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.

Topics

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11:35 a.m.

Bloc

Odina Desrochers Bloc Lotbinière, QC

Mr. Speaker, I need not remind my hon. colleague opposite that the top priority for the Bloc Quebecois and its 44 members sitting in this House is to get Quebec out of the federal system.

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11:35 a.m.

Liberal

Guy St-Julien Liberal Abitibi, QC

Immediately.

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11:35 a.m.

Bloc

Odina Desrochers Bloc Lotbinière, QC

But in the meantime, we want justice. I did not ask that transfer payments be increased, just that the government give us what is owed to us, the amount of the cuts made since 1993. That is all we are asking from the other side.

We in the Bloc Quebecois advocate sovereignty for Quebec. But in the meantime, until the Quebec people chooses sovereignty, count on us to defend in this federal Parliament the interests of Quebec, which are tied to its exclusive jurisdictions: health and education.

The reason we are also going to intervene in coming months in this House is to put the brakes on the numerous standards the government across the way wants to set in its attempts to interfere in exclusively provincial jurisdictions.

I repeat: the Bloc Quebecois is here to defend the interests of Quebec. The Bloc Quebecois is here in this House to promote the sovereignty of Quebec, so be prepared in coming months to see us keeping a vigilant eye over the way you are going to administer our money. What we in Quebec want above all is to get what is due to us.

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11:40 a.m.

Winnipeg North—St. Paul Manitoba

Liberal

Rey D. Pagtakhan LiberalParliamentary Secretary to Prime Minister

Mr. Speaker, I wish to comment on the member's remark that he would like justice. I must ask if there is justice if his party continues to wish to separate from Canada when the aboriginal people in his province would like to stay within Canada. Is there justice when the majority of Quebeckers would like to stay within Canada while his party continues to insist that it would like to separate?

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11:40 a.m.

Bloc

Odina Desrochers Bloc Lotbinière, QC

Mr. Speaker, what all Quebeckers, whether aboriginal, anglophone or francophone, are demanding is to be the ones who determine the future of Quebec.

I am very pleased to see that the hon. member across the way has so many concerns, but I would like to find out his opinion on his party's offensive relating to the reference to the supreme court. I would like to know if he will be equally objective when it becomes obvious that his federal allies in Quebec are now denouncing the way the Liberal Party of Canada is handling things, denouncing the fact that the future of Quebec has to go through federal courts, which do the thinking for the federal government.

So, before he gives us any lectures about the aboriginal people, I would like to ask his opinion of this objectivity, this great democratic spirit which his government seems to be trying to show with this reference to the supreme court.

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11:40 a.m.

NDP

Alexa McDonough NDP Halifax, NS

Mr. Speaker, I am very pleased to have the opportunity to participate in the debate this morning. This debate gives us a chance to talk about priorities with respect to the upcoming budget, a subject very much on the minds of Canadians across the country. We are debating a resolution introduced by the official opposition to reveal what its budget priorities would be in respect to the upcoming budget. The opposition tries to build its case for the further erosion of government spending in this country.

Reformers have been quite specific about what they see as the formula. It involves a 50% tax reduction. They argue that 50% of any dividend from the reductions in our deficit should go toward debt reduction.

I listened carefully to the Leader of the Opposition as he spoke in this House concerning this resolution. I heard him speak not a single word about real investment in this country, in its infrastructure or in the well-being of its citizens.

Nothing was said to acknowledge the damage and destruction that has befallen the health care system over the past three years because of the misplaced priorities of the Liberal government. Nothing was said to acknowledge that we presently have a severe access problem in Canada with respect to young people getting the education they need. Nothing was said about the crumbling infrastructure. Nothing was said to acknowledge that we as a modern nation are doing very little and less than every other OECD country with respect to research and development in Canada. This is very serious in the area of medical research, for example.

There is nothing to acknowledge that their propositions and proposals would further erode any commitment to community based economic development and any commitment to address regional inequalities in this country. Much less there is no indication whatsoever that they recognize the urgency of doing something to introduce a national child care program, a national pharmacare program and some significant infrastructure to provide home care for the people who are suffering as a result of health care cuts.

People are suffering because the population is aging and less adequate health care is available to them. There is a big burden being heaped on to families and on to communities that do not have the resources to provide that home care which is desperately needed.

Reform advocates a cut in direct spending by another $8.9 billion. Let us be clear that the bulk of these cuts would hit unemployed workers, would hit regional development, would hit equalization payments to the poorer provinces in this country and would further erode any national commitment to Canadian culture.

The Reform Party does not seem content with the federal Liberal cuts in government spending. Let us be clear that those federal Liberal cuts have brought spending in Canada to a level not seen since 1949-50. I remember when the federal finance minister introduced the budget. He congratulated himself on reducing spending to 12% of the GDP, a level not seen in this country for 45 years.

Does the Reform leader recognize that there has been some damage done in the process? Does the Reform Party leader recognize that yes, Canadians want to see responsible fiscal management but in the main, Canadians feel that the Liberal government has already gone too far and we have to do something about the damage and the devastation that has been wreaked by this recklessness. What do we see instead? We see the Reform Party arguing that we should go even further.

It occurred to me as I listened this morning first to the Reform Party leader and then the spokesman for the Liberal government that what we are hearing once again are Liberals and Reformers talking about running Canada the way a business is run. It may seem like not a bad analogy to talk about being responsible and to talk about being able to balance budgets and so on.

However, they do not seem to want to run Canada's business in the way someone would run a business if they actually expected that business to succeed, if they actually intended that business to grow and prosper. They want to run Canada like it is the target of a hostile takeover, not a flourishing business; sell off the assets, lay off the employees, take the money and run, move on.

Reform and the Liberals treat Canada like a bad investment. “Pull your money out,” they say, “the stock is worthless”. Where will Canada be in 20 years if the finance minister and the federal government keep following that Reform vision for Canada?

Where will we be if Korea has invested in the education of its children and the skills of its workers while young Canadians are marching on the streets? Where will Canada be if the U.S. and Chile invest in a modern transportation network while we allow ours to crumble further?

What will happen to the competitive advantage medicare gives us in labour costs for example, not to mention our national pride and attending to the health of the people of our nation, if we allow it to shrivel further and die on the vine?

For the past five years this country has been caught in the confines of the narrow vision and the shrivelled horizon of the right wing debate. Not content with the growing inequalities its prescriptions having engendered, Reform wants to further dismantle the ability of government to act in the public interest and turn over still more of our economic life to the whims of the free market.

When I was listening to the Reform leader's advocacies in this House this morning, I was in my office meeting with a group of Canadians who are desperately concerned about what we are doing to the lives of children and families in this country. They are very concerned about what it does both to the lives of individual children and the soul of a nation for the government to be contributing through its calculated deliberate adopted policies to the growth of poverty among our children. They are concerned about what it does to the lives of people and to the future of this nation to be fueling those policies advocated by Reform and adopted by the Liberals, to be increasing day in and day out the inequality, the gap between the super rich and everyone else in this country.

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11:50 a.m.

An hon. member

How about giving them a real job?

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11:50 a.m.

NDP

Alexa McDonough NDP Halifax, NS

Nothing in any of the proposals put forward this morning deal with that fundamental challenge. We hear one of the Reform members say, “How about giving people a real job?” That is a good start. That might be one of the few things that has ever come from the Reform benches with which I agree. Let us look at the question of what it means to be concerned about making sure that people have jobs.

I do not hear the Reform Party saying this, but it is absolutely true that until last month individual Canadians, children and families, were living with an unemployment level above 9% for 86 consecutive months. Finally that unemployment level for the first time has come down a little bit and we have the government saying its policies are working, that it has the economic fundamentals right. We have Reform egging the Liberals on saying, “Therefore let us cut government funding even further, let us cause even more devastation”.

If the Reform Party were serious and if the government were serious about making jobs the centrepiece of its economic and social platform, for starters it would look at what it has done to erode the potential for jobs in this country because of the massive cuts to research that have taken place. Let me just zero in for a minute on the issue of medical research. This is a real challenge that we face in this country.

Over the last decade we have seen an erosion in the commitment to medical research in this country that puts Canada in the very worst position among the G-7 nations. I want to refer to an excellent paper that was presented by the associate dean of medicine at Dalhousie University in my home riding of Halifax. Dr. Dickson, the author of that paper, has put forward a very compelling set of facts and arguments why this government has to face up to the fact that it has caused a steady erosion of commitment to medical research over the last decade and what the implications of having done that are for the future prospects in this country.

There can be an argument made that there is no better way. This is an argument which in fact has been advanced by the OECD. There is no better way to advance the development of jobs in this country than to recognize the need to invest in research. In so doing we not only end up with a better educated nation, we end up with a better infrastructure and an increased capability to generate jobs, the kind of high wage jobs, the high end jobs, the value added jobs that are part of the new economy if we take it seriously and we seize that challenge.

But what do we hear from Reform? We hear advocacies that would take us in the direction of the worst kind of low paid jobs, unprotected because the marketplace is going to do it all.

I had the opportunity recently to spend five days meeting with a group of political economists, academic researchers in the Boston area from Harvard, Brandeis, Boston University and MIT. They had some warnings for Canadians with respect to where the Reform Party is trying to drive this country and the fact that the Liberal Party seems all too willing to accommodate the advocacies of the Reform Party.

What did those American political economists say to us? They said not to be too impressed by the unemployment level in the U.S. which is at 4.7% today. Frankly that surprised us because on the face of it, it looks like exactly what we would want. But that is what they said and we must heed their advice because not to heed their advice is a very short-sighted thing for us to do. They said, “If you keep pursuing the kinds of policies that the Government of Canada has been pursuing in recent years, very much advocated by the Reform Party, you will end up with jobs that are unprotected, jobs that are inadequate in their pay, jobs that have no security and no future attached to them. You want to look very carefully at what kind of country you are going to end up with”.

What kind of country we are going to end up with is exactly what those folks who were in my office wanted to talk to me today about with respect to policies affecting children and families. The kind of country we end up with when those are the kinds of new jobs we create when at the same time there is a greater amassing and concentration of wealth among the most privileged in society is a Canada that is badly divided, where the social fabric is being torn apart, where there is greater insecurity, where there are increased levels of violence and in the end where social solidarity is shattered.

Let us resist those continuing advocacies from the Reform Party. Let us persuade the Liberal government that there is a better way, that there is a fairer way for us to move forward. That means we have to recognize that investing is what a budget is about.

This party wants to only talk about spending and not recognize that what we are talking about is investing in our children, investing in our families, investing in our communities, investing in our futures. They want to always talk about taxes as if it is something that people throw out their window. Taxes are an investment and taxes are our way of sharing as a society in the burdens and the benefits.

I appreciate the opportunity to put forward some of these concerns. Let us heed the voices of those on behalf of children and families in this country. Understand the difference between spending and investing. Understand the difference between the notion of taxation as some form of punishment and the notion of taxation as a fair way, as a cost effective way for us to ensure that we have our social and economic infrastructure on a sound footing and that we are going to be in a position to move forward, to harness the benefits of the new prosperity if we have invested wisely.

We can make sure that we can offer our young people a sound future, a promising future if we recognize the need to invest in their education and in their well-being. Fundamentally that is a question of priorities.

That is what budgets are about. That is what this debate should be about. I hope that we would hear from some of the other members in the Reform Party and the Liberal Party on what their vision is for the kind of Canada we are going to create if we pursue the kind of divisive policies they keep advocating, as we heard once again from the leader of the Reform Party.

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Noon

Liberal

John McKay Liberal Scarborough East, ON

Mr. Speaker, nothing focuses the mind like bankruptcy, particularly the bankruptcy of a nation.

If the hon. member were staring the budget deficit of $42 billion or $28 billion or $8.9 billion in the face, what would she have not done that we have done the past year? Would she have not paid down $16 billion on the debt? Would she have not cut EI premiums by $1.4 billion, 1% of the government's revenues? Would she have not given an $850 million tax credit, with a further tax credit to come, for children? Would she not have restored $12.5 billion to the cash component of the CHST?

Which parts of these programs would she not have done, because these parts of our program do show our values that one has to be fiscally responsible. One has to be focused. It is fine to talk rhetoric, but I would like to hear the hon. member tell us which one of those programs would she not have engaged in.

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Noon

NDP

Alexa McDonough NDP Halifax, NS

Mr. Speaker, let me say first of all that the member opposite is absolutely right to talk in terms of fiscal responsibility. Let me repeat what I know the member is well aware of.

The New Democratic Party brought forward a very clear set of priorities that would have resulted in the balancing of the budget. It would have resulted in the elimination of the deficit ahead of the deficit reduction targets of the Liberal government and the finance minister.

The difference is that it would have done so at a lower level of unemployment. In other words we would have accepted the challenge, we absolutely accept the challenge of eliminating the deficit. There is more than one way to achieve it.

The way the Liberal government chose to achieve it was to wipe out over $7 billion in social spending for health, education and for basic social support services for children and families in this society, and then congratulated itself for eliminating the deficit. But the government completely failed to recognize that there is not just a fiscal deficit to be concerned about, there is a social deficit. What that means is that we have added to the health deficit in this country. We have added to the education deficit in this country. We have added the burdens that make it all the more difficult for us to move forward in this country from a position of strength. Now those deficits have to be addressed.

The member opposite asks a perfectly fair and reasonable question. What would the New Democratic Party have done instead? Would we have said to heck with the deficit? Not at all. We put forward a program that would have eliminated the deficit ahead of the finance minister's targets, but we would have done it through growth in the economy. We would have done it by making jobs the number one priority, which is what Canadians want and what they still want, instead of saying we will continue to live with over a million and a half Canadians remaining unemployed. At least that many or more are continuing to be severely underemployed.

I do not know whether the member could think of a defence when given those two choices, either choosing in favour of reducing the deficit while unemployment remains at highly inflated levels or whether he would agree that it is a question of having different choices available and choosing the one which has done the most damage to people instead of the one which would have strengthened the economy and allowed us to move forward.

The member talks about us being bankrupt in this country. It is very hard to make a case for bankruptcy as being the lot of many Canadians when we look at the record profits which corporations have amassed over the last couple of years. The bank sector alone has made profits of over $7 billion. That is where the money is. It is not a question of there not being any money. Canada is wealthier than it has ever been in its history.

The questions are what are we doing with that wealth? How are we reinvesting that wealth for the benefit of all Canadians, not just for the benefit of a privileged few? What are we doing to make sure we strengthen the base, the foundation, on which all Canadians can move forward to share in the benefits of the new economy and to know that our country is headed in a direction which really deals with the basic needs and priorities of Canadians?

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12:05 p.m.

Reform

Monte Solberg Reform Medicine Hat, AB

Mr. Speaker, I want to thank the hon. leader of the New Democratic Party for participating in the debate today. However, I want to challenge her thesis that if we spend more somehow the debt will decrease.

I would like to point out to the hon. member that in Saskatchewan the New Democratic Party took quite a different view. In fact, it dramatically cut spending for such things as hospitals and it actually ended up balancing the budget.

In practice the NDP actually does something quite different from what it says. I wanted to point that out.

I also want to point out that for 30 years we have been spending more than we have been bringing in. The result has not been that we have eliminated the deficit. In fact, it is quite the contrary. We have built up a debt of $600 billion. The only way the government could finally wrestle it down was to cut spending. Granted it did it in the wrong areas, but that is how it eventually did it.

If we could create jobs by spending more we would all have three jobs. I do not think that a $600 billion debt and 8.6% unemployment point to a formula for creating jobs.

I point out that when the debt rises to $600 billion it is low income Canadians who pay the most. We have a situation now where the average family in this country pays $6,000 a year in taxes as its share of the interest on the debt. The interest on the debt has eaten the heart out of social programs. There have been dramatic cuts made to health care and higher education to the tune of 35%.

I do not see how the hon. member can say that somehow if we spend more it will be good for Canadians.

Finally, I want to point out that because we have spent so much we cannot afford the tax relief which low income Canadians need. A single mother making $15,000 a year still pays $1,300 in taxes. I do not think the hon. member thinks that is socially just. I ask the hon. member, if that is not socially just, why does she not support a plan which would reduce taxes for people like that single mother and leave that money in her pocket so she can look after her child and guide her life the way she chooses?

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12:05 p.m.

NDP

Alexa McDonough NDP Halifax, NS

Mr. Speaker, for the second time this morning I actually agree with one of the positions put forward, which was the very last point the Reform member made. Let me say that whenever I think those policies are fair and just I have no hesitation in embracing them.

Yes, there should be a tax cut. There absolutely should be a tax cut for those at the lowest income levels who are paying an unfair portion of tax.

Yes, it is nice to know that the Reform Party has finally come on board in supporting the NDP position to cut the GST. It is certainly an improvement over where it was when it was advocating that we should actually increase the GST and start taxing food as well.

Let me say that policy is paltry and token compared to the other so-called tax reform policies that the Reform Party advocates. Let us look at the proposal to cut the capital gains tax in half. This is nothing but a tax break for the wealthy. By making only 37.5% of capital gains subject to income tax rather than 75%, this would give those earning $250,000 a year a tax cut of $40,000 each and every year. Is that the Reform Party's notion of tax fairness?

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12:10 p.m.

Progressive Conservative

Scott Brison Progressive Conservative Kings—Hants, NS

Mr. Speaker, sound economic policy requires courage, diligence and, very important, consistency.

Last year the Reform Party wanted to cut spending by $12 billion. Now it wants to put a cap on current spending. Its policy has changed somewhat on that.

Last year the Reform Party was focused on tax reduction and now its current strategy is to focus on attacking the debt largely due to recent polls of Canadians.

We are all waiting with bated breath for the next position de jour of the Reform Party on these important fiscal issues. It is an interesting spectacle to watch the party of prairie populism evolve into the party of prairie poll mongering.

The Progressive Conservative Party stands firm on our campaign commitment to reduce taxes and increase economic activity to benefit all Canadians. The leader of the Reform Party acknowledged earlier today, in speaking about the fiscal dividend, that it has taken 15 years to eliminate this deficit monster.

We appreciate that the leader of the Reform Party recognizes that the steps necessary to reduce and eliminate the deficit began 15 years ago under the PC government of Brian Mulroney who was responsible for introducing the structural changes in the Canadian economy which were largely responsible for putting in place fundamental changes such as the free trade policy, which the Liberals fought vociferously, the GST, which the Liberals fought vociferously and now claim to have invented, the deregulation of the financial services industry, transportation and energy.

It took nine years of Conservative government to undo many of the counterproductive, interventionist policies of Liberal governments which had effectively rendered the Canadian economy incapable of moving forward.

I am very proud of the role that the PC government made, especially in the early 1990s, in courageously moving forward with these policies which laid the groundwork for the elimination of this country's deficit.

Ordinary Canadians have yet to benefit from this current jobless recovery and ordinary Canadians deserve a piece of the pie. The PC party's growth agenda will provide each Canadian with a bigger slice of what will be a significantly bigger pie. The PC party has been extraordinarily clear on this policy and we have not shifted to acknowledge any change in poll numbers like others.

For instance, the leader of the Reform Party said earlier, after a meeting with pollsters, he was told that Canadians feel this government is weak. We did not have to consult with pollsters to realize that this Liberal government is extraordinarily weak. We were able to probably save a significant amount of money in drawing that conclusion on our own.

The Reform Party's policy strategy changes are somewhat like the weather and one can only assume that El Nino has influenced its current position. There seems to be an ongoing competition between them Reform Party and El Nino in terms of which one can blow the most hot air from the west.

We continue to believe—and we are resolute in this—that broad based tax reductions to help put money back into the pockets of ordinary Canadians cannot wait until later. They are needed now.

High taxes kill jobs. It is critical to recognize that between 1989 and 1993 the Progressive Conservative government reduced taxes as a per cent of GDP from 14% to 13% from 1989 to 1993. The Liberals have since increased personal income taxes as a percentage of GDP from 13% to 14%.

High taxes reduce disposable income in two ways: reduction in the paycheques of Canadians and reduction in the amount of money they have to pursue their dreams and to attain the goals they set for themselves.

The long term reduction in economic growth that results from a reduction in lower incentive to work and invest is another toll that high taxes put on the Canadian economy.

The Industry Canada report “Keeping up with the Joneses” cites an increasing gap in the standard of living between Americans and Canadians. The take home pay of Canadians has been reduced remarkably compared with that of our U.S. counterparts.

The question could be what are the Americans doing that we are not doing in Canada. The question really should be what they are not doing. They are not taxing the population to death in the U.S. That is what we are doing in Canada and we have to stop.

High payroll taxes are one of the most detrimental impediments to job creation in Canada. We must move to reduce EI premiums. High income taxes and high payroll taxes continue to damage the Canadian economy.

We could look at the impact that has occurred with the brain drain. Young Canadians graduating from university and in order to pay the egregiously high level of student debt they are carrying are having to go to the U.S. to receive higher pay and to pay less taxes. They do not want to go to the U.S., but they are forced to by a Canadian Liberal government that is not acknowledging the need for change in form of tax reform now.

I quote the industry minister in a November 8 article in the Toronto Sun . He said “Taxpayers who have more money in their pockets would have more money to spend. Tax cuts increase domestic consumption”.

The industry minister should talk more often with the finance minister. Tax cuts would put more money in the hands of ordinary Canadians and empower Canadians to determine their own financial futures.

The Liberals boast of creating a surplus but the Minister of Finance will not even give the finance committee the updated projection figures from last October.

The next federal budget must send a clear signal that at least one-third of the fiscal dividend will be used to reduce the tax burden on Canadians.

The government should commit to further reducing excessive EI premiums to offset the proposed CPP premium increases. We also have to consider an appropriate framework for the setting of public policy.

This is not a question merely of the size of government, albeit government is far too large in Canada by about 16% of our GDP. Nine per cent of our GDP is going toward paying interest. It is a question of definition of government and the role of government.

What things should government be doing that it is currently not doing? What things is government doing now that it could do differently or could cease doing? What things could government pursue? What new initiatives could government pursue which would result in investment in the future of young Canadians in particular.

Between 1993 and today the Liberal government cut indiscriminately. It cut not just fat but bones, tissue and marrow. It cut the hearts out of many Canadians, especially in Atlantic Canada where the impact of those cuts has been extremely devastating.

After having cut indiscriminately it is preparing to spend indiscriminately. Nothing incites a feeding frenzy in the Liberal caucus faster than the smell of hard currency around the snouts of hungry Liberal backbenchers.

It will be interesting to see, as the weeks unfold, how the Liberal government and the finance minister slash leadership candidate response to the demands of his own caucus on new spending initiatives.

Any new spending initiatives on the part of the government must be based on strategic investment criteria that will improve Canada's comparative advantage internationally, especially in a global society. We need to ensure a set of criteria is applied to every new spending initiative. This would provide for Canadians an improved comparative advantage in the future and would not simply be another pork barrel policy of government waste.

Let us consider the example of medical research. Canada is the only G-7 country that has decreased its investment in medical research and development funding over the past several years. Canada spends $8 per capita on medical research compared with the U.S. which spends $60 per capita. Under the Liberal government MRC funding has been cut to 1987 levels in constant dollars. During the past five years the U.S. has increased funding to its sister councils by 80%.

In a global context, our largest trading partner is investing heavily in research and development. It is making a commitment to strategic investment and creating a centre of excellence for medical technology in the U.S. It frightens me to recognize the impact of our failure to respond to this investment and our failure to invest similarly in Canada in the long term competitiveness of Canadians.

Post-secondary education is another area that has a direct affect on Canadian competitiveness as we enter the 21st century. Student debt has risen by 280% in recent years. Tuition costs have increased by 110%. It is interesting to note that a four year university program in Canada will saddle the average student with about $25,000 worth of debt. Similarly a four year program in the U.S. will leave an American with about $18,000 worth of student debt in Canadian currency.

We are making higher education in Canada not less but more expensive. The burden on our young people as they carry this into the workplace is significant. It will impact considerably on their ability to produce as citizens of Canada and to produce within a global arena.

A recent study by the Maritime Provinces Higher Education Commission found that 82% of grade 12 students in Atlantic Canada were interested in higher education. However, 55% of these students say that they will not be able to achieve higher education for financial reasons.

In 1993, when the Liberals gained power, only eight students in Atlantic Canada carried a student debt greater than $30,000. That number has grown over the past five years to the point that today there are over 900 students in Atlantic Canada with a student debt greater than $30,000 upon graduation. The figure has gone from eight students to nine hundred in five years.

Atlantic Canada has been particularly hard hit, as have all Canadians, by the Liberal government's attack on higher education. I am proud of Nova Scotia's strong heritage as a cradle of higher education in Canada. The decimation of opportunities in higher education by the Liberal government and its slash and burn policies have inflicted irrevocable damage on the future competitiveness of young Canadians. It is a sad legacy of the government.

The Reform Party said this week that debt should be Canada's number one priority in order to reduce the debt to GDP ratio. There is another way to reduce debt to GDP ratio. We certainly acknowledge that the debt must be reduced. The other way is to actually grow the GDP. Spending initiatives based on the right criteria, including the criterion of competitiveness, will actually bolster the competitiveness of young Canadians. It is possible that certain strategic spending initiatives can improve the GDP ratio and grow the economy faster.

If we focus on cutting the debt and refuse to acknowledge the issues of student debt, consumer debt or personal bankruptcy, all of which have been growing remarkably over the past several years in Canada, we fail Canadians.

The national debt is one debt, but the social debt that is being paid by ordinary Canadians in the balancing of the budget over the past few years has been similarly damaging.

Investing in our young people is a worthy objective. Our party believes that we need to couple strategic investment with debt reduction and tax relief. The Reform Party may over the next several weeks change its policy or emphasis again, but ours will remain constant. Our belief is that Canadians will succeed with a lower debt. Canadians will succeed when provided with lower taxation. Canadians will succeed with a government which is able to redefine its role relative to the Canadian people and to make strategic investments in the areas which will truly impact positively on the future of Canadians.

By cutting transfers the Liberals have effectively shifted debt and financial responsibility to the provinces. Similarly the provinces have shifted responsibility to municipalities. Municipalities have shifted responsibility to ordinary Canadians. The growth in personal debt and the growth in bankruptcies, all such issues, have come from initial decisions.

The Liberals really did not cut the expensive, wasteful, bureaucratic and redundant spending that they could have cut. Instead they tackled the debt by dealing with cuts to the provinces. We can offload a lot of things to the provinces. One thing we should not offload as a government and one thing this government has done is effectively to offload leadership.

We need to reduce taxes. We need to invest in Canadians. We need to ensure that all Canadians have an opportunity to invest in their own futures. Young Canadians need a future where the Canadian economy is healthy and individuals can function competitively in a knowledge based society, without the impediments of fat, ineffective or interventionist governments.

With the PC agenda for growth, Canadians will receive tax relief, debt reduction and strategic investment, thereby enabling them to strengthen Canadians' competitive advantages as individual Canadians. Our plan will work for Canadians and our plan will help put Canada back to work.

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12:25 p.m.

Reform

Monte Solberg Reform Medicine Hat, AB

Mr. Speaker, I thank the hon. member, the new finance critic, for participating in the debate today. I congratulate him on his post.

I want to set the record straight with respect to what my friend said vis-à-vis Reform Party policy on debt. As my friend knows, last fall the party engaged in a round of consultations with Canadians across the country. We specifically went out to hear what Canadians had to say. Canadians said very clearly that they saw the debt as the number one issue across the country. My friend may mock this but the polls in fact confirm that.

No one will ever accuse the Conservative Party of listening too closely to Canadians. We know that. I think people who remember Brian Mulroney will attest to that.

I want to ask my friend a question. We heard a salute to Brian Mulroney from my hon. friend. He lauded the Conservative record, the record where they increased taxes 71 times, the record where they added $300 billion to the debt, the record where they led Canada into the worst recession outside the great depression that the country has ever seen, and the record where we saw the trust in politicians eroded to new lows because of that prime minister.

Because he seems to think that the previous record was so good, is hon. friend suggesting that a new Conservative government would continue with the self same policies that gave us those record debts, record taxes and record deficits that we had under Mulroney?

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12:25 p.m.

Progressive Conservative

Scott Brison Progressive Conservative Kings—Hants, NS

Mr. Speaker, I appreciate the comments of the member for Medicine Hat.

On government by polls, I do not pay a lot of attention to polls. My party and I determine economic policy which will best lead Canadians into the 21st century. His party had polled that my riding would go Reform last election. I would not be here if those polls had been correct. Therefore I tend to focus on sound economic policy.

When I refer to the Conservative government as having been extraordinarily important in laying the structural changes necessary to eliminate the deficit, those were not completely my own words. Those came from the Economist in its preview of the world 1998, which said specifically that much of the credit for deficit reduction in Canada belongs to the Conservative government of the early 1990s which introduced free trade, GST and deregulation of the financial services industry, transportation and the petroleum industry. I suggest that perhaps there are more people than simply I who credit the Conservative Party for what it achieved in the early 1990s.

When talking about trusting politicians and doing one thing and saying another, I think Brian Mulroney was, for instance, portrayed by the leader of the Reform Party as being a fake. Brian Mulroney did not dye his hair. Brian Mulroney did not have his teeth done. Brian Mulroney did not have his eyes operated on, and yet they refer to Brian Mulroney as a fake. Let us give credit where credit is due.

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12:30 p.m.

Liberal

Dan McTeague Liberal Pickering—Ajax—Uxbridge, ON

Mr. Speaker, I was going to say something, but I thought the jousting between the two parties on the right was more appropriately described as the reason why they are both on that side of the House and the reason they are going to remain on that side of the House.

I would like to congratulate the member on his new elevation in terms of this very significant, very important work he is going to be undertaking on the committee. But it seems to me that like his brethren and friends and, I guess, former political alliances in the Reform Party, they too have not only a case of amnesia but do not understand their own policies that they have articulated in the past.

The hon. member will know that the motion today is being presented by a member whose party, in a very short period of time, has gone from zero in three to the taxpayers budget, a fresh start, securing your future, yadda, yadda, yadda.

The point is that party has really not got it right yet. It is one of the reasons it is not on this side of the House and the Canadian public understands that very well.

I want to deal with the question and the comments that were raised by the hon. member in his defence of Brian Mulroney, and perhaps a bit of advice. If he drops that, he might find himself a bit more successful in the long run because the Canadian people, as we know, are always right. They full well know that in terms of the budget and in terms of the situation this government inherited in 1993, the $42 billion deficit was something that was accelerated by his government and the person he is now praising. That is a problem we inherited, it is a problem we are dealing with, and I think we are dealing with it very successfully as adjudged by the Canadian people last year.

In the last election the Conservative Party seemed to have a bit of trouble with its platform. It suggested that one-third, once we achieved the point of reducing or removing or eliminating the deficit, would ultimately be spent on tax reduction. The rest was sort of put toward the balanced budget approach, the balancing of the ultimate deficit.

Perhaps the hon. member could clarify, since it seems that there is a huge contradiction in his statement. The hon. member is so concerned about the outcome of young people and students in this country who are engaged in education, particularly in his region. I can assure him that there are universities right across this country.

Could the hon. member perhaps illustrate to us the conflict, the problem he sees in saying that we are going to reduce the deficit, reduce the debt, give people all this tax money back and achieve the objective of higher education? How does he do it when he has increased the burden on ordinary Canadians, as evidenced by his friend, Brian Mulroney?

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12:30 p.m.

Progressive Conservative

Scott Brison Progressive Conservative Kings—Hants, NS

Mr. Speaker, I appreciate the hon. member's comments, and perhaps we should ask him to translate yadda, yadda, yadda. Sometimes these are very complex, mathematical and economic equations and perhaps I could lend him a calculator. One-third plus one-third plus one-third equals one, and what we are suggesting is one-third for debt reduction, one third for tax reduction and one third for sound, strategic investments in the future competitiveness of Canadians. I do not think this is particularly difficult but I would gladly sit down with the hon. member after we are finished and we can do the math ourselves.

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12:35 p.m.

The Acting Speaker (Mr. McClelland)

Before we resume debate, in the questions and comments period in the future we are going to try to give a few more people an opportunity to ask questions. By doing that if there is an indication, during the debate or during the initial presentation, of a great interest in speaking, if members would indicate to the Chair your interest in asking a question, the Chair will then have some idea how many people are interested in intervening. Or if hon. members stand initially we can figure out in our minds how much time should be reserved for each intervention and each response.

For instance, if five people stand, then there might be five one minute interventions and one minute responses. This would give all hon. members a better chance to speak on issues. This is something we are going to try to work out much as we have done in question period since the beginning of this Parliament to see if we can work this into debate as well. There is no intention to make this a hard and fast rule. We have to try to live with the feeling and the mood of the House at the time. Just so people know, it might make things more interesting in the House.

On a point of order, the hon. member for St. Albert.

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12:35 p.m.

Reform

John Williams Reform St. Albert, AB

Mr. Speaker, I was listening to your announcement from the Chair because I am not aware that this has been agreed to by the parties. Of course, as you are aware, the Speaker is a servant of the House and not the master of the House.

I was interested in finding out how you are going to police this new policy that you seem to be introducing and springing on the members right here.

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12:35 p.m.

The Acting Speaker (Mr. McClelland)

Certainly there would not be any intention to police. It is not a new policy. It is something that has worked very well in question period. It is deemed to have worked very well in question period and it has in the last session. We have tried it from time to time.

As I think I clearly said, it is purely at the pleasure of the House. It is not an intention of the Chair to impose anything. It is merely a suggestion that perhaps we could accommodate more members if we were to be more liberal or less liberal in our approach; more reform or perhaps more conservative and less liberal.

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12:35 p.m.

Reform

Monte Solberg Reform Medicine Hat, AB

Mr. Speaker, I want to say to my hon. friend from St. Albert that I think the Sergeant-at-Arms does carry a sword and I think that is the way we could probably keep some order in this place if we really had to.

It is a pleasure to rise and address this motion. I will read the motion again just for people who are watching this debate:

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.

I think we are talking about an extraordinarily important issue here today. Unfortunately I do not have time to explore that issue as deeply as I would like, but I do want to focus on one aspect of that, what we in the Reform Party refer to as social benefits of tax relief. In order to do that I must talk a little about how government overspending has really come to hurt Canadians.

I want to talk first about the effect of overspending on social programs. Earlier the leader of the New Democratic Party spoke and I know the NDP is extraordinarily concerned about social programs. I can tell the leader of the NDP that the Reform Party is as well. We point out to our friends in the NDP and to the Liberals that since we have run up a debt of $600 billion and now have interest payments in this country of around $47 billion a year, we have had to find cuts elsewhere. The government in its wisdom cut social programs. Who does that hurt the most? It hurts low income Canadians. It hurts the most vulnerable.

I remember sitting on the finance committee and having Dr. Judith Kazimirski appear before the committee. Dr. Kazimirski was the head of the Canadian Medical Association. She spoke with a tremendous amount of passion about how long people with breast cancer or prostate cancer had to wait, on waiting lists, in this country because we cannot properly fund health care today. That is a disgrace. That is what has happened because we have interest payments of $47 billion a year, because successive Liberal, Tory, Liberal, Tory governments kept spending more than they brought in. The result was a debt of $600 billion. It has been the most vulnerable people in society who have paid the biggest price for this. We see that in the erosion of our social programs, but it does not end there.

When we look at the taxation system in this country, we see another perfect example of how overspending and mounting debt have hurt the most vulnerable people in society. If we look at working class Canadians and middle class Canadians, they have paid a tremendous price for overspending. I point to the tax load people have to carry in this country. We have the highest personal income taxes in the G-7, 56% higher than the G-7 average, than all the other people we trade with, the U.K., the United States, Japan. That is staggering.

My friend from the Conservatives was talking a minute ago about people going to the United States. According to the government's industry department study, people in the United States are 25% wealthier than Canadians. Just a decade ago we had Canadians who were on par with the Americans in per capita income. We tied second and third in the world. Now we are twelfth. The economic powerhouse Iceland is ahead of us because the Liberal and Tory governments did not keep their eye on the ball. When the Liberals were reducing the deficit they did it on the backs of taxpayers, so their per capita income went down and down. That meant a tremendous strain on families.

Not surprisingly, in 1991 Decima poll came out and said that 74% of working Canadians said that if they had their druthers, if they could afford it, they would have one parent at home. But they cannot afford it. Since 1990 personal incomes, real disposal incomes, dropped by $3,000 for the average family. That is unbelievable. Now Canadians are under tremendous strain because governments have overspent and the debt has mounted and mounted. Now we have interest payments of $47 billion a year. That would be bad enough, but we have Liberals and now the Conservatives talking about spending even more money.

I guess a debt of $600 billion is not enough. I guess taxes which are among the highest in the world are not enough for these people. Liberals want to spend 50% of the surpluses on new programs. Some people say the surpluses might hit $30 billion. That is $15 billion a year in new spending? We have a debt of $600 billion which leaves us extraordinarily vulnerable to shocks from around the world. But these people are so reckless that they want to spend more.

The Conservatives say they will spend a third of the surplus, $10 billion a year, in new spending advocated by a Conservative government. That is scary to me. This is the time to be prudent on the one hand and secure our present situation by starting to pay down debt. We heard that from Canadians when we went around the country this fall. They said pay down debt, it is our first priority, please pay it down, we have had enough of this profligacy of $600 billion debts, we need to pay it down.

On the other hand and close behind Canadians were saying “Let us start to give people some hope for the future. Let us give them some tax relief. Let us leave them with more money in their pockets so they can drive their own futures, so they can live their lives”.

We have all received letters from people who say “I have had it”. I received a letter from a lady who lives in Quesnel, B.C. Her name is Margaret Snell. It is one of the most heart-wrenching letters I have ever read. Her son came to her and said “Mom, I cannot be in baseball, soccer or hockey this year because we cannot afford it, right?” She was ready to complain about the CPP increases. They simply do not have the money. For them it was not an option of taking it out of disposable income. Like many Canadians, they do not have any disposable income. It was either going to come out of the mortgage or out of the groceries.

My point is simply that Canadians cannot afford a government which continues to spend. We have to have debt reduction. We have to have tax relief.

My party has laid down some solutions. We have set some targets for reducing the debt. Right now the debt is $600 billion. We would reduce it over 20 years to about $343 billion. It would go from 70% of the economy down to about 20%. It would save $20 billion a year in interest charges on the debt. That $20 billion could be returned to social programs. It could be used for tax relief. It is an extraordinarily prudent measure. It is something which would secure the future of young people who are having to bear an inordinate burden because of the profligacy of previous governments.

The other half of that surplus would be devoted to tax relief. We list nine measures in our document. The one which comes to mind right away is that which concerns the 3% and 5% Tory surtaxes. The Conservatives introduced them specifically as a measure to reduce the deficit. The deficit is now gone. The Liberals have a moral obligation to get rid of the 3% and 5% surtaxes. They were implemented specifically to pay down the deficit. It is gone. Let us remove those surtaxes and help all Canadians.

My friends across the way talk so often about the need to be more compassionate. I agree with that. Let us be more compassionate. If we implemented the tax relief measures which the Reform Party is talking about, we would lift 1.3 million low income Canadians off the tax rolls. The single mother who makes $15,000 and pays $1,300 in income tax today would pay nothing. The family of four making $32,000 which is paying $3,000 in income taxes would pay nothing. It is time to help Canadians.

We have laid down the challenge to my friends across the way. This is an hour of decision for them. There is a budget coming up. It will be the first balanced budget in 27 years. It is time for them to set a new course for the country. We do not want to see them go back into that spending mode which got us into this problem in the first place. Canadians do not want it. They have made that extraordinarily clear.

I lay down the challenge to my friends. Please consider seriously what we are suggesting to you today. If you do, I can guarantee that you will have the support of not only the Reform Party but of Canadians from coast to coast.

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12:45 p.m.

Stoney Creek Ontario

Liberal

Tony Valeri LiberalParliamentary Secretary to Minister of Finance

Mr. Speaker, I will try to be as brief as possible because I know there are other individuals who would like to pose questions.

I want to reiterate that when the fiscal dividend emerges Canadians want action on three fronts. That is essentially what we heard from Canadians. They want action on debt reduction, action on investment in a stronger economy and a stronger society, and they want some tax relief.

Let me focus on the tax relief. When we look at securing the dividend submission by the Reform Party, it proposes a wide mix of tax measures that when mature will cost around $30 billion and foregone revenues will in fact increase by $4 billion each and every year. It actually underestimates the total cost of its package by $10 billion.

As a responsible government we do not have the luxury to be irresponsible much like the Reform Party. We have to ask ourselves a very basic question: Where is the $30 billion-plus coming from for tax cuts? The Reform Party does not fully answer this question in its prebudget document. Is it going to come from a reduction in health and education spending, in a reduction in benefits for families, or should we just walk away from the success that we have had and increase the deficit? Should we not go for a balanced budget?

We cannot afford as a responsible government to deal with issues much like the Reform Party because it has not done its numbers. I will give the Reform Party a calculator with batteries.

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12:50 p.m.

Reform

Monte Solberg Reform Medicine Hat, AB

Mr. Speaker, I would simply point out to my friend that not only are these things costed out and not only do we use the government's numbers, but he is in fact completely wrong when he says that the tax relief for Canadians coming from the Reform Party would be $30 billion. It would be $20 billion. I note that my friend finds that quite shocking. It would work out to over $2,000 for the average family of four by the year 2000.

I just want to emphasize for my friend that Canadians are not going to be fooled this time. They have made it extraordinarily clear that they do not want to radically increase spending. I think this is where the Liberals have gone off track. They made a commitment and now they cannot back out.

However, we know that Canadians from coast to coast, by a majority of about 90%, say they want an emphasis on paying down the debt and reducing taxes, not on increasing spending on fuzzy-headed programs that have no end that Canadians can somehow divine.

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12:50 p.m.

Progressive Conservative

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

Mr. Speaker, when I spoke on the unemployment rate in Newfoundland and Labrador, Reform immediately told me that the smallest violin plays for Atlantic Canada. In other words Atlantic Canada should be cut loose financially from the rest of Canada.

My home province of Newfoundland staggers under an unemployment rate of more than twice the national average. Our net out migration rate is about 9,000 people in Newfoundland and Labrador and we have a population of approximately half a million. Whole communities along the coast of Newfoundland have been decimated with nobody left in some of these communities but pensioners and families on social assistance. There are areas where I would support an increase in spending.

The have not provinces are in the position of where every dollar that is raised in resource revenues is clawed back practically dollar for dollar from our equalization payments. Therefore, I could support a renegotiation of the equalization entitlements for the have not provinces.

I would point out to the Reform Party that in balancing the national budget Canada eliminated about 15% of its federal public service. In Newfoundland before that process is finished we will have eliminated roughly about 30%. I agree that we should have balance in spending but—

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12:50 p.m.

The Acting Speaker (Mr. McClelland)

My apologies. The hon. member for Medicine Hat has about 50 seconds to respond.