Debates of Feb. 26th, 1998

The Budget

[Maurice Godin, Bloc, Châteauguay, QC]

Madam Speaker, I listened to the hon. member from the NDP, and I fully agree with him. I also share his concerns.

The budget is totally silent on the issues of employment and tax cuts. It does not propose anything to eliminate the debt and, more importantly, it includes no firm commitment on how surpluses will be used. We know full well that the Liberals are merely launching new programs, such as the millennium scholarship fund, in an area of provincial jurisdiction.

We know that the debt is the result of the federal government's absolute spending power. It is the result of initiatives implemented in the seventies and designed to promote federal identity, such as Air Canada, Petro Canada, and so on.

It is often said that the Conservative government is to blame. However, the largest deficit was incurred when Marc Lalonde was Minister of Finance, in the seventies.

Does the hon. member agree that this government is currently headed in the same direction as the Liberal government of the seventies? Does he agree that we will have to put a stop to the federal government's absolute spending power in areas of provincial jurisdiction, if we are to eliminate the debt?

[Nelson Riis, NDP, Kamloops, BC]

Madam Speaker, again that was a very thoughtful question from my friend in terms of pointing out what the government did in the budget to inflict pain on a lot of people who have been experiencing and living in pain for many years now.

This was an opportunity for the government to extend some care, concern and compassion to those men, women and families who have suffered so much during the difficult years of restraint. This was the opportunity.

The government has the money. Before it said that it did not have the money and now it has it. It had the money to improve health care. It had the money to support education. It had the money to help people who did not have jobs. In other words, the government could have acted in a number of areas that would have reflected on the value of caring, but it chose not to.

That is fair. It is a free country. However let the record show that when the Minister of Finance had the opportunity to help Canadians who needed help, he chose not to do so.

[Marlene Catterall, Liberal, Ottawa West—Nepean, ON]

Madam Speaker, contrary to the comments of the previous speaker, I am quite proud to rise to speak on the budget. I will be sharing my time with the hon. member for Thornhill.

The first balanced budget in nearly 30 years is something to be really proud of, not only for the government but for all Canadians and for this Parliament. The budget reconfirms the value of the prudent fiscal approach we have taken over the last four years. We will continue that prudent fiscal approach so that Canadians can look forward to a government which is not run on credit cards.

I want to comment on the speech which the hon. member for Kamloops just delivered. His whole approach showed why the NDP has lost substantial credibility. He spoke about several things. He said the budget did nothing for employment. That comment shows clearly that the NDP does not understand what builds employment in a country.

He said that the budget would do nothing for poor children and for those who most need help. I will outline exactly how it helps those very people in society who most need our help.

Let me talk about employment first. Governments do not create employment. We have all seen the folly over the years of government throwing money into make work programs that are temporary and that do nothing to deal with the underlying causes of unemployment or to better prepare people to take part in the economy and the jobs that are available.

However governments do create the economic conditions that allow the private sector to create employment. That is exactly what our previous four budgets have done and what the budget continues to do.

It continues to ensure low interest rates. It continues to ensure low inflation. It continues to ensure that investors can have confidence in the economy of Canada because they can have confidence in the fiscal situation of the Government of Canada. Those economic conditions are very clearly supported and strengthened by what is in the budget as well as what has been in our previous four budgets.

Employment is built by research. Now, with the flexibility to make some choices, one of the major new investments we have made is to put money back into research granting councils: the Medical Research Council, the Social Sciences and Humanities Research Council and the National Science Research Council. We are restoring funding for those bodies to where it was in the 1994-95 budget. We will be increasing it further over the next few years. We know that the research we do now is the jobs of 10 years, 15 years or 20 years from now.

Another thing, and perhaps the most important thing, we are doing is investing in the knowledge and education of our population and not just our young people and children. There are measures in the budget to make it possible for more and more young bright people to have an education without assuming a mortgage of debt that can last, for some, the rest of their lives.

The tax treatment of education expenses and the ability to deduct interest on student loans from income taxes as they are being paid back are a couple of ways in which we are helping students to afford an education without being burdened with ongoing debt.

We are helping Canadians in the workforce to go back to school and upgrade their learning so that they can take advantage of new opportunities that are arising in a dramatically changing economy. We are supporting their tuition fees with grants. We are supporting their child care costs. We are making it possible for the parents of many young poor children, about whom my colleague from Kamloops talked, to get the education that will help them to have better paying jobs and to better support their families. As the member knows perfectly well, low income single parents, usually moms, cannot afford to go back and get that education. The budget will help them do it.

He mentioned that we are not investing in health care and that we are not investing in education. I consider that to be a statement that is not honest and is not consistent with what is on paper in the budget.

The member knows perfectly well that we are restoring $1.5 billion of cash money to the provinces for education, health care and social services. That is not counting the extra billions of dollars that come to the provinces through tax points that are being transferred from the federal government. That is not counting the equalization payments which are also transferring billions of dollars to the provinces to be used for those and other purposes.

However, if the member expects us to start transferring more billions to the province of Ontario which has cut more out of health care to finance a tax cut than any money that has been reduced by the federal government to health care, it will not happen.

I want to talk about poor children. The member made a special point of saying we are not doing anything to help poor children. In 1996 the Liberal biennial convention adopted as its top priority a resolution dealing with the issue of poor children. That was dealt with in our last budget and it is dealt with again in this budget. I am particularly proud of that.

The member also said that caucus members on this side had nothing to do with the budget. I want to tell him that the budget was developed by our caucus members. That resolution received the national support of Liberals plus the support of our finance minister. It was the initiative from my riding association, supported by the Nepean Women's Liberal Association, that made it a national priority, not only for members in the House but for Liberals right across the country.

The member may not have read the budget. I do not know how he could overlook an additional $850 million dealing with child poverty through the child tax credit. That is a total of $1.7 billion in two budgets. Maybe it is not enough, probably not, but there are other measures.

We are delivering a first broad based tax relief to Canadian taxpayers, starting with those most in need, that is, low and middle income Canadians.

Yes, the reductions in taxes are modest but they are targeted to those who need them most. Four hundred thousand Canadian families with children will no longer pay income tax because the basic deduction has been reduced. Families receiving under $30,000 will pay significantly less income tax this year. Poor families are the families of poor children. When we help families of modest income we help poor children.

I have no problem standing here today saying I am proud of the budget. I feel I have contributed to the budget. I feel every one of my colleagues on this side of the House has contributed.

We promised Canadians when we ran for election in 1997 that we would stay the course, that we would not fritter away the benefits that had been gained by their sacrifices across the country in order to put us in a sound fiscal situation where we are not seeing growing interest payments eating away at our ability to do anything for health care, for the economy or for children.

We have now broken the back of the deficit. We have a balanced budget. We have choices to make as Canadians. We have made prudent choices in the budget. We are heading in the right direction. I stand here proud of the budget.

[Yvon Godin, NDP, Acadie—Bathurst, NB]

Madam Speaker, I would like to ask a question regarding the budget.

The hon. member may think that I did not read the budget, but I did. The problem is that her counterparts in New Brunswick may not have done so, or did not understand it or are no good with figures.

Dr. Russell King, the New Brunswick health minister, condemned the budget. The Newfoundland health minister condemned the budget. New Brunswick finance minister Edmond Blanchard condemned the budget. Education minister Bernard Thériault condemned the budget. That is what is happening across the country. Canadians are condemning the budget. They have missed the boat.

Apparently, she wants credit for that; we thought the Minister of Finance was alone, but she is in the same boat.

I would like to ask my hon. colleague a question. They say RRSPs can be used to good advantage, but the poor in Canada cannot afford RRSPs.

I have another question for her. She mentioned that scholarships would be awarded on the basis of merit. I can tell you one thing: children who leave for school without having eaten properly—teachers tell us of children going to school on an empty stomach—will not get scholarships to study on the basis of merit. Those scholarships are not for them.

The Liberal government of Canada has missed the boat. The Liberal government of Canada said that 50% of the surplus would go towards social programs. All the Liberal provincial ministers in the country are condemning the budget. Either you do not know how to read, or they do not know how to read, but I have read the budget, and I have ears to hear what the provincial ministers are saying.

[Marlene Catterall, Liberal, Ottawa West—Nepean, ON]

Madam Speaker, I have nothing to learn from my colleague opposite.

I live five minutes away from a community of 500 families living out poverty on a daily basis. In my riding, there are thousands of poor families; I am very close to these families and these communities—

[Gérard Asselin, Bloc, Charlevoix, QC]

There is nothing in the budget for them.

[Marlene Catterall, Liberal, Ottawa West—Nepean, ON]

—and I am here to represent these people.

I urge my colleague to read the budget and tell the truth in the House. There are $1.7 billion specifically for poor children. There are tax cuts that target poor families, that will help them.

If I were a premier, I would want much more money from the federal government, there is no doubt about it, and I would complain if I did not get it. But the premiers must also assume their responsibilities. I have no patience for the complaints of Ontario's Mr. Harris, for example, who has made much deeper cuts in health care in that province than the federal government did.

[Yvon Godin, NDP, Acadie—Bathurst, NB]

Where I come from, animals are treated better than people, and that is the fact of the matter.

[Marlene Catterall, Liberal, Ottawa West—Nepean, ON]

I urge Canadians to read the budget, to find out what is in it, and to judge for themselves whether or not they share our values.

[Elinor Caplan, Liberal, Thornhill, ON]

Madam Speaker, I am proud to rise today to participate in this very important debate.

February 24, budget day, was a very good day, a good day for Canada and a good day for the people of Thornhill.

I am proud to stand in my place today in this Canadian House of Commons where I have the privilege of representing the people of Thornhill and the opportunity to support this balanced budget, a very balanced achievement.

The previous Conservative government had brought this country to the brink of financial crisis. Our deficit was $42 billion, the largest in Canadian history. Now for the first time in almost 30 years the budget is balanced, the deficit is gone. In just a few years this country has gone from what was described as an economic basket case to the country leading the G-7 nations of the world in economic and job growth, and this year we will be the first country in the G-7 to balance the books.

Yes, I am proud. I am proud that we are now able to make strategic investments in our priorities, our children, our youth, our health and our communities. We are preparing for a secure future.

The budget is our vision. It reflects our values and our plans for that secure future. By investing in knowledge and creating educational opportunities we can complete the transition from an industrial economy to one that is information based.

The key component of our plan is the Canadian opportunities strategy. The centre piece of our strategy is the Canadian millennium scholarship endowment fund. Our plan will provide more young Canadians with access to post-secondary education than ever before. It will provide post-secondary scholarships for tens of thousands of deserving young Canadians in the next century. It will help ensure that Canadians can fully benefit from the new jobs and the new economy of the 21st century.

This government has also introduced the Canada study grant to assist students with children or dependants, which is so important. We have also included new tax credits for interest paid on student loans and a Canada education savings grant which will provide a grant of 20% of the first $2,000 of annual contributions to RESPs for beneficiaries up to age 18. That will ensure that people save for their children's education.

Beginning next year, Canadians will be able to make tax free withdrawals from their RRSPs for lifelong learning. These approaches will help address the burden of student debt as well as enhance access to educational opportunities.

This government understands the importance of education. We also understand the importance of research. That is why over the next three years we will increase the budget to the three research granting councils by $400 million. This will create jobs, generate economic growth and establish Canada's position among world leaders in research.

In this budget the government has acted on our commitment to add an additional $850 million to the Canada child tax benefit, bringing our total commitment to $1.7 billion. This is important progress in the battle to end child poverty.

The riding of Thornhill is a new riding, created in the federal riding redistribution before the last election. Thornhill has two municipalities within its boundaries, Markham and Vaughan. The riding is bordered on the east by 404, on the west by 400, to the north by highway 7 and Rutherford Road, and the southern boundary is Steeles Avenue.

On the east side of Yonge Street is the town of Markham which was founded in 1794. Markham is a remarkable community which combines the charm and atmosphere of a small community with the amenities and business advantages of a cosmopolitan centre.

On the west side of Yonge Street is the city of Vaughan, a growing and thriving young community. The area of Vaughan which falls within the riding of Thornhill is commonly referred to as Thornhill-Concord.

Thornhill is like this wonderful country. It is a mirror of the world. For example, in the town of Markham over 40% of the residents were born outside Canada and there are some 65 languages spoken. In the last election the people of our community were given a clear choice. Thornhill overwhelmingly chose the balanced policies and fiscal prudence that the Liberal plan offered.

Thornhill also had a chance to judge the record of the first Liberal mandate. I had the honour to be elected as the first member for Thornhill, another reason why I am proud to speak today in this House of Commons.

Let us for a moment review the Liberal government's record. More than one million jobs have been created since 1993. In 1993 unemployment was 11.4%. In January of this year unemployment was at 8.9%, still too high but the lowest level in seven years.

Canada has gone from having the second highest debt to GDP ratio to the lowest of the G-7. In 1996-97 Canada's debt to GDP ratio recorded its first significant decline in 25 years. This government is committed to moving in the right direction, keeping the trend on a downward track.

I am happy to stand here today and proudly tell my constituents that by any international comparison the Canadian economy is strong and we have earned the United Nations ranking as number one in the world, as the best country to live in, to work in and to raise our families in.

I want to maintain that quality of life. There is still work to be done. That is why I wanted to come here to Ottawa to do that work. I can assure my constituents that this government will continue to work on behalf of all Canadians as we move forward toward the millennium and beyond.

The Minister of Finance told this House and this country that we have won a major battle. However, we all know we have not won the war. Yes, the deficit is gone but the heavy legacy of 25 years of deficits remains and Canada's debt burden is too high. Through the debt repayment plan and other fiscal measures we will bring down the debt.

Our fiscal plan is clear and balanced. Over the course of our mandate half of any budgetary surplus will provide debt and tax relief and the other half will be invested in our social priorities. Why? This government is committed to taking the necessary steps to reduce unemployment and social inequities in our society.

Youth unemployment at 16.5% is too high and we are taking steps to ensure that all Canadians can get a first job and use their skills and talents to help build our economy and secure not only their future but our future. Yes, we have cut taxes but the impact from those taxes is going to the people who need it the most. Why? It is simple fairness.

We have reduced the unemployment insurance contribution by $1.4 billion for 1998, our fourth consecutive reduction of employment insurance premiums. Furthermore, we have created an important incentive, an employment insurance premium holiday for employers who hire young Canadians in 1999 and in the year 2000.

Over the next three years $7 billion of cumulative tax relief will be provided. Nearly 400,000 low income Canadians will be removed from the tax rolls and another 4.6 million taxpayers will pay less income tax. Almost 13 million Canadians will no longer pay the 3% general surtax and another 1 million people will see that surtax reduced.

I am proud to repeat the commitment of the leader of our party, the leader of our government, the Prime Minister of Canada, when he said we will never allow the finances of the nation to get out of control again.

I am happy to tell the people of Thornhill that not only will this year's budget be balanced but so will next year's and that of the year after.

To conclude, I thank Thornhill for its confidence. I will always do my best to act in its best interest, the public interest. I am proud to support this 1998-1999 balanced budget on its behalf and on behalf of the public interest of Canada. I am proud to stand in my place today.

[Gerry Ritz, Reform, Battlefords—Lloydminster, SK]

Madam Speaker, I would like to ask the hon. member a question on the government's debt reduction policy. She talked about the old 50:25:25 program but what I see in the budget documents is a $3 billion contingency fund. If there is enough money left out of that, barring any other glitches to the economy or whatever, it will be applied to the debt.

Over the next three years the maximum we would see paid down on the debt is $9 billion according to my math. In that same three years, interest on the debt will accumulate to almost $140 billion. I am wondering how she gets some sort of balance or fairness out of that for taxpayers.

[Elinor Caplan, Liberal, Thornhill, ON]

Madam Speaker, I know the member finds it hard to accept good news, but the fact is the GDP to debt ratio is on a downward trend. We have already seen some $14 billion repaid on the debt. We have put in place contingency amounts of $3 billion this year, next year and the year after.

These funds will be used for debt reduction. This is part of the debt reduction strategy that I believe is in the interests of Canadians and that is part of a balanced policy. It meets our commitment which says that 50% of any budgetary surpluses will go to social investment and protection of our quality of life and 50% to debt and tax relief. That, of course, is over the course of our mandate.

I am pleased that the member brought this to the attention of the House because the debt repayment strategy and the reduction of the debt to GDP ratio is something that is very important as part of that strategy.

[Jean-Guy Chrétien, Bloc, Frontenac—Mégantic, QC]

Madam Speaker, earlier this morning, a call came in at my constituency office, which I quickly returned of course, via my Ottawa office. It was a call from the AFEAS group in Quebec.

Women are extremely disappointed with the latest Martin budget, especially as concerns the calculation of the amounts women will be eligible to. From now on, it will be based on family income instead of personal income. This is yet another low blow, especially to women who have been away from the labour market and will be hard hit.

In my region, at Garthby, Beaulac and Disraëli in particular, a letter writing campaign is being staged to raise the finance minister's awareness of the injustice of the poverty issue in this country, because the hon. Minister of Finance, being a very rich man, is naturally above all that.

I would like the hon. member opposite, who supports the budget brought down by her finance colleague of course, to tell me if she at least has compassion for the women who will be the most affected by this calculation based on family income.

[Elinor Caplan, Liberal, Thornhill, ON]

Madam Speaker, in response to the member opposite I say merci beaucoup.

I think women are big winners in the budget and I will tell the House why. Of the 400,000 people who will no longer be paying income tax, many of them will be women. One of the things we know, unfortunately, is that too often in Canada the face of poverty is women and their children.

Women will now be able to have an increase in their child care deduction from $5,000 to $7,000. Women will also be able to participate in student loan programs which are now extended to part time students, many of whom are women. When it comes to the Canada pension plan, young women in the future, or in fact all youth in Canada, can now be assured that the plan will be there for them.

The changes to the seniors benefits will be discussed in the legislation of the House, but I can assure the member that the guiding principle of the government when it comes to any changes is to ensure that the impact is understood and that we try to be as fair as we can be. We understand the special needs that women often have in our society, particularly those who are raising children alone.

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

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.

[The Acting Speaker (Mr. McClelland)]

On questions and comments, the hon. Parliamentary Secretary to the Minister of Fisheries and Oceans and then the Reform. If we have time, we will come back to the parliamentary secretary.

[Wayne Easter, Liberal, Parliamentary Secretary to Minister of Fisheries and Oceans]

Mr. Speaker, I have a comment and a question.

I am not surprised at the political rhetoric of the member for Kings—Hants. We know there is an ongoing election in Nova Scotia. He tried to almost belittle the current premier of Nova Scotia for supposedly not having spoken out on the budget.

Let me tell the hon. member that I was very proud to sit in the last caucus with Russell MacLellan as a member from the province of Nova Scotia. If anyone stood up for Atlantic Canada, Russell MacLellan did. We as a government had to make hard decisions left to us because of the legacy of the former Mulroney Tory government. As the Minister of Finance said the other day, we took over a $42 billion deficit and we have managed to bring it down to what it is today.

Let me say again that Russell MacLellan as a member fought hard in terms of trying to retain an employment insurance program which would be of benefit to the people of Cape Breton and throughout Nova Scotia.

I think the member has to look at the progress which we have made. For heaven's sake, he must admit that we got rid of the 3% surtax which the former Tory government implemented to deal with the deficit but did not. Can he not see that this budget is—

[The Acting Speaker (Mr. McClelland)]

I am sure there is a question in there. The hon. member for Kings—Hants.

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

Mr. Speaker, there seems to be some confusion. Perhaps I was wrong when I said that Russell MacLellan did not stand up in this House for Nova Scotia because he did. He stood up to vote for cuts to health care and education in Nova Scotia. He stood up to support Bill C-68. That certainly did not help people in rural Nova Scotia. He stood up to support policies which were damaging to Nova Scotia.

The member talked about the 3% surtax. It was a deficit reduction surtax and it seems to have worked, has it not? The fact is that his government has not eliminated the 3% surtax.

If he wanted to improve his knowledge of these affairs he might subscribe to The Economist for $172 Canadian. The Economist says that the fundamental changes made by the Conservative government in the early 1990s, including free trade and the GST, are responsible for the Liberal government's ability to pay off the deficit.

Let us give credit where credit is due.

[Keith Martin, Reform, Esquimalt—Juan de Fuca, BC]

Mr. Speaker, the hon. member comes from the east coast. He recognizes very well that currently there is a crisis in health care on the east coast. It is an enormous crisis. The people are not receiving essential services when they need them.

The government said that it put an extra $1.5 billion into health care by raising the floor. The government has not even hit the floor yet. The reality is that not one red penny has gone into health care.

I would ask my Conservative colleague whether he feels the government has put money directly into essential health care services or whether the Canadian public, which needs those essential services, are once again being shafted.

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

Mr. Speaker, when the government talks about establishing floors for health care I would like it to understand that health care in Nova Scotia is subterranean. It has not reached the floor. It is still in the basement.

The fact is that this government continues to cut cash transfers to seven of the ten provinces, including Nova Scotia which will receive $14 million less in cash transfers from this government over the next four years.

Health care cuts have not stopped. In fact there will be less cash transfers from this government for health care for Nova Scotia and for health care for Prince Edward Island and for health care for New Brunswick.

I would urge the hon. member opposite, who comes from Prince Edward Island, to join with us and stand up for his province to ensure that these cuts do not continue. There is an immediate price to be paid for the health care system in Prince Edward Island. If he is unwilling to do so, we will fight on this side of the House for his constituents in Prince Edward Island because we need a commitment for health care in Atlantic Canada and it will come from this caucus and from other members opposite.

[Jean Dubé, Progressive Conservative, Madawaska—Restigouche, NB]

Mr. Speaker, it is no small feat to forge social policies for the people of this country. Our society expects that government will take care of the elderly, our young people, our workers and other individuals facing personal crises and needing a helping hand.

These are values Canadians are not prepared to sacrifice. Yet they know they come at a price. The challenge for any government is to balance these values against fiscal responsibility.

You may think this is patently obvious, but as I read the budget, I realized these fundamental principles were well worth repeating.

These concepts and values have been ignored by this government. This government claims to be sympathetic, yet it threatened seniors with a hidden project it never unveiled as part of its platform. This government claims to be concerned about workers, but the budget has nothing to say about job creation measures for the young and the not-so-young people of this country.

Finally, this government claims to be fiscally responsible, but that responsibility is at the expense of the businesses and workers whose contributions to employment insurance continue to add to the Minister of Finance's coffers.

Not to mention that the finance minister in the hopes of polishing his own image has downloaded many of his cuts to the provinces. The provinces were expecting concrete measures to match the federal government's rhetoric about reinvesting in health care and education. What they got was a serious reality check.

The Liberals have failed to restore the $6 billion they have taken out of transfers to the provinces for health care, education and social assistance since they came to power. Not only will most provinces lose out on cash transfers over the next five years, but the federal Liberals have had the arrogance to undertake what they call a major initiative in education without consulting with the provinces. I will say more on that later.

In the maritimes where I am from not many provincial politicians are applauding the federal government. In fact I think the only one who thinks this budget is good for his province is Russell MacLellan, the premier of Nova Scotia. Talk about being out of the loop. His province will lose about $14 million in cash transfers over the next five years. Reality. But Nova Scotians need not worry too much. Within a couple of weeks they will elect a new premier who will actually fight for their best interests and get them off their knees.

In New Brunswick, which is not too far from P.E.I., the Liberal provincial Minister of Finance who is from my hometown had no praise to sing. This is a guy who has sheepishly accepted the federal government's cuts over the past few years. He finally woke up to find “one-third of what we spend in this province is devoted to health care and this particular budget adds no new money to that area”. There are no new dollars being directed to the provinces for health care as a result of this budget.

With this budget this government has shown once again that it is without vision and is satisfied with piecemeal solutions. A perfect example is the proposed millennium fund, a public relations exercise at best. It shows just how much the government just does not get what the problems are.

Today students are faced with tremendous debts because of tuition fee hikes. The student debt load ought to be of primary importance to all Canadians. Student debt affects more than just students. It is an obstacle to the sustained economic growth of our country. Canada simply cannot allow so many of its young people to be crushed by their debts.

Reductions in post-secondary education transfer payments by the Minister of Finance have forced provincial governments to reduce the financial resources of their colleges and universities.

They in turn have been forced to raise tuition fees. This has led to such a rapid increase in the student debt load that it has become a serious threat to the economic future of our young people. In 1997 students owed an average of $25,000.

The Liberals are making a great song and dance about the Canadian millennium scholarship foundation. A problem of this size will not be solved by putting a little more money in the pockets of a very small number of students. Only a very limited number of students will be helped by these scholarships. In fact, 93% of them will not get a red cent.

To add insult to injury, the millennium fund only kicks in in two years. This government's philosophy is that young people are the future of our society. It keeps forgetting that they are also very much a part of the present with needs that must be answered today.

The program does not deal with structural problems such as transfer reductions and the cost of education, which are the fundamental causes of the debt load.

We must make sure young Canadians stay in Canada, and we must give them the same opportunities their parents had. We must absolutely put an end to the tragedy called the brain drain.

Taxes are too high in Canada. They kill initiative, they make investors look elsewhere, thus depriving our country of jobs, and they push enterprising Canadians to seek a better future abroad. I urge the government to set aside partisan politics and to listen to reason. Payroll taxes kill jobs.

Reducing employment insurance premiums is a sure way to promote job creation in small and medium size businesses, in every economic sector. It only makes sense, and everyone agrees, except of course the federal government.

The Minister of Finance's tax cut for low income Canadians is an insult. The only thing this tax cut is going to do in my hometown is maybe drum up some business for the coffee shops, because for many of my constituents all they are going to be able to afford with the minister's tax cut is an extra cup of coffee a week. It is absolutely ridiculous.

Fiscal balance was primarily achieved because of the sacrifices made by the workers, employers and taxpayers of this country. Canadians are the real heroes in this budget. It is thanks to them that our finances are in better shape.

Even though the budget does nothing to thank Canadians for their efforts, I can to assure them that a nice blue sky is looming on the horizon.

[Elinor Caplan, Liberal, Thornhill, ON]

Mr. Speaker, I have a comment. I listened very carefully to my Conservative colleague speak about the differences between the Conservative policy and Liberal policy. I would remind him and all Canadians that it was the Conservative government's policy that left a $42 billion deficit which this government had to deal with. I would also remind him of policies of Conservative governments across the country.

I happened to see Mr. Eves on the news this morning whining about this budget. I remind all Canadians, particularly those in Ontario who listened to Mr. Eves, that the provinces make choices. While the federal government listened to the national forum on health and raised the transfer from $11 billion to $12.5 billion for health and education in the Canadian health and social transfer, Ontario chose a personal income tax cut which will reduce provincial revenues by $4.8 billion when fully implemented.

When we compare that to the transfer payment reduction of $850 million for 1998-99, it means in Ontario after Conservative policies Ontario's revenue reduction because of tax cuts is five times more than what it is blaming the federal government for. If Ontario were really interested in maintaining health care and education, it would look at its policies and understand how misguided, unbalanced and detrimental they are. When I listen to this member compare that, I think—

[The Acting Speaker (Mr. McClelland)]

The hon. member for Madawaska—Restigouche.

[Jean Dubé, Progressive Conservative, Madawaska—Restigouche, NB]

There was no question there, but I will certainly reply to the comments regarding inheriting a debt.

I think the hon. member should go back a little further to when her idol, Pierre Elliott Trudeau, was prime minister of this country. When we took power in 1984 we inherited the debt. We had to deal with that.

We talk about a balanced budget. We are certainly applauding a balanced budget today, but I will tell the member how we got there. The Liberals certainly did not got there in three years. We got there because of the measures put in place by the previous Conservative government.

The member mentioned transfer payments. Is she from Atlantic Canada? I am from New Brunswick. I have seen the devastation in the health care system, in education, in high unemployment. New Brunswick will lose $11 million in cash transfers in the next four years.