Madam Speaker, let me start by saying that today's motion has more to do with some obsolete NDP theology than it does with any of today's economic realities. It seems to be almost an article of faith to the hon. member that our government is “blind to the human tragedy of 1.4 million unemployed Canadians” and the supposed proof of our sin is that we have succeeded in meeting our target for dramatic deficit reduction and consistent inflation control.
I remind the hon. member of an old saying that there are none so blind as those who will not see. It is very clear that this opposition party cannot see or understand some of the fundamental facts of life about jobs, about deficits, about inflation and about responsible government.
Members of the government and members in this House are concerned about the opportunity that Canadians have for employment. Another fact to put on the table is governments cannot create jobs for every Canadian in this country. It is only the marketplace that can do that through the work of the entrepreneurs and their companies creating the products and services that people need and can pay for.
Two of the worst barriers that government can put forward are to let deficits rise and inflation get out of control. High deficits and inflation are a guaranteed recipe for economic weakness and job loss and most Canadians understand that. They have seen destructive dynamics at work in the past and they are finally seeing government turning the corner and starting to see the reduction of deficit and low interest rates.
Deficits mean nothing more than higher taxes tomorrow to pay for the money the government has borrowed. It is the prospect of high inflation that pushes interest rates up.
It is not an ideology. This is a matter of hard economic reality. Letting deficits and inflation rise pushes up taxes and interest rates and puts conditions in place that drive down growth and job creation. That is irresponsible government.
The hon. member for Cumberland—Colchester went on about the success of the Mulroney government and how Canadians are bowing down to the great policies of that government. The past administration had no political will to reduce the deficit, to put conditions in place to encourage jobs and growth.
I would go as far as to say that the prior administration could not hit the side of a barn as a target. It proved that in all the years it was in office.
When we came to office the government committed itself to breaking the vicious cycle of deficits, debt and inflation. We knew that it was the best and surest way to spur the economic growth which produces jobs, good jobs, sustainable jobs. It was the best and surest way to make it possible for government to stop raising taxes and ultimately, as our finances improved, be in a position to reinvest in Canadian priorities.
The finance minister told Canadians in last week's economic and fiscal update that the plan is working. We have achieved a dramatic turnaround in our national deficit burden, with the lowest deficit in 20 years. With the commitment of the government and the Bank of Canada to firm targets, inflation is at its lowest sustained level in 30 years.
These are not abstract achievements. There is no plot by bankers and bureaucrats to oppress workers and worsen employment, as the hon. member's motion implies. The proof is clear and concrete.
In 1995 we began hitting and beating our deficit targets. As inflation remains stable, short term interest rates have dropped 5 percentage points. That means falling below and staying below U.S. rates.
More important, long term 10 year bond rates are down nearly 4 percentage points over the same period. They have been below U.S. rates since February. That is performance which is unprecedented in Canada's post-war history.
What makes this so important? It involves more of the facts which today's motion does not understand.
While the Bank of Canada has some influence on short term interest rates, it is the market and only the market that sets the long term rates. What the marketplace is saying about Canada's long term rates today is that our prospects for continued growth and stable inflation are among the best in the world.
Private sector economists are now saying that Canada's growth over the next two years will be at its strongest level in decades. In fact, they predict we will have the strongest back to back growth of any of the group of seven leading industrial economies, better than Japan, larger than Germany and stronger than America.
We are seeing some of the benefits of low interest rates being delivered now. Five year mortgage rates are at their lowest level in decades. Housing starts are up 24% over 1996 because of those interest rates. People are buying new houses. That means new jobs in construction and manufacturing.
Low rates have also helped to increase business investment. It has surged over 25% from last year. That means plants being built and people being hired.
Consumer confidence is the highest it has been in over eight years. Again, that means people buying cars and other goods, creating more jobs.
Since the beginning of this year 279,000 new jobs have been created. That is the economic plan at work.
I know that members have heard of this outstanding outlook before in the House, but I want to say that it will be repeated in the coming months. It will be repeated because these are the facts that the various opposition parties want Canadians to forget and ignore. They want to blind Canadians to these facts, or at least denigrate and downplay them. These facts prove that our balanced, consistent approach to growth and job creation is working.
Let me be specific about a couple of issues which are tied to today's motion. The hon. member goes on to condemn this government about being obsessed with future inflation. Inflation takes time to build a head of steam. The Bank of Canada eased off the gas pedal to avoid having to jam on the brakes later on. That is the best way to avoid the painful boom-bust cycle which Canadians saw in the 1970s and 1980s.
Hon. members talk about pain and suffering. What about the pain and suffering that Canadians felt when they came crashing down through these boom-bust cycles because the monetary policy was not flattening out those cycles and ensuring they stayed consistent so that Canadians would not suffer through them?
This week a Canadian auto workers union economist said that economic growth and lower interest rates alone would have allowed us to meet our deficit targets. In other words, we did not need to cut any government spending. In fact, just freezing it would have allowed us to meet our targets and that would have been good enough. There are some real problems with this myopic and partisan analysis.
The finance minister always made it clear that our deficit targets were never intended as the most we could do but were the least we could do. It is always hoped that we would do better. It is absurd to suggest that meeting deficit targets is good enough and that there is no benefit in doing better than that.
The minister announced an $8.9 billion deficit, down from the projected $24 billion. That means there is $15 billion less borrowing than we originally forecasted. That means that $15 billion is not being added to the debt and that $15 billion will not be costing taxpayers hundreds of millions of dollars of interest charges. That is a real bottom line benefit to beating our targets.
A private senior economist said earlier in the week that interest rates would not have fallen to 30 year lows had financial markets not been convinced the federal government truly had spending under its control.
We recognize that unemployment remains tragically high and that we have to do more. It is a commitment of the government. It was an important part of the finance minister's update last week.
We live in a dramatically evolving world economy, an environment where the foundations for employment are changing. It presents new challenges and responsibilities for government.
Let me close by saying that the government can make a difference in some key areas. First, a sound economic framework is essential for ensuring sustained prosperity that creates more and better jobs. Second, promoting knowledge and innovation in the economy is key to ensuring a more positive economic future. Third, the government has a responsibility to ensure that Canadians not only survive in an evolving economy but are well equipped to survive.
All Canadians need and deserve a government that is truly committed to economic progress, to growth that creates real jobs and generates new revenues which can help us preserve valued programs such as health care and to creating conditions for economic growth.
That is what we are committed to do. That is the road we are constructing. That is the destination we will help Canadians reach. As a result, more jobs will be created and there will be greater security for today's citizens and for our children.