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—