Debates of Feb. 18th, 1998

Supply

[An hon. member]

Not as good as MPs' salaries.

[Jason Kenney, Reform, Calgary Southeast, AB]

There is no MP pension. In fact there is no pension for people who work in the independent schools. They are there because they are profoundly dedicated.

My father worked for the air force but not long enough to get an air force pension. Then he worked in independent schools where there are no pensions. When he retired he and my mother simply did not have enough money to live on. That is the truth.

One day my father opened up the careers section of the Globe and Mail and found that a school in the United Arab Emirates, in Dubayy, was seeking a headmaster for a new international school. Lo and behold, my father applied and was selected.

In the United Arab Emirates, which is not a country I would suggest as a model for the Canadian economy, the tax rate is precisely zero. There are no taxes.

I am not suggesting that Canada ought to adopt the Arab economic model. However, when we are competing in an international marketplace with the best trained and the most skilled professionals, we are competing with jurisdictions like the United Arab Emirates which allow people to keep 100% of the fruits of their labours, not 30% or 40% as in Canada.

The moral of this personal story is that in three years my father and mother will have been able to save more for their retirement there than they were able to during the time they worked in Canada. That is a shame.

My oldest brother is a very skilled lawyer with an expertise in a particular area of international law. He went to Canadian universities. We subsidized his education, for which he is grateful. When he went on the international marketplace offering his wares, he found that by practising in New York State he was able to keep 20% to 30% more of what he earned than he could here. He just relocated to Dublin, Ireland, with his company, taking 30 employees who would otherwise be in Toronto or Montreal.

There is a kind of personal irony in this story because some of my ancestors actually came to this place 150 years ago during the Irish potato famine, from which I have since recovered. They came here 150 years ago for economic reasons. They came to the shores of this great country aboard the coffin ships in 1847, seeking a life of hope and growth and leaving behind them a life of subsistence agriculture and no opportunity. They found opportunity in Canada and prospered in many different fields.

I am proud of my ancestors who worked so hard to build the country and give so much to me and my generation. However, I find it tragic and ironic that 150 years later the descendants of those very same potato famine emigrants are now going back across the Atlantic, back to the land from whence they came where they now find economic opportunity.

The grandchildren of paupers from Ireland are going back to Ireland now because the tax rates in Ireland have been lowered to a point where it is now leading the OECD in growth. There has been a 9% growth in real income for each of the last four years.

There is no more a brain drain in Ireland. The greatest export in Ireland used to be its people. Now it is keeping its people because it has invested in higher education, in lower tax rates, and in research and development. It is the model growing economy of Europe as a result.

Young Canadians are pulling up their stakes and moving from this place to Ireland because they do not have the kind of opportunity they need here; because relative to our G-7 partners the personal income tax burden of Canadians is a whopping 56% higher; because the Canadian property tax burden is the highest in the entire OECD; because the corporate income tax burden is 9% higher in Canada than the average in our G-7 partners; because the average Canadian family paid a total bill of $21,242 or 46% of their income last year compared to only $17,000 in food, shelter and clothing.

If one were to keep constant the personal income taxes brought in, in 1994 by the government, it would necessitate a $6.5 billion tax cut just to keep income taxes constant with where they were three years ago.

The top marginal tax rate in Canada kicks in at $60,000 a year while in the United States it kicks in at $271,000 a year. The Americans have many flaws but at least they are prepared to reward risk taking and the kind of venturous spirit that is necessary in a free market economy. We penalize those people. We think the wealthy are those who earn over $60,000 a year but the middle class knows differently.

My family and other Canadians have moved abroad because working Canadians and their employees are currently paying a deficit reduction tax of $7 billion into the unemployment insurance fund. It is basically a cook the books fund for the Minister of Finance to cloud the actual size of the deficit.

Young Canadians are moving abroad, are moving to the United States and leaving with the skills we have given them. We have just raised CPP payroll taxes by 73% over six years, the largest single tax increase in Canadian history. It is a $10 billion tax increase which I am ashamed to say my hon. friends in the PC caucus voted for at second reading.

While I am speaking about my friends in the Tory Party, I cannot help but recall their economic record, those who introduced—

[An hon. member]

Oh, oh.

[Jason Kenney, Reform, Calgary Southeast, AB]

I am being heckled by the hon. member for Markham. A comment he made during his speech was interesting. This new found champion of fiscal rectitude was quoted in the Economist & Sun of Markham on November 25, 1997. I would be happy to table the article. He is quoted as “putting some distance between himself and the provincial Tories as he spoke to Markham high school students” the week previous.

Of the Mike Harris tax cutting, deficit cutting, waste cutting Tories, he says “If they don't get a gentler heart and get a little humanity and sensitivity into it, not only will they hurt themselves but they will hurt us, the federal Tories”.

Do my Liberal friends believe that a party at 12% is saying that the tax cutting champion of Canada, Mike Harris, is going to hurt it when he is at 35% in the polls? I would expect as much from a party that raised taxes 71 times and cut the average after tax disposable income of Canadian families by over $2,900 in their last term of government alone. I would expect it of a party that raised federal revenues to 16.9%, their highest point in history. My friends remind me of their GST, their great glory. They bask in the glory of the GST.

I hope my hon. friends in both parties will listen not to me but to the voice of the Canadian people. Let us look at the most recently released major national poll, released February 9 by the Globe and Mail .

The government promised in the campaign to spend 50% of every $1 billion in a future surplus on debt reduction and tax relief. We did not hear a word about debt reduction and tax relief in the throne speech. We heard very little about them in the November economic statement by the finance minister. Now that the Minister of Finance and the Prime Minister are doing their prebudget spin, it is very clear that 75% or 80% of the surplus will be directed to new big government Ottawa programs.

That is not what Canadians want. In that poll Canadians were asked “Do you think the federal government should start to grow again? Should it get bigger?” Guess how many think it should start to grow. The grand total is 15%. Some 44% thought it should stay the same size and 40% of Canadians think the government should shrink further than where it is today. The government is to spend 80% of its surplus on new programs and only 15% of Canadians think that is an appropriate response.

When asked what the priorities ought to be with the surplus we will be facing next week, 45% of Canadians chose debt reduction as their preferred option; 29% said tax relief to create jobs, hope and opportunity for young Canadians to which this motion speaks; and a grand total of 23% said it should go into new program spending like the blow away millennium project of the Right Hon. Prime Minister.

When those 15% who think we ought to spend more were asked what their spending priorities were, they said their top spending priority was to increase transfers to the provinces for health care and higher education. When they asked about a federal government sponsored scholarship fund, it fell so far down the list that I cannot even find it.

They want to repair the damage the government has done by cutting over $9 billion to health care and education. The government wants to take the credit. Instead of co-operative federalism, instead of transferring the money to the provinces where it will be most efficiently and creatively administered, the federal government wants the credit. That is what the $3 billion millennium fund is about.

It is not about the future. It is about a past rooted in the 1960s, a past of big government, a past which offers very little to my generation. We need the tax relief and investment in education and research development which will provide real hope and opportunity. For that reason I am pleased to support the motion.

[Some hon. members]

More, more.

[The Deputy Speaker]

I can see there is a lot of enthusiasm so we will move quickly.

[John Bryden, Liberal, Wentworth—Burlington, ON]

Mr. Speaker, I listened very carefully to the remarks of the member for Calgary Southeast.

[An hon. member]

You did?

[John Bryden, Liberal, Wentworth—Burlington, ON]

Yes, I did. Early in his remarks he criticized the government for having incurred a hundred billion debt in the course of the four years of its mandate. He was alluding to the fact that it took us four years to reduce the deficit of $44 billion a year down to zero. He was criticizing us for not cutting spending fast enough.

We are Liberals, not Reformers. We believe we have to move rather reasonably on these things and not an immediate slash and burn. We tried to move ahead in cutting spending in an orderly fashion so the economy could get used to it.

Nevertheless, after four years we did get there. I am sure the member for Calgary Southeast will agree it is very good to get the deficit down to zero and to start paying down the debt.

If the member for Calgary Southeast who supports the Conservative motion listened very carefully to what the Conservatives were saying, he would have heard that the Conservatives—

[The Deputy Speaker]

If the hon. member is going to ask a question, could he do it right away, please? I am trying to squeeze people in, as we have been doing all day.

[John Bryden, Liberal, Wentworth—Burlington, ON]

Mr. Speaker, I will ask the question very quickly. You are quite right.

Conservative members suggested cutting taxes, which would cost $2 billion. They proposed through the member for St. John's West free tuition, which would cost $2.6 billion. They also proposed increasing transfers for another $1 billion.

Does the member for Calgary Southeast agree with the $5.6 billion in new spending suggested in the Conservative motion?

[Jason Kenney, Reform, Calgary Southeast, AB]

Mr. Speaker, my party and I do not support any new net spending, but we believe we can repriorize overall spending.

We spend $103 billion in program spending. There is no reason we could not take billions out of grants and handouts to businesses, crown corporations, regional development programs and useless grants and redirect them to where they would be far more productive in research and development and higher education.

[Elsie Wayne, Progressive Conservative, Saint John, NB]

Mr. Speaker, I read in my local paper that the Reform deputy leader was in my riding. In her interview by the editorial board she talked about extra spending. She wanted extra spending in health care. She wanted extra spending in education. She wanted extra spending in social programs. She wanted all kinds of extra spending.

Does the member have two different stories, one for the House of Commons and one for when he comes to Saint John, New Brunswick, to see if he can pick up some votes?

[Jason Kenney, Reform, Calgary Southeast, AB]

Mr. Speaker, I appreciate the member's question. I can understand the member is confused in the same way as the member from Ontario was.

We are proposing that new spending can be found for such areas as research and development, higher education and health care transfers, but not net new spending. That new spending ought to be found by reducing other programs.

We have enumerated the areas we think deserve reinvestment and the areas we think should be cut in order to fund those reinvestments in our excellent document “Securing Your Future” which is available on the Internet at www.reform.ca.

[Paul Szabo, Liberal, Mississauga South, ON]

Mr. Speaker, during the member's speech he gave some figures. I would like to table figures from the Angus Reid poll issued on February 7, when Canadians were asked what they wanted to see the fiscal dividends spent on.

The top priority was health and education, followed by increased programs to create jobs for young people, followed by programs such as home care and pharmacare, followed by new benefit programs for children in low income families, followed by the new scholarship fund to improve access to education, followed by reduction of debt, and then followed by tax reduction. I do not know where the member gets his information from, but this is public.

I have a question for the member. A Statistics Canada report says that in 1995, 11,000 knowledge based persons left Canada but 34,300 knowledge based persons entered Canada. It says there is no brain drain. In fact we have a net addition to the knowledge based manpower in Canada.

[Jason Kenney, Reform, Calgary Southeast, AB]

Mr. Speaker, the very same poll from which the member cites asked the question “What do you think should be the federal government's main priority in deciding what to do with any future surplus money?” Reducing accumulated debt, 45%; cutting taxes, 29%; spending more in government programs, 23%. The numbers he was reading were from the 23% who think we ought to spend more.

With respect to Statistics Canada, I simply do not buy the idea that we have a net increase in skilled workers. We have a very high level of immigration, relatively speaking, and many immigrants are quite well skilled.

However many Canadians who have gone through our post-secondary and university education programs are leaving the country. I defy members of the House to stand and say they do not know people or are not related to people with post-secondary education who have left the country for brighter economic opportunities elsewhere.

[Scott Brison, Progressive Conservative, Kings—Hants, NS]

Mr. Speaker, I thank the hon. member for sharing his thoughts today and for the gastro-colonic reflexes from members opposite.

It has been sad for some of us to watch the party of prairie populism emerge and evolve into the party of prairie poll mongering.

Our party believes as strongly as the Reform Party in the free market. The Liberals believe in free government, in big government. The Reform Party believes in free market. We believe in free market for the Canadian economy, but we believe that all Canadians need access to the levers of the free market. There are some fundamental changes that need to occur such that those Canadians can access the tools.

Speaking of brain drains, in 1993 there was a huge brain drain from the House. However one of the most important issue is student bankruptcies. Students are graduating on average with $25,000 worth of debt in Canada. In 1997, 8,000 students had to declare bankruptcy.

What is the hon. member's personal opinion on the bankruptcy issue? Since it is an immediate problem, how would the Reform Party address the student bankruptcy issue in the short term?

[Jason Kenney, Reform, Calgary Southeast, AB]

Mr. Speaker, a brain drain is voluntary and a lobotomy is imposed. That is what happened to the Tory caucus in 1993.

With respect to student loans, we propose that student loan interest should immediately become tax deductible to reduce the burden. We also support the immediate adoption of a income contingent student loan repayment program.

The hon. Leader of the Opposition tabled a private member's bill to that effect in 1994. We have long been on the record as taking concrete steps to adopt the kind of flexibility in student financing we need to relieve the enormous burden many young people face.

[Gary Lunn, Reform, Saanich—Gulf Islands, BC]

Mr. Speaker, I thank the hon. member for Calgary Southeast for his riveting speech. When this member gets up to speak, he speaks with such knowledge on the subject and based on his record with the taxpayers' federation that he is obviously an authority on the subject.

It is ironic. I was speaking with good friends of mine, Troy Lanigan and Robert Pauliszyn of the taxpayers' federation, who say that we have the formula exactly right. The taxpayers' federation is agreeing with us: 50% debt reduction and 50% tax relief.

Because the other side cannot seem to get it, would the member explain to them in quite simple terms how tax relief will stimulate the economy? They do not seem to understand.

[Jason Kenney, Reform, Calgary Southeast, AB]

That is a difficult question, Mr. Speaker. I will just briefly point to history as evidence that tax relief produces more jobs.

In 1962 when John Kennedy dramatically cut marginal rates, employment and disposable income skyrocketed. When Ronald Reagan did it in the early 1980s, revenues skyrocketed as did real incomes. When Mike Harris did it in the last two years in Ontario, revenues grew faster. When Bob Rae and the Liberal Government of Ontario raised tax rates, revenues went down. When Mike Harris cut tax rates revenues went and with them came tens of thousands of new jobs.

[Ronald J. Duhamel, Liberal, Secretary of State (Science]

Mr. Speaker, I will be sharing my allotted time with my learned and articulate colleague from Mississauga West.

It is rather interesting to listen to the debate. A colleague in the Conservative Party talked about the Liberals being big government. We should compare the size of government today with what it was prior to the election of the Liberal government.

Let us look at the motion to see whether or not there is a problem with it. It says “lower the tax burden”. It does not say by how much. Would it be lower the tax burden of everybody? By how much? Are we talking one percentage point or ten? Is a particular level required before it is effective? They do not talk about that, of course.

Offer interest relief to students is another comment that is made. How much interest relief? Does it matter? Is it a little bit? Are we talking total relief? Are we going to put it off for a while? No, of course they would not explain it.

Do you know why they would not explain it, Mr. Speaker? I will tell you why. It is because they do not know what to do. They had nine years to do it, and what did they do? Nothing but accumulate large debt, a huge $42 million deficit, and in fact get booted out as they should have been.

When hon. members talk about brain drain, I suspect some of them can spell it but I bet they cannot define it. They do not know what they are talking about. They are offering a simplistic solution. They say we should lower interest rates and offer some interest relief and all of a sudden we will get a solution for those people who may be seeking employment elsewhere. That is why they are out of power.

They say nothing about the short term challenge Canadian industries face or nothing about the long term challenge. They do not know the difference. They have made no concrete proposals in terms of how you would address each one. Absolutely none.

And do you know why? Because they do not know the solutions. They have no creativity, no imagination.

This is from a party that left us with a $42.8 billion deficit. I want to say en anglais et en français that when they left power the unemployment rate was 11.4%.

We had an unemployment level of 11.4% in Canada. And here they are today with ill-defined solutions, and no suggestion on how to go about solving the problems.

They failed to acknowledge that. I am not one of those who pretend that we as a government have been perfect, but we have done some things that have been acknowledged and in fact have worked. We do have the lowest unemployment levels in seven years. We have with other Canadians created over one million jobs. We started from the second highest level in terms of the deficit to GDP ratio and we are now down to the lowest.

They fail to acknowledge those and many other successes of this government. I hope it is not because they do not understand.

When one speaks about a knowledge based economy it is important to realize that we have to train, attract and retain highly skilled workers. That is not done in a simplistic manner, as has been suggested. We need to encourage people who have good ideas and good skills and who have the ability to continue to learn. We live in a society where continued learning is absolutely essential.

The principal issue here is to understand the complexity of the problem. I have not heard that from members opposite. I have heard slick little slogans that if we do this and if we do that all of a sudden everybody will want to stay. I am sorry but that is not the way it works. We have to broaden and deepen the talent pool in Canada.

We have had difficulties all along the way. We continue to have difficulties.

I had the honour of chairing the G-8 ministers committee on science, education and technology. Countries such as the United States of America, Japan, Russia, Germany, Italy and France shared with each other the challenges they face. Do they have the same problems we have? On this particular front they do. Is that what they have to do as well? Do they have to adopt this ill-defined solution? This solution does not even attempt to define the problem.

Not only do taxes have to be decreased, as the motion says. That is one part of the solution, of course, but the true solutions are far more comprehensive and far more complex. We need partnerships between the universities and the various sectors, the various levels of government, and industry. All this is essential. The government is already working with all those partners.

It is working toward deepening the pool of scientific and technological workers.

I want to give some concrete examples. I challenge my colleagues opposite to argue the points which I am about to raise.

There is the millennium fund which will provide scholarships to tens of thousands of low income able Canadians. I heard a member of the Reform Party suggest that it is wasted money.

All I can say is that the young people with whom I speak do not believe it is a waste of money.

We have not sufficiently invested in the granting councils in the past. I hope that will be corrected because they are a source of tremendous possibilities for the education of people generally and in particular young people.

We have established an infrastructure that encourages innovation. No doubt members are aware of reason for the establishment of centres of excellence, which bring together researchers from government, universities and business. There is the Canadian Foundation for Innovation.

The foundation for innovation now has over $800 million which will be devoted to improving the infrastructure of universities, colleges, teaching hospitals and like enterprises which undertake research. Why? So they can employ, train and educate more young people for today's knowledge based economy. That $800 million will activate over $2 billion. Was that a bold and creative move on the part of government? Yes it was.

We need to encourage workers to stay in Canada. We have done that by using the national graduate register, helping students and employers to match job openings with qualified Canadians. Over 50,000 people are on that network. We have had a great deal of success with it.

The student connection program is the first business experience for many young people. Those young people train managers and employees on how to use the Internet so they can get a head start or be competitive in the knowledge based economy.

We need to create an economic environment which fosters innovation. We have the IRAP program. We have research and development tax credits. We have an unemployment rate which is the lowest it has been in seven years. It is still too high, but it is coming down.

Through much sacrifice we Canadians have collectively created one million jobs since 1993. We must continue to build partnerships among all levels of government with our partners in the private sector. We must work together to enable Canada to enter the new millennium as a leader and not as a follower.

I will close these few remarks with the comment that it is always so easy to turn up with a ready made solution. It is so easy to turn up claiming one knows the answers. It is so easy to suggest something without defining it. It is so easy to criticize without offering any concrete and proven solutions.

That is exactly what this is. To get this motion from a party that had nine years of opportunity in government and that will probably be judged as the worst government this nation has ever had is extremely difficult to believe. To suggest that we are going to address the need for workers in the knowledge based economy by undertaking those two steps, steps that are supported by both parties on the right, is really not understanding the problem. It is really not addressing it. It is really letting Canadians down.

[Jim Abbott, Reform, Kootenay—Columbia, BC]

Mr. Speaker, I would like the member to address the issue of the cost of the millennium fund. I suggest the whole idea of this millennium fund is nothing more than to create some kind of movable shrine for the Prime Minister when he finally retires so that it will have his name on it.

Let us assume the finance minister determines he is going to put $3 billion into the fund. Let us further assume that fund will theoretically throw off a certain number of dollars. Let us pick a figure of 5% or $150 million a year that would be directed toward these scholarships. Let us also take into account our national debt is approaching $600 billion. By taking $3 billion that could be used toward paying down that $600 billion debt, by not paying down that $600 billion debt, that $3 billion still has interest payable on it.

Guess what? At 5% the cost of that $3 billion is $150 million, indeed the amount of money the government wants to spin off to the students through this millennium fund, this great moving shrine for the Prime Minister who at some point in time will be the ex-prime minister.

This millennium fund is nothing but smoke and mirrors. If you do not pay down the $3 billion, you have to pay interest on the $3 billion. How can you pay interest on the $3 billion when you have already put the interest back into the bond market? It is just smoke and mirrors.

[Ronald J. Duhamel, Liberal, Saint Boniface, MB]

Mr. Speaker, I am offended by the suggestion that this is a shrine to the Prime Minister. The Prime Minister has chosen to invest in young people. He has chosen to prepare Canadians to meet the challenges of the knowledge based economy, to prepare Canadians to go forward in the new millennium as leaders and not followers.

The member is with the same party that came to this House of Commons to suggest that Liberal solutions could not tackle the deficit. I am delighted to tell the member and his party that Liberal solutions have indeed tackled the deficit. It may have been wrestled to the ground.

The member of the Reform Party and his party do not understand that sometimes when you make strategic investments you get a whole lot of return. The Reform Party does not understand that if you fail to invest in the skills of the knowledge based economy that you will be at the back of the line. I want to be with the young people at the front of the line. I applaud this move and I will support it completely, totally, unequivocally.

[Scott Brison, Progressive Conservative, Kings—Hants, NS]

Mr. Speaker, sound long term economic policy takes years to have an effect. It also takes consistency. Let us talk about consistency. The hon. member was first elected to this House in 1988 I believe. As I said, consistency is critical when we are talking about sound economic policy.

The Economist magazine's 1998 preview did say specifically that the deficit reduction in Canada was largely due to structural changes made in the Canadian economy by the government in the early 1990s, free trade, the GST, deregulation, including the elimination of the national energy program—and I hope my friends in the Reform Party appreciate us for that—and deregulation of transportation and financial services.

Where did the member stand on the issue of free trade and on the issue of the GST? We have acknowledged that consistency is critical. Where did he stand at that time on those two issues?

[Ronald J. Duhamel, Liberal, Saint Boniface, MB]

Mr. Speaker, he is the same member who just a short while ago said that Liberals were big government. I challenge that member to compare our size of government with that which preceded us which was the Progressive Conservative Party, just in case they have forgotten.

The member is trying to take credit for the government's success with other Canadians. That is what he is trying to do. He is trying to suggest that after the nine years the Conservatives spent in power where they were dismally unsuccessful on any number of fronts whether it be debt, deficit, unemployment, we are reaping the benefits. I am sorry. We have done as we have because we have stood with Canadians. I stood with my party.