Members think this is funny. Let me share this with them and show them why the taxpayers of Canada would see this as a spending bill.
Anything that provides a tax cut means there is a cost to the federal treasury. The indications are that the cost of this at the minimum, at the floor level, would be $150 million. To maturity the cost could be as high as $3 billion. If we were to go to the next step, which would be to take it further than just first time homebuyers and expand it to include all homebuyers, the cost could be as high as $6 billion to the federal treasury.
What the member is really asking for is to go to what fundamentally is an American system. This does not surprise me because all I hear when I hear Reform Party members stand up in this place is the defence of the great U.S.A. and its tax system, its safety system and social system. All they ever talk about is how great the United States of America is.
It would be a real treat to hear a member of the Reform Party stand in the House of Commons and talk about how great Canada is. But we do not hear that. We hear, “Let us get the Star Spangled Banner up there and tell everybody boy oh boy, the way to run things is the way they run it south of the border”.
I happen to think they are wrong, as they chirp away, not only wrong but a dangerous policy.
There are ways to help first time home buyers. One very obvious way that the members opposite neglect to recognize is the interest rate in this country. Just think about the difficulty that a first time home buyer would have in buying a home in my community. The low end would be somewhere around $130,000 for a townhouse up to $200,000 for a fairly modest three bedroom home in a subdivision in my city. They would need a down payment of approximately $30,000. They have to save that money. If they were buying a semi-detached or single home with a maximum CMHC insured mortgage, they would end up with a mortgage payment, if the interest rates were at 10%, as high as $1,500 a month. That is a lot of money for a first time home buyer to assume.
If they were to buy the smaller home then they would be able to cut that down but it is still going to be $1,000 or more per month. What people tend to forget when they are buying a townhouse is that they have to add on common area maintenance fees to the mortgage. Even for a townhouse at the lowest end of the market in big city Canada, we are talking about $1,200 to $1,500 a month in mortgage payments if the interest rates are as high as 10%.
What has happened since this government took office in 1993? By putting confidence back into the marketplace, by eliminating the $42 billion inherited—