Mr. Speaker, it is my pleasure to speak on the implementation bill and add my comments to the budget debate.
As many members have stated, this budget is very historic. I think all our Liberal budgets have been somewhat historic but this budget is historic because it can bring in renewed optimism and renewed hope. We are now embarking on an age when we will no longer say that with reliance on federal government support things are going to get worse. We can now begin to say that we have reached the bottom and things can get better.
More needs to be done. Many people in this country are hurting and many people are not sharing in the prosperity that is generally around the land. I will return to that point toward the end of my speech. Let me highlight what I think are the major accomplishments in the budget.
Against the backdrop of unemployment dropping very rapidly in my own community, as I mentioned in one of my comments earlier, since 1993 or thereabouts the unemployment rate has dropped probably from around 16% to about 8%. We are seeing a gradual but steady month over month decline of the unemployment rate which is fundamentally the most important statistic that we can talk about. It is more important than the balanced budget. It is more important than tax relief. Jobs are the real issue in this country. When people have the dignity of work they are more hopeful for their existence and more hopeful as a community.
Having said that, however, we cannot underestimate how important balancing the budget is. Not until we balance the budget can we start to deal with the major issue of the debt. By balancing the budget we know that as the economy grows both in real terms and in inflationary terms and as we pay down the debt the proportion of the debt as a percentage of our economy is going to get smaller very quickly.
If we have approximately 2% growth on an annual basis combined with approximately 2% inflation we can expect that the debt as a percentage of the economy will be cut in half in merely 10 years or thereabouts. That is a tremendous achievement. It is all based on having a balanced budget.
In promising a balanced budget this year, next year and the year after, the finance minister has put us on the road to solid recovery.
When I look at how things have changed in my own community since we took office in 1993, I see a change from a community which suffered a terrible recession in the late 1980s and early 1990s to one where the prosperity level is very high. I see examples of this where the Magna automobile corporation is making a huge investment in my riding. Approximately 1,000 jobs will be created in a new plant Magna is putting in. Freightliner is making a major investment to build highway trucks in my riding.
The unemployment rate has been cut in half over the past five years. Farm incomes are up. By and large things are clearly better off now than they were in 1993. People expect them to be even better over the next five years. The message of this budget really is that things are going to get better.
The highlight of this budget is balance. Not only is it balanced this year, it will be balanced for the next two years.
Members of the opposition like to talk about how many times the government raises tax and they bring out numbers, 37 times. Why do they not congratulate us for the tax relief in this budget? It is not enough. We need to lower taxes even more. It is a step in the right direction. I believe quite firmly it is a trend. Because of the changes announced in the budget, 400,000 Canadians will no longer be paying any federal tax at all. That represents approximately 1,200 people in my own community.
The budget sets priorities, investing in education with the millennium scholarship fund, investing in children with the announcement of a second $850 million for the child tax benefit of which I am very proud.
Let me talk about what opposition members said previously and ask them why they are not applauding the budget. The Reform Party stated in its campaign that a Reform government would balance the federal budget by March 31, 1999. The leader of the Reform Party promised that in 1996 in Fresh Start. Lo and behold we balanced the budget a full year earlier than the Leader of the Opposition promised to do.
The Leader of the Opposition also said in Fresh Start that after a Reform government balanced the budget annual surpluses would be used to reinvest in the Canadian economy through lower taxes, to increase spending on health and education, and begin to reduce the debt. That sounds very much like Liberal policy. Perhaps the Leader of the Opposition is really a Liberal, but I do not think so.
Reform's suggestion for tax relief calls for measures found in the 1998 budget. The basic personal amount would be increased from $6,456 to $7,900. At least we went one-third of the way, albeit means tested. The 3% and 5% surtaxes of the Tories would be eliminated. We went part of the way and I am hopeful we will go the rest of the way. Students would be allowed to claim a tax deduction for interest payments on student loans. Lo and behold the Liberal government adopted just such a policy. Do we hear the Reform Party applauding us? No. Job killing payroll taxes paid by employers would be reduced. We reduced the EI premiums again, effective in 1998.
I will turn my attention to the Bloc for a moment. The BQ urged the federal government to use the $3 billion it saves annually as a result of this review to encourage small and medium size business as well as very small businesses to create jobs. This reduction in tax burden for businesses could take the form of tax holidays linked to business performance with respect to creating jobs and helping youth enter the job market.
The 1998 budget delivers. To encourage employers to hire young Canadians, the budget proposes to give employers an EI holiday per additional young Canadian between the ages of 18 and 24 hired between 1999 and 2000. Should the Bloc Quebecois not be applauding us for this measure?
As with the new hires program in operation in 1997 and 1998, employers will be allowed to stop paying premiums when they reach the 1998 level of payroll or they can claim a rebate when filing their tax forms. This will reduce payroll costs for employers by about $100 million a year for 1999 and 2000. Is that enough? Do EI premiums need to come down even more? They certainly do but at least it is the start of a trend.
The New Democratic Party called for an increase in capital and research funding to restore and renew post-secondary facilities. The Liberal budget increases funding to research granting councils. Our budget of last year provided $800 million to create the Canada Foundation for Innovation. Should the NDP not be applauding these measures?
The NDP also asked for investment in families with measures such as access to high quality child care and support for parents. Our budget increased the child care deduction by $2,000 per child. I have three children who attend day care. That will amount to $6,000, a significant amount, and the government should be applauded for that.
I will turn last to the Progressive Conservatives. The leader of the Tory party promised a balanced budget by the year 2000. That was in its 1997 election platform, “Let the Future Begin”. Only two years later we delivered a zero deficit. Should the Tories not be saying the Liberals brought in a balanced budget two full years before they could do it?
The leader of the Tories said repeatedly that we must reduce EI taxes when over their nine years in office the Tories increased EI premiums four times from $2 to $3. The Liberal government has reduced EI premium rates each year since 1994 from $3.07 that year to $2.70 this year, and hopefully they will go down even further.
The Tory's 1997 platform promised to start a $100 million Canadian merit scholarship program. Our 1998 budget introduced a $2.5 billion millennium scholarship fund. Surely the Tories can applaud us for investing in higher education. The Tories promised to make CPP self-financing, which we did with Bill C-2, and called for the cash floor of the CHST to be raised to $12.5 billion. Lo and behold we have done just that and I would expect the Conservatives to applaud.
The Tory plan for growth asked for the basic exemption to rise. It asked for the 3% surtax, the Tory gift to the taxpayers, to end and for a tax credit for interest on student loans. All these measures are in our 1998 budget.
I ask all members of the House to support our budget because it is not only balanced from a fiscal point of view. It is balanced in terms of providing tax relief, debt reduction and much needed reinvestment in social programs.