Mr. Speaker, I will be sharing my time with the hon. member for Hastings-Frontenac-Lennox and Addington.
I am pleased to participate in the debate. The 1997 budget represents the fulfilment of the red book commitment on the economy. Almost 3.5 years ago the Liberal Party made a series of commitments to Canadians on the economy.
One of the most challenging and badly needed of the commitments was to reduce the federal deficit to 3 per cent of GDP by the end of our third year in office. We have not only fulfilled this commitment. We have exceeded it.
The deficit for 1996-97 will be no higher than $19 billion, substantially better than our commitment to reduce the deficit to3 per cent of GDP this year. It is more than $5 billion lower than target and $9.6 billion below the 1995-96 deficit.
I remind the House that this is the largest year over year decline ever. Because of the efforts of the government to clean up the nation's finances led by the Prime Minister and Minister of Finance, Canadians see light at the end of the tunnel.
The 1997 budget is more than just the achievement of these impressive numbers. It represents the fulfilment by government of major election commitments, the significance of which should not be underestimated.
When we took office Canadians were fed up with government. Canadians had just undergone almost 10 years of a government that kept on promising to get Canada's fiscal house in order and consistently failed. We cannot undue mistrust fostered by previous governments overnight, but we have taken a major step by keeping our commitment on reducing Canada's deficit.
The 1997 budget demonstrates that the government did not cut just for the sake of cutting. Rather the budget is a springboard to the 21st century, preparing Canada for the next millennium.
Perhaps what is most important is not what the budget does for Canadians today but what it will do for the country tomorrow. More than any other budget, the budget is a rallying cry to all Canadians to prepare for the next millennium. We are well on track to eliminate all borrowing requirements from international markets by 1998-99. This means that we will have the lowest deficit among the G-7 countries.
The budget contains a number of very focused investments in Canadians. Certainly one of the most needed of them is the Canada child tax benefit. This investment which totals $6 billion will begin to help families escape the welfare trap. The federal government will assist low income families with this tax benefit, removing the disincentive to find work. This will have the added benefit of allowing provincial governments to take some of the money they are currently spending on welfare and redirect it to services and programs for the working poor.
We have also taken action to strengthen health care. The recent report of the National Forum on Health stated that the transition to a better system in the future requires some targeted investments today. This our fourth budget provides $300 million over the next three years to implement key recommendations of the National Forum on Health.
We have provided $150 million over the next three years for a health transition fund to held provinces launch pilot projects to investigate new and better approaches to health care.
The budget also introduced Canada information services and increased funding for the community action program for children and the Canada prenatal nutrition program. These measures demonstrate our commitment to the Canada Health Act and to Canadians who want a strong health care system.
If Canada is to excel in the next century we must have a modern, innovative economy. The economy of the next millennium will be knowledge based economy and research intensive. The government recognizes that if Canada is to be a leader in research and development we must have a strong research infrastructure. The 1997 budget creates the Canada foundation for innovation for modernization of research infrastructure at universities, colleges, research hospitals and associated organizations in the areas of health, environment, science and engineering.
The foundation will be run by those who conduct the research and by those who need to know what needs to be done. In other words we are not adding another layer of bureaucracy. We are reaching out to those involved in industry and we are working in a co-operative manner.
The foundation will be funded by an upfront investment of $800 million, which will allow the foundation to provide around $180 million annually over five years. This is an investment in the economy today which will result in an innovative and modern economy tomorrow.
The Canada foundation for innovation represents a major investment in Canada's research and development sector. This is a sector with the brightest minds in the world. Sadly it is a sector that has been ignored by previous governments. The government values the research and development sector. We have sent that message loud and clear through this major investment on behalf of all Canadians.
A great deal has been made about the numbers in the budget. Indeed they are impressive. However the budget is not about numbers. It is about the people of Canada. We have taken the first steps in laying the foundation for Canadians to seize the next century. In a relatively short span of time we have put an end to Canada's crippling deficit cycle. We have gone from having one of the worst deficit levels in the G-7 to one of the best in a very short span of time. As a result of this action Canadians are enjoying the lowest interest rate levels in decades.
The opposition has claimed that interest rates are low throughout the world and that our Minister of Finance cannot take credit for the low interest rates. The fact that ours are lower now than those of the United States means that our minister can certainly take the credit for it. It has been a long time since our interest rates have been lower than those south of the border.
Our economy is poised to enjoy tremendous growth. Our ambitions go far beyond just these economic goals. That is why we have taken measures to fight child poverty and to strengthen Canada's health care system. These are elements of our society that Canadians cherish. We took the approach to deficit cutting that we did because we wanted to preserve and strengthen these elements of society. The budget is a very strong first step in that direction.