Mr. Speaker, I start by congratulating Mr. Speaker and his peers on ascending to the chair once again. I know of the Speaker's interest in this position. I know he will enjoy his time even though, as some people suggest, it may be a difficult Parliament.
I also congratulate all members of the House on their election to the House of Commons. It is a great privilege to be here.
I certainly thank the constituents of Medicine Hat for placing their trust with me once again. It is a great honour. I will do my level best to ensure that I deliver their message loud and clear to the House of Commons.
I rise to address the throne speech delivered on Tuesday by the governor general. I will touch on what I think is, at least in the economic spirit, the key point in the throne speech from which all decisions in it will flow. That is the decision in the spring during the election campaign when the government said that it would devote about 50 per cent of its surpluses, any surpluses that it realized, to new spending. The other 50 per cent would go toward tax relief and debt reduction.
What criteria did the government use to determine how this formula would work? What were the criteria? I do not recall any consultation with the people of Canada asking them how they wanted to spend any surpluses. I do not recall that at all. I do not recall any focus groups or any polling. I do not remember any of that.
Two years ago when the government decided it would create a new $2 coin, there were consultations to decide what would go on the coin. However there were no consultations on what to do with the 75 billion $2 coins the taxpayers send to the government every year. There were no consultations on that, but it was very committed to ensuring that we got the $2 coin with the polar bear.
The next issue implicit in the government's decision not to consult people is its belief that the money from the Canadian public actually belongs to the Liberal Party. That seems to be implicit in this.
The issue here—and it is something successive Liberal and Tory governments have missed for a long, long time—is that money belongs to Canadian taxpayers. Canadian taxpayers work hard and long, in fact probably longer and harder than just about any country in the industrialized world, to produce taxes for the government to spend on their behalf. Certainly it is time for governments to recognize this and acknowledge them in the form of consultation process. Unfortunately that did not happen.
Specifically in the throne speech, once we get beyond the decision to spend 50 per cent on new programs and the decision seemingly to spend 50 per cent on tax reduction and debt reduction, we encounter the actual words in the speech. There is one line about tax relief and debt reduction. We should gild it. It should be framed. It is on page 4 and is the only reference in the whole document. It reads:
It will seek to devote one-half of the surplus in this mandate to addressing the social and economic needs of Canadians. The other half will go to a combination of reducing taxes and the national debt.
Where does it go after that? For the next 20 pages all we hear are plans on how to spend Canadians' money. It does not even end there, because on a subsequent day we have the Prime Minister announcing in his speech that we will spend even more money in a new endowment the government thinks is necessary for the millennium.
Then we hear that the government is contemplating buying helicopters, the self-same helicopters it chastised the Conservatives for wanting to buy. Truly I wonder what is going on here. It is as though Pierre Elliott Trudeau never left this place. There is a social program in every pot.
We should be very concerned. It has taken us 27 years to get out of a deficit situation but the government, ignorant of the 27 years that have gone before us, now seems intent on going back and starting to spend all over again.
The big concern—and I am glad to see the media is raising this as well—is that the government never set a base line anywhere in the document upon which it will determine its surpluses. Now it is very possible that it will spend all its surpluses before we even get to a surplus point. It is already borrowing against future surpluses.
We will have a very insignificant surplus. Therefore we will not have the money that should go to Canadians in the form of debt retirement and tax relief.
One question the government needs to answer very soon is what is the base line upon which it will determine what the surpluses really are. Then we can have an honest debate within the narrow bounds the government has laid out about how much money should go to taxes and debt retirement. I am very critical of what is in the throne speech from an economic point of view. I am very disappointed. However, I believe it is the role of the official opposition to also offer some constructive criticism. I would argue that the Reform Party has done that in spades over the last few weeks by offering not only a discussion paper on some of the alternatives to what we could do with the surplus but to inform the debate and start a consultation process.
We believe it is very important to consult with Canadians on this issue. As I pointed out earlier, it is Canadians' money. They deserve to have a say in the whole issue. It is a novel approach in this place to recognize that the money belongs to Canadians. They worked long and hard for it. In a moment I will tell the House just how long and hard they work compared to citizens from other countries around the world.
We have produced a document called “Beyond a Balanced Budget”. I want to draw from it right now to explain how the Reform Party would approach the ad hoc debate that is occurring today in the country about what to do with any surplus. It is ad hoc because the government has chosen not to involve Canadians in it. However, in our role as official opposition we have decided that we would like to do that. We do that by asking seven basic questions.
First, what is a realistic projection of future surpluses once the federal books are balanced?
Second, what is the optimal level of government?
Third, can these surpluses be increased by more responsible federal spending?
Fourth, what is the optimal level of taxes?
Fifth, what is the optimal level of debt?
Sixth, how can we change the spending patterns of government to better reflect the priorities of Canadians?
Seventh, if a public consensus can be achieved with respect to an appropriate level and pattern of federal spending, taxation and indebtedness, what measures are required to ensure the federal government respects those targets and lives within its means?
Those are the seven questions that we want to put to Canadians. We have already started the process and we argue it is something that the federal government should do. If Canadians want to read this document it is available to them on the Internet at www.Reform.ca/babb. I will try to remember to mention that at the end of my speech as well.
Let me go through some of those seven specific areas to lay out why the Reform Party has huge concerns about the whole approach the government is taking with what would be a surplus, if the government does not spend it all before it actually got there.
The first point comes from the section in our document on the size of the surplus. What is a realistic projection of future surpluses once the federal budget is balanced?
The first point I want to make is that when we use the government's own projections we find that probably by the year 2001 or 2002, which would be the end of its mandate, it will have a surplus of approximately $14 billion annually. That is a very conservative estimate. Others estimate as much as $20 billion. Of course, that suggests that the government will be spending about $7 billion to $10 billion on new programs every year by the end of its mandate. This is the same sort of increase we had in spending during the 1970s that got us into this whole problem in the first place.
The second section I want to touch on is the part on the optimal level of government. I point out in the second section of our paper this quote. “While provincial spending increased from 2.5 percent of GDP in 1960 to 6 percent of GDP in 1995 and local government spending went from 4.74 percent to almost 6 percent, signifying greater participation in the provision of direct goods and services in each province, the federal level only dipped from 6.2 percent of GDP to 4.22 percent of the GDP over the same timeframe”. In other words, the provinces and the municipalities have done their part. In their jurisdictions they have done what they needed to do to realize the needs of their citizens. However, at the same time the federal government had trouble letting go. It cannot for a moment consider, and this was especially true under previous Liberal administrations, letting go of some power. I would argue that is one of the reasons we have a constitutional problem that never ends. The neverendum they call it, and it is certainly true.
We argue it is time to look at the optimal level of government. We want to talk about responsible federal spending and whether these surpluses can be increased. During the election campaign we pointed out how we could shrink the size of government while improving services for health care, higher education and research and development. That would leave us with bigger surpluses. In the third section we talk about that. $24 billion in surpluses under a Reform government with the chance to implement some of our ideas would mean more money for deficit reduction, more money for tax reduction and money that would go toward important programs like health care and higher education.
In the fourth section we talk about the optimal level of taxes. It is important, especially after the international trade minister has spoken, to point out how much we are at a competitive disadvantage to other trading partners around the world. In the G-7 Canada is the highest taxed as a percentage of personal income tax to GDP of any country, by far. Our personal income tax rate is 52 percent higher than the rest of the G-7 nations and 25 percent higher than the industrialized countries in the OECD. Canada's personal income tax rate is through the roof.
This has a tremendous negative impact, like the brain drain for instance. We lose all kinds of very highly qualified people to the United States and other countries around the world because the personal income tax burden drives them away.
If we were able to drop those tax burdens we would have an increased labour supply, increased participation in the labour force, lower gross wage costs for employers, increased entrepreneurship and business start-up. There is no end of benefits to lowering personal income tax. It is time for the government to start to consider those things, and we want to talk to the Canadian public about it.
In the fifth section of our paper we talk about the optimal level of debt. We point out the horrendous impact of the debt. We pay $47 billion in interest payments on the debt each and every year. That adds up to a tax burden of $3,518 in taxes per year or $295 each and every month for every Canadian taxpayer.
If we had that money to apply to health care, we could run every single hospital in the country for two years on one year's interest payments on the Canadian debt. It is time to start reducing the debt. We make that argument forcefully in our paper but the government has shut off that option by deciding it is going to spend its way to prosperity.
In the next section of the paper we talk about responsible spending. We point out that because of things like interest payments on the debt the federal government has reduced its transfers for health care by 35 percent. Yesterday the health minister tried to deny that it is 40 percent, so we will grant him that it is just 35 percent, $6.8 billion. And Liberals claim to be members of the party of compassion.
The Liberals have closed more hospitals in the country than any provincial government, yet they say that they care about Canadians. If they truly do, it is time for them to come to grips with the problem of the debt, with the problem of taxes. Specifically, if they get a handle on government spending and quit spending more and more and more, they will be able to devote more money to the programs Canadians really care about.
In the final section of our paper we talk about the need for government to be accountable. I know that is a novel theme in this government. We know the government has promised in the past to be more accountable. The Liberals talked of ethics, watch dogs and that sort of thing but it has never come to be. We argue very strongly that it is time we had balanced budget legislation.
As we point out in our paper, a balanced budget law would be an important first step in reassuring Canadians from coast to coast that the painful tax increases and reductions in the social safety net that were made necessary by previous governments will never occur again.
That is what is in our paper. We will be going across the country during the next several months asking people to help us bring forward some recommendations for the federal government, to give it a road map so it understands where Canadians are at on these important issues.
Outside of the unity debate there is probably not a more important issue that the government will deal with in its mandate, yet it has decided to shut Canadians out of the process. I think that is ridiculous.
This whole debate reminds me of a mutiny. It is as though a mutiny has occurred on the ship of state, while the captain, the Prime Minister, is on shore golfing, and the first mate, the finance minister, is asleep in his cabin. The Minister of Canadian Heritage along with the Minister of Foreign Affairs and the Minister of Transport have taken over the helm of the ship of state—and I am borrowing an analogy which the leader of the Reform Party used yesterday—and decided to go to Sweden because that is where they saw the land of opportunity. However, they are going from Lake Erie to Lake Ontario but they have decided not to use the Welland Canal. They are going down the Niagara River. It is scary. I do not have to tell you, Mr. Speaker, what is at the end of the Niagara River.
Envision the Minister of Canadian Heritage with a parrot on her shoulder and a patch over both eyes. As they go down the river a din is heard in the distance. The minister says “Oh listen to the people applauding. They can hardly wait for us to arrive”. The finance minister, now swabbing the deck at sword point, is saying “No, I don't think that is applause”.
Can you imagine what the Canadian people are saying? They hear the rabble upstairs, they hear all the noise and they are very concerned because they too can hear the din. It is time for the government to recognize where it is headed with this throne speech. It is heading toward the falls. It is time it allowed Canadians to come up out of the hold to take control of the ship and turn it around. We will never in a 100 years solve the problems of the 1990s with the solutions of the 1970s.
It is time for the government to wake up and recognize that Canadians have a stake in this. This is the most important economic decision the government will make in its mandate, the most important decision it will make as it leads Canadians into the new millennium. Let us ensure that Canadians have a say in this. Let us ensure that their values are reflected in the direction in which the country goes.
Let us have some appreciation for the fact that the small business people are the job creators. Let us understand that they want to have some of the $13 billion EI surplus. Let us understand that they are frightened to death that we are going to pass on a burden of $600 billion worth of debt to their children. Let us have some appreciation for where Canadians are at and let us make sure that from here on the government hears what Canadians are saying. In the government's absence, the Reform Party will be there to stand up for them.