Madam Speaker, it is with pleasure that I rise in the House today to speak to Bill C-28 which offers a wide range of tax related measures, most of which have been discussed at great length in the House by myself and other members.
The bill demonstrates the Liberal philosophy to governing our country: government by knee jerk reaction, crisis management and economic tinkering. Liberal governments do not plan to fail but quite frequently they fail to plan.
Effective economic policy needs to be consistent and the vagaries of politics cannot interfere with the economic direction of the country. In the Liberal war of politics versus economics politics always wins. Unfortunately Canadians frequently lose. That goes back to 1974 with wage and price controls, the 18 cents per gallon tax, the budget of Joe Clark and the Liberals' flip flop on that, their flip flop on the Pearson airport deal, helicopters, GST and free trade.
However, I am pleased that at least they have maintained the policies of the previous government to the extent that those policies have been largely responsible for the government's ability to reduce the deficit. The types of policies I am speaking of are free trade, GST, deregulation of financial services, transportation and energy. Those were the policies of the previous Conservative government which provided the government with an opportunity to make some choices for the future of Canadians. I say with great confidence that not a member on the government side of the House today would disagree that their previous policies are clearly failing ordinary Canadians.
In Bill C-28 the finance minister tinkered with several areas to provide minimal targeted tax relief. He complicated a tax code which is already far too complex. Canadians should not need tax accountants or even tax lawyers to deal with their governments. Even the Americans are moving toward streamlining their tax measures when the Canadian tax code is far more complicated.
The targeted education tax measures in terms of basic direction and intent are very strong. We suggested as part of our prebudget position that the government move toward providing better incentives for investments in RESPs and providing more flexibility for Canadians to invest in their futures and the education of their children.
However, this type of stop gap, one off, cobbled approach to education will not be effective without a holistic approach to economic public policy. Public policy should be designed to provide opportunities for young Canadians in Canada not only to obtain an education but also after their education.
The recent government budget announcement relative to RESP changes follows on the heels of the proposed changes in the bill. If we look at tomorrow's edition of Investor's Digest we see an article by Brenda Robertson which reads:
My problem with the RESPs is that they're already too complicated for investors. The new grants—will probably create more confusion.
This case in point is from the mouth of a tax accountant who probably prefers a complex tax code at some level. She is saying that it is actually getting too complicated for the ordinary Canadian to benefit from.
In the PC plan for growth we call for government to allow Canadians to have more flexibility with their RESP contributions and transfers from their RRSPs, but only as part of a holistic policy toward economic growth, one that combines tax relief, lower income taxes, lower payroll taxes, greater opportunities for jobs and growth in Canada that would keep young people here where they belong.
Let us look at what the government's policies have done to higher education in Canada. We can start with Nova Scotia, the cradle of higher education in Canada, and the immediate situation of the faculty strike at Dalhousie University. Dalhousie is my alma mater. Its students felt that their concerns were being overlooked in the recent election by the two levels of government, both the provincial Liberals and the federal Liberals. The Dalhousie students union spent $40,000 to buy television advertising to make sure Nova Scotia voters were reminded of the education crisis which was looming because of federal cuts to health and social transfers to the provinces.
The student debt load has grown in recent years by 280%. The debt load at the completion of a four year degree now averages $25,000. In 1993 only eight students in the maritime provinces had debts exceeding $30,000 after their four year programs. In 1997 there were over 900. The number increased from 8 to 900 in that short period of time.
Why is student debt load ballooning out of control? It is partially because of the cuts to transfers but also because of the general unemployment situation. Tuition has only increased by 110% but student debt has increased by 280%. The disproportionate growth in student debt is due to the general unemployment situation. Students are competing with graduates for jobs that were previously within the exclusive domain of students.
It is ludicrous to address the issue of student debt load without addressing the issue of general unemployment. That is why we need to address the issues of reducing taxes, growing the economy and providing an economy that creates jobs and provides a better opportunity for young people to work, provide for themselves and supplement their incomes while going to university.
Acadia University is in my riding. Its students just went through a near crisis because of a strike that loomed for several months. Uncertainty was created. Many of those students who were having difficulties came to my office to seek advice. They were not finished their degrees. They were faced with a faculty strike and already had $30,000 in student debts. What a great way to start their careers.
The chain of events since 1993 on both the federal scene and the provincial scene in Nova Scotia has been unfortunate for the Liberal Party of Canada and its cousins in Nova Scotia. For the first time in Nova Scotia's history a governing party has failed to win its successive second term.
The legacy of Russell MacLellan, who called the federal budget an excellent budget for Canadians and for Nova Scotians, is that the Liberal Party lost 20 seats. The Liberals went from 39 to 19 seats in Nova Scotia. Russell MacLellan is kicking himself today for not speaking up when he was in Ottawa and for not speaking up in previous budget debates when the government was adamant that health care and education would be cut to the bone.
National leadership is required at all levels to ensure young Canadians receive the best education in the world to get the best jobs in the world. Leadership is not about federal or provincial jurisdiction. It is about federal and provincial co-operation. The struggle to raise the living standards of a nation is inextricably linked to the quality of its education system in a knowledge based society.
While we need a strong education policy we also need to address tax policy. We need tax relief to keep our best and brightest in Canada and to stop the brain drain that is sapping the lifeblood from Canada's future. Sherry Cooper from Nesbitt Burns stated that the government's changes or lack thereof to education and tax policy will turn Canada's brain drain into a brain train to the United States.
Once our students leave school the economic outlook for them in Canada is very bleak. Canada continues to have a youth unemployment rate of over 17%. Highly educated and motivated Canadians are being forced to leave the country in search of work. As an Atlantic Canadian, I have seen the brain drain issue for a number of years. For over 30 years families have watched their young people leaving Atlantic Canada and going to central Canada to seek opportunity. Unfortunately it is now an issue with which all of Canada is familiar. Across Canada young people are leaving and families are watching their children leave Canada to go to the U.S.
Every year 80% of Waterloo computer science graduates go to the U.S. The combination of higher income and lower taxes in the U.S. is too seductive to walk away from. Canadians need bold action from the Minister of Finance to reverse this exodus. Yet the Liberal policy is to maintain high payroll taxes and the highest income taxes in the G-7. These policies run counter to the most basic of free market logic.
Bill C-28 epitomizes this Liberal philosophy. Instead of making substantive changes to initiate growth in the economy the minister has nickelled and dimed the Canadian people by offering targeted tax cuts in politically palatable areas. If the PC Party plan for growth were implemented we would see the basic personal exemption increased to $10,000. That would take two million low income Canadians off the tax roles. Instead the Canadian government offered Canadians a stop gap solution, an increase of $500.
In fact the tax relief for a Canadian making $10,000 per year in this budget works out to $80 per year. That is an insult. There is no member on the government side of the House here with me today who would disagree that it is an insult.
The fact is that $80 per year amounts to one cup of coffee per week at Tim Horton's, one cup of coffee per month at Starbucks.
It is unacceptable, frankly, that this government has balanced the budget on the backs of ordinary Canadians and now refuses to provide any benefits back to the ordinary Canadian taxpayer.
My Liberal colleagues told this House about the marvellous tax relief and what they have provided for Canadians, and clearly that is not the case. In fact, again, I urge members to pick up a copy of tomorrow's Investor's Digest . In terms of tax relief it states, “What's going to happen when we head into the next recession with nine per cent unemployment, crippling taxes, massive debt and a weak dollar? Presumably, having spent the fiscal dividend on education the Finance Minister will have little recourse but to run renewed deficits as income slows”.
Again, this government is making the wrong choices. It fails to deliver the opportunity to average Canadians to make their own choices as to what to do with their fiscal dividend. This government may have moved into the black, but Canadians are still running in the red. Personal debt is at an all time high in this country.
Bill C-28 makes 15 small and favourable changes, arguably, to the tax code for selective groups, but again this is not sound economic policy. It further complicates the tax code. Certainly we would prefer to see some tax breaks for some Canadians as opposed to no tax breaks at all. But what about really addressing the issue of the egregiously complicated and not user friendly Canadian tax code and making it easier for average Canadians to deal with their own government?
Canadians have not experienced a real after tax pay increase since the early 1980s. Personal disposable income has dropped by 6% since 1991. In Canada the Liberals have maintained high payroll taxes and they continue to believe that we can create a growth economy with a high tax economy. It is not possible and we are going to continue seeing a gap in the standard of living between Canadians and Americans.
If we look at Bill C-28 and the revisions to the CHST, the Canada health and social transfer, the CHST helps the provinces pay for health, education and welfare. In the Atlantic provinces where the local tax base is not as strong as it may be in some parts of the country to pick up the slack when these cuts are particularly draconian, the effects of changes and cuts to the CHST are dramatic and the impact is devastating.
The government talks about having established a cash floor for the CHST funding. The fact is that the cash floor is established on a national level. The fact is that seven of the ten provinces will continue to receive less money every year for the next four years, including provinces like Nova Scotia.
When the government talks about cash floors it should realize that health and education spending in many provinces is not a matter of having a floor. It is subterranean. It is not up to the national standards and the Liberal answer is to cut further the cash transfers to the provinces in those areas.
Our platform would call for a provincially reached cash floor level that would truly establish the long term stability of social investment in each province of Canada. We need a plan that ensures equity and equality of opportunity for all Canadians.
This Minister of Finance would like Canadians to believe him when he says in a press release that “Governing is about choices, priorities and values. Our choice is clear. Health care is a priority for this government”.
Based on the Liberal convention of last weekend and the outcry of Liberal delegates from across Canada for this government to start investing more in health care and to start dealing more with the health care crisis of this country, obviously health care may be a priority for the Liberal Party at a grassroots level but it is not a priority of this government.
I said a few minutes ago that there was not one government member on this side of the House who would disagree with me when I say that the government's policies are clearly missing the mark. There may be one now.
We will continue to offer our positions and our beliefs which represent our unwaivering belief in the free enterprise system. The free enterprise system is the best system to provide all Canadians the opportunity to succeed and prosper in this country.
We also believe that the free enterprise system is only going to be successful and sustainable if all Canadians have access to the levers of the free enterprise system and to the levers of growth to bootstrap themselves and their families.
We need a government that is prepared to commit to sound strategic social investment in areas that will include the competitiveness of Canadians in a global environment as we enter the 21st century, as well as a government that will couple this investment with tax reduction and provide Canadians the types of opportunities they need and deserve right here in Canada.
Canadians need a plan for growth. That is what the PC party is offering Canadians. It is not offering a stopgap, one-off approach to economic policy but a holistic economic policy that will provide Canadians with a plan that will work and will put more Canadians back to work.