Debates of March 10th, 1998

The Budget

[Garry Breitkreuz, Reform, Yorkton—Melville, SK]

Madam Speaker, I have two questions. It will only take several moments to ask them.

I really appreciated the member's plea for more tax reduction and increasing the personal exemption to $10,000. I wholeheartedly agree with that. We desperately need that kind of help for especially low income Canadians.

The question I have relates to that in the sense that the government has put in place a child care credit or tax reduction that applies only for those who use care outside of the home. I think this is a gross injustice. I cannot agree with it.

My concern is that this child care credit should apply to all parents. They should not be forced to take their children outside of the home. I was wondering if the member would agree.

The second question is in regard to agriculture. He made a big point about agriculture and the fact that it was not addressed in this budget. I agree with him. In fact agriculture will be devastated by what this government has done.

In just one example, the CPP premium increase is going to hit all Canadians but farmers are going to find that the price of their produce, the things they have to put in, their input costs into their crops and whatever, are going to increase because of the CPP premium increase. It is going to add to all of their costs, as it will for all Canadians.

I am wondering if he would agree that we need tax reduction, especially in the area of agriculture. I know there needs to be improvements to infrastructure, transportation and all this but the tax increases, I hope he would agree, that have been implemented by this government are going to hit agriculture very hard.

[Rick Borotsik, Progressive Conservative, Brandon—Souris, MB]

Madam Speaker, I appreciate the question from the hon. member from Yorkton—Melville.

The first question with respect to day care, what we believe in and obviously with the basic personal income tax exemption of $10,000, we believe that sufficient dollars would then come back into those individual's pockets who best know how to spend their dollars, and in fact would allow them more dollars to have day care for their individuals, whether it be in the home or whether it be in licensed day centres.

However, back to agriculture, I could not agree more, particularly with the CPP. If you are in fact a small business or a self-employed individual, the contributions to CPP are twice as much as what they would be if you had employer contributions.

Agriculturalists, farmers, obviously are going to be impacted quite dramatically by this. It takes a substantial amount of cash out of their own personal pockets to put into a CPP plan which I am still not convinced, and have not been convinced by government, is going to be there when in fact those individuals are going to recover some of their investment from it in benefits.

I agree, we agree, small business, personal income tax deductions and small business tax, regressive payroll taxes should be reduced, as by example in Manitoba and fortunately the member from Winnipeg suggests that we should be looking at Manitoba as being a benefactor from the federal government. The fact is that Manitoba has benefited because of these types of reductions to regressive payroll taxes.

Business Of The House

[Peter Adams, Liberal, Parliamentary Secretary to Leader of the Government in the House of Commons]

Madam Speaker, there has been consultation among the parties and I think that you will find unanimous consent for the following change to standing order 95(2).

I move:

That when an item of Private Members' Business that is not votable is proposed, the Member moving the item shall speak for not more than 15 minutes. Thereafter, no Member shall speak for more than 10 minutes for a period not exceeding 40 minutes. After 40 minutes or earlier, if no other Member rises in debate, the Member moving the said item shall, if he or she chooses, speak again for not more than 5 minutes and thereby conclude the debate.

(Motion agreed to)

The House resumed consideration of the motion.

The Budget

[John Duncan, Reform, Vancouver Island North, BC]

Madam Speaker, I must say I have enjoyed this budget debate. We had a certain amount of finger pointing. After all, the budget and the exercise that goes into it is the single most important activity carried out by government.

How did we ever get where we are now after 30 years of running unbalanced books basically? The last member was pointing fingers at Prime Minister Trudeau's administration. If we look back to that time and place, we see 14% annual increases in spending throughout that mandate which was what got us started. We then ended up with a Conservative administration that added to the burden once again.

One has to wonder when we have the single most important activity of government and we cannot get it right. Even though I have been in this place since 1993, it still astounds me that we ever arrived at where we are and are still paying the price. Whoever was the architect back then should be ashamed.

I have two things to talk about today. I want to talk about the budget in general and make some comments about the fisheries specifically.

I am still at a loss today to say anything positive about the budget that was brought down by the minister. For 30 years, as I have already explained, Liberals and Tories abrogated their primary responsibility which is to prioritize government activities in spending in order to optimize the benefits to Canadians. This obviously did not happen. This has led to the taxpayer being penalized. They paid the penalty of balancing the books which led to the ongoing penalty of Liberal debt costing Canadian families $6,000 annually to service.

This is not the only legacy. We still have Canadian jobs and economic opportunities that are being stifled which is continuing to hamper social program spending. Canadians have clearly stated what their priorities are: pay down the debt, reduce taxes, and spending that is focused on things like health and education.

I and many of my colleagues have asked the question of many of our constituents. Some of my constituents want to know why I am asking such a common sense question. The answer is so common sense that they wonder why I am asking the question. In a sense I agree with them, but common sense seemed to be out the window for 30 years in this place. Let us hope we never get back there again. Maybe we are still there.

What does this budget do? It has 100% new spending, 0% debt reduction and 0% tax relief. After 30 years the government balanced the books on the backs of the taxpayers over the last several years. In this budget it robbed those same taxpayers of well-deserved tax relief and debt reduction.

Let me just talk about the department I am most familiar with in this Parliament, the Department of Fisheries and Oceans. This was one of the most heavily cut government departments in the last Parliament and it is ongoing. At the same time that costs are being cut in fisheries, we have a crisis of unprecedented proportions in the cod fishery on the east coast. We have salmon disappearing on both coasts. We have unresolved issues with Alaska on the west coast. We also have a huge lack of vital information on many species on all three coasts.

How can we maintain, as the minister has done, that our prime concern is conservation if we do not spend any money or devote any resources to it?

The standing committee on fisheries travelled to both the east coast and west coast. We have yet to go to the north coast. We have heard from fishermen everywhere we have gone about the lack of biologists and how appalling all that is. Yet, we seem to have a healthy, in terms of numbers, bureaucracy in DFO in Ottawa. However, when an entrepreneurial fisherman wants to start up a box crab or other new fishery, we do not have the DFO biology resources to assist in the feasibility study. Everyone recognizes and agrees that field enforcement has been shorted in a major way.

When fishermen complained about the DFO it was never about the frontline workers who provided so much support. The frontline workers were often the people who were familiar with the community as well as the fisheries. They were located where the action was. They tended not to be bureaucratized and were promoted from within the ranks. They were effective in galvanizing whole communities to assist in the stewardship of the fishery resource.

With the poorly thought out cutbacks, they are no longer there. It seems that the DFO has a leadership which cares more about perpetuating its own self-importance than it does about the people who really matter. The department does not seem to realize that without fishermen to manage, it has no mandate.

Many fishermen have complained that the DFO is only interested in supporting large companies and does not care about the independent small businessman. This government may say that it is more cost effective to have large companies fishing and that individuals do not have enough of a profit margin to make them viable. However, we do not think it is up to government to make that kind of judgment.

If a person wants to try to set up a business, and if the government has set up certain barriers in the way of studies that have to be done, it is up to the government to assist those individuals in meeting those requirements. It is not up to the government to put up more barriers and create a Chinese maze for approval seeking.

The DFO needs a new, strong mission statement which includes all people. It needs a new vision which includes empowering lower levels of the organization. Many of the lower level employees are paranoid about making decisions because the decisions they have made in the past have been countermanded so many times.

The DFO needs consistency and honesty at the uppermost levels for without this the lower levels are paralyzed. People need direct leadership in order to do their jobs in an enthusiastic and creative fashion.

We all understand that cuts had to be made in order to fix the fiscal mess of this and previous governments. What is now required are measures to ensure that spending is prioritized so we do not choke off the lifeblood of our nation.

We have heard that one of the new spending initiatives of the Liberal government includes $40 million to something called strengthening communities. I would think that hiring a few biologists and allowing them to do their jobs and allowing local fishermen to develop new fisheries would strengthen a community.

For every fisherman who is allowed to fish, other jobs are created, such as crew and plant workers to process the fish. The spin-off is wonderful and can be multiplied many times.

We do not need only a few large corporations doing the fishing to make work for other people and to keep communities alive. In fact, we keep hearing from fishermen that large companies can ruin local communities by centralizing operations and by being too remote from the realities of daily living.

I have heard from many groups and individuals who have attempted to develop entrepreneurial opportunities, often with 100% of the investment coming from private sources, who have been stymied and frustrated by their inability to find one advocate within the DFO, or DFO personnel question the economic viability and tell them how to rig their boats for new fisheries when it is the fishermen who should be determining viability.

DFO personnel should be worrying about fisheries management and biology, not boat owner viability, particularly in the pioneer fisheries, such as some of the offshore and outside 200 mile limit fisheries which are being created.

This government must reset its priorities. It must roll up its sleeves and do real work in determining where money should be spent and where it can be cut. When you toss around figures with too many zeros after them, you lose your sense of reality. This government has lost that sense. When we try to talk to a government that has its nose up in the atmosphere where only millions and billions make sense, we naturally become discouraged and disillusioned. How can we relate to the government? We cannot.

The government is too complacent by far. It needs to go out and talk to the grassroots, those people without whom we would all be out of a job. This government needs to pay back Canadian taxpayers by delivering debt and tax relief. The Liberal campaign promise was to dedicate half the budget surplus to debt and tax relief.

There is no surplus in 1998 because the government spent it. There is no debt reduction forecast because the government budget wipes out the surplus for each of the next three years. The Liberal election promise was quickly broken by a government with no shame.

I am splitting my time with the member for West Vancouver—Sunshine Coast so I will finish now.

If a government cannot keep its promises in regard to the most important mandate it has, then why should it be trusted to keep any of its promises?

[Andy Mitchell, Liberal, Secretary of State (Parks)]

Madam Speaker, I am pleased to have an opportunity to question the hon. member on a very specific component of his speech. He talked critically about the fact that we were spending money on strengthening communities. I was quite surprised to hear him say that.

One of the measures in the budget that my constituents were very pleased with was the increase from $500 to $1,000 for the tax exempt portion of income for volunteer firefighters.

The member may not be aware of it but in rural Canada, in communities like Bracebridge, Gravenhurst and Parry Sound, fire protection is provided by men and women who volunteer as firefighters. Without that volunteerism, without the dedication of those volunteers, we would not have the kind of fire protection and safety we have in our communities.

It is positive and important for this government to recognize that volunteerism by increasing the tax exemption by 100% from $500 to $1,000. The recognition of those individuals is important. It is critical and it strengthens our communities. Why is the member against assisting those men and women who are the volunteer firefighters in our rural communities?

[John Duncan, Reform, Vancouver Island North, BC]

Madam Speaker, there is nothing quite like somebody putting words in your mouth. In terms of tax relief measures and the kinds of measures that are quite generic, those are very good things.

The member will not find a Reformer arguing that we should not increase basic exemptions for items such as the one mentioned by the member. In terms of strengthening communities, who can argue against motherhood? We want to strengthen communities. My point is that this government is doing things in an insensitive fashion.

The government is hurting coastal communities in particular. That was my point. The government's attempts to cut costs have tended to take away from the field and centralize. As a consequence rural and coastal communities, specifically in terms of the fisheries file, have been very much damaged. It is ongoing.

This week we are talking about light stations on the coast. The light stations on the west coast are more important to many rural communities than are the post offices in Ontario communities for example. They are much more important. If those light stations were in Ontario, with as many Liberal members of Parliament as there are in Ontario the government would not be doing what it is doing to the light keepers on the B.C. coast. That is just one tiny example, but the fisheries file has all kinds of them; what has happened to our field personnel, our enforcement personnel and our biologists.

Entrepreneurs cannot try to get anything done when it comes to developing a new fishery. There is nobody there to be their advocate when they talk to the Department of Fisheries and Oceans. This is a big item. Thousands of jobs are going begging in B.C. right now in shellfish aquaculture alone because of a lack of people within DFO to be an advocate to either keep existing operations going or to allow new entrepreneurs to do their thing. It is very sad.

[John Reynolds, Reform, West Vancouver—Sunshine Coast, BC]

Madam Speaker, it certainly is a pleasure to speak on this budget debate. I am sure the Liberal members who had questions to ask of my colleague will also have some to ask me when I am finished.

When the Liberals took office, Canadians were paying $125 billion a year in taxes. After five years of the Liberal government in power, we are now paying $162 billion in taxes. By the year 2000 we will be paying $173 billion in taxes according to this latest budget. That is a $48 billion increase, $5,000 for every taxpayer in Canada.

When the Liberals took office, we were $500 billion in debt. A lot of that was blamed on my colleagues from the Conservative Party but the Liberals were in power before them. Between the Liberals and the Tories it was $500 billion. Today one would think from all these great speeches on the other side that we had eliminated that debt. We have a deficit that is down to zero, or so they say. The debt is at $583 billion. The Liberals have increased that debt in their short term in office by $83 billion. That is at a cost of $6,000 per year for every taxpayer.

The Liberals have the chequebook out again. They get the deficit down to zero and they come up with $11 billion in new spending. No tax relief and no debt repayment.

Like all other members, I was in my constituency last week going from community to community. A Liberal member asked a question about small communities. I was up in the Sunshine Coast in the area of Sechelt. A great little business seminar was going on. It was business opportunities. A lot of government departments were there, both provincial and federal. They were giving out information to small business. A lot of small businesses had some great ideas which I thought we could use in this House.

One of the people at that conference who was with his wife pulled me aside and told me about some of the things they were concerned about. I asked him if he would mind writing them down and faxing them to me on the weekend. I told him I would be speaking on the budget and I would like very much to pass his comments on to my colleagues in the House of Commons.

I would like to read some of the comments that the husband and wife made. These people are in their retirement age. They state: “Currently there is a lot of concern regarding planning for retirement especially for taxpayers 50 to 60 years old due to the uncertain changes to old age benefits. Taxpayers in this group do not have the time to overhaul planning for their retirement which has been based on long term legislation. Accordingly, now that the budget has been balanced perhaps consideration could be given to some other alternatives that would take into account the time factor that is so critical to long term planning for retirement”.

They talked about an old age pension phase-in to change the entitlement. It is not a bad idea. It is being done in other areas. They talk about age 56 to 65 in the year 2000, no changes with benefits at 65. People of the age 46 to 55 now in the year 2000 will receive old age pension at 66. People of the age 36 to 45 in the year 2000 will receive old age pension at the age of 67. People now age 26 to 35 will receive old age pension at 68. People age 12 to 25 in the year 2000 will receive old age pension at 69. Under the age of 16 in the year 2000 people will receive old age pension at the age of 70. Their attitude was that this would scale it down and help balance the books a lot quicker than what the government is doing now.

There were other concerns that my constituents had. Their comments to me were the constant delays in implementing increased RRSP limits, allowing the self-employed to an expense of half their CPP contribution to be accorded consistent treatment with employed personnel. This is a great concern of a lot of the senior citizens in my area and people who are self-employed.

Provide some relief for single income families who choose to have one parent at home to raise children. There are many responsible young parents who sacrifice much to have the mother stay at home to raise their children because they understand the importance of such a task. Our government needs to encourage this endeavour with appropriate measures that give consideration to some form of joint tax filing.

Consideration should be given to allow interest on RRSP loans as an income tax deduction restricted to perhaps the interest paid only in the year of contribution.

That is what people are thinking when we talk to them in our constituencies. They are not all that thrilled that the deficit is down. They expected when they elected this government that it would get that deficit down. The message was very clear. It was very clear to the Conservative party. It went from a great big majority to two seats in Canada. It did not take a brain surgeon to figure out that we should get the deficit down.

What has this government done for the debt? Nothing. It has announced $10 billion in new spending programs. We have to look at those programs and ask would the average Canadian not be better with taxes lowered, with just a little bit more in their paycheque. Let us let Canadians spend the money instead of forming new government programs and new bureaucracies. Let us ask this government what it is doing.

I want to talk a little bit about British Columbia. British Columbia has been a contributor to Canada for many years, in excess of what we raise in our province in taxes. We are very happy to do that, to help Canada be a united country. But we ask what has this government done in fisheries? My colleague our fisheries critic has talked about that.

I can tell you that British Columbians are pretty upset with the treatment and the respect they get when it comes to fisheries. I can only hope when I see the comments about the number of people being fired at fisheries on the east coast that they are ready to swing the broom and the hatchet in British Columbia. Let us get some action out there so we can get some employment in this area.

There is a harbour in Squamish that this government has been collecting $200,000 a year in fees for as long as you can go on. We have asked why the government is not dredging the harbour. For those who are boaters, if you read the chart it says you can go into the Squamish harbour with no problem, that there is lots of depth. Well the silt has built up. If you were to try to go into that harbour in high tide right now, you would likely go aground and somebody could be seriously injured or even killed.

We have advised the ministry of that but it says there is no money for it. Where is the money it collected? We know the government is trying to download the harbours and I have no disagreement with that as long as everyone does it fair and square. But while we are waiting for that we should not have to wait to dredge a harbour that is a danger to British Columbians and tourists who will travel into that area.

We look at immigration in British Columbia. What is this government doing in immigration? I asked a question in committee last week about what it would cost to bring that department into the 21st century with proper equipment and the answer given was $100 million. An awful lot of money, but not when you consider that there is $300 million being spent on welfare alone on people who are coming into Canada and abusing our refugee system by coming in from safe havens across the U.S. border and other areas.

Those are the types of things British Columbians want to see this government do something about. They want to look at the transfer payments to British Columbia. I said that we pay our fair share but we are suffering in health care because this government has cut payments in those areas. It should be doing more to assist and we should be getting more of our share back.

The infrastructure program is a political game with this government. Everyone has their applications in but it is amazing. I checked with my Reform colleagues. Not very many infrastructure programs are being funded in the areas with Reform members but the minister of fisheries has funding programs and the provincial government has funding programs. They are playing politics with the infrastructure program in British Columbia. British Columbians are not happy about that, no matter what their politics are. That program should be equally shared among all British Columbians.

With regard to coast guard services, we are not getting our fair share. I see Liberal members laughing. It is not a funny matter. One even sounds like a separatist. Only my colleague in the Senate has ever talked about British Columbia being separatist.

British Columbians are Canadians. They have supported Canada quite happily over the years. But we want to know that British Columbia is recognized here in Ottawa.

Premier W.A.C. Bennett, one of our long serving premiers, used to say it is a 3,000 mile flight to Ottawa but it is 35,000 miles back. That is the feeling still, unfortunately, of a lot of British Columbians.

I came to this House in 1972 and I could give some of the same speeches I made in 1972 right now with what the people in British Columbia are thinking about some of the issues as they face British Columbia. We want to make sure our voice is being heard.

It was one of the great issues in British Columbia during the last election. That is why the Reform Party won the majority of the seats and why they won the majority of seats in Alberta, and why we are growing in Manitoba and Saskatchewan. It was because people there knew that a grassroots party was listening to the people, was bringing a message to Ottawa, and oh, will this place be exciting after the next election when the Reform Party sweeps Ontario and chases a lot of those Liberals home.

[Scott Brison, Progressive Conservative, Kings—Hants, NS]

Madam Speaker, the hon. member brings an interesting perspective on the issue of fiscal policy to this House. As he mentioned, he was elected in 1972, I believe.

The process of deficit reduction has taken 15 years. Those are not my words. Those are the words of the Leader of the Opposition in the budget debate, that it has taken 15 years of policies, including the GST, free trade, deregulation of financial services, transportation and, I would add, the elimination of the national energy program.

The Conservative government was able to reduce the deficit as a percentage of GDP from 8% in 1984 to 5% in 1993 and reduce program spending growth per year from 14% to 0% growth when the Conservative government left office in 1993. I think the hon. member should look back with some pride at his contribution at that time and having contributed to deficit reduction and policies that contributed to it and that were continued under this government.

During the 1970s and 1980s, we saw significant debt growth, in fact debt growth from zero in 1970 in Canada and in many industrialized countries, including the U.S. Public opinion was not in favour of reduction in social spending. Public opinion ran contrary to the whole notion of attacking debts and deficits during the late 1960s through to the early 1990s.

My question for the hon. member: As a member of a party that professes to be focused on grassroots populism and on effectively listening to the public and responding to whatever the public wants, representing via a poll or whatever means that it has at that time, as a Reformer, if he or if his party had had access to the levers in the 1970s and 1980s when the public clearly did not want reductions in social spending and when the public clearly was not focused on deficit reduction, would he not, as a corollary of that argument, have focused on and supported public opinion at that time and would he not have perpetuated policies effectively representative of the public at that time?

[John Reynolds, Reform, West Vancouver—Sunshine Coast, BC]

Madam Speaker, I should remind the hon. member that I was a member of the Conservative Party and left in 1977 when there were still reasonable budgets in this country. I was not part of the party when it went through the great spending program.

The hon. member asks me would I have spent that money and would I have listened to the public. It was not the public they were listening to, it was the professional spin doctors and pollsters that have become such a professional part of this business of politics for both the Liberals and the Conservatives.

If the hon. member were to go out and listen to the public and watch the public, he would understand why in western Canada there really is not any Conservative Party any more. They stopped listening to the people.

I can remember being at meetings in western Canada with members of the Conservative Party who were friends of mine. They would try and tell us that we did not understand, this is the way we have to do it in Ottawa. I told them I did not understand them because they were going to be kicked out of office. That is exactly what happened.

It is the people in this country. We can stand up in this House and make all the speeches we want. I have been in and out of this business a few times. I had talk shows and radio shows in between. If we are not out listening to the people we will not understand. That is why there are 60 Reformers here and why there will be more in Ontario after the next election.

The people of Canada told the Conservative Party what they were doing in the years it was in office by taking the party from one of the largest majorities in Canadian history to the lowest number of seats that any major party has ever held in Canadian history.

[Wayne Easter, Liberal, Parliamentary Secretary to Minister of Fisheries and Oceans]

Madam Speaker, I will be sharing my time with the member for Vaughan—King—Aurora.

I am most pleased to participate in this debate on this budget. My seatmate, the member for Vancouver Quadra, in his response put it quite appropriately when he said and I quote “On the budget it is a defining moment in our history”. It is indeed a defining moment in our history.

After almost three decades of deficit financing that clearly handcuffed our ability to govern in the interests of communities, people and the nation as a whole, we now have a balanced budget and have greater flexibility in making decisions in the future.

I heard the remarks of the members for Vancouver Island North and West Vancouver—Sunshine Coast earlier. They talked about their concerns about dredging and some other concerns they had in fisheries and oceans. I would agree. There are concerns in that area. Now that we are in a position that we are able to balance the budget, I would hope that they would be onside in terms of spending in some of those areas instead of giving tax deductions to the wealthy.

Gaining this position has not been easy. The last four budgets from a personal point of view have not been easy, especially in the region where I come from, Atlantic Canada and in rural areas. In getting to the position of balancing the budget, rural Canadians have had to share a greater part of the burden than people in other areas.

Now we have accomplished our goal. We have a foundation which we can build on in the future. I have been accused of a lot of things. On this, I will clearly say that it is good to see a real Liberal budget again.

I quote from Giles Gherson of the Ottawa Citizen on February 25. He said:

How better to define Liberalism for the 1990s than closing the widening income gap between rich and poor by giving the country's poorest people not just a tax cut, but help to get the training needed for high-skilled, high-paying jobs of the new knowledge economy.

What he clearly says in that statement is the direction that we have gone in this budget. We have balanced the budget. We have targeted more to the low income people. It has been called an education budget in terms of looking at the future. It goes in a very different direction than members opposite seem to want to go with greater and greater tax relief for the wealthy instead of looking at all the people of this great country.

In the general sense, this budget is an education budget with its emphasis on youth, education and training and a lot of initiatives. I just want to list a few: financial assistance to students through the Canada millennium scholarship foundation and the Canada study grants; support for advanced research and graduate students through several granting councils; helping to manage student debt loads through tax relief for interest on student loans and improvements to the Canada student loans program; helping Canadians to upgrade their skills through tax free RRSP withdrawals for lifelong learning and tax relief for part time students; encouraging families to save for education through a Canada education savings grant; supporting youth employment through EI premium holiday for youth employment and youth at risk; and, connecting Canadians to information and knowledge through the SchoolNet and community access programs.

Those are measures targeted at the people of tomorrow, the people who are going to build this country into the future. That is the kind of forward-looking budget and forward-leaning government that this government on this side of the House is. Such measures show foresight and are indeed building for the future.

In my province of Prince Edward Island the increase in the cash floor of the CHST from $11 billion to $12.5 billion is extremely important. I know others have argued that it is not enough. It is never enough, but the fact that we are increasing the cash portion of the transfer means a lot more to Prince Edward Island than to some of the other provinces. Because of our smaller population base, just transferring tax points to Prince Edward Island as we have traditionally done would not be as important to us as is the transferring of the cash itself. That is extremely important to the health care issue in the province of Prince Edward Island.

One member opposite said there was no tax relief in this budget. He is clearly wrong. I believe there is $7 billion of tax relief over the next three years to those who need it most. That is the difference between Liberals and Reformers. We are targeting it to those people who need it the most, not those who need it the least.

The number of taxpayers in Prince Edward Island who are going to benefit from tax relief will be about 70,000 people; that is 97.2% of taxpayers in Prince Edward Island who will benefit from the tax relief measures outlined in this budget. That is good news.

I should make some other points on tax relief in part because of members opposite who are trying to leave the illusion that there is no tax relief. There is an additional $850 million to the child tax benefit program. The child care expense deduction will go from $5,000 to $7,000 for children under the age of seven. There is the new caregiver credit. There is the Canadian opportunities strategy. I do not want to take a lot of time on this but the list goes on and on.

What about rural areas? I do not mind putting on the record that I still have a grave concern about cost recovery and where it is going to lead in the long term. I would hope that in future budgets and in future government initiatives that we can move to reduce the cost recovery measures. I am concerned that cost recovery over the long term can kill the very economy that we are depending on for growth with the cost recovery fees, in particular in agriculture and fisheries.

I put out a caution that I would have liked to have seen more done in this budget, especially in the area of cost recovery.

In terms of the budget working for rural Canada, we ought to recognize that many of Canada's most important industries, such as agriculture, energy, mining, forestry and fishing, are based in the rural communities.

These primary industries account for almost half of Canada's exports. Canada's improved financial situation helps to keep interest rates low, encouraging small businesses, farmers, fishermen and others to invest in rural areas. That is one thing that certainly a balanced budget will help us with.

The group that will benefit most from the 1998 budget initiative to allow self-employed Canadians to deduct the cost of health and dental insurance premiums is rural Canada. That is a very important initiative, especially for the farming community.

The 1998 budget confirms the four year, $20 million Canadian rural partnership initiative. This initiative will support innovative programs to help rural Canadians find community solutions to challenges such as maintaining good soil and water and charting a successful course in a rapidly changing global economy.

In conclusion, the budget has foresight. It is balanced and it is leaning and looking toward building for the future in both rural Canada and especially among our young people.

[Jean-Guy Chrétien, Bloc, Frontenac—Mégantic, QC]

Madam Speaker, listening to the hon. member for Malpeque, the Parliamentary Secretary to the Minister of Fisheries and Oceans, one is tempted to take him seriously. However, his partisanship clouds his thinking. According to a basic law of physics, for every action there is an equal and opposite reaction. In preparing his budget, against the revenues the Minister of Finance also wrote a list of expenditures.

I would like the hon. member for Malpeque, who primarily represents middle-class Canadians from Prince Edward Island, to comment on the 10% increase provided for in this estimates for the Senate. A $45 million budget for 104 senators. This represents roughly $450,000 a year per senator. Given the amount of work they do in a year, one might say they are paid a very high hourly rate.

I would also like the member for Malpeque to tell us what he thinks of the 12% increase in the budget for the Governor General of Canada and his staff. During last week's break, I asked more than 250 of my constituents to name the governor general and not one of them knew who he was. I told them he nonetheless cost them $12 million a year. Yet no one knew his name.

I would like our colleague from Malpeque, who with his wife runs a successful dairy business, whose dairy herd has a good yield, why there is absolutely nothing for the farm community in this budget he just praised, a so-called forward-looking budget. What is left for agriculture after the WGTA, which provided a grain transportation subsidy for Quebec and the maritime provinces, was eliminated, after the subsidy for industrial milk producers was phased out over five years and after almost all research stations were shut down? Nothing.

Back home in PEI, he will boast about this budget for the future. In that sense, the mind of the Parliamentary Secretary to the Minister of Fisheries and Oceans is clouded by partisanship because there is nothing in this budget for the middle class, which really needs tax relief.

[Wayne Easter, Liberal, Malpeque, PE]

Madam Speaker, the hon. member started by saying that it was a relationship of physics. I was wondering where he was going in terms of his physics lesson in the beginning.

In terms of the three last points he made including the feed freight assistance program, yes, they were cut in the previous budgets, but the fact is that we paid funds to compensate producers. Now they have been able to build some additional industries because of the money we put into those areas including his home province of Quebec.

The dairy subsidy is one of the benefits, and he knows it, of the supply management system in Canada. When that subsidy was dropped over a period of time, farmers were still able to get a return on their cost of production plus a fair return on their labour investment. He should look at the number of dairy producers in his home province of Quebec that benefit from that kind of scheme.

In terms of his point on research, the fact is that with our matching initiatives we have been able to considerably increase the funding going into research.

If the member would have held meetings in his home province in terms of how much Canada as a nation was transferring to Quebec, he might have seen some better discussions in terms of those meetings.

[Maurizio Bevilacqua, Liberal, Vaughan—King—Aurora, ON]

Madam Speaker, I am very pleased to have an opportunity to address the House on this historic occasion. When I first came to the House of Commons as a member of Parliament almost 10 years ago, I could not have predicted that one day we would be speaking of a balanced federal budget. No one could have. At that time deficits had become a permanent part of our political culture.

Since I moved to Canada in the early 1970s our country never witnessed a balanced budget. Deficits were the reality of my generation. Younger generations grew up with them. It is the reality we lived with. This is a discouraging fact. The deficit was always a dead weight around our nations leg, slowing us down, holding us back.

The deficit robbed the government of its freedom to act in the best interest of Canadians. It clouded our vision and limited our horizons.

In my first term as a member of Parliament the only thing that was more discouraging than the existence of the deficit was the former government's failure to control it. Every year at budget time Canadians were presented with an impressive sounding plan to reduce the deficit. Then year after year after year the deficit would rise and our faith in the government's fiscal policies would fall.

Finally Canadians ran out of patience and voted for change. When the government took office it inherited a deficit of approximately $42 billion. It was an overwhelming challenge but the government did not shrink from it. From the outset the Minister of Finance brought forward budgets based on credible plans to control and reduce government spending. By sticking to these plans the government was able to slowly wrestle the deficit to the ground.

The Minister of Finance deserves our congratulations for succeeding in a task that has defeated many of his predecessors. However, let me echo what he said in his budget speech on February 24. “Canadians can be very proud today. This is their victory”.

Since the government took office Canadians have been key players in the budget making process. The public prebudget consultation introduced by the government gave every citizen an opportunity to speak directly to the government on this issue. Individuals and groups responded with enthusiasm. They came forward with their proposals for what should be in the federal budget.

Last year I participated in the prebudget consultations. The finance committee held public hearings from Vancouver to St. John's. These were complemented by prebudget town hall meetings held by members of Parliament in communities throughout the nation.

As a result, last year's exercise was the most extensive prebudget consultation to date. On behalf of the finance committee I would like to express our warmest and sincerest gratitude to the thousands of Canadians who made insightful contributions. Many of their thoughts, ideas and recommendations were addressed very clearly and precisely in the 1998 budget.

The people of Canada spoke out in a loud and clear voice. They told us that they want balance; not just a balanced budget but a balance in government policies, in its goals and in its results.

The government has listened and it has acted. The budget is the response. The 1998 budget responds to the expectations of Canadians.

Let us consider the following points. The government has eliminated a deficit which has been a priority for Canadians for many years. It has put in place a mechanism to start paying down the debt, which many have identified as the next challenge that government must attack. The government has taken some major steps toward tax relief. It has invested funds in certain key areas guaranteed to secure the maximum advantage for the resources available.

The budget is a turning point. This is the year we stop borrowing from our children. This is the year we start giving them something back. Instead of mortgaging their future we are now helping them to build their future.

With the Canadian opportunities strategy we are introducing a comprehensive approach which will ensure that all Canadians have access to an education. This is the cornerstone of our government's commitment to ensuring the future prosperity of this great nation.

Let us make no mistake. Getting an education is crucial. It will decide whether young Canadians will work as active players in the knowledge economy or they will be pushed to the sidelines.

The Canadian opportunities strategy is the key to a bright and rewarding future. It includes measures to help those who are currently students, graduates coping with student loans, the worker seeking to renew his or her skills, parents and grandparents saving to pay for students' education, post-graduates and others working in scientific and medical research, young people facing challenges in joining the workforce, and children in communities trying to gain access to the Internet.

I am personally very pleased to see the emphasis that has been placed on helping Canada's youth. It is tangible evidence of our commitment to Canada's future.

The budget contains other strategic targeted investments. For example, to help families with child care expenses the budget proposes to increase the limit on the child care expense deduction. For Canadians providing care for the elderly or disabled family members the budget proposes a new caregiver credit which will reduce federal taxes by up to $400.

Self-employed Canadians, owners and operators of small businesses will now be able to deduct premiums for health and dental insurance against their business income.

At the same time the government is moving forward in key areas. During last year's prebudget consultation Canadians told us that they support a measured approach to tax relief. They understood that as we enter a new era of balanced budgets no steps should be taken which might jeopardize the hard won victory over the deficit.

Therefore the vast majority of people who participated in the consultations agreed that in the initial stages tax relief measures should focus on Canadians in greatest need. That is what we have done. The government has taken measures to increase the basic income tax exemption. They will mean that 400,000 low income Canadians will no longer have to pay taxes. Another 4.6 million people will see their taxes drop as a result of these changes.

The budget also eliminates the 3% general surtax in its entirety for individuals with incomes up to $50,000. The general surtax will also be reduced for those with incomes between $50,000 and about $65,000.

Taken together, these tax relief measures will amount to a saving of approximately $7 billion for Canadians over the next three years. In all, 14 million low and middle income Canadians, 90% of all taxpayers, will benefit. This is only the first step. In the years ahead as resources permit, the government is committed to extending tax relief to other Canadians.

Finally, the budget addresses a third concern shared by a large number of Canadians: reducing the national debt. In the years ahead the government will continue to include a $3 billion contingency reserve in its budgets to prepare for unforeseen developments. If as was the case in recent years that reserve is not needed, it will go directly to paying down the debt.

At the same time, our government will continue paying down its market debt, the funds it has to borrow on financial markets. Already this year the government has paid down almost $13 billion of this debt.

For these reasons and many more, it is fair to describe this budget as an historic budget. Not only does a balanced budget represent something no other government has accomplished in 30 years, more importantly, it was done without destroying Canada's social safety net.

That has been the genius of the government's budgets. They have always combined fiscal responsibility with social responsibility. By doing so the government has ensured that Canadians will leave future generations with the legacy of expanding opportunities rather than one of high taxes and escalating debt.

There is no question in my mind that Canadians believe that tomorrow will be better than today.

[Libby Davies, NDP, Vancouver East, BC]

Madam Speaker, I heard the member opposite say that this budget focused on Canadians in greatest need and that the prebudget consultations were extensive. He also mentioned that all Canadians will have access to post-secondary education. I really disagree with those statements.

I remember the prebudget hearings that were held in Vancouver, where I come from. I can say that the people at those hearings had serious and sharp disagreements with the priorities of the government.

The hon. member said that the budget has been brought forward without destroying the social safety net. I would suggest that the evidence shows that the social safety net has already been destroyed by the Liberal government and the billions of dollars that have been taken out of the transfers to provincial governments.

I want to ask one question on education. The member says that there will be access for all Canadians. We have heard that the millennium fund and the $2.5 billion that has been provided will assist only 7% of students in this country. That is certainly not access for all to post-secondary education.

The child tax benefit that the Liberals have made so much about has not been indexed for inflation. It will not begin until 1999. And it will amount to a measly 80 cents a day for poor kids in poor families.

I would ask the hon. member to explain to the people of Canada how he believes this budget is helping those who are most in need.

[Maurizio Bevilacqua, Liberal, Vaughan—King—Aurora, ON]

Madam Speaker, as a member of Parliament I have travelled extensively throughout the country, not only as a member of the finance committee but also during the years when we were dealing with social security review. Many of the measures that have been announced in this budget actually address the concern cited by Canadians may I say from coast to coast to coast in relationship to key areas.

I do want to go back to the issue raised in reference to the Canadian opportunities strategy. There is no question that it does include measures that will benefit those who are currently students, graduates who are coping with student loans and workers who are trying to upgrade their skills.

Also there is the registered education savings plan and the greater flexibility therein and the government's contribution to postgraduate students who are working in scientific and medical research. The hon. member ought to say that we are investing precisely in the areas she has stated.

I can say with a great deal of certainty that in many quarters this budget is being dubbed at times as the education budget, as a budget that speaks to the development of human resources in our country. When we look at the amount of funding that has been directed toward those areas, the member must admit that students are much better off today than they were prior to the budget. We have to have a sense of fairness in addressing this particular budget as it relates to the quality of life that students will have as a result of the measures.

I can honestly say it addresses some of the concerns I had many years ago when I was sitting in the opposition benches about the various cuts the then Conservative government was imposing on youth programs. I am really glad to see that the government has highlighted youth as a major issue that we need to make great investments in.

On the question of transfers to the provinces, the hon. member knows that we raised the floor to $12.5 billion, as much as the national forum on health said that we should. We followed up on that.

[Bill Gilmour, Reform, Nanaimo—Alberni, BC]

Madam Speaker, I will be splitting my time with my colleague from Calgary—Nose Hill.

It gives me great pleasure to speak on this budget. As environment and Senate critic for the official opposition, I will be addressing both of those issues in turn.

One of the new spending initiatives outlined in the budget includes new spending for climate change. Before 1997 the Liberals spent over $100 million in direct funding each year to address climate change. The last budget provided an additional $20 million per year over the next three years. We are now up to $120 million. This budget provides another $50 million per year over the next three years, bringing the budget for climate change up to $170 million a year.

The government is muddling through on this issue. First, it fails to address the real agreement. It knew that this issue was coming down the pipe. It had been coming for many years. Yet this government failed during Kyoto. It had the opportunity to set up consultations beforehand to go to Kyoto as other countries did with a plan in mind. It failed to do that. The government failed to do its homework and show Canadians the various implications of the targets that it was about to sign.

The provinces have to be onside for any global agreement on climate change within Canada. What did our government do? It consulted with the provinces beforehand and then immediately dismissed the provinces and settled for a level that was 6% more stringent than the provinces had agreed to. It is the provinces that are going to have to implement this deal. What a nifty way to start out on a deal; alienate one of the partners you are trying to work with.

To show where we are, the government agreed to levels 6% lower than the 1990 levels for climate change. Picture where we are now. We are already 13% above the 1990 levels. Now the government says we are going to go 6% below that target in the next 10 or 12 years. Collectively 13% plus 6%, we have to change 19% over the next 10 or 12 years.

This is not fearmongering, but to give people an idea of what that 19% means, to reach those levels we could take all Canadian light cars and trucks off the road. I do not think we want to do that. Or we could remove 90% of the commercial trucks and air, marine and rail transportation. Or we could eliminate the heating in all of our homes, all of our commercial buildings and all natural gas distribution. Or we could shut down three-quarters of our fossil fuel power generation.

That is the level this government agreed to in Kyoto. The problem is how we are going to get there. There is no plan. This government has not put forward a plan. Look at the players. It is every Canadian. It is the provinces. It is industry. It is all of us combined, yet there is no plan.

Throw $170 million at it. That is the answer. That simply will not wash.

Instead of consulting Canadians on the implications of the deal and working together to find common ground to develop a strategy, this government has a half-baked idea of getting 26 Order of Canada members together so that they can express their feelings. That is going to get us a long way.

Where is the plan? That is the bottom line. I would hope that with the $170 million we will see a plan from this government over the next few months. Then both sides of this House can see where we are going with it, work with the provinces, work with all Canadians so that we can solve this problem.

While I have the opportunity I would also like to touch on endangered species. Bill C-65 on endangered species died on the order paper at the last election.

There were a number of concerns with that legislation. I have had meetings with various provincial environment ministers, and industry and environmental groups. I would hope that the minister is doing the same thing. The legislation was so flawed that even many Liberals on the other side of the House would not have been able to vote for it.

I hope those concerns will be addressed in a new bill dealing with endangered species that would come forward probably at the earliest next fall. We all want to work together to have good endangered species legislation which protects the species but also works well for Canadians.

One of the major flaws with Bill C-65 was the lack of private property rights. There has to be a mechanism to deal with private property rights. There has to be a compensation mechanism so that if people have something on their land they are not basically thrown off their land, they can be compensated and move forward.

There is another issue which comes very much to the fore. It has come from a number of groups I have met with. The legislation has to be at arm's length from politicians. We cannot get at it. The example I will use comes from the last election when the cod fishery was opened up on the east coast just before the election. It was an issue that was just there to catch votes. Any endangered species legislation has to be at arm's length so that we as politicians cannot do that. I am not sure what the mechanism is but there has to be a mechanism that allows a relationship so that any political party cannot get at it to play with or manipulate the system.

There also has to be clear federal-provincial guidelines. The old legislation basically went into provincial jurisdiction. This was a major problem with most of the provinces. With the citizen's right to sue, this was a concern where third parties had the ability to sue. There were major concerns with the legislation.

I would hope legislation that is possibly going to be introduced in the fall will address these issues and that it will be legislation we can all support.

Finally in my portfolio I deal with the Senate. Some members opposite may say that is the other house and we cannot deal with it. There is one way we can. Our very first vote, vote one of the estimates is the Senate. It is the Senate appropriation. It is the Senate's money. This year the Senate has asked for $44,691,000 which is $4 million more than it had last year, a 10% raise. I would challenge anyone to look at the budget and justify why other departments would require a 10% increase. I do not think they do. A few departments would have that. I am not on a witch hunt. I am simply looking for accountability.

Something happened for the first time in the history of Canada during the last Parliament. Through the public works committee this House passed a resolution to send a letter to the Senate that requested the Senate finance committee to come before the House of Commons to explain its expenses. The Senate refused to do that. We have another House that is unaccountable. That is the point we should be dealing with. We appropriate the Senate's funds so we should have the ability to scrutinize the Senate's budget.

I hope this government in its budget will not only just throw money at issues like climate change, I hope it will involve Canadians and the provinces, and that we have legislation we could all support at the end of the day.

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

Madam Speaker, it is a pleasure for me to add some comments on the budget. As the official opposition's social policy critic I look at the budget in terms of how it will affect average individual Canadians and their families.

As we all know, our federal government has lived on borrowed money every single year for the last 30 years. I ask Canadians watching this debate did you as a regular Canadian run your family finances that way? Did you borrow more and more money every single year for the last 30 years? What if you had done that? What shape would you be in now?

That is about the shape our federal government is in after its members have been such poor stewards and fiscal managers. Now we have a federal debt of $583 billion. That is a mortgage on our children. Every single year they have to pay interest on that debt. That is money they will not have to look after their own security. If we add provincial debts, even though five provinces have balanced their budgets in years past, the total debt of Canadians is $900 billion. Because of that each Canadian family of four owes $77,000 on the federal debt alone.

I ask Canadians, suppose the federal government took out a $77,000 mortgage on your house and expected you to make the monthly payments. That is exactly what has been done. Annual interest payments of $45 billion are made every year by Canadians on the federal mortgage. The average family of four pays $6,000 each and every year as its share of interest on the national debt. That has to come out of taxes. There is no money growing on trees yet.

I ask Canadians watching this debate what you and your family could do with an extra $6,000 every single year. Nearly one-third of total government spending goes down the drain to pay interest. That would be enough to pay for the total federal government support for all our important social services, for health, for education, for welfare, for equalization and for old age security. That is how much money we give to our lenders every year just in interest payments.

Because we have to pay so much each and every year in interest on our monstrous national mortgage this is what has happened to the transfers to support health care, education and welfare.

In 1994 the government supported those important programs to the tune of $19.3 billion. In 1995 it slipped to $18.6 billion. In 1996 it slipped to $14.9 billion. In 1997 it slipped to $12.5 billion. That is what has happened to the government's support for the programs which it has pretended to protect.

Since the government took office interest on the debt increased by $7.5 billion a year. It is no accident that the same government has reduced health and social transfers to the provinces by $7 billion. Interest goes up and social funding goes down.

If an individual has a credit card balance or a bank loan they have to pay finance charges. Those dollars are taken away from discretionary spending. They are taken away from saving for emergencies. They are taken away from the amount each of us has to educate our children. They are taken away from the amount each of us can put away for retirement.

In the same way our enormous national mortgage and the interest we must pay on it every year limits the social security which our citizens can expect.

We have seen that happen. I have just talked about it. We have seen $3.3 billion a year cut from EI benefits. We have lost $7 billion from the health care, education and welfare programs. What has that led to? It has led to hospital closures and longer waiting lists. Now the government is making a big deal about home care. I guess there has to be home care because there is no hospital care. Of course there is no money to fund home care.

Students are facing rising tuition fees and high levels of debt. There is less security for families.

What will happen when another recession hits, as it inevitably will? There is a business cycle. This will require an increase in social spending. Where will that money come from?

What will happen when interest rates rise? They are at historic lows. They will not stay that way forever.

Lower debt is the key to social security, both for us today and for our children and our grandchildren, but the government has no serious plan to tackle the mortgage which we have burdened our children with.

Not only has Liberal and Tory gross mismanagement of Canada's fiscal house for decades imperilled the security and social services to protect Canadians, their insatiable grasping for more and more tax revenues is impoverishing our citizens. The average Canadian family has suffered a $3,000 drop in real income since the Liberals took office. Canadian taxpayers must start paying taxes at under $6,500 a year of income. It is less than $12,000 for a family of four.

How many people do we know who can live comfortably on $6,500 a year? Anything they make after that the government starts taking out of their pocket.

The average Canadian family spends more on taxes, about $21,000 a year, than on food, shelter and clothing combined, which is about $17,000. Since 1961 families have spent less on shelter, food and clothing. What they pay in taxes has nearly doubled over the same time period. It is brutal taxation. People are not able to keep enough of their own money to meet basic needs and yet every year the government wants more.

I quote from a recent study by the Vanier Institute of the Family: “Because expenditures on basic necessities take a larger share of the monthly budget for lower income families, relatively little room is left for other items which can be very important for the health and well-being of our family members”.

The Liberals in their last budget made much of child poverty and how they were going to attack it. Liberal budgets have caused child poverty. Liberals should be hanging their head in shame.

The same study found that families need an average of 76.8 weeks of employment to pay for all of their expenses. Of course, there are only 52 weeks in a year. What happens is that many families become dependent on various income security programs to survive. Inflation and increasing tax bites are leaving even that security in tatters. The value of the child tax benefit declines every year. The refundable GST credit declines in value every year. Personal taxes payable creep up steadily every year. These stealth taxes fall most heavily on the working poor.

The government makes much of the tiny bit of tax reduction thrown into this budget but the facts are that over four years total tax relief will be $6.3 billion but bracket creep over the same period of time will bring in $8 billion, a net tax increase of $1.7 billion. Only a Liberal could call a $1.7 billion net tax increase tax relief.

Families and Canadians must have tax relief. They must have a sensible determined plan to get rid of this mortgage on our country. Because neither of these things were done in this budget, I will not be supporting the budget in the vote tonight.

[Roy Cullen, Liberal, Etobicoke North, ON]

Madam Speaker, I would like to put a question to the member for Calgary—Nose Hill which she may or may not want to answer. I do not mean to pry but I was wondering whether she has ever had a mortgage on a home, her own home.

I had the good fortune of owning a home in Canada. When I bought my first home in the late 1970s I had a mortgage of $50,000. Frankly, I thought I would have to declare personal bankruptcy within the first or second month. However, in another six months to a year I looked at my mortgage and it was suddenly fairly manageable. I had not become obsessed with the mortgage and life went on.

I do not want to treat the member's remarks about dealing with the debt facetiously. I am all for dealing with the debt, but I think there is a danger of becoming obsessed with it.

I wonder if the member would answer my question, although I would understand if she declined.

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

Madam Speaker, the mortgage on our country is not backed up by any asset. The mortgage on our country is simply and solely money that our children owe. We have a situation where we have consumed $583 billion that we did not pay for. Now we are simply loading it on our children's credit cards and telling them to pay the interest every year and maybe sometime somebody will get around to paying down the debt.

For this member to suggest this is in any way analogous to buying a house shows how very little the Liberals understand the terrible injustice that has been done to our children.

I would just point out to Canadians watching this debate that this is the kind of frivolity with which the Liberals treat the mortgage that has been put on our children's future. It is not backed up by any asset and not fairly incurred.

[Andy Mitchell, Liberal, Secretary of State (Parks)]

Madam Speaker, there are two points that I would like to make to the hon. member.

First of all, she talks about taxpayers. She is right to talk about taxpayers. They are an important part of Canada. In fact, there was $7 billion worth of tax relief in this budget. What this member and what her party do not talk about are those Canadians who are not taxpayers: the disabled who are unable to work; seniors who are living in poverty; Canadians who are unable to find work for whatever reason. Those 10 million plus Canadians in this society who are not taxpayers deserve the interest of this government as much as Canadian taxpayers.

Second, and I will be very brief here, it was interesting that the member, in talking about transfers to the provinces, failed to bring up the fact of equalization and the fact that equalization payments have actually increased. Do you know why I think she may not have brought it up? Because her party's platform in the last election called for the absolute gutting of these transfer payments, of these equalization payments, so that our poorer provinces, the provinces where access to basic services are important and need the support of equalization, would be disadvantaged. That party would simply do away with it. So I ask the question: Why would she not talk about equalization payments and her party's determination to gut them?

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

Madam Speaker, the Liberal member opposite has a lot of nerve to talk about gutting when this is a party that has cut $7 billion from support for health care and education. That is gutting.

What we have done in our program is to say that equalization must go to the poorest provinces. Remember, equalization does not come from the federal government. It goes from have provinces to have not provinces. It has nothing to do with federal government spending.

Let us talk about what this government has done for seniors and the unemployed.

[The Acting Speaker (Ms. Thibeault)]

I am afraid the time has expired.

[Roy Cullen, Liberal, Etobicoke North, ON]

Madam Speaker, I am pleased to share my time with the member for Ahuntsic.

I guess the member opposite has had a mortgage and is still alive and well and unfortunately she missed the point of my question.

I am very pleased and honoured to be part of a very historic moment because our federal government budget will be balanced for the first time in almost 30 years. We have achieved this with balance and with determination. We have not been slashing and burning. We have been listening to Canadians. This balanced budget could not have been achieved without the support and with sacrifices from many Canadians. The effort has been worth it.

A balanced budget means no new borrowing by the Government of Canada. We can now begin to pay down our public debts. We can reduce the tax burden of Canadians and we can make important and strategic investments in our health care system and in providing Canadians with access to the knowledge and skills that will be necessary for the jobs of the 21st century.

Our federal budget will be balanced for 1998, 1999 and 2000. This is the first time in almost 50 years that the federal government will have balanced its books for three years in a row. That is why I am pleased to be part of this historic moment.

Some, including members of the official opposition, call for more departmental and program budget cuts. Certainly there will always be room to increase efficiencies and make sure that programs are still relevant. I would like to highlight that by the end of the year 2000 federal program spending in relation to GDP or the size of our Canadian economy will be at the lowest level in 50 years. That is quite an achievement. Over the next two years the percentage of our federal debt in relation to the GDP, the size of our Canadian economy, will drop from 72% to 63%. It will decline very quickly in the years following.

We have started the very important process of paying down the public debt and we will continue to do so. As my colleague pointed out, so far this year $13 billion of market debt has already been paid down.

In this budget the Minister of Finance is providing $7 billion in tax relief to Canadians. When members opposite say there is no tax relief, please, there is $7 billion in tax relief. In terms of new spending initiatives, 80% of our new spending initiatives reflect two of the highest priorities of Canadians, access to knowledge and skills and increased funding for health and education through increased transfers to the provinces.

The key to jobs and growth in the years ahead is knowledge and skills. The Canadian opportunities strategy will help prepare Canadians for this rapidly changing world. The Canadian opportunities strategy acts on seven fronts: one, to help students in financial need to cope with rising costs; two, to increase assistance for advanced research and graduate students; three, it helps individuals repaying student loans, particularly those in need; four, it helps Canadians upgrade their skills throughout their working lives; five, it helps families save for their children's education; six, it encourages employers to hire young Canadians and help young people make the transition to work; and seven, it helps bring the benefits of information technology into more classrooms and communities across Canada.

A very important component of the Canadian opportunities strategy is a Canada millennium scholarship foundation. Canada millennium scholarships will be awarded to more than 100,000 full and part time students each year over the next 10 years. This initiative will level the playing field or begin to level the playing field for low and middle income individuals who demonstrate academic merit.

I was very pleased also to see more support for research in Canada. The increased funding to three granting councils will complement very well the $800 million Canada foundation for innovation which our government launched last year. As a nation, we must invest increasingly in both the public and the private sectors in research, development and in our people. Our federal government, as the fiscal capacity permits, is demonstrating this commitment.

Many conscientious students in my riding come to my office with problems paying off their students loans, so I am very pleased to see the improvements in the Canada student loans program that were announced in this budget. These measures include income tax relief for interest charges on student loans and the extension of loan repayment periods.

Changes to RRSP provisions, the new Canada education savings grant and an increase in the limits of contributions to the registered education savings plans will provide greater opportunities for adults to participate in lifelong learning and for them to save for their children's future education.

This budget allocates a further $850 million to enrich the Canada child tax benefit, a further investment in the future of our children. When children are deprived of the opportunity to reach their full potential, we as a country are deprived of our full potential.

Canadians are concerned about the state of our national health care system. This budget confirms an increase in the cash floor of the Canada health and social transfer from $11 billion annually to $12.5 billion annually. This amount responds directly to the recommendations of the national forum on health.

In addition to this annual cash contribution, our federal government will pour over $13.5 billion in 1998-99 into provincial coffers in tax points for health and social programs. This is totally different from the equalization transfers.

There has been much misinformation about the impact of federal transfer payment reductions to the province of Ontario over the last few years. I would like to clarify that.

When fully implemented, Mike Harris' 30% tax cut scheme will reduce provincial revenues by $4.8 billion per year, money that could have been used to balance the budget or fund health care. It is more than five times as much as the $850 million that federal transfer restraint will have cost the province by the year 1998-99. Let us put things in the proper perspective.

The province of Ontario has made some choices as we have and we have not sacrificed important social programs for tax cuts. General tax cuts will come when we can afford them as Canadians.

This budget begins the process of tax reductions as I said, and I am confident that more tax reductions will follow. We have heard much recently about the so-called brain drain. Some would call it the brain trade, but I think it is clear that we need to pay attention to differential tax policies in the United States and Canada as it affects individuals.

In the United States, for example, tax policies encourage employees to own shares in their own company. Tax policies also encourage employers to set up employee share ownership plans. The results are significant. Increased productivity, more employment, greater job satisfaction and many other benefits. I believe we should be moving aggressively in these areas as well.

In the overall equation, we need to understand and accept the fact that individuals moving to the United States are often making a lifestyle choice. I quote from the Toronto Globe and Mail recently from a professional who moved to the United States and then moved back to Canada after some years in the United States. The article is entitled Back from the Brain Drain. He said: “I doubt that there are substantial tax gains to be made for the average young professional if he had to pay the real cost of health care and relocation.”

This is not from a right wing think tank. This is not theory. This is from a Canadian who went to the United States and has come back.

There are many other positive provisions in this budget which we cannot really outline here in any detail. We have heard about many of them from my colleagues. Not too many of the other members opposite have mentioned them but there is health care, child care expenses, people with infirmities, with disabilities, self-employed individuals, the voluntary sector and a host of other very positive provisions.

To sum up, this budget has balance. It is the Liberal way but I would ask all in this House to celebrate this historic moment and agree among parliamentarians that we will work together to build a stronger future for all Canadians.

[Garry Breitkreuz, Reform, Yorkton—Melville, SK]

Madam Speaker, I have a very simple question for this member. I have asked this question previously but really did not get an answer. One of the things that the government has done in its budget is give a tax break to parents who use child care outside of the home.

I feel this is totally unfair and unjust. The member talks about balance. There is no balance here. Does he not agree that parents giving care to their children in the home provide just as valuable a service to society as anyone else and should be afforded the same tax considerations?

It is going to have a very negative effect on the family to have parents subsidize other parents who use child care outside of the home. Those parents that make that choice, I believe, should be afforded the same privileges as those that use child care at home. Would he agree?