House of Commons Hansard #79 of the 36th Parliament, 1st Session. (The original version is on Parliament's site.) The word of the day was debt.

Topics

Budget Implementation Act, 1998Government Orders

4:50 p.m.

NDP

Lorne Nystrom NDP Qu'Appelle, SK

The member from British Columbia laughs but the NDP governments, the CCF governments, going back to 1944 in Saskatchewan, have always balanced their budgets. The member knows that.

It is his friends in the Conservative Party, the Grant Devine government, who ran up in nine short years the largest per capita debt in the country, even higher than Newfoundland. It is his friends. They were the reformers of the day who ran up the debts. It was the Brian Mulroney Conservatives who ran up the debts, the friends of the Reform Party, the fiscal conservatives.

If we want to learn something about being responsible financially, look at the history of the CCF-NDP in Saskatchewan. It was always balancing budgets and at the same time had the most progressive social and economic legislation anywhere in North America.

Budget Implementation Act, 1998Government Orders

4:50 p.m.

Liberal

Tony Valeri Liberal Stoney Creek, ON

Mr. Speaker, I have a very quick comment to follow up on what the hon. member said.

His leader proposed the program in 1997 with tax increases amounting to $8 billion but spending increases of almost $20 billion. That leaves a shortfall of $12 billion.

The hon. member just got up and said how his party is very concerned about finances and to ensure balance. There is a $12 billion difference and the NDP never did explain how or where it would find the $12 billion. I will give the hon. member a chance.

Budget Implementation Act, 1998Government Orders

4:50 p.m.

NDP

Lorne Nystrom NDP Qu'Appelle, SK

Mr. Speaker, that is Liberal mathematics. I do not think the Canadian people will believe him on that. Once again I tell him about the fiscal record of the Saskatchewan government. The experience speaks for itself.

Here is a government that was left with a humongous deficit, a humongous debt that was run up over nine short years by a very conservative government, very similar to some of the Reform Party folks today, similar to the Mulroney government the Liberal member opposite supports.

It turned this around within two short years. We are the first government in Canada provincially to balance the budget. We have now had five successive balanced budgets.

One can be fiscally responsible and progressive at the same time. That is exactly what has happened in the Saskatchewan NDP governments, the CCF governments. That is now what is going to happen in places like Great Britain with Tony Blair.

Budget Implementation Act, 1998Government Orders

4:50 p.m.

Liberal

Steve Mahoney Liberal Mississauga West, ON

Mr. Speaker, I was interested to hear the previous speaker not cite the example of Ontario under the NDP in his very eloquent defence of what one could only call a dramatic shift in the philosophy of this party at certain provincial levels dating back to the Tommy Douglas days.

Tommy Douglas was a great Canadian, I might add. He contributed tremendous things to our country. Regardless of political stripe, we have to be proud of the legacy of someone like that.

It is interesting to see what has happened in Saskatchewan. The member does not mention the hospital closings, the privatization and the shift in the burden, the changes. The reality that Mr. Romanow faced when he took office was that they were going to literally devalue the financial status of that province if he did not make some dramatic adjustments.

I am sharing my time with the hon. member for Scarborough Southwest.

Take a look at the policies of Tony Blair and the Labour Party in England. Mr. Blair is showing in my view the fact that there need to be adjustments from the extremes.

It is interesting. The Liberal Party has been in that position for years. What does it say, we represent the radical centre and not the extreme of the left.

Budget Implementation Act, 1998Government Orders

4:50 p.m.

An hon. member

The flushing middle.

Budget Implementation Act, 1998Government Orders

4:50 p.m.

Liberal

Steve Mahoney Liberal Mississauga West, ON

The flushing middle. Let us leave that out of it. Leave my personal descriptions out of this.

In all seriousness, though, there is a recognition in economics that we simply have to change the way all governments of all stripes around this world have behaved over the past 50, 60 or 100 years. There is no question about that.

We could all do our mea culpas if we want but the fact is to accuse this government of carrying of the mantle of Brian Mulroney is absolutely mind boggling. What we inherited—

Budget Implementation Act, 1998Government Orders

4:50 p.m.

An hon. member

It does hurt.

Budget Implementation Act, 1998Government Orders

4:50 p.m.

Liberal

Steve Mahoney Liberal Mississauga West, ON

It does not hurt, it is ridiculous. It is not true. The member opposite chirped and I will respond to him because I actually intended to raise the issue. I am not afraid to talk about the GST brought in by Brian Mulroney.

Business people in my riding will say please stop already with all the changes. “I have already converted all my cash registers and my accounting procedures and my ledger sheets. I already have a system in place to handle the debits and the credits on the GST. I would not mind if you would lower the rate to make the cashflow a little easier but please do not go through another major overhaul”.

We have attempted to harmonize and we have successfully done so in eastern Canada. The response in Ontario from the Chamber of Commerce, the retail associations and the consumer was do not do that, it will just to complicate business lives.

I hear members talk about great success in other parts of this country. I spent five years suffering in opposition as I watched Bob Rae and Floyd Laughren attempt to spend their way to prosperity. Imagine, they attempted to intentionally spend $10 billion more than they were bringing in so they could run deficits and then increase the total debt of that province to the point where there was a very serious problem. Now the other extreme has come in. They can pretend to be Tories in there but the reality is they are closer to their Reform cousins. It is only because they made a deal not to set up a Reform Party in Ontario that the Reform backed off, Harris was elected and now he has gone to the other extreme.

Budget Implementation Act, 1998Government Orders

4:55 p.m.

An hon. member

Are you still crying?

Budget Implementation Act, 1998Government Orders

4:55 p.m.

Liberal

Steve Mahoney Liberal Mississauga West, ON

A little. It hurt but I got over it. I would not be here if I did not get over it.

This is what we have done, what is in the budget and what we are talking about today. We have said enough of the overspending. The $42 billion deficit is history but we are not going back to the days where we could spend on any kind of program, social or otherwise. We have to live within the means of this country. Canadians understand that. I would have liked it if we could have given more in the form of tax decreases but I believe that is coming.

Everyone seems to want to talk about the conference of this weekend which was a great success. Imagine saying that backbenchers should have the courage to get up and criticize the Prime Minister. He only got 90% voter approval from our party. I happen to be a proud member of the Liberal Party. I think I was listening to the grassroots when 90.19% of the people at that convention gave a ringing endorsement to the Prime Minister, the leadership and the plans put in place by this government.

Help me to understand what we in the backbench are supposed to criticize. Members can be assured that we fight within caucus, we fight within committees for things we believe in but why would we criticize our Prime Minister for bringing in the Canada millennium scholarship fund? I guess members opposite do not want to support students. We heard, we listened, we saw the demonstrations, we saw the students taking over the bank in downtown Toronto, we saw them marching on legislatures around the country saying give them an opportunity to survive while they learn. They cannot be expected to come out of post-secondary education with debts of $30,000 and $40,000 and not give them some opportunity for relief.

What did we do? We brought in some tax relief for students who graduate with debt. We brought in interest relief. We even went as far as to say that if the circumstances warrant, there is a process in place to forgive the debt.

The socialist answer to post-secondary education is that it should be free. There should be no obligation for any of the participants to pay for it at all. It should become part of the social safety net. Most Canadians, certainly those I represent, would totally reject that idea.

If one takes a look at the cost of education in Canada, there is no question that it is a burden on students. They do have to work hard to get through. The tuition fees for a world class university in Ontario such as the University of Toronto, York University, Guelph, McMaster and Western in London are about $3,800 a year. These are post-secondary education institutions which are second to none in the world.

However, if we were in a university in the beloved Reform Party's United States of America, we would be spending between $30,000 and $50,000 on tuition. We do not have that situation in this country. However, even though the students have to struggle and work at part time jobs, they wind up with a debt.

Most Canadians would hope that the debt would be manageable and the opportunity would be there for students to pay down their debt once they had jobs and became productive members of society by earning money and paying taxes. That is what this government believes.

This budget has clearly shown that we believe in a balance that creates incentives and jobs for young Canadians. We want to ensure that our young people have a chance to learn in order to earn money and pay back what they had to borrow while they learned. That is not radical, centre, left, right or anything. It just makes darn good sense. I know that Canadian youth will benefit from this millennium scholarship fund and from the financial leadership of the Minister of Finance and the Prime Minister of this government for many years to come.

Budget Implementation Act, 1998Government Orders

5 p.m.

Reform

Darrel Stinson Reform Okanagan—Shuswap, BC

Mr. Speaker, again we get into a balanced budget scenario here.

Before we get into that, the member mentioned disagreeing with his leader, the Prime Minister. Maybe he has learned to not disagree with the Prime Minister in the same way the hon. member from York South—Weston has learned. He now sits over on this side of the House.

I will ask the member the same question I have asked other members on that side today. I have had a number of phone calls from my constituency in regard to the high taxation levels in Canada. I have only heard one member from over there say he has had two phone calls on it. I would like to know if the member himself has had any phone calls on the high taxation levels that this government is imposing on honest, hard-working citizens in this country.

Budget Implementation Act, 1998Government Orders

5 p.m.

Liberal

Steve Mahoney Liberal Mississauga West, ON

Mr. Speaker, I would be happy to share the phone log of my office. Of course I have had a few calls about that. I had those calls when I was in the provincial legislature. Who likes paying taxes? We would all like to reduce taxes. However, until we are able to get the books of this country balanced, which is what this government has been doing since 1993, how can we possibly talk about taxes?

Let us take a look at what happened in Ontario. The Ontario government came in with a huge deficit and a huge debt and automatically reduced provincial income taxes by 30%. Those taxes have come down by about 22%, with more still to come. What is the outcome of that? If we decrease taxes before we get rid of our deficit and start paying down the debt, then we have to take it from somewhere.

People can say that health care has not been cut in that great province, but it is nonsense. If we talk to the people lying in beds and cots in emergency departments we will see exactly where the 30% tax cut has come from.

Let us do it with a balance. On the weekend, the Prime Minister said that one of the things we want to do, in addition to supporting health care, is to look at reducing taxes. I am confident we will do that.

Budget Implementation Act, 1998Government Orders

5 p.m.

NDP

Lorne Nystrom NDP Qu'Appelle, SK

Mr. Speaker, my question for the member across the way concerns the GST.

His solution now is to harmonize the GST. We are going to have the polls closing in Nova Scotia in about 55 minutes and one of the issues down there was the harmonized GST. I predict we are going to see the NDP rock and roll tonight and increase its seats massively in the province of Nova Scotia. We will see that in about an hour and a half.

I want to ask the member to answer very precisely a very precise question. Was it a mistake on behalf of his party in 1993 to go across this country and promise to abolish the GST? We saw what the deputy Prime Minister did. She resigned her seat and faced a byelection.

Was it a mistake? Does he feel guilty about it? Does he feel badly about the fact that they told the Canadian people one thing and are now doing something else?

Was it a mistake to promise to abolish the GST and then to—

Budget Implementation Act, 1998Government Orders

5:05 p.m.

Liberal

Tom Wappel Liberal Scarborough Southwest, ON

We did not promise to abolish it. What election were you in?

Budget Implementation Act, 1998Government Orders

5:05 p.m.

NDP

Lorne Nystrom NDP Qu'Appelle, SK

I heard the Prime Minister. We can play clips of the Prime Minister on television where he said “Elect me and the GST will be gone”. He was going to abolish the GST. Liberal members have said that also. I heard the platforms of Liberal candidates in 1993 who said they would abolish the GST. That is exactly what they said.

Was that a mistake? Please answer the question very honestly and very straightforwardly. Was it a mistake?

Budget Implementation Act, 1998Government Orders

5:05 p.m.

Liberal

Steve Mahoney Liberal Mississauga West, ON

Mr. Speaker, I do not want the member to put words in my mouth. I did not say at any time that the solution to the GST issue is to harmonize. What I said is, that is indeed what happened in some parts of this country, particularly on the east coast. It is something that has been rejected in the province of Ontario, which is the largest province. It does a tremendous amount of business. That is because the business community has said “Don't make more changes to the tax system which are going to drive up our costs so we will have to try to keep up with you”.

I said that if we could lower the rate of the GST, businesses would like that.

The fact of the matter is that this government did make a promise and that promise was to eliminate the $42 billion deficit. We have done that. We have balanced the books. We have started to pay down the debt and we will start to relieve the tax burden on Canadians.

It is the Canadian people who have paid the price, who have suffered and who have worked with this government to abolish the deficit and start paying down the debt.

Budget Implementation Act, 1998Government Orders

5:05 p.m.

Liberal

Tom Wappel Liberal Scarborough Southwest, ON

Mr. Speaker, it is a delight to be able to stand and offer my few comments on Bill C-36, the budget implementation act. I support the budget and therefore I am quite pleased to support any legislation to implement it.

I want to describe the budget and the budget implementation act by using one word, credibility. I want to do so by looking at history.

I was first elected by the people of the then riding of Scarborough West to come to this place in 1988. In 1988 we were in opposition. We listened very carefully to the government of the day, the Conservative government. I am addressing now historical fact which can easily be checked by examining the records and by examining Hansard .

Michael Wilson was the finance minister. At that time, in 1988 and early 1989, there were no Reform members in the House. There were no Bloc members in the House. Michael Wilson, year after year, stood and made promises. Year after year those promises were broken. Year after year he blamed the previous government. Year after year the debt and the deficit kept growing. What did the Conservative government do?

In 1986 the general surtax was brought in. What for? To pay down the deficit and to pay down the debt. Were they successful? No they were not. The debt and the deficit kept increasing, yet every year Michael Wilson would stand in his place as finance minister, except for the year the budget was leaked, and remind everyone that this year his promises would come true. It was like shooting fish in a barrel to be in opposition. We knew he would not fulfil his promises. He had no track record. He had no credibility. Everything he said did not come to pass.

The Conservative government implemented the general surtax in 1986, which was followed by the GST. Hon. members will remember that the debate was centred around modernizing the tax system, getting rid of the old tax. Sure there would be more money coming in, but what would they do? It would be revenue neutral. They would only charge sufficient GST to bring in the same amount of revenue as the old manufacturers' sales tax. If they were wrong in their calculations—and remember, Mr. Wilson was always wrong in his calculations—if there was an excess, they would apply it to reducing the deficit and the debt.

There was a huge excess in the GST coffers. An election was coming so what did the Progressive Conservatives do? They gave GST rebates and GST refunds instead of applying that money to the debt. It was great for the people who got the cheques, but it did not help reduce the debt. What happened to the debt? It kept rising. What happened to the deficit? It kept rising.

We campaigned on a number of things in 1993, including getting a handle on the debt and the deficit. We promised that we would eliminate the deficit and we were elected. We were given a mandate to do that, among other things. Lo and behold we had the Reform Party here. It was not the official opposition, but it was here. When our finance minister stood and delivered his first budget he pointed out that he was going to do two-year rolling targets. He did not want to say things on which he would be unable to deliver. He only predicted two years into the future, using very conservative business estimates.

What was the Reform Party's mantra? Of course they have forgotten about it now. It was very simple. It was “Oh, these are Liberals. They will never do that. All Liberals ever do is spend. You cannot believe the Liberals. They will never pay down the deficit, never mind make inroads on the debt, because they are Liberals”.

Day after day in question period on the first budget the Reform Party stood and said “This government has no credibility. They are Liberals. We do not care who the finance minister is. We do not care who the Prime Minister is. This government has no credibility. They are Liberals and they are going to spend us into bankruptcy”.

What happened? In each budget the finance minister was more than right. That makes it difficult for members of the opposition, I admit. It is sure nice to be on this side where the finance minister says he is going to deliver and he delivers. In each budget he has delivered he has neither overestimated nor overspent. He has been measured in his responses.

Conservatives cannot say this because they can hardly throw stones at their own glass house, but the Reform Party, not having been in government and not having understood how things worked realized “Hey, we have been yelling at the Liberals now for three years saying they are not going to pay down the deficit. Guess what? They are going to pay down the deficit, so we had better change tactics. We thought they were going to do things differently, but maybe they are doing things differently because now they have changed tactics. What are their tactics now? Their tactics are to cut taxes”.

The Reform Party was not telling us to cut taxes when we were cutting the deficit. They were making fun of us that we would never cut the deficit. This budget shows us that the deficit is gone. It is gone for good. It was the Liberal Party which got rid of it and a Liberal finance minister who delivered on everything he said in the budgets. That is credibility and that is what we start with in a budget. We start by saying that we are going to do something and we do it. Then we go beyond that and do a little more.

What was the Bloc doing throughout all this? Quebec does not have enough. We can listen to parrots for only so long. The fact is, we run a country. There are 10 provinces and two territories, soon to be three territories. We have to divide everything. We have to run this country equally to make sure that all Canadians from all provinces and all regions are looked after as best we can.

Here we have this budget which, like all the other budgets before it, will come true. Why? Because all the other budgets have come true and the finance minister has the rolling targets.

What is going to come true? One, no more deficit. What happens when there is no more deficit? We still have a big debt. Like everybody who has a big debt we want to pay it down. We are going to pay it down. How do we know that? Because we have said we are going to pay it down and each and every one of the predictions that the finance minister has made in the time he has been finance minister have come true and these will come true as well.

That is the Liberal way. It is not about slashing to reduce things. We have to do things in a measured, orderly way to reduce the deficit to zero, which has been done, to start reducing the debt, which is a legitimate goal, as well as to help ordinary Canadians.

Yes we agree we should cut taxes. I pay too many taxes in my opinion. Ordinary Canadians want to pay less in taxes. It would be wonderful if we could cut taxes across the board. What have we done? We have at least started.

The 1986 general surtax that was brought in by the previous government has been eliminated for the vast majority of Canadians. We have come up with some innovations with respect to helping low and middle income Canadians. We have to start somewhere. We are not going to start at the top like the Tories and help the rich first and work down. We are going to start by helping low and middle income Canadians.

What did we do? Beginning in July of this year the basic personal exemption will increase. What does that mean? That means 400,000 low income Canadians will no longer pay any federal income tax. If some province wants to try and go in there and pick up the slack and steal some money from these folks they will have to deal with it at the ballot box.

The 3% general surtax will be eliminated for people with an income of up to $50,000 and reduced for those with incomes up to $65,000. What is that going to mean? That is going to mean $1.4 billion dollars in tax relief for 14 million low and middle income Canadians by the year 1999-2000, 90% of all taxpayers.

While we are doing this we are paying down the debt. The deficit is gone. We are paying down the debt. We are doing what the Reform Party wants and what most Canadians who have any common sense when running their own families do, and that is starting to pay down the debt. But we are also starting to give tax relief.

Because this budget has credibility and because the finance minister has credibility, I know that in budgets to come there will be more tax relief and greater debt payment. That is why I am pleased to support this budget.

Budget Implementation Act, 1998Government Orders

5:15 p.m.

Bloc

Gérard Asselin Bloc Charlevoix, QC

Mr. Speaker, first of all, I appreciate the summary of the financial history of Canada. However, I think the hon. member went back too far. Going back to 1984 would have been sufficient. We would have heard of a former Prime Minister, namely Pierre Elliott Trudeau, who led a Liberal government for twenty years or so. We are too young to go back as far as the member did.

In 1984, the Canadian debt—and that was before the Conservatives took office—was $187 billion. The Liberals are ones who had been in power. They were originally responsible for the Canadian debt.

When the Liberals took over from the Conservatives in 1993, the debt was $500 billion. Today, the accumulated debt has reached $585 billion. This means that, between 1993 and 1997, the Liberal government has let the debt grow, just from accrued interests of course, because it is not doing anything any more. If the debt continues to grow when there is no spending, it has to be from accrued interests.

I would like the hon. member to comment on this. When the Liberal Party was in the opposition, it voted against the GST and free trade. If it had not made cuts in transfer payments to the provinces and in employment insurance, if it had acted on the auditor general's recommendations, I think it would have achieved a zero deficit just the same.

Budget Implementation Act, 1998Government Orders

5:15 p.m.

Liberal

Tom Wappel Liberal Scarborough Southwest, ON

Mr. Speaker, I thank the hon. member for his question.

I only had 10 minutes so I could only go back to 1988. If I have the consent of the House I could go back to 1867 if hon. members would like to hear it.

When I was in opposition I did not vote for the GST. The Liberal Party fought the GST every step of the way. I was the revenue critic for the Liberal Party at that time. I went across the country advising businesses not to pay the GST until the law was actually passed. You will remember, Mr. Speaker, that the Conservative government was trying to collect the tax months before the legislation went through the Senate and indeed received royal assent.

Let us talk common sense. Of course the accumulated debt increased from $500 million to $585 million during the three years that we were in our original mandate. Why? Because we were still paying down the deficit. We cannot pay down the debt until we get rid of the deficit. We have gotten rid of the deficit. Now we will see the figures go down.

Budget Implementation Act, 1998Government Orders

5:20 p.m.

Reform

Ken Epp Reform Elk Island, AB

Mr. Speaker, I am going to stand here and do exactly what the hon. member asked us to do, which is to congratulate him. I am going to congratulate him and the Minister of Finance. Why am I doing that? Because they finally opened their ears and heard the Canadian people.

I do not think that if he were truly honest he would exclude the Reform Party's influence in this. We are the ones who came here and for the first time in over 30 years it became respectable to talk about governments becoming smaller, spending less and getting the fiscal house in order.

The thing I take exception to is that the Liberals try to pass it off as if we are already out of the woods. The fact of the matter is, now that we are in tax time, for every $1,000 taxpayers send to Ottawa, $300 is for interest. There is a lot of urgency to reducing and paying off the debt so that we can start cutting those interest payments, so that we can reduce taxes and have money to spend on the programs we value.

The finance minister keeps setting these loosey goosey targets. The present target is to pay off the debt in 200 years. That is $600 billion at the present target of $3 billion a year and 200 years is not good enough.

Budget Implementation Act, 1998Government Orders

5:20 p.m.

Liberal

Tom Wappel Liberal Scarborough Southwest, ON

Mr. Speaker, I always listen carefully to the member for Elk Island but he lost me in that last comment. We will pay the debt down as fast as we possibly can in a measured way. It may take time. It took time to accumulate. We cannot do it overnight but it is going to be paid down. It is going to be paid down over successive governments with successive finances.

I appreciate the member's honesty in congratulating us. Obviously we listen to Canadians but I can tell the hon. member that when there was only one Reform member, the hon. member from Beaver River, even before that we were already talking about this in caucus.

Budget Implementation Act, 1998Government Orders

5:20 p.m.

Progressive Conservative

Jim Jones Progressive Conservative Markham, ON

Mr. Speaker, on February 24 this year the finance minister brought in the first deficit free federal budget in 28 years. It is a budget balanced on the backs of taxpayers, the unemployed and the provinces.

The Liberal government has been able to sell itself to Canadians on this balanced budget yet it is due to the efforts of all levels of government and individual Canadians over the last 15 years that this has finally happened.

The finance minister should have sent a message of growth for the economy and hope for Canadians by delivering broad based tax cuts. We know now about his priorities. Broad based tax relief is off the table and massive Liberal spending is back.

The Liberal government has once again broken its promise. During the election it campaigned on the promise that the surplus would be spent in two parts, 50% to new spending and the other 50% to debt and tax relief.

The 1998 budget had no economic plan, no plan for growth, no targets for employment, no targets for job creation, no targets for tax reductions and no targets for debt reductions. The only visible target the government has put forward is that of spending. This is a budget from a government that has lost sight of the real needs of Canadians.

Last month's budget made one thing very obvious. The Liberal government is trying desperately to correct the problems it has created by past policies. An example would be the Minister of Finance's sudden attention to and concern for students. Suddenly the Minister of Finance has a plan to help students, a plan designed to offset the effects of his cuts to the provinces, a plan that causes tuition fees to rise too high in the first place.

The Canadian millennium scholarship fund, the pet project of the Prime Minister, is getting a lot of attention. It sounds wonderful but consider just how wonderful it really is. Here are the specifics. The fund is $2.5 billion. There are 100,000 scholarships. Students can receive an average of $3,000 each year with a cap of $15,000 over four years. The only stipulation is that the students will have to wait for two more years before they will see any of the money.

When will the government realize that the students face debt problems today? Dangling a carrot in front of them and then saying wait until the year 2000 just does not cut it. A student who appeared on the CBC national news in February put it best. This particular student was quoted as saying “Of course they balanced the budget and that is why I have a debt of $30,000”.

The issue of student debt should be one of utmost importance to all Canadians. Student debt does not just affect all students. It is an impediment to sustained economic growth in our country. Canada simply cannot afford to have a sufficient portion of its young people so heavily burdened by debt.

The cuts by the Minister of Finance to transfer payments for post-secondary education have forced provincial governments to cut funding to colleges and universities. In turn these institutions have no alternative but to raise tuition fees on the backs of students. As a consequence student debt has risen dramatically.

In 1993 the average student graduated with a debt load of $9,000. Today a student graduates with a debt of $25,000 to $30,000.

The Liberal government thinks that by involving its millennium scholarship endowment fund it is solving the student debt problem. While it may put some additional funds in the pockets of some students, on the whole it is not the answer to this crisis. Let me explain.

The scholarship only helps a very small limited number of students, approximately 3% to 4% of those going to universities and colleges. The scholarship does not address the structural problems such as cuts to transfers and the cost of obtaining an education. These are the root causes. These are the issues that need to be directly addressed by the federal government.

Young Canadians want to work. They want to work in Canada. The challenge for this government is to create employment opportunities. This is done by giving them a fair start in life. This means making education affordable, implementing responsible fiscal policies, offering a competitive tax system that will allow Canadians to spend and save.

Let me remind the House that transfers to the provinces increased by $6 billion under the previous Progressive Conservative government. Since the Liberal government took power in 1993, the transfers to the provinces have decreased by $6 billion. We now see the repercussions of these decisions.

We have been advocating tax cuts for Canadians as a primary task for government. Recently Canadians were hit with increases to the Canada pension plan with still no substantial offsetting relief in the EI premiums.

The government continues to collect $6 billion annually from excessively high unemployment insurance premiums. May I remind the House that the current EI premiums are at $2.70 and it is recommended that at $2 this program could be sustainable even in a recession.

Sure the budget was balanced. The important part is how. I have answered that. On the backs of each other. Many Canadians have faced higher taxes and have lost their jobs. Businesses are closing due to the economic environment. Canadians have experienced the effects of cuts to our health and education system and have been offered no reasonable relief. Working Canadians have seen their personal disposable income decline by 1.3% since 1993.

Overall we just need to look to our neighbours to the south to see the incredible difference in tax levels, unemployment figures and job opportunities. Brain drain, high taxes, high student debt, high unemployment, lack of job opportunities all go hand in hand. One feeds on the other.

In the budget the basic personal tax credit was raised by only $500 to $6,956. The PC government would have taken advantage of this balanced budget opportunity to give every Canadian a significant tax break by raising this credit to $10,000.

While we are pleased that the government decided to cut the 3% general surtax for low and middle income Canadians, unfortunately the Liberals missed the opportunity to make this tax relief broad based. Again we must keep young Canadians in Canada and give them the opportunity their parents had. It is crucial that we solve the alarming trend that we know as brain drain.

Another important issue the government did not address in this budget is the year 2000. We just heard in the industry committee that as high as 30% of the industries in Canada could go bankrupt or out of business in the year 2000. I have been quoting—

Budget Implementation Act, 1998Government Orders

5:25 p.m.

The Acting Speaker (Mr. McClelland)

If the hon. member for Markham would excuse me, the time for debate on this bill today has expired. When the bill comes back to the House again the hon. member will have three minutes on debate plus questions and comments of five minutes.

Budget Implementation Act, 1998Government Orders

5:25 p.m.

Glengarry—Prescott—Russell Ontario

Liberal

Don Boudria LiberalLeader of the Government in the House of Commons

Mr. Speaker, it was not possible, unfortunatly, to reach an agreement pursuant to Standing Orders 78(1) and 78(2) with respect to the proceedings at second reading of Bill C-36, an act to implement certain provisions of the budget tabled in Parliament on February 24, 1998.

Pursuant to Standing Order 78(3), I give notice that, at the next sitting of the House, a minister of the crown will be moving a time allocation motion for the purpose of allotting a specified number of days or hours for the consideration and disposal of proceedings at that stage.

Budget Implementation Act, 1998Government Orders

5:30 p.m.

Some hon. members

Shame.