Mr. Speaker, it is an honour and pleasure to address the House this afternoon on the fourth budget of our mandate.
As with the case of our first three budgets, the good news continues. The fourth Liberal budget continues the plan of competent fiscal and economic management that is reducing the deficit. It creates a climate for jobs and economic growth in both the short and long term and ensures the long term future for effective sustainable social programs and investing in a stronger society through education, health and our children.
Our fourth budget announces that this year's deficit is the lowest in 15 years. It represents the largest ever year over year decline in the federal deficit. By 1998-99 we will no longer need to borrow new money from the financial markets and we will have the lowest deficit in the G7, a truly amazing economic turn around in four short years.
When we took office Canadians knew that tough decisions on fundamental reforms were required. They did not want tinkering. They wanted lasting solutions. They want us to develop a plan. They want us to stick to it. We have done just that. We are continuing the job with our fourth budget.
This budget is a plan for wise and thoughtful investment in Canada and Canadians. It is an investment in post-secondary education. It is an investment in a stronger society. It is an
investment in immediate jobs and growth. Allow me to address some of these points.
The annual costs of post-secondary education are truly astronomical; $10,000 to $12,000 a year for under graduate studies when all expenses are included. Canadians want and deserve the opportunity to equip themselves and their children with the knowledge, skills and education necessary to succeed an prosper in the global world; necessary for Canada to succeed and prosper in the global world.
The measures in the budget designed to ease the financial burden of post-secondary education are commendable. Let me deal with a few.
The budget provides assistance for parents saving for their children's education by amending registered education savings plans, or RESPs as they are commonly called. The full benefits of these tax sheltered plans are reaped by parents who start saving when their children are very young.
The budget proposes that annual contribution limits to RESPs be doubled to $4,000. This will assist parents who are not able to start saving for their children's education when they were young and therefore have fewer years to make contributions. It will also provide major incentives for increased savings for education.
Under current RESP provisions, all RESP income must go for education purposes. The family loses the investment income in its plan if their child does not pursue higher education. Since this can discourage parents from starting an RESP, two measures are proposed to address this problem.
First, individuals winding up an RESP will now be allowed to transfer all or part of their RESP income into their registered retirement savings plans, provided they have unused RRSP room. Alternatively, individuals without RRSP room or who do not wish to make RRSP contributions, will be allowed to change the investment directly, subject to an appropriate charge. This charge will ensure that assistance is not provided to those who might use RESPs for tax deferral purposes unrelated to either education or retirement savings.
This is a tremendous incentive for parents to save for their children's education. This is a tremendous relief for parents who are worried that they will not be able to afford the costs of their children's education.
To assist students currently enrolled in post-secondary education, the budget has further welcome news. The amount used to establish the education credit will increase immediately to $150 per month from $100 and to $200 for 1998 and subsequent years. The budget proposes to extend the tuition tax credit to mandatory fees set by post-secondary institutions to cover the costs of education although this will not include fees levied by student bodies.
To ensure that all students can use these credits fully they will now be allowed to carry forward all unused portions of these credits to be applied against any future income. This measure will also benefit workers who are returning to school.
Through the Canada student loans program the federal government provides financial assistance to students who need help to pursue post-secondary education. Often this is the only avenue that many students have to finance their higher education. The problem arises when our best and our brightest graduate with a heavy debt load but have difficulty obtaining immediate employment or are underemployed. Admittedly students facing hardship are allowed to defer making payments on their loans for up to 18 months. Notwithstanding, some students are still unable to meet their obligations.
To better recognize that some students still may not have the capacity to repay their loans, the budget will extend from 18 months to 30 months the period of time during which students are allowed to defer making payments. The government will pay the interest that the student would have paid over this extended period.
Combined with the initial six months after graduation when no payments are required, students will have up to three years of help in dealing with their loans. This measure will be effective August 1, 1997 and will provide an additional $20 million a year in assistance to students. These measures are investments in our greatest asset, our children.
The budget also reflects a strong investment in the health care of Canadians. Our publicly funded health care is studied and emulated by countries throughout the world. It is one of our finest achievements. We must be ever vigilant against those who would seek to destroy it.
The government is committed to the principles of the Canada Health Act. We must not only protect medicare but work with the provinces to improve it, to strengthen it, to respond to changing health needs and advances in medicine. We must ensure that our health care dollars are spent effectively and efficiently, but we must also ensure that our health care facilities, our hospitals, be kept open to serve our citizens. Canadians deserve not good health care, but excellent health care, the best health care the world has to offer.
In October 1994 the Prime Minister established the National Forum on Health to develop a vision of the health system that will meet the health needs of Canadians into the 21st century. In February 1997 the forum issued its report.
In response to the forum's report the government has acted and acted quickly. The 1997 budget provides $300 million over the next three years for additional health care initiatives. Each dollar of this new money will be devoted to improving the delivery of health
services to Canadians. We will provide $150 million for a health transition fund to help provinces launch pilot projects to investigate new and better approaches to health care. Projects could include, for example, better ways to provide medically necessary drugs and home care services. The assistance regarding expenditures will be made jointly by Canada's health ministers.
The national forum emphasized that health care providers need timely access to quality health information in order to provide the best possible care. We have allocated $50 million over three years to put in place a new Canada health information service. The national forum also spoke in favour of stronger community based programs and the need to invest in a healthy future for our children today. We agree.
We currently fund two community based programs directed at improving the health of children. The community action program for children supports hundreds of groups, for example, in providing parenting education, child development centres and family resource programs, all directed to addressing the needs of children at risk up to the age of six years. As a member of the justice committee, which has just completed a study of the Young Offenders Act, I can confirm that this is a very wise initiative.
The Canada prenatal nutrition program promotes the birth of healthy babies among high risk pregnant women. The 1997 budget increases funding for these two programs by $100 million over the next three years, money very well spent.
Time and time again we are told that our children are our most precious resource and I agree. Yet the country has too many children and their families living below the poverty line. This is not right and this is not acceptable. This must be changed and we must not stop until there is not one single child living in poverty.
The budget is one further step to this end as we propose to allocate $850 million to increase existing spending under the child tax benefit. This includes $600 million of new funds as of July 1998, in addition to the $250 million increase in child benefits announced in the 1996 budget. This initiative will require partnership with the provinces, a partnership on behalf of our nation's children. We will provide additional resources when we can afford it.
Why are we doing this? The reason is clear. I quote the Minister of Finance: "Opportunity denied in childhood too often means chances lost as an adult. The future of Canada's children is a future of this country itself". Nothing more needs to be said.
With the new Canada child tax benefit, provinces will have room to provide more services and benefits to children and low income working families. For example, in kind benefits such as medical or dental care that are now available only to welfare recipients could be extended to low income working families. Positive steps, positive developments and a positive budget.
As I conclude, I wish to point out that the government has set its priorities over the last four years and has stuck to them. It is continuing to bring down the deficit, to restore economic stability and vitality to the country by providing substantial new resources to invest in jobs, in health care, in education and in children. The journey is not over. We have come far and our vision will carry this country forward into the next millennium.