Debates of March 7th, 1996

The Budget

[Paul Devillers, Liberal, Parliamentary Secretary to President of the Queen's Privy Council for Canada and Minister of Intergovernmental Affairs]

Mr. Speaker, I thank my hon. colleague for his question.

I totally agree with him that businesses should pay their share of taxes to the government. In his question or comments, he indicates to us that he is not satisfied with the membership of the commission, but that is only a beginning. I am sure the government will try to find ways to settle its matters so that large businesses pay their share of taxes.

[Jean Augustine, Liberal, Etobicoke—Lakeshore, ON]

Mr. Speaker, I am sharing my time with the Parliamentary Secretary to the Minister of Human Resources Development.

The residents of Etobicoke-Lakeshore join me today as I stand to participate in the discussion of the 1996 Liberal budget. This is a budget which clearly demonstrates the government's ability, not only to listen but, more important, its ability to act.

In my town hall meetings, in discussion with community groups, and my regular meetings with various community leaders, the message has been consistent: maintain vital social programs but reduce the deficit with spending cuts, not tax increases. This is the message that my constituents in Etobicoke-Lakeshore told me to bring to Ottawa.

Without digging into the pockets of Canadians, the budget has managed to offer something for everyone. It reinforces a secure, stable and growing system of federal support for medicare, post-secondary education and social assistance. At the same time it re-emphasizes jobs and economic growth while creating investment in three priority areas; youth, technology and trade. These areas are essential to future jobs and future growth in my constituency.

I invited 50 of my constituents to meet with me this morning to hear what they had to say about the 1996 budget. I held a forum in order that we may continue on in our important dialogue, addressing the needs and concerns of our community. We met and we will continue to meet because a budget is not an end in itself but a means to a better future for all Canadians.

I would like to take this opportunity to tell the House that my constituents were very pleased that the Liberal government, for the third consecutive year since its election, has not introduced personal income tax increases. Businessmen and businesswomen drew more encouragement from the fact that no new corporate taxes were introduced.

Many of my constituents wrote to me and expressed their concerns about gasoline taxation. I remember letters from Mr. Victor Rowland, Mr. and Mrs. William and Jean Christie, Mr. and Mrs. Andy and Theresa Manuel, about gasoline taxes. They were

told this morning that their voices were heard. The government did not increase the price of gasoline or any other excise tax. Less taxes translate to more money in the pockets of individual Canadians. Etobians and other Canadians have every reason to be encouraged by the fiscal process the government is making on the national agenda.

The Minister of Finance reaffirmed our deficit reduction plans in the House. We have delivered on the red book commitment to reduce the deficit to 3 per cent of GDP, down from the 6 per cent that existed when the government took office slightly over two and a half years ago. Over the horizon we can already identify evidence of the inevitability of the new 2 per cent goal.

Fiscal progress should always be a means to greater public ends, to lower interest rates, to more jobs, to a more prosperous and secure Canada.

Of equal importance, our fiscal progress will better enable us to move forward on other priorities and issues so important to our citizens. Clearly one of those high priorities must be the preservation of Canada's network of social programs. These are programs which offer life long protection to Canadians. These programs have helped established us as one of the most envied nations in the world.

To achieve that end, as the Prime Minister promised, we had to provide a long term funding arrangement for health and social programs that is growing, stable, predictable and sustainable. The Canada health and social transfer was introduced in last year's budget as the single largest federal means of providing financial support to provinces for health care, for secondary education and social assistance.

One of my constituents, Ms. Barbara Center of the Lakeshore area multiservice program, which in Etobicoke we fondly call LAMP, articulated her concerns on the effects of possible reductions in federal transfer payments for health care at my Etibocoke-Lakeshore prebudget consultation in early January of this year. She will be pleased to know that not only the present parliamentary secretary to finance but also the Minister of Finance heard her remarks.

My constituents are pleased to hear that the 1996 budget now acts to extend the CHST, and furthermore that there will be no further cuts to the CHST. Following consultations with the provinces, the new budget sets out a new five-year funding arrangement for the CHST in which transfers grow and the cash component is stabilized and increased over time.

The CHST entitlements will grow from $25.1 billion to $27.4 billion over the next five years, an actual projected increase of $2.3 billion higher than in 1997-98. This will mark the first time the federal government has taken action to increase the growth in these transfers since the age of restraint instituted in the mid-1980s.

It is also important to note that the government will legislate a floor to provide a sound guarantee that cash transfers will never fall below the $11 billion mark at anytime during those five years, and this is important for us. These proposals demonstrate the Liberal government's strong commitment to secure Canada's health system and social safety net and to build a renewed social and economic union. This is a system that many Canadian seniors have helped to build.

In this light, the 1996 budget takes the necessary action to safeguard the public pension system not only for present seniors but also for our youth who will one day become seniors.

Our system faces many challenges. Canadians are living longer and hence receive pension benefits over a much longer period. There will be fewer working Canadians to support the escalating cost. These factors and others will increase the cost of our public pension faster than our capacity to pay for them unless we act.

The government in partnership with the provinces and territories has already launched a major public consultation program on changes needed to the Canada pension plan.

The Ontario Coalition of Senior Citizens was also represented and did submit its concerns at the Etobicoke-Lakeshore prebudget consultation. The coalition will appreciate knowing that while the OAS and GIS programs have been subject to taxation, the new seniors benefits will be completely tax free. They will incorporate the existing age and pension income tax credits. Seniors will not have to report the benefit on their tax forms. Furthermore, payments to couples will be made in separate and equal cheques to each spouse. As the benefit will be fully indexed to inflation, a vast majority of seniors will be better off.

It should be emphasized that savings will come from slowing the rate of growth in program cost, not at the expense of those in need. While the savings at first will be small, they will build year by year to about 11 per cent of program cost by the year 2030.

Public consultations will be held on legislation which will be introduced in the future. We are ready to participate. The constituents of Etobicoke-Lakeshore can be assured that I will once again offer their input toward the construction of a more sustainable public pension system. Their participation is critical to us as we move forward with these changes.

I end by underscoring my belief that the government is on the right track. In 1993 we ran on a balanced platform. We made a commitment to restore fiscal sanity to the country while focusing our efforts on protecting vital programs and improving opportunities. The budget shows we are firm in our resolve. The federal deficit will continue to decrease and the economy will continue to

grow. Most important, I am especially pleased that we are not cutting spending on the backs of those who can least afford it.

I am confident that as I continue to discuss the budget with the residents of Etobicoke-Lakeshore they will support the measures the budget proposes to secure Canada's social and financial future. I therefore call on all of my colleagues in the House to join with the government in support of the budget.

[Daphne Jennings, Reform, Mission—Coquitlam, BC]

Mr. Speaker, I remind the hon. member that the budget offered no tax relief. It was not a balanced budget, which we had hoped for, at least for 1997-98, which we certainly could have achieved.

The debt is climbing at a tremendous rate. The debt was not mentioned. We keep talking about the deficit. The deficit may be decreasing but the deficit could also disappear if it were handled correctly. What about the debt? The debt is growing. What are we doing about the debt? That is the serious issue.

In particular, the hon. member mentioned there were no tax increases. The new child support package, which will come into effect on April 30, 1997, raises some concerns which relate to what I call tax increases.

One of the concerns is no deduction, no inclusion. That is the new role of the day. The parent paying support will no longer have an incentive and so they might default. It might be easier for them to default now. It probably will happen. Wonderful people that they may be, these are difficult times.

If this is the case, we may see that it will be more difficult for them to find the money. If the incentive is not there for deductions, we may see this occurring. We may have a new social problem erupting before our eyes, or rather an increased one because some of that occurs right now. It may be an enlarged social problem which will come about. That will make it very hard on the parent trying to support a child and counting on that support.

If the person paying support no longer receives a deduction, that is a tax increase. Therefore I disagree that there are no tax increases.

Will this cause a present problem to become larger, requiring more taxpayer dollars to be spent as a watchdog or as a guideline to keep these people paying? That will be costly to the taxpayer. Who pays when the courts get involved? The taxpayer. That is a tax increase.

The second concern with respect to the new rules announced is that the Minister of Finance can make it retroactive. I fear this will open the flood gates for more litigation. Either the payer or the recipient could sign and file for change. That will lead to enough litigation among family law lawyers across the country to ensure that very few of them will be sitting idle. Who will pay the cost of the court cases or even of the new actions which may succeed with mediation only? That is another tax increase.

Nothing in today's world is as costly and expensive as court cases. Courts are expensive and divorced parents have enough hardships to overcome. Do the children want to be reinvolved in more hassles this litigation will open up? They do not need to put in more time, more energy, wasted energy, that this new legislation will make possible.

I realize we have a problem right now with the legal profession. The Globe and Mail the other day stated some lawyers are not able to pay their fees to the law society. I can see this being a major problem.

However I am concerned that this almost seems like an attempt by the government to open up a flood gate, and so now we have all these new cases and for what purpose? I wonder if the member could comment on this. How does she feel this legislation will help people?

[Jean Augustine, Liberal, Etobicoke—Lakeshore, ON]

Mr. Speaker, the premise of the member's question underlies the point that divorce and the courts are really a way to accept responsibility for children.

I ask the member to look very carefully that within marriage itself and within the responsibility parents have for their children, that responsibility has to be first and foremost, not looking at the legal system and the taxation system as the way and the means to bring about resolution to the responsibility parents have to support their children.

It is also interesting that Reform members look at the budget, a budget that contains so much, a budget that speaks to so many issues, and focus on the negative aspects. Instead they should pull from it some of the things we need as Canadians, as a community and as legislators to work together and to move issues ahead.

The budget provides the parameters. The legislation that will follow and the support through the taxation system will help confront the social problems that face us. We must focus on the problem of poverty among youth and among children, rather than seek to redress to every ill through the taxation system.

[Bob Nault, Liberal, Parliamentary Secretary to Minister of Human Resources Development]

Mr. Speaker, I am proud to rise in support of the budget tabled by my colleague, the Minister of Finance.

In the 1996 budget we have tried to reflect the commitments we made during the 1993 election. To the House and to all those listening in Kenora-Rainy River and across the country, it

continues to put our fiscal house in order and promotes our job and growth agenda.

We all know and have to continue to emphasize that when we came to office we inherited a deficit of $42 billion, 6 per cent of GDP. We stayed firm in our commitment to reach an interim goal of 3 per cent of GDP within three years.

To meet this goal we embarked on the most thorough review of government programs and spending ever seen in Canada. As the Minister of Finance pointed out yesterday, it would have been quite easy to balance the books in one year. We could have taken the Reform Party's approach and simply hacked away at the most vulnerable in society.

Fortunately, though, we are not the Reform Party. It tries to hide its lack of ideas by irresponsibility and spouting out simple solutions to complex problems. We take our responsibility to all Canadians very seriously. We do not try to offer easy answers because there are not any.

We have met our commitments to Canadians. Through our balanced approach we have brought government spending to its lowest level of GDP since 1949. At the same time we have maintained vital programs like health care which some members across the floor would be happy to abandon.

We have not only met our deficit targets, we have exceeded them. This budget sets out a 2 per cent deficit target for 1997-98. We are on the way to a balanced budget. We will not stop, I assure the House, and the finance minister has reiterated this, until we get there.

Cutting is not an end in itself. It is a means to an end. We on this side of the floor recognize that. Our management of the economy has seen interest rates fall dramatically, a vital component of job creation which some people seem to forget. As a result, more than half a million full time jobs have been created during our mandate.

Some of us who are little bit younger may not be as wealthy as some of the folks across the way, but just think about this for a moment. If the average homeowner with a $100,000 mortgage were to factor in the changes in the interest rate for the last two years that have been possible by the changes that this government has made, the savings would be $2,400 a year. That is a significant amount of money for someone who has a mortgage. That is as good as any tax cut, the ability to say to the millions of people who have mortgages that they have saved a tremendous amount in interest payments because of the good fiscal management and policies of this government.

We recognize that we can and should do more. The budget sets the wheels in motion after the first two budgets cleaned up the Tory mess. We are going full steam ahead to provide opportunities to Canadians.

I do not have the time to go into the full details, but I want to touch on some of the key points in the budget that was presented to Canadians yesterday. The first point is youth. Young people today face great challenges both in financing their education and in finding their first job. The budget marks a major commitment to youth. Tax benefits for full time students are being increased. By doubling federal funding for summer jobs, an extra 30,000 young Canadians are being provided the opportunity to finance their education.

The government is building on the successful youth internship program and committing an extra $315 million to work with the private sector to create youth employment. Some people across the way might think that is small potatoes and something to sneeze at, but for young Canadians who know how difficult it is to get their first jobs that kind of help is welcomed news. By investing in our youth I can assure hon. members that the government and most Canadians believe we are building a stronger future.

We are also helping Canadian families, especially the working poor. Parents who want to upgrade their education and find better jobs will now be able to claim child care expense deductions. This includes parents who show the courage to return to high school. By changing the child support system, we are doubling the working income supplement of the child tax benefit. This will benefit more than 700,000 working Canadian families. This support for the working poor is one of the values that makes me proud to be a member of the government.

It is very easy to say cut and slash until the budget is balanced. However, we all know and I am sure you know, Mr. Speaker, that in your riding there are many poor people who could not survive the kind of quick action that some parties in the House advocate.

We are also showing a dedication to seniors now and in the future by introducing the new seniors benefit. By targeting resources to those most in need, benefits for seniors with incomes below $40,000 will be maintained and increased. Our seniors built this country and the government will fight to protect their independence, their benefits and their dignity from those across the floor who want to leave them twisting in the wind.

I come from a relatively lower than middle class riding in northern Ontario. These kinds of changes are going to improve the positions of the vast majority of seniors who I represent. I would have thought that people across the House would have been quick to get up on their feet and say that this is a welcome change and something of which all parliamentarians should be proud, that we have made seniors more secure in their golden years.

I am also proud that we have set out a plan which will not only stabilize but will increase transfers to the provinces for health care and post-secondary education. After all, our party created medicare and will not see it destroyed. That commitment is what differs members on this side of the House from other members.

I would also like to touch on aspects of the budget that will directly affect rural Canada. As a rural member of Parliament I have spoken many times in the House and in caucus about rural Canada and its unique problems, as opposed to the problems some cities have.

The community access program helps rural and isolated communities develop and expand Internet access. In northwestern Ontario it is a real opportunity for us to overcome our isolation and compete with the world. This program has already benefited several communities in my riding, including Ear Falls, Ignace, Sioux Lookout and Dryden. The budget provides an extra $30 million to the vital program and I applaud the Minister of Finance for this.

Sometimes the very basics of infrastructure that people from major centres take for granted do not exist in the rural parts of the country. For us in rural Canada to compete not only with our friends in some of the major centres in Canada but around the world we must have the tools.

Private sector companies like Bell Canada will not put that kind of investment into rural Canada because there is no return on the investment. Therefore the government has a very legitimate role to play. I applaud the Minister of Finance and the government for recognizing that without government help these links would never take place.

Another vital sector that members have heard me speak about on several occasions is mining. The rural caucus my colleagues and I belong to has spent many afternoons and evenings in meetings with various ministers trying to convince them of the need to help the mining sector.

The new tax provisions concerning flow-through shares and capital cost allowances will spur exploration and investment. Rural Canada has been asking for these measures and the government has responded to the need.

Finally, the budget allows a 2 per cent increase for Indian Affairs and Northern Development. I know the members of the Reform Party are going to criticize that increase. Before they do, they should learn a little history. They should visit some First Nation communities and have their blinders removed.

There are 46 First Nations in my riding, more I believe than any other riding in Canada and I am proud to represent these First Nations in the House. I have seen firsthand the poverty and despair brought on by decades of neglect and mistreatment by governments of all stripes. I have also seen the determination that First Nations have to take control of their destiny and break the cycle of despair.

We cannot rewrite history, but we can and must help toward a better future. Through our commitment to aboriginal Canadians we are writing a better future. I quite frankly applaud the government for recognizing the poorest of the poor in our country.

In conclusion, we have listened to the Canadian people. We have reduced spending. We have held the line on taxes. We have protected and enhanced the programs and benefits that provide opportunity for Canadians.

The Minister of Finance has lived up to his commitment and I want to congratulate him. Once again, I reconfirm that I support the budget and the government. We are on the right track and we are going in the right direction.

[Rey D. Pagtakhan, Liberal, Parliamentary Secretary to Prime Minister]

Mr. Speaker, I want to compliment the distinguished presentation from my colleague from Rainy River. I thought I should seize the opportunity just in case the opposition did not see the wisdom of this budget and the wisdom of the member's presentation.

We have to remind the opposition what the finance minister meant in his budget speech when he said: "We must never let the need to be frugal become an excuse to stop being fair". That sums up the essence of the 1996 budget. We have stayed the course of fiscal health while at the same time focusing attention on the needs of all Canadians. The government has demonstrated a caring sensitivity all along.

I liked the creativity of the hon. member's presentation when he used a concrete example. He talked about the savings that each one of us have on mortgage payments. I still have a mortgage to pay. Maybe members opposite have fully paid for their homes but I, like most Canadians, have not. Savings like these are real savings to Canadians and we must not lose sight of that fact. That is a mark of the government's caring and compassionate commitment to Canadians.

Speaking of another mark of the government, it was stated in the budget that there will be a health services research fund. That is a mark of the creativity of the government. It ensures that our health care system is the best in the world, not only in the quality of care, but in the efficiency and the effectiveness with which we deliver the system.

The hon. member for Rainy River told us about the attention, the focus and the commitment to the youth, the students and the seniors of the government. All are hallmarks of its caring soul. I

compliment the member on his excellent speech, seeing that the opposition hesitates to do so.

[Bob Nault, Liberal, Kenora—Rainy River, ON]

Mr. Speaker, I want to thank my colleague for his kind remarks.

One of the things that has intrigued me the most about some of the comments members of the third party have made is that they keep saying the government did not cut taxes. Why did it not? They say it would stimulate the economy.

I want to quote a politician that the opposition knows very well, Premier Klein of Alberta. He has given advice to another friend of ours, the premier of Ontario, on the issue of making major tax cuts as part of his overall game plan.

I want to put it on the record because I think this must be the only group in Canada that thinks you can make these tremendous changes and reduce the deficit and get it under control while at the same time cut revenues by 30 per cent, as Mr. Harris has suggested.

Let me read the advice that Mr. Klein gave to Mr. Harris the other day, as quoted in the Toronto Star . ``Harris is wrong to be planning to cut taxes at the same time as he is cutting government spending. I think he is going to have real difficulty doing both. Here in Alberta we never even contemplated a tax cut. Our focus was entirely on eliminating the deficit''.

I concur with that. I believe that anybody who thinks that Mike Harris is going to give Ontarians a 30 per cent deal with his fiscal problems is smoking something that is illegal in Canada.

I cannot believe that the members opposite keep suggesting to us that we have not done a good job with our budget because we did not give a tax cut. I just thought maybe the members would keep in mind that their friend in Alberta disagrees with them.

[Ed Harper, Reform, Simcoe Centre, ON]

Mr. Speaker, I am pleased to take part in this debate.

Before I begin my comments I want to say this. I am sure that Premier Harris of Ontario will be delighted at the words of wisdom that have been passed his way by a member of the government which is running up the largest deficit in this country's history.

The Liberals are running up a debt of over $600 billion. They talk about their concern for our children's future. They have just mortgaged it to the point where our children will not have the opportunities in their future years that we have had. I am sure Mr. Harris will take that remark on the basis of where it came from. I speak tonight on this budget with our country at a crossroads, a country in a fiscal and unity crisis. It is a time in our history when Canadians are looking for leadership, vision, hope.

That was reflected in the year end poll that was reported in Maclean's magazine where Canadians' view of their future is at an all time low. That is after two years of the Liberal government. Canadians view their future with more pessimism than they have in 20 years.

After two years of the Liberal government we had a throne speech and a budget and hopefully a new beginning, a realization of the errors of the past and a move toward a new and brighter future. They both failed miserably in addressing that, unfortunately.

The Prime Minister started out in the throne speech by declaring to the world that the back of the deficit has been broken. I do not know of any business organization that agrees with that comment. The only back that has been broken up to this point is the back of the taxpayer. We have not broken the back of the deficit.

I will read from a letter that came from the president of the Canadian Chamber of Commerce. The Canadian Chamber of Commerce is a group of entrepreneurs, an organization that creates jobs in this country, an organization that wants to get this economy moving. On December 6, 1994 a letter to all members of Parliament and the Senate stated:

Last year through the aim for a million jobs survey our members told us in no uncertain terms that elimination of the deficit and reduction of the debt must be our number one priority if Canada's entrepreneurs are to create new jobs. The next federal budget will be crucial to the future of our country.

Tough choices will be necessary and despite the overwhelming consensus that the deficit must be cut, we fear that the cuts will not be deep enough. The finance minister's promise to meet his target of a deficit that is 3 per cent of GDP by 1996-97 is simply not good enough. The deficit must be reduced to zero by 1997-98. The consequences of the government not following through on this are unthinkable.

That is a survey of 6,000 entrepreneurs, the people who create the jobs we are looking for and which the government is failing to create. That is what the business community is saying.

There is nothing in this budget that will create jobs, jobs, jobs. There certainly is no hope for tax relief. There is no vision. There is no future that Canadian taxpayers can see in it.

This is not the first budget. This is the third budget this government has brought forward. The first budget did absolutely nothing. It was a stand pat, feel good, we do not really have a problem budget. That is after nine years in opposition. The Liberals were nine years in opposition. They finally come into power and they are not ready for it. They do not know how to deal with it. They do not even understand the magnitude of the problems the country was facing.

Along comes the second budget in 1994 and finally we get some realization that we do have a problem. They finally come to realize that there is a relationship between these deficits and this huge debt and job creation. In that budget we started to make some modest

cuts, not nearly deep enough but at least we saw some hope that there is now a move in the right direction, that the government has made the connection that it we want to create jobs, if we want to offer tax relief to Canadians, we have to do something about our overspending and get our budget in balance.

This third budget has just dashed all those hopes that Canadians had. What we have in this third budget is time out, no more cutting. We will stand back now and just let things roll along. We are in a battle to save Canada, the most crucial budget in Canada's history, and what does the government do? It calls time out.

The government can call time out. It will quit the battle at this point but the clock keeps ticking. At $1,000 a second, $100 million a day we are deeper and deeper in debt while the government stands back and tries to decide what it will do. It just is not good enough.

This budget fails to deal with two main election promises. Those are jobs, jobs, jobs and the GST.

The infrastructure program was to be the answer to job creation. For month after month we heard what the infrastructure program has done to create jobs. It has been an absolute failure. Worse than that, it has put us $6 billion deeper in debt. If it were half as good as the Liberals claimed it to be, I would have thought they would have reintroduced it. It has been deep sixed, as it never should have been introduced.

In the budget speech the finance minister delivered there was not a word about the GST. There is not a word about it because the Liberals are embarrassed about their inaction with respect to the GST. A lot of Canadians voted for the government on the understanding that it was to scrap the GST, not sugar coat it and not have it reborn under another name.

At least one member of the government has had the courage to stand up in public and say: "We were not true to our word. We did not do what we said we would". I applaud the hon. member for York South-Weston for saying that. A few other members have indicated their embarrassment. I hope they have the courage to stand up and say the same thing.

What we will not find in the budget speech but which is in one of the documents is a reference to the federal sales tax being harmonized. There was never any talk of harmonizing it, but that is what is coming down. That means we will have what is known as the LST, the Liberal super tax. We should mark our calendars. It is not far down the road. Canadians will not be fooled by the LST; a tax is a tax is a tax.

Let us take a look at exactly what was in the speech presented by the finance minister yesterday. On page 3 he very clearly outlined the problem. In his opening remarks he told us that he understood the problem under "Securing the Future". It is as clear today as it has ever been that Canadians do not want rhetoric from their governments. What they want is action. What they seek is real progress.

Seldom in our history have so many experienced such anxiety. Canadians feel their very way of life is at risk. They look at medicare and feel it is threatened. They look at the pension system and wonder if it will be there in future years. They consider the economy and worry that the gale force winds of competition and change will carry their jobs away. Canadians think about their children and ask what kind of opportunities will be left for them.

If there is one obligation before government today it is to do its part to address these deep concerns. It has to do what it must so that confidence can overcome anxiety and hope can replace the despair in the country today. The budget does not deal with those deep concerns.

Let us move on to page 4 under "Securing Our Financial Future". Here we get into the 3 per cent of GDP they keep heralding in speech after speech. I do not know who set that yardstick. It is no yardstick. The IMF and Moody's have both said it is no yardstick, that it is too low, it is not a realistic objective. What the government is saying by aiming so low is that it does not really understand the magnitude of the problem and it is not prepared to deal with it in a realistic way.

Page 6, paragraph 4, talks about getting budgets in balance:

No matter their political stripe, every single province and territory has as a primary goal the return to fiscal health. In fact, eight are expected to report a balanced budget-or even a surplus-for the fiscal year ending this month and the results are striking.

Striking results. It is right there. Why have the Liberals not received the message? There are striking results from getting the books in balance. They still have not committed to do that.

What he is saying in this document he is not prepared to do. Obviously he does not really believe it. However, it is right there. This is the blueprint.

On Page 7, "Principles for Securing the Future", paragraphs 4 and 5 state:

Second, our fiscal strategy will be worth nothing if at the end of the day we have not provided hope for jobs and for growth. We must focus on getting growth up at the same time as we strive to get spending down.

That is not happening.

Third, we must be frugal in everything we do. Waste in government is simply not tolerable.

We are about to spend $675,000 advertising the $2 coin, as if Canadians had any choice. If that is not a colossal waste of government spending I do not know what is.

On page 8 under the heading "A Measured, Responsible Pace":

Chronic deficits put the disadvantaged at risk, because it is they who suffer when the financial strength of government is so weak it can no longer reach out to those in need.

However, that does not mean that we share the view of those who think we should be going to zero deficit overnight.

No one said that. No one said we will get to deficit reduction overnight. We had a plan to do that in three years and it was achievable, but the government failed to realize it.

I will jump to the real tragedy in this document. It is on page 28 under the summary statement of transactions. The first line is the budget revenues. We show budget revenues going from $116 billion to $141 billion, an increase of $25 billion. We then drop down to the deficit. The deficit declines from $42 billion to $17 billion, a drop of $25 billion. The government is reducing the deficit on revenues, not on cost cutting, which this document is attempting to tell the Canadian people it is.

However, the real shame here is this net public debt. The government in its mandate is going from $508 billion to $619 billion of federal debt. I say shame. That is mortgaging our children's future and as a government it should be ashamed of itself.

[Stephen Harper, Reform, Calgary West, AB]

Mr. Speaker, I have the pleasure on behalf of the Reform Party of rising to speak to the budget. In doing so I will try to keep my remarks brief and to the point.

In the 1993 election the Reform Party ran on a proposal to cut the deficit in order to create jobs and to cut nearly $20 billion in government spending over a period of three years. The Liberal Party ran on a program to create jobs by ignoring the deficit.

Let us look at what we actually have from the government after three years. I draw the attention of any Canadian who is interested to the budget speech. Skip through the first 27 or 28 pages, which is all bafflegab. One thing we notice about this minister is that the less he has to say, the longer his budget speeches.

There were fewer proposals in this one than in the last two but it must have been the longest budget speech in history. When you get to the end, look at the four pages at the back because they provide a statistical summary of the budget that has most if not all of the relevant information for most Canadian taxpayers.

From 1993 to 1998 the deficit is projected to fall from $42 billion to $17 billion, a drop of $25 billion. How is that achieved? Revenue will rise in the same period by $25 billion. This is the government saying it has no tax increases but revenue is rising as a percentage of the economy.

However, if we have a $25 billion revenue increase and a fall in the deficit of $25 billion, why do we have any spending cuts at all from the government? Why do we not have a balanced budget?

We have an increase in interest payments of at least $11 billion. I say at least because most of that has already been achieved and it will continue to rise. One of the ways the government makes the deficit look like it is to continue to fall is by insisting that interest payments will taper off, that we will have lower and lower interest rates, but that is the best case scenario.

Interest payments have already risen $11 billion, and so the government has been cutting over this period. By the end of 1998 it will be cutting $23 billion in programs and will still have a deficit of $17 billion. That is an interesting figure, $23 billion, because that is more than the Reform Party had proposed to cut in the 1993 election. It is because the $100 billion in debt the government is adding, it is the cost of its delay and the cost of fiscal mismanagement. By the way, the debt at this moment and in the next year at least and probably the year after will continue to grow faster than the economy.

Now the Liberals tell us they have targets. The targets are outlined in the budget. We just had a deficit of $32 billion. It will be $24.3 billion next year and the year after it will be $17.7 billion. This all sounded very familiar, so I asked one of my researchers to get me the 1991 Tory budget presented three years into the Conservatives' last term of office. Guess what the 1991 Tory budget stated. The deficit that year was $30.5 billion; for the fiscal year beginning in 1992, the projection was $24 billion; in 1993 it was $16.6 billion. It all sounds familiar.

[Barry Campbell, Liberal, St. Paul's, ON]

And did they get there?

[Stephen Harper, Reform, Calgary West, AB]

The parliamentary secretary asks if they got there. No, they did not get there. And there is no guarantee we will get there this time either.

The last government did not get there because it did not have a plan and because everything it did was eaten up by increased interest payments. But I will say that this government does have a partial plan to get there. What is that plan? Very simply it is to attack the slash and burn Reform Party while slashing in particular social programs far deeper than the Reform Party ever proposed.

In the 1993 election we said to cut unemployment insurance by $4.5 billion. There were howls of outrage from the Liberal Party. The Liberals have already cut the program which was at $20 billion at its peak under the Tories and which is now paying out $13.5 billion today with more cuts to come as proposed in the bill the government tabled in the last session and will table again.

We said to make old age security based on income and not to pay it to anyone with an income above $53,000. The Liberals now propose exactly the same policy. No more universality. Make old age security based on income. Except now it is based on $40,000 instead of $53,000.

We said to cut the Canada assistance plan by roughly 10 per cent, $750 million. The Liberals have done exactly that and there are more cuts to come in the next two or three years.

In our 1993 election proposals we said we did not need to cut post-secondary education at all to balance the budget. The Liberals have already cut it 10 per cent and there is more to come.

We said not to cut health care funding. It is the most important priority of all Canadians. The Liberals said they would not. They said they would preserve the five principles of the Canada Health Act. They have cut health care by 10 per cent and there is more to come. There are still the five grand principles; there will just be no money to implement them.

In fact, in these last three areas, the Canada assistance plan, health care and post-secondary education, in the next two to three years the Liberal Party will cut over $7 billion in cash payments to the provinces. This will be the principal means by which the Liberals will reduce the deficit.

What is still there that we have proposed to cut that the Liberal Party has not cut? The Liberals have not cut the regional pork, the regional development programs. They did not cut the funding to the special interest groups. All those programs are still there. And of course, they still have their gold plated MP pensions.

What happened to the other promise, the one about jobs? We were told we did not have to worry about the deficit because we were creating jobs instead. Well, there is no jobs plan in the budget. There is not even an estimate on jobs in the budget. It is unprecedented in my 10 years of experience in federal politics to not even provide employment estimates.

The Liberals say cutting is not an end in itself. Cutting is apparently not an end in itself. Cutting is done by the government not as an end in itself but in order to protect friends, in order to send out political messages, in order to attack the Reform Party, in order to mask fiscal incompetence. In other words, the government cuts spending in order to make programs, in order to make taxpayers and in order to make jobs the targets of our policies instead of the winners; to make them the victims instead of the winners.

The Liberals were elected in 1993 by telling people what they wanted to hear: there would be no GST, no free trade, no distinct society, lots of jobs, universality of pensions and do not worry about the deficit.

Canadians have to make a very serious decision next time of whether they will be fooled again.

[Derek Wells, Liberal, South Shore, NS]

Mr. Speaker, the member has been very critical of some of the things he says are in the budget. He has not recognized the programs for youth.

The theme of my speech when I give it next week is to compliment the government on two main things: the government has maintained its deficit targets and there are no new taxes. In my opinion it is reassuring to see that it is possible for a government to make a budgetary plan, as was outlined in the Liberal red book, and then stick to that plan budget after budget.

I did acknowledge the member opposite saying the government did have a plan. That plan projected certain deficit targets. Not only will we meet those targets, we will exceed those targets.

The main objective of the Liberal platform, the point I want to make, was job creation. There is a recognition of that. That is what we are doing by creating the proper economic climate.

The member would acknowledge that there is a direct link between deficit reduction, interest rate reduction and job creation. That is the aim of the government. That is what it will continue to do as it not only meets its targets but exceeds its targets on its way to a zero deficit over the next number of years.

[Stephen Harper, Reform, Calgary West, AB]

Mr. Speaker, on the youth employment initiatives, I guess all I will say about them is the youth of Canada will be paying the interest on the borrowed money for those for the rest of their lives.

A comment was made of importance of lower interest rates for young people. Let me say something about the lower interest rates of the government.

When I was elected I was married just after that in 1993. Being an economist by training and watching what was planned in the fiscal policies of the government, my wife and I took out a mortgage. I said lock that mortgage in today for five years because under the government we will not get interest rates this good for the next five years. Today even with the low interest rates the government is talking about one cannot lock into a mortgage at the interest rate I locked into in late 1993.

[The Acting Speaker (Mr. Kilger)]

It being 7.09 p.m., the House stands adjourned until tomorrow at 10 a.m., pursuant to Standing Order 24.

(The House adjourned at 7.09 p.m.)