Debates of March 9th, 1998

The House resumed from February 26 consideration of the motion that this House approves in general the budgetary policy of the government; and of the amendment.

The Budget

[Gary Lunn, Reform, Saanich—Gulf Islands, BC]

Mr. Speaker, it is with pleasure that I rise to comment on the government's budget. It is a budget which I see as a missed opportunity, a shallow budget and it does not deal with the issues.

However, let us deal with the positives. In most things there are positives and negatives. The positives will be brief. This is the first balanced budget in 28 years, something we can all celebrate and be proud of.

The next question, after a balanced budget, we have to ask ourselves is what are we going to do with the surplus, if there is any, and how are we going to go in the years ahead.

I want to inform the House that I did a poll in December and received just short of 2,500 responses. An overwhelming number of people from Saanich—Gulf Islands responded to the poll.

One of the questions I asked was what we should be doing with any future surpluses. I asked is our spending just right, do we need tax relief, do we need debt reduction, what should the priorities be.

I want to inform the House that 95% of the 2,500 respondents from Saanich—Gulf Islands stated very clearly that the priorities have to be lower taxes and debt reduction. This government does not have it yet.

Now we are going to the downside of the budget. It was actually 2,491 respondents who replied to the survey. What we have, and it scares me, is a bunch of ministers who are now lined up at the Prime Minister's door with their Christmas wish lists, and this government has just gone into a spending binge like it has never seen money before. That really scares me.

What we saw in this new budget is $11 billion for spending over the next three years. There are a number of my colleagues around me from British Columbia. If anybody can talk about high taxes in this country, British Columbians can. They are crippling the economy. The British Columbia economy will, out of all the provinces in this country, have the best economic growth. Why? We are one of the highest taxed provinces.

That has to start out of this House. This House has to lower the taxes. The government has a priority. What have we seen? Not lower taxes, but this is the very government that has brought tax increases which caused the downturn in the recession of British Columbia.

We have seen the single largest tax increase, the Canada pension plan increase. This government is proud of it. It is one tax increase after another. Yet we see the minister stand up, very proud of his so-called tax reductions, but they are insignificant. Those members stand up and go on and on. We have the new millennium fund. They talk about that providing an education for students, giving them opportunities.

If the so-called slush fund of the Prime Minister is dissected and if we ask what it will do for students, we will see that it will help a handful of them. A whopping 6% of all the students are going to see one dime of that money. The other 94% will not see five cents worth of it. The government has not addressed any of the real problems at all.

The other factor the government did not address is the debt. We know we need tax relief. Canadians are telling us loud and clear that we still have a massive debt in this country.

This government since 1993 has added $75 billion to this debt. Every Canadian taxpayer's first $3,200 goes to pay interest on the debt. That does not talk about paying down the debt. It the first $3,200 that people send into this House right here. There is something wrong and this government has to make it a priority.

There is no money allocated to debt reduction. We have seen the Prime Minister say we will put $3 billion into this new fund and after three years we will decide if we want to put it on the debt.

The government has no vision. It has no plan. It does not know which programs and how long the wish lists are of its ministers. It wants to make sure it has enough money in this little fund to accommodate all the wish lists first. Then, and it is a big if, it is a maybe, like everything with this government, it will tell us if it will put anything on debt reduction.

I do not have a full 10 minutes since I spoke for a few minutes last time, therefore I will go right to the back end. This is what disturbs me the most regarding this budget.

We have heard the word discrimination used in this House. If we want to talk about discrimination, here is a budget that is discriminatory. It really troubles me.

This government has not only failed to address the importance of parents who choose to stay home to raise their children and the value they bring into society, but it is discriminating against them, which is worse.

The government has increased the limits for child care expense deductions to $7,000 for children under age 7 and to $4,000 for children ages 7 to 16. These deductions are only available to people if they are working. When a person chooses to stay home and care for their families, it is in my view probably the single most important role we have in our society today, and this government puts zero importance on that. It is an absolute disgrace.

The Liberals should be ashamed of themselves. They can sit over there and hang their heads, which they should. They not only failed to address the important role stay at home parents play in society today, but they made it worse for them.

There are so many areas in our tax act which could allow one parent who recognizes the importance, value and contribution this makes to our society to stay at home. I have had many personal experiences of these things happening in society. When these people apply for a bank loan they are asked what they do. They say, for example, “I am just a housewife”.

We have a responsibility in this House to change this and make it a priority. However, there is absolutely nothing in this budget which does that. I think this is an absolute disgrace. The government should scrap the refundable child care tax credit and make it available to all families' children whether the parent is working or not. Maybe that stay at home parent, who has been working a lot more hours than anyone who goes out into the workforce, wants a day to themselves and be able to put their children in child care. Maybe they would like one day a week to do something. But they do not get that chance. If someone is working the government will pay for day care but it will not look after the child care expenses for the stay at home mom.

We often talk about crime, which is a serious problem. My hon. colleague from Esquimalt—Juan de Fuca introduced a private member's motion a few weeks ago concerning crime prevention as opposed to crime management. I suggest that this goes to the very root cause of some of our societal problems. We need to have people who place importance on the value of raising children in the home.

I appreciate that not all parents can do that. It is very expensive in our society today and many families are forced to have two incomes to survive. However, they at least should not be discriminated against. They should be able to choose. They have enough of a challenge living on one income. We should at least give equal benefit to those parents who choose to work.

There are a number of issues in this budget but I would like to remind the government that its number one priority is the taxpayers and it is high time it gave them some of the dividend that is due to them.

I saw many media reports that stated the Minister of Finance has finally balanced the budget. Imagine that, the finance minister has balanced the budget. I think he is sadly mistaken. It is the Canadian taxpayer who has balanced the budget. I suggest the finance minister was probably clueless about this. Six months ago he was telling us that he had a $17 billion deficit. That was when the election was called. The minister did not know what was going on and that was his best guess.

If the truth be known, this government has raised taxes which are, ironically, all sneaky and hidden taxes. The Liberals stand up and say they have no real tax increases. However, we have gone through the list and there are 34 or 35 of these sneaky hidden tax increases. I have just been advised that there are 37 sneaky and hidden tax increases. This government should be ashamed of itself. It is time it paid that dividend back to the Canadian taxpayers and then put some on the debt, which is what is going to kick start this economy. It is not the minister's wish list lined up at the Prime Minister's door waiting to spend this great big pot of money that they can hardly wait to get their sticky fingers on.

I take interest in the fact that the members on this side of the House are listening. Hopefully they will take this message back to their caucus and rethink this one.

Mr. Speaker, I have just been advised that I was supposed to announce that I was splitting my time. I did announce it at the beginning of my speech, just before the break. I spoke for three minutes and I understood I had seven minutes to complete my speech. There was some confusion.

[The Deputy Speaker]

The hon. member had the advantage of getting a full 10 minutes on this occasion because he was starting up following the vote on the amendment to the amendment which took place. He is now making a new speech on the amendment which is now the subject of the debate before the House. He got the benefit of an extra three minute bonanza. I had assumed that he was going to do a 20 minute today and really let the government have it. That is fine.

Questions and comments on the hon. member's speech. The hon. member for Calgary Southeast.

[Jason Kenney, Reform, Calgary Southeast, AB]

Mr. Speaker, I commend the hon. member for Saanich—Gulf Island for his eloquent remarks.

During his remarks he addressed the question of tax fairness for stay-at-home families, families that choose to stay at home.

During my election campaign in Calgary Southeast I debated a Liberal candidate from Calgary West, Alderman David Bronconnier, who said that by wanting to eliminate the tax disparities that exist in the tax system for stay-at-home families, namely by wanting to eliminate the child care tax deduction and replace it with a refundable credit available to all parents, including those who stay at home, Reformers wanted to put women barefoot and pregnant back in the kitchen. I wonder if the hon. member could comment.

Does he believe that women and men who choose to stay home and care for their children, who give up the second income, who make the financial sacrifices and who get no tax recognition of that effort, does he believe that they are barefoot and pregnant in the kitchen? Does he dismiss their effort in that kind of arrogant way or does he believe that they should be treated fairly by our tax code?

[Gary Lunn, Reform, Saanich—Gulf Islands, BC]

Mr. Speaker, I am glad that it was not me who heard those comments during the election because I would have been absolutely disgusted and appalled.

I can give the member a personal experience. My brother-in-law, who has been married to my sister for four years, chose to stay home and raise his three daughters while my sister worked as a teacher. I made it very clear that this is not a gender issue. We are in the 1990s. Maybe some of the Liberal people who ran in the election were not aware of that. It is an issue where families have chosen to stay at home, especially when children are young and it is so important that they get that important start and that they get the nurturing, love and caring that they need and that they get the values.

Some families are just not in the financial situation where they can. Some have chosen that the second parent will only work half time because they want to be their for their children to give them that most important start.

If this government could recognize that there is so much unfairness in our tax system to these families, it might be able to have more people stay home if it gave them the same opportunities that it gives both parents who work.

If my wife went out and got a job for zero money, I would be further ahead because we would both be working and would be given different tax incentives which we are not now entitled to. That is the point. We could deduct $7,000 off our income for child care expenses. It is incredible.

The situation in my family is we have two very young children, ages 2 and 4. My wife was a professional and gave up her career. She would some day love to go back to work. Right now she believes it is so important for our two children. They need her at home right now. She is staying at home and gets zero, absolutely zero. What is even worse is that she does need time for herself. She does need a half a day. She does need a day. She would not get the same thing as if somebody takes her children off to day care. This is only one example. There are many, many areas in our system today where we do not recognize the importance of raising children as an important role in society. This tax unfairness is only one aspect.

We have a very important role to ensure that this gets recognition. This is one of the most important occupations in the land. I think it will go a long way to starting to change this kind of discrimination and tax fairness for all. I am going to be addressing this in the months ahead and pressing this government.

[Werner Schmidt, Reform, Kelowna, BC]

Mr. Speaker, it is an honour and a privilege to enter the debate on the budget and what has been presented to the House of Commons. There are three words that I use as a focus for my speech this morning. The three words are stop, look and listen. These words are addressed to the Minister of Finance and to the Prime Minister: stop, look and listen. These are the three words that we often use when we prepare young people and children when they are going to cross the street: stop, look and listen before you cross to make sure that you are safe.

Why have I chosen these three words in terms of the context of a budget? There are a number of reasons. The first one is the finance minister should stop increasing the debt to larger than it is already. He says we have stopped that, we have balanced the budget, there is not a deficit this year. He did that, he says. No, he did not do that. He increased taxes and taxpayers balanced this budget. Fine, we will grant that the deficit continuation has been stopped. That is good.

Let us go on and ask why it is that it should continue to be stopped. We tell our children to stop, look and listen because we love them. Because we cherish them, we want to preserve the good quality of life that they have. We here in Canada are enjoying a quality of life that is the envy of many parts of the world. Many organizations, agencies and countries have declared Canada as the preferred country in which to live. If we do not stop the burgeoning of the debt, we are going to be in trouble and we will lose that preferred point.

We want to go now to the next word, which is look. Look where the Prime Minister and the finance minister are standing today. If we look at this very carefully we will recognize almost immediately that Canada is standing at the precipice of fiscal disaster. All we need to do is step forward and go into that debt creation spiral once more and we will create a problem not only for ourselves but for generations to come and reduce Canada's position in the world.

Why do I say this? I say this because we need to address a particular question. What are the social consequences of maintaining the position of not preparing and stopping this growth of the debt.

First of all, we should remember that we have in Canada an absolutely inadequate research funding proposal. I want to draw attention here to what has happened in terms of our research and development funding in Canada. In fact, we rank number six and number 14. Let me list the countries that are in a better position than we are in terms of spending on R and D. Sweden spends 2.9% of its GDP on research and development; Japan, 2.87%; Switzerland, 2.8%; United States, 2.75%; Germany, 2.6%; France, 2.4%; United Kingdom, 2.08%; Finland, 2.2%. Netherlands, Norway, Denmark, Belgium, Austria, all of them spend more on R and D than we do.

We claim that we are one of the preferred countries of the world. We say that we want to be competitive. We want to compete successfully in the international marketplace. How can we expect to do this when these other countries are spending more money on research and development than Canada?

It is impossible for us to maintain that position. Why? Because Canada is essentially an exporting nation. We depend upon other countries to buy our products. If they are spending more money on research and development of new ideas and new discoveries, how can we hope to compete with them? The time has come to look at this very seriously.

Then we have the gall of the Minister of Finance telling us that the research money has been put back into the funding councils like MRC and NSERC. All that happened is that the money that was taken away five years ago has been put back.

It has not been put back in one amount. Listen to what the Minister of Industry said in his recent publication that he sent to all MPs. New funding he calls this. New funding for the granting councils will be increased over a three year period beginning with an additional $120 million in 1998 to 1999, continuing with $135 million in 1999 to 2000 and levelling off at $150 million in 2000 to 2001. This will restore the councils' funding levels to 1994-95. Now is that not an interesting twist of logic. First of all he starts off with new funding and then he says this will restore their funding to where it was in 1994-95.

There is no new money here. This is just replacing what they took away. What does this do? Not only does it threaten our competitiveness and our ability to innovate, it demoralizes and challenges, in fact it discourages, the brightest and finest of our intellectual people. Why? Because the material and equipment that they need to use to do their research is inadequate. There is a lack of appreciation for the work that they are doing, there is decreased motivation to pursue new ideas.

What do they do? They leave the country to go elsewhere where their efforts are supported and where they can have better equipment and where their particular work is encouraged and developed.

I want to refer to a particular article that was given to me from the Ottawa Citizen . This is a very serious development that has taken place. In this instance, the declining of money for R and D, the story chronicled the departure of 11 of 17 research scientists. That is well over half. They went to other nations because of the funding cuts in Canada. Eight of these went to the United States. We cannot afford to have this brain drain happen in Canada because that means our brightest and finest are leaving this country and going elsewhere.

It is not just research funding that is the problem here. There is also the question of taxes and salaries. Let us compare a person earning $50,000 in the United States. That person pays, in the United States, $4,910 in taxes. In Canada, that same person earning $50,000 pays $10,647.

Not only is the money there to provide for the equipment and for the research and development but also in the personal taxes that these people pay. Is it any wonder that they leave?

We need quality research. We need to develop it further. Let me point to one particular development at the University of Saskatoon and the establishment there of the Synchrotron facility. That needs to be developed and expanded so that it can do the kinds of things that need to be done in this country.

Medical research has slipped back. The application of new ideas and the development of new technologies is in jeopardy. That is not all. The other social costs that come out of this is that students are unemployed; 16.8% are unemployed. That is far too high. First of all when they graduate, they carry on their shoulders a government debt of $20,000 because of the huge debt that is there. The average student has another $25,000 of student loans. That is a $45,000 debt charge right off the top and that poor student has to start paying income taxes the minute he reaches a salary of $25,000.

What kind of justice, what kind of fairness is that in this particular country?

Not only do we need to look at the social consequences of not stopping the marshalling and the growing of the debt but we have to listen.

In four different high school classes last week I was told for the first time ever by young people that it was not fair that those who graduate from post-secondary institutions have to begin to pay for the debt the government was unable to pay for. The government spends money on their behalf so that they live a standard of life they are not prepared to pay for. They think it is not fair they should be saddled with a tax bill that is so large they are groaning under its burden.

The time has come for the government to stop wasteful spending, to stop giving grants and subsidies to business and industry, and to look at where it is and where it is going. Government should listen to what the people are saying. It should reduce the debt and lower taxes.

[Tony Valeri, Liberal, Parliamentary Secretary to Minister of Finance]

Mr. Speaker, I listened attentively to the comments of my colleague opposite. I want to make a couple of points regarding the debt.

The debt is certainly declining. The debt to GDP ratio will decline 63% over the next two years, the largest drop of all G-7 countries.

I want to focus on the stop, look and listen idea put forward by the hon. member. Yes, we have stopped the deficit. We have stopped the rise of the debt. Certainly we will continue to look and listen to Canadians, to reflect Canadian priorities and to ensure that those priorities are reflected in budgets.

This brings me to my comment about this budget. Essentially it is an education budget. The hon. member says that we are doing all these terrible things when in fact we are giving young Canadians an opportunity.

I draw the attention of the hon. member to the Globe and Mail article of this morning. It says quite clearly that the work is going to those who have earned a university degree, a college diploma or some other form of post-secondary educational certificate. If young people can do anything to insulate themselves from joining the unemployed, the data paints a pervasive picture that the answer can be summed up in one phrase: stay in school.

We have reinvested in young people, reinvested in the Canadian priority and provided some vision with respect to education. That is the linkage that provides competitiveness for this great country which will bring us into the next millennium.

We could talk about restoring funding to the granting councils. The member is unequivocally correct that we are restoring funding to 1994 levels. He must realize—and I am sure he does—that Canadians have waited 30 years to balance the budget. We have finally done that. We are reinvesting in Canadian priorities.

How could the member honestly ridicule the budget and say that it does not reflect Canadian priorities? It does. I draw the hon. member's attention to the article in the Globe and Mail . I could pass a copy on for him to read.

[Werner Schmidt, Reform, Kelowna, BC]

Mr. Speaker, I thank the parliamentary secretary. I read the article. I know the budget apparently is balanced. I think that is wonderful. That is great. The Prime Minister says that there is a millennium scholarship fund. It is to be a wonderful thing.

Is it not interesting how Liberal logic works? First, they cut the spending for education penalizing all students. Then they come in with a great big millennium scholarship fund which will maybe benefit 6% of students. Is that not interesting?

They take it away from 100% and give it back to 6% and say this is what they have done for the citizens of Canada. What a bunch of misleading logic.

Are there some good things in the budget? Have the Liberals listened? I am glad the hon. parliamentary secretary said that the deficit has been stopped and that they are going to listen. Notice he said that they were going to. They have not done it. They have not demonstrated that in the budget.

The time has come for us to get serious about exactly what we are going to do. When will government pass a law that says there shall be no more deficit spending or that it will be a liability for each MP who voted for going into a deficit position.

We need such a law. We also need to recognize that the people have said that if there is a surplus it should be used to pay down the debt and reduce taxes. We need to get serious about that. We do not need new spending.

We did not hear people ask the government to spend more money. They have asked for taxes to be cut and the debt to be reduced. That is what they said absolutely, unequivocally and very clearly all across the country. The CFIB said it. The Canadian Chamber of Commerce said it. The Chamber of Commerce in Kelowna said it. Ordinary citizens on the street say it. Students in the schools say it. I say it. The official opposition says it. The government should listen.

[Andrew Telegdi, Liberal, Kitchener—Waterloo, ON]

Mr. Speaker, the member talked about not spending money. Then he came after the government about spending money on research and development. It just does not jibe.

What does he have to say to the president of NSERC, the president of the NRC, the presidents of the universities in my riding including the University of Waterloo, Wilfrid Laurier and Conestoga college, and to students who have praised the budget for what it does for the future of the country? I do not want to see him sucking and blowing at the same time.

[Werner Schmidt, Reform, Kelowna, BC]

Mr. Speaker, we need to put money into NSERC and into research and development by reallocating funds.

If the member would have listened carefully as he should have, he would have heard me say that we need to cut wasteful spending. EI premiums should be reduced so that we do not have an $8 billion surplus there. We need to do away with grants and subsidies to industries that do not need them. We need to do away with the wasteful spending that exists and many duplications in various departments. Then the money will be there for reallocation to essential research and development. That is the answer.

[Hedy Fry, Liberal, Secretary of State (Multiculturalism) (Status of Women)]

Mr. Speaker, I am proud of the fact that, for the first time in 20 years, we have a balanced budget.

I am proud to speak to the budget as Secretary of State for Multiculturalism and the Status of Women and as a member of parliament from British Columbia.

Balancing the budget was our initial objective, and one we shall continue to pursue in the next millennium. This balance will have a profound impact for years to come.

The budget is not a stand alone budget. It builds on past budgets. It is a building block for future budgets. The budget is providing a solid infrastructure for Canada for years to come. It tries to address the things we need today while it looks for the things we will need 20 and 25 years down the road. That is one of the reasons I see it as a very important budget.

The budget builds a strong and stable infrastructure for Canada in the future, a strong and stable infrastructure for Canada in terms of its economic growth, its human resource development, and its ability to have clear committed social programs to assist those who are disadvantaged or who have barriers to achieve the opportunities they need to move forward and become contributing citizens.

The budget therefore builds on youth employment as have past budgets. It builds on money that was put forward to assist with child poverty as have past budgets. It assists with tax incentives and with student loan incentives as have past budgets. It continues to build on slow changes in tax initiatives. It is a brick by brick budget. It is a budget by budget budget. It is a balanced budget. It is a budget of balance because it reflects the values of equal opportunity and social justice for all Canadians.

Given the situation we were in, let us not forget that when we first talked about deficit reduction we promised that in three years we would bring our deficit down to 3% of GDP. We are now at four years and we have eliminated our deficit entirely. We did not only do what we said we would do. In the same very measured, very controlled, very conservative manner, we managed to do more than we said we would do. We have even surpassed our own expectations.

Last year we brought the debt down by $13 billion. We do not need to be defensive about the budget because it speaks for itself. We have done something that no other government has done in 30 years. In the next three years we will have done something that has not been done in the country for 50 years. We can stand it up against anything anyone chooses to say about the budget.

We talked about how we would slowly move into debt reduction. We talked about how we would at the same time not do one thing at the expense of another. We have looked at how we are building an economic base and how we are building a social infrastructure. We have also looked at tax relief.

This is a very measured budget. It cannot do everything for everyone. That is how we have managed to get to a point we can be proud of today and to speak about the changes that have been made in the country over 50 years.

This is not a one fell swoop budget. Some people across the floor would like us to say “Let us target one thing only and let the others go by the wayside; let them take care of themselves”. That is not the Liberal way. The Liberal way is to look at how we balance things and at how we ensure that we set priorities. We look at all our communities and the things that are needed across the board.

We decided as well in the budget that since we could not do everything all at once we would set our priorities and our targets so that low income Canadians and moderate income Canadians are our first priorities.

As the Secretary of State for Status of Women, I want members to know this is a budget that has listened to the collective voices of women across the country. It addresses the diversity of women's needs and priorities at every stage of their lives. Given that women make up 51% of Canadians, it is completely unacceptable to decide that we would build a strong country, build a competitive nation and not make sure 51% contribute to the social economic growth of the country. No business people would ever do that. No business people would take 49% of their resources, stretch them and then ignore the other 51%.

Clearly it is one way of building human resource potential. According to the Bank of Montreal study last year women are not victims. Women are employers. Women are able to form businesses. Women are able to contribute to the economic growth of the country. In so doing they take the power for themselves so that they can deal with their lives, move forward and contribute fully. We have looked at women not only in one phase of their lives. We have looked at women from students to entrepreneurs, from single mothers to caregivers.

One of the most significant elements in the budget for women is the recognition for the first time of unpaid work in the home. Unpaid work is part of the foundation of our economy. Even by conservative estimates we know that women do two-thirds of the unpaid work, community work and volunteer work. When women do this work it means that the government does not have to pay for that work to be done by other sectors. It also means that women are contributing without any reimbursement whatsoever to the gross domestic product of the country. This was recognized in the budget. Only one other country in the world has such a recognition, and that is Norway.

I am extremely proud of the budget. There are those who will say that value for unpaid work by women is too little or not enough. We recognize that the budget will be a building block for future budgets. We have done something extremely historic and important this time.

The budget proposes that a new caregiver credit will reduce federal tax for up to $400 for Canadians providing care and support for elderly or disabled family members. That tax exemption will also apply to GST and harmonized sales taxes for any expenses incurred from providing care for a person with limited means of self-care. It targets people who need help the most right now.

In the budget we looked at low income families. That was one place we felt we would start first. We needed to help low income families, especially low income families with children. Some 85% of low income families with children are headed by single women and 65% of those women are living in poverty.

This budget has built on the last budget when we committed $850 million to the child tax benefit. This budget commits another $850 million over two years. This brings it to a total of $1.7 billion to help low income families with children, which consist of very many single women.

We also look at how we help women to get an education so they can become independent workers and can move on if they choose. It is about choice. This budget is about the most important thing to Canadians, the ability to choose.

Women with dependants can now go to school and can extend the education tax credit for part time work. Women with children tend to go to school part time. This is very important for them. It also increases the child care expense deduction for part time schooling.

The opportunities strategy is going to give up to $3,000 a year in a grant, not a loan, to persons with dependants who are in financial need. This goes straight to the heart of all of those women with children or those women who care for someone in the home and cannot afford to go to school. They are going to be given money that they will not have to pay back. This is about building the human resource potential of this country.

The student loan repayment initiative is going to be based on helping those who are in financial need. This again touches very many women who are in this particular class.

I heard the millennium student fund being bandied about across the way. Obviously members do not seem to understand that when we give money directly to people as we are doing, and if we focus on people who are in need and who have talent and ability, it strikes at the heart of what we have all believed as Canadians, that one day our children will be able to do better than we have done. This means that children or young people who have ability and talent but who do not have money will be able to get money so they can have a post-secondary education, a college education or skills training in any kind of school. Then they can find work and put their talent to work for the benefit of this country.

There are so many things in this budget that assist women and which I am extremely proud of. There are also some things which as a member of Parliament for British Columbia I am extremely proud of. I just talked about all of the student initiatives. I have one of the largest student populations in my riding. All of the things that are going to happen today, the students who need loan repayment assistance, the ones who will need to go to school in the future, the single women students in the riding are going to be assisted.

There are three universities in my riding and there are many hospitals which are doing valuable research. The money that has been given back to the research councils is going to be very important for many of these universities and hospitals in my riding. I have already heard from them. They have called me up to say well done, that they needed this and that it is very important. It is something that says we believe in the ability of the creativity of Canadians to continue to lead in the technological age.

Tax measures are an important tool. We know having done some very important gender economic indicators with the provinces over the last two years and in which every province participated, that income tax assists women. It is one of the most important tools to equalize women's income. Women do better after taxes than before.

The tax relief for low and middle income Canadians this budget provides is good news for millions of men and women across this country. In fact over the next three years some $7 billion in tax relief will be provided to low and middle income Canadians.

As of July 1 the government will raise the amount of income that can be earned tax free by low income single Canadians by $500. Most of them are women. It will go to $1,000 for a family. I can assure this House that the women who are partners in those families will welcome the relief, even if that relief helps to go to what is putting down money so that their children when they reach 18 can go to go to university.

We hear those across the way talk about how we have done nothing about tax relief, that we have done nothing on income tax. It depends on who you think are your constituents. We think our constituents happen to be the low and middle income Canadians who need our assistance right now, not the very well-heeled friends of my friends across the way.

Effective July 1 some 83% of taxpayers who are earning under $50,000 will see the 3% general surtax eliminated entirely. For middle class Canadians and middle class women this is an extremely important piece of tax relief.

The Bank of Montreal recently said that small and micro businesses run by women entrepreneurs are increasing at three times the rate of male entrepreneurs. This budget introduces changes for self-employed Canadians who cannot incorporate. We know that these Canadians run very small micro businesses. Many of them are run by women and nearly always from their homes. These women cannot incorporate. They will now be able to deduct health and dental benefits which they would not have been able to deduct before. That is very significant.

We know that women entrepreneurs earn far less than their male counterparts. However, last year they created more jobs than the top 100 Canadian companies. We are talking about job creation. At the same time we are talking about empowering the people who are proving to be the best entrepreneurs in the world.

Everyone has been talking about health care. I think I know a little about health care. It is an issue of vital concern to many women, to me, as well as to the many women in my constituency. Not only are women the major consumers of health care, they make up the bulk of the health care workforce. They are the health care providers. They have taken responsibility for many of the health care services which communities can no longer afford to provide. When the hospitals close down their acute care units and send people out into the communities, the people who pick up the slack are women. That is why the tax credit for caregivers is a very important move.

Important research is being done in my riding. There are also important things being done elsewhere in British Columbia and right across the country. Today I heard an hon. member say that we should not be subsidizing or lending money to businesses in Canada that do not need it. The initiative taken by Industry Canada has assisted business innovation in this country. Businesses have been able to move forward. It has put us at the forefront of world technology.

Recently in my riding the government lent $305 million to RADARSAT II which is based in Richmond. This will provide leading edge technology for mapping the whole world. Canada is the only country in the world which has been able to achieve this kind of technology. Just think of the spin-offs which will come from that kind of loan.

Bombardier just received $2 billion in international business as a result of a very small loan.

In British Columbia Ballard industries has moved into leading edge technology with respect to environmental pollution and new energy sources for cars.

Forty million dollars of loan assistance has brought billions of dollars from the rest of the world which is looking for Canadian technology. That provides jobs for Canadians.

We are thinking in a very holistic way. We are not thinking in a linear way with blinkers on. It is a little difficult for my friends across the way to take their blinkers off and look in a broader and more long term way at what we need to do in this country.

This budget's reaffirmation to address aboriginal issues and youth unemployment will have an impact on many young people across the country. We know that Canada's youth are looking for something which will give them hope for the future. We cannot simply look at youth as one set of people between the ages of 17 and 25. If we look at the unemployment rates of young people in this country we will know that aboriginal youth have an unemployment rate of almost 40% and that visible minority youth have an unemployment rate of 27%.

We need to understand that some youths in this country face extraordinary barriers. We are trying to address some of these barriers. It is not the one size fits all policy. It is not a let us throw everything out to everyone and see who can catch the best because it is the people who jump the highest who will always catch it.

We have to talk about how we marshal for ourselves in the 21st century a country that is going to build its human resource potential. It is a country where our young people will take the talents they have, where our businesses will take the technology they have, where the 51% of our human resources who are women will prove to be the employers and will move forward and contribute to Canada's growth in the way we know they can.

This is a remarkable budget. I am proud to be a member of the government that has brought this budget down.

[The Deputy Speaker]

I can see there are a lot of questions. We have 10 minutes of questions and comments so what we will do is five one-minute comments and one-minute responses. That should take up the full 10 minutes.

[Monte Solberg, Reform, Medicine Hat, AB]

Mr. Speaker, that does not leave us much time.

I simply must point out that some of the assertions the minister made were perhaps a little bit misleading. First, the minister suggested that the federal government is the first government to balance a budget in 30 years. I would point out that just the other day Manitoba announced its fourth balanced budget in a row. I would point out that Alberta and Saskatchewan have done the same. I would point out that municipal governments balance their budgets as a matter of course every year. The government should not be patting itself on the back so heartily for something that is regularly done by most governments.

I would also point out that taxpayers are the ones who have balanced the budget. The member asserted that it was her government that balanced the budget. However it was taxpayers overwhelmingly who balanced the budget through higher taxes.

The minister has stated that taxes are going down. In fact when one includes the hike in CPP premiums and bracket creep, taxes have been going up each and every year of the government's mandate. I do not know how the minister can make her assertion. How can the minister assert that taxes in fact are going down? When one includes CPP premiums and bracket creep, the effect is that taxes are actually going up.

[Hedy Fry, Liberal, Vancouver Centre, BC]

Mr. Speaker, the 3% surtax was put on by the Conservative government ostensibly to bring down the deficit. What it in fact did was it kept the deficit going up and up and up. We had promised to take that surtax off and it has now been taken off. That is going to affect 83% of taxpayers. The 3% may not be a lot of money to some people in this House but for some of my constituents it represents a great deal of money.

When we talk about bracket creep and taxes going up, the member is not taking into consideration the middle income Canadians who are going to be helped by this measure.

It is very fine to talk about other people who have balanced their budgets, but we are speaking here about the federal government. We are the ones who inherited a $42 billion deficit.

[Christiane Gagnon, Bloc, Québec, QC]

Mr. Speaker, I suspect the minister does not read the same newspapers we do. This budget cannot be described as taking a number of realities into consideration, particularly with the manoeuvrability left to the government after the many cuts that have been made.

The minister is responsible for the status of women. The $850 million in child tax benefits are far too little. Moreover, a number of groups, Campaign 2000 for one, are calling for $2 billion to be invested immediately, not two years from now. What this budget indicates is that a step in this direction will be taken next year or in two years. There is therefore no short term strategy in place to help children, among others.

In my opinion, this budget does not take into consideration the overlaps in Quebec. As we saw in this morning's newspapers, students are calling for compensation to adapt a program to the reality of Quebec. The true problems of students are not being addressed.

We also know that the pickings were pretty slim where the status of women was concerned—

[The Deputy Speaker]

Order, please. The hon. secretary of state.

[Hedy Fry, Liberal, Vancouver Centre, BC]

Mr. Speaker, first and foremost we probably do not read the same newspapers. The newspapers I read have an overwhelming number of students saying that this is a very important budget for them. They have applauded this budget.

Second, we talk about children. If we look at this budget and take it in isolation, one will recognize that it builds on past budgets and it is a building block for future budgets. In three years we would have spent $1.7 billion on the child tax benefit. That is not in isolation.

Provinces are working in partnership with this government to put up equivalent amounts of money that will equal $3 billion between the two levels of government to assist children. The provinces will look at the services for assisting these children while we hand them money.

[Libby Davies, NDP, Vancouver East, BC]

Mr. Speaker, I listened to the hon. member and and heard her say that the budget is remarkable. What is remarkable is that this budget has absolutely failed poor kids in this country, it has failed the unemployed, it has failed women and it has failed students.

I would like to ask the minister, if this is such a remarkable budget, why is it that only 7% of students will be covered through the millennium fund?

If it is such a remarkable budget why is there nothing in this budget that addresses women's equality and pay equity? If this is such a remarkable budget, why is it that poor kids in this country will have to wait until next year to get a measly 80 cents a day through the national child benefit when we have heard repeatedly that what is needed is about $2 billion to ensure that those kids are helped.

What is remarkable is that this budget has failed.

[Hedy Fry, Liberal, Vancouver Centre, BC]

Mr. Speaker, again, I think there must be some sort of collective mental block across the hall because when we talk about this budget building on the last budget and being the building block for future budgets, we are talking right now about what was promised in the last budget—the $850 million that will be starting in July and the other $850 million that will come over the next two years—together with the provinces which are anteing up money to put into services to help those same children who live in poverty, there will be a total of $3 billion over the next three years between the two levels of government. It's pretty simple math.

[Jim Gouk, Reform, West Kootenay—Okanagan, BC]

Mr. Speaker, the secretary of state talked quite a bit about the millennium fund.

The fact is that this is only going to put about $300 million in to replace the money lost to the provinces which were the recipients of a $7 billion cut a year. So it is a small drop in the bucket.

She said specifically she has a lot of students in her riding, and to quote her words “who need to be able to go to school tomorrow”. How does she think that she can stand and talk positively about a Liberal budget that puts in a small portion of what was taken away in transfer payments? It is not going to help people until the year 2000 so it can build a monument for the Prime Minister.

[Hedy Fry, Liberal, Vancouver Centre, BC]

Mr. Speaker, there are the up to $3,000 a year grants for students in financial need with dependents.

That is going to be happening now. Perhaps the hon. member might like to listen to my answer so that maybe in future he will understand the realities of the budget and not continue to find some very strange interpretations of it.

[Dick Harris, Reform, Prince George—Bulkley Valley, BC]

Mr. Speaker, only Liberal arithmetic could talk about this budget as being a benefit to Canadians.

As a matter of fact, if you look at the budget very carefully—which we have done and they obviously have not—you will see that because of the budget there is no net gain for Canadians. In fact, there is a net detriment to Canadians to the effect of $4.8 billion in increased taxes by the year 2000 since the Liberals came to poewr.

I want to specifically go back to the health care issue of which the member is so proud. The fact is that the Liberals have cut $7.5 billion out of health care and education since 1993. They are putting $1.5 billion back into it. That is a net loss of $6 billion.

Even the NDP party can figure out that is a net loss. Why can the Liberal Party not figure that out?

[Hedy Fry, Liberal, Vancouver Centre, BC]

Mr. Speaker, I might want to point out that it is Liberal arithmetic that got rid of a $42 billion deficit in under four years.

That is real arithmetic. That is not imaginary. But you know, it is interesting to say that there is a sort of tunnel vision when we talk about the budget. Probably why the arithmetic is mixed up and our arithmetic managed to do positive stuff is that when you look at the fact that you are talking about taxes, let us look at the assistance for the deduction of health and dental benefits for unincorporated small businesses. These may mean nothing to hon. members across the way, but it sure means a lot to a lot of the women in this country who are trying to make ends meet.

When we talk about the holiday from payroll taxes for people who hire young people between the ages of 20 and 24 who do not have a high school education, until the year 2000 there is a holiday from those taxes. These are real taxes. People pay them. It is a way of assisting business to be able to help employ young people. This is real money that is being offered up. I think hon. members might want to look at some Liberal arithmetic for a change and learn something.

[Dick Harris, Reform, Prince George—Bulkley Valley, BC]

Mr. Speaker, I will be sharing my time today with the member for Surrey Central.

It is interesting that the member across the way just finished talking about this tax relief for business in regard to the EI premiums. I can tell the hon. member that I was in business for over 25 years as a small businessman and I never hired one single person because there was some money available from the government. I hired additional people because I thought that my business could improve and make money by having more staff. So these government programs that the hon. member is talking about really are not a big incentive for businesses to expand. I want her to know that, particularly in the small business sector where the small businessman has to be very cautious in his approach to expanding, and I have that experience.

I am pleased to speak to the budget today. I have done a reasonable amount of travelling in my life in Canada, in the U.S. and in some other countries of the world. What struck me when I was travelling outside of Canada was how people from some other parts of the world believe that Canada is a caring country, a country that looks after its citizens.

Today, across the House, is a government that claims to have the best interests of Canadians at heart. In the last few months I have talked to Canadians from all parts of Canada, all walks of life, all sectors of employment and I have noticed one thing, and that is that they simply do not buy this line about a caring Liberal government.

After decades of massive overspending, helped on by their brothers and sisters in the Tory party, massive debt, the highest tax rate among industrialized countries in the world, after seeing education costs skyrocket, after massive tax hikes that the Canadian people have endured, after watching our health care system crumble like ancient ruins, after all this there is no way that this government can sell this idea that they care about the citizens of this country. This budget will simply harden and strengthen this opinion that they are not the caring government that they claim to be.

Let me start at an obvious point: our children. A caring party would see children as the key to Canada's future. It would want to make sure that they get the very best start in life possible. A caring party would make the families of these children the highest priority in a budget, but the Liberal budget does not do this.

For instance, the increase in the child tax benefit will not replace the billions of dollars in cuts to health care and education that families are having to face now. It will not even begin to lift our poor families out of poverty because the increase in benefits, as small as they are, will be taken back through increased taxes.

For example, the 15% in income for a $21,000 income a year two child family is taken back by their income tax burden, up 15% since 1992. The increases in the child care expense deduction will not help families much either, especially—and these were overlooked—single income families where one parent chooses to stay home to look after the children. This government treats single income stay at home parents as second class families in this country. The official opposition, the Reform Party, would end this discrimination by extending the child care deduction to all parents, including stay at home parents. In short, Reformers would make staying at home to raise children a choice, not a sacrifice. That is what Canadians want more. They want to have choices and they want the freedom and the tools to do it. Reformers would also increase the spousal amount from $5,380 to $7,900, levelling the playing field for all parents, all families.

Our policies in the Reform Party put families first because they deserve to be first, and certainly they should be first in a budget by this so-called caring Liberal government. But these things are not in this government's budget.

Children grow up fast. The first thing you know, they are off to college and university. Does the Liberal budget help a young Canadian currently with a $25,000 student loan debt? If the student is maybe one of the lucky 6% to get the maximum each year from the Prime Minister's personal trophy, the millennium fund, their outstanding debt would go down to $10,000. At first glance that looks good.

That is fine until they go out and get a job and they are finished university. If they happen to be making the average industrial wage of $36,900, then whatever help they may have got through the millennium fund is quickly eaten up by the tax burden they are going to have to endure as soon as they start working.

Students do get a little tax relief on the debt, but it is quickly eaten up because over the next 12 years they would pay a 73% CPP tax increase, they would pay every cent and more back to the government that they ever got from the millennium fund and they would still have the leftover portion of the student loan.

What we are talking about here is sleight of hand budgeting by the Liberal Party. On one hand the government gives to students and on the other hand it takes it back. That is what this budget represents. What we have here when you do all the math is a zero net benefit to our Canadian students.

Looked at this way, the millennium fund is sleight of hand funding for students. It helps only about 6% and it leaves the current students with heavy debt loads simply out in the cold.

The official opposition has a lot more compassion for the younger generation than this so-called caring Liberal government. As a start, we would restore health care and education funding by putting $4 billion back into it, not the $1.5 billion that the Liberals have so generously said they were going to. We would put $4 billion back into it.

This will do a lot more for the students and the Canadians worrying about their health care than the millennium fund or the small amount of the $7 billion that the Liberals have cut from health care and education in the last three years.

Canadians wanted a budget that has some compassion for the seniors in our country. When it comes to overspending, patronage or pork-barrelling, these Liberal governments can never be accused of dragging their feet, but somehow they missed the seniors.

This budget offers no benefits for Canada's seniors. Two years ago the Liberals announced the new seniors benefit proposals. Two years later, now, seniors are still waiting to find out what it is all about. Two years later, seniors are still wondering how it is going to affect their retirement plans. When the seniors benefit kicks in, if it does, seniors will be looking at it, wondering what it has been all about because there has been precious little released on it.

They do not know how to plan for their retirement appropriately to work into the new seniors benefits because they do not know what is in store for them. They are angry and afraid. For instance, this great benefit will not even begin to help the poorest seniors. It will provide them with a scant 17 cents a day in increased benefits and that is not enough to buy a cup of coffee in this country.

At the same time, this being zero help to the poor seniors, the benefit discriminates against the middle income and upper income seniors by taxing back up to 75% of their personal retirement savings that they have sacrificed and put away so they can be secure in their retirement.

What it means is that the poorest seniors will not benefit and the seniors who make sacrifices in their working career will be penalized for doing so.

So this is the heart of the matter. Canadians expected a budget that would respect the challenges and the sacrifices they have made in their lives. They wanted a budget that tells them that the government appreciates the challenges they face and thanks them for the sacrifices they make; for the young boy up on his father's shoulders looking around believing every dream was possible; for the students up late at night studying, trying to make their dreams possible; for the mid-career Canadians hoping for their dream of a secure retirement; for the seniors who have had their dream of retirement with dignity shattered. Where in the budget are the dreams of Canadians? There are no dreams, only nightmares.

There are high taxation levels, promises of debt reduction that have been broken and increased spending programs that give ample evidence that the tax and spend days of the Liberals are back again. The only thing that happened was that Canadians woke up to the reality that this Liberal government is not the caring government it claims to be.

[Tony Valeri, Liberal, Parliamentary Secretary to Minister of Finance]

Madam Speaker, I have a couple of points. I find it somewhat amusing to actually have a member of the Reform Party talk about the fact that this is not a caring government.

I only want to remind the hon. member that some of the documents that the Reform Party has put out talk about reduction in program spending to 10.5% of GDP, which equates to $10 billion, another $10 billion to be found somewhere. The Reform Party talks about spending more on education and health care and reinvesting in Canadians when in fact it does not talk about where it is going to get that money.

The Reform Party offers up a bunch of one time savings that even the auditor general says are only one time savings. It talks about ongoing expenditures. It talks about cutting equalization which will affect the majority of provinces. That is what the Reform Party is talking about. At the same time it talks about caring.

It talks about student loans and that this budget does nothing for students. We spent the last week talking to a number of university students and college students who talked about the investment that this government has finally made in education so that students do have access.

I would like the hon. member to stand up and say that this budget was wrong when it now allows a student to write off the interest cost they incur for their education, just like a business writes off the costs that it would incur to run its business. What is wrong with that?

The member focuses on the millennium scholarship. It is a seven point program. The hon. member should take the time to read what the education package is all about so that he can go out and speak intelligently with the students in his own riding and not just focus on one particular part of the strategy that he does not like. I would submit that Canadian do support it.