Mr. Speaker, it is my intention to share my time with my colleague from Langley—Abbotsford.
It is a pleasure to stand in the House today and to speak to the motion put forward by my colleague from Medicine Hat, that this House condemn the government for making its 50:50 election promise on future surpluses without adequate public debate as to the optimal size of government, taxes and debt, thus threatening to repeat Canada's 27 year old history of deficit spending, creating high debt, financed by high taxes, causing high unemployment.
Before I proceed, Mr. Speaker, I congratulate you on your appointment. I look forward to the deliberations under your care and control. I would also like to thank the members of my constituency of Cariboo—Chilcotin for participating in the democratic process of the June election, in particular those who worked to support my candidacy and my election. I am honoured to represent the views of Cariboo—Chilcotin and it is my intention to represent my constituents to the best of my ability.
The people of Cariboo—Chilcotin voted for Reform during the last election because, like many Canadians, they wanted three things. First, they want equality to be the guiding principle in the national unity debate. Second, they want accountability from the government, its department and agencies. This has been diluted more and more over the past years. Accountability has been taken from the House of Commons and put in the hands of the cabinet, with order in council administration, and in the hands of bureaucrats. This should be restored to the House of Commons. Third, they want fiscal responsibility to be the watch word of the government and every future government which holds power in this country.
It is the third point on fiscal responsibility which I will focus on. Specifically, I will do two things. First, I will outline where massive government over spending has led our country. Second, I will describe a plan that will save us from forever following that destructive and empty path.
Political pundits and financial analysts say that Canada is at a critical moment in its financial history. I am sure that we can all agree with this. Over the past 30 years we have seen successive Liberal and Conservative politicians repeat the same destructive pattern in government, irresponsible spending which has caused chronic deficits and spiralling debt financed by escalating taxes. Thanks largely to tax increases there is a huge and growing surplus in the employment insurance fund, subdued growth in public debt charges and cuts in provincial transfers for health, education and welfare. Also because of pressure from the Reform Party, the public and the financial markets, we are on the brink of resolving the second of the four problems, deficit spending.
Following our present course, Canada is at most two years away from a balanced budget and this is good news for all Canadians. This brings us to a critical point in our history. Reformers have circulated a discussion paper, “Beyond a Balanced Budget”, to seek the will of the Canadian people. This paper is not a policy paper, it is a discussion paper. It is a discussion paper seeking Canadian opinion. We will find this discussion not only in homes and offices but also on the Internet and in town hall meetings and we will find Reformers listening carefully to what Canadians are saying.
There is a real need for this national discourse. The last time the federal government was in a similar situation was in 1969-70 when Canada recorded a $139 million surplus. After that time, the road the government chose was one of massive overspending and mortgaging our future to borrow the money. It chose to run deficits year after year. Where did this course take us as a country? How can we ever avoid going that way again?
The result of consistent overspending and borrowing over the last 30 years gave Canada a debt that grew from $20 billion in 1970 to approximately $600 billion today.
Allow me to outline the magnitude of this debt. Our $600 billion debt works out to over $19,600 for every man, woman and child in Canada. For a family of four that comes to almost $80,000. I calculate it as $78,400. Canada's $600 billion debt is one of the highest debt burdens among industrialized countries. It is 74 percent of gross domestic product. As a percentage of GDP our net foreign debt is the worst of any of the world's major economies. Canada owes 25.3 percent of its debt to foreigners.
A recent study by the Fraser Institute puts total Canadian debt, all of our Canadian liabilities, at closer to three and a half trillion dollars after accounting for federal, provincial, local marketable debt, government business enterprise debt and debt guarantees, QPP, CPP, unfounded liabilities, hospital sector debt and total unfunded liabilities of the medicare system. Three and a half trillion dollars we are in hock.
To describe the size of our debt more graphically, a financial analyst in the 1995 Grant's Interest Rate Observer said that 8 percent of Canada's land mass is covered in water while the other 92 percent is covered in debt. That is how one financial analyst started to tell investors around the world about Canada. If the net public debt were converted to $5 bills and laid end to end it would circle the earth 1,448 times. I did not make that calculation, I only report it.
I have just described the legacy of 30 years of chronic overspending by successive Liberal and Tory governments. This is what federal government after federal government gave our country again and again to serve their own short term political ends at the cost of nearly bankrupting our nation. We could say so what, and many people do say that. So what if our debt is one of the biggest in the world? So what if government keeps borrowing?
Just as we cannot rack up personal debt and expect there to be no consequences, neither can the country. Let me outline for the House the major consequences of massive government debt that haunt and will continue to haunt future generations of Canadians.
First, interest charges. The federal government spends $46 billion a year to service the debt. That is about 33 cents of interest charges for every dollar in revenue raised by government. It is Ottawa's largest single expenditure, more than twice the size of the next expenditures on seniors and transfers to provinces. These interest charges mount by $5.3 million an hour and chew up $1 in every $3 in budgetary revenues. Think about that. We pay bankers $46 billion a year. We pay Bay Street, Wall Street, Hong Kong, bond bankers for money borrowed to finance yesterday's programs. We owe $46 billion to buy virtually nothing of value for Canadian citizens today.
The annual interest bill would be enough to run each and every hospital in Canada for two years. The interest for one year would pay tuition for four million Canadian youths to finish a four year degree at university.
There is a means of handling this situation. What should a balanced budget look like? What would we do? There should be legislation to prevent a government from increasing the deficit. Over a three year period a government should be required to balance its books or call an election. The first three year period would commence three years from the passage of the measure except for certain crises such as recession, severe flood, earthquake or war. They must be dealt with as they arise. These would be a release valve.
However, 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.