Mr. Speaker, I am proud to take part in this debate on our third budget, and especially to point out that, in the last two and a half years, Canadians have relied on the government not to create jobs but to generate a social and economic climate conducive to economic growth and job creation.
We are also proud of our achievements thus far. In fact, since we came to office, the unemployment rate has fallen by 2 per cent and some 500,000 jobs have been created, most of them in the private sector and almost all of them by small and medium size businesses, of which I am proud. That said, there is still much to be done. Unemployment is still too high and Canadians, especially young people, are concerned about future jobs.
We intend to take lasting and meaningful measures. Rather than relying on short term direct spending programs, we will take a more productive approach by focusing on co-operation with our partners and strategic investments to give the forces of economic change an incentive to create jobs.
But let us start at the beginning. To secure the sustained economic growth we need to create new jobs, we must first guarantee the basic elements of the Canadian economy by reducing and eventually eliminating the deficit. Chronic, large deficits go hand in hand with high interest rates. High interest rates, in turn, discourage investment, borrowing and consumer spending. Ultimately, they have a detrimental effect on employment.
We must also keep inflation low, since it reduces pressure on interest rates and results in lower overhead for companies. It goes without saying that keeping the operating costs of a Canadian company at a minimum level promotes investment. This, in turn, helps create jobs.
Today, we are reaping the benefits of our efforts to tackle the deficit and control inflation, which is at its lowest level in 30 years. Short term interest rates have already gone down three percentage points since the last budget, and we have made major progress in terms of our competitiveness, as indicated by the unprecedented level of our exports. However, there is an obvious need to maintain and even increase our efforts in order to ensure the future of Canadians.
In addition to providing a solid economic framework, we took a hard look at what more we can and must do. Some issues are so vital for Canada's future that they warrant a significantly greater effort on the part of the federal government. Our youth, in my opinion, is one such area.
The unemployment rate for young people is around 16 per cent, which is one and one half times higher than the national average. The transition from school to the labour market must be looked at. Our young people are our greatest asset. They are the key to the future. They need higher education, since this is vital for any job. They also need more assistance in finding that all-important first job.
We have a plan. The programs announced include Youth service Canada, Youth internship Canada, as well as the summer employment program for students. In addition to these initiatives, the student loans program, whose budget provides for an additional $556 million, will include the negotiation of loans totalling over one billion dollars and will help more than 360,000 students.
The 1996 budget also calls for new measures to enable young people to meet the challenge of the labour market, so that future generations will be able to keep pace with the remarkable changes in the world economy. To that end, we have inaugurated an apprenticeship program. As the result of rearrangements within the taxation structure, these new measures will make it possible to free up an additional $165 million in the form of tax assistance to students and their families.
This program has three main components. First, there is additional tax assistance to students, through a 25 per cent increase in the education credit, that is to say from $80 to $100 per month. The budget also proposes a 25 per cent increase in the ceiling for
transfer of tuition and education credits to family members who are supporting students.
Second, savings to finance education over the long term are eligible for assistance, because the annual limit for contributions to registered education savings plans has been increased.
Assistance is also available to single, low income parents, by authorizing the child care expense deduction from any kind of income when the single parent is also a full time student. This applies to secondary students. Two parent families are also eligible for this deduction if both adults are studying at the same time. The age limit for this deduction will also be raised to help parents of older students.
Implementation of tax rules in favour of education is a first step. However, young Canadians need much more than educational opportunities in order to get a job on the labour market. They need professional experience.
We first provided for on-the-job training by re-allocating $315 million over three years to help create job opportunities for young people. These funds will combine with the $700 million we set aside for this year for youth internship Canada, youth service Canada and summer employment programs.
As an initial intermediary stage, the budget will double our commitment to the summer employment program from $60 million to $120 million.
We are concerned not only about young people, but about the burgeoning technologies that are changing our universe. In short, innovation feeds productivity and growth, which underlie the jobs of tomorrow. We have a job to do to stimulate Canada's creative abilities.
The initiatives currently in effect include changes in the type of work done by the National Research Council in areas such as biotechnology, telecommunications and the latest in manufacturing and infrastructure technology.
We are working closely with the private sector in projects such as CANARIE, which is aimed at speeding up the establishment of high speed electronic networks. Furthermore, we are encouraging the expansion of new technologies in small businesses under the industrial research assistance program.
Here again, we want to do more. We are re-allocating $270 million worth of savings over three years to promote innovation and technology. This measure provides for the creation of technology partnerships Canada, a fund to stimulate the development of environmental technologies, high tech manufacturing processes and biotechnologies. It will also help maintain jobs in the aerospace industry, which is facing fierce highly subsidized foreign competition.
We will give an additional $50 million to the Business Development Bank. This money will enable the institution to loan an additional $350 million to knowledge-based, and growth businesses.
Moreover, we are creating a program under which 2,000 computer students will help connect 50,000 small businesses to the Internet.
Last but not least, trade, which is at the heart of the Canadian economy. We export a third of what we produce, providing work for millions of people.
In this budget, we are allocating a further $50 million to the Export Development Corporation. We are reallocating resources from concessional loans to foreign borrowers to finance higher volumes of non-concessional financing under an improved system of risk management. This measure will permit an increase of up to $500 million of year in the financing available to Canadians exporters.
To conclude, I will say that the private sector is our most important and most astute innovation mechanism. Young Canadians are our most solid hope for the future. And trade is one of the most powerful means to create wealth. We are investing in these three areas.
The framework is in place. The economic situation is improving. The fundamentals to create partnership are in place. We are being true to our commitment to provide opportunities in the areas of education and modernization, as well as job opportunities for young people in the next century.