Madam Speaker, I rise in support of Bill C-28. It is an axiom in government that what you do right you do not sell to get credit for, yet when we are giving $1.5 billion back to the system the opposition still criticizes us.
We are receiving this fiscal dividend today because of good fiscal management.
In the years 1993-94 the choice was to raise taxes or cut programs and transfers. It was apparent then, as it is now, that Canadians wanted a mature and balanced approach to government finances. Balance addresses program spending, provincial transfers, tax cuts and debt reduction.
In the fiscal year 1997-98 the Government of Canada reduced market debt by approximately $16 billion. It also passed on a tax cut of $1.4 billion with the reduction of EI payments, approximately 1% of government revenues.
In addition, it added $850 million to a tax credit, which is about a half-point in government revenues. For the first time in 30 years it actually reduced the GDP to debt ratio.
There was a tax cut, a tax credit and a paydown on the debt all within one fiscal year. That is pretty good government which the people of this country saw fit to re-elect.
The bill addresses the issue of continuing devolution of authority under the CHST. It is clear that Canadians do not want their bureaucrats falling all over each other to administer programs. Surely we can agree that it is simply silly for a food processing plant to have a federal meat inspector, a federal health inspector and a federal fish inspector, not to mention the provincial health inspector, the provincial food inspector, et cetera, et cetera. Sometimes they even arrive on the same day.
What small business has not had the experience of the federal income tax auditor, followed by the federal sales tax auditor, followed by the retail sales tax auditor, et cetera, et cetera, all asking for the same material, only organized in a different way?
Canadians spoke about this sort of duplication and their message was loud and clear. By withdrawing from a number of these services in these overlapping jurisdictions the government put an end to this kind of waste. It was a clear message from Canadians to which this government responded.
In order to properly fund the devolution of authority and yet still see that government services are provided, the government entered into the CHST. Cash and tax points will approximate $25 billion this year. They are roughly equal. All the provinces budgeted this year on the basis of $11 billion in cash. However, with the passage of this legislation the provinces will anticipate an additional $1.5 billion in cash. For the province of Ontario, the impact of raising the cash floor will be approximately $2.5 billion over the course of the next five years.
In the fiscal year 1997-98 Ontario will receive about $9.1 billion, or 19% of its operating budget. For each man, woman and child the federal government will send to the province of Ontario $800.
However, the more sanguine question is can Canadians from Ontario truly trust that the Government of Ontario will apply this increased money to the needs of the vulnerable people in the province of Ontario? Will the CHST go to the 7,000 homeless people in the GTA? Will the money help those who need help and those who are being removed from their beds in mental institutions in the province?
Can refugees expect that the settlement moneys will arrive while they settle in our country? Or will we be surprised when the money goes to fund the $5 billion deficit primarily created by the ill advised tax cut of the province?
Ontario will have a greater fiscal deficit this year than the entire federal government. Does this make sense? A tax cut for someone earning $250,000 results in a $15,000 cheque coming back from the province of Ontario. A tax cut for the average or medium taxpayer in the province, that is $33,000, means $250 in his or her pocket. In some respects this is a tail about how to govern and how not to govern.
Ontario's government under Premier Mike Harris and its hand maiden, the Reform Party in this House, would urge us to do a tax cut in priority to all else. Mr. Harris has increased Ontario's debt each year and I, if I were a member of the Reform Party, would not be too enthusiastic about claiming credit while the debt of Ontario goes up from $88 billion to $108 billion and is expected to increase by $30 billion over the course of Mr. Harris' mandate. If this is common sense, I for one would prefer that we absent ourselves from a common sense revolution.
Two-thirds of the $30 billion debt increase will be attributed to this ill advised tax cut. Mr. Harris has turned homelessness into a growth industry in our province. Mayor Lastman has seen fit to create a task force on homelessness but the premier, feeling the political pressure no doubt, has also created his task force on homelessness, which will be funded by and created by parliamentary assistance. I will not be overly sanguine as to the report itself as those lapdogs report to the premier.
In my own riding of Scarborough East homelessness is such an exaggerated and exacerbated problem that we are now shipping people off to St. Catharines and Peterborough.
As I was saying, the tax cut for a person in the province of Ontario who earns $250,000 is $15,000. So Mr. Harris receives an A+ for that tax credit from that individual. Mr. Harris' perverse policies are putting Canada's largest province in the debt hole faster than the Canadian government can get the rest of the country out of it. Canada cuts debt and Ontario increases debt. Canada restores necessary program financing and Ontario turns program cutting into a fiscal mantra. Canada targets tax cuts and Ontario targets tax cuts for the wealthy. Ontario is trashing the best of times while this government struggles to include everyone in the rising prosperity of the country.
Canadians have given a very clear message: apply this money to health care and education. They are not asking for a tax cut. They want their health care systems and education systems restored to being the best in the world. They want to be confident that when they go to a doctor they will receive the service in a timely fashion, accessible, publicly administered and of the highest quality. They do not want to do a wallet biopsy every time they need a medical service. They want to know that their children will be the best educated children in the world.
Even when this government reduces transfers those reductions only represent 2% to 3% of provincial revenues. Even with these reductions a number of provinces have been able to balance their budgets. Sadly Ontario too would have had a balanced budget except for this ill advised and foolish tax cut.
Ontario does not have to be running a deficit. I am not at all confident that this $1.5 billion increase, of which Ontario will receive a substantial proportion, will be directed to the most vulnerable in our society. Regrettably I believe this extra money will go directly to fund this tax cut.
Mr. Harris, Canada just wrote you a cheque for—