Madam Speaker, today I will be splitting my time with the member for Madawaska—Restigouche.
When I heard the comments earlier and the buoyant optimism of the member for Thornhill about the budget and I heard the comments from the member for Acadie—Bathurst about the pain and suffering in his riding and the inadequacies of the budget in addressing those pains and sufferings, it reminded me that three of the Atlantic provincial governments, two of which are Liberal, have come out against the budget.
The only Atlantic Canadian premier who has not stood up to the budget is the Prime Minister's lap dog in Nova Scotia, Russell MacLellan. Why would Nova Scotians expect Russell MacLellan to stand up for them now, because in 17 years in Ottawa he failed to stand up for them?
Canadians are disappointed. Canadians have sacrificed over a period of 15 years to reach this budget surplus. When the member for Thornhill refers to the Liberal progress in reducing the deficit, she should remember that the deficit grew as a percentage of GDP from zero in 1970 under Liberal leadership to almost 9% under the Liberals in 1984. It was reduced from 9% to 5% of GDP under the Conservatives between 1984 and 1993.
Deficit reduction has taken some time and the Conservative government deserves credit for policies like free trade, which helped make it possible, policies members of this government fought vociferously when they were in opposition. In any case hypocrisy is only half a mortal sin and it does not seem to have hurt them to date.
The reason Canadians are disappointed in the budget is that after 15 years of sacrifice, after 15 years of visionary policies and difficult decisions to reach this point, they needed acknowledgement that they had actually paid the price of the deficit. Ordinary Canadian taxpayers who have seen their taxes increased over the years, who have seen their personal disposable income drop 6% in recent years at a time when the U.S. personal disposable income has increased by 13%, needed a break.
The Liberals talk about how great things are and the fundamentals of the economy. We should look at how we are doing in comparison with the U.S. Canadians pay roughly one-third more in income taxes than our American friends. The U.S. savings rate has held steady at around 6%. That is about three times what Canadians are able to save. Personal disposable income has been on the rise in the U.S. and has been on the decline in Canada.
The most important social indicator, unemployment, remains at 9% in Canada and 17% for our young people. In the U.S. the unemployment rate is 4.7% I do not think we should be taking a lot of time to commend the government for helping the Canadian people.
Our party has been consistent over the past 18 months in encouraging the government to increase the basic personal exemption to $10,000. We do not believe that a Canadian making less than $10,000 should be taxed. The Liberals recognized that taxing poor Canadians was not a good idea, so they raised the basic personal exemption by $500. If we calculate the total benefit in the budget for someone in Canada making $10,000 per year, it is $80 per year. That is one cup of coffee per week at Tim Horton's. If they are going to Starbucks, it is one per month.
The poorest of Canadians who have borne the brunt of the government's cuts to health care and the government's increases in taxes have suffered to reach this point. That was a pittance, an insult, a slap in the face that the government gave ordinary Canadian taxpayer. It is unacceptable.
I know some members opposite will say that things are better in Canada because of our health care system. It may have been possible to say that a few years ago but it is not possible to say that any more.
Across Canada there is a phenomenon of Canadians waiting in hospitals for adequate health care. In my riding there are constituents who are laying on gurneys in hallways of hospitals in places like Kentville, Nova Scotia, or the Hants Community Hospital in Winsor, Nova Scotia, waiting hours for adequate treatment.
Some members opposite will say that has been going on for years in the U.S. What is the difference between someone laying on a gurney in Kentville, Nova Scotia, and someone laying on a gurney in New Jersey? The biggest difference is that if they make less than $10,000 per year in the U.S., they do not have to worry about having to pay income taxes to the federal government. That is the biggest difference.
It is unacceptable that in Canada people making less than $10,000 a year, first, are not given adequate health treatment and, second, have to be concerned about paying their federal income taxes which the government can spend on pet projects to facilitate a monument fund for the Prime Minister.
The Liberals call Canada a kinder, gentler nation. Their cuts to health care have certainly contributed to the end of that reputation.
The biggest single looming social issue that threatens the future competitiveness of Canada is our brain drain, the loss of our brightest and best to the U.S. Every year we lose 400 to 500 doctors to the U.S. because our taxes are too high. Eighty per cent of the graduates from the University of Waterloo in computer science are going to the U.S. every year. The budget gave the government an opportunity to address this.
Sherry Cooper, chief economist from Nesbitt Burns, said the following about the budget:
We are pouring all this money into education and scholarships and then the better and brighter will go straight to the U.S. where taxes are massively lower.
Effectively the government's policies and the budget are taking the brain drain and making it into the brain train. The U.S. and its economy will benefit the most by the government's inaction in addressing the issue. It should be very thankful for all the bright young Canadians we are sending to the U.S.
Sound economic policy takes holistic approaches. If we look at the overall situation in Canada, unemployment, the high debt rates of students and their personal bankruptcy rates are symptoms. They are not the problem. The cancer in Canada is high taxes.
Instead of treating the cancer, trying to effect change, reducing taxes and implementing policies that will work and put Canadians back work, the government is essentially treating lesions.
There are still 1.4 million Canadians out of work. High taxes kill jobs. The government continues to wallow in ignorance and to perpetuate policies of high taxation. Nesbitt Burns went further:
While the budget did contain a variety of tax cuts, they were targeted in nature and will have only a marginal macroeconomic impact. They will not provide a meaningful boost to employment and will not do anything to bolster competitiveness....it fails to address Canada's primary tax problem—a top marginal tax rate in excess of 50%, compared with 40% south of the board.
This is unacceptable. The president of the Canadian Federation of Independent Business, Catherine Swift, responded that the budget would do nothing to reduce the unemployment rate in Canada.
The Liberals say that we should wait for tax cuts. Effectively they are saying that the unemployed can wait. The unemployed cannot wait. The loss of productivity, the loss of competitiveness, the loss of Canadian families and of Canadian young people cannot wait for the government to realize that it needs to do the right thing.
The first thing it has to do is provide Canadians with a plan for growth which will reduce taxation, will put more money in the pockets of Canadians and will provide Canadians with an opportunity to stimulate economic growth in their families, in their communities, and to get back to work.
The worst and the most insidious taxes are payroll taxes in terms of their impact on employment. Payroll taxes are a direct impediment to job growth in Canada. The government has taken the CPP payroll tax increase last fall of $11 billion and has failed to reduce EI premiums to help offset those payroll tax increases.
It is saying 10 cents over a period of three years when we advocated reducing the EI premiums to $2 immediately. That would do more to stimulate job growth in Canada and still provide an opportunity to have an adequate surplus in the EI fund. The government has not done it. It is saying that there will be a $7 billion of tax relief over three years when we know that it will eliminate it in one year with excessive EI premiums.
The policies of high taxes are clearly unacceptable. Canadians know it. We need strong leadership to reduce taxes. I can only hope they will occur under the government prior to four years from now when we have to make the tough decisions and put Canadians back where they should be, at the top in terms of international competitiveness.