Mr. Speaker, it is a pleasure to rise in the House of Commons this evening to represent the people of the riding of Essex and to participate in this economic development debate.
On February 24 we introduced our fifth budget. I am unsure if this is the most important budget in our country's recent history or if the distinction more rightly belongs to our government's first budget which set the course that allowed us to be debating today, for the first time in 28 years, a balanced budget and the economic development that results from a balanced budget.
One thing I am sure of is that our Prime Minister and our Minister of Finance deserve praise and thanks for restoring fiscal sanity to our country's books and for ensuring the future of Canada's children and grandchildren for years to come.
When we were first elected in 1993, the federal deficit stood at $42 billion. It is sad but amazing to consider that prior to this budget one in three Canadians, everyone under 27 years of age, had never seen their federal government balance its books. For the 1997-98 fiscal year there will be no deficit, for the first time since 1970. This historic announcement that the Government of Canada has recorded its first budgetary surplus in 28 years is great news for all Canadians.
I also want to extend praise and to thank all Canadians who helped guide this government through the difficult task of balancing the books.
One thing this government did different from previous governments in addressing the deficit problem was to consult with Canadians. I know full well from my experience as vice-chair of the finance committee last year on how widespread those consultations were and how seriously the Minister of Finance viewed them. It is not just the finance committee that holds prebudget meetings. Many individual members of Parliament also do.
Each year since being elected in 1993 I have hosted prebudget hearings in my riding. Each year I am pleased with the articulate and well thought out presentations and how many of the suggestions, which come up in similar meetings across the country, are reflected in the budget. I held my fourth prebudget consultation in the town of Essex on November 14, 1997. I would like to read into the record my conclusion from that meeting.
“In conclusion, the one point on which there seemed to be almost universal agreement was that the federal government should be allocating financial resources and management to training and to research. Although the debt was acknowledged as a problem, it was not given priority over basic concerns for our social programs, pension plans, health care and education”.
I would like to take a moment and compare that statement to the 1998 budget. One of the themes of my meetings was the need to allocate financial resources and management to training and education. This is certainly reflected in the 1998 budget.
In the budget the government introduced the Canadian opportunities strategy which builds on actions in the 1996 and 1997 budgets and also introduces new measures. The Canada millennium scholarship program is the centre of the Canadian opportunities strategy. It is the single largest investment ever made by a federal government to support access to post-secondary education for all Canadians. Through an initial endowment of $2.5 billion, the arm's length Canada millennium scholarship foundation will provide scholarships to over 100,000 students over 10 years.
Scholarships will go to help Canadians who need help financing their studies and demonstrate merit. For full time students scholarships will average $3,000 a year. Individuals can receive up to $15,000 over a maximum of four academic years. The Canada millennium scholarships could reduce the debt load that recipients would otherwise face by half.
The government is also introducing Canada study grants. These recognize that many students needs are not fully met by scholarships and student loans. Beginning in 1998-99, Canada student grants of up to $3,000 a year will go to over 25,000 needy students who have children or other dependents. These grants will help both full time and part time students and will cost up to $1 million annually.
As we are aware, student debt has become a heavy burden for many Canadians. In 1990 a graduate completing four years of post-secondary education faced an average debt student loan of $13,000. By next year the same graduate's average debt will almost double to $25,000.
To deal with this problem, the budget proposes five things. First, all students will get tax relief, 17% federal credit for interest paid on their student loans. Second, we are increasing the income threshold used to qualify for interest relief on Canada's due loans by 9%. More graduates will be eligible. Third, we are introducing graduated interest relief which will extend assistance to more graduates further up the income scale. Fourth, for individuals who have used 30 months of interest relief, we will ask the lending institutions to extend the loan repayment period to 15 years. Fifth, if after extending the repayment period to 15 years a borrower remains in financial difficulty, there will be an extended interest relief period. Finally, for the minority of graduates who still remain in financial difficulty after taking advantage of these relief measures, we will reduce their student loan principal by as much as almost half.
Another item in terms of training that often came up at my prebudget hearings was that assistance needed to be targeted, not just toward youth and students, but also to assist individuals already in the workforce who needed to upgrade their skills.
Several new measures are proposed in this budget that will improve Canadians' access to learning throughout their entire lives. The first is tax-free RRSP withdrawals for life long learning. At least six million Canadians have RRSPs with total assets of $200 billion. This represents an important source of funds. Beginning on January 1, 1999 Canadians will be able to make tax-free withdrawals from their RRSPs for life long learning.
An individual who has an RRSP and has enrolled in full time training or higher education for at least three month during the year will be eligible. An individual will also be able to withdraw up to $10,000 a year tax free over a period of four years to a maximum of $20,000.
To continue to upgrade knowledge and skills can be particularly hard for the growing number of Canadians studying part time and trying to manage the difficult balance of work, family and studies. The 1998 budget proposes two measures to help them. Beginning in 1998 the education credit will be extended to part time students and, in addition, for the first time parents studying part time will now be able to deduct their child care expenses.
The Canadian opportunities strategy also addresses the urgent problem of youth unemployment. The actions we are taking will give young Canadians the job experience they need and provide support for those who have dropped out of school and face particularly tough challenges.
As well, the 1998 budget provides employers with an employment insurance premium holiday for hiring additional young Canadians in 1999 and the year 2000 between the ages of 18 and 24. This will increase employment opportunities for youth and reduce payroll costs for employers.
Second, investing a further $50 million in 1998-99, $75 million in 1999-2000 and $100 million the year after will more than double fund the youth at risk who lack basic education and skills.
These programs do work. For example, there are several at work in my riding currently. There were four youth centres in my riding just last week which received $33,000 in funding to run programs to assist young people, to help find employment, write resumes and prepare for job interviews.
Another comment that came up during my prebudget hearing, not just this year but over the last several years, was the need for Canada to invest in research and development. As chair of the industry committee, this is a theme very close to my heart. Consequently, I was thrilled to see the 1998 budget provides additional funding of $34 million annually for the national research council industrial assistance program to help small and medium size businesses as was announced in our election campaign promises.
As well, the budget also makes available increased funding for more than $400 million over three years for science research granting councils: the medical research council, the national science and engineering research council and the social science and humanities research council: $120 million in 1998-99, $135 million in 1999-2000 and $150 million in 2000-2001, providing invaluable service to Canada. This will encourage our best and brightest to stay in Canada.
Again, similar to the concerns of my constituents, this budget has proposed a rational approach to reducing national debt, and to do so in a manner that does not put our social programs or health care or education at risk. I know that in my home province the premier has claimed the opposite.
To set the record straight, I would like to quote a Southam newspaper journalist, Andrew Coyne, who had little time for the tired old provincial complaint about transfer cuts, pointing out that “the total cut to federal cash transfers to the provinces amounted to barely over 3% of total provincial revenues, hardly draconian”.
In conclusion, I would like to outline for my constituents that this budget also confirms a four year, $20 million Canada rural partnership initiative. It will support programs, help rural Canadians and communities to find and support maintaining good soil and water and charting a successful course.
In conclusion, our budget has many stages and we go on into the future. It delivers real benefits for Canadians today and a great outlook for Canada as we start the new millennium.