Yes, after tax. If they want to put the kids in ballet or in hockey they have to do it with 52 cent dollars. This makes it extraordinarily difficult. Sometimes people have to sacrifice these things and often they do. Since 1990 disposable incomes in Canada have fallen by $3,000 for the average family of four. This makes it extraordinarily hard for people to live their lives as they want to do.
I point to another example of where I feel the government has taken over too much control of the lives of Canadians. The most timely one is the Canada pension plan. For the last 30 years the government decided it would look after pensions for Canadians. Over the last 30 years governments knew the Canada pension plan was going off the rails. In fact when it was set up it was doomed to fail. For 30 years the Conservative and Liberal governments did nothing. In the meantime a liability of almost $600 billion was run up.
All this is coming to light and the government's only solution is to keep control of a plan which it has absolutely botched. It is now asking all working Canadians to pay another $700 a year as a reward for the job they have done for the government to provide them with the same pensions they were getting before, $8,800 a year. Actually it is a little less than they were getting before.
It is time for the government to begin giving up some control. Let us let workers control the money they now have to give to government. Some young entrepreneur who is just entering the workforce today will have to pay $3,200 a year for the next 45 or 47 years, until they are 65 years old, to get a pension of $8,800. That is so ridiculous it hardly deserves comment. Unfortunately that is what is happening. The government refuses to consider any of the options.
Around the world countries such as Australia, the U.K. and the United States are moving toward the idea of a personalized RRSP type system. They are giving workers control over their own lives. People are building up huge retirement accounts for themselves and for their families. However our power hungry government steadfastly refuses to do so. I do not know what else to attribute it to. The government refuses to allow Canadians to retain control over their own income. I do not understand why. I do not understand why the government never considered looking at some of the other options when it was investigating all this a couple of years ago.
Government members went across the country to talk with Canadians about what government should do about the $600 billion liability. They only met with 270 Canadians who were told “Your only option is to fix the plan as it now is”. That was the only option offered. That is ridiculous.
If there is to be a consultative process in a modern democracy, government should be willing to consider all options. Sadly that was not done and Canadians are now saddled with an unbelievably unfair tax hike that will hurt young Canadians more than anybody. It will drive a wedge between generations in years to come.
What is the solution to the problem of government grabbing more and more control and getting bigger and bigger? The solution is obvious. We should simply return to the tradition of limited government which we had for close to the first 100 years of Confederation. Until 1965 the level of Canada's taxes compared to the economy was only 27.7%. The G-7 average was 27.6%. We were almost exactly on par. The 1996 statistics indicate that Canada's taxes as a percentage of the size of the economy represent 43%. The G-7 average is 36%.
Not only have we grown tremendously relative to how much we taxed people in 1965. We have also grown tremendously compared to our trading partners in the G-7. We are about 25% higher than them in terms of the total economy. Our income taxes are 56% higher than those of our G-7 trading partners.
We should return to the tradition we had of limited government, a government that lives within its means, does a few things well that only the federal government can do and should do, and a government that allows the provinces, municipalities, individuals, families and charities to do all the rest. Does it not make sense for the federal government to focus on the things only it can do?
It would have benefits well beyond saving a few dollars. Maybe we would have a government that was actually effective at delivering some of the essential services which only the federal government can deliver.
Imagine if the federal government took all the bureaucrats who occupy the buildings in downtown Ottawa and focused them on fixing the criminal justice system. We might even have a criminal justice system in which Canadians have confidence.
Imagine if we focused some of the savings on equipping our Canadian military? The Reform Party raised the issue, before the House rose for the Christmas recess, of a soldier in Bosnia who suffered head injuries when a vehicle rolled over because we could not supply him with a helmet. I cannot believe it.
The federal government should focus on fixing the Canadian military and providing the equipment that is needed. Our soldiers did an outstanding job in helping Quebeckers and Ontarians during the recent ice storm. Let us give them the equipment to do the job when they go overseas to Bosnia or Haiti or wherever they are sent. That is the sort of thing the federal government should focus on. If it did those things instead of getting into all these other things it would have the money to do so.
My friend across the way is saying we need the money. Of course we need money. However, instead of spending $24 million on a flag program at the same time that hospital beds were being cut, maybe the government should have taken a look at the priorities of Canadians.
One solution in giving Canadians more control over their lives is simply to return to our tradition of limited government, a government which lives within its means, a government which does not spent more than it takes in.
Our party would invoke balanced budget legislation to ensure that legislators keep their promises and live within their means so that we do not saddle future generations with huge amounts of debt either through CPP or through the debt the federal government has already built up.
My second point is that it is time to support the family budget by controlling the appetite of the federal budget. There are three steps in doing so. The first step is that we have to freeze spending at its current levels and reallocate spending within those levels, within the hundred billion dollar budget.
If we did that, what would happen very quickly is that money that goes toward flag programs would get put into health care. Money that goes to building golf courses, which is something the government actually does, believe it or not, would go into things like research and development. If spending were reallocated into things Canadians really care about, people would be forever thankful to the federal government for finally doing the things they care about.
If the government focused on fixing the criminal justice system and doing those sorts of things instead of getting into fuzzy, ill defined projects, Canadians would be quite grateful.
The second step is to secure our future by paying down debt. My friends across the way proposed in the election campaign last year, in the throne speech and recently in the prebudget report of the finance committee that they would like to see 50% of any surpluses spent on new spending. That shocked me. I could not believe it when I heard it.
We are just emerging from a deficit we have had for 27 years. We have a debt of $600 billion. The average family pays $6,000 a year in tax just to pay their share of interest on the debt. It is unbelievable. My friends across the way want to start spending again. I cannot believe how imprudent, how foolhardy that approach is. It is absolutely ridiculous.
We need a plan to pay down the debt. The government does not have a plan. The Reform Party has come up with a plan. If we took half the surpluses we will soon be running and devoted them toward paying down debt, we would very quickly be in a situation where we would have reduced our debt to GDP ratio from over 70% down now to about 20% by 2016.
In the process of doing so, when we get down to about 45% of GDP mark we would probably start to recapture our triple
a
credit rating and interest costs would start going down. When we get down to about 20% of GDP, or a real cut of around $240 billion in overall debt, there would be a savings every year of about $20 billion in interest payments Canadians are currently making. That $20 billion could go back into hospitals, research and development, or possibly be used to deal with the huge unfunded liability in the Canada pension plan. A lot could be done with that $20 billion.
I must point out to my friends across the way how imprudent they are. We have a debt of $600 billion. We have a global marketplace and a global environment. We have things like an Asian crisis that help spike interest rates or cause all kinds of volatility. Unfortunately the government in its wisdom does not think it is a problem. It would rather take any surpluses and devote them to new spending.
My final point is that we must create an environment for prosperity and opportunity. We should not be driving up taxes evermore. Our income tax is 56% higher than the G-7 average, according to a report from the government's industry department. We are 25% less wealthy than our American colleagues across the boarder.
The Reform Party would take the other half of the surplus and devote it to lowering taxes. That would do more for the average Canadian then all the fuzzy headed social programs the government is embarking on, the 31 new programs it announced in the throne speech.
My other point is that my friends across the way have made a history in this country with the claim that they are more compassionate. I will address that head on. I wonder how compassionate it is to allow a family of four with an income of $32,000 to pay $3,000 in federal income tax. How compassionate is it to allow a single mother with one child, a waitress who makes $15,000, to pay over $1,300 in income tax?
Canada is the stingiest of all G-7 trading partners in how we treat low income Canadians with respect to basic exemptions. We are the stingiest. That is unbelievable to me. We always hear about Canada's tolerance and compassion. Where is the tolerance and compassion in that? Let us elevate all those people. Let us lift them off the tax rolls by bringing in tax relief that will allow those people to not pay any federal income tax.
I have raised the following issue in the House before and it deserves mention again. We have talked about people like Alice Strelaf, an older lady who lives in Abbotsford. She wrote to us because she was concerned about her personal situation. She had an income of about $18,000. She had to mortgage her home in order to pay income tax. She had to turn down the heat in her house so she could somehow get by. She is paying thousands of dollars in taxes every year. That is ridiculous.
There is a lot the government can do to help people. It can break that ridiculous promise it made in the election campaign and devote more of that money to paying down the debt on one hand and to lowering taxes on the other.
Bill C-28 is insubstantial stuff. It does not address the real issues that Canadians are concerned about. From an unemployment rate of 8.6% to staggering taxes to record high debt, those things need to be addressed. We need to address what would happen to the strength of the dollar if we suddenly started to pay down debt. It would go up dramatically. We need to deal with those issues and not the insubstantial housekeeping stuff the government seems to think is so important.