Debates of Feb. 26th, 1998

The Budget

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

Mr. Speaker, transfer payments and equalization account for 40% of the budgets of the Atlantic provinces. That is pretty good.

Not only has the member a selective memory, but he is also subject to illusion when he talks about the Nova Scotia election.

I have a simple question. The budget the member talks about in terms of reductions was in fact the 1995 budget. We felt we had to make choices. We did not cut as deep as some wanted us to. We had to make the choices to get to where we are today. My question is quite simple for his selective memory.

Does the member support his leader and the member for Saint John when they voted with Reform in the 1995 budget against the budget because it did not cut far enough? That is where his party leader stood. Does he support that position?

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

Mr. Speaker, there is certainly something wrong with the memory of this member from P.E.I. I would like to ask him a question about what his party's position was on free trade and what his party's position was on the GST. They were supposed to throw it right back and did not. That is the reason we have a surplus today.

Does the member from P.E.I. say we should cut back transfers even more in his province? Is that what you are saying? That is what I thought I heard.

[The Acting Speaker (Mr. McClelland)]

I remind members to address each other through the Chair. The time for this particular intervention has passed.

[Jerry Pickard, Liberal, Parliamentary Secretary to Minister of Public Works and Government Services]

Mr. Speaker, I think a very historic budget has come out. I have no question that the Minister of Finance has, along with the cabinet, along with the Prime Minister, done something that all Canadians have longed for over the last several decades. When we talk about eliminating the deficit, it is extremely important and it is extremely historic for Canada.

We were the basket case of the G-7 countries a short time ago under the former government. We have totally turned that corner and now we are moving in a very positive direction. Eliminating the deficit is not the end, and every person in this House realizes it is still very important that we maintain a course that is set to improve the financial status, the financial balance sheet, the whole finances of Canada.

At the same time, it is extremely important that we look at the socioeconomic side of what is happening to our people. We look at what measures a government can take to create a better society with the assets we have.

I think when we talk about complaints regarding how dollars are being spent, it is like a family. There is no question that every person in the family is not going to agree with exactly how every dollar should be spent.

Surely we can agree on some basic elements and principles that have been going on in the last three years. We can agree on some basic directions in which we are intending to go in the future.

This budget does set a course. The course is not to spend lavishly, not to move our finances into a precarious position by huge tax cuts, not to put at risk what we have achieved to this point.

There are those in the House who say that we should cut taxes, a big cutting of taxes so that people can go out and spend more money. Are they responsible in looking at the view that we should not follow a course of being prudent, being cautious, being careful and realizing that the roller coaster of economics goes up and the roller coaster of economics goes down?

We in Canada cannot control world markets. We in Canada are subject to actions that occur in the United States, actions that occur in Asia, actions that occur in South America, actions that occur in Europe or anywhere else in the world.

If we are not really cautious about charting a course, putting a little money away for a rainy day, cushioning the effects that world economic questions can raise, then we are really at risk of falling back into a deficit. If interest rates throughout the world start pushing higher, if our Canadian dollar comes under heavy assault, as it really did a few weeks ago, if the Asian markets do not stay steady and move along, we are vulnerable.

Therefore when we talk about tax cuts, heavy payments, social spending, if we do not stay the course we have set over the last three years, we leave ourselves very vulnerable not only today but in the future.

Some would say we have a scenario to deal with. We have almost $600 billion in debt and the interest on that money is crushing. There is no question about that.

Huge interest payments are very expensive to Canada. For every $3 we take in in taxes, one of those dollars is spent against the debt on interest alone.

Therefore realizing that enormous problem we have, realizing what is happening within the spectrum of payments, we must make certain that we can pay that off without extending our debt, without extending other programs beyond our means whereby we would fall further into a deficit situation in the future.

I believe the finance minister has achieved that. I believe he has a very conservative approach to maintaining our financial security. But at the same time he has examined very carefully what is going to make us more prosperous.

The decision is let us get the population that is going into the workforce as well educated as possible. Let us put those people in a position where they understand high technology, where they have post-secondary options not available to many young people today. Let us make sure that every young Canadian has the opportunity to have the highest level of education they can achieve and the education that is going to bring them to a point of good, solid income earners.

How does that affect Canada? If we educate our young people to the abilities of handling high tech, we can then develop this high tech industry in this country and move forward. We can move forward with business opportunities never perceived before. We have a great opportunity here to move our young people into those high tech areas, move our young people into job situations which in fact will pay tremendous benefits to this country in the short term as well as the long term.

It will attract businesses into Canada that are working in the high tech industry and we can become a very focal point of high technology for Canadians, for North Americans, for the world. I have no question when we look at that issue it is extremely important that we be the leaders.

How does that affect other jobs? Even those who do not go to school will have opportunity to move into other areas because there is no question once you develop a high tech area, once you develop more jobs, there are other job opportunities, small business and so on, to support those people working in the industries, which we are going to train Canadians to do. This budget speaks of our prosperity in the future.

I would also like to touch on the questions we talked about with regard to what is most important for us at this point in time in order to help low income Canadians. I agree it would be nice if we could give more tax breaks and tax cuts. But we did target low income Canadians with a personal exemption. We removed our 3% surtax, which meant that many of our low income and middle income Canadians will have a much better opportunity within the tax structure than they had before.

I see my time is up. I would like Canadians to sit back and think about what opposition members have been saying to this point. I have heard them criticize what has been said, but in fact those critics are always going to be there. I have not heard them present good, solid solutions which would cure our illnesses.

I think we have moved to a very positive area. We are on the move, and staying the course is the only way I see this country gaining the most benefit it can.

[Michel Bellehumeur, Bloc, Berthier—Montcalm, QC]

Mr. Speaker, it is always great to hear government members comment on a budget or on a bill. They always think they hold the key to the truth. They have the knowledge and the truth, they are right. No one else in Canada or in Quebec can be right; they are the truth.

We have to look at the criticisms and comments on this budget. They did not come just from the wicked old sovereignists. They did not come only from the people of Quebec. Criticisms have been levelled across Canada. They have come from the papers and the editorialists. They have come from friends of the Liberal government, who say that this budget massacres the middle class and that the government is knowingly hiding revenues in order to play petty politics.

They say the government lacks clear vision on how to use the accumulated surplus. They say the government is taking billions of dollars from the pockets of the most disadvantaged.

The speeches I have heard here are something else. In university, I had a professor who taught about taxes and who gave me a golden rule, which I follow in politics, and the hon. member should be aware of it. He used to say “Students, there is one rule to remember in taxation: you stuff mattresses, not the springs”. The member opposite did not understand anything, because he is trying to stuff the springs. He is trying to stuff taxpayers, who fill the government coffers with their taxes.

The worst thing, and I will conclude on this point, is the millennium scholarship fund of $2.5 billion they are investing directly in provincial jurisdictions.

I ask the hon. member: is it not more important, because he seems to consider education important, to ensure that young people going to school eat well, that students in primary and secondary school have the tools they need and that universities are properly equipped? The federal government is in no position to do that, but the provinces are. If the federal government has too much money, why does it not send it directly to the provinces as transfer payments?

[Jerry Pickard, Liberal, Kent—Essex, ON]

Mr. Speaker, I would very quickly point out that again the member said nothing positive. He has really not tried to present an alternate viewpoint. All he has done is to hammer the government for what it did. I would challenge some of the things he said. I really do not think I have read press clippings that say it is a disaster for the middle class. As a matter of fact, I have read some very positive clippings along the way.

I would point out that a lot of members have suggested taxes have been increased and we have a huge amount more money coming in today than we did in 1993. That is very correct, but I want to point out why that is correct.

We have worked very hard to get the fundamentals right in this country. Low interest rates, trade missions, promotions for small business loans, all of the fundamentals that require a thriving society; that has been the goal of this government. As a result, we not only have created a tremendous number of new businesses in this country, more successful businesses in this country, but we have also employed one million more people. The extra revenues have not come from tax increases. The extra revenues have come from putting more Canadians to work. Those extra revenues are now coming back to help us with the costs of operating the country.

It is fundamentally important to understand that we as a government have done everything we can to make certain the fundamentals are correct. By doing that, more Canadians are working and taxes do increase.

[Karen Redman, Liberal, Kitchener Centre, ON]

Mr. Speaker, I would like to begin by saying that this government has done something that no other has accomplished in over 30 years. Through the direction of this government, the Canadian people have achieved a balanced budget.

In response to this achievement, the finance minister delivered a budget balance on Tuesday. This budget is visionary. Its recommendations are sustainable. Its foundations are predicated on fiscal stability. Its scope reaches all Canadians in a fair and responsible manner.

As a member of the House of Commons Standing Committee on Finance, I had the opportunity last fall to hear from Canadians from Vancouver to St. John's. I also hosted a consultation session in my riding of Kitchener Centre. I submitted those recommendations to the Minister of Finance.

This budget speaks to the requests made by Canadians, made by my constituents. It speaks to our children, our youth, our unemployed, our working families, our businesses, our disabled people, our aboriginal population and our elderly.

This budget is in the best interests of all Canadians. It invests in community, the community of Canada.

The budget is multifaceted. I could not hope to touch on all of its merits. Instead I would like to highlight four themes: feasibility, fairness, focus, and the future.

We heard that Canadians were pleased that the deficit had been brought under control. We now find that we are even ahead of that target. However there was also an expressed concern that the government would revert to the program spending ways of the past. This government in the budget sets out a course for a continuous mandate of sensible reinvestment for Canadians without jeopardizing all we have been able to accomplish together.

Along with the previously committed programs of previous budgets, as well as Bill C-28 which will receive debate in this House in the next few weeks, we are committing to a course which is sustainable.

Canadians wanted to see us bring down the deficit. This budget fulfils that wish through designating our $3 billion contingency reserve to this purpose if it has not been required.

The current budget commits 60% to debt reduction, which is slightly more than we said we would do in the last election. This was among the recommendations made by my constituents in Kitchener during my prebudget consultation.

I would like to point out that the contingency reserve has not been required for the past four years. As a result, we have been able to reduce our marketable debt by $13 billion. This plan remains within the context of Canada's budget, interest rates and the debt to GDP ratio.

In addition to securing an enduring reduction in public debt burden the government has also reduced its exposure to increases in interest rates by restructuring the composition of our public debt. Sixty-five per cent of our debt is at a fixed rate. This is in the face of 50% in the early 1990s. This saves Canadians almost $1 billion in debt charges per year and will help us to manage our debt over the long term.

This government is committed to the feasible delivery of what Canadians said they needed and what Canadians want.

On fairness, this government is committed to meaningful consultations. I see the issues and the concerns expressed by the people across Canada addressed in this budget. This budget spans generations, provinces, and all of Canada's many ethnic communities. It truly is a budget for all Canadians. It offers visionary approaches to issues which Canadians hold dear to their hearts.

As a demonstration of the government's commitment to ensuring fairness in taxation, it has removed the 3% general surtax introduced by the Mulroney government. In addition, the government will increase the basic personal exemption by $500 for single taxpayers with an income under $20,000 and by $1,000 for a family with an income under $40,000. As a result 400,000 Canadians will be removed from the tax rolls and there will be tax relief for 4.6 million Canadians.

This budget is focused. While providing a fair approach which benefits all Canadians, this budget also addresses key areas for growth and improvement.

I would like to read a segment from my prebudget town hall report: “Education is the key to our future. Start early. Keep it accessible. Encourage lifelong learning”. This is what I heard from the people of Kitchener Centre.

A key focal point of this budget is on lifelong learning, encouraging Canadians to maintain and develop skills and knowledge.

There was a 24% increase in technological, computer and professional development as well as apprenticeship in short term programs across Canada in 1997, an increase over 1996. Due to a number of factors people are realizing the importance of ongoing lifelong learning. We are making those programs available to them through interest relief and being able to use their RRSPs for educational programs.

Part time university enrolment was down 10% to 18% in 1997 from 1996, due in part to rising costs, work and family commitments, the realization that a university degree is helpful in obtaining employment but specific skills development is also beneficial. This budget addresses these issues through offering ongoing support to lifelong learning by making the RRSPs accessible and by allowing for RESP contributions. The government will match 20% of those contributions.

Eligibility for increased assistance is also available for part time students and for students with families and other commitments. We are also opening up the eligibility to include apprenticeship programs. Generally, we are being more inclusive of the entire education spectrum. This is key to the skills development which is needed for our future workforce.

Studies in the Kitchener area indicate a desperate need for high tech and knowledge skilled workers. We have seen a shift from manufacturing industries to those in the high tech sector. This budget offers Canadians the tools they need to develop the skills that are necessary to carry them into the future and ensure increased employment opportunities.

In addition to the increased aid to students and those furthering their education, we have the Canadian millennium fund.

The government has also offered to help ease the debt burden on recent graduates by offering tax relief on the interest portion of the amount paid on loans approved under federal and provincial student loan programs.

This budget also offers an EI holiday which gives employers an incentive to hire young Canadians. This is an attempt to stop the no job, no experience, no experience, no job cycle.

Constituents at my town hall said that technology and innovation are the future. Our companies need research and development if they are to grow and prosper. Effective in 1998-99 this government has committed to restoring research granting councils to their 1994-95 levels and will continue to grow over the next two years reaching their highest level ever by the year 2001.

This budget will increase funding for research and development by more than $400 million over the next three years. This commitment to research and development will allow Canada's innovation sector to continue to be at the cutting edge. We cannot continue to lose Canada's best and brightest. We are much better off to have them make their medical discoveries and develop new technology in Canada rather than try to repatriate them after the fact.

Health care is also a key concern of Canadians. It is one of the reasons why in both Bill C-28 and this budget we have committed to having a floor of $12.5 billion going to the provinces for their CHST.

This budget looks to Canada's future by making strategic investments in areas I have mentioned. Studies indicate that over the next two decades the most critical economic challenge will be the supply of skilled labour. It is said that the attention paid in the past to address the deficit and inflation will be necessary to address this need for skilled labour in the future. The result of not addressing this would lead to a lack of economic growth with thousands of Canadians who want to work but lack the job skills to find employment.

Larry Smith, an adjunct faculty member in economics at the University of Waterloo, called this budget a stunning economic accomplishment.

Building on the theme of lifelong learning I would like to share an analogy made by one of my colleagues. If a man is hungry and you give him bread, he will eat for a day. But if you give him seeds and teach him how to farm, he will nourish himself into the future.

Truly, this budget has that kind of investment and that kind of vision both for Canadians and for the future of Canada. This budget is offering Canadians the seeds to gain the knowledge and the ability to reap the long term benefits.

[The Acting Speaker (Mr. McClelland)]

Questions and comments. We have the hon. member for Winnipeg Centre first, then the hon. member of Esquimalt—Juan de Fuca and then the Bloc. If you keep it short we will get everyone in.

The first speaker will be the hon. member for Winnipeg Centre and the third will be the hon. member for Frontenac-Mégantic.

[Pat Martin, NDP, Winnipeg Centre, MB]

Mr. Speaker, I am interested in the previous speaker's comments about lifelong learning and shortages in skilled trades. He spoke about a number of issues I have been very concerned about and on which I was looking optimistically to the budget for some satisfaction.

During his budget speech the Minister of Finance spoke at length about the need for lifelong learning. I believe he used those terms. He spoke about the need for a strong human resources strategy, for more workers in the field of science, industry, trades and various non-university post-secondary training. He capped it off by saying that this was a matter for the provinces. The lead up and a number of the issues raised by the minister and the previous speaker gave us no satisfaction in the skilled trades.

As a journeyman carpenter who has spent his life in the building trades, I have seen a real problem with training opportunities for people who choose blue collar trades as a career choice. All the funding for students while they are in the classroom component of their apprenticeship program has been taken away. There is no longer any income maintenance for those students.

What satisfaction is there for the people in the building trades, the plumbers, carpenters and electricians, who earn while they learn and who have to go to community colleges? Could the member tell me where in the budget there is any satisfaction given to those individuals?

[Karen Redman, Liberal, Kitchener Centre, ON]

Mr. Speaker, Conestoga College in my riding works with the sectors the member is talking about to offer those kinds of programs. Through access to the RRSP and the RESP they will now be able to access funds to help with that portion of their education. I see this as very forward looking and very cognizant of the kinds of skills training they need.

[The Acting Speaker (Mr. McClelland)]

I ask the hon. member for Esquimalt—Juan de Fuca to try to keep it to around 30 seconds or so.

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

Mr. Speaker, the hon. member correctly mentioned that the government has increased the floor for spending on health care and the CHST from $11 billion to $12.5 billion. However, she made the mistake of saying that it was an increase in the amount of money put into the health care system.

Right now the government is spending more than $12.5 billion on the CHST. How much money does the hon. member feel is going toward increased payments to the provinces for health, education and welfare? There is absolutely none.

[Karen Redman, Liberal, Kitchener Centre, ON]

Mr. Speaker, the hon. member is quite right. The CHST is made up partially of cash transfer and partially of a taxing authority given to the provinces through tax points. That is predicated on the growth of provincial economic conditions, so there is more money going to them.

The budget is one of several budgets brought in by the government. Bill C-28 is the legislation that entrenches the commitment the government has made. The government made an increased commitment of $12.5 billion during the last election. All members opposite refused to support that legislation in the standing committee, so I wonder what they are talking about.

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

Mr. Speaker, everyone knows that Canadians and Quebeckers are among the world's most highly taxed people.

If we compare ourselves to our American neighbours, as we are so fond of doing, we pay 25% more in taxes. One reason, unfortunately, is that there is duplication.

For instance, when a dairy cow's production is used for industrial milk, the federal minister has jurisdiction. When it is used for commercial milk, the milk people drink every day, the Minister of Agriculture of Quebec, or of Ontario if the cow is from that province, has jurisdiction over the animal. The Minister of Finance, and our wonderful Prime Minister, are now creating more duplication: millennium scholarships.

I wonder whether my government colleague is happy about this duplication, which unfortunately stirs up ill feelings and sets people at loggerheads. In this case, it will not be cows coming under two jurisdictions, but students. The first four months are paid by the federal government, and the next four by—

[The Acting Speaker (Mr. McClelland)]

I am sorry, the member's time is up. The hon. member for Kitchener Centre has the floor for a short answer.

[Karen Redman, Liberal, Kitchener Centre, ON]

Mr. Speaker, I simply acknowledge that education is a partnership between both levels of government. I would say lucky are the students who have two levels of government working in partnership in their best interest.

Education and health care are priorities of the government. If we were to ask the students if they would rather have two levels of government looking after them, which means more money and better access to education, they would be in full agreement.

[Jason Kenney, Reform, Calgary Southeast, AB]

Mr. Speaker, I am pleased to rise in debate on the budget released this week.

The budget was a historic achievement. I was born in 1968, two years before we began to run deficits for the rest of my life. I have known virtually nothing but deficits for my entire conscious life. Therefore, it was with great expectation that I ran in the recent election and took my seat in this place, anticipating this budget, knowing that it would be the first balanced budget in Canada in three decades.

I must say that as a former Liberal I have great personal regard for the hon. Minister of Finance. I expected him to seize the moment, to seize the great opportunity of the first surplus in 30 years, to chart a new course for Canada, a course of greater opportunity, hope, growth and employment, particularly for younger Canadians, a future which would unshackle us from the terrible destructive burden of the $600 billion debt and the 47% tax burden carried by Canadian families. That is what I anticipated.

I also anticipated that this would be an enormous achievement and would strike out in all the right directions. However, I found that the budget just struck out. It struck out on every count. It struck out three times. It struck out in terms of controlling spending because we see federal spending going up yet once more in the budget. It struck out in terms of debt reduction because we see in the budget plan zero commitment to specific debt reduction. Most of all, it struck out in terms of providing hope, growth, opportunity and employment through meaningful substantive tax relief.

In fact the budget increases spending, increases taxes and keeps the debt at its current level of $583 billion. With all due respect, I cannot imagine under the current economic and fiscal conditions how the government could have framed a less constructive future oriented budget than it did. I am truly and sincerely amazed that the minister missed the mark to the extent he did.

When one looks at the means by which the budget has been balanced it is not altogether surprising. After all, 69% of the deficit reduction that we have seen since fiscal year 1993 has been achieved through increases in government revenues and only 31% has been achieved through spending cuts.

My friends opposite will say that revenue increases will go from $116.5 billion to $160 billion in the upcoming fiscal year and that those enormous revenue increases of nearly $50 billion were achieved through growth in the economy and more employment. In part, that is true, but they are not telling Canadians that the absolute tax burden, no matter how it is calculated, has gone up at the same time.

If we look at the straight revenue growth of nearly $50 billion clearly it has gone up. However, if we look at taxes as a percentage of gross domestic product it has gone up. If we look at personal income taxes as a percentage of GDP it has gone up. If we look at taxes as a percentage of family household income it has gone up. If we look at taxes as compared to other family household expenditures like food, shelter and clothing it has gone up. If we look at inflation the tax haul has gone up faster than inflation.

I do not need to make this argument with reference to the statistics. The ultimate proof of whether or not we have a higher absolute tax burden today is in the paystubs people get when they open their paycheques from work and what they see on the bottom line today is a higher tax burden than what they were paying in 1993.

Most shocking, in three years when they open up that paystub, having heard all of this marvellous rhetoric about tax relief, they will find that their after tax disposable income will have gone down yet again. Yes, this is a tax increase budget. It is a budget which increases net taxes on most Canadians.

People will ask me how that is possible since the government has listed specific measures on the 3% surtax and a $500 increase in the basic exemption for some Canadians. They will ask how they could then see an increase. It is for two reasons.

First, the government managed in January to impose, as we all know, the largest tax increase in Canadian history, the $10 billion CPP payroll tax grab which will do nothing in the long run to salvage that Ponzi scheme for my generation.

It will in the immediate three years take $10 billion a year out of the pockets of taxpayers in a destructive job killing payroll tax. That is only part of the story because when we factor in the insidious effect of tax deindexation and the bracket creep imposed in 1986, we find that more and more Canadians will be pushed up on to the tax rolls than ever before. Because more Canadians will be earning more than the basic exemptions they will be pushed up into higher marginal rates.

The recent study by KPMG, which is not the Reform Party's research but private sector research, indicates that by the year 2001 an average taxpayer will have paid $5,300 more than they do today in income taxes because of bracket creep, that they will pay $913 billion next year alone because of bracket creep. It is an enormous, insidious tax grab.

Do not trust me on that, Mr. Speaker. I want to quote the leader of the opposition, a very credible source, who said with respect to the budget “The Minister of Finance told us there were no tax increases in this budget. That statement is false because taxes are going up in this country because of the deindexation of deductions which this government has done in its past budgets”. He went on to say “These taxes are hidden. They are sneaky. You don't notice them until you get the bill. They are practically invisible, but the sneakiest tax increase of all was the deindexation of personal income tax which will cost Canadians billions of dollars more annually. The minister kept quiet about it. Here again low and middle income Canadians will carry the heaviest burden”.

That was the leader of the opposition in 1987. That was the Right Hon. John Turner, leader of the Liberal Party of Canada who at the time talked about this secret insidious tax grab on low and modest income Canadians, which has forced the lowest income Canadians on to the tax rolls. People who earn $7,000, $8,000 or $9,000 a year, alone among the industrialized countries of the world, have to pay taxes in Canada.

The minister provided in his budget a distributional impact of the so-called tax relief that he has afforded, but when we add in the effect of the CPP payroll grab and bracket creep we find that a $20,000 earner single taxpayer, the Minister of Finance says, will get a $63 tax break. Whoopee, $1.10 a month. We can buy a cup of coffee once a month while these Liberals probably spend about $3 on latte at Starbucks. Add in the CPP and bracket creep and it is an $86 net tax hike for that same person.

Look at a $50,000 single income earner for a family of four. The finance minister says they will save $238. When you add bracket creep and the CPP they will pay $68 more. This does nothing in terms of tax relief. We do not have to make this argument because people's paycheques will make it very evident when this budget is implemented.

Not only does it not raise taxes, it does nothing in terms of concrete commitment to debt reduction. This I find the most shocking thing of all. In poll after poll, the vast plurality of Canadians say their top priority is to pay down the debt. They know we are siphoning $45 billion a year off the productive sector of this economy to flush it down the destructive sinkhole of government debt financing. They know the average family now spends $6,000 a year in interest on the debt.

What did the finance minister say in his budget document? He says on page 52 that the net public debt this year is $583.2 billion. The net public debt next year will be $583.2 billion. The net public the year after that will be $583.2 billion. The net public debt the year after that will be $583.2 billion, with $45 billion in interest payments.

The minister may call this a debt reduction budget. It does nothing in terms of the debt. He said that if we are lucky, he might allocate the $3 billion contingency fund to debt reduction. Three billion dollars times three years is $9 billion. A $9 billion reduction on a $580 billion debt, my goodness, it's remarkable. It will only take him 200 years to pay down the debt of my generation.

What is going to happen to the interest payments, $45 billion this year to $45 billion in the year 1999? This has nothing to do with debt reduction. If he does to the contingency fund in future years what he did in the current fiscal year, there will not be a contingency. There will not be a surplus to dedicate toward the debt because he has spent it this year.

That is why we need more than rhetoric when it comes to fiscal discipline. We need a statutory and, I would argue, constitutional mandate to force the government, regardless of who is in power and regardless of the political circumstances of the day, to pay down debt.

Alberta has done it. It has cut its net debt in half in four years because of a law that requires that every single dollar in surplus be directed to debt reduction. That is what we need here. The minister says “Trust me. I will direct the contingency fund. If the minister of heritage doesn't get her hands on it, if my other tax and spend colleagues don't spend the surplus before it gets to the debt, I will use it to pay down the debt”.

I just realized I should wrap this up because I am splitting my time with my colleague. Is it too late? Can I yield to the hon. member for Esquimalt—Juan de Fuca?

[The Acting Speaker (Mr. McClelland)]

With unanimous consent, but there would be no questions or comments to you. Is there unanimous consent?

[Some hon. members]

Agreed.

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

Mr. Speaker, I thank my hon. friend from Calgary Southeast for pulling up his reins, because I know he has a lot more positive interventions and I am sure he will make those during question period today.

If I were a cynic I might believe that this budget was the leadership budget, but I am not. Certainly the government deserves to be congratulated for balancing the budget. But this budget is a tale of lost opportunity. This budget is a tale of what could have been an opportunity that could have really managed to give the Canadian people the ability, the opportunity and the chance to build a better, stronger future for all Canadians.

Yet we have missed opportunities that flew threw the finance minister's and this government's fingers like water in sand. The finance minister and this government have once again pulled the wool over the eyes.

I am going to talk about government fables. But first I would like to talk about one fact. If we look back in history to the behaviour of government finance ministers and Liberal governments in the past, we can see that their governments have spent, spent, spent. If not for the Reform Party the government would never have balanced this budget.

History has proven that it was the Reform Party on the tails of this government which has managed to force this government to finally do the right thing and balance the budget.

Let us talk about government fables and fact, reality versus fiction. Government members like to talk about a million jobs created. That is the natural increase that we would normally have in the most unambitious of growth rates. The cold hard reality is that in this country we have a 17% unemployment rate among youth, we have a 9% unemployment rate in the rest of the country and we have an underemployment rate that is beyond what anybody in this House can possibly imagine.

All one needs to do is go down the streets and see the vacant store front windows, see the people who are far overqualified for the jobs they have, listen and talk to the shopkeepers and business owners. They say “my gosh, if I only had some extra money I could hire apprentices, I could hire more employees, I could invest in my business, I could become more competitive, I could be the engine that helps to drive our economy in this country, a country that is only scratching its potential”.

The government likes to talk about tax rates. The government likes to say it has dropped the tax rates. Let us look at the reality. To a family earning $30,000 the government in its generosity in this budget has given back $148. That family should not spend it all in the same place because $148 for a family of four with one earner will not go very far.

The cold hard reality is yes, the government has gone and given some tax relief. It has put a couple of pennies in the left pocket while taking both hands and scooping out pails of money from the other to the tune of $38 billion over the last four years since we were elected.

CPP rates doubled, and that is going to crush our economy. It is going to have a major negative effect on the economy. I challenge the members on the other side to address that issue with us in an active debate and to open their eyes and not accept what their government colleagues tell them but, for heaven's sake, look at the facts. Take a critical view of what they are told. Analyse what they are told. Take a look, with the experiences that they have, to see in their own riding with their own business people, their own people who cannot find a job and compare that with what they are told. That is all we ask. If they do that then the reality will be immediately evident to them.

The fact is we have the highest tax rate that exists today in the G-7 nations, and that has a major crushing effect on the economy. The finance minister could have lowered the tax rate, could have taken a leaf out of the books of Alberta, Saskatchewan, Ontario, taken a look internationally at Ireland and England, countries and provinces that have taken the bull by the horns, lowered taxes and removed egregious rules and regulations that seek to strangle off the ability of the private sector to function properly. Did the government do that? No. Why? If I were a cynic I might think it was a leadership budget. If I were a cynic I might think it was trying to seduce the Canadian public by giving it a few pennies so it will remember at election time. But I would never say that in this House.

This is a shame. The government intelligently made an investment in education. We compliment the government for doing that. But that is only one half of the equation. An educated population can be provided, but what is the point of providing an educated population when the educated population has no jobs to go to in Canada?

As has been mentioned numerous times in this House, those people flock to greener pastures, to vibrant and growing economies. They flock to the south. They flock to the east. They flock to the west. But they do not stay in Canada.

The taxpayers are spending their hard earned money to educate the public and to provide it opportunities in a country where the opportunities are far less than what they could be.

The government has failed on one half of the equation. It should have listened to the plans of the Reform Party, which are based on fact, experience and workable pragmatic solutions to get people back to work. We would do it by reducing taxes and by eliminating interprovincial trade barriers and the rules and regulations which strangle the private sector.

The government has partially addressed the issue of research and development, a major pillar in our ability as a country to be functionally active.

The finance minister was very incorrect in his speech when he said that the Asian flu is over. I can tell the House that the Asian flu is far from being over.

There are two major cleavages taking place in Japan and in Indonesia. The solutions are there. There is no domestic will to deal with them. I can only implore the government to work with other countries and pressure those countries to produce solutions to deal with their problems. If they do not, an economic tsunami will come across the Pacific and hit Canadians harder than anything before.

I would like to congratulate the government on listening, in part, to the Reform Party in getting the budget balanced. However, the government is once again pulling wool over the eyes of the Canadian public. It is saying it is giving something to Canadians when it is not. It is using this budget as a leadership budget. It is trying to seduce Canadians so it will vote for this government in the future.

The government should have done the right thing. It should have listened to sound economic advice, which I know the finance minister is open to. He should do the right thing and provide targeted spending for things like education and health care, for which there was no spending provided in this budget, contrary to what the government says. One of the great fallacies of this budget is that the government says it is putting money into health care. The cold hard fact is that there is not one red cent going into health care.

The government has merely juggled the books and given the public an illusion. There is a serious problem in health care. Patients are not receiving essential care in emergency departments and hospitals all across the country. People are suffering and dying on waiting lists.

I implore the health minister to get together with the finance minister and the Prime Minister to make a concerted effort to invest some of the funds they are sitting on now in health care, reduce taxes and provide Canadians with the real opportunities they deserve.

[Mac Harb, Liberal, Ottawa Centre, ON]

Mr. Speaker, I have never in my life seen so much confusion from a party which is really in total disarray. The right hand does not know what the left hand is doing.

For example, two days ago the party's finance critic stood up to say that a Reform government would give across the board tax relief, regardless of the level of income. In other words, someone who makes $500,000 a year would get the same tax break as someone who makes $25,000 a year. Across the board tax relief.

Today the party's health critic stood up to say that the government should spend more money on health care. Then another member just before him stood up to say the government has to give more tax relief.

We have not yet declared victory. We still have a debt which is close to $600 billion. We have to take the balanced approach.

How can the member justify his party giving across the board tax relief to the rich as well as to the poor on an equal footing while reducing the debt and keeping the deficit under control?

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

Mr. Speaker, it gives me great pleasure to talk about Liberal confusion.

Regarding health care, the Prime Minister this morning said there is no problem with health care. Yet the health minister is afraid to take his own child into the emergency department. He is afraid the resources are not there to provide access to his child when his child is sick. It is confusion when the health minister and the Prime Minister cannot agree that we even have a problem in health care. I can say as a physician we have a serious problem in health care in this country.

To answer the member's question, if—

[The Acting Speaker (Mr. McClelland)]

You will not get a chance to answer that question because the hon. member for Quebec is about to ask a question.

[Christiane Gagnon, Bloc, Québec, QC]

Mr. Speaker, my colleague seems to be wondering what planet the opposition parties are living on. As for me, I wonder what planet the Liberal government is living on to bring down a budget such as the one the finance minister brought down.

This budget is a piecemeal approach. They are not addressing the real problem of poverty, as the government wished. They go on about wanting to reduce poverty in Canada, but I do not think this sort of budget will do it. They are not addressing the real problems. They are spending money all over the place without any real strategies.

For instance, they cut the Canada social transfer by $42 billion. At present, they are boasting about wanting to attack an area of provincial jurisdiction, the Canada social transfer. In health and education, the Canada social transfer will receive a mere $2.5 billion, after $10 billion has been cut from education alone. In order to really address the problem of education in Quebec, Quebec and the other provinces should get the Canada social transfer back, so that they may develop true education strategies.

What we are calling for, therefore, is to return the funds in the Canada social transfer so that true strategies may be developed. In Quebec, what are those true strategies? To address the problem of school dropouts and to restore funding to educational institutions so that they may be in good financial health and able to provide students with a proper education.

We would have liked to have seen real employment insurance legislation, with lower contributions and more people eligible. So the millennium scholarships, employment insurance, a real employment strategy—

[The Acting Speaker (Mr. McClelland)]

I am sorry, but the time for questions and comments is up.

A short response. I am sorry, but we will not get the NDP in in this round.