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.
Mr. Speaker, as we move toward the 21st century one of the things that Canadians have a right to expect from their federal government is leadership, far-sighted, decisive and strong leadership, but that is not what the Canadian public has been receiving from this government.
I talked to a pollster several weeks ago who conducts a lot of polls and focus groups and is particularly observant of the adjectives that people use to describe the government of the day.
He noted that in the last days of the Mulroney administration the word arrogant occurred more and more frequently as the adjective used to describe that government.
I asked what adjective is being applied to this government as it enters into its last term. He said the adjective that is being applied to this government by Canadians more and more is the word weak.
In case some hon. members are not sure what that word means or think that it refers to seven days in a row, according to the dictionary these are some of the synonyms for the word weak: feeble, frail, fragile, infirm, decrepit, impotent, strengthless, powerless, flaccid, anemic, exhausted, flimsy, broken down, run down, rickety, tottering, doddering, broken, lame, halt, withered, maimed, shattered, shaken, palsied, decrepit, languid, poor, infirm, faint, sickly, vapid, flat, insipid, watery, loose, lax, nerveless, slack, spent, weatherbeaten, decayed, rotten, worn, seedy, languishing, wasted, unsupported, helpless and defenceless.
Today we want to focus on a particular area where the weakness of the government is self-evident. The subject of the supply motion before us condemns, and rightly so, the government's management and mismanagement of Canada's high debt and taxation levels.
The government is fundamentally weak on debt reduction and tax relief and it is the duty of the House to hold it accountable for that weakness.
There is a critique of the Liberal position and Reform's alternatives for debt reduction and tax relief which we have produced in a little booklet entitled “Securing Your Future”. This is a summary of a longer 50 page paper containing the results of the prebudget consultations conducted by the official opposition entitled “Securing the Dividend”.
All this material has far more to say on debt reduction and tax relief than anything produced by the finance committee of the House. It is the work of the official opposition research and communications people, with the supervision and involvement of the hon. member for Medicine Hat, the hon. member for Calgary Southeast, the hon. member for Prince George—Bulkley Valley and the hon. member for Battlefords—Lloydminster. I thank them for the enormous amount of work they have done on this subject.
I should also mention to the public that this booklet can be obtained from any Reform MP or by contacting us at 1-888-733-6761, or at our web site, www.reform.ca.
This booklet also contains a score card for rating the finance minister's forthcoming budget with respect to its treatment of debt reduction and tax relief. This score card for rating Liberal financial performance was inspired by the score cards used to monitor rowing contests, rowing being the only activity we can think of where one can sit on one's rear end and go backward and still have some chance of crossing the finish line.
On the debt problem, this is the essence of it. Under Liberal-Tory mismanagement the federal debt rose to $583 billion, which is 70% of the GDP. Over the past 25 years Liberal administrations added $195 billion; the Tories, $300 billion; the current administration, $75 billion. Canadians spend $45 billion per year on interest, more than on health, education, equalization and pensions combined. The interest on this debt is the greatest threat to social programs.
To put this in understandable terms, most Canadian families have a mortgage but what this debt does is establish a second mortgage on the future of every family of four to the tune of $77,000. The average family, therefore, pays $6,000 to $7,000 a year in taxes on that mortgage, so this debt erodes the disposable income of every family in the country.
In summary, the Liberal-Tory record of debt accumulation is the worst of any post-war government in the western world. It is a national disgrace and strong leadership is required to correct it.
The official opposition therefore proposes that Canada make federal debt retirement a top financial priority by committing 50% of any future federal surpluses to debt reduction. We believe that we are supported in this by a majority of the Canadian people.
If we were to say to average families saddled with a $77,000 second mortgage because of the federal government that they will receive some extra cash this year, we are convinced that most families would make it their number one priority to pay down that mortgage, and that is what we are saying the federal government should do.
In this booklet and in the background paper that supports it we have set down a plan to pay down the debt. It includes setting debt reduction targets and sticking to them, aiming to reduce the debt from 70% of GDP to 50% by the year 2003 and to 20% by the year 2016. In other words, the debt would almost be cut in half by the year 2016, in 20 years. That could cut the second mortgage on the family from $77,000 to $39,000. If the Government of Canada did that it would save about $20 billion in interest payments per year by the 20th year.
To back up this debt reduction plan we also propose balanced budget legislation, a legal requirement to keep the budget balanced over a four year cycle, a legal requirement to put 50% of any defined surpluses into a national debt retirement fund, and penalties on ministers and on MPs for violation.
Six provinces of Canada have balanced budget laws. There ought to be a federal law to make a repeat of the Liberal-Tory debt accumulation illegal.
Turning to the Liberal-Tory tax record, under Liberal-Tory administrations Canadians have been subjected to over 108 federal tax increases since 1984, 71 by the Tories and 37 by the Liberals. We now have the highest personal income tax levels among G-7 industrialized countries, some 56% higher than the average of those countries. We do not just tax the rich. Canada's top tax rate kicks in at incomes of $60,000 a year. In the U.S. it kicks in when one makes $270,000.
I often go to universities to speak to the students. Invariably, when we have an open question period, some student will stand and say “I am graduating next year with a computer science degree” or a degree in this or that. “Here is my tax position in Chicago and here is my tax position in Canada. Why is the tax incentive to leave the country rather than to stay?”
We do not just overtax the middle class. We overtax the lower middle and the poor. Canada starts taxing people when they make $6,500 a year. Even the heartless U.S. does not start until one makes $9,500. The average among the OECD countries is that one does not start paying income tax until one makes about $15,000 a year.
The Liberal government currently takes $1.8 billion a year from people who make $15,000 or less and takes $12 billion from families who make $30,000 a year or less. In other words, it collects almost $14 billion a year in taxes from people who, by its own definitions, are near or below the poverty line.
Last year, to add insult to injury, the government announced the biggest tax hike in history, bigger than the Mulroney GST, the finance minister's 73% hike in CPP premiums.
Putting this again in understandable terms, the disposable income of the average Canadian family has dropped by $3,000 as a result of the taxing policies of the Liberal administration. There has been economic growth in the country since 1993 but governments have consumed the lion's share of it. The average Canadian family now spends more on taxes than on food, shelter and clothing.
I do not have time but other members will get into this point. Reform has a concrete plan for tax relief. We want to make tax relief a real priority by committing 50% of future surpluses to genuine broad based relief. We urge the government to adopt these tax relief measures. We list nine particular measures in “Securing our Future”. These measures plus the indexing of personal income tax add up to about $20 billion a year in tax relief by the time all are delivered over a period of five years.
The Reform target would be to provide $2,000 of tax relief to the average family of four by the year 2000 and to lift 1.2 million taxpayers off federal tax rolls altogether.
We will urge the government to proceed immediately with tax relief measures that stimulate job creation. One of those of course is to make a 30% reduction in EI premiums paid by employers, to stop using the EI surplus funds to offset general deficits, and to convert the EI into a genuine job loss insurance program. This proposal is based on the simple proposition, which seems self-evident to everyone but the government, that high taxes kill jobs and that lower taxes create jobs. It is time for a national job strategy built on that principle.
When it comes to financial reforms, timing is everything. We say now is the time for debt reduction. Now is the time for tax relief. Now is not the time for increased federal spending.
The official opposition, therefore, does not support the government's plan to make increased spending the top priority by committing 50% of any surplus to increased spending. We do not support the finance minister's plan to increase program spending from $103 billion to $113 billion over the next three years.
We advocate holding the line on program spending for three years at $103 billion, saving and spending more wisely during that period until we get our financial house in order, not wasting on mismanagement such as the helicopter decision, such as numerous decisions the government has made, and reducing spending in some areas in order to hold the line.
That does not mean you cannot increase spending in some areas like health care or research but if you do, you have have to reduce something else just like the way most of the families in this country have to live.
After the year 2000, we say to hold spending at 10.5% of GDP. After 2000 spending can be allowed to increase but not faster than the economy is growing.
To reiterate, now 1998 to the year 2000 is not the time for increased federal spending. Now is the time for spending what we have more wisely, for saving, for paying down debts and reducing taxes.
In conclusion I want to say two further things. The first one is to the public. This is a watershed budget year. Very often budgets are simply a one year extension of whatever was done the previous year with a whole lot of PR hype around it to make it look like something more is being done. That is not the case this year. We are actually at the point where the federal budget should be balanced and therefore some crucial decisions with respect to future direction have to be made.
I appeal to the public to inform themselves on this issue, to look at the finance minister's budget in detail, to look at Reform's plan “Securing Your Future” and to communicate their advice and their position to elected representatives. If they share our conviction that debt reduction and tax relief should be the highest priorities, please let this Liberal government know in no uncertain terms.
I also say to the House that I feel we should all be conscious of a sense of urgency on this matter. It has taken 15 years to balance this federal budget. 1983 was the first year the polls showed sufficient public support to implement a vigorous budget balancing policy in this country. The election of the Tory government in 1984 was largely based on that appeal. People balked, they were tired of Liberal overspending and they thought the thing to do was to elect a Conservative administration.
We know what happened. Conservatives were elected in 1984 and re-elected in 1988 but the debt continued to grow, the taxes continued to go up and the deficits got worse.
It was in 1993 that a block of members were elected to this House who made deficit reduction their number one priority. Under constant prodding from Reform and from others throughout the country, the Liberal government finally has got the deficit under control and will have the budget balanced by 1998.
My point is that it took 15 years to implement a self-evident policy for which there was public support. It still took 15 years to do it. My point is that we cannot afford now to take another 15 years to get debt and taxes under control.
The leadership of this government on debt reduction and tax relief is weak and indecisive. It needs to be prodded like it has never been prodded before. This is why the official opposition urges support of this supply motion 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.