Mr. Speaker, I am sharing my time with the member for Thornhill.
In preparing for this debate I read very carefully the NDP motion. Central to the whole discussion is the words in the motion that the NDP is criticizing the government's policy and creating unemployment because of its pursuit of a monetary policy obsessed with future inflation and so on and so forth. The key words are “monetary policy” as opposed to fiscal policy.
If I may explain the difference, monetary policy has to do with interest rates, money supply, the manipulation of the exchange rates of currencies across borders. Fiscal policy, on the other hand, has to do with government spending; the government public accounts, the amount of revenue it gets in, the amount of money it spends and whether or not it runs a deficit as a result of these spending practices.
I realized as I looked at the motion that one of the reasons why the economies of the nation, of Canada and the provinces, have got into such tremendous trouble over the past two decades is because governments have been pursuing incorrect ideas with respect to the impact of monetary policy on the creation of employment.
The NDP or social democrats in general believe that we can arbitrarily influence employment levels by manipulating the money supply and manipulating inflation. It believes this is an absolute thing that can be done and that fiscal policy can be set aside.
Fiscal policy has to do with keeping accounts balanced. It is very clear that throughout the 1970s and the 1980s, the previous federal government, for example, took the lead of the NDP which was very strong in that Parliament. It set fiscal responsibility aside and pursued a policy that had to do with arbitrarily manipulating money supply or interest rates or thinking it could do so. But in the long run the government ran up a huge debt of over $500 million. At the time that government lost office it was running an annual deficit of around $43 billion or $44 billion a year.
It shows me that the New Democratic Party, the fourth party in the House, is still a dinosaur in its attitude toward the economies of nations and the economies of this nation. NDP members should be aware that the direct manipulation of economies through monetary policy has failed worldwide. This is why the Soviet Union collapsed. This is why the controlled economies of eastern Europe collapsed. The highfaluting theories of arbitrarily controlling the strings of the economy and expecting that would directly create jobs just does not work.
The vast majority of Canadians except for a few people in the NDP know it is quite simple. You do not spend more money than you receive. You have to keep your house in order. It makes no difference whether you are a federal government, the government of the United States or an ordinary household anywhere in Canada, in the maritimes or in western Canada, if you spend more than you take in you are going to get into a lot of trouble.
I had occasion to test the Canadian public's opinion on this issue. The fourth party members are fond of pretending they represent ordinary working people and the intelligence of ordinary working people. They certainly do not represent the intelligence of ordinary people, be they in cities or in rural areas.
Annually the Rockton fair is held in my riding. It is a fall fair. It is probably one of the biggest fall fairs in Ontario. Rockton is a little village community of 150 people. The fair has been going since 1853 and styles itself the Rockton World's Fair. It is among the top 10 fairs in Ontario. Over the four days of the Thanksgiving weekend it received 75,000 visitors. It draws people from all around the golden horseshoe area.
My riding is rural and suburban. I have country folk and fairly affluent suburban folk. Nearby is Hamilton which has principally urban people. An enormous mixture of people come to the Rockton fair.
I always have a booth at the Rockton fair so people can meet the MP. If they have complaints they can make them directly to me. The people at Rockton fair seemed extraordinarily satisfied with the performance of the Liberal government, but that is an entirely different story. They are aware that the government has conducted an excellent fiscal policy which has chiselled down the deficit from $40-odd billion to $8 billion in the last year. It expects to eliminate the deficit in the next year. By any other yardstick in the G-7 the deficit is already eliminated. The finance minister mentioned yesterday that we have actually begun to pay down the debt to the tune of $11 billion.
In anticipation of this good news, on Thanksgiving weekend I conducted my poll at the booth at Rockton fair. I placed four jars on the table in front of my booth. I had another tin that said surplus. On a big sign I said “If you were Paul Martin and you had a surplus, how would you spend it?” The four glass jars I had labelled tax cuts, reduce the debt, reduce the GST, restore social spending.
As each person came by the booth and expressed an interest—it is amazing how interested people were—I offered them four beans. I said “Pretend you are Paul Martin and this is $4 billion. You can put it in these jars however you like, in whatever order you like no matter what”.
It is amazing how enthusiastically people took those four beans and approached the jars and thought and considered carefully how they would spend that $4 billion surplus. They would hesitate here and there.
Five hundred and twenty-five people took part in my poll. They represented every walk of life. There were farmers. There were pensioners. There were young people. There were people from Hamilton because the Rockton fair pulls in people from Hamilton. There were people from all over the region. On Thanksgiving Day, it even brought in people from Toronto.
I had an excellent sampling of public opinion, and it cost a lot less than an Environics poll or any of these other very expensive polls that the government engages in. I would suggest that it was far more accurate than most of those polls because the sample was very large.
I would like to give the results of the poll. On the first two days 321 beans showed up for reducing the debt, 207 for increased social spending, 101 for reducing the GST and 121 for income tax cuts. The following day the numbers were similar: 341, 208, 160 and 126.
Approximately 42% of all the people who came by the booth felt that we should reduce the debt first. I wish both opposition parties would bear in mind that these are ordinary Canadians from all walks of life. They said that of course they would reduce the debt first because if that is done first, everything will follow.
I am glad of this opportunity to speak in the House today because I can say to the finance minister, to all my colleagues and everyone in the House that I feel, as a result of this experience, the correct course for government is sound fiscal policy first. Forget about monetary policy because that follows.
The correct course of government is to get the debt down. Then there will be more money to spend on social spending. What I hope will happen is that we will have more money to not cut income tax but to cut the GST. I think it is the worst tax imaginable.
I would like to see the finance minister use 50% of his surplus just as was suggested by the poll on reducing the debt and the rest divided equally between reducing the GST and improving social spending. We, as Liberals, have to be very concerned in maintaining the social safety net. This is where we differ so enormously from the Reform. We are not prepared to spend like blazes like the NDP in order to do it.