Mr. Speaker, it is a pleasure for me to be given this opportunity to participate in the debate on our most recent budget. There are many positive details in the budget but will focus on a few issues which are very important to me and to the constituents of Scarborough Centre.
First I will touch on the measures we have taken with respect to supporting small and medium size businesses. I speak from experience when I say that I know the importance of a strong support network which is indeed instrumental in allowing small businesses to grow. Before I entered the political arena I too was a small businessman. I believe the growth of small and medium size businesses is essential to the creation of jobs for all Canadians.
Our government believes that small businesses will remain a key source of continued employment growth in the years to come. The small business sector now accounts for over half of all private sector employment. The impact of this most important initiative is the profound way it will continue to be relied on as our growth and economic initiatives for today and the future. Because of the importance of small business, the government has been working on ways to make life easier for the owners.
One measure that was announced in this year's budget is the quarterly remittance of statements. The joint forum to reduce paper burden on small business identified frequency of remittance as a major irritant and recommended that quarterly remittances be made for small businesses. Monthly remittances impose a great burden on small businesses, as they do not normally have the in house resources that larger companies have.
The budget proposes allowing small businesses with average monthly remittances of less than $1,000 complete with a good record of compliance for payment of income tax and other payroll deductions to be remitted on a quarterly basis as opposed to a monthly basis. This will potentially affect approximately 650,000 businesses, representing 56 per cent of all businesses.
Also announced in this year's budget is the raising of the lending ceiling for small business loans from $12 billion to $14 billion.
Since the Small Business Loans Act is expected to hit its$12 billion ceiling by July 1997, the government has raised it by$2 billion to ensure that loans can continue to be made in both 1997 and 1998.
For any of the other small business organizations, the loan act is something that I believe small business should access and tap into with respect to supporting them when it comes to expansion, to purchasing equipment or expanding the business, fixed assets et cetera. This program has proven to be extremely beneficial to the small and medium size businesses right across the country.
Our government has also lowered the EI premiums which in turn helps employers and employees. In 1993 EI premiums were pegged at $3.30 per $100. Today they are at $2.90. This budget has clearly stated that the premiums will be going to $2.80 by 1998. When we add the entire program that is a combined savings of almost$1.7 billion both for the employers and the employees. I would tend to look at that as a tax deduction as opposed to a tax increase. Although I use the word tax, I have always termed this type of deduction as a premium rather than as taxing.
The new hires program which was introduced in the 1997 budget will also allow up to 900,000 eligible employers to pay virtually no premiums for new jobs created this year. As I mentioned earlier, together these measures will combine to almost $1.8 billion in payroll deductions for both employers and employees.
These measures coupled with the low interest rates, the lowest in almost 35 to 40 years, have generated an environment of confidence and strong growth within the small business sector.
As the statisticians and the economists are stating, this trend most likely will translate into about 300,000 to 350,000 new jobs in 1997. I cannot express how important this sector is not only to my riding of Scarborough Centre but to all communities across Canada.
Large firms have been downsizing consistently, entrepreneurship has become the in thing of today and this is why I speak, as a former entrepreneur and a small business owner, on how important interest rates are. When we look at today's primate rate at 4.75 per cent, an individual whose running and operating line is at an average of $150,000 may be saving 2 per cent or 3 per cent, constituting a considerable amount of money at the end of the day. When we look at their loan payments certainly the less they pay in loan payments, the more they can put back into upgrading their company or hiring new staff.
When we look at mortgage payments and the rates of today which hover around 6.5 per cent for a five year mortgage, maybe 6.75 per cent, for the average individual renewing their mortgage today there is a considerable savings of anywhere from $3,000 to $4,000 on an average $100,000 mortgage. I would like to emphasize this because this is disposable income that these families or small business people never had three or four years ago. This is after tax dollars.
Our small business community has become more sophisticated and globally competitive, particularly in a technology based economy. It is vital we understand that as we move from a resource based economy to an information based economy it is important not only to support these organizations to expand and invest in research and development but that we train our workforce to have the tools and the skill sets needed to compete in today's economy.
Our government has also shown a willingness to support and foster the entrepreneurship spirit that drives the small business community. That is why another measure in our budget is to increase the funds for Canadian tourism. Funding for the CTC will increase $15 million per year over the next three years. Much of this funding will go toward increasing Canada's visibility in foreign markets. The Prime Minister's trade visits across various countries have brought in close to $22 billion in contracts. There are companies in my riding of Scarborough Centre that have benefited directly as a result of those trade missions. We see our trade surpluses today at numbers that we never imagined they would be and with the stability of the dollar this certainly enhances our economic position both locally and abroad.
I want to return to the tourism industry. This industry has huge potential for employment creation and by infusing money within that industry with more funds we can encourage and continue interest in that area. The other dimension in supporting the tourism industry is that it gives us an opportunity as a nation to showcase our country from sea to sea.
I would like to take this opportunity to encourage Canadians to visit other parts of this country. Maybe we could entice Canadians to travel within our country by some form of tax breaks and rebates at the same time.
I congratulate the Minister of Finance on his continued balanced approach to fiscal responsibility. After being elected three and a half years ago our government pledged to get our financial house in order. We have set firm two year rolling targets and this will be the third year in a row we have met and bettered our deficit targets. Our 1996-97 results will be more than $9.5 billion below our deficit a year ago. That is the largest year to year decline. We are clearly on track to meeting our deficit targets for the next two years;$17 billion for 1997-98 and $9 billion for 1998-99. This means Canada will enter the new millennium in a position to eliminate financial borrowing needs. Once again we will be in control of our own country. We will have reduced the deficit to zero and we will be able to say that we are number one in the G-7 countries.
Often the opposition refers to EI and Canada pension plan contributions as payroll taxes. I would like to take this opportunity as a former business owner to say that when I hired an individual, UI deductions or Canada pension contributions were not a deterrent in hiring new employees. I looked at it as part of the benefit package that the company had to offer.
I would also like to take this opportunity to make it clear when talking about Canada pension contributions that opposition members have often used the figure of a 73 per cent increase. It is totally unfair when they say it is a tax. Let it be stated very clearly that Canada pension plan contributions are simply contributions. It is saving today for benefits in the future.
Probably each member in the House drives a car. Every year he or she pays insurance premiums, expecting nothing back. I hope that none of us ever has a car accident because only then would we access the program. Similarly, we pay unemployment insurance hoping that we never lose our jobs, but on the chance we might be laid off or are out of employment we can access that program.
I would also like to comment on earlier debates in the House with respect to the health programs and the slashing that has supposedly gone on. Earlier in the debate-