Mr. Speaker, the most important challenge facing us today in this country is putting Canadians back to work, putting Canada back to work. We now have 1.4 million Canadians who are unemployed, 1.6 million Canadians who are underemployed or who have just dropped out of the workforce and millions more on welfare across this country. Officially 9% of the Canadian population is unemployed. Our challenge is to figure out ways to put these people back to work.
I will say at the outset that I am an optimist. We have an opportunity now. We have turned the corner in terms of the fiscal crisis in the country. We can now turn our energies and resources toward setting goals and targets to put the Canadian people back to work and to build a strong and robust economy to make this country the greatest country in the new millennium. This is the challenge and that is what we have to do.
It is a sad commentary in our country when we have more food banks than we have McDonalds, when we have people who are living on welfare, in poverty and without decent housing. Farmers are going bankrupt. Students are dropping out of universities because they cannot afford the tuition fees. It is a sad commentary when we come from the wealthiest country in the world yet so many of our people do not have an opportunity to do what they want in life, to have a decent job, a decent trade and a decent skill in order to raise their families. This is a national disgrace.
We should have the same determination and zeal to fight the war on unemployment and to set targets and goals as this country has had on the war on the deficit and setting targets and goals over the last five or six years. This makes sense.
I disagreed with many of the ways the government tackled the fight on the deficit. I disagreed with many of the provinces in the way they fought the deficit. But at least there was a plan, there was a goal and a timetable. Now we should do the same thing when it comes to fighting for jobs in the country and for putting the Canadian people back to work.
Mr. Blair has targets and timetables in terms of youth unemployment in Great Britain. The same thing is being done in other countries around the world, so why can we not do that in this country? I am afraid now that the finance minister has wrestled the so-called inflation demon to the ground he is going to allow interest rates to rise and slow down the economy and add to more unemployment in the country.
When we look at what happened in the past, it was not government programs that caused the debt in this country, it was the interest rates. A couple of years ago a study by Statistics Canada showed that 50% of the debt was caused by high interest rates. Only 6% of the debt was caused by government programs. The other 44% was caused by tax expenditures and tax loopholes and the failure to have a fair tax system in Canada.
It worries me when I see stories in the paper about the possibility of interest rates rising once again. We have this great inflation demon raising its head again. Inflation is 1.8%. With inflation at 1.8% and 9% of our people unemployed and the Canadian dollar sitting at about 73ยข American, why is the government now concerned about fighting inflation?
What the government is going to do is cool down the economy. It has already raised interest rates twice this year. In all likelihood it is going to increase interest rates again in the next few days, certainly within the next week or two. When it does, the banks increase their lending rates to small business, homeowners and farmers and the whole economy slows down. People lose their jobs, people are laid off and the wage fare is once again going to remain flat and stagnant in the months and years ahead.
The challenge is to get out and do whatever we can as a nation to put our people back to work. To make sure, the Minister of Finance in his talks with Mr. Thiessen, the governor of the Bank of Canada, should say that a 1.8% inflation rate is not too high, it is not too dangerous and it will not hurt the economy. Instead let us keep interest rates in the country low so we can stimulate the economy and put Canadian people back to work. This is extremely important.
I want to look at the negative part in the manner in which the government fought the debt and deficit. Only 6% of the deficit is caused by the government's programs. About one-half of the 6% was spent on social programs. Because of the cutbacks of billions of dollars we have many needless victims of the war on the deficit. I think of the people who go to the food banks, those living in poverty. There are the cutbacks in the health care system, the line-ups in the emergency rooms, people waiting to get into hospitals and the cutbacks in transfers to the provinces for health, education and social programs. There is tremendous poverty and third world like conditions on many of our First Nations reserves and in the inner cities.
These are the victims of the war of the Minister of Finance on the deficit. It did not have to happen. The natural growth in the economy because of the drop in interest rates in the last few years would have been enough to bring down the deficit within the targets the Minister of Finance set two or three years ago. He did not have to leave a carnage of victims across the country.
Once again I warn the government that if it listens to the Governor of the Bank of Canada and the Minister of Finance we will be back in the same old vicious cycle of higher interest rates, fewer jobs, flat wages and people suffering because of the monetary and fiscal policies of the government across the way.
Instead we need more money spent on health and education. We have to restore at the minimum the funding that was there two or three years ago before the beginning of the cutbacks. We have to restore transfers to the provinces in these important areas. We also need a sensible targeted tax cut.
We are suggesting dropping the GST entirely on some essential goods in Canada such as children's clothing and books and increasing the tax credit for low income people, an expenditure that would cost about $1.2 billion which would not only be a relief to people who need it the most but would create jobs in terms of stimulating the economy. These are some of the things that need to be done.
I will be introducing a motion very shortly in the House to establish a community reinvestment act, an act that is very similar to what we see in the United States. It would require banks and financial institutions to invest a certain proportion of the money they take out of a community back into the community. That is a way of creating jobs. More important, it is one way of trying to rectify some regional inequities in Canada.
Today we have a recovery, so they say, but the recovery is very unequal. The recovery is primarily in four or five regions of the country: Alberta, southern Ontario and two or three other regions. In much of the country there is no recovery. In much of the country there is still a great recession. In much of the country people are still going hungry and there is still poverty.
One way of trying to redistribute income and opportunities a bit is to have a community reinvestment act where banks and financial institutions have to invest a certain amount of the money in deposits they receive from a community back into the community. Those are some things that can be done.
We have a great opportunity. We have turned the page. We have a new parliament that is much more balanced than the parliament we had in the last three or four years, a parliament that can be much more progressive. The government must change its ways and get off that neo-conservative agenda of the Margaret Thatchers and the Ronald Reagans it has been following in the last four years.
The government has to stop listening to the Reform Party which wants to make it more conservative than Conservatives and start listening to the people who want a good, progressive government which gets involved and shows some leadership from coast to coast.
Canadians want a strong government that tries to correct inequities. They want a strong government that supports social programs and social spending. They want a strong government that once again will show some leadership in making the number one issue in the country the creation of jobs by setting targets and timetables; by keeping down interest rates; by having targeted tax cuts; by investing in people, health, education and social services; and by investing in research and development. Then we will build a strong and competitive economy and make Canada the best country in the 21st century.