Mr. Speaker, I appreciate the opportunity to participate in the budget debate.
First of all, let me congratulate the Prime Minister for his leadership on this issue and of course the finance minister for his fortitude and the vision he has shown toward leading us to a balanced budget.
Most important, I take this opportunity to congratulate and thank the Canadian people because this is indeed their budget, their reward. All their hard work has paid off in a balanced budget; 1998 marks the first time in 30 years that a federal Government of Canada has journeyed into this area. Before we get to the facts and figures, I want for a moment to outline how we got to where we are today by taking us back to 1993.
When I was first elected in 1993 the deficit was $42 billion and the country's finances were in disarray. This meant high interest rates and of course fewer jobs for all Canadians along with lower revenues overall.
This led to a very dismal economic situation. Our future did not look good but the people in 1993 gave us a mandate because we gave a very clear message of what we wanted to do. We also told them at that time that it was not going to be easy.
In the fall of 1994 we introduced a framework for a better economic policy, a guide that would dictate just what this government was going to do, how it was going to do it and what it was not going to do.
The 1995 budget put that framework into action. All of us took the plunge at that time. The 1995 budget set the country on a course of fiscal responsibility and government renewal. We all knew that these decisions were not going to be easy.
The reduction in government spending was unprecedented in Canadian history. The budget not only overhauled how government works but what government does.
We reduced program spending from $120 billion to $108 billion. In short, the 1995 budget initiated that overall departmental spending be cut by 19% in three years.
The 1995 budget also made it clear that subsidies would decline by 60% in three years. The government made the move to privatize, for example, commercialized government operations where it felt feasible and very appropriate.
As I stated, we changed government operations as a business for future generations. We responded to the need for more than an effective system of provincial transfers. For example, the Canada social transfer made it possible for the provinces to be more flexible and respond to the needs of the people rather than the flexible rules that existed in the past.
Each province has different needs. However, the conditions of the Canada Health Act were and still are being maintained. As the Prime Minister emphasized just the other day on television, health is one issue that we are adamant on maintaining for all Canadians. For this government these conditions remain fundamental and non-negotiable.
We also decided in 1995 to make some very different choices. We chose to work in favour of a strong economy and a stronger country. Many governments have known and talked about the need for reform and renewal. Our government chose to stop talking and to start acting. It was very tough but we made it happen and here we are today.
For a moment let us fast forward to 1998, the first budget of the new mandate. The economic recovery was indeed remarkable. In 1993 the deficit was $42 billion. Who would have believed we would be sitting here today talking about a zero deficit, a balanced budget? We have been applauded not just within Canada but beyond our country.
In 1993 the unemployment rate was 11.4% and growing. Today, when we look at the more recent statistics, it is almost 8.5% to 8.6%. If we start breaking that down regionally, in the greater Toronto area it is even lower than 8.5%. I believe it is just over 7%. Calgary, for example, is looking for people to hire today.
Also in 1993 interest rates were at an all time high. They were definitely in the double digits. They are now hovering around 7%. Not too long ago they were even as low as 6% to 6.5%.
The burden of debt in 1993 was very unmanageable. Now, with a zero deficit, we can start chipping away at the debt. Anybody who can add one and one will know that we first had to address the deficit before we could start addressing the problem of the debt.
The 1998 budget puts in place the debt repayment plan. We have actually paid down $13 billion in market debt in the past year alone. In the next three years we predict that we will be able to bring down the debt by an additional $9 billion.
The economy is now on the move upwards and growing. On the average in 1997 the economy had an overall growth of 3.5%, the best pace since 1994. In fact, our economy has managed to climb its way out from the financial basement of the G-7 to being number one and applauded worldwide.
Job creation has rebounded very strongly since 1993. More than one million jobs have been created since 1993. This is not according to what we as politicians are saying or what people are saying. This is according to what the statisticians are saying and the people who are working out there today.
Consumer confidence is back and strong. Canadians are feeling very confident about their economy and about their country as a whole. With this balanced budget we are finally able to introduce initiatives that will leave more money in the pockets of all Canadians who have worked so hard and have been so patient with us and this government. That was reflected with the return mandate to continue the programs that were commenced in 1993.
The government has kept its promise to reduce taxes once the budget was balanced. We know that in 1993 we inherited payroll contributions of $3.03. Since then they have been going down steadily to about $2.70 where they stand today. The 1998 budget has targeted tax relief to those who need it the most, low and middle income Canadians. As I said, by July 1998, as the budget states, almost 400,000 low and middle income individuals will be removed from the tax rolls and an additional 4.6 million taxpayers will pay less income tax.
Let me stress that in Ontario alone 91% of all taxpayers will benefit from tax relief. Catherine Swift, president of the Canadian Federation of Independent Business, said: “Putting more money into people's hands is good for the economy”. That is what this budget has commenced doing.
Very clearly there are modest tax reliefs right now but it is only the first step, as the finance minister and Prime Minister have stated, and as we all have been stating.
As our economy continues to improve taxes will be reduced even further. This year's balanced budget alone means we can again start investing in our future, particularly in the areas that Canadians have told us are their priorities.
More than 80% of all new spending will go to health and education through increased transfers to the provinces. The 1995 budget made some very difficult decisions with regard to health. We did not have many choices at that time. Our backs were up against the wall. In 1998 we had a choice and we chose to follow the recommendations of the national forum on health and increase the Canada health and social transfer cash floor from $11 billion to $12.5 billion, an additional $1.5 billion on the forum's recommendation.
This measure will provide the provinces with an additional $7 billion in cash over the next six years to fund health care, education and social assistance. It is now up to the provinces to make the choices of how they spend their moneys.
Will they continue to cut funds from health care in order to keep their election campaign promises of tax relief? In Ontario alone the Tory tax cut agenda will reduce provincial revenues by $4.8 billion per year. This is more than five times the $850 million a year in federal transfer cuts to that province. Canadians should realize that the province's insistence of blaming the federal government for all these woes is of course a convenient way of detracting attention from their program.
Another choice the federal government has been given with this year's balanced budget is to introduce the Canadian opportunities strategy.