Debates of March 18th, 1997

The Budget

[Pierre Pettigrew, Liberal, Papineau—Saint-Michel, QC]

Mr. Speaker, what we have been saying for a long time is that the responsibility of the government is to create a climate, the right conditions. What I have said is that it has not materialized completely yet and the economic growth has not yet

translated into all the jobs we hope will be created in the next few months and years.

The interest rates are much lower than they have been. They were two points higher than the interest rates in the United States when we took office in 1993. They are now more than two points lower than in the United States after four Liberal budgets. What can I tell you, this is certainly contributing to the right climate.

Inflation is now at less than 2 per cent. Really for the first time in decades we have full control of public finances. This is extraordinary. I do not say that the job is finished. Governing is an ongoing process. I hope we will be continuing to govern for a while.

What I am saying is that what we have achieved has been without putting at risk the social fabric of society. The social fabric of society has been saved and protected and ensured into the future.

This is why I say there is light at the end of the tunnel. We still have important moves to make in the direction we are giving right now to Canadians but there is hope. Let us stop saying all the time that there is no hope. What the young want is for us to let them know that there is hope and that we are going in the right direction.

[Dennis Mills, Liberal, Broadview—Greenwood, ON]

Mr. Speaker, I would like to compliment the minister on his remarks. The initiative of the national child tax benefit is a great initiative. As Liberals we should be proud that we are once again speaking for those in our community who are most disadvantaged.

We always talk numbers around here in such large, grandiose ways, about the deficit and the debt. We talk in numbers that sometimes the average person on the street does not quite understand. The reality is that we still have a large number of Canadians who are out of work. They are not looking for a debate in the House on whether the deficit is $19 billion or $17 billion. They are looking for some hope and energy so that we can get people going again.

I would like to propose an idea to the minister responsible for putting Canadians back to work. Would the minister consider seeking an all-party consensus that we have an emergency debate so that every single member of Parliament could stand up and in a constructive way put forward thoughts and ideas on how we could get the whole momentum of hope for getting people back to work going again?

It should not be the normal hours. It should be, in the true sense of the word, an emergency debate, perhaps from 10 a.m. until9 p.m., 6 or 7 days a week. We would go until we sort of sensitized the whole country that we are totally obsessed with the idea of getting Canadians back to work.

I watched the minister on television last night when he announced a very specific project in a region of Montreal where he was getting Canadians back to work. The problem is that one announcement like that is not enough to get the whole energy system of the country going.

Would the minister take the initiative, appeal to the Prime Minister that we create a national, bipartisan debate in the House of Commons so that we could come up in a constructive way on how all members of Parliament can put their ideas on the table on how they can get their own communities going?

[Pierre Pettigrew, Liberal, Papineau—Saint-Michel, QC]

Mr. Speaker, I certainly welcome the member's suggestion for raising the profile of the situation of unemployment in Canada. It is something that should be above party politics, particularly at this time.

We need all the creative work that can be done. I am sure that opposition members would be able to contribute as well. This is something that does concern every one of us. In most of our ridings, we have too high an unemployment level.

We need all the creativity that we are able to produce in the House and elsewhere. It is the one priority that we should be having right now, job creation in Canada. It is something that we will continue.

Certainly I as minister am very open to any constructive suggestion from my colleagues in our caucus or from opposition members. We are trying very hard these days.

[Paul Crête, Bloc, Kamouraska—Rivière-Du-Loup, QC]

Mr. Speaker, I am delighted to rise today as part of the debate on the budget speech. However, I am less than delighted with the budget.

In fact, I have a short anecdote for you. One or two days after it was tabled, an accountant was to come to the chamber of commerce in my riding to make a presentation on the budget. In his introduction, he said: "When I learned I would be doing this presentation, I was quite anxious thinking there would be a lot of elements that would be difficult to integrate. My problem this morning is that there is nothing new in the government's budget, so there are few elements. It is a budget on automatic pilot".

The problem is that we do not need budgets on automatic pilot in Canada and Quebec at the moment, we need budgets that address the main problem: jobs. In past years, a lot of work was done on the issue of the deficit with some results, although much was done on the backs of the provinces through cuts to transfer payments and on

the backs of the unemployed through the unemployment insurance reform.

As far as jobs are concerned, this time, the issue on the table, the main concern of the people in my region, in Quebec and in Canada is, how are we going to use the human potential available? And how is it that the unemployment rates are acceptable?

The government is arguing that it can do no more. It is setting up attractive conditions, and it is up to the private sector to create jobs. The private sector has a responsibility in job creation, but the government also has the responsibility of tackling this problem.

The first step would be for the Prime Minister to say: "We will indeed make it a priority, we will set up objectives to ensure we put the same energy in job creation as we may have put into deficit reduction in the past". The tools are there. We can suggest some to him. On the weekend, at the Bloc Quebecois convention, there was no shortage of solutions proposed at the workshop on employment.

We are not saying that it is an easy matter, but there are things that the government could do, but chooses not to simply because it lacks the political will to do so. For example, it could very substantially reduce unemployment insurance premiums, which would result in the creation of tens of thousands of jobs. It could create an employment RRSP, as suggested by the hon. member for Saint-Hyacinthe-Bagot, the Bloc Quebecois' finance critic. We made this proposal to the minister. What did he do with it? He forgot about it. They decided it would be business as usual. They stuck to the traditional course, and did not bother with that.

Jobs have been created in the past and are still being created, but a whole class of people, all the unskilled workers who have been affected by technological change, are being ignored, much as if they were so much cast-off furniture. This is unacceptable.

Society must be able to react more rapidly if we are to have an agreement on manpower. A system which takes as long to react as the Canadian one does is unprecedented. For the past five years everybody in Quebec has been saying that common sense requires Quebec to be responsible for manpower, but the federal side is still hemming and hawing, trying to ensure that it will have some control over it, while it really falls under the jurisdiction of Quebec.

This is another tool which has to be handed over to ensure a better match between workers' training and available jobs. The employment insurance fund surplus must be used to this end. It must be used not only in the financial statements, to reduce the deficit, but above all to launch dynamic manpower training initiatives, to allow workers to get a training and keep their jobs. We must be proactive and take action before problems appear.

There is nothing of that kind in the budget and I think the federal government should do its homework to ensure that interesting solutions are found.

Other means were suggested in a workshop on employment during the Bloc Quebecois convention, this past weekend. For example, we could do something to reduce drastically the red tape for small and medium business. I challenge the members to go through all the administrative steps that must be taken when a business is established. The number of governmental organizations to communicate with and the number of forms to fill up are enough to discourage any entrepreneur from creating jobs.

A progressive retirement plan proposal was also put forward. Why not allow people who are at the end of their careers to gradually reduce their job schedule to four, three or two days for the last five years and to use their RRSPs to make up for the difference without having a tax penalty. That would be an incentive for them and an opportunity for young people. Again, this is an interesting solution.

Mutual fund or investment fund management is another issue that must be looked into, even though it is more complex. Many funds invest on the American market and other markets around the world. As the government here in Canada, we have a duty to provide interesting conditions to make sure these funds invest in Quebec and Canada so that our savings support our own development and not the development of others.

There is another avenue to explore. Look at what is happening today: while jobs are being created for individuals with postsecondary education, the situation remains dismal for those without high school education. Literacy needs to be improved. Does this budget contain any major initiative providing for the federal government to withdraw from this area, give the budgets back to the provinces and let them take over? No, not a word.

They are leaving it up to market forces without making any attempt at enabling those who have been a little left out because of their lack of education to train, get back in the race on the labour market and finally get work. There is nothing to that effect in this budget.

There is another instance where, in my opinion, the Minister of Finance lacked compassion. For nearly a year now, questions have been asked and letters written to the minister about American pensions. While the minister acknowledged there were iniquities in the new tax treaty between Canada and the U.S., nothing has been done. This matter should have been addressed in the February budget.

The tax treaty between Canada and the U.S does have to be amended, reopened if possible, or reviewed from an administrative point of view. While we are still waiting for a final decision on this, there are people who have been living on $6,000 a year for the past

two years. They used to receive $8,000, a small pension if you consider that some of them do not yet qualify for old age security. Members should try working out a household budget of $6,000 a year, just to see.

Before, people did not have to pay taxes upon receiving their cheque from the American government. They would receive the whole amount and declare half of it the following year, in their tax return. This taxation method allowed low income people to be a little better off, thanks to their tax refund. This is no longer the case. Now, 25 per cent of the amount of the cheque issued by the American government goes directly to the U.S. treasury, and Canadians have no way of getting that money back.

What is rather unfair is that people who worked and earned a good salary for a long time, and who are now getting a big pension, are in a better financial position than they were in the past. However, low income people, that is those who receive $8,000, $12,000 or $15,000 per year, or a support income of $3,000 or $4,000, are now being deprived of an essential part of that income.

The Minister of Finance should have spent as much time looking at this issue as he gave some people to take advantage of tax loopholes. A change must be made as soon as possible. I am asking the minister to get the unanimous consent of the House to correct this situation, through the budget or through a short term measure, at least on a temporary basis.

We made suggestions, including a proposal whereby the income supplement would be calculated on the net amount received by the individual, thus allowing senior citizens to get their supplement more easily. Such a solution would not solve the problem, but at least it would make it easier to give back money to those who need it on a daily basis. We are not talking about family trusts, we are not talking about billions of dollars: we are talking about people who need that money to buy milk, to buy butter and to pay their rent. The federal government is showing an unacceptable lack of compassion toward these people.

For all these reasons, I feel the government did not do its homework with this budget. It merely lets the train follow the tracks without changing the speed. We have a new problem called non-employment. This shortage of jobs, hundreds of thousands of them, keeps us from putting to work citizens who are ready and willing to serve their community.

We must create opportunities, we must create a dynamic. The government must really make this a priority and follow up on the slogans used during the election campaign. Imagine the impact, on the credibility of parliamentarians, of the slogan "jobs, jobs, jobs" used by the Liberals in the 1993 election campaign now that, four years later, there are as many people out of work as there were back then.

During the next election campaign, the Conservatives will use the speeches made by the Liberals in 1993 to talk about change, while the Liberals will use the Conservative rhetoric. This is a tradition among old line parties. However, it does not solve the problem.

What is required in this budget are clear and specific decisions and commitments on the part of the government to make employment a priority. For these reasons, we will support the amendment tabled by the Bloc Quebecois.

[Benoît Sauvageau, Bloc, Terrebonne, QC]

Mr. Speaker, my colleagues and I are pleased to take part in the debate on the budget and on the Bloc Quebecois' amendment.

During the last election campaign, and ever since, we have heard so much about the red book that at some point we decided to read it for ourselves. There are some passages that, after three and a half, almost four, years leave us wondering whether the people who wrote it have lost their memories, are suffering from Alzheimer's, or at the very least should be ashamed to see what this book has produced after three and a half years.

I will quote you a short passage from page 13 of our Liberal friends' red book:

Today, after nine years of Conservative government, Canadians are facing hardship: 1.6 million unemployed, millions more on welfare, a million children living below the poverty line, record numbers of bankruptcies and plant closings.

Like I said, that was from page 13 of the Liberal Party's red book.

What compassion. What fine words. I do not know whom they hired to write such wonderful prose, but they should have hired somebody else to carry it off.

It has been three years now, and I would remind members that there are not 1.6 million unemployed, but 1.5 million Canadians still without jobs; there are 3 million Canadians on welfare. Instead of one million children living below the poverty line, there are now 1.5 million in this situation. The number of bankruptcies has reached a record level in 1996, and these are not Bloc Quebecois figures, these are not figures provided by nasty separatists, but figures from Statistics Canada, Industry Canada and Human Resources Development Canada. These figures are very interesting when starting off a speech in reply to the budget speech.

What have the Liberals who were so appalled by the situation in 1993 done after three and a half years in government? They have made things worse than in 1993 and today they are telling us how wonderful they are.

I wonder whether, in the next campaign, the Liberals will dig out their red book and parade it around, saying: "Look, we have kept 80 per cent of our promises". I wonder if they will use the Statistics

Canada, Industry Canada and Human Resources Development Canada statistics to show that we are not the ones contradicting them, but that it is their own organizations instead which are saying: "The government has not met its objectives, has not kept its promises". Not just little promises, but the major promises of the election campaign: jobs, children, and bankruptcies. In other words, things that affect the pocketbooks of the men and women of Quebec and of Canada.

If I were a Liberal MP, I would make sure no red book came anywhere near me, and I would make the rounds of the bookstores and the MPs' offices to make sure there were none to be found, for I would be embarrassed to be seen with one in my possession.

As critic for international trade, however, I will make reference to the Minister of Finance's budget speech, four key points in particular. First of all, back to the red book, which contained promises on respecting democracy and human rights throughout the world, international trade versus human rights, respect for democracy and the Liberal Party vision of foreign affairs.

What has this government done in the past three years about international trade and foreign affairs? As you will see, on this first point, I will be able to demonstrate to you that they have not done much. On the contrary, they have backtracked. Not just inertia, but backtracking with respect to their promises, their positions as set out in the red book.

How has the Liberal Party backtracked on aid for international development? How has the government backtracked on the question of encouraging democratic rule in the various parts of the world? Here is one simple example.

First of all, CIDA is responsible for administering some 80 per cent of the Canadian Official Development Assistance program, or ODA. This supports sustainable development in the developing countries, in order to reduce poverty and contribute to the creation of a safer, more equitable and more prosperous world.

In 1997-98, spending by CIDA will total $1.6 billion or $160 million less than had been estimated in 1996-97, to keep a promise the government had made to help countries that wanted a greater measure of democracy to prosper and provide for sustainable human development. What is the Canadian government doing? What is the Liberal Party doing? In its budget, it cut Canada's official development assistance by 10 per cent.

The International Development Research Centre examines the problems of developing regions throughout the world and tries to find ways to use and adapt scientific knowledge to improve the economic and social well-being of these regions. The government subsidy for the International Development Research Centre for 1997-98 will, according to the budget of the Minister of Finance, total $88 million, $8 million less than in 1996-97, which means another 10 per cent cut.

I repeat, the Liberal government said it wanted to defend and promote democracy and human rights throughout the world. However, we see a 10 per cent cut in official development assistance and a 10 per cent cut in funding for the International Development Research Centre.

I hope they are not going to brag about how they kept those promises during the next campaign. In any case, I hope they will be embarrassed if they ever do, because they know they will be stretching the truth, to avoid using another term that would be unparliamentary.

Because of the cuts initiated by the Liberal government, official development assistance has been reduced to less than 0.7 per cent of GDP. The United Nations, the OECD and its development assistance committee had suggested 1 per cent of GDP. The Canadian government had also promised to maintain a significant level of international aid, and among the G-7 and the OECD countries, the objective was to give 1 per cent of GDP to development assistance. During the three years it has been in power, the Canadian government has reduced development assistance from its already inadequate level of 0.7 per cent to less than 0.7 per cent.

Is development assistance important? Should charity not begin at home? Let me tell you that in Canada, one job out of four depends on foreign consumers; one job out of four in Canada depends on our exports. Is it important to ensure that our customers are in good shape socially, economically and politically? It is essential.

The Canadian government has no choice but to defend, promote and encourage political, economic and social stability in those countries. Eighty per cent of the world's population will soon need greater stability to be able to buy and acquire our products. If only from the strictly fiscal and economic point of view, we must ensure that these countries enjoy a certain level of growth and stability.

We should also promote research and development here in Canada. This will only take a few seconds. In a document by the OECD on employment, we read: "The main cause of rising unemployment and the increased number of low paying jobs is the growing gap between the need for OECD member economies to adjust and innovate and their ability and political will to achieve this". Does the Canadian government have the political will? No. The Canadian government has put nothing in its budget, the Minister of Finance put nothing in his budget to help businesses and international development.

[Colleen Beaumier, Liberal, Brampton, ON]

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.

[Jim Silye, Reform, Calgary Centre, AB]

Mr. Speaker, the hon. member talked about how opposition members have-and I know I have been one of them-criticized the finance minister for creating the myth that he has broken the back of a deficit that still stands today at $19 billion.

I attacked the government for trying to take credit for the jobs it claims to have created when the net number is only 100,000, from 1.5 million to 1.4 million. Yet it claims to have created a net 700,000 jobs.

I criticized the finance minister for taking credit for having low interest rates. What advantage are interest rates to people who cannot borrow money? It does not matter what the rates are. What advantage are the interest rates when credit cards are not affected by their lowering? Interest rates set in Canada, as they are in the United States, are usually set and tied to inflation.

The member will recall a gentleman by the name of John Crow who used to worry about inflation. We had high inflation and he set interest rates high to curb it. It took lot of years of struggling.

I remember the Liberals on this side of the House, when they were in opposition, being against the high interest rate policy of John Crow and criticizing him. He is the individual who deserves credit for the low interest rates in Canada today. Inflation has been killed and brought to its knees. Then interest rates came down. That is who should get credit for the low interest rates, not the government or its budgetary policies. In spite of the budgetary policies of this government interest rates came down.

I heard many members of the House take credit for the low interest rate, jobs and breaking the back of the deficit. It is all a myth. They are spinning a myth. The reality faces them in black and white. Yet they brag and congratulate a finance minister who has failed to address the real problem of the debt and the high interest costs to service it. We will all pay for that in the long run. No one is addressing that except the Reform Party.

[Colleen Beaumier, Liberal, Brampton, ON]

Mr. Speaker, it is very interesting to hear the hon. member say that we have not dealt with the deficit. When we were at the polls three and a half years ago, Canadians did not want the Reform approach of chop, chop, chop. Canadians accepted the fact that 3 per cent of GDP was what the social fabric of the economy could accept.

You gave it your best shot three and a half years ago. Canadians rejected your approach. We have lived up to our commitment to Canadians.

If the economy was not doing so well, you can be sure that the finance minister would take the blame. I believe he also deserves the credit.

[Ted White, Reform, North Vancouver, BC]

Mr. Speaker, the member during her speech said how proud she was of the government for what it has done for the health care system.

I would like to ask her a couple of questions related to that topic. I wonder how proud she is of her Minister of Industry who gave an entrepreneurial award to a Winnipeg company which specializes in selling health insurance to Canadians to go to the United States if they have to stay on a waiting list too long.

Is she also proud of her government that has a Canada Health Act that means in Vancouver there are waiting lists for an MRI? People are not allowed to pay for one but dogs and cats can be scanned on the MRI for veterinary surgeons, because there is not enough money in the system. Is she proud of her government for that?

[Colleen Beaumier, Liberal, Brampton, ON]

We all recognize that there are serious problems with the health care system and in the response of the government it is trying to address these issues.

The information in the report that has just come out by the Canada health forum indicates that we are prepared to take action to correct these situations.

[Larry McCormick, Liberal, Hastings—Frontenac—Lennox And Addington, ON]

Mr. Speaker, it is an honour and a privilege for me to rise today to participate in the budget debate. I am proud to support the 1997 budget. In particular I endorse very heartily the agenda for jobs and growth.

The government's plan for jobs and growth is to stay the course on restructuring the country's fiscal health, to invest for immediate jobs and for immediate growth, but also to invest for long term job creation and growth and to invest in a stronger society.

Building on the efforts and successes, our fourth budget brings the hopes and dreams of Canadians closer to fruition. For the record, we are solidly positioned to eliminate financial requirements. The deficit has fallen from $43 billion to $19 billion. In 1998-99 the government will no longer need to borrow money on financial markets to pay for programs and debt charges. This is a remarkable achievement, giving Canada the best record of any of the G-7 countries.

Since the 1993 election, 715,000 jobs have been created, 80 per cent of which are full time jobs. That is another remarkable achievement. Although unemployment has dropped from 11.4 per cent to 9.7, it is much too high. However, the foundation for growth and job creation has been laid. Interest rates, as we have all acknowledged, are at a 35 year low. Confidence in Canada's economy and governance has been established. The government is identifying opportunities and developing strategies that will work.

Our goals have been achieved in a managed and responsible way. I commend the Minister of Finance for having elected to provide selective tax cuts of almost $2 billion over the next three years: for low income families, charities, the disabled, students and for parents saving for their children's future education. That will benefit us.

More than 1.4 million low income Canadian families with 2.5 million children will see an increase in federal child benefit payments by July 1998. We have accomplished these targeted tax cuts while we have created no new taxes.

My riding of Hastings-Frontenac-Lennox and Addington is rural, and small business makes major contributions to our local economy and to job creation. This budget rewards small business. Payroll records can now be filed quarterly, a major saving in time and paperwork.

There are no further cuts to government programs. In fact, as a result of the 1997 budget, investments are being made in tourism, rural development and small business, all areas with a significant potential for job creation.

The government is investing in post-secondary education and innovation, including increases to the education credit, an extension of the tuition tax credit, flexible student loan repayment options and help for parents saving for their children's education. It is planning for the future by renewing research infrastructure at Canadian post-secondary institutions and research hospitals through the Canadian Foundation for Innovation which will secure our future.

The government is investing in health care, particularly by strengthening community based programming and programming directly related to the health of children.

I was particularly pleased to hear of the rural development opportunities that were included in the budget. The riding which I represent is a rural riding. Many of the initiatives in the budget will benefit the constituents of Hastings-Frontenac-Lennox and Addington. For example, tourism will reap the benefits of another $50 million which has been invested into the BDC. That will lever up to $250 million more in new loans for tourist operators, especially those outside the major urban areas. An additional $45 million over three years have been designated for the Canadian Tourism Commission.

These initiatives are very important to my riding, which borders Lake Ontario and Algonquin Park. We have always had a very challenging time in accessing capital and international markets.

Certainly rural constituents will benefit from the technology programs. The community access program is being expanded in order to connect more than 5,000 small communities with populations between 400 and 50,000 people. We already have Bancroft and Northbrook-Cloyne participating in the program. Other communities will benefit from it.

We have addressed child poverty. My riding, like too many others, has experienced too much poverty which has had a negative impact on the lives of the children today and will have a negative impact on their future. To quote the Minister of Finance in his budget speech: "Too many Canadian children are not getting the start they need to become healthy, happy, educated and productive adults. This is not only a personal tragedy, but also a loss for the nation as a whole. And so there is a growing consensus among Canadians that our first priority when it comes to any fiscal dividend is to invest in the well-being of our children, the future of our country".

The first step will occur in July 1997. The working income supplement will be enriched by $195 million. Benefits will be provided for each child instead of per family. Step two will take place in July 1998. The supplement will be combined with an enriched child benefit to form the Canada child tax benefit.

The government has made a very sincere promise. It will continue to work with the provinces to design complementary changes that will help to reduce child poverty and barriers to work.

Building on the efforts to improve the conditions under which children are growing up, we are creating opportunities for youth so they may make the transition from school to work when that time

arrives in their lives. The youth employment strategy is an important step toward restoring hope for young Canadians.

Recently in my part of the country Industry Canada had an information fair. More than 20 government departments staffed booths, answered questions and provided material. People are writing into my office and phoning us asking for more of this information. I am glad to see the government focusing on small business and the opportunities we have for export development and trade.

Last spring I worked with a coalition of community groups to mount an area business show "Connections 96". I am happy to report that the show is being repeated on April 19 of this year. "Connections97" will showcase business and community groups. There will be displays of products and services, panels, discussions and guest appearances of accomplished people from a variety of interests.

This is what good government can produce: government and the private sector complementing each other's efforts to produce jobs and growth.

The budget recognizes the fact that no single initiative will address the challenges we face. However, the threads, woven together, do promise a beautiful tapestry in which the government works with the private sector so that the needs of the vulnerable in society, the poor, the children and the aged are met.

This budget is about getting our fiscal house in order and about investing in the future. I thank the minister for an excellent budget.

[Jim Silye, Reform, Calgary Centre, AB]

Mr. Speaker, I would also like to compliment the member on his speech. He worked very hard and diligently at it. He stayed up late at night to write every single word of it and I know he believes everything that is on that piece of paper.

Does he believe in the contradiction he is perpetrating on the Canadian public? He says that the government has created 700,000-plus new jobs. The finance minister and the Prime Minister have said that that is a net number.

Then, in his speech, he indicates that the unemployment rate has gone from 11.4 per cent down to 9.7 per cent. If you take the drop and the number of unemployed when this government came into power, which was at 1.5 million, it rather rounds out to close to 1.4 that still exists, which allows for some variance in there and some cushion.

How is it that this member can defend the cabinet ministers' claim that they have created 770,000 net new jobs, yet in his speech say that the unemployment rate has only dropped from 11.4 to9.7 per cent? Maybe the member could address that discrepancy.

[Larry McCormick, Liberal, Hastings—Frontenac—Lennox And Addington, ON]

Mr. Speaker, I appreciate the opportunity to address that question for my hon. colleague from the fine province of Alberta.

Seven hundred thousand new jobs have been established. These are not my figures. They are from Statistics Canada. That is over 41 months. In the 41 months prior to the election, there was a loss of 100,000 jobs. There was no gain by your friends and by your colleagues during that government.

Canadians are re-entering the work force daily in our ridings. Housing starts are on the rise. This is winter. Basements are being dug in the small community of Bath, Ontario, a loyalist community on the banks of Lake Ontario. People are moving in weekly from Toronto and Montreal. Young couples are coming to our area. One billion dollars has been invested in our community in the last year. It is investment from around the world. People feel good.

When this happens, many people re-enter the workforce. I am glad to see this confidence. Yes, the challenges are there. Is this glass of water half empty or half full? It is half full. I am glad that it is there so that I can drink from it. We can benefit from the workforce. I am proud to be a member of the government.

[Ted White, Reform, North Vancouver, BC]

Mr. Speaker, I constantly hear the members of the government talking about child poverty and how they are going to get rid of it.

I would really like to hear a definition of poverty from one of the government members. When I have asked in my riding for the definition of poverty, people always come back to me with, the children would have no shoes, no television, no refrigerator. There would have difficulty affording food and people would be living in very difficult conditions.

Would the member, please, give me a definition of poverty and tell me what percentage of his riding is living that way?

[Larry McCormick, Liberal, Hastings—Frontenac—Lennox And Addington, ON]

Mr. Speaker, Hastings-Frontenac-Lennox and Addington, my riding, has the unfortunate title of having the second highest unemployment rate in eastern Ontario and the second lowest income. Many of our people have comfortable lives. I grew up in that area. I realize in your area of Vancouver-

[The Deputy Speaker]

I ask the hon. member to please address his remarks through the Chair.

[Larry McCormick, Liberal, Hastings—Frontenac—Lennox And Addington, ON]

Mr. Speaker, I am not sure I can actually say how many children are barefoot. However, our investment and our concern about child poverty is more than just clothes, it is more than just the food on their plates, it is their stake in our future.

[Keith Martin, Reform, Esquimalt—Juan de Fuca, BC]

Mr. Speaker, I will be sharing my time with the hon. member for Mission-Coquitlam.

It is interesting and sad that in a nation as great as ours with its tremendous potential in terms of resources and human capital we have managed to squander it for so much and for long. This year's budget was another opportunity to make our nation great, to put our economic house in order and to strengthen the social fabric which ensures most Canadians can live comfortably and are protected from some of the more egregious circumstances that occur south of the border. It is unfortunate that once again we have seen opportunity lost.

If the government had taken our solutions of three years ago, today we would have a balanced budget. We would be bringing down the real ogre which compromises our social programs and our employment situation, decreasing the debt. The government chose to ignore the factual practical solutions we gave it two and half years ago. Now the government is spending more money than it takes in and it compromises the very people it professes to help, the poor and those in the lowest socio-economic groups. The government compromises the very programs it claims to uphold, health care, welfare, old age security, guaranteed income supplement.

The government fails to recognize as it fails to tell the public that if you do not live within your means, if you are not fiscally responsible, you are socially irresponsible. In a nutshell, Reform's platform can be best summed up as fiscal responsibility with a social conscience, as fiscal responsibility with social responsibility.

We have been accused of trying to cut. Yes we have but we have tried to determine where moneys can be spent to preserve those programs most needed by Canadians and to eliminate those programs that are not. This is not because we wish to cut programs but because we wish to ensure that the social and economic fabric of Canada will be intact. Canadians will have an opportunity in the future to live long, prosperous and healthy lives. Unfortunately what is happening out there, away from this bubble of Parliament Hill, is very different from what the government would lead Canadians to believe.

In my other profession as a physician I see there is a great destruction taking place within the health care system. Canadians are not getting their essential health care services when needed. Instead, they are getting these services when governments say they can. The government like to trumpet out that it is the great staunch defender of the Canada Health Act. You can defend a piece of paper but it does not do a whole lot of good for somebody trying to get into an intensive care unit bed when they are having a heart attack if the money is not there. But that is what is happening throughout the country.

The government has to wake up. It is doing a huge disservice to Canadians by spinning them a series of gross misinformations about our health care system, our social programs and the economic situation in the country. Government members like to stand up and say they are balancing the budget and winning on the deficit. Winning for whom?

The government is trying to balance the budget on the backs of the only people who pay the money to run this place and every single program in this country, the hardworking, much beleaguered, overtaxed Canadian taxpayer. That is what is happening. The government has instituted 35 tax increases for Canadians. It is living off the avails of programs from before to keep the interest rates low. Actual cost cutting has been very small. It is disingenuous to say to the public that the government has not increased taxes when the reality is very far from that.

The government has also compromised some other very important programs. It has yanked out $7 billion from health care, welfare and education. This is at a time when education is going to be the underpinning of our social fabric.

Reform has put forth effective, concrete solutions. I will discuss a few of them. If the government were to institute just a fraction of them, we would begin to greatly improve the welfare of Canadians.

First, get the deficit down to zero but for heaven's sake bring forth a surplus budget so we can bring down the debt. Second, stop increasing taxes. Canadians cannot stand any more tax increases.

Third, simplify the tax system. It is unfathomable that we have a tax system that is so complicated that many Canadians simply cannot do their own tax returns.

In private companies, the true creators of jobs, small and medium size businesses, their ability to increase employment, invest in their companies and in the economic strength of the company is compromised by the egregious taxation system. It acts as a strangle hold on companies to compete. Companies have problems competing within the country but, worse, they have problems competing with companies in other parts of the world because our tax system prevents them from being competitive.

We also have a whole array of restrictive, stultifying rules and regulations which crush the living daylights out of companies and their ability to be aggressive, mobile and nimble in creating jobs and survive.

The government must work with its provincial counterparts to develop ways to streamline the systems, the rules and regulations that are completely necessary.

Everyone in the House knows that we are one of the most, if not the most, overgoverned democracies in the world. We do not need that. It is the taxpayer who is paying for it. In essence the tax system, overspending and the debt are a noose around the private sector and every Canadian, and around our social programs. We have to remove it from around the necks of Canadians and put forth good, strong economic policies that will get people back to work and strengthen the social fabric.

The government likes to trumpet employment statistics. The fact is that we have been suffering from the worst and longest unemployment record since the depression. This Liberal government and the preceding Conservative government are directly responsible.

If the Canadian people would like to see a change they should vote for the Reform Party in the next election. However, before they do they should look at our policies and compare them to those of the Liberals, the Conservatives and the NDP. Compare policy to policy and idea to idea. Canadians must get involved.

It is also essential to remove other barriers to trade. The government had an opportunity to decrease the interprovincial trade barriers. Did it do it? No. It touched and nibbled around the edge. There are more barriers to trade between my province of British Columbia and Ontario than there are between any province in Canada and the United States. Does this make sense? It is absolutely absurd.

The government also has to decrease taxation levels. The GST should be scrapped as soon as possible. There is a model we can look to. In 1992 the Conservative government decreased taxes temporarily. What happened to government revenues? They went up. What did the government then do? It started to tax wildly and government revenues went down. Think and listen. There are examples which we can draw from.

In conclusion, if we are to get substantial changes and if we are to achieve our potential, then the place to change first is Parliament because it is not a democracy; it operates more a medieval fiefdom and gives democracy a very bad name.

[John Cannis, Liberal, Scarborough Centre, ON]

Mr. Speaker, I would like to take a few moments to respond to the hon. member's comments.

I will go down the list, but first let me state that I do agree with him that our tax system needs to be looked at and simplified for each and every Canadian.

I am sure the member did not become a medical practitioner by being stupid. The member said that if this government had listened to the Reform plan two and a half years ago we would have been better off. I would like to remind the member that not only did we listen to the people of Canada but even his own members listened to us and applauded us. It was after our previous budget when their own finance critic was the first one to stand up and lead the applause after the budget was presented.

It is so ironic because on two occasions the member for Saanich-Gulf Islands stood up and said that this government had gone too far and had cut too much. On the very same day I recall being in the House when the member for Lethbridge stood up and said that we did not go far enough.

I do not know what the Reform Party actually wants this government to do. We know what we want to do and that is a balanced approach.

I want to take this a step further because he touched on the health care system. I want to use the example of Ontario which most recently has put close to $400 million back into the health system and is saying that the $500 million cut slotted for 1998 most likely will not take place.

The national forum on health not too long ago announced that the problem with the health system is not that we do not have enough money in it but that we have to simply spend the money wiser. Having that feedback, we as a government took it a step further and talked about putting $50 million back into the program for the next three years. We also talked about introducing the pharmacare program. That is why we are going to insist on protecting the program.

When he talks about social conscience, let us recall that in their presentation just a year and a half ago, their approach to taking care of our seniors and the needy was to turn them over to the communities, the social services, the relatives and the charitable organizations.

They say they want to get rid of the GST, scrap the GST, as the member stated a minute ago. In their own platform they state they will hold on to the GST until they balance the budget and then they will address it.

If they were elected would they scrap the GST immediately or not?

[Keith Martin, Reform, Esquimalt—Juan de Fuca, BC]

Mr. Speaker, there are a lot of questions that the hon. member asked me and I would like to go through a few of them because I do not have enough time to go through all of them.

The first thing I would like to say concerns the government's claiming it is the great defender of health care by putting a few hundred million dollars in. That may be well and true, but if you put a few hundred million dollars in after you have removed $7 billion in transfer payments, what kind of arithmetic is that? Take away this much and give this much. I am sure the provinces will be absolutely ecstatic to hear that.

Looking at any place in the country will show the devastation in our health care system, lengthening waiting lists and people suffering. However, I will not get into the specifics.

With respect to the health care forum, those people were selected by the government to get the result that the government wanted. When the asked members on the health care forum whether surgical waiting lists were becoming longer and longer, the response by some of the members was that is because doctors do not want to work. That is what the members of the health care forum said. They said that doctors do not want to work and that is why we have increasing waiting lists.

The Minister of Health likes to say, as my hon. friend mentioned, that the answer is not more money but better management. That is like saying we are in favour of sustainable development. It is another motherhood statement. We need specific solutions as to how we are to provide Canadians with health care when they need it. Not once in the three years that I have been here have I ever heard one constructive solution as to how we are to make sure that Canadians will get their health care when they medically need it. All we hear is better management.

I have asked the Minister of Health time and time again what is meant by better management. Not once have I ever received one single iota of an example or a constructive solution to resolve or explain that statement.

We have put forward constructive solutions. They may not be what the government wants but they are what the Canadian people want.

[Daphne Jennings, Reform, Mission—Coquitlam, BC]

Mr. Speaker, in rising to speak on the 1997 budget I want to look at some of the facts.

The Liberals announced a deficit target of $19 billion. However hitting the deficit reduction target still leaves us $17 billion to$19 billion short of what we are spending this year. It is not really a success story.

The national debt will reach over $600 billion this year, an increase of $111 billion since the Liberals took office. By April it is expected to hit the $600 billion mark but there is no plan to reduce it.

Since the Liberals took office tax revenues have increased by $30.4 billion or $2,250 per taxpayer. Yet we hear constantly that there are no tax increases. Surely the Liberal government's most outrageous statement regarding our nation's finances must be that the government has not raised taxes during its mandate.

As we saw in this year's budget speech the Minister of Finance went a step further and made the claim that in last year's budget and in this year's budget they had not raised taxes at all. Regardless of whichever way we look at it, taxes have risen in each and every year of Liberal rule. In fact there has not been a single year when the overall tax burden was reduced.

What about personal income taxes, the most odious of all taxes? They are on their way to reaching record highs when measured in dollar terms, relative terms or comparative terms. An example of such tax hikes is the 1.5-cent increase in excise tax on gasoline which is worth about $500 million a year. The elimination of the $100,000 lifetime capital gains exemption is worth about$340 million a year. The clawback of age credit on seniors is worth about $300 million per year. Reducing RRSP limits and overcontribution allowances is worth about $125 million a year. Forcing part time workers to pay employment insurance premiums is worth as much as $1 billion per year. The tax on employer paid insurance premiums is worth about $210 million a year. Increasing the air transportation tax is worth about $40 million per year. Increasing the corporate surtax is worth $120 million a year.

Since the deficit will have fallen by $33 billion, a full 92 per cent of that reduction in the deficit is due to higher revenues, not reduced spending.

[Jim Silye, Reform, Calgary Centre, AB]

Tax increases.

[Daphne Jennings, Reform, Mission—Coquitlam, BC]

"Tax increases" as my colleague says. In other words the deficit is the symptom of a spending problem, not a revenue problem.

What about protecting health care? By the time the Liberals leave office they will have slashed health and education spending by $75 billion or 39 per cent. Is this protecting health care? The government has cut $7 billion in health transfers to the provinces and then let the provinces take the fall for the reduced services. This is not protected health care. We are facing a government which is lacking in accountability, integrity and responsibility.

The Liberal vision is a country where the average taxpayer pays $10,200 to the federal government each and every year, and $3,400 a year is to service the debt alone. As well the Liberal vision is a country where 7.3 million Canadians earning less than $30,000 pay 27 per cent of their incomes to the federal government.

With regard to creating jobs, doubling the CPP premiums does not bode well for the 1.1 million unemployed Canadians who will now become more expensive to hire. Payroll taxes are job killers. On top of all this the Liberals have done nothing to address the waste and inefficiencies in government.

This year we can again expect unemployment and not tax relief, bankruptcy, personal insecurity, more contract work, layoffs, shrinking income, increasing taxes and another year of record high tax burdens.

Spending borrowed money is living on borrowed time. We have mortgaged the futures of our children and grandchildren and it must stop. Today I have some of my grandchildren sitting in the gallery. It is their futures I am concerned with as well as those of others.

Let us take a look at that part of the fresh start plan to make government smaller and more effective. I am sure the members

opposite would agree with that. It would provide tax relief to stimulate job creation, end overspending and attack debt. I am sure all of us in the House would like to see that happen.

A balanced budget is a means to an end with the end being a smaller, leaner and more focused federal government. A balanced budget is not an end in itself. Attempting to balance the budget by waiting for tax revenues to catch up to spending simply ignores the fact that the current size of the federal government is unsustainable.

Let us look at our unemployment figures. In 1993 the government was elected on the promise of jobs, jobs, jobs. Three years later Canada still suffered from a jobless rate of 10 per cent. Since the Prime Minister took office the seasonally adjusted unemployment rate has averaged 9.96 per cent. High taxes go along with high unemployment.

I would like to use a chart to emphasize some of these items. Some points have been made on it. There are a few facts regarding the government's failure on jobs. Since January 1995, some 25 months ago, only 153,000 full time jobs have been created or about 6,000 jobs per month. There were far less than the 312,000 new entrants the labour force needed. In the same period 121,000 part time jobs have been created or about 4,800 a month. Also over the 25 months since January 1995 the economy has added only 274,000 jobs or 10,960 per month. At the same time the labour force has grown by about 12,500 per month.

We are getting the picture here. The need is not being supplied. The result has been a 37,200-person increase in unemployment since January 1995. Since taking office the Liberals have presided over a level of unemployment that has averaged 1,490,000.

We must stress that unemployment now is not a global problem. The Prime Minister likes to say his record is the best in the G-7 group. but I would like to clarify this. The Prime Minister likes to compare our job creation performance with that of European countries. I draw to the attention of the House that the comparison is irrelevant since the economies are so different.

Better comparisons might be found with the United States, with Australia and to a lesser extent the United Kingdom where performance has been much better than in Canada. In Canada it is 9.7 per cent on this chart whereas in the United States it is 5.3 per cent. In the United Kingdom it is 6.7 per cent. In Australia it is8.6 per cent. In Japan it is 3.3 per cent. In Austria it is 7 per cent. In Sweden it is 8.7 per cent. In Switzerland it is 5.3 per cent. Those are all lower than Canada's unemployment rate. We have to take a look at that.

[An hon. member]

Spinning a myth.

[Daphne Jennings, Reform, Mission—Coquitlam, BC]

"Spinning a myth" as my colleague says. Absolutely.

On failing to hold the line on taxes, I should point that the Liberals have hiked taxes 35 times since taking office. Some examples include forcing employees to pay tax on employer provided life insurance benefits and eliminating the capital gains exemption that benefited hundreds of thousands of middle class taxpayers. It is awful. Who gets hurt again? It is always the middle class.

Tax revenues will be $24.5 billion higher in 1997-98 than they were in 1993-94, an average of $6 billion a year. Of this$24.5 billion about 30 per cent is due to the combined effects of Liberal tax hikes and Liberal inflation tax.

Canadians paid an average of 23.3 per cent of their personal income in direct taxes and other payments to governments in the 1990-96 period, up from 20 per cent in the 1980s and up from12.3 per cent in the 1960s. Americans by comparison paid 17.5 per cent.

A full 7.3 million Canadians earning less than $30,000 owed $10.7 billion in federal tax in the 1994 taxation year. It makes no sense for the Liberals to talk about child poverty-we keep hearing that word-when they are forcing low income parents to pay taxes.

The Liberals have been milking the employment insurance system to meet their deficit reduction goals. The real disposable income of the average family of four has fallen by $3,000 since 1993.

I see my time is almost up. The budget does not bode well for the future. The Prime Minister has already stated that he will increase spending if the Liberals manage to balance the budget. He claims that across the board tax cuts are not the right thing to do in a society like Canada.

If Canadians trust the Liberals again it will not be long before another deficit crisis rears its ugly head. This is a slippery slope, I hope Canadians will say they will not put up with it any longer at the next election.