House of Commons Hansard #53 of the 36th Parliament, 1st Session. (The original version is on Parliament's site.) The word of the day was spending.


Questions On The Order PaperRoutine Proceedings

February 5th, 1998 / 10:25 a.m.

Peterborough Ontario


Peter Adams LiberalParliamentary Secretary to Leader of the Government in the House of Commons

Mr. Speaker, I suggest that all questions be allowed to stand.

Questions On The Order PaperRoutine Proceedings

10:25 a.m.

The Deputy Speaker

Shall all the questions stand?

Questions On The Order PaperRoutine Proceedings

10:25 a.m.

Some hon. members


Questions On The Order PaperRoutine Proceedings

10:30 a.m.


Paul Szabo Liberal Mississauga South, ON

I rise on a point of order, Mr. Speaker. I appreciate that you have risen with regard to the issue on petitions. I believe there are very good reasons for the House rules with regard to whether a member concurs.

Certainly all members of Parliament represent all constituents and there may be cases where members of Parliament do not for good reason support but do not get an opportunity to make that case.

I would therefore ask the House if it would not only remind members of that rule but possibly provide members with the substantive reasons for the rule within this place.

Questions On The Order PaperRoutine Proceedings

10:30 a.m.


Dick Harris Reform Prince George—Bulkley Valley, BC

Mr. Speaker, the hon. member raises a point about presenting petitions on behalf of our constituents.

The point is that we do represent our constituents by the presenting of petitions, whether or not we concur with them. There are many that I presented in this House that I do not concur with and I have managed to slip that in after I have presented the petition. In the same way there are many that I personally support.

I do not agree with the member's theory that we should not be permitted to give our opinion on a petition. The fact is we present them on behalf of our constituents.

Questions On The Order PaperRoutine Proceedings

10:30 a.m.

The Deputy Speaker

The point is that the rule is there. I am as the officer of the House charged with the responsibility of enforcing those rules and asking members to observe the rules.

Questions On The Order PaperRoutine Proceedings

10:30 a.m.

An hon. member

They are not rules.

Questions On The Order PaperRoutine Proceedings

10:30 a.m.

The Deputy Speaker

An hon. member says they are not rules. They are certainly an established practice and have the force of a rule in the House. Not every rule is written as such.

I urge hon. members to comply with that position. If there is to be a change in it, there is a procedure for doing that. Hon. members know they can raise the matter at the procedure and House affairs committee. I am sure that if the committee presents a report the House will consider it.

SupplyGovernment Orders

10:30 a.m.


Preston Manning Reform Calgary Southwest, AB


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,

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.

SupplyGovernment Orders

10:45 a.m.


Hec Clouthier Liberal Renfrew—Nipissing—Pembroke, ON

Mr. Speaker, I was indeed amazed when the Leader of the Official Opposition mentioned rowing.

Far be it from me to indicate to hon. members present that I am on the Henley rowing team but I do remember something that F. Scott Fitzgerald wrote in the last lines of The Great Gatsby , not to be mistaken for the great Myron or anything. In The Great Gatsby he wrote “rowing against the tide but borne back ceaselessly into the past”.

The difficulty I have with the rowing analogy is that on occasion hon. members opposite want to return to the past. It is a rather draconian way of looking at how our country is currently being operated.

I also noted that he used the word weak in varying forms. His etymological skills impress me. I wonder if the hon. member's researchers spent a week researching the meaning of the word weak. I remember him talking about computers and note that the hon. party opposite can be contacted at www.something or other. I wonder if that stands for weak, weaker and weakest.

I am reminded of something Shakespeare's MacBeth said: “Out, out brief candle; life is but a walking weak shadow, a poor player that struts and frets his hour upon the stage and it is heard by nothing. It is a tale told by an idiot signifying nothing”. That is not my terminology. The hon. member opposite does strut. He certainly does fret. I do not agree with MacBeth. The hon. member is no idiot. He is a very clever man. That is why it really surprises me when he speaks about the taxes of the current Liberal government.

The hon. member said that a single mother who earns $15,000 and has one child would pay $1,364 in income tax. The real facts are that over four million—four; one, two, three, four—four million people in this country pay no taxes.

The member talked about leadership. A leader is a custodian of the nation's ideals, of its cherished beliefs and permanent hopes which make a nation out of a mere aggregate of individuals. I ask the hon. member and his party how in heaven's name we will be able to coalesce in this country when he perhaps unknowingly wants to indulge in proposing such divisive tax measures.

I could go on and on but I know—

SupplyGovernment Orders

10:50 a.m.

An hon. member

You have, you have.

SupplyGovernment Orders

10:50 a.m.

An hon. member

More, more.

SupplyGovernment Orders

10:50 a.m.


Hec Clouthier Liberal Renfrew—Nipissing—Pembroke, ON

It is so great to get the accolades from the members opposite.

I would like the hon. Leader of the Opposition to indicate how he believes the Liberal Party is being injurious to this country when he knows full well that there was a $42 billion annual deficit when we inherited the leadership of this country. Now the deficit has not only been eradicated but it is quite possible that we will have a surplus. At one time or another the members opposite quite obviously voted for another political party other than their current party which must have run up that bill in an extraneous fashion.

Would the hon. member opposite care to indulge the estimable group on this side of the House with what he believes could lead us to a brighter future?

SupplyGovernment Orders

10:50 a.m.


Preston Manning Reform Calgary Southwest, AB

Mr. Speaker, we were impressed by this member's commentary during his intervention, in particular the demonstration of his capacity to count to four and also his recitation of the one and only Shakespeare quotation he knows. We appreciated that contribution. Please, not more, not more.

There were really two questions in his intervention. He wants us to give the federal government credit for this balancing of the budget. We have already argued that we have pressed harder than any others in the House for the achievement of that objective so of course we are pleased when we get to that point.

However there is something the government must recognize and apparently the member missed my entire point. There are four things wrong. That is a number he should be able to grasp. There are four things wrong with the federal fiscal house. One is the deficit, another is chronic overspending, another is the high level of debt and another is the high level of taxation.

Any member in this House who is under the illusion that the fiscal house of the federal government can be fixed by fixing only one of those flat tires has an awful lot to learn. What we are endeavouring to do is get the member beyond this point to the point where he recognizes that increased spending by the federal government is the wrong course. A new attention to debt and tax relief has to be given. That was the whole thrust of my talk.

The member's allegation is that somehow what Reform is proposing is divisive to the country, or in other words tax relief is divisive but spending brings us together. If high spending brought us together this ought to be the most united country in the world. What Reform's tax relief measures do is something that is beneficial to every part of the country.

My time did not permit me to translate our $20 billion of tax relief into its regional impacts, but let me give the member those regional impacts. If the government implemented that package of $20 billion in tax relief measures per year, the nine measures listed in our program, this is what that would deliver per year to the regions of Canada.

Atlantic Canada would get $1.4 billion per year, more than what the government has ever paid in regional development grants. This is given to the many rather than to the few and you do not have to be a friend of the government to get it. Quebec would get $4.5 billion a year in tax relief. To Ontario, $7.5 billion a year. To Manitoba and Saskatchewan, $1.4 billion in tax relief. To Alberta, $1.9 billion. To British Columbia, $2.5 billion.

I suggest that if we gave that kind of tax relief to every part of the country, it would do more to stimulate our economy and bind us together than the divisive and patronage-riddled spending of the federal government.

SupplyGovernment Orders

10:55 a.m.


Nelson Riis NDP Kamloops, BC

Mr. Speaker, I also have a question for the Leader of the Official Opposition. My preamble will be somewhat shorter than the previous one.

I would like to tell the leader of the Reform Party that the quote was not from Shakespeare, it was in fact from F. Scott Fitzgerald.

The arguments that the hon. member makes are interesting. I would like to ask him a question about the GST. One of the proposals people have been suggesting is that one way to stimulate local economies, neighbourhood economies right down to the suburbs, would be to phase out the GST. With the elimination of the deficit, which was one of the arguments for the introduction of the GST, what does the Leader of the Official Opposition think about the proposal that now is the time to begin phasing down the GST?

SupplyGovernment Orders

10:55 a.m.


Preston Manning Reform Calgary Southwest, AB

Mr. Speaker, the short answer to the member's question is that we favour reducing the GST rate by 1% which saves taxpayers about $3 billion. That is one of the tax relief measures contained in this menu of tax relief measures.

Our longer term proposal for the GST is to flatten and simplify the income tax system and integrate the GST into it thereby eliminating it all together. We favour this as an intermediate measure because the other reform is a huge and complicated one, the 1% reduction in the GST.

There is another point I would make to the members of the NDP, and I make this sincerely. There is an awful lot of disagreement between Reformers and the NDP on a lot of things but I plead with the NDP to look at this issue of debt reduction and tax relief from a social standpoint. This is an area in which the NDP professes to have deep concerns and values.

We argue that high debt is socially irresponsible. It is the interest on that debt that is eroding all the programs the NDP hold most dear. We argue that these are punitive tax measures, particularly the ones that hit the lower income people. We can argue what is the best way to help those people, but surely leaving more money in their pockets has to be the socially responsible, not just the fiscally responsible, thing to do.

I appreciate the member's question. I would appeal to the members of the NDP to support these measures, perhaps for somewhat different reasons than ourselves, but to take into account the social as well as the fiscal implications of what we are proposing.

SupplyGovernment Orders

11 a.m.

Willowdale Ontario


Jim Peterson LiberalSecretary of State (International Financial Institutions)

Mr. Speaker, judging from today's Reform motion the official opposition has clearly not seen the movie Titanic . It should. Then it would realize what perilous policy can ensue; the disaster that can occur when speed is put ahead of cautious progress; the tragedy that can follow when it is decided that lifeboats are not a necessity.

That is very much what the motion endorses, a titanic rejection of responsible and balanced decision making at the national level.

The motion condemns the government for its pledge to divide any surplus which we may have in a coming budget, half to investment in economic and social measures and half to tax reduction and reducing the debt.

Reformers do not want us to make these investments in Canadians and in their social and economic future. Full speed ahead, they demand, on tax cuts and debt reduction. Scrap the lifeboats. They reject the investments we have made in education, in health care, in innovation and in combating child poverty.

That is the party which wants us to cut $1 billion from government programs to help Canada's aboriginal peoples. It would do away with equalization payments to help those most in need.

Let us look at our record. If it has worked, what is the major impetus to take us away from policies that have succeeded? When we took office just four short years ago the deficit was $42 billion. We are one year ahead of all the programs put forward by the Reform Party. We will be in balance next year. We have experienced going from a moribund economy that was on the verge of international intervention to an economy with the highest growth rate, with the highest growth rate in jobs of all G-7 countries.

Jobs are of critical importance to Canadians today and for the future. Since we took office the unemployment rate has fallen from 11.4% to 8.6%. That is not good enough, but we have created 937,000 private sector, full time jobs during this period. It is a very important trend which we must encourage and set for the future, and I will speak about it a little later.

During this period of time the finance minister, the government and the prime minister have adopted a policy of sound fiscal management. Part of that management for the future is our 50:50 balance, as we have stated.

We will continue to adhere to the paths which have gained us fiscal success in the past and our two year fiscal plans. We will continue to adopt very prudent economic assumptions in budget making. We will have a contingency reserve to look after unforeseen circumstances. We will continue with our economic forecasting. To the extent that we do not have to use the contingency reserve, it will naturally be used to reduce the debt.

We also must have the flexibility to respond to unforeseen circumstances which come about. I mention in this regard the Asian crisis. As the state of the union address indicated, an economy affected anywhere can affect economies everywhere. We have seen how the Asian influence has affected not just the economies of the far east but those of the west.

Had we not taken the measures that we did to put our fiscal and monetary house in order, our dollar would have been far more affected than it was. Of this I am sure. As it is, the Canadian dollar has suffered less because of the Asian crisis than any other currency in the world except for the American dollar.

I am also proud that Canada has assumed its role with the International Monetary Fund in helping to provide funds to stabilize those economies and restore them to a path of stability in the far east. Canada is a very open economy which depends on the international flow of goods, capital, trade and personnel.

In this regard I am very proud the government announced its support for the Toronto Centre at York University school of business. It will be bringing in financial institution regulators from around the world to provide courses and case studies so that we can combat one of the major reasons the Asian crisis took place: insufficient regulatory authority and control over financial institutions.

I am proud to say that the Toronto Centre is chaired by Mr. Ced Ritchie, an individual who has had a very distinguished career in banking in Canada and internationally and brings a great deal of leadership to it. Its executive director is another person of great experience in the financial sector, Paul Cantor.

They are very tangible contributions. They may be small in terms of dollars, but the impact they can have on the world economic situation and that of Canada is critical.

Let us look at our program. It is important to invest 50% of future surpluses in economic and social programs, and 50% in debt reduction and in tax reductions. Even though we will see a balanced budget in the next fiscal year, Canada's debt right now is about $583 billion. As of October it was about 73.1% of GDP and going down. This is a very high debt burden for all Canadians to bear. This is why we are committed to reducing that debt on a steady and ongoing basis into the future.

What has happened because of our economic performance? Due in no small measure to the leadership by government, to the end of October we were able to pay down $11 billion of Canada's national debt.

In terms of tax cuts, which I know interest hon. members opposite very much, in spite of the difficult economic circumstances we have faced we have made tax cuts and it has been part of our recovery.

Where have we cut those taxes? To show our priorities we cut them for students and their families to make education more affordable. We cut taxes for Canadians with disabilities. We cut taxes for children in poverty, particularly poor families with a child tax benefit of $850 million, with more, a second tranche, to come in the future.

I am proud that we have done this in concert with the provinces, both of us targeting our unique resources to help working families at the bottom end of the rung. This is the way it should be in Canada. This is the path I encourage all members to support, governments at all levels working through common goals to help Canadians who need it the most.

At the same time we cut the taxes borne by small businesses which are creating new jobs under our new hires program. We eliminated all payroll taxes for small businesses that took on new employees. That was targeted tax relief for a specific purpose.

We cut by $1.4 billion the payroll taxes paid by all corporations, reducing the EI contributions from $2.90 to $2.70. When we took office it was at $3.07 going to $3.30. In spite of difficult economic times we cut taxes in this area.

There is one area in which I think I am proudest as a Liberal to say we have cut taxes. We recognize that governments are being forced to cut back their spending. We have cut back spending. Program spending has been cut by us by $15 billion. We realized that we had to give the private sector more of a means to fill some of the voids. This is why we enhanced substantially in two budgets the tax benefits available to those who contribute to charitable and voluntary organizations. I am pleased to say they have responded by increased efforts at fund raising and renewed efforts to help Canadians. This is the way it should be.

In terms of our spending let me indicate our priorities during difficult fiscal times. What have we done? We have increased spending on health care in terms of the Red Cross and in terms of aid to those who suffered AIDS through the blood program. A program is forthcoming for hepatitis C victims. We also raised the cash floor of the CHST by $1.5 billion in transfers to the provinces for the medical attention of Canadians throughout the country.

Another area where we have shown a sense of priority on behalf of Canadians is aboriginals. The condition of Canada's first peoples has a claim on the conscience of every Canadian. This is why the Minister of Indian Affairs and Northern Development recently announced a $350 million increase to deal with some of the problems of the past that have been incurred and suffered by our first peoples.

A third area where we have shown our sense of priorities for the future of the country is education. In 1874 in the British House of Commons Benjamin Disraeli said “Upon the education of the people of this country the fate of this country depends”. Those words cannot be more apposite today in our country. We realize that to have the type of future economically we need Canadians who are among the best trained and best educated in the world.

In spite of the need to get rid of our deficit we have taken concrete measures. We have doubled the amount that one may contribute to a registered educational savings plan to help make education more accessible. We have extended the relief period for interest on Canada student loans. We have introduced tax deductions for the ancillary fees that students must pay to go to an institution of higher learning. We have expanded the educational tax credit to make it easier for people to go back to school.

In May 1997 we established the Canadian Foundation for Innovation. The federal government's contribution was $800 million. Together with support from the private sector we will lever it up to at least $2 billion. These funds will be used to invest in new research and development in our universities, in our colleges and in our hospitals.

We have taken another measure in the last two budgets. I cite what we have done with charitable giving to our educational institutions.

Lastly, I was very proud that in the fall the prime minister announced that the government will establish and endow the millennium scholarship fund. This fund will assist thousands upon thousands of deserving students who might otherwise have been deterred or prevented from obtaining post-secondary education.

As our finance minister recently indicated, this is why the coming budget, and I venture to say succeeding budgets, will further address the issues of access to and excellence in education, recognizing the need to ensure that Canadians are among the best educated of all people in the world, where we truly recognize, as did Disraeli, that our future depends on it.

We have taken a balanced approach, making investments today through social and economic programs that will strengthen our economy, strengthen our social fabric and strengthen in the days and years to come the ability of Canadians to compete in our global economy.

Our balanced program of investment in the future, of reducing taxes and of reducing our debt on a continuous and ongoing basis was something put to the Canadian people before the election last spring.

The people of Canada chose a Liberal government that refuses to relegate Canadians who are in need or at risk to third class steerage on the Titanic . Canadians want to continue a course that offers safe travelling and secure arrival and a prosperous future for all Canadians, not just the affluent or the advantaged. This is the Liberal approach. This is our balanced approach for the future.

SupplyGovernment Orders

11:15 a.m.


Preston Manning Reform Calgary Southwest, AB

Mr. Speaker, I compliment the minister on his speech. I want to make a couple of comments and then ask him a question.

First, I think he misuses the Titanic analogy. It is the government that is on the Titanic and the iceberg out there is the national debt. If you hit that, you are going to tear a hole in the government, you are going to tear a hole in every social program funded by this country.

Second, I was amused by his quoting Disraeli. He of course is free to quote whoever he likes. The minister realizes, of course, that Disraeli spent his entire life attacking and trying to destroy the British Liberal party under William Gladstone.

The minister also implied that Reform does not support federal spending. I encourage him to read and study what was actually said. We are prepared to support a spending program of $103 billion in 1998. That is exactly the same spending program in aggregate terms that the government is proposing. What we are saying is we should freeze that for three years and give greater attention to this debt and tax problem which we say is looming larger.

The third comment before I get to my question is the minister talked about flexibility and the desire to protect the Canadian dollar against instability such as is registered in the Asian financial flu. Surely the minister knows from his own background that the speculators that take a run at the Canadian dollar, or anybody else, look at your fundamentals. They take a run at you when your fundamentals are not right. It is true one of the fundamentals they look at is whether your budget is balanced, but the other fundamental they look at is your high debt levels.

Surely the minister recognizes that we are carrying a lot of our debt on short term money. A one and a half per cent increase in interest rates would add about $8 billion to interest charges in two years and blow the minister's projections for a balanced budget out the window. Getting the debt down is one of the best protections you have against Asian financial flu.

That brings me to my question. I know the minister will like this because he has sometimes indicated in question period where his heart is. He has admitted to the House that our tax levels are excessively high. He must know that high taxes kill jobs and low taxes help create jobs.

He knows our tax rates are higher than the US and that our unemployment rate is four points higher than the US. He knows that tinkering with taxes is not going to provide the tax relief required to stimulate real job creation.

Why in the name of jobs, why in the name of common sense, does the minister not become a champion of bold, vigorous, major, substantive tax relief within the Liberal cabinet?

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11:20 a.m.


Jim Peterson Liberal Willowdale, ON

Mr. Speaker, our government, in its very first budget in 1994, saw the iceberg. We steered the ship of state around it, and this is why—

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11:20 a.m.


Preston Manning Reform Calgary Southwest, AB

The debt is underneath.

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11:20 a.m.


Jim Peterson Liberal Willowdale, ON

I think the hon. Leader of the Opposition would be pleased to hear more. We saw it. We avoided it. We were able, ahead of the schedule set for us by the Reform Party, to get our deficit under control.

I will take some credit on behalf of all government members in this House, but the Canadians who sacrificed to make this possible are the ones who deserve the credit as well. We avoided that iceberg and we have done it in such a way that we were able to almost inoculate ourselves perfectly against the Asian flu.

The hon. member talked about how the international markets have reacted to Canada. They have reacted better to the Canadian dollar than to any other currency except the U.S. dollar, which has always been a safe haven in difficult times. Ours has fallen less than any other currency against the American dollar. This is a sign of international confidence in Canada, but he talks about the debt we are committed to continuing to get it down.

The hon. member talks about tax levels. Yes, we are committed to reducing taxes and we have already shown tangible examples of where we have reduced taxes.

Canada today lies in the middle of the G-7 countries in terms of the total tax burden borne by Canadians. Higher than Canada are France, Germany and Italy, and lower than Canada are Japan, the U.S. and the United Kingdom. We have made one of the three prongs of our economic future that we will continue to reduce taxes. But we are not going to reduce taxes at the expense of people who are disadvantaged in our society, people who need health care, people who need learning, people who need education, families living in poverty, the disabled, people from the regions who deserve help. We are not going to do it at the expense of being able to reduce, on a reasonable basis, our debt burden. We are committed to that. We are doing it in a balanced fashion. That is the difference between us and the Reform Party. We are going to continue the paths which have proved so beneficial to Canadians over the past four years.

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11:20 a.m.


Dick Proctor NDP Palliser, SK

Mr. Speaker, I listened with interest to the minister's speech earlier and I want to come back to that.

The minister talked about cutting taxes to persons with disabilities, but he gave us no data on that. What would the tax reduction be for an average individual who is disabled? We know, for example, in the recent CPP changes, the pensions were slashed for folks with disabilities. What I would like to ascertain from the minister is what was the average reduction in taxes for persons with disabilities.

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11:25 a.m.


Jim Peterson Liberal Willowdale, ON

Mr. Speaker, prior to the last election the Liberal Party established a task force of Liberal members of Parliament, headed by our current solicitor general. The task force toured the country and came up with a very thoughtful and caring report which talked about the real costs of disabilities to many Canadians.

The general implication of the recommendation was that we should try to recognize the added costs that persons with disabilities must bear in order to be full and functioning members of our society and economy.

We undertook to start that process through enhanced credits for home care, for medicine, for new apparatus which they might need and those kinds of things, which would recognize the added burdens they have which do not give them a level playing field when it comes to being members of our society.

If hon. members opposite have suggestions as to how we might further enhance our support for the inclusiveness in our society of Canadians with disabilities, we would welcome their recommendations and suggestions.

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11:25 a.m.


Odina Desrochers Bloc Lotbinière, QC

Mr. Speaker, as a member of the Bloc Quebecois, I am pleased today to take part in this opposition day devoted to a debate proposed by my Reform Party colleagues.

First, I must say that my political party approves the principle behind the Reform statement to the effect that the government is “imperiling the economic and social security of Canadians with their reckless commitment to dramatically increase spending” at a time when “Canada has the highest personal income taxes in the G-7”. I would add that the Minister of Finance's priorities are not fair to the average taxpayer.

We think it is clear that the federal government must stop spending and focus on running the country better. However, the Bloc Quebecois' ideas for attaining this goal of reducing spending are a little different from those proposed by the Reform Party.

I will begin by reminding members that last October's cross-country tour of major Canadian cities, and the comments made by organizations and individuals in the course of approximately 50 meetings of the Standing Committee on Finance show that the country as a whole wants the Minister of Finance to change his political tune.

The Bloc Quebecois is clear about this: the Liberal government must call a halt to the cuts it has been making to provincial transfer payments since 1993 and, in particular, forget about the $30 billion it was planning to cut over the next few years.

The Minister of Finance must give back to the provinces the amounts he has cut and must certainly not launch costly new programs with national standards that would interfere in areas of provincial jurisdiction. In Quebec and throughout the rest of Canada, the public continues to condemn the Liberal administration.

The federal government is largely responsible for the deterioration in Quebec's health services and for student debt, for our young people being crushed under the weight of the tax burden imposed by the federal government.

Last December, Quebec's premier, Lucien Bouchard, made an interesting proposal to the Minister of Finance. This proposal reflected the wishes of all Quebeckers. The wonderful surpluses soon to be announced by the Minister of Finance should be used as follows: 25% to make up for cuts to transfer payments and 75% to ease some of the load on taxpayers. That is a realistic suggestion.

In this connection, the Minister of Finance ought to abolish the employment tax, or in other words reduce employment insurance contributions by employers and workers, and labour and management are unanimous on this. Even the chambers of commerce throughout the country are insisting that the Minister of Finance decrease contributions.

So what is the Minister of Finance waiting for before taking concrete action in response to these demands? He cannot take action, understandably, because he continues to dip into the employment insurance fund in order to reduce his deficit. What the Minister of Finance will be announcing to us shortly is, in actual fact, nothing more than a simple mathematical operation and the pseudo-surpluses will in actual fact be nothing more than the amounts he has taken out of the employment insurance fund.

The rules as they stand still allow the Minister of Finance to dip into these funds, which were contributed solely by businesses and workers, and which, let us remember, now add up to about $12 billion.

It must be kept in mind too that the auditor general also strongly recommends an annual report on all employment insurance activities, so that the Canadian people may know how this program is really being administered. To this too the Minister of Finance turns a deaf ear. He continues to obstinately pursue the policies he has always favoured.

Let me now tell you about another solution which could help alleviate the taxpayers' fiscal burden, namely having better control over the numerous service charges created in recent years by various federal departments and agencies. The figures are alarming. These federal agencies implemented service charges when the Minister of Finance authorized them to do so in 1995. The minister stated at that time that it was appropriate to charge such new fees in order to finance part of the programs and services provided by the federal government.

Who is paying for this new approach? The taxpayer. Let me give you some examples of increased service charges by federal agencies: a head tax of $975 for each new immigrant coming to Canada; administration fees for a passport raised from $35 to $60.

Another measure directly affects families and outdoor enthusiasts: in 1995-96, $35 million in entrance fees was collected from users of our lovely national campgrounds, and these fees almost doubled in 1996-97, totalling over $61 million. Today, access to national camping facilities costs more than to private ones. How can these hidden taxes imposed with the finance minister's blessing be justified when the people of Quebec and Canada are already taxed to death?

The pre-budget consultations clearly showed, once again, that there are two economic visions in the country. The federal government wants to centralize everything, establish national standards and continue to infringe on the exclusive rights of the provinces. As for Quebec, it leads a daily fight to protect its autonomy against this centralizing government. It takes all kinds of actions to ensure that the federal government respects provincial jurisdiction.

The Bloc Quebecois is simply asking the Minister of Finance to give the provinces their money back. The minister must correct the social injustice he created for those directly affected by his financial decisions, namely the unemployed, students and low income people.

Where do the finance minister's real interests lie? In the coming months, the Bloc Quebecois will speak as often as necessary, here in this House and everywhere in Quebec, to get the point across to the Liberal government. Between now and budget day, we will insist that the Minister of Finance finally see the light.

We stand up for Quebec, whose federal transfer payments were drastically cut these past few years. Also, the Minister of Finance has to stop dipping into employment insurance surpluses and ask his colleague, the Minister of Human Resources Development, to amend the Employment Insurance Act to make it more accessible and compassionate for the workers.

To conclude, we ask that future surpluses be used by the federal government to do justice to the province. Moreover, the government must implement job creation initiatives. Finally, it must be truly responsive to the needs of our people.

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11:35 a.m.


Steve Mahoney Liberal Mississauga West, ON

Mr. Speaker, I listened with some interest and bewilderment to some of the comments actually coming from the hon. member opposite representing the Bloc.

What we heard was a speech on what we should do better in running the finances of Canada. I made some notes. I heard him suggest that we should reduce the employment insurance premiums, increase transfer payments to the provinces, cut the fees currently charged to new immigrants, cut the increased cost of passports, reduce user fees in our parks and we should redistribute money to students, seniors and people along those lines. This is interesting advice coming from a member of party that is dedicated to destroying the country.

I wonder why we would be given such advice when in fact his party's stated goal is open. There is no question that it is honest about its goal in this country. I find it rather curious.

I heard the member talk in terms of two visions. He said one was of a central government in this country based here in Ottawa with more power and more responsibility in the hands of the national government. The other vision that he talked about was one of decentralization, one that gave more power to the provinces. However, the member must admit that there clearly is in this place a third vision that is propagated by his party which is to secede from the federation known as Canada. I find it somewhat at opposite ends of the particular issue.

I have two questions for the member. If indeed he believes that we should increase transfer payments to the provincial government, and most notably to the province that he represents, the province of Quebec, why would he vote against Bill C-28 yesterday in this place which clearly did exactly that and replaced the transfer payment level back to $12.5 billion? Is this really just a game or is the party opposite giving us legitimate advice that all Canadians would benefit from? Or is it strictly looking at it in a myopic and self-centred fashion for the province of Quebec?