Mr. Speaker, the success of our economy will very clearly depend on our young people, just as their success will depend on their ability to participate fully in all the economy has to offer. There is a clear role for government in helping our young people to prepare for a rapidly changing economy through the acquisition of the right skills and the provision of opportunities to gain work experience.
And so in this budget we are providing an additional $165 million over three years to be funded through reallocation within the tax system so that students and their families will be better able to deal with the increased costs of education.
First, to recognize the non-tuition costs of schooling we are increasing the education credit from $80 to $100 per month. Second, in order to support parents or spouses who help underwrite the education costs for students we are raising the limit on the transfer of tuition and education credits from $680 to $850 per year.
Third, to encourage parents to save for their children's education over the long term we are proposing to increase the annual limits on contributions to registered education savings plans from $1,500 to $2,000, and the lifetime limit from $31,500 to $42,000.
Fourth, as we have said, we are broadening eligibility for the child care expense deduction. This measure will assist parents to undertake education or retraining. Single parents will be allowed the same deductions that today are only available to couples. And for the first time, the child care expense deduction will apply to those completing high school, not only post-secondary education.
For our youth, learning is the first step. But increasingly, education alone is not enough. What is required is the opportunity for them to gain experience on the job. To help reach this goal, the government is reallocating $315 million over the next three years from other spending in order to help create youth employment opportunities. This is in addition to our existing funding provided through such programs as youth internship Canada and youth service Canada.
Some of these additional funds will go to substantially increasing our support for student summer employment. Summer employment not only provides young people with the opportunity to earn the money they need to complete their education, it can also supply critical job experience.
Therefore, we are doubling our assistance for summer employment for 1996-97, from $60 million to $120 million.
Another part of the $315 million will be used to assist young Canadians who have left school to find work. The details of all of these youth initiatives will be provided in the near future by the Minister of Human Resources Development.
In summary, we are eager to enter into a new partnership between the public and private sector to create entry level jobs for the young. Government and business have worked well together on trade as Team Canada abroad. Let us now, business, labour, educators and government work together even harder at home for jobs for our youth.
Our ultimate challenge is to change the very economic culture of the nation, to make Canada one of the most innovative countries in the world. Some may think that innovation applies to only one small sector of the economy, to those who write software, who surf the net. Nothing could be further from the truth. This is not about part of our economy. It is about all of our economy. From small business to large business, from coast to coast to coast, from mining and oil and gas, from agriculture and forestry the application of technology has become essential.
Clearly it is the job of the private sector to innovate because it is its survival and growth that are at stake. But government too has an important role, in levelling the playing field against foreign competition, in forming partnerships to invest in areas of basic research of high risk, and where the scale of investment is simply too large for the private sector itself to carry alone.
To that end, the Minister of Industry will be announcing the creation of technology partnerships Canada. This program will encourage the development of environmental technologies, advanced manufacturing and materials as well as biotechnology. It will also help maintain jobs in the aerospace sector, which is subject to very heavily subsidized foreign competition.
This marks an important departure from past practice. Both the risks and the rewards will be shared with the private sector. The government's investment should not exceed one-third of the total. The emphasis is on partnership, not unilateral federal action. The reallocated resources provided in this budget, together with the existing Industry Canada funding, will enable Technology Partnerships Canada to grow to about $250 million by 1998-99. This will lever substantial additional investment by the private sector.
In addition, the government is injecting $50 million into the Business Development Bank. This equity will in turn allow the bank to provide an additional $350 million in loans to knowledge-based, exporting and growth businesses that would not otherwise have access to the commercial banks.
The Minister of Industry will also accelerate efforts to bring the benefits of information technology to the whole country. By 1998 through school net we will have connected every school and library in the country to the information highway. By the same year 1,000 rural communities will also be connected through the community access program.
In order to bring to small business the advantages of access to the information highway, we are instituting a program in which 2,000 computer students will connect some 50,000 small businesses to the Internet, not only installing those systems but advising their owners on how best to use them.
Our financial institutions have a key role to play in facilitating the growth of Canadian business. Over the past year, the banks have made progress in dealing with the concerns of small business. More needs to be done.
To ensure our financial institutions provide the best possible financing for growing export and knowledge based businesses, the government will work with business and all financial institutions, including the banks and the insurance companies, to ensure that further progress continues.
Finally, we are currently reviewing the legislation governing financial institutions. We are doing so with a view to improving the framework that was established in 1992. We have concluded that the financial sector has yet to fully adjust to this framework. Therefore, the present restriction on banks selling insurance will be maintained.
The present framework for selling insurance through agents and brokers will be preserved. The white paper covering this and all other aspects still under review will be released in the coming weeks.
Let me conclude this section by discussing trade. Canada's trade performance has been extraordinarily good. No one can deny that. The export sector has been the fastest growing sector of our economy, expanding at an average 8 per cent per year over the past decade. Our merchandise trade balance has soared, reaching a record surplus of $28.3 billion. And as a share of the economy, our current account deficit is at its lowest level in ten years.
Trade will continue to be a major thrust of the government's economic policy. The Team Canada approach established by the Prime Minister has proven to be a major success and will remain a centrepiece of our strategy.
The Minister for International Trade will continue our determined drive to secure new agreements for more open markets around the world, building on the exemplary work of his predecessor, the Hon. Roy MacLaren.
Export financing is critical to ensure that Canadian companies can fully realize the opportunities before it. And so in this budget we are providing $50 million of new equity to the Export Development Corporation in order to support new export sales financing vehicles and new partnerships with exporters in the commercial banks.
In addition, we are reallocating resources from subsidized loans for foreign borrowers to non-subsidized loans under an improved system to manage risk. This measure will increase the amount of financing available for Canadian exporters by as much as $500 million per year.
I would now like to deal with the question of government revenues.
No one is ever happy with the tax system. That is why we must do everything we can to ensure that it is fair and that the system as a whole is as effective as possible.
Taxes are clearly higher than any of us would like, but the issue is not simply one of rates. Il is also important to ensure that the system is supportive of the nation's goals. To this end, the budget announces the following additional revenue measures.
This is to announce the following revenue measures. The revenue we realize from many of these has been reallocated to provide tax incentives that will assist students, help the infirm and support charities.
Let me begin with the provision of tax assistance to encourage Canadians to save for their own retirements through RRSPs and RPPs. We are proposing a number of changes that will better target this assistance to modest and middle income Canadians while limiting the cost to taxpayers.
First, we know that many younger Canadians have a difficult time finding the money to make full RRSP contributions. This is often due to other pressing obligations, including education or raising a family. We want to give them the maximum opportunity later in life to help make up for that lost time.
Therefore, we will allow Canadians unlimited time to make up for any years when they were unable to make their full contribution. Thus the current seven year limit on carrying forward any unused contribution room is eliminated.
Second, the contribution limit for RRSPs is being frozen at its current level-$13,500-until the year 2003. The limit will then increase to $15,500 by 2005.
Third, we are reducing the age limit for contributing to RPPs and RRSPs from age 71 to 69.
In order to improve the effectiveness and the fairness of the tax system, a number of additional measures are being announced. In order to see them established, the government put in place incentives for investment in labour sponsored venture capital corporations. These incentives have worked. These funds are now very well established. Therefore, we are proposing several measures to reduce the unique incentives in place for these funds.
Next, the budget provides a variety of measures related to the resource sector. In relation to oil, gas and the mining industries, we are clarifying and tightening rules related to the resource allowance following the review announced in our last budget. While revenue neutral, this will result in a more consistent and stable tax structure.
We are announcing as well changes to the accelerated cost allowance rules for new mines, including oil sands, so that all types of oil sands recovery projects are treated more consistently.
For mining flow-through shares, the current 60-day rule is being extended to one year while the eligibility rules for these shares are being tightened for the mining and oil and gas sectors.
We believe that environmental health and economic development should be complimentary not contradictory concepts.
To that end, this budget announces income tax changes that will provide an essentially level playing field between certain renewable and non-renewable energy investments. This is part of the base line study of possible barriers and disincentives to sound environmental practices initiated earlier.
One measure is to create a new Canadian renewable energy and conservation expenses category in the tax system. A second measure is to extend the use of flow-through share financing, currently available for non-renewable energy, to similar costs for certain renewable energy and energy conservation projects.
A temporary tax on large deposit taking institutions, including the banks, was included in last year's budget. It will be extended for a further year.
Finally, and of import, an effective business tax system should not only raise revenue, it should be designed to help create jobs. We believe that it is time for a comprehensive look at this issue.
In order to identify any obstacles to job creation currently contained in the tax act and to suggest needed reforms, we are announcing today the establishment of a technical committee of outside experts who will report to me later this year to be followed by public consultations. If the creation of secured jobs is our objective, then every effort of government, including the tax system, must be directed toward that end.
That concludes our description of the measures contained in this budget. They reflect our desire to put in place the strongest economic framework possible for sustained growth and jobs.
We spoke at the outset about the anxieties that grip our country. This budget is about doing what we can to help Canadians put those anxieties to rest. But let us be clear. A budget is only a small part of the answer. The full response lies in recognizing where we are in the evolution of a country and where we are in the evolution of the world beyond our borders.
It is time to turn the page. Because the fact is that success for countries is no different from success for families or communities or individual citizens. It is based, above all, on one thing: the constant setting of goals and the meeting of new challenges. Successful countries do more than occupy a place on the map. They live in the souls of their people because they are relevant to the betterment of their lives.
And so for Canada it is time to set goals anchored in our shared values and our shared aspirations. We have done that throughout our history, in the days when we dared speak of a national dream and then built it; in the days when we aspired to a kinder society and then created it.
Now it is time to move forward once again, to arrive not simply at a common understanding of what we are, but a common vision of what we can be. Our challenge today is to make Canada a place of great expectations, a country once again where our children believe that they have the opportunity to do better than their parents.
We must set great national challenges, not small ones, because it is only by reaching as high as we are able that we will discover how far we can go.
The issue is, why can we not decide together in the House and in this country that 10 years hence, Canada will be regarded as the world leader in the new industries of the new economy, in biotechnology, in environmental technology, in the cultural industries of the multichannel universe? Why not decide together that 10 years hence, increasing child poverty rates will be a thing of the past, that illiteracy will be erased from our communities, and that when it comes to international tests, our students will not simply do fine work but in fact will be the very finest.
Why can we not decide together that medicare, ten years hence, will not simply survive, but be the most successful system in the world, a system that is second to none? Why not decide together that ten years hence our streets will be the safest they can be -à not because we have the largest number of prisons or police, but rather because we have faced squarely the sources of crime?
If we want to open new doors for our children, there is literally nothing standing in our way. We are a society that mirrors the diversity of an entire planet. We are already building on a great foundation. Now it is time to draw on that foundation, to write a new history ourselves.
And so I would ask, let us act, not as special interests, but as stewards of the national interest. Let us follow in the footsteps of those who came before, who saw challenge as a rallying cry to move forward, never as an excuse to give up.
Let it be said by those who come after us that we set the goals, that we met them together, that we propelled Canada forward into the new millennium, still and always among the front ranks of the nations of the world.