Mr. Speaker, it is a pleasure to participate in this very important debate, a debate which speaks to the issues of Canadian values and priorities for today and for the future.
Canadians have spoken. Their message was quite clear. Canadians want balance, balance between the security offered through debt reduction and tax relief and the benefits of investing in people and indeed our future. They quite frankly told us that health care, education and pensions are not only line items on a budget sheet, but rather they represent our core values as a people. Indeed they are an expression of our values.
This fall as part of its annual prebudget consultation, the House of Commons Standing Committee on Finance travelled from coast to coast to coast engaging Canadians in a national dialogue about building a strong economy and a strong society. We asked our fellow citizens about their values, about their priorities and how the federal budget should reflect them.
I am pleased to announce that this year's consultation was the most extensive ever. In addition to regional consultations and round table discussions in which members of the committee participated, we called upon members of Parliament to hold town hall meetings to ensure that the people in their ridings were involved in the policy process. That is very important.
It is important because as the Standing Committee on Finance travelled to the major cities of this country, members of Parliament were reaching to the rural areas of this country, to the small towns. Many of the discussions took place not necessarily in hotel ballrooms but around the kitchen table, where many important decisions in this country take place.
People everywhere throughout this great nation accepted our challenge with a great deal of enthusiasm and a determination to make a difference. It was quite clear to me that they approached this consultation with an understanding that economic growth and fiscal success are not ends in themselves, but rather they are means to improving the quality of life of all Canadians.
In total, including round table discussions, witnesses, town hall participants, letters and e-mails, our committees received over 4,900 submissions. This national conversation was both rewarding and enlightening. Not only did we as members of Parliament come away with a sense of what individual Canadians want in the next budget, but we learned a great deal about the new outlook that is shared by many Canadians.
It is one that is filled with a great deal of optimism and hope. People told us that change is not something they feared. Change is something that we embrace.
Throughout our meetings it became quite clear that the challenges we faced as a nation in the 1980s and 1990s have made us a more confident people. This in large part is possible because of our Canadian character which allows us to adapt to change and triumph in the face of adversity.
Adversity is the right word to describe the situation our country faced in the early 1990s. We were confronted with a vicious circle of high deficits, high interest rates, slow economic growth and high unemployment. This vicious circle wreaked havoc on our standard of living, on our position on the world stage and on our future.
Thanks to the hard work, the foresight and much sacrifice, Canada is about to enter a new era, one in which the government's bottom line will be written in black ink rather than red and one in which the Government of Canada will be able to tackle the challenges facing our nation more effectively than it could in the past.
We are moving forward, replacing the excesses of the past with the successes of today. Interest rates are at their lowest levels in three decades. Inflation remains firmly under control. Consumer and business confidence are up and continue to rise. The virtuous circle of lower deficit, lower interest rates, stronger economic growth and job creation is perpetuating a culture of success.
On October 15, 1997 the finance minister unveiled the results of four long years of sacrifice by the Canadian public. Clearly that sacrifice has paid off. The deficit four years ago stood at $42 billion. We all remember that when the Liberal government took office after the Conservative government the deficit was at $42 billion. Now it is at $8.9 billion. Every target has been bettered. The $8.9 billion is almost $15.5 billion below the original target for this year and almost $20 billion below the deficit of the previous year.
The minister went further, promising a balanced budget no later than the year 1998-99. Today Canadians face a brighter future. Let us for a second take a minute or so to look at some of the headlines that appeared in newspapers. In the Globe and Mail , October 1, 1993, “Economic outlook dim”. In the Globe and Mail , July 1, 1997, “Economy Rockets Ahead”. In the Financial Post , September 18, 1993, “Falling jobs, sales, exports turn 1993 into a disappointment”. In the Financial Post , November 12, 1997, “Economy gets upbeat appraisal”.
The next headline speaks to another very important issue about Canada's position on the world stage. How sad it was back in the early 1990s when editorials, newspaper articles and opinions around the globe were stating that Canada was a basket case in economic and financial terms.
In the Wall Street Journal , March 24, “Canadian government disappointed with down grade”. In the Wall Street Journal , February 20, 1997, “Canada's budget wins applause because of its restraint”. In the Ottawa Citizen , July 23, 1993, “Recovery sputters through spring”. In the Toronto Star , December 2, 1997, “Economy grows at 4.2%”.
This must mean something. It means that through the hard work and sacrifice of Canadians, through the entrepreneurial spirit of the private sector in Canada and through the responsible management of the Canadian economy by the federal government, Canadians are now looking to the future with a great deal of optimism.
There is a great deal of pride in me and I am sure in Canadians from coast to coast to coast when we see that economic conditions have bettered to the point where now Canada is not being laughed at by other countries. Because of what we have been able to do in the House of Commons and throughout the country, Canada is referred to as the Canadian miracle.
Gone is the burden of the $42 billion deficit. Gone are the crippling interest rates and rising inflation. Gone is double digit unemployment. Over one million jobs have been created since the government took office. Unemployment has been below 10% for 12 consecutive months.
I understand the pain the member for Markham is going through. He remembers as clearly as I do when the former prime minister stated that the unemployment rate could never fall below 10% until the next millennium. I understand and I feel his pain.
This enhanced confidence in our prospects and abilities will prove to be truly a valuable asset as we face new challenges in the future. Not only do we as Canadians believe that tomorrow will be better than today. We also have the capacity to make it so.
Canadians feel empowered in today's society. They have seen the impact they have on government policy. They are determined now more than ever to continue to steer our country in the right direction.
Throughout our consultations Canadians spoke clearly and decisively on many issues. They expressed serious concern about the national debt. Canadians want us to finish the fight with the deficit and to turn our attention to the debt.
At 73.1% our debt to GDP ratio continues to curb our economic potential. This is why the committee called for the government to establish an interim debt to GDP ratio range between 50% to 60%, and we went further. We also said that it should be done within the life of this mandate.
There is no question about the fact that Canadians want to leave future generations a legacy of expanding opportunities rather than one of high taxes and escalating debt. Let me leave no doubt in the minds of my hon. friends across the way. Canadians recognize that across the board tax cuts are not affordable at this time. To implement them would be irresponsible and short sighted. I also want my friends in the House to know Canadians want targeted tax relief.
That is the reason the committee felt it was important to address a number of issues including raising the basic personal non-refundable tax credit amount, reviewing the impact deindexation has had on our tax system, addressing the issue when the fiscal situation permits, and reducing or eliminating surtax on personal income. These are all issues we heard about. As a responsible committee we brought them to the attention of the House of Commons and the Minister of Finance.
A message that was very clear from the people of Canada was that once tax cuts are feasible, the focus should be on the personal income tax. The committee continued to call for immediate measures that would help those in greatest need.
There has been a lot of talk about spending and investment, call it what we may. The reality is that Canadians are against old fashioned spending sprees. They want continued fiscal responsibility. They want continued prudent budgeting and prudent assumptions. They want the $3 billion contingency fund to be used toward the debt, a very important point to be made.
They do not want to see the economic stability of the country undermined by an oppressive deficit ever again. They want to ensure that those who need it most receive support from our social safety net. They want to build an economy that is prepared for the challenges that lay ahead in the next century. They want responsible government. They want wise investments. They want results.
The spending patterns of previous governments demonstrated a lack of respect for Canadian taxpayers. As elected representatives we owe it to the families we represent to invest their resources wisely. New resources, whether invested through new programs or significant changes to existing programs, should be allocated within a framework of accountability like that introduced in the government's program review.
That means determining whether the program addresses an evident problem, whether it could be resolved more efficiently by the federal government, other levels of government or the private sector, whether the proposed program is the most effective way to approach the problem, whether the program is being delivered efficiently and whether we can afford it.
It makes sense to put checks and balances in place to ensure Canadian taxpayers are getting the best value for their tax dollars. Let me quite blunt. Having the money to spend is no justification for spending the money. Respect is a theme that runs throughout our report: respect for Canadians, taxpayers, those in need, innovators, respect for their right to a responsible government and a better tomorrow.
RRSPs are one of the three pillars of our retirement income system. The committee in its wisdom recommends that the schedule for contribution limits set out in the 1996 budget should be revised so as to allow contributions to increase before 2002. The committee also recommends that the 20% foreign property rule be increased in 2% increments to 30% over a five-year period. This diversification will allow Canadians to achieve higher returns on their retirement and reduce their exposure to risk, which will benefit all Canadians when they retire.
Canadians also told us that small and medium size businesses create roughly 85% of all new jobs and account for 45% of Canada's GDP. Their importance in our economy cannot be overstated. It is in everyone's interest to ensure our economic environment is one in which they can thrive. It is for this reason that the committee supported the government's move to lower EI premium rates. This measure, the latest measure taken by the government, will result in a $1.4 billion saving for both employers and employees.
However, we went further than that. We also said when the fiscal situation permits, EI premiums should be further reduced. We call on the government to ensure that EI premiums not be increased during an economic downturn.
The committee also recommended that the government take steps to address imbalances in the way different sectors of our economy are treated by the tax system and to examine the appropriateness of the $200,000 threshold of the small business deduction.
As we build a strong economy, the government should do its part as a partner and facilitator to modernize the economy and to do its part. That is the reason we supported programs such as Technology Partnership Canada, the industrial research assistance program, because it goes a long way in helping Canadian businesses compete in a global economy.
Our report also respects Canadian priorities when it comes to the social safety net. Both on the road and throughout the public hearings in Ottawa, Canadians told us that they are ready to reinvest in the social and economic needs of our society. That means improvements to Canada's health care system, which includes an increase in the CHST cash floor to $12.4 billion, a recommendation that was acted upon earlier this week.
It also means continuing support for the youth employment strategy. If I can speak on this particular issue for a few minutes, Mr. Speaker. I had the privilege to chair the Ministerial Task Force on Youth. From that Ministerial Task Force on Youth the government responded with the Youth Employment Strategy. Today, as a result of those measures, hundreds of thousands of young Canadians have benefited.
Youth Internship Canada, Youth Service Canada, the Summer Job Action Plan, these speak to a very important issue providing opportunities for young people to give them that very important first chance at a job, to get that very important first line on their resumé.
As a member who has dedicated the greater part of his political life to addressing the issue of youth unemployment and concerns related to young people, I can say that the most important barrier they face is the experience paradox: no job, no experience; no experience, no job. That is why the government as a partner in the development of the Canadian economy should play its role in making sure that that very first important chance is given to young people.
We live in changing times, more challenging times for our young people. Many of the new economy's jobs require a higher level of education which means that one of the roles of the government should be to provide opportunity and accessibility to post-secondary education so that young people, students, can be given the opportunity to acquire the educational level required to get those new economy jobs.
Investment in these areas are means to making the new—