Madam Speaker, it is a pleasure for me to rise in the House today to address the 1996-97 budget as presented by the Minister of Finance on March 6.
When our government was elected in October 1993, Canadians from coast to coast to coast told us that reducing the deficit and the debt must be our number one priority. This budget along with our two previous budgets showed Canadians that we have been and continue to be listening.
When this government was elected the annual deficit was more than $42 billion. By the end of the 1995-96 fiscal year we reached the deficit reduction target of approximately $32 billion. We are on target to reach our original goal set for the 1996-97 fiscal year of a deficit of 3 per cent of GDP which will be approximately $24 billion.
The Minister of Finance has already set two rolling targets to take us into the second half of our mandate. These targets will reduce the deficit to 2 per cent of GDP by fiscal year 1997-98. By the turn of the century, by the year 2000, I personally hope to see that the deficit is realized to zero and the introduction of a balanced budget to this House.
The 1996 budget continues on the track of reinventing government. Last year through a major program review we managed to protect vital programs while reducing spending to its lowest level of GDP in almost 50 years. This year we have further reduced program spending in order to move closer to a balanced budget. Federal program spending this year will represent 12 per cent of GDP, its lowest level since 1949 and down from 20 per cent only a decade ago.
Liberal governments over the years have played a leading role in building Canada's social programs. Today faced with dramatic changes to our society and our economy, the Liberal government must ensure that these programs remain effective and financially sustainable.
One way the government is doing this is through the new Canada health and social transfer which consolidates transfers for health care, post-secondary education and social services. The transfer is a block fund which offers more flexibility to the provinces. This flexibility will allow for the development of innovative programs for Canadians receiving social assistance. Greater flexibility will also reduce administrative costs and will allow provinces to adjust to the new funding levels while still protecting programs that Canadians desire.
This budget introduces a five year funding arrangement for the CHST for the years 1998-99 through to 2002-03. The CHST will be stabilized at the 1998-99 levels for another two years and then will begin to grow. There will not be any cuts to the CHST beyond those announced in last year's budget. When the CHST begins to grow beyond the year 2000, federal transfers will increase for the first time since the mid-1980s.
The CHST will allow provinces to plan programs to meet their needs with clearly set levels of federal funding. By providing predictable funding, the government is demonstrating its commitment to safeguarding health care and other social programs that are valued by all Canadians.
As we all know, part of the CHST is made up of a cash transfer which was scheduled to gradually decline. However, in response to concerns about diminishing cash transfers, this government has announced that the cash component will be kept above a floor of $11 billion per year for the five years between 1998 and 2003.
While the CHST will give more power to the provinces, the cash transfer will guarantee a strong federal presence for programs of national priority such as post-secondary education and social assistance.
In addition, the government will continue to vigorously defend the five principles of the Canadian health care system: comprehensiveness, universality, accessibility, portability, and public administration. The federal government will also work with the provinces to develop other shared principles and objectives for this new transfer.
This budget is good for Canadians. For the third year in a row there will be no increase in personal income tax rates nor will there be any increase in excise taxes.
Additionally, the budget marks a significant turning point. In our first two budgets we were forced to make a lot of tough but necessary decisions in order to clean up the economic mess left by the previous government. Unlike those budgets, this budget has a more direct focus on the future, a more sustainable plan, a long term plan for Canadians. This focus is reflected in our attention to our youth, our attention to working families and in particular to seniors.
February's throne speech put the problems facing Canadian youth into the spotlight. Youth unemployment and underemployment are a serious concern in my riding of Cumberland-Colchester. Young people throughout the area feel that they have to leave home, in fact many of them must leave the country to find employment.
This budget announces concrete measures which demonstrate that the Liberal government is serious about improving opportunities for young Canadians. To make education more affordable, tax credits for university and college students and their parents will increase. This budget will also stabilize the funding that we transfer to the provinces for post-secondary education. In addition, it lays out a plan to increase that funding over time.
This budget will double federal funding for summer jobs. In 1996-97 we doubled the number. There are 200 more jobs in my riding. The deadline was April 12 and we encouraged employers in all sectors of our society to get out there and employ our youth this summer allowing an extra 30,000 young Canadians to gain vital experience and help finance their education. It also challenges the
private sector and other levels of government to do their share to create opportunities and to assist our youth in finding their first job.
My riding of Cumberland-Colchester consists of hard working families who work long hours with fewer benefits to try and stretch that paycheque as far as they can. These families will benefit from this year's budget.
Parents who wish to return to school in order to find better jobs will now be able to make full use of the child tax credit. This includes parents who show the courage to return to high school. We are raising the age limit for the child care deduction from 14 to 16 years so that more parents who work nights can claim it. As well, we are doubling the working income supplement of the child tax benefit. This will mean an extra $500 a year for low income working parents.
This budget is also committed to security for the elderly through the availability of old age security and the guaranteed income supplement. The budget includes a new seniors benefit to be implemented in the year 2001. This tax free benefit will replace the existing OAS and GIS programs. More than 70 per cent of our seniors will actually receive higher benefits under this new system, many of whom are single women.
Pensions for today's seniors, near seniors and their spouses will be protected. Seniors will be guaranteed to receive an amount that is no less than the current pension plan. The new system will better respond to the needs of low income seniors and will ensure a responsive, affordable system for our children and grandchildren. Let there be no doubt that we will look after our elderly and that this budget is the first step in doing so.
There are a record number of single parent households in this country. When a marriage breaks down, the children are always the first to suffer. I have received many letters from men and women alike who are concerned about the current child support system. This budget speaks to those concerns and introduces measures to improve the system, measures that include a revised tax treatment of child support payments.
Currently child support payments are taxable for the recipient and tax deductible for the parent paying support. This is wrong. Payments are supposed to provide support for children. They are not income for parents. The budget proposes that all child support awards agreed to on or before May 1, 1997 will not be included as income of the custodial parent for tax purposes, nor will they be tax deductible for the parent paying the support. The government will also introduce new guidelines and enhance enforcement for the collection of child support payments.