Debates of Feb. 5th, 1998

Supply

[Monte Solberg, Reform, Medicine Hat, AB]

First, Mr. Speaker, it is sad that the Liberals and Tories allowed the fisheries to be destroyed in Newfoundland; we probably would not have the problem we have today but that is a fact. I would simply point out that the Reform Party would put $1.4 billion back into Atlantic Canada through tax relief, something which would stimulate those economies far more than some government initiative that inevitably ends up being some kind of a patronage program that rewards Conservatives and Liberals.

[Diane Ablonczy, Reform, Calgary Nose Hill, AB]

Mr. Speaker, today is an opposition day which is when an opposition party can put forward an issue for debate and consideration of the House for the day. Today the Reform Party has put forward this motion for consideration and debate by the legislators in this Chamber:

That this House condemns the government for imperilling the economic and social security of Canadians with their reckless commitment to dramatically increase spending, at a time when the average family's share of the federal debt is approaching $80,000 and Canada has the highest personal income taxes in the G-7.

What I would like to particularly focus on in the few minutes I have to speak is how government spending increases are imperilling Canadian social security.

Security is one of the most important parts of human existence. We want to be secure. We need to know that when we are young we will be cared for, when we need to be educated and trained that there will be opportunities for us to gain the skills that we need in order to build a good life for ourselves with good jobs and good incomes.

We need to know that when we become ill we will have the health care measures that will preserve our lives, our well-being and our health. We need to know that when we become old we will be able to retire on secure, comfortable incomes.

Those measures and those aspects of our lives as Canadians are extremely important. If the case is that what the government is moving toward and what this Liberal government intends to do is going to further imperil the already shaky security or lack of security in many of these areas, then we in this House need to be very concerned about that. We need to do our job to urge and to push the government in a direction that will alleviate this danger to our personal security.

We have brought forward and our speakers have brought forward even today evidence after evidence that Canadians are moving toward a lower standard of living. And this plan by the Liberal government to continue the mother government's federal spending programs, many of which intrude on the jurisdiction of the provinces, will continue to lead to a lower standard of living and in some cases more so in some regions of the country, as one of the questioners pointed out a few minutes ago.

In some income groups the standard of living is so low that there is essentially not enough left for necessities. The government in noticing this says “We are going to do something about poverty among children and poverty in some rural and remote communities”. What it could have done was to not enact the policies which led to this tragic set of circumstances to begin with.

I would like to refer briefly to two studies, one which was just released by Industry Canada and one by the Ottawa based Centre for the Study of Living Standards.

There are some interesting highlights in the just released Industry Canada report. I wish I had time to refer to it in detail but I do not. I will specifically point to the areas that talk about the resources and the standard of living Canadians have and how they are being impacted upon.

The study specifically compared the Canadian standard of living, the kind of standard of living that Canadians have as compared to their neighbours in the United States. We have to remember that Canada does 80% of its trading in economic activity with the Americans. It is a very appropriate and very needful comparison that has been done by Industry Canada.

These are only a couple of things from this study. People who are listening to this debate may want to refer to it in more detail.

First of all and most tellingly, the employment rate in the United States, the participation rate in the labour market is much higher than in Canada.

There are people who are looking for work and there are people who have simply given up looking for work and are doing other things. For example they are working abroad, going back to school or simply just are not working at all and are relying on other family members for support.

The participation rate in Canada's labour force is far lower than the U.S. rate. The unemployment rate is much higher in Canada for those who want to work and are ready, willing and able to work. According to Industry Canada, if Canada had the same employment rate as the United States there would be one million more people working, which would put to work two-thirds of those who are currently unemployed.

My colleague from Medicine Hat was asked a question concerning regional disparities by a member of the Conservative Party. He mentioned the terrible problem of regional disparity. In the United States problems arising from regional disparity occur at about half the rate of those found in Canada.

The bankruptcy rate in the U.S. has fallen by 30% since 1995, while in Canada it has increased by 80% to record setting levels, which affects small and medium size businesses. Canadian businesses are unable to even make a go of it, never mind earn the decent return business people need to feed their families and provide for the necessities of life.

Real personal income per capita is 24% higher in the United States. Families earn nearly 25% more in that country just a few miles south of us than our families do. The household debt is a lot higher in Canada. The savings rate has fallen as Canadians have been forced to collapse their RRSPs and personal savings to cope with the increasingly harsh economic climate in our country.

It has been rightly mentioned that Canadian expenditures on research and development are half of U.S. expenditures. Our most highly skilled professionals including engineers, architects, surveyors, mathematicians, computer scientists and natural scientists earn far lower salaries than their U.S. counterparts and their tax burden is much higher. It is no wonder we are having a massive brain drain to the south because of these circumstances.

On average Canadian wage earners pay approximately 33% more in income tax than their U.S. counterparts. They also have our favourite tax, the GST that the Tories brought in and the Liberals failed to get rid of as they said they would. U.S. taxpayers can deduct mortgage interest payments and student loan payments from their taxable income. This all means that Canadians have far fewer resources left in their hands to care for their personal needs, for their children's needs and for their families' needs.

Even more telling is a study conducted by Ottawa based Centre for the Study of Living Standards. It compared the wealth created per person in Canada with the same figure for the other member countries of the OECD. Thirteen leading industrialized countries were compared. The results were absolutely shocking.

We created per person an amount of wealth that put us dead last among all industrialized countries. Every other country in the industrialized world increased their wealth, but Canada actually lost ground up to 1996. We scored a decrease of 0.4% per person. Norway increased its per capita wealth by over 22%. All other countries experienced an increase except for Canada

This means that Canadians do not have enough resources left in their hands to meet their needs and the needs of their families. Yet government takes more and more to fund the spending programs that have proven so ineffective when it comes to security and a good standard of living.

I urge the government, as we set out in our motion, to reverse this commitment to reckless spending and instead to pay down the mortgage on our future. Let us keep more of our own money to give us real social security.

[Dan McTeague, Liberal, Pickering—Ajax—Uxbridge, ON]

Mr. Speaker, it is truly amazing to hear all the comments cited by my hon. colleague from Calgary—Nose Hill. I would swear that some of them were probably taken from magazines like the New Republic or perhaps the Fraser Institute or other think tanks whose primary responsibility is to put most ordinary Canadians into the financial dunk tank.

It is very clear to me that all the things cited by the hon. member do not square with the reality that Canada currently enjoys the highest standard of living rated by the United Nations. That is an inescapable fact. No matter what the hon. member wants to posit or what wonderful little fantasies he wants to put forward, the reality is that we are doing pretty well.

The motion today is about the fruits, efforts and undertaking by the government and the Canadian people to reduce the deficit. This debate would not take place if we had not reached the point where we could begin to discuss one day the opportunity of dealing with the fiscal dividend. Clearly hon. colleagues in the Reform Party who have provided the motion today ignored the fact that what we are proposing as government was vindicated and authorized by the Canadian people.

If the Reform Party has a problem with democracy it ought to say so here and now. Given that what we are proposing squares firmly with the election platform we have put forward, what problem do Reformers have with that? If they have a problem with that, perhaps they ought to redefine their definition of democracy.

[Diane Ablonczy, Reform, Calgary Nose Hill, AB]

Mr. Speaker, Canadians only wish that the performance of the Liberals squared with their election platform. We all know about the scrap the GST promise. Where are we today?

There are so many inaccuracies in the comments of the member opposite that I can hardly even address them all. However he said something that was true. The facts I cited were amazing and should be paid attention to on the other side. They were taken from the government's own industry department study, from a think tank in Ottawa that is well respected. These are not made up figures. These are the government's own figures and we need to start paying attention to them.

It is not true that Canada has the highest standard of living in the world. Other countries are ahead of us, in particular the United States, as the Industry Canada study indicated.

Clearly the member was not listening to what I said. Once again he is living in some kind of fool's paradise that we do not have to do anything; don't worry, be happy.

This is not a fiscal dividend that is being spent. This is our money. This is Canadians' money. It is not money for the Liberal government to play Santa Claus with. It is time the Liberals understood that.

When the member talks about democracy he might want to look at a Roper Canada poll taken in December which showed that 39% of Canadians want a cut in taxes above everything else. Some 37% want to pay down the national debt. Guess how many want an increase in social spending. Only 19%.

If the hon. member wants to follow democracy, to listen to Canadians and to do what Canadians want with their money, he might pay attention to what they are really saying.

[Norman E. Doyle, Progressive Conservative, St. John's East, NL]

Mr. Speaker, let me pursue for a moment the issue of reduced spending. We all support debt reduction as long as there is a balance in the sharing of responsibility with the rest of Canada.

As I said a few moments ago, we badly need a better recognition of the disparity that exists between Atlantic Canadians and the rest of Canada. I feel strongly that have not provinces need a better deal on equalization. I can support as can a lot of Atlantic Canadians an increase in spending as long as it is directed to the right areas. One area would be a better deal on the equalization formula.

I wish I had more time to pursue the issue. What is the member's position on correcting that disparity by renegotiating the equalization formula for have not provinces?

[Diane Ablonczy, Reform, Calgary Nose Hill, AB]

Mr. Speaker, as the member may know, I was Atlantic affairs critic for our caucus in the last parliament and spent many days and hours in Atlantic Canada.

I share his tremendous concern about the terrible conditions of many Atlantic Canadians, particularly in the more remote areas and communities due to mismanagement of the fishery, misuse of development moneys, patronage and all the things that have caused a lot more harm than good to a beautiful and vibrant area of the country.

We have proposed that equalization payments should be re-examined. Middle income provinces are getting a share of equalization payments that would be more appropriately directed to the very poorest provinces, which would mostly be the Atlantic provinces.

I look forward to working with the member to support a program that would direct more equalization resources to meet the need for better delivery of social services and social security in the Atlantic provinces.

[Tony Valeri, Liberal, Parliamentary Secretary to Minister of Finance]

Mr. Speaker, today's motion accuses our government of imperilling the economic and social security of Canadians. The only thing truly at peril is the credibility of the official opposition.

All members of the government share the view of most Canadians that our national tax burden is too high. That is why we have committed clearly and concretely to take significant steps to reduce the broad tax burden shouldered by Canadians as we move from a deficit to a fiscal dividend.

The finance minister also made clear that a balanced budget was not the end of a fiscal turnaround. We must move on to bring down our hobbling public debt as well. These facts, high debt, too heavy taxes, are not signs of a national failure or futile policy. They are the carryover of the economic malaise we inherited five years ago.

It was a wasting sickness in which 25 years of deficit spending played a tragic part. It is a disease that still leaves symptoms when the patient is well into recovery. That recovery is a fact that disturbs and dismays members of the official opposition. Since they can no longer deny the success of our approach to deficit reduction, they must find a new threat to browbeat and bully Canadians. That is the threat of reckless spending.

Let us look at how reckless we have been since coming to office and the direction we have set for the future. Let me emphasize that this is a direction which was endorsed by Canadian voters in the last election.

Last October the finance minister presented the government's fall economic and fiscal update. It demonstrated convincingly that our government's plan to restore Canada's fiscal and economic health was working. We started with an absolute and unequivocal pledge to eliminate the deficit. We did this because we understood that the price a nation pays for years of excessive deficit spending is clear, concrete and corrosive.

Most of all deficit financing means higher taxes. Last year the federal government had to pay over $45 billion in debt charges. That is equal to about 32 cents of every dollar of tax revenue Canadians pay to Ottawa. Looked at another way, that $45 billion is equivalent to 70% of federal income taxes that Canadians pay. It is more than EI premiums and GST combined.

That is why when we first came to office we set about putting our fiscal house in order, something the opposition party clearly did not understand then and does not understand today. We knew it was the essential foundation for lower interest rates and higher economic growth which means jobs. I am sure the NDP will appreciate this point. That is what Canadians want. We knew that without a fiscal turnaround we would never be in a position to pursue broader tax reductions.

As most Canadians know, our deficit control plan centred on cutting government spending has met its targets and in fact exceeded them.

Our deficit progress has delivered real and rewarding results for Canada. We have transformed the vicious circle of higher deficits, higher interest rates and slow economic growth into a virtuous circle where lower deficits have helped produce lower interest rates, leading to higher economic growth and lower unemployment, ultimately leading to even lower deficits.

Even today as we have been buffeted by the impact of the Asian currency crisis, Canadian rates are still below U.S. rates, both for 30 day bills and long term bonds.

Our fiscal turnaround is not a transitory phenomenon. We have confirmed that the federal deficit will be eliminated no later than this coming fiscal year and it will be the first time that the federal government books have been balanced since 1970. This means that we are now looking to the day when Canadians will see a fiscal dividend. To sustain our economic progress, we will make sure that our commitment to fiscal prudence does not change. As the prime minister said, we will never again allow the financial health of our country to get out of control.

What about that fiscal dividend once the federal books are balanced? In fact, what about the Reform motion today that warns of that reckless spending by this government? Again, listen to the real facts.

Our government has committed to a 50:50 allocation of the dividend among, one, expenditures to address economic and social needs and two, tax cuts and debt reduction on the other. Let me touch on some of the issues and concerns that we feel must in fact define this dividend debate.

On the tax issue, our government is absolutely committed to bringing down the tax burden of Canadians. Because the dividend can start off small, it leaves little room to implement a substantial across the board reduction right away. We feel that the most responsible course will be to continue to provide targeted tax relief where it does the most good, as we have done in our recent federal budgets.

Our priority here will be to provide tax relief to low and middle income people and families first. When we can afford it, we will and we must go further and reduce the broader tax burden.

Then there is the challenge of investing in Canada's future. We believe the responsibility of the government today goes beyond debt and tax reduction only. To rule out the need to invest strategically in areas such as health care, education and public pensions is not just bad social policy, it is bad economics. Such programs provide Canadians with the security to participate in our fast changing economy with confidence.

The real question is to find the right balance, a balance that ensures that the quantity of growth we all seek contributes to the quality of life Canadians deserve. For example, growth may be central to a strong economy, but in today's world of accelerating technological change, knowledge and skills are central to growth. They are central to a society that is more fair, where people have the skills that mean good jobs and good incomes.

That is why the federal government has taken measures to make registered education savings plans more attractive and flexible, measures that we just this week debated at second reading of Bill C-28. Just this week we debated and voted on this bill. Of course the members of the official opposition rejected that measure and voted against it.

That is also why the prime minister has announced that we will create a Canada millennium scholarship fund, to reward academic excellence and assist thousands and thousands of low and moderate income Canadians.

I guess this is that reckless spending that the Reform Party says puts Canada at peril. I am convinced that the vast majority of Canadians certainly see it differently. They see it as a wise use of part of the coming dividend.

It is also not good enough to have the right skills if our country does not also offer the opportunities to develop and apply those skills in the laboratory and the workplace.

Again, that is why the government, to help strengthen this synergy, called for and created the Canada Foundation for Innovation. It provides $800 million to help maintain or enhance facilities at our hospitals and universities, facilities to deliver world class research and keep top flight researchers here at home.

I will not put words into the mouths of members opposite, but perhaps this is another example of the reckless spending the opposition wants to attack. However, I do not think I have heard them say openly that this is a measure which should be killed. I will not say they have said that, but I will say that most Canadians see it as a rewarding investment, not a reckless one.

If we are to equip Canadians for success in a new millennium we must first focus on early childhood where the capacity to learn is developed. That is why we are building a new partnership with the provinces on behalf of children and providing $850 million in additional resources under the child tax benefit.

Our goal is clear and concrete, to begin to put an end to the welfare trap where low income parents who return to the workforce see their children's economic conditions actually worsen because they lose services provided under social assistance. Going to work should make people's lives better, not worse. We are addressing that.

Is this, once again, the reckless spending which Reform feels will imperil Canada's economy and society? I do not think so.

There is another measure which was included in the debate on Bill C-28, which is the action of the government to enrich the Canada health and social transfer which goes to the provinces to support health care, post-secondary education and social assistance and services. Because of our faster than expected fiscal progress we are in a position to guarantee that the CHST transfers to the provincial governments will be $12.5 billion for each of the next five years. That is $1.5 billion more over the previous floor and it represents overall $7 billion to the provinces. It is an increase which does not threaten our balanced budget.

Perhaps opposition members will think that is reckless, but millions of Canadians would surely disagree. They want a strong health care system. They value support for education. They believe our country should help the disadvantaged. They know these are valid and vital uses of federal resources, especially when they do not jeopardize our progress to a balanced budget.

I suggested at the start that the only thing in peril, going by today's motion, is the Reform's credibility. I think I have made my point.

I would like to pay specific attention to the prebudget document which the official opposition has put forward.

The Reform Party talks about balancing the budget and applying unused contingency reserves to debt over the next three years. I want to thank the Reform Party. I am very pleased that the Reform Party now endorses the government's budgetary policy.

In October the government committed to balancing the budget no later than 1998-99. The government also made the commitment that if the contingency reserve was not needed it would be applied to the debt. That was in October. Some members opposite were there, some were not. I only hope that those who were there would have communicated that to the rest of their caucus.

They talk about freezing program spending through to 2001. Reform suggests freezing total program spending but allowing the natural increase in the major statutory programs to take place.

Essentially what they are advocating is a cut of $3 billion or 6% of the non-transfer portion of spending over the next three years. Where does it come from?

A number of one-time savings are offered up as advocated by the auditor general but where it will find $3 billion of ongoing savings is yet to be identified. That is what the platform says.

Members keep changing their minds on this. They are all over the map. In the 1997 election they talked about calling for large cuts to EI and equalization. Now they think spending on these programs should be allowed to increase. They have no credibility on the issue of expenditure reduction.

We can go on and on but the one area I need to spend some time on because it is a major plank in the platform that this official opposition has is the wide mix of tax measures.

I would call on this party to go back, redo its analysis, redo the costing of this measure because when the analysis is complete, when the tax measures that are put forward by this party are looked at, when they are mature they would cost around $30 billion in foregone federal revenues and would grow by $4 billion each and every year.

They underestimate the total cost of their package by over $10 billion. As a responsible government, we do not have the luxury of basing our policies on sloppy and incomplete analysis.

We have to get our numbers right and we must look at the consequences of any measures that we undertake, obviously not a criteria of that party. In that regard I think we would have to ask ourselves one very basic question with respect to the Reform Party package. Where is the $30 billion plus for tax cuts to come from?

Reformers have not answered that in their platform. They have not answered that in their prebudget document. I suppose we will have to guess what they might propose to do to make up the foregone revenue, perhaps reduce transfers for health and education, reduce benefits for families with children or the elderly or perhaps the suggestion that we walk away from all the sacrifice and hard work of Canadians.

Canadians have partnered and ensured that we were able to balance this budget. Should we just add it to the deficit and the debt? I am not sure at all.

I think when we look at the spending plan that this government has proposed and how it is balanced with the real commitment to action on taxes and debt reduction, the reckless risk taking and a government out of control is not seen.

What is seen instead is a realistic strategy that invests in Canada's renewal, a strategy developed in consultation with Canadians by a government committed to helping them regain control of their lives and their children's future.

The reason this motion deserves to be dismissed is so that we can get on with the job of building that future in a way that is responsible and responsive to Canadians.

[Jack Ramsay, Reform, Crowfoot, AB]

Mr. Speaker, I listen to this nonsense. I listened to it for years before I was elected. I used to watch this kind of nonsense from both sides of the House.

My wife and I have raised four children and they are now young adults. We have twin sons. When our two boys were in grade 10, they got part time jobs making a minimum salary. When they came home with their paycheques they were aghast at the difference between their gross pay and what they were going to be able to cash that cheque for because of people like this taking and gouging young Canadians like our children and millions like them.

They are being gouged with high payroll taxes and now we are hearing this kind of verbiage that drips with the attributes of hypocrisy.

That is what we are hearing. They are saying that they are responsible, that they have got to give control back to Canadians. Who took the control from them in the first place? Who increased the taxes year after year after year?

I was born, my mother tells me, in that old log house that I remember with a sod roof. We eventually moved out of that house. We were not unlike many of our neighbours. We moved out of that home to a better home, but we could never have done it if 50 cents of every dollar we had earned had been taken away by taxes.

We built this country on low taxes. What is destroying this country is high taxation. When there are millions of families like Kim Hicks' who are struggling to make ends meet on $30,000 a year and the government is taking anywhere from $2,500 to $3,000 away in taxes, that is criminal. That is what is wrong with this country. That is what is wrong with this government. A single mom with one child makes $15,000 and has to pay $1,300 in taxes. What does the member have to say to those people? Certainly the nonsense he has given us today and placed upon the record is no comfort to them.

When we look at the mess we are in, we look at the pilot of the Titanic . Who piloted the Titanic into the iceberg? Someone who was absolutely asleep at the wheel. That is what we have seen for the last 25 years. The pilots, whether they were Liberal pilots or Tory pilots, for the last 25 years have steered us asleep straight toward an iceberg and that iceberg is now $600 billion in size.

Forty-seven billion dollars of the taxpayers' money has to be used not on social spending, not on health care, not on education, not on seniors, not on those people who need it. No. It has to be used on the iceberg that the Titanic is headed toward.

That member stands and ridicules, mocks and scorns every attempt that the opposition members bring forward to return control back to the people. What does he do? He pretends by saying “We have screwed up this country but we are the only ones that can solve the problem. We are the ones that brought us into debt but we are the only ones who can get us out of it”.

Everyone understands the principles of economics. At the end of every month millions and millions of families have to sit down and pay their bills. They know that you cannot continue to go on and on if you are spending more than what you are bringing in.

For 25 years and beyond, that is what the Liberal and Tory governments have done to the people of this country, to my children and millions of other children. They intend to do it to our grandchildren as well, particularly with the 73% increase in the Canada pension contributions our children and grandchildren are going to have to pay.

The member should hang his head in shame and say “Yes, we made a mistake. Let us correct it. Let us work together to do something for our children and our grandchildren” and for the Kim Hicks of this country.

I do not know if the member has anything to respond that is worthwhile to these facts but I certainly give him the opportunity.

[Tony Valeri, Liberal, Stoney Creek, ON]

Mr. Speaker, I truly welcome the opportunity to respond. I appreciate the member's passion for this particular topic, although I would question some of the facts.

I want to reiterate once again that when we talk about taxes, this government has not once increased personal income taxes since coming into office in 1993.

I would ask the member to perhaps listen to the answer since he had the opportunity to take the floor a little earlier.

I would encourage the member to join us as we move to the next millennium and to stop talking about the 50 years that have gone by. It is only because of the support of Canadians for the actions of this government that we are talking about a fiscal dividend today.

This government is not taking the credit. It is Canadians who should take the credit.

Do not come to this House and continue with this verbiage about how I am standing up and belittling the member. Let us get it clear. Canadians ensured that this government was able to complete a program that was laid out beginning in 1993 continuing through to 1997.

When the member talks about spending, there is spending in this government in this country today that is the lowest in 50 years. It is not this particular government that is overspending.

When we talk about what is so crucially important to sustain this country, it is that we must not and will never overspend or spend more than what we take in. It is quite clear and it has been said over and over again. I only wish that for once a member from the opposition would get up and recognize that fact. They should check Hansard because over and over again it is there, but they agree to ignore it.

Let me move to some of the other members of that caucus. The member for Selkirk—Interlake said that any shortfalls Manitoba suffered from equalization cuts could be made up by provincial tax hikes or spending cuts. Is that coming from that opposition party? Is that coming from that opposition party that just had a member stand up and say “Give back to Canadians no tax increases”. A member of his own party says “Do not worry about cutting, they will jack it up at the other level”. That is something we will not do. That is not the role of this government.

They talk about cutting spending. I will use another example of a member of that particular party and perhaps some will recognize the quote, “I support the idea of regional economic development. As a former mayor of Dauphin I know the importance of it. We need the money to leverage other money”. That was the member for Dauphin—Swan River.

[An hon. member]

But you do not go into debt to do those things.

[Tony Valeri, Liberal, Stoney Creek, ON]

And you are exactly right. Every measure that this government has taken and every measure this government is considering does not in any way jeopardize the balanced budget we are going to achieve. It does not increase the debt that we have in this country. I only wish the hon. member would go back and check Hansard because over and over again those arguments have been answered.

Any new initiative that this government will undertake will not increase our deficit or increase our debt. Not one. This government will take the balanced approach. It will reduce the debt in real terms and on a ratio basis. It will invest strategically in priorities of Canadians and it will reduce taxes for Canadians. That is what this government will do.

[John Williams, Reform, St. Albert, AB]

Mr. Speaker, I will be splitting my time with the member for Lethbridge. I believe that all members of the official opposition will be splitting the time from here on in.

When I heard the opening remarks of the parliamentary secretary I thought for an instant that perhaps the Liberal majority was going to be in jeopardy. The way he was speaking I thought he was going to come over and join us. Then I thought he would not do that but that the light was finally going on in the Liberal government's mind.

The member was talking about such things as “lower interest means more growth” a quote by the Parliamentary Secretary to the Minister of Finance. Finally we have an admission by this government after 25 years, that it finally has realized that debt does not buy your way to happiness and it does not buy your way to riches. Finally and hopefully and completely forever we will not see higher interest. That by his definition will mean more growth. It also means more jobs for Canadians, more jobs for our kids, more future for our young people as they try to find a job after finishing university under a mountain of debt because of the high cost of education, courtesy of this government.

He also said “Lower deficits mean lower taxes”. After 27 years of the Liberals and the Tories managing this country, they have finally come to the realization that a lower deficit means lower taxes, and they have saddled us with $600 billion in debt, $45 billion a year in interest.

They are finally saying “If we could only get rid of that deficit”, and it was their creation. They are finally saying that we can lower taxes. The Reform Party has been saying let us lower taxes, let us create growth, let us create jobs. Obviously the message is finally getting through and I am glad to see it.

The member also went on to say that less taxes create more jobs, which I just covered. He said that high deficits mean lower growth and we are now looking at the first surplus since 1970. What an admission by a government that would allow us to go 27 or 28 years without a single surplus. Every year the debt has been going up and up and up, taxes have been going up and up and up, the interest cost has been going up and up and up. After all that head in the sand style of government the Liberals finally come around and say that the Reform Party has it right and they are endorsing our principles and policies.

The parliamentary secretary said that they will never spend more than they take in. How Canadians wish they had listened to their own advice years ago, many years ago. We would have no debt. We would have $45 billion, $1,500 for every man, woman and child. That money would be in the pockets of Canadians for them to spend every year. Six thousand dollars per family would be in the people's pockets every year. They would be able to buy goods, increase their standard of living and provide better education for their children.

But no, this government because of its folly and insanity, which it now realizes to be folly and insanity, is now saying that it would have been better if it had left the money with Canadians. Think of the prosperity we would have. Think about how much higher the economic growth would have been. We would be one of the most prosperous nations on earth. Our dollar would be on par and our interest rates would be the same as those of Japan. It would be heaven on earth. It would be Shangri-La right here had it not been for this Liberal government.

We can talk in generalities but we have to translate these policies and ideas into workable things that will ensure that government is more efficient. Government should deliver what it says it will with the same degree of productivity and efficiency we expect from the private sector.

As the chairman of the public accounts committee, I am quite often appalled at the way this government allows its senior bureaucrats to mismanage their departments at great cost to the Canadian taxpayer. I have some examples from the auditor general's report, chapter 13 concerning Health Canada.

Page 13-31, paragraph 13.145 states that a limited review of ambulance costs identified cases of potential abuse that had gone undetected. In one such case a client had taken 150 ambulance trips costing over $21,000 during a five month period. It goes on to say that no one had questioned the trips until they were identified by an internal review. Someone was using an ambulance as a taxi, we were paying for it, and nobody in the department was asking what was going on. What is going on here?

Exhibit 13.16 on page 13-29 refers to provision of dental services. One dental provider billed $25,000 for 58 root canal therapies, about 12 times more than the average practitioner performed in the province. Another provider charged $40,000 for 92 crowns, which is six times more than the provincial norm. A dentist claimed $27,000 for 356 coloured surface restoration procedures, about 40 times the average for such a procedure performed by dentists in the province. And Canadians paid.

Canadians pay these kinds of bills each and every day because the departments, the ministers and the senior management do not know how to manage Canadian taxpayers' money. They just pay the bills as they come in because they are quite comfortable with their jobs, their security and their salaries, and yet the Canadian taxpayer has to squeeze out more and more money each and every year to pay for this serious mismanagement and waste of money.

That is the type of thing that goes on each and every day. That is the type of stuff the public accounts committee is trying to stop. That is why we are looking for some serious changes to be made by the Liberal government. As it saves it will look after Canadian taxpayers money. As the chairman of the public accounts committee I will put the Liberals on notice that we will be holding them accountable for the way they spend the money.

We have to compliment the auditor general for bringing these types of issues to our attention. Unfortunately every time the public accounts committee meets it deals with issues of this magnitude and waste of these huge proportions. It goes on and on. It never seems to stop.

We are $600 billion in debt. We have heard people talk about all kinds of scenarios. They talk about what would happen if our economic growth were to slow or stop. It reminds me of the days of the depression. In 1929 the country was going into a deeper and deeper recession. People were losing their jobs. There was 25% unemployment.

[An hon. member]

It was a Tory prime minister, wasn't it?

[John Williams, Reform, St. Albert, AB]

It was a Tory prime minister. It was Mr. Borden. He said “We are not going to borrow any money because we want to make sure our credit rating is strong. It does not matter that people are unemployed and starving in the streets”. He wanted to protect the credit rating. He refused to borrow money. If we ever get into that situation again we will not be able to borrow money because our credit rating is so weak. Therefore, while history may not repeat itself, it is bound to rhyme, as someone once said. Canadians will be left high an dry with the Asian flu, if it ever reaches North America. Because of the $600 billion debt, because of our vulnerability, because of mismanagement by this government and the previous Tory government we stand to suffer.

I hope that does not happen. I hope this government sees the light of day. We need to have serious, proper management of the affairs of the nation. We must ensure that the government does not fritter money away with its 50:50 split on surpluses, giving some to reduce the debt and spending the rest on goodies. That cannot happen. Let us see some real responsibility for once.

[Paul Szabo, Liberal, Mississauga South, ON]

Mr. Speaker, I have been sitting here since 10 o'clock this morning listening to the debate and there is an issue which has come forward which should be of serious concern to the House. It has to do with the integrity of information which has been put on the floor from time to time, particularly as it relates to tax matters.

The Leader of the Opposition, yesterday in question period and again today in his opening speech, used the statement that Canada's highest tax rate kicks in at approximately $60,000, whereas in the U.S. it kicks in at $270,000, making the point that somehow we should have parity. In fact what it means is it would provide tax breaks to 10% of the highest income earners in Canada, although his description was that it would help low and medium income Canadians. It is not correct.

The hon. member for Calgary—Nose Hill tabled in the House her views. She said the effect of the tax burden in Canada was 33% more than it is in the United States and that Americans can deduct the interest they pay on their mortgages. She did not mention that they also have to pay capital gains tax on principal residences, which we do not. She also did not mention that they do not have free health care, that they have to pay for it. She also did not mention that the same analysis went before the finance committee which noted that there is parity and equity between the effective Canada and U.S. rates. The information provided to this House was incorrect.

Finally, the hon. member for Crowfoot gave the example that a single mother making $15,000 a year would have to pay $1,300 in taxes.

That is not correct. A single mother getting the non-refundable tax credit of $6,456 also gets to claim the child as an equivalent to spouse exemption which means that the first $13,000 is in fact sheltered from tax. That leaves $2,000 on which only $500 of tax is paid. When we add on to that the fact that she is eligible for the child tax benefit of $1,800 and the GST credit of another $400, not only does she not pay $1,300, she gets back $1,300 on the $15,000.

[John Williams, Reform, St. Albert, AB]

Mr. Speaker, I think the member just pointed out the classic difference. The Leader of the Opposition pointed out that this government is taxing billions of dollars out of the pockets of people who are defined as poor and below the poverty line. We just heard the example of how the government takes millions of dollars away and turns around and gives it back to them, saying it is doing a great job. That cannot be.

We could improve the efficiency of the government by not collecting the taxes from these people. Why would we collect taxes from the poor and the people who are below the poverty line just so we can channel it through the government and give it back to them in the form of a cheque? This is absolutely ludicrous.

Surely the member would agree that to leave the taxes in their own pockets and not take it away is a far greater incentive than to come out with a myriad of programs with all the rules and regulations that force people into complexities of following government rules and perhaps having to give up a job in order to qualify for a benefit.

Why does the government not leave the money with the people? Why does it not let them prosper and stand on their own two feet and get on with being a real Canadian with a real job? That is what it is all about. It is not government.

[Jason Kenney, Reform, Calgary Southeast, AB]

Mr. Speaker, I would like to get into this battle of the accountants that is happening here and remind the hon. member for Mississauga South that as an accountant he is wont not to see the forest for the tree. He knows very well all the detailed features of the comparative tax codes of Canada and the United States.

However, the bottom line, the forest, the big picture is that the U.S. tax foundation calculates that the total family tax index in the United States is no more than 34% of total family income, while the Canadian family tax index, calculated by the Fraser Institute, an organization which the hon. Minister of Finance has recognized as a great economic authority while speaking at its conferences, was 47%. This 34% versus 47% is the big picture.

[John Williams, Reform, St. Albert, AB]

Let me enlighten you, Mr. Speaker. I am splitting my time with the member for Lethbridge. He is following right after me. I think the previous speaker, the member from Calgary, has pointed out quite clearly that there is a massive difference between us and the United States. There is also a massive difference between our unemployment rate and its unemployment rate and our economic growth and its economic growth. There is no question that lower taxes create jobs.

[The Speaker]

I am going to recognize the hon. member for Lethbridge, of course, but I would tell him that it would be my intention to intervene when he would be in about the middle of his speech. Therefore, I wonder if he would prefer to wait until after question period and then he can get a straight run at it. What would you like to do, sir?

[Rick Casson, Reform, Lethbridge, AB]

I would like to start now, Mr. Speaker.

[The Speaker]

I will give you about three and a half minutes and then you will finish after.

[Rick Casson, Reform, Lethbridge, AB]

Mr. Speaker, I will try to talk fast. It is atrocious to think about the last 30 years of foolish spending sprees by the Liberals and Tories, 30 years of the financial burden of Canadian taxpayers being made heavier.

Perhaps the problems lie with the lack of accountability. When Canadians elect a government they vote under the assumption that government will act in their best interest.

Unfortunately, where our pocket books have been concerned, this has not been the case. Foolish spending has left us buried in debt. Today's opposition motion condemns this and any government that imperils our economic and social security.

Think of this motion as an insurance policy against reckless endangerment of our hard earned tax dollars. Amidst all this government hoopla is the attempt to boast of eliminating a deficit it created, Canadians deserve the assurance that governments be held accountable for such absurd spending practices.

If the CEO of a major corporation does not act in the best interests of a company and its shareholders, the board of directors will turf that CEO as a sign of non-confidence in his performance.

Do the citizens of Canada not deserve the same degree of accountability? Let us face it. The stakes are even higher here. We are talking about the finances not of one company but of an entire nation.

It is ridiculous to applaud a government for eliminating a deficit not only that it is responsible for, but this government did not even reduce the deficit responsibly.

How did it manage to eliminate its deficit? By reducing health and education transfers to the provinces. Thanks to the federal cuts, provinces felt the pinch. Hospitals closed, school programs were cut, payroll taxes were up and the list goes on.

The Liberals have addressed the deficit by raising Canadians' taxes 37 times. Now the Liberals have announced 31 new spending programs that would take spending levels higher than they have ever been, leaving Canadians with the highest income taxes in the industrial world.

All this led to even fewer dollars in the pockets of Canadians. We are supposed to thank this government for getting rid of a deficit? Let me take a moment to use an analogy of the nation's financial situation.

Let us consider the government as the Titanic of financial coffers. Consider now the deficit as the part of the iceberg situated above the water surface. If members know anything of the formation of an iceberg, they know that the portion of the iceberg they see above the water is minuscule to the vast amount that is hidden beneath the water.

If the deficit represents a small portion of the iceberg above the water, what will we call the massive unseen structure? That is our debt.

For the government to lick its chops in anticipation of blowing our surplus, I urge it to remember that the average family's share of the federal debt in Canada is now approaching $80,000, a mortgage every family has.

Our nation's massive debt has approached the $600 billion mark and the government is claiming an economic victory. This is an affront to all Canadians.

The error of foolish Tory and Grit spending must come to an end immediately. There is only one reason why this motion may not pass today. If we could just for one moment put political patronage, broken promises and partisan tactics aside and consider the responsibility each and every one of us in this room has to our constituents, the bottom line remains the same.

We each have a serious obligation to safeguard the economic and social security of Canadians. The time has come for governments to put an end to the last 30 years of Liberal and Tory financial mismanagement.

The legacy of massive overspending deficits, debt and tax increases must end. Any government that claims economic victory is just like the Titanic heading for disaster. Full steam ahead on spending now is a collision course with economic mayhem.

Large debt burdens force interest rates higher and increase the cost of mortgages, carrying car loans, household appliances and credit card balances.

[The Speaker]

My colleague, I know you are right into it. You still have six minutes to go in your speech and five minutes of questions and comments. We will see you after question period.

We shall now proceed to statements by members, beginning with the hon. member for Scarborough Southwest.

Sri Lanka

[Tom Wappel, Liberal, Scarborough Southwest, ON]

Mr. Speaker, I want to draw the attention of the House to the 50th anniversary of the independence of Sri Lanka, once known as Ceylon.

The year 1948 marked the end of a period of colonization and the beginning of a journey for its people to turn Sri Lanka into a country that inspires the pride and support of all of its citizens.

Sri Lanka is a parliamentary democracy and a sister nation to Canada in the Commonwealth. It is a nation that is embracing modern business, trade and international relationships.

It does so as an island which is home to rich and unique languages, cultures and character based on a history going back hundreds and thousands of years.

We recognize that Sri Lanka has major challenges in ensuring standards of institutional fairness and equity among its peoples. It is to be hoped that the current violent conflict will end soon so that the people of Sri Lanka may grow and further develop in peace and harmony.

During the 50th anniversary celebrations I wish all Sri Lankans, especially those who have settled in Canada and in particular those who have made Scarborough, Ontario, their home, a prosperous and above all a peaceful future.

Natural Disasters

[Ken Epp, Reform, Elk Island, AB]

Mr. Speaker, there has been a great deal of focus on the effect that recent bad weather has had on our citizens, particularly our farmers. It seems that we pay particular attention when there is a sudden disaster like a flood, fire or ice build up from freezing rain.

I wish to draw the attention of the House to another weather related hardship. It is slower but equally devastating. Farmers in the north part of my Elk Island riding have been prevented from seeding or harvesting their crops for two years in a row because of untimely rains. Imagine the devastation of losing annual income two years in a row.

I urge the government to view this kind of disaster with the seriousness that it deserves and to extend much needed help to those needy farm families.