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House of Commons Hansard #146 of the 35th Parliament, 2nd Session. (The original version is on Parliament's site.) The word of the day was budget.

Topics

The BudgetGovernment Orders

11:20 a.m.

Reform

Ted White Reform North Vancouver, BC

Madam Speaker, I listened with quite a lot of interest to the member's speech. At the very end of his speech he said that Canadians support the budget.

I would just like to ask him a question based on a letter that I have received from one of my constituents dated February 11 with respect to the budget. My constituent says: "Last October I was lucky enough to receive a $300 per month raise in pay. My wife and I consider ourselves fortunate and looked forward to being able to remodel our kitchen in the new year. When my end of January pay arrived, there did not seem to be any extra money available. Closer examination reveals that from my original $300 raise, $162.60 went to increased income tax and $129.96 went to increased CPP and UI deductions which left $7.44 on my cheque". When that was combined with some additional increases in natural gas and so on, he calculates that he is actually $14.56 worse off in January 1997 than he was in January 1996.

At the end of the letter he says: "I do hope that you have enjoyed using the extra $1,951.20 of income tax that my raise produced in your budget this year".

I would like to ask the member whether he thinks it is productive that the tax creep that has been encouraged by the government's actions has actually created a situation where people are worse off a year later than they were in 1996. Why is he so proud of his budget when all it has produced is more hardship for Canadians?

The BudgetGovernment Orders

11:20 a.m.

Liberal

George Proud Liberal Hillsborough, PE

Madam Speaker, I thank my hon. colleague from North Vancouver for his question.

Obviously the individual he is talking about is in a very high tax bracket. As I said throughout my speech, as a result of this budget people are better off today than they were four years ago. I say that without any fear of contradiction. We have lowered the payments to unemployment insurance. We have done all these things. We have lowered interest rates. People have more money after they pay on their mortgages and their loans. Things are much better.

The government could give an across the board tax cut, but this is not the time to do it. The government does not think it is the time to do it. However, eventually the time will come. If we give an across the board tax decrease right now, then the deficit would go up. We cannot afford to do that. We have to get our financial House in order. When that day comes we will certainly have even a better budget than we have today.

The BudgetGovernment Orders

11:25 a.m.

Bloc

Osvaldo Nunez Bloc Bourassa, QC

Madam Speaker, my colleague is pleased with the budget and the success in the battle against the deficit. However, he does not say a word about child poverty, a serious issue in Canada and Quebec nowadays.

There are 1.5 million children who live in poverty in this country, and the government has no real intention of solving this problem. The government has set targets in its battle against the deficit and it has met them, but it has not set any objectives in dealing with the very serious problem of child poverty.

I would like the member to explain to us why the government is investing only $600 million in the fight against child poverty, while various anti-poverty organizations tell us that it must immediately invest at least $2 billion in concrete measures in order to address this problem.

The BudgetGovernment Orders

11:25 a.m.

Liberal

George Proud Liberal Hillsborough, PE

Madam Speaker, I thank the hon. member for Bourassa for his question. No doubt it could be said that nothing is ever enough.

We put $600 million in the budget to fight child poverty. Probably it is not enough but it is all we could do this time. A lot of poor children belong to families where there are single parents. This is a terrible tragedy of our society. We have to make things better for these people.

If the hon. member goes through the budget and sees the programs in it, the money that has been put in there, probably it is not enough. However, it is a lot better than it was last year.

The BudgetGovernment Orders

11:25 a.m.

Liberal

Roger Simmons Liberal Burin—St. George's, NL

Madam Speaker, I too want to rise and voice my support for the measures in the budget brought down just over a month ago. The would-be minister from Calgary Centre draws attention to his presence here.

I say to my good friend from Calgary Centre, I have a lot of choice on this one. It is my choice to support this budget. If he will give me a chance, being the gentle man that he is, I will tell the House in the few minutes I have some reasons why I support the budget.

The first was alluded to by my good friend from Bourassa just a moment ago, the issue of child poverty. As my friend from Hillsborough said, not enough is being done. However, we are making some progress. Some money has been put into this important initiative. I happen to believe, as a Canadian and as a Newfoundlander, that it is an absolute disgrace that so many people are living in poverty in this, the best country in the world.

Obviously, we have done some things very wrong over the past few years so that we should have that situation still applying. We have to address that one. It has to be a priority for Canadians of all political stripes because poverty, which you rather take for granted in third world countries, is right under our noses. People have to ask why we cannot do more to alleviate that situation, to get rid of it sooner rather than later.

I salute the Minister of Finance because he has made some progress in this area through the child tax credit. It is a step in the right direction in addressing the problem of child poverty.

The budget this year, which proposes to increase spending on children, will increase from $5.1 billion to $6 billion by July 1998. That is some progress but dollars do not say it all. The reward will be in the benefit that these dollars achieve over time. Also in the budget there is new emphasis on young people not only in terms of increased funding for summer jobs but in terms of addressing some of the problems they face with funding for university. We have an improved system of student loans and education credits to ensure fuller access to a good education by all young Canadians from coast to coast.

I like the emphasis in the budget on the assistance for disabled people, including broadened tax relief for medical expenses. It is something that I have been fighting for for a long time, I and many others in this House, and I am glad to see that the government is moving in that direction.

I was also pleased with the emphasis on health care in this budget and the new initiatives that the government proposes to take, in particular in the area of nutrition for example.

If we reflect on the time we have been here since November 1993, three and a half years, things in financial terms, in fiscal terms were quite different and a lot bleaker at that time than they are right now. This government, through the leadership of the Prime Minister and the Minister of Finance, has restored some sanity to the public finance system. We all know the statistics on how we have brought down the deficit by so much over such a short period of time. I will not bore members with those stats again.

Let us always keep in mind that government finally is not about managing money, as important as that is. That is the means to the end. If we do not manage our money right, we cannot do these things in terms of social programs and job creation that we are dedicated and committed to doing. We have to keep our eye on the ball. While managing money is an important step it is not the end in itself. It is just the means to the end. The end itself has to be, must be at all times, people. We have to see that people are better served.

People who are unemployed are not very well served. It is difficult to appreciate the importance of deficit reduction or many other things that are touted in this budget if one does not have a job. In my own riding, in my own province the unemployment rates is still unacceptably high. I salute the job creation initiatives in this budget. I believe we are generally going about it in the right way because I am a free enterpriser. I believe that government does not create jobs. It is the private enterprise sector that creates the jobs and small business that creates jobs. There are measures in this budget including lowering employment insurance premiums which make it more attractive for small business to create jobs.

We have had to be patient. It is hard to be patient if one does not have a pay cheque to put the groceries on the table. I believe that the effect of the kind of budgetary measures that we have had over the last three or four years, together with the one right now before us, the cumulative effect of that will be to increase more jobs out there.

Already the record of this government is that it has increased 700,000 jobs. The projection is that we will see another 300,000 or so in this year.

We are beginning to see the light at the end of the tunnel. I have great concerns for those people who do not have jobs. We have to see that more is done by government in terms of leadership, in terms of the incentives we provide to bring down the unemploy-

ment rate. In my own situation in Burin-St. Georges and in Newfoundland generally, we have over the past three or four years been devastated by a terrible downturn in the fishery.

There too we are beginning to see a bit of light at the end of the tunnel. I do not want to anticipate my friend, the minister of fisheries, but I am hoping that he will accept the recommendations of his advisory council and reopen the fishery at least in a limited way on the south coast, 3PS, 3PN, 4S and so on, that area that recommendations apply to. I hope we will see a reopened fishery.

Those people who are on TAGS, those people who are on government assistance, are not there because they want to be there. They would rather be working. Speaking of those people, we are still leading the charge on the issue of labour force attachment.

These people through no fault of their own were prevented from working by a government initiated endeavour. They were barred from working. The government mandated that shutdown. Through no fault of their own they now find themselves being treated as new entrants. That is unconscionable. It has to change. These people were not told upfront that might happen to them. Indeed it was not going to happen to them. If we had been able to stick with the original objectives in that program, where all would be trained, that would not have happened. That circumstance of no labour force attachment would not have applied. It applies today because in midstream, because of increased numbers coming into the program, the government had to change the rules and deprive people who would normally have had some training opportunities because of a limited budget.

For those reasons, that they did not know upfront and that the rules were changed in the middle of the game, these people, in all conscience, have to be given labour force attachment.

I have addressed that issue on every forum I have been able to. I have talked to the Prime Minister and the minister. I have raised it in caucus and I have raised it on the floor of the House on several occasions. We have to continue to punch away at it until we beat some sense into the heads of the people who matter on that issue. It is an important issue. It affects about 15,000 people in Atlantic Canada and Quebec, the five eastern most provinces. We have to do the fair thing when it comes to that issue.

Government is also about fairness. People out there have difficulty identifying with the positive things that may be in a budget or in a government initiative if they see something like the TAGS issue which has become a symbol of basic unfairness.

There is no good reason for it, certainly not a monetary reason. What we are talking about would cost $30 million to $60 million over time. That is not a lot of money in the greater government context. It is money which would be well spent.

Let me recap my remarks, as my time has expired. I support with a heart and a half this budget. I invite my friend from Calgary Centre to do likewise.

The BudgetGovernment Orders

11:35 a.m.

Bloc

Richard Bélisle Bloc La Prairie, QC

Madam Speaker, I listened to the speech by the member across the way, and I would like to ask him two questions.

Does the member agree that the finance minister is giving himself room to manoeuvre by hiding up his sleeve, according to Bloc Quebecois estimates, $8 billion this year and $14 billion next year?

Would the member agree that these sums of $8 billion and $14 billion should be used to restore the levels of transfer payments to the provinces? And this is particularly important since the member comes from a maritime province which greatly needs its transfer payments, which were cut by the finance minister. Moreover, instead of keeping these large amounts as a reserve, the minister could reinject them into the economy in order to help unemployment insurance claimants recover their former benefits.

Is the member ready to support the Bloc Quebecois in its efforts to have the reserves hidden by the minister used to restore transfer payments that have been cut from the provinces, and the money taken from the unemployed, since it is their money after all?

The BudgetGovernment Orders

11:35 a.m.

Liberal

Roger Simmons Liberal Burin—St. George's, NL

Madam Speaker, I thank my friend from La Prairie for his question. However, I must have missed the preamble to his question because I did not fully understand what the conspiracy was. He said that the Minister of Finance is hiding some $8 billion. Could he be a little more specific. I will attempt a response.

The BudgetGovernment Orders

11:35 a.m.

Bloc

Richard Bélisle Bloc La Prairie, QC

Madam Speaker, I will rephrase my question. According to the calculations made by the Bloc Quebecois, the minister could have lowered the deficit a lot more this year. It is said to be around $17 billion, but according to the latest trends, the real figure, which will be known in the next few weeks, could very well be around $10 or $12 billion. In the next few years, probably by 1999 or by 2000 at the latest, the Canadian deficit will have been eliminated.

The Bloc Quebecois calculated that, by announcing a $17 billion deficit for this year, the Minister of Finance has kept $8 billion up his sleeve for this year and probably $14 billion for next year.

Could all the billions the minister is keeping in his pocket be given back to the unemployed who have been robbed by the

government's employment insurance scheme? Instead of hiding all those billions to bring the deficit down to zero as fast as possible, would it not be better for the government to give back the$4.5 billion cut in transfer payments to the provinces?

The BudgetGovernment Orders

11:40 a.m.

Liberal

Roger Simmons Liberal Burin—St. George's, NL

Madam Speaker, one of the things we whisper on our side is that the Minister of Finance is really a closet conservative. Certainly on fiscal matters it is well known that he is a conservative. If we look at his record of budget making over the last three or four years, we will notice that on the matter of projections about employment levels, deficit levels and so on, he has always been a bit cautious.

What my friend from La Prairie characterizes as hiding I would put in another context altogether. I would submit that the Minister of Finance is being true to form here in that while he has projected a deficit of $17 billion, I am sure, as the member suggests, that the Minister of Finance is hopeful it will come in below $17 billion. I would not subscribe to the suggestion that somehow he has been duplicitous and is somehow hiding a lot of money. He is just being himself and is being a bit conservative.

Let us hope the member for La Prairie is right that the deficit is even lower than the $17 billion projected so conservatively by my friend.

The BudgetGovernment Orders

11:40 a.m.

Reform

Ed Harper Reform Simcoe Centre, ON

Madam Speaker, I will be sharing my time with the member for Fraser Valley East.

It is with some disappointment that I get up today to speak on this fourth Liberal budget. It is a good time to reflect on the fact that it is the fourth budget. In my view it is the second really do nothing budget of the four. I say that because the first budget introduced by the finance minister was a stand pat, do nothing budget. It was not until his second budget that the government acknowledged the seriousness of this country's deficit and debt. He did start to make some moves to deal with that serious problem. But in the second and third budgets he did too little. It was too little, too late. Of course, this fourth budget is an election budget. It is stand pat, status quo which has serious consequences on the country as a whole.

This fourth budget gives absolutely no hope to those who are unemployed. Despite the election promise of jobs, jobs, jobs, the same number of Canadians are now looking for work as when the government was elected. There are about 1.4 million Canadians who are still looking for jobs. There are about two million to three million underemployed Canadians. About one in four Canadians is employed but is worried about their ability to hold on to their job. There is tragedy among our young people with a youth unemployment rate of 16 per cent. This is an extremely serious issue which the government has failed to address in its budget. We have had 76 months of straight unemployment in excess of 9 per cent. That is the worst record since the depression.

There was no hope in this budget for the crushing tax burden that is faced by all Canadians, be they consumers or part of the business community. It is unbelievable that after four budgets we still have no commitment to a balanced budget. The finance minister says that we are heading in that direction but there is no firm commitment, no timeframe, no date set to indicate when we will have the books in balance.

The budget says to a lot of Canadians that they are reluctant to slay the monster they created. They want to keep that avenue open. There are those in government who are saying the era of cuts is over and they can now start spending again when we are approaching $620 billion of debt.

In the budget tax revenues will be up $4 billion. They will be $24 billion higher than when the government took office in 1993. When the finance minister talks about his war on the deficit and we take a look at how he has achieved the reductions in the deficit, 71 per cent of those reductions have been accomplished through increased revenues and only 29 per cent have been achieved by expenditure reductions. There is much more that could be done and much more that should be done.

Those expenditure reductions have been mainly reductions to the provinces in transfer payments. There has been $7 billion in cuts to health care and education in our social programs by a government that gets up day after day and talks about being the defenders of health care.

Since the government was elected in 1993 it has introduced 35 tax increases. Just before the budget was presented the 36th increase was introduced. It is indeed a killer. It is a $10 billion tax grab under the increases in the CPP.

The finance minister argues that it is not payroll tax, that it is an investment. However when it is compulsory out of payroll, from the taxpayers' pockets to the government's pocket, that is a tax. When the government sets the rate that is a tax. I would like to see anyone in government defend what the finance minister is saying to young Canadians, that this is an investment. Young Canadians are struggling to make ends meet. They are not looking for an investment. They are looking for some tax relief so they can keep their heads above the water and pay the debts that are mounting.

Earlier finance minister acknowledged that payroll taxes were a cancer on job creation. Apparently he has changed his mind on that, but members on this side have not changed their minds. Payroll taxes are a cancer on job creation. As a matter of fact the finance department issued a report recently on the number of jobs that were lost on the modest increases in CPP between 1986 and 1993. About half of what is being proposed this time cost Canadians 26,000

jobs. This will create a loss of jobs but the government has yet to acknowledge how many.

The debt will be about $620 billion by the end of 1997-98. That is our collective shame and our challenge. The government says we are acknowledged as the number one country by the United Nations. We are the number one country in the world. I will not dispute that but I will take exception to the fact that we have more mortgaged our children's future to achieve that number one status. We have not paid our way. That should be our shame.

Since the government was elected it added $111 billion to the debt. The finance minister has gone on about reducing the deficit from 5 per cent to 4 per cent and 3 per cent of GDP. He has not mentioned the fact that we have seen the debt go from $500 billion to over $600 billion. The additional $111 billion the Liberals have added represents about $8 billion in additional interest servicing costs, approaching a total federal interest bill of $49 billion or35 per cent of revenue. That is more than the government is spending on pensions, employment insurance, health education and social programs.

When dealing with those kinds of numbers a 1 per cent increase in interest rates could add potentially $4 billion to our debt servicing costs. Yet I hear the government cheer the fact that the finance minister is talking about only overspending by no greater than $19 billion. I find that no cause for cheering. We are still living beyond our means. Our debt to GDP ratio is the second highest in the G-7.

European countries that want to join in the common currency must be below the 60 per cent target of debt to GDP. Ours is currently much higher than that at about 74 per cent.

What is lacking in the budget and in government's thinking is vision. There is no plan. I read in the paper the Prime Minister has now realized how important vision is. It is encouraging that he is to start getting a vision for the country. There has to be a better way than 76 months of straight unemployment over 9 per cent.

All we have heard from the government-and we heard it today and we will continue to hear it-is that its only jobs strategy is lower interest rates. This will create employment. Lower interest rates are something the government does not have full control over. They are very volatile.

The government encourages borrowing when it should be doing just the opposite. It should be encouraging Canadians to save and to pay their way.

Let us look at the climate for lower interest rates in Canada today. On Saturday the Globe and Mail published an article about record consumer bankruptcies.

I wanted to get into the better way, the Reform way, but I see my time is up.

The BudgetGovernment Orders

11:50 a.m.

Liberal

Paul Szabo Liberal Mississauga South, ON

Madam Speaker, in his statement the member challenged anybody to convince him otherwise that the CPP increases were not a tax or that Canada pension plan premiums were not a tax.

Let me put on the table a couple of facts on the record for the member. He will know that today's pensioners, those people collecting CPP today who have contributed the maximum throughout their careers, are receiving $8 for every $1 for they contributed. That amount tends to indicate that it is not a sustainable situation. When there are five working Canadians for every one retiree it is sustainable, but when the ratio decreases to three to one something has to be done. That is why the changes were made.

As an aside, the member will know that the increases proposed by the government are 9.9 per cent whereas his party is recommending something like 13.5 per cent. If it is a tax in the member's view, why is it that the collection of Canada pension plan premiums does not go into government revenue and therefore reduce the deficit?

When employers pay a little more CPP they have a higher deduction, lower income and thus pay lower corporate tax. The corporations have to pay the additional amount. All other things remaining equal their corporate taxes are going down. In fact the deficit will increase further.

When individuals have to pay additional CPP premiums from their paycheques it reduces the amount of income tax they pay and government revenue goes down further. No matter how we look at it government revenue is going down and the deficit is increasing as a result of the increase in the Canada pension plan.

Does the member not agree that the increase in Canada pension plan premiums increases the deficit of the Government of Canada?

The BudgetGovernment Orders

11:50 a.m.

Reform

Ed Harper Reform Simcoe Centre, ON

Madam Speaker, I thank the member for his question. I do not know from where he got the statement that revenues were going down. When I looked the budget over that escaped me completely. Government revenues have gone up. It is right there and it is indisputable.

The BudgetGovernment Orders

11:50 a.m.

Liberal

Paul Szabo Liberal Mississauga South, ON

CPP does not increase revenues.

The BudgetGovernment Orders

March 18th, 1997 / 11:50 a.m.

Reform

Ed Harper Reform Simcoe Centre, ON

I know that. It is outside the budget but it is a payroll tax. The member said that it was not a tax. When the government takes out of employees' pockets and it is compulsory, I challenge any member to debate with working Canadians that it is an investment and not a tax. They are not looking for an investment. They are looking for a tax reduction. It

is a payroll tax. The finance department has said it is a payroll tax. The member's play on words will not fool Canadians. Regardless of how it tries to fudge the issue it is a reduction in the take home pay of Canadians.

The corporations are telling the government to reduce payroll taxes to help them create jobs. The government is talking to the corporations but is not listening to them. They are asking the government to do exactly opposite to what it is doing if it is serious about creating jobs in Canada.

The BudgetGovernment Orders

11:55 a.m.

Liberal

Dennis Mills Liberal Broadview—Greenwood, ON

Madam Speaker, I listened carefully to the remarks of the member for Simcoe Centre. The notion of comprehensive tax reform is an area on which the House should be engaged in full debate in a very active way.

I am totally opposed to the member's obsession with deficit and debt. We took a position in the House of Commons four years ago that we would get the fiscal framework of the country in order and that if we did so private sector industry would pick up the slack. We would create an environment so that all these people could somehow create jobs. The fact of the matter is that industry has not done that. It has not come to the party.

What does the member believe we have to do in the House to get industry active in the game of job creation?

The BudgetGovernment Orders

11:55 a.m.

The Acting Speaker (Mrs. Ringuette-Maltais)

I will allow about 30 seconds for the hon. member to answer.

The BudgetGovernment Orders

11:55 a.m.

Reform

Ed Harper Reform Simcoe Centre, ON

Madam Speaker, 30 seconds. It will be a short response from a short member.

The BudgetGovernment Orders

11:55 a.m.

Reform

Ted White Reform North Vancouver, BC

I am the short member in this place.

The BudgetGovernment Orders

11:55 a.m.

Reform

Ed Harper Reform Simcoe Centre, ON

Industry is not reacting because industry is looking for the government to get its fiscal house in order. Industry is looking for the government to make a commitment to a balanced budget and the government has not done it.

The BudgetGovernment Orders

11:55 a.m.

Reform

Chuck Strahl Reform Fraser Valley East, BC

Madam Speaker, it is a pleasure to speak on the budget somewhat after the fact. The budget has kind of come and gone like the proverbial wind in a barnyard, but it is still with us today in debate. It will be with us in the upcoming election whether it is this spring or next fall.

It is good to talk about budgetary items since budgetary items will affect every department and all Canadians because they are footing the bill for the budgetary priorities of the government.

In the wake of the budget many people are asking why they do not feel so good if this is a feel good budget. Where are the benefits? What will the government do to address that we now have over 9 per cent unemployment for 77 consecutive months? The 1.5 million unemployed that shocked the Liberals when they were in opposition is the same 1.5 million unemployed of today. Many people do not see the benefits.

People are also saying they are not sure the government's priorities on spending are where they should be. When I talk to people they say the government's priorities should be a good health care system and a pension system that is supportable and gives the benefits needed. They see the federal government has cut health care and education funding to the provinces by 39 per cent since it came into power. They see hospitals closing. They do not see a lot of benefit for them.

They also see the government raising CPP premiums by 73 per cent. Private contractors will pay $3,270 per year in CPP contributions if they are their own boss. They must pay their entire working lives almost $3,300 per year all for less than a $9,000 per year pension. This is quite a contrast to the MP pension plan that the government has schemed to maintain. It will pay the equivalent of millions of dollars to some members of Parliament for a relatively few years of work.

There is no plan for tax relief in the budget. That is a shame for individuals who have seen their net income drop by some $3,000 a year since the government took office.

It is also a shame because private industry does not see why or how it is going to be able to afford to hire more people. Payroll taxes continue to go up. The general taxation level is staying too high and the federal government does not seem to be listening to businesses.

Provincial governments, for example the Alberta government, have asked the federal government to have a look to see what lower tax rates and the lowest tax rates in the country mean the most job creation. It is a direct correlation. Why does the federal government not see that?

All this comes in the context of the Liberals now doing their spinning as much as possible to try to create the impression that the Prime Minister is a man with vision, that he can see into the future, that he is able to see what we need and where we are going.

I do not know whether Canadians believe that. Certainly none of what the federal government has done to date budget-wise was visionary, especially its own red book promises. It is now rather waffling in the area of, do I borrow more money, or do I spend a little more on some programming, should I reduce the deficit, is tax relief a good idea or not?

A little while ago the Prime Minister said that tax relief was un-Canadian. Now we hear the finance minister saying that tax relief would be good some time, he just does not know when.

The national debt will exceed $600 million next year, some$111 billion more than when the Liberals took office. Deficit reduction is due mainly to higher revenue and not to reduced spending. The deficit remains some $19 billion, which proves that the country does not have a revenue problem. Revenues are up. We seem to have a spending problem but the government will not address that.

Since the Liberals took office, tax revenues have increased$30.4 billion. The Liberal vision seems to be that it is okay that the average taxpayer sends some $10,200 to the federal government each and every year, $3,400 a year to service the debt alone.

If that is the vision, then it is no wonder that so many Canadians are working two jobs, that they are moonlighting, that many of them are working on the underground economy and that people are saying they have to do what it takes because if they play by the rules this government is setting, they cannot even feed their families. That is where lack of vision from the Liberals is hurting the average Canadian family.

There are 7.3 million Canadians earning less than $30,000 a year. The Liberal vision seems to be that that is somehow okay. In other words, the chronic problem of the working poor is somehow okay.

Again I mention that by 1998 the Liberals will have cut health and education payments to the provinces by $7.5 billion while cutting its own spending only that much as well. In other words, a lot of the deficit reduction which it has been able to achieve is on the backs of the provinces with the reduced health and education transfers.

I would like to talk specifically about a budgetary item in my own constituency. The Liberals in the last budget, not this one, closed CFB Chilliwack. Now that we have the access to information documents before us, some of the retiring generals and so on have said that this move was a poor move at the time, that it was not a budgetary move but a political move.

In addition, it has been done without consultation with the local communities. That is in contrast to what it said in its February budget when it stated: "where warranted, the federal government is prepared to work with community leaders and other levels of government to assist in the development and implementation of community adjustment plans".

We have tried to do that. We met with Treasury Board in Ottawa on April 17, 1996. We were told that there was no money, no compensation, no second thought and that it was just there to determine the process by which the lands could be disposed of. The lands now, according to the Minister of Transport, may sit idle for as long as seven years, stuck in aboriginal land claims which are benefiting neither the aboriginal people nor the community at large.

There has to be something, I would argue, given the words of the federal government both in opposition and since its members have been in government, to mitigate this problem in our community. A $105 million impact on our community cannot be just shrugged off without consultation and without a plan B, a plan that will help the community to make that adjustment.

I have asked in the past and I am asking again today for the federal government to consider transferring E division headquarters of the RCMP to Chilliwack, to the lands at that site. It would be a good use of that land. I have written a letter again to the minister today asking him to do that. It would inject spending into the local economy.

It would be good for the RCMP. They could come into a federal facility where they would have new buildings. It is a lower cost for the RCMP to be in Chilliwack as opposed to where they are located now. It makes sense economically. It makes sense to the members of the RCMP who could enjoy a lower cost of living in Chilliwack. It would be fair because it allows the federal government to do something, as it promised, to make the adjustment from shutting down CFB Chilliwack lands to another use of those lands. It would also let the process begin about the uncertainty of what is going to happen to our lands.

Since the government has pushed ahead with this, the land at CFB Chilliwack has to be divvied up quickly in a way that will allow both the aboriginal people and the community at large to benefit. If E division headquarters were to come to Chilliwack we could make some use of some of the newer buildings and some of the new facilities.

We could then start the process of rezoning that land where applicable. The aboriginal people could get part of it, the community at large could have access to it, developers and home builders and so on could have access to that land. It would be a good budgetary procedure as well if the government could only do that.

I do not have time to get into all the Reform proposals, things like increasing personal deductions, some of our tax proposals and so on, but I am interested in doing that in questions and answers if anyone would be keen to get into that subject.

The BudgetGovernment Orders

12:05 p.m.

Liberal

Dennis Mills Liberal Broadview—Greenwood, ON

Madam Speaker, I would like to speak specifically to that portion of the member's speech which deals with base Chilliwack.

It is an interesting example. We have been listening to Reform members all morning and they keep saying that the government has not cut enough, that the Minister of Finance has not cut enough, and that we must continue to keep focusing on a balanced budget. Yet here we have a concrete example in the member's riding, where

his community has been a victim of this ideological campaign to eliminate the deficit almost overnight.

I am sympathetic to the closing of that base. There are several other examples across the country where this obsession with the deficit has shut down key government instruments, the government presence that has helped build the country.

I listened to the member say that he went to Treasury Board, the very group that did the cutting. He went back after the cutting was done and said: "Can you help us get this thing going again?" He feels that he has been a victim of this deficit thing that is evolving in the House of Commons.

I say to the member respectfully and sincerely, does he not think that this campaign to balance the books virtually overnight should now be halted a bit and we should get back into the business of putting a bit more government intervention into the economy so that we can get our constituents back to work. What would the member say to that?

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12:05 p.m.

Reform

Chuck Strahl Reform Fraser Valley East, BC

I thank the hon. member for his question. I know he has expressed to me both personally and in the House his concern about CFB Chilliwack. I appreciate that. He has been one of the few members who has actually publicly worried about what has happened to British Columbia's last land forces base. I thank him for those words.

I have two or three comments that are appropriate here. One is that I had said to the minister if he could show me how he can complete the mandate of the Canadian armed forces, how he is going to save money and if he could lay it out for me, I would be hard pressed to say that it is a lousy idea.

What we have been able to find so far from access to information requests, from comments by Colonel Daigle of the western forces command, whose budget briefing documents say there is no money to be saved by this closure, from General Addy who said that this is a military risk and a poor military decision, from the cost overruns in the transfer of base personnel to CFB Edmonton, now some $200 million over budget, is that there is no money to be saved. If there was money to be saved and we could do the job, we would look at it. However, there is no money to be saved and we cannot do the job. It was a poor decision all around.

If money could be saved and the job could still be done, we would have to take a serious look at it. However, that is not the case. That is why I believe this decision has been politically motivated, which makes it a doubly heinous decision. Money has not been saved and the military now says it cannot fulfil its obligations in British Columbia because it does not have a land forces presence.

On the issue of whether the government should slow down its deficit cutting, I would like to say two or three things. Government still has priorities. The budgetary plan of the Reform Party is to spend $94 billion on federal government programming. That does not include servicing the debt. That is still a substantial chunk of change which we think Canadians want and deserve.

Further discussion, I believe, will not be so much on whether the budget should be balanced. Everyone says that the budget should be balanced, whether it be done in two, three or four years. The question then becomes: at what level of taxation should the budget be balanced?

It could be balanced at $94 billion, which is our proposal. It could be balanced at $109 billion, which is the government's proposal. It could go to $120 billion-

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12:10 p.m.

The Acting Speaker (Mrs. Ringuette-Maltais)

The hon. member's time has expired.

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12:10 p.m.

Papineau—Saint-Michel Québec

Liberal

Pierre Pettigrew LiberalMinister of Human Resources Development

Madam Speaker, I am very pleased to rise in this House to discuss the budget that was tabled by the finance minister a month ago today, on February 18.

I will begin my remarks by extending my warmest congratulations to my colleague, the Minister of Finance, for the excellent budget he tabled in the House. Of course, this budget, his fourth, builds on the measures announced in the three previous budgets and on the extraordinary work done by this government over the last few years. The work we have done is so exceptional indeed that, when we came to power in 1993, few Canadians expected us to do so well in managing our country's public finances.

This government has put Canada's public finances on such a sound footing that we can now see the light at the end of the tunnel. For years and years, Canadians had been criticized by foreign markets throughout the world for having lost control over their public finances. We have now regained that control thanks to this finance minister and to the government which has contributed to these efforts.

Now that we have put our public finances on such a sound footing that foreign markets and Canadian economists have regained confidence in us, that interest rates are at their lowest level in thirty years and that inflation is finally under control, what kind of society do we want to build, now that our finances on a sounder footing than any time in the past thirty years?

What the Minister of Finance showed us in his budget was a government whose primary focus is giving hope back to Canadians, because the budget, in a fundamental way, puts people first.

Now that we can finally see the light at the end of the tunnel, we are turning our attention to people.

This is a government that wants to build a stronger society, a society that gives everyone a chance to make a contribution, a society that gives even those who are sometimes the least fortunate a chance to hope again.

I often kid my colleague, the Minister of Finance, telling him that he has been just as wrong in his forecasts over the years as all his predecessors. Obviously, I kid him because, if he has perhaps erred, it has been in the sense that the deficits have been lower than he had announced, whereas previous governments have, for years now, always announced lower deficits than they actually produced.

I, of course, prefer the Minister of Finance's rigorous management and tendency to underestimate our deficits rather than constantly overestimate them. I think this was by far the best way of operating.

Naturally, we are concerned about the continuing high unemployment. We are obviously aware that our increasingly healthy economy has created more jobs in Canada since 1993 than the economies of most industrialized countries, that our performance has far surpassed the average of G-7 countries. In this we must take pride.

It is still not enough. We must do more, and I, for my part, am confident that we are going to achieve much better results with the continuing high performance of our economy. It is important that the growth of the Canadian economy, which rests on a solid foundation thanks to this government, can now lead increasingly to job creation everywhere.

I would now like to draw your attention to the kind of society we are going to build on the solid foundation and the achievements of recent years. We on this side of the House have compassion for the least fortunate members of our society and we must stand united, as a society, and invest in each other's future.

The priority we have set, a priority I would consider national because the Government of Canada arrived at it in discussion with the provincial governments, is the situation of children in low income families. The child tax benefit is one of the first investments we can make. Now that we have some leeway, the Minister of Finance has shown that this government continues to be concerned about the least fortunate members of our society, those who are most vulnerable.

What we have also demonstrated as well is that, by focusing on the children of low income families, we are investing in the future, since everyone is aware that poverty consistently leads to situations that are harmful to society. Poverty is unacceptable in itself, for the people experiencing it, but it is an extremely heavy burden for society as well.

Thus, when we invest in the children of poor families, we are strengthening the social fabric of our society, and therefore are making what might be called an investment in the future, rather than a social expenditure, for poverty can kill every spark of promise there is in an individual. I believe that everyone can see that poor children start off with a strike against them. They have more school problems, and more need of the health care system. Knowing that the poor are always more liable to end up unemployed and dependent on social programs, we must therefore make sure that fewer children start off life on the wrong foot.

A child who starts off on the wrong foot has a hard time changing gears and overcoming obstacles later. These children need to be nourished; the same goes for their spirits, their hearts, their souls and their potential. This we have done, in a way that strikes me as eminently responsible.

We wanted to break down what we call the welfare wall. The child tax credit established by this government in conjunction with the provinces across Canada is intended to break down that wall. This is an extensive, nation-wide effort, in which the provinces and the Government of Canada are working together in an area of concern to them both.

What do I mean by the welfare wall? The social assistance trap which holds too many children prisoner. Very often, parents faced with the decision of whether or not to return to work opt for staying on welfare so that their children will continue to benefit from the programs-such as dental care and coverage for certain prescriptions-they are entitled to as welfare recipients.

As a government, we have determined that we must help families get off welfare if they have the chance, without penalizing their children. This is what we are doing by putting $850 million in new funding into the child benefit. This will come into effect on January 1, 1998, perhaps earlier if the program we want to create with the provinces can be ready sooner.

The idea is to reduce the social welfare trap that penalizes parents, or at least their children, if they agree to go back to work. The purpose of the child tax benefit is to provide equal opportunities for children in low income families with one parent working, by allowing provincial governments to use the money freed by the increased federal tax benefit to ensure that these children have access to better, more equitable services. This is the goal of our policy.

From an economic point of view, this policy is fundamentally sound and, from a social point of view, it is an investment in our future. We all know that a child who has a bad start in life will ultimately cost much more to society. This policy seems extremely interesting to me.

The $850 million that will be allocated as of January 1, 1998 will be added to the $5.1 billion the government is already paying for the child tax benefit. As of January 1, 1998, $6 billion will be paid out to families with children. We see this benefit as a down payment the government hopes to increase in the future as soon as our financial picture improves. The money to help low income families will rise from $3 billion to close to $3.9 billion, an increase of around 30 per cent.

Thus, 1.4 million families, or more than 2.5 million children in Canada, will see an increase in the benefits they receive from the Canadian government. The results are remarkable, because at the same time we have managed to update Canadian federalism by proving that we can work in harmony with the provinces in this country.

Canadians are sick and tired of seeing two levels of government quibbling over jurisdictions. They want us to work together. We must clarify our roles to avoid this constant stepping beyond the limits of our responsibilities and to avoid creating conflict situations. We must clarify our roles, and that is what we have done with the national child benefit.

The Government of Canada will provide income support for families, while the provinces have agreed to redirect money from welfare to programs and services for children living in low income families. It is this kind of partnership that shows how flexible Canadian federalism can be, how Canadian federalism can be a real boon to the priorities we want to establish, including for our children.

It is time that we realize that federalism is not some game, either the government in Ottawa wins and the provinces lose or the other way around, when the provinces win it is Ottawa that loses.

Federalism is a win-win situation when the two levels of government determine that our federation can be more harmonious and less conflicting. This is the great work we are doing at the ministerial council on the social union. Progress has been absolutely remarkable in the last few months.

I would like to thank my provincial colleagues very much for their extraordinary work and contributions they have made to the national child benefit for which all Canadians are already so grateful and pleased because they can see the better society it is going to build.

The second priority of our discussions at the ministerial council on the social union is the issue of Canadians living with disabilities. We have also taken important steps in the budget to help many of the 4 million Canadians, about 15 per cent of citizens in the country, who live with disabilities. It is absolutely important that in this society that we build on the solid foundation we have built over the last few years, after four budgets from the Minister of Finance, which have established the foundation. It is important that the society we build on that foundation will allow every citizen to participate more fully in life in Canadian society.

We know that the 4 million who live with some disability have more obstacles to overcome to participate in society. This is why in our budget we really wanted to respond to several recommendations of the task force headed by my colleague, the member for Fredericton-York-Sunbury. The Scott task force has done wonderful work to really bring our attention and focus on the priorities of Canadians living with disabilities who must be helped by the government to participate more fully in life. This is the kind of society we believe in. It is important that it be reflected in society.

We have therefore renewed the VRDP. The budget has actually set aside $168 million to extend the vocational rehabilitation of disabled persons program for another year. It is a very good program which is helping Canadians with disabilities to get back to work and to contribute and earn a living with dignity, which every human being in the country is entitled to.

In addition to the VRDP this budget provides $70 million in tax assistance to Canadians who are facing significant medical costs. I think it is a very important element which will help them as well.

The budget also provides for investing $30 million in a new opportunities fund which assists the economic integration of persons with disabilities in their community. We will operate in partnership with non-governmental organizations, NGOs.

In fact I welcome the outstanding job done by members of these NGOs who are working together with organizations for Canadians who live with such disabilities. Without these NGOs, they would not have the same quality of life. That is why we are working very closely with these NGOs to help them financially and in the work they do to help persons with disabilities in Canada to enter the labour market satisfactorily, something they want very much.

This budget has also shown how concerned we are about our youth. On February 12, few days before the budget was tabled, I had the honour to announce, on behalf of the Government of Canada, the youth employment strategy.

The youth employment strategy is not just a strategy for youth, but a strategy designed by young people for young people. We consulted them. What did they ask us? They said: "Sir, could you please help us get better access to the information we need to get a job? Could you tell us about training programs and careers that are

available to us?" As you know, there are many in my own department, Human Resources Development Canada.

So we put in a 1-800 line which is perfectly democratic. It gives everyone access to programs and services, even people living in rural areas, because we did not forget the outlying regions in this strategy. With our 1-800 line, democracy has reached those regions as well, through access to programs and services.

Rural youth are extremely important for us. This is why we were so pleased to be able to connect them through a web site available all over the country with a 1-800 line that everyone can have access to in a very democratic way wherever one lives in the rural regions of this country.

We have been asked by people to get them out of the vicious cycle of no job, no experience, no experience, no job. We have created 110,000 work experiences in order to allow young people to get work experience. It has been clearly demonstrated that people who have such work experience through an internship somewhere get a job within a few months after that.

That is why, once this work experience has been acquired, a young person tends to find a job more easily, I mean a steady job, after his training.

Since the Chair would like me to conclude, I want to say that the work we did in the social union council is particularly useful and constructive, now that our public finances are in good shape, in fact better that they have ever been in Canada for decades. We can now look to the future with far more hope and enthusiasm. We now know that the social safety net we have in Canada will be strengthened in the years to come. There is light at the end of the tunnel. We again have something to look forward to. And we are very pleased to share this prospect with the provinces.

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12:30 p.m.

Reform

Jim Silye Reform Calgary Centre, AB

Mr. Speaker, I would like to congratulate the minister on his speech. It was very enthusiastic. It is obvious that he believes everything is rosy and great and that the items in this budget and all his plans and best wishes are going to create all the wonderful jobs by the expenditure of these moneys that he has outlined so carefully.

However, I would like to remind him that the light he talks about at the end of the tunnel is not a great vision for Canada. The light at the end of the tunnel is the single biggest problem that this government has failed to address, the debt. That debt is going to be over $600 billion. There is no plan by the finance minister or this minister to address how they are going to amortize or mortgage that $600 billion in some reasonable economic way, like a 35 year period, to pay it down.

He brags about the great finance minister who has addressed the deficit. The government is still spending, according to the latest numbers, $19 billion more than it is bringing in. There are some members opposite who would like to start spending more. They think that because the government is ahead of its deficit targets is new found money, a surplus. That is not a surplus.

What I would like to point out is that this minister is complimenting the finance minister and himself for a job half done. I know he will say that nobody is always ever happy and that they want to always get further and better. However, on this job issue, I am getting sick and tired of listening to government try to take credit for creating jobs, to say that their job is to create jobs. Then other members get up, and actually this is a more intelligent response, but it is not the government that creates jobs. It creates the environment and the right conditions and the private sector creates the jobs. But the government has not done its job yet. It has only done half a job. It is still running a deficit.

On the jobs that the government says it has created, I heard this all last week in question period 770,000 new jobs. Then the finance minister claimed that was a net number.

This is the question I would like to ask the minister directly. He should know this because he is in charge of job creation as well. When the Liberals got elected jobs, jobs, jobs was the platform and 1.5 million Canadians were out of work. Their job strategy was infrastructure, a number of these other items that are in the budget and this was going to reduce the unemployment rolls.

Unemployed according to statistics is 1.4 million. If we are talking net numbers it would seem to me, if I do the arithmetic, this government, if it wants to take credit for creating the jobs, created 100,000 new net jobs, not 770,000 new net jobs. Otherwise the unemployment would have been 2.2 million, not 1.5 million.

Somewhere in there the arithmetic is not right. Somewhere in there somebody is spinning a myth that Canadians are getting a bit confused by. I as a member of Parliament do not have this straight. I do not understand how this government can stand up and say it created 770,000 new jobs and it is the private sector that creates the jobs, which is a contradiction right there, and then have an unemployment rate that is only 100,000 lower than what it was.