Mr. Speaker, I am pleased to rise to speak on behalf of the government in support of Bill C-28. This legislation has many components, but they are all tied together in a way which is consistent with a strong and dynamic economy and, by extension, a strong and dynamic society.
As a government we committed ourselves to a historic turnaround in Canada's federal finances because we understood that sustained deficit reduction was a key to lower interest rates and higher economic growth. We also understood and made it perfectly clear that lower rates and higher growth are not ends in themselves. Instead they are the best way to achieve the real bottom line benefits which Canadians deserve, more jobs and the national resources to make strategic social investments where and when needed.
As we move into 1998 Canadians are close to the threshold of a major change in our economic history, the day when the federal government is deficit free. This progress, coming much faster than we originally dared hope, is indeed delivering the benefits we always expected and always wanted. It has created the conditions for lower interest rates and sustained economic growth, growth unheard of since the 1950s and 1960s.
In 1997, 363,000 new jobs were created. That is the best record since 1994. In December the unemployment rate of 8.6% was the lowest in seven years.
The government is now in a position to make key social investments, investments which respond directly and concretely to the concerns of Canadians. Just as important, we can make these investments without jeopardizing our continued advance to a balanced budget. That is an important consideration in Bill C-28.
The most important and significant part of this legislation clearly is the measure to increase the cash floor of funding to the provinces under the Canada health and social transfer. Bill C-28 increases this guaranteed amount of federal cash funding for health care, post-secondary education and social assistance and services from $11 billion to $12.5 billion a year through to the year 2002-2003. It starts applying this higher cash floor one year earlier than was originally slated and planned.
This means the provinces will receive close to an extra $7 billion over six years. That is by far the largest new spending commitment we have made since first coming to office.
The Canada health and social transfer measure represents by far the most financially substantive measure in Bill C-28 and the one ultimately which affects a great many, indeed most, Canadians.
The cash floor of $12.5 billion is the precise amount recommended by the national forum on health and it is important to note that.
There is another aspect to the Canada health and social transfer which demonstrates our commitment to fairness and to positive partnership with the provinces. In response to the provinces' request for flexibility, we restructured the previous system with its separate targeted components into a single Canada health and social transfer. This addressed longstanding provincial concerns that the inflexible conditions associated with the previous transfer system did not allow them to meet specific regional needs and opportunities. We instituted the Canada health and social transfer to deliver greater flexibility, while still firmly upholding the principles of the Canada Health Act.
This is legislation which guarantees that the future growth in the tax point component of the Canada health and social transfer will not see the cash portion decline below $12.5 billion over the next five years.
In other words at least $12.5 billion in federal funds will be there each year every year. It will be there to help provinces provide the national health care systems that Canadians cherish. It will be there to support the post-secondary education that gives young Canadians new opportunities in the future. It will also be there to support social assistance so that Canadians in need are not abandoned or betrayed.
There are two tax expenditure measures that reflect our government's commitment to strengthening Canadian society.
First, C-28 follows through on our 1997 budget pledge to help and encourage Canadians to save for the post-secondary education of their children. Under this legislation we are increasing the amount that Canadians can invest in a registered educational savings plan from $2,000 to $4,000 a year for each student beneficiary.
This is an important change because this government wants to continue the task of improving access to post-secondary education for our youth. Our youth need this access and they deserve this access. This will help young Canadians to compete in a fast paced economy as we move into the 21st century.
As well, C-28 will allow someone who has contributed to an RESP but who then sees the intended student not go on to post-secondary education to transfer the income from that plan into an RRSP. This will reduce the risk and the disincentive that parents may face that in fact the benefits of their RESP investment could be completely forfeited if their child chooses not to pursue higher education.
Using the resources of a strong economy to ensure a secure and compassionate society is a key obligation of government. However, we must not put aside our work to maintain and expand that economic strength. We need to work harder all the time in that area.
One of the foundations of a well-functioning economy is an effective, fair and transparent tax system, a system that allows companies and individuals to focus on the work of building and growing their companies or personal endeavours through real value added and not through the manipulation of tax rules. That is why C-28 includes a range of technical tax measures to reflect that reality.
The government did what it had to do and it did this when it had to be done. We have now been able to help achieve the federal fiscal success that is beginning to pay real dividends, dividends of solid benefit to each province and to all Canadian citizens. This seems to be something that the Reform Party either does not understand or chooses to ignore.
Remember that it was a strong majority of Canadians who demanded that the deficit problem had to be solved. They have supported our action plan indeed in many, many numbers and it is gratifying to see that. In fact without their support our success would not have been possible.
Canada's solid fiscal and economic progress has been won by the hard work and shared commitment of all Canadians. This progress makes possible a renewed investment and commitment in key social areas. It is necessary therefore to support Bill C-28. It deserves the support of all members.