Madam Speaker, it is a pleasure for me this afternoon to join in the debate on third reading of Bill C-92, an act to amend the Income Tax Act, the income tax application rules and another act related to the Income Tax Act.
We cannot discuss the bill without talking about Canada's crippling public debt, which currently stands at over $600 billion and is still rising steadily. It is expected that our national debt will reach at least $619 billion by 1998. The Mulroney Tories added $300 billion in just nine years. People are well aware of the legacy of Brian Mulroney. Thanks to Liberal overspending, Canada's public debt has increased by a further $111 billion since they came to power in the fall of 1993. The interest payments on the national debt are expected to be a staggering $45 billion to $46 billion per year over the next three years.
Who pays for all this? There is only one Canadian taxpayer and that is who is paying. Of the $10,200 the average taxpayer sends to the federal government each year, about $3,400 of it will go to service the huge public debt.
Then we come to the deficit. It was projected at the time of the budget at $19 billion for this fiscal year. It is hardly a figure to brag about, but that is exactly what the Liberals have been doing. After learning about this figure Alberta provincial treasurer, Jim Dinning, said that if he were the one turning in that figure he would expect a kick in the butt. He would deserve it.
We know that the burden of deficit reduction has been shouldered by Canadian taxpayers as the Liberal government waits for tax revenues to catch up to its spending. There are rumours that the deficit could come in substantially lower. We are quite likely to see figures of $14 billion, $13 billion or perhaps down around $10 billion in deficit projections at some point during the election campaign.
British Columbians will be very suspicious of that type of rhetoric during an election campaign. They well remember Glen Clark of the NDP that is still in power in British Columbia and some of the projections about deficits, balanced budgets and that type of nonsense during the last provincial election. Regardless of the deficit number, the point has to made and Canadians have to understand that the hole is still getting deeper. We might be digging a little slower but it is still getting deeper every year and we are still passing on more and more debt to the next generation.
How has the Liberal government made the gains it has in the battle with the deficit? A number of my colleagues referred to this during their presentations over the last hour. It is a fact there has been a $24 billion a year increase in taxation revenue.
It is a fact that as we go into an election campaign, whether it is this spring, next fall or next year, the Liberal government has to run on the record that it is collecting $24 billion more this year in taxation revenue from Canadians than it did in 1993 when it came to power.
It has to run on the record that it has cut roughly $7.5 billion from the Canada health and social transfer. It cannot deny, despite its red book claims of being the great defender of medicare, of being concerned about the next generation and education for our young people, that it is the one that has made that huge cut of $7.5 billion to the CHST.
The Liberals cannot deny that a week before this year's budget they slipped in a 73 per cent increase in the CPP premiums. The facts speak for themselves. They cannot deny that they have been very fortunate to have their administration operating at a time when our nation has enjoyed the lowest interest rates in four decades. That is the real reason that some gains have been made on the deficit.
What have we seen in the area of spending? We have seen a total lack of priorities. From the time the Reform movement was born in 1987, we recognized that the way to get government spending under control was to reduce the size of government by prioritizing spending on the things Canadians desire most. The simple fact is that we cannot continue to do business as usual. That is what the Liberals are attempting to do. They have made some cuts but in reality they still cling desperately to this old philosophy of big government, of we know what is best for all people.
The arrogance of past prime ministers was very clear during Brian Mulroney's presentation to the Canadian Club in Toronto the other day. We are seeing that same type of we know what is best from the Liberal government across the way.
Nothing provides a more apt example of why we find ourselves in the position of needing to borrow $10.8 billion this year than Canada's regional development agencies. They provide a perfect example of the Liberal philosophy: throw money at it and the problem will go away. Through agencies such as the Atlantic Canada Opportunities Agency, Western Economic Diversification and the Federal Office of Regional Development for Quebec, this government is subsidizing private businesses and adding to our
staggering national debt which will be paid off by the long suffering Canadian taxpayers and by future taxpayers.
By doing so the government is interfering with natural market forces. It is using low interest, no interest or in some cases what the Liberals would like to call non-repayable loans-whatever they are-to give some businesses an edge over their competitors that are not fortunate enough to be chosen as the objects of the Liberal government's pork-barrelling patronage.
In November 1996 the Atlantic Institute for Market Studies conducted a study which was aptly titled "Looking the Gift Horse in the Mouth: The impact of federal transfers on Atlantic Canada". The authors of that study found that if the federal government had invested all regional subsidies to Atlantic Canada in three month United States treasury bills it would have built up a nest egg of about $700 billion U.S. since 1971. That is about $1 trillion Canadian if the federal government had invested that money.
To put this into perspective, that is almost twice the size of our national debt. The House will remember what I said earlier about priority spending. It would translate into a surplus over the debt, no more punishing debt service charges and ultimately into much reduced taxes for Canadians.
In his 1995 budget the finance minister promised to undertake what he called a program review. Part of the program review involved a commitment to refocus the regional development agencies and to decrease spending in this area by 50 per cent, from $1.1 billion in 1994-95 to $576 million in 1997-98. What do we see now? We see a very different picture from what was promised by the government in 1995.
When we look very closely we see that regional development agencies will actually have total expenditures of $1.2 billion in 1997-98. However, we do not see the increases in the budget numbers. The increases have been hidden, as have other spending increases. For example, the 1997 budget did not even provide a breakdown of what the regional development agencies will spend in the upcoming fiscal year, even though such breakdowns have usually been provided in past budgets. If a breakdown of spending had been provided, what taxpayers would see is not the 50 per cent decrease that the finance minister promised in 1995, but an increase.
Instead, when funding to extend the infrastructure works program is included, what we really see is a 7 per cent increase in total expenditures for regional development agencies from the last fiscal year. Funding for infrastructure is included in this calculation because the Liberal government originally intended it to be included.
In their 1995 budget projections for regional development spending the government noted that the figures were to include infrastructure expenditures. This makes sense, considering that infrastructure programs are a form of regional economic development based on a formula that includes regional unemployment levels.
However, what we see now is the Liberal government trying to exclude money for infrastructure works from the regional development figures in an attempt to make it seem as though spending in this area has actually decreased. It is smoke and mirrors. This is creative accounting at its worst.
When funding to extend the infrastructure works program is included, what we see is this:
First, Atlantic Canada Opportunities Agency spending will increase 2 per cent from the last fiscal year to this year, to $347 million in 1997-98. Spending by the Federal Office of Regional Development for Quebec will increase by 11 per cent, to $408 million. Spending for the western economic diversification program will increase by 10 per cent, to $380 million.
Where is the money for regional economic development agencies going? A look at the public accounts for 1995-96, released in October 1996, gives us some telling examples.
For example, in that year $211,500 from the Atlantic Canada Opportunities Agency went to the Society for Canoe Championships in Dartmouth, Nova Scotia, and $310,071 from the western economic diversification program went to the Abbotsford air show. Those are probably worthwhile organizations, but is it right to invest taxpayers' money in such a way?
In January 1997 an interest free loan of $723,000 was granted by the western economic diversification program to Alberta potters, jewellers, weavers and other craft artists belonging to the Alberta Craft Council for Business, Training, Marketing and Network Development.
When we look at the 1997-98 estimates respecting spending by the Federal Office of Regional Development for Quebec, we see that from last year to this year total grants under this program, or as the Liberals have been fond of calling them, non-repayable loans, have increased from $300,000 to $1,055,975. Why? Because once again the Liberal government has chosen to subsidize small business rather than introduce meaningful tax cuts which would encourage economic growth and assist all small business.
The increase is attributable to grants made under IDEA, the innovation development entrepreneurship and access program for small and medium sized businesses.
In the limited time remaining, I will sum up by saying that over the last 3.5 years we have seen a lack of commitment to spending priorities. Reformers suspected before we became members of Parliament and it has been borne out over the last 3.5 years that the government is committed to the philosophy of big government, big spending, big taxes. The cuts it brags about and which it is taking into the election campaign are in reality just smoke and mirrors. It has not happened.