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.