I am sympathetic to that change, will the hon. member deny that the change will in fact result in a net revenue gain of $200 million to the Liberal government?

[Tony Valeri, Liberal, Lincoln, ON]

Mr. Speaker, again we are on the constant downward trend. We are meeting our economic targets of reducing the deficit and ultimately dealing with the debt. We are not doing it in a slash and burn fashion, which is how Ontario is doing it.

The easiest thing for us to do would be simply to come forward, slash and burn, and get the numbers down. However, that is not the goal in and of itself. We must take a balanced approach in dealing with the debt and deficit. We must deal with social programs. We cannot cripple the economy because we want to hit a certain number. We have to be balanced, measured and determined.

When we talk about tax reform, when we talk about wanting to change things, we have to get the fundamentals in place in order to deal with the main objectives of jobs and growth in the economy. That is what we are committed to on this side of the House. We are going to deal with it.

With respect to changes in taxes, we are talking about fairness, what is equitable. We made some of those changes in the last budget and we will continue to do so as we move into the following budget and the next election.

[Bob Mills, Reform, Red Deer, AB]

Mr. Speaker, I have followed this debate with interest.

Some of the quotes the hon. member for Glengarry-Prescott-Russell used were interesting. Maybe I should reply to some of those with some quotes from the Prime Minister: "I have a plan and I have the people". We are still waiting to hear the plan. We are still waiting to see which people will carry this out.

He said we will have a government that will listen to the average Canadians and earn their trust with a balanced, realistic plan with concrete goals, not empty promises. He said that after nine years of broken promises and shattered dreams Canadians deserve a change. We are all still waiting.

He said that for nine years Conservatives have claimed to cut costs while they have been transferring them to the provincial and local levels but the same taxpayers keep paying. They still keep paying because we still keep transferring it to the provinces. We still keep hearing the phony thing that we have planned.

A lot of people have not heard about that plan and certainly do not see it coming from the government. In the past couple of weeks I talked to 400 farmers in Alberta. I have talked to people in Etobicoke. I talked to people in Regina last weekend. They are all waiting for that plan.

They are looking at what the Liberals are saying: "We have everything under control. Feel good, be happy, do not worry about anything". Everything is fine is what the spin doctors are telling the Canadian people but the Canadian people are way ahead of the politicians.

Albertans feel pride because now we are starting to pay down our debt. The pride and the feeling of accomplishment certainly are much greater than anybody feels from the lame duck budget the federal government has put forward now for a third year.

I have made up a little card which I have started handing out to people. People say the Liberals say everything is under control. We hear quotes from some of their henchmen saying everything is under control. We have a deficit that has gone from $42 billion to $30 billion to $21 billion to $17 billion; are we not wonderful? Really what we have done is set the target so low that anybody could hit it.

The hon. member from the Bloc said what the Liberals never talk about is the $600 billion of debt. They never talk about the $50 billion of interest accumulating every year which has to be paid down before we can provide any services.

What members have to look at is how that happened, which is on my card. We started in 1972 with approximately $16 billion and a Liberal government. In 1983 and we we up to $160 billion under a Liberal government.

In 1984 we said here is a guy who said he will not let this grow any more from $160 billion. By 1993 we all know the day we were elected it was $489 billion. When we go back to the people again, it will be $620 billion. It is going straight up, but the Liberals never talk about that.

The people talk about that. The people know what is threatening their programs, what is threatening their health care, what is threatening their jobs, what is threatening their pensions. They are all being threatened by that debt and by those interest payments. That is what is threatening the programs, and the people are smart enough to know that.

The people are asking where is the plan? Where are the targets that will actually achieve something? Do not simply offload problems to the provinces. The provinces are trying to do their job; at least seven will have a balanced budget. Then they will start paying down their debt.

I mentioned the pride when that is finally achieved.

Let us talk to the people. What do the people say? They say lower taxes to give them the incentive to create jobs. Give them some reforms to the systems in place so they can preserve what they all value as Canadians.

The Liberals are stuck on this slash and burn thing. Two or three years ago some speech writer wrote that down for them and they are not clever enough to come up with anything new that describes anything like what the people are saying.

We should probably start right here with ourselves. What are we doing with the number of members of Parliament? We are increasing it. We should be decreasing the number of members of Parliament and setting an example. We are over governed. We do not need all the government we have. We should be totally reforming that place on the other side of this building. That is a disgrace. I am embarrassed about it but nothing comes forward in that regard.

We do not have reform in this Parliament. We have members taking their pensions and justifying it. How can they do that when they are telling people they have a plan, that they will lower spending, that they will set the example for Canadians?

We are increasing the number of members of Parliament. We are taking a watered down pension. We are not doing anything about the GST. We are not doing anything about the debt. We have so little business to do in the House that it is embarrassing. We delayed the opening of Parliament because there is so little to do.

The people of Canada recognize this. They know the sham that is going on. They know the government has no plan. They know the government will not deal with the debt, will not deal with the interest payments, will not deal with threats to our social programs, will not provide jobs. It is just sitting there coasting along and hoping a miracle happens.

I do not believe that miracle will happen. Business knew what to do long ago to get its act together. Government has not even started. In this place nothing has happened. This budget is another disaster with no goals, no limits, no plan as we were promised.

The people know where it is at and the people again, as so often is the case, are way ahead of their leaders. They are ahead of their bureaucrats and they know what has to happen. They are prepared for it and they will take pride in it.

We need a government that has a plan, and yet there is no plan. Yesterday's debate was a perfect example: "We will get rid of the GST, that is a promise. We will kill it, destroy it, bury it". Yesterday in the House every single last Liberal voted to keep the GST. That is the plan and the delivery of the things they went door to door with and promised.

How can one feel any way but unhappy with this place? How can one feel anything but disgust when one hears the sorts of things we keep hearing? There are prepared speeches that people pick up. They do not feel it from the heart. They do not feel it from their people. They have not talked to their people. They are just doing what the spin doctors say will get them elected again. It is a disgrace.

We are talking about the most important thing we all have, our economy. We do not have jobs, we do not have anything and there is no plan here. We have MPs taking their pensions, we have MPs increasing the number of members in this place. We have no plan, and that is sad. It is sad for my grandchildren, for my children, for future generations. We should all have a moment of silence, and the members across should join, because of the lack of a plan. The budget only demonstrates that.

[Jesse Flis, Liberal, Parkdale—High Park, ON]

Mr. Speaker, I always listen very attentively when the hon. member speaks because when he first came to Ottawa he made a lot of sense. However, today he has fallen into the Reform rhetoric and does not make any sense at all.

He said he was in Etobicoke helping the Reform candidate to get elected there. I was there as well. There was not much support for the Reform Party in Etobicoke.

The other day he also saw what happened at Queen's Park when the riot police had to be called in. These are scenes we witness in other countries. Never did we predict we would witness such scenes here. The Harris government is doing what the Reform Party wants for the entire country. Does the hon. member want to see these kinds of scenes repeated across the country?

[An hon. member]

That is what the people want. That is why they elected him.

[Jesse Flis, Liberal, Parkdale—High Park, ON]

An hon. member says that is what people want. If that is what people want, can he explain why the government party is running 58 per cent in the polls and his party ratings are going down further and further? It shows the public is not buying the Reform program.

The hon. member went on to talk about the GST. He tied that in with party's lowering taxes. It would lower taxes, get rid of the GST. At the same time he criticizes the deficit and the public debt. What he shared with us will drive the deficit up even further and increase the public debt.

That is why I said he used to make sense but all of a sudden does not make sense. He complains the government has no plan. The government ran on a plan. We put out a very clear platform and the people gave us the mandate to implement the platform over the next five years.

We have another two years to go. Mike Harris tried to do in one year what we are spreading over a four year period. This why the people are quite happy with our latest budget, quite happy with the first two budgets. They know we are on track. The financial confidence is there. The investment confidence is there. I think the government is right on track and I do not see why the Reform Party cannot understand this.

[Bob Mills, Reform, Red Deer, AB]

Mr. Speaker, there were a number of questions and I do not have enough time to answer them all.

I remind the member that a number of Liberals believe that support is an inch thick and a mile wide.

I tried to convey the feeling that Albertans have of the pride of ridding the deficit and who are now working on the debt. We are proud of that. The threat to everything in the country is the growing debt and the interest payments. That is the message; $50 billion in interest is what is threatening health care, pensions and jobs. Business will not provide more jobs until it sees a plan and light at the end of the tunnel. The only light at the end of the tunnel must be the lowering of taxes, a plan whereby people are treated equally and fairly.

With regard to his reference to polls, I go back to a much earlier politician from this place when he described that polls were for big dogs. That probably summarizes what we can do with these polls.

Why the great popularity of the government? After probably the most disliked Prime Minister the country has ever had, anything would be a breath of fresh air. I agree with that. We need light at the end of the tunnel. The debt and the deficit have to be dealt with and interest payments must be cut down.

[Keith Martin, Reform, Esquimalt—Juan de Fuca, BC]

Mr. Speaker, Bill C-10, an act to enable the government to borrow, simply should not exist. It is proof positive that the government has failed the Canadian people in trying to do that which it professes to do, which is get our economic house in order, preserve social programs and above all else, give hope to a Canadian public that so desperately needs hope.

Once again the government has mortgaged the future of every Canadian. It is borrowing on the future of Canadians, their children and their children's children to pay for today. Granted all of what we have today goes on their shoulders because previous governments, Progressive Conservative and Liberal alike, have spent wildly giving us the situation we have today.

Although the government has done a few things that no previous government has done, it still has much further to go. It is still compromising the country as we know it, compromising the very roots of Canadian society. Hence we see the great angst that exists among the Canadian people: their fear of the unknown, their fear

of the future, their fear of losing their jobs, their fear that their children cannot find jobs, their fear of losing the social programs which all of us have come to depend on for health care, for education and for pensions.

The fact that we have to borrow from the future speaks loudly to the fact that our economic house is not in order.

Reformers have been accused of being the slash and burn party. The government has repeatedly said that it is on the right track. This is a track running right into a brick wall.

The International Monetary Fund at the end of last year told the finance minister clearly that if the government does not change its targets, if it does not bring those targets more into line and be more aggressive, not only in its deficit reduction, but most important, in its debt reduction, then Canada is going to be in severe trouble.

We need not look any further than New Zealand to see the consequences of inaction. If the government does not act, if it does not get our economic house in order today, then Canadians are going to suffer. Those who will suffer the most are the poorest and most dispossessed in society. These are the people above all else who we should be here to help. The fact that the government is borrowing once again, spending more money than it takes in, is compromising the health, the welfare and the future of every Canadian.

Three years ago the Reform Party gave the government a specific, concise and effective plan to get the country's economic house in order, to get people back to work, to give confidence back to the people, to preserve social programs, to preserve programs that help those who need help. Did the government take it? Absolutely not. The government ignored it, to its peril and the peril of all Canadians.

The purpose of the plan was to make sensitive, effective cuts to government spending to preserve funding for those people who need it the most, to preserve health care, to preserve education and to preserve the core of the pension programs for those who need them for the future. The government ignored it. Yet the Liberal plan we are following is eroding away at government spending as we speak.

When we were all elected two years ago the government had $120 billion to spend on government programs. Today it has $103 billion. Next year it will have $93 billion to $94 billion. Where has the money gone? It has gone to pay the interest that must be paid on the debt, the debt that is being added to as we speak, the debt that will continue to be added to because the government has failed to balance the books. Every day Canadians have to balance their books. If we do not we go bankrupt. That is reality. The government is committing Canada to bankruptcy and that is completely unthinkable.

Why does the government not act? It does not act out of fear. I understand that. It takes courage to move ahead and address the problems in our midst. Why are the problems in our midst not addressed? It is for fear of having to lead the debate, for fear of the media and for fear of what some small minority groups will say.

However, members must have the courage to act on their principles. They must have the courage to do the right thing for the Canadian public. If they do not it will be the Canadian public that suffers. It is our job. It is not our job to play partisan politics which is what we are descending into and to an even greater degree every day. This place is fracturing into different groups rather than having the vigorous debate that is necessary to find solutions to the problems of the country.

I fear that the problems have become secondary to playing the game of politics. The maintenance and acquisition of power is the game. Canada's problems become secondary to that little dance that is going on here. That is the system and the morass with which we are faced. However, this is an opportunity to change that system and to become more effective.

As an aside, I personally believe that we need to make a hybrid model between the American system and the Canadian system to give individual members of Parliament more power, to give committees more power in enacting legislation and to enable all members of Parliament to represent their constituents rather than doing what the party tells them do. That is something that we in this party have been pushing forward for a very long time, free votes in the House of Commons. I believe it is essential for a democracy to have this because we do not live in a democracy today.

If those changes can be made then this House will provide a more vigorous and effective debate that enables members to formulate plans that can be directly applied to the problems which face Canadians today. I fear these problems are not being dealt with in an effective fashion in the House because of the insidious creeping of partisan politics among us. That is in part why we do not see action on the great problems that face Canada today.

However, it is still inexcusable for the government not to act on the economic situation by continually borrowing on the future of all Canadians.

The Minister of Finance wants to create a study group to determine how the tax system can be addressed more effectively for businesses. I will give the minister a free bit of advice. If he wants to improve the economics in Canada, if he wants to give people a better chance of getting a job, if he wants to preserve social programs and if he wants to give people hope, then he should

cut the tax rate. People should be given more money in their pockets so they can spend it.

Interestingly enough, I believe in 1991, in the dark years of the Conservatives, the Prime Minister of the day actually decreased taxes for a very brief moment in time. What happened? More money was coming into government coffers at that time than ever before. What did the government then do? It started to tax wildly. It brought in the GST and increased taxes. What did all that do? It simply decreased the amount of money coming into the public purse, crushed the economy, raised taxes, decreased the ability of people to get jobs and generally smothered an economy that could otherwise have been more vigorous.

In Canada, we have an enormous opportunity. We are blessed with enormous riches in minerals, in timber but also in the people. We have an enormous wealth of individual strength, tolerance and understanding that cannot be rivalled by any other country in the world. These enormous talents, ideas and potential need to be focused on the issues that not only affect us but affect all countries in the world. It does Canadians a great disservice not to do that.

I implore the government to use its power to work with us, to employ some of our ideas and to use them itself for the good of all Canadians. The problems of this country cannot wait another day. They must be acted on today. The solutions are out there. Let us act on them for everybody.

[John Richardson, Liberal, Parliamentary Secretary to Minister of National Defence and Minister of Veterans Affairs]

Mr. Speaker, the hon. member is one of the more moderate members of the Reform Party. However he stated some things that I do not think carry a lot of water.

He is using the New Jersey model to cut taxes. Let us take a look at that New Jersey model since he brought it up. New Jersey is now the most polarized state in the United States. The poor have never been more poor and the rich have never been more rich. The middle class has shrunk. That is the state that cut taxes. It is a model that was used by one of our provinces in its approach to an election.

The other model he used was New Zealand. New Zealand has not recovered from the crash of its program. it is still not on its feet yet. It is not a vibrant society.

Why are the major financial lenders in the world giving kudos to Canada? It is because we are attacking the problems in a thorough manner. The government has set targets and it will reach those targets, as stated by the Minister of Finance.

The hon. member talked about a fractious caucus. There is no more fractious caucus than the one to which he belongs. That caucus brings its members back to account to them and some come out in tears. It does not paint a very good picture of a party's solidarity.

He also talked about freedom of speech. That does not speak well for the party either. Talk about practising the new politics. The party that came into power saying it was going to do it a new way but it just found a new way of doing the old things better.

This is not as easy as one thinks from the outside. It takes a lot of co-ordination and practice among all of the parties. To bring laws into place a lot of consultation has to take place and there is no knee-jerk reaction to it.

I wanted to pick up on those points made by the hon. member. I have one question for him. Has the Reform Party chosen to use the New Jersey model for a tax cut model the same as the province of Ontario did and end up as a result with a polarized community of the very rich and very poor?

[Keith Martin, Reform, Esquimalt—Juan de Fuca, BC]

Mr. Speaker, I thank the hon. member for his questions. I am glad he asked them.

First, I never brought up a New Jersey model in my speech. To answer his question on tax cuts like there were in New Zealand, the plan we gave the government, the zero in three plan, did not involve an across the board tax cut for anybody.

Reformers maintain that government spending has to be controlled, the deficit has to be brought down to zero and then the debt, the real ogre, must be attacked. That is the plan we gave to the government. That is the plan it ignored.

Second, I did bring up the New Zealand model. It does take time for a country to get back on its feet after decades of overspending. The reality for New Zealand is it took 10 years. For Canada it is probably going to take a similar amount of time. If the changes are made today, we cannot expect to have the results for some years.

The converse of that argument is if the changes are not made things will be a lot worse for a lot longer. That is why we demand that the issues be addressed now, and if the government fails to do that it will imperil the Canadian public.

The hon. member did make a number of erroneous statements. New Zealand is doing better than it has ever done. It is one of the lions in terms of economic growth of countries in the world. Over the last couple of years its economic growth rate has increased dramatically from 5 per cent to 10 per cent.

The hon. member said that kudos have been given to Canada. I suggest the hon. member look at what the International Monetary Fund said. The IMF gave our Minister of Finance a very stern warning, making it very clear that his targets are totally unaccept-

able. That is not the first time. It has been repeated time and time again. The primary international financial agency in the world has told Canada to buck up or it will be in trouble.

The hon. member brought up the issue of free speech. We do not have a bunch of cowardly individuals, such as those who are in government. Many of them say they would like to make changes in the government but are afraid to do so because of the whip structure. At least in our party we can speak our mind, and we do.