Madam Speaker, I will be sharing my time with the Parliamentary Secretary to the Minister of Foreign Affairs.
To begin with I must say to the hon. member for Kings—Hants that I am proud on behalf of all vertically challenged Canadians to have an opportunity to stand in the House to speak in this prebudget debate.
This initiative was established by the Liberal government in the last mandate in 1993. It was to give parliamentarians an opportunity to gather in the House to debate the budget during its formulation process as opposed to the previous practice of having a budget debate after the tabling of the budget. I am pleased that we as members of Parliament have the opportunity to be here because of this Liberal initiative to have a prebudget debate.
I would like to congratulate all the members of the finance committee, particularly the chair. They did a fine job. They travelled across the country soliciting views from Canadians from coast to coast to coast. Members of the committee ensured that the perspectives of Canadians were brought forward and were part of the analysis in putting together the report.
During its first mandate over the last four years the Liberal government made significant progress. Some of the items I mentioned earlier in debate. When we began our mandate we inherited a $42 billion annual deficit. I was pleased, as I know all Canadians were, when the finance minister was able to make his report to Canadians and indicate that the deficit would be eliminated no later than the next fiscal year.
In reality, several hundred million dollars have already been paid on the debt. We will actually be in a surplus position very shortly. That is a significant accomplishment when we consider it has been a generation and a half since we have been in that position as a country.
I talked a bit about setting strong economic conditions, which we have established in Canada over the last four years. I would like to take a look at some of those achievements in terms of maintaining a low, sustained, constant level of inflation to allow for an economic environment where investment can occur.
Let us take a look at interest rates. If we go back to the beginning of this decade, in 1900 three month treasury bills were at 11%. Today they are at 3%. We were looking at a prime rate in 1990 of 14%. Today it is under 5%. Canadians can very much relate to the rate of interest they pay on their mortgage for their new home. In 1990 a five year rate was around 13.5%. Today it is just a little over 7%.
We have made some good progress. Because of that progress, because this Liberal government has managed the economy of Canada prudently, effectively and efficiently, we now as a nation, as a Parliament, as a government have some important choices to make about where we go from here.
During the election campaign many suggestions were put forward by many parties and many individuals. This government put forward the very straightforward proposal that once we get into a balanced position and we have a surplus, we will take a 50% portion of that surplus and apply it to debt and tax reduction. Over the period of our mandate we will use the other half to invest in the types of programs and priorities wanted by Canadians.
We have been having that discussion with Canadians in order to hear their perspective, to hear what they think about our proposals. Over the past couple of months I had the opportunity to hold two forums in my riding of Parry Sound—Muskoka. One was in the town of Huntsville which was attended by a large number of individuals from the Muskoka side of my riding. The other session was held this past week in the town of Parry Sound which was attended by a large number of people from the Parry Sound side.
We talked about those options, about debt reduction, tax reduction and expenditures. I will summarize what some of those individuals were saying. There was not only a belief but an insistence that we do not ever return to deficit financing in government, that we should bring to an end what had been going on in this country for a number of decades, the deficit financing where we basically use the assets of today for our use and burden our children and grandchildren with the cost of that. Canadians in my riding were very clear to say that must come to an end.
They said very clearly that they understood we were nearing the end of our battle with the deficit, that indeed the debt was too high and that we needed to devote some of our resources to paying down that debt. They talked about tax decreases, and yes they do believe we need to have tax decreases. But they made the point clearly that tax decreases must be made in a way that is the most beneficial to Canadians and most beneficial to our economy.
They are not interested in across the board tax cuts that give the largest financial gain to those Canadians who earn the most. They want targeted tax cuts. Tax cuts like what the Minister of Finance announced in his last budget where he talked about $850 million to low and middle income families with children, where he talked about the tax cuts of over $160-odd million to Canadians with disabilities, tax cuts that would help young people with their education and help the parents who support them. Those are the types of tax cuts Canadians want, focused tax cuts that will help those who are least advantaged in society.
They are not interested in large across the board tax cuts. They are not interested in a suggestion made in the Tory campaign platform, to reduce corporate taxes which would have seen our chartered banks receive reduced taxation. They want tax cuts targeted to those in Canada who are most in need.
They talked about the need for new investment. They talked about the need to protect our social programs in Canada. They talked about the need to support programs like medicare. They talked about the need to support things like post-secondary education. They talked about the need to try to stimulate economic activity so it could lead to job creation.
One of the important initiatives that I believe needs to be addressed in this budget is the whole concept and need to deal with the issues that involve rural Canada. I represent a riding that is rural in nature. We are about 30% of the Canadian population. I think we have accomplished and made the point over the last few years that the circumstances under which our constituents live in rural Canada are different than those in urban Canada.
The realities and the economic conditions we face are unique. Things like distances, geography, population density are all factors that need to be taken into account when we develop a budget.
I made this speech on a number of occasions in past debates when we talked about the budget. I would hope that as we formulate those policies, whether they have to do with tax reductions and the type of tax reductions we undertake, or the types of investments that we believe Canadians want and we should undertake, that they reflect the needs and concerns of rural Canadians and that they reflect the economy under which we operate and that we as a parliament make sure that the needs and concerns or rural Canadians are addressed.
I am pleased to have had the opportunity to have spoken on the prebudget issues. I am pleased to have had the opportunity to share some of these thoughts and concerns with my colleagues in the House. I look forward to next February when the finance minister tables his budget in the House and we see another important step on the way to the economic progress of Canada.