Mr. Speaker, I am pleased to have the chance to comment on the budget and the supplementary estimates and to bring a dose of reality to the debate.
Liberals deserve the credit for bringing in the first balanced budget in 30 years. It just goes to show how incompetent the Mulroney Tories were when they failed to balance the budget in similar circumstances during the mid-1980s.
It reinforces the incompetence of both the former Liberal government and the Tory government when we have a national debt that is over $583 billion. It is because of the incompetence and the negligence of these governments that we are in this situation.
I want to continue the discussion which my colleague just ended on the surplus. This budget should have shown a $3.2 billion surplus, but the Liberals chose to use it for new spending. They chose to put $2.5 billion into the millennium fund. While Canadians support funding of essential programs like health and education, the Liberals have used the millennium fund to hide their deviousness.
The accounting has been brought into challenge by my colleague. I would suggest that it is very plainly a manipulation of taxpayers' money. The government has taken $2.5 billion out of the current budget even though this money is designated to be spent two years down the road.
The auditor general has criticized this imaginative bookkeeping and the government has defended its action. What a surprise. If the government truly believes that this is good accounting practice, then I challenge it to allow all Canadians and Canadian businesses to use the same accounting practices in the real world, that is, to write off expenditures before they occur on their income taxes. Regular Canadians would go to jail if they tried to do the same thing.
Let us look at the amount of support the Liberals are talking about. The millennium scholarship fund will offer up to 100,000 post-secondary students grants averaging $3,000 a year. I had not realized the difference between a scholarship and bursary and that causes even more concern because these grants were supposed to help low and middle income students. Now that is under question.
When one considers that there are 1.7 million full time or part time students in post-secondary education across the country, the millennium scholarship fund will only support 6%. Does this government honestly feel that 94% of post-secondary students are in the high income bracket? When this system is implemented there will be a lot of disappointed and financially strapped students who were given the understanding that help would be there.
Why did the government choose this particular avenue? Why did it choose to only help 6% of the students? I can only imagine it is because if it transferred the money to the provinces under the Canada health and social transfer, the federal government would not really get any recognition. I think the government was concerned over the photo op when handing out the cheques. If it transferred the money to the provincial governments to use for the benefit of all students, it would not get this photo-op.
Another major problem with this is the ego of the Prime Minister. He wanted to have a legacy to leave behind. This country cannot afford to pay for an individual's ego.
Another concern I have with this budget is that it does not address the very serious problem of taxes and bracket creep. This is an area where the government continues to draw more and more dollars out of the taxpayers' pockets. Bracket creep occurs when an individual's pay rises to a point where it enters a higher tax bracket.
While salaries have inched up over the past six years, tax brackets have not. By law, tax brackets are only adjusted when the consumer price index rises by 3% or more in any given year. This has not happened for the past six years. Inflation has risen 9% over the same period of time. Thus individuals whose salaries have just kept up with inflation often find themselves in a higher tax bracket.
In his budget speech the Minister of Finance made it clear that it is deliberate and that he intends to continue with this practice. He stated “Upon coming into office, the government and the Bank of Canada agreed to hold inflation inside a range of 1% to 3% to the end of 1998. That policy has worked. That is why we are announcing today that we will extend the current agreement with the Bank of Canada for a further three years”.
This government has made it clear that it intends on screwing the Canadian taxpayer in this fashion. If this is not the case then I once again challenge the Liberals to introduce legislation to eliminate the 3% threshold for indexing the tax brackets. We know they will not because they want the money.
Let me outline how much money we are talking about. This year the Liberals will have collected an additional $800 million in taxes through bracket creep. Next year it will be $1.5 billion. By fiscal year 2000-01 the amount will be $3.3 billion.
Canadians already pay enough taxes. In British Columbia the average family income is $57,949. The average tax bill in British Columbia is $28,461. That is an awful lot of tax from one family. While all Canadians need tax relief, it is nowhere needed more than in British Columbia. With the highest marginal tax rate in North America, it is driving business out of the province.
My constituency sits on the American border. I cannot begin to count the number of businesses that have moved 20 or 30 kilometres south because of taxation. Thousands of jobs have been lost. Millions of dollars in tax revenues have been lost. It is this departure of capital and jobs that has led to British Columbia's woes. Responsibility belongs to both the federal and the provincial governments which are taxing Canadians out of house and home.
The federal government is putting far too little back into that province. Last year, transfers from the federal government accounted for only 9.7% of provincial revenues, the lowest in the country. Other provinces received much higher amounts from the federal government.
Forty-three per cent of Newfoundland's provincial budget comes from the federal government. For New Brunswick that figure is 45.5%. For Quebec, 17.6% comes from federal coffers and 31.8% of Manitoba's provincial budget comes from federal revenue. The Canadian average is 16.9%. British Columbia's is 9.7%. I suggest that British Columbia is getting shafted.
The Atlantic provinces received an average of $2,000 per capita from the federal government. Quebec received $927 per citizen from the federal government. British Columbia, lo and behold, received only $524 per citizen from the federal government. Now that British Columbia is entering a recession, it deserves to be recognized as being in a situation of need by the federal government.
What do we get from the federal government? “It is the provincial government's fault. It is the fault of the Asian economy. It is everybody's fault but ours. And by the way, don't count on us for any support or help”.
The Liberal government is so very quick to take responsibility for the economic upturn and to take credit for the boon in other parts of the country, but when it comes to accepting the blame when an area of the country enters a recession, the government runs a hundred miles. Liberal hypocrisy in its purest form; they accept all the credit but they deny all the blame. The Liberals cannot have it both ways. It will not bode well for the Canadian economy if this is going to be their approach.
The government has shown that it can cruise through economic good times, that it can garner a surplus and use it for new spending. But when the economic cycle starts to go downhill, as it is doing in British Columbia, this government shows that it has no idea of how to handle it. That is very scary for all Canadians.