Debates of March 9th, 1998

The Budget

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

Madam Speaker, the old Liberal arithmetic is going full force over there.

The member absolutely knows that the millennium fund is a trophy for the outgoing prime minister. It is going to benefit only 6% of the students in this country. What about the other 94% who will not be able to take part in it? For those 6% it does benefit, the tax increases this government has put in have ensured it will get back every single penny and more from those 6% once they start their jobs. That is the fact.

Let us also look at the economy. The one thing the Liberals do not get as far as building a healthy economy is that there is a undeniable direct link between lower tax regimes and lower unemployment and an economic growth. There is a direct link. Countries with low or even reasonable tax regimes have much lower unemployment than we have in Canada and they have a healthier economy that is growing at a better rate than Canada's. These Liberals do not get that because it is not in their philosophy to give a reasonable tax regime to Canada. They do not get it.

[Darrel Stinson, Reform, Okanagan—Shuswap, BC]

Madam Speaker, I have been listening very intensely all morning to the so-called sharing and caring Liberal government and now I have a question for the hon. member for Prince George—Bulkley Valley.

I have heard about the money flowing back into education and the health care system from this government. My understanding is that it has ripped billions out of this system and is now basically giving us back pennies in return. I would appreciate if the hon. member could address this.

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

Madam Speaker, the fact is, to use the words of the finance minister, that since 1993 the Liberal government has ripped seven and a half billion dollars out of the health care and education systems. Now it is looking for the crown of heroes for putting a billion and a half back. That is a net loss of six billion dollars. The government is putting the money back by specifically targeting it for pure political means.

[Gurmant Grewal, Reform, Surrey Central, BC]

Madam Speaker, I rise on behalf of the people of Surrey Central to voice our views on the budget. Six provinces already have balanced budget legislation in place but this government does not. Balanced budgets should be mandatory for every government by legislation.

It is not the pen of the finance minister filled with the black ink given to him by the Prime Minister but the Canadian taxpayers who have made the balanced budget. Seventy per cent of the deficit was eliminated by the increase in tax revenues. Canadians now pay 56% more tax than the average of the G-7 countries and 23% more tax than the average of the OECD countries.

Since it took office, this government has increased taxes 37 times and has squeezed every dollar from the taxpayers. It has squeezed $48 billion worth of revenue from taxpayers and has added $83 billion to the huge debt that now stands at $583 billion. This has been accumulated by the mismanagement and lack of vision of this Liberal government and previous Tory governments one after the other.

On average Canadian families pay $6,000 per year just to pay the interest payment of $45 billion on the debt. A third of each dollar goes to service the debt. A newborn baby is not assured of good health care, education, a job or a pension. That newborn baby is assured of one thing, a $20,000 debt. That is shameful in this country.

This government has made no real effort to give tax relief to taxpayers or to lay out a plan to pay the huge debt. It is this debt and the high tax rate that discourage domestic and foreign investment in Canada. The debt and the high tax rate stagnate job creation in Canada. The debt and tax rate hinder economic growth in Canada. The debt and the high tax rate cause the brain drain in Canada.

Budget day was a martyrdom day for this country. The Liberal finance minister has sacrificed the future prosperity of Canadian taxpayers. He has made martyrs out of Canadian taxpayers. If a budget is balanced by increasing tax revenue alone, it could have been done 25 years ago. Where was this Prime Minister who was then finance minister in the Liberal government? Where was that bottle of black ink 25 years ago if he wanted to balance the budget? It has not reduced federal spending at all. It has not pursued the elimination of waste in the government. This government has all kinds of credit cards and cheque books even for future generations and is issuing one cheque after the other.

In this budget the government has already announced 17 new spending initiatives worth $11 billion. This shows that the government completely lacks vision and accountability.

The other day the Leader of the Opposition and other colleagues gave many examples of irresponsible spending by this government. Let me turn for a minute to my critic role. This budget adds $90 million to foreign aid this year and $50 million to it next year, while foreign aid donated by other countries around the world has decreased. The private sector investment is increasing.

By throwing out more money, this government is rewarding the CIDA minister for her failures, inefficiencies and mismanagement. The CIDA minister has said before the committee on foreign affairs and international trade “the cuts in the budget have made us work smarter”. What a funny quote. Why could her ministry not work smarter before the cuts were made?

On the other side, on page 29 of red book II it promised that 50% of a surplus would be used to reduce the debt and the other 50% would be used to address social and economic needs through program expenditures. But this government, like its GST promise, its jobs, jobs, jobs promise, and like 136 other promises, has again betrayed the trust of Canadians. We know that Canadians will not forget this great betrayal by this government.

Two economists from the major banks are saying that the government is understating its surplus by $5 billion to $6 billion this year and $9 billion to $10 billion next year. This government should not play political football with the future of Canadians.

I am also a member of the Standing Committee on Public Accounts. We have been very disappointed with what we have learned about the political mismanagement by the Liberals of federal government affairs which were brought, one after the other, before the committee. According to the Auditor General of Canada, the Liberals have overstated the 1996-97 federal deficit by $800 million. How? It has paid the $800 million to a dummy organization which did not even exist in that fiscal year. What a shame. That $800 million was paid to a company that did not even exist in that fiscal year.

I have another example. The auditor general insists that the Liberals eliminate their $20 billion gap between their estimates and the actual liabilities of the federal government's employee pensions. The auditor general made it very clear that the $20 billion figure was based on a political decision and not on an accounting decision. The Liberals are using creative accounting practices, something no small or medium size business could ever use.

The auditor general has scolded the Liberals for not following the generally accepted accounting principles or the public sector accounting auditing board guidelines. If it is not a cooking of the books what is it? They should not follow the laws of the cooks but the laws of the books.

The government should be credible, honest, clear, straightforward and accountable to Canadians. It must maintain transparent accounts. This is not leadership by example. How can Canadians trust this finance minister regarding what he calls a balanced budget? Why does this minister use a surplus to play politics with?

Rather than caring about the future of Canadians, I think this budget looks like a shell game. Canadians cannot be fooled by this shell game.

A few years ago in Canada on average one parent used to work and the other parent took care of the children and the family at home. Nowadays and for some time both parents work and the average family makes less money. Parents get less time to spend with their children.

When those children go to school they have to struggle to get quality education with the competition and it being so expensive. They go to schools which are famous for drugs, gangs and crime. When they graduate they have to struggle to get jobs. There is 18% unemployment rate for youth. When they get jobs they go on the same vicious cycle of paying taxes and in the end when the time comes for retirement the situation is terrible. There may be no money left for their pension.

The system is unfair and the government lacks accountability. The government lacks vision. Every corner of our lives is mismanaged by big government. It may be the Young Offenders Act. It may be victim rights. It may be the multilateral agreement on investment. Whatever we talk about, the government is famous for mismanagement.

[John Richardson, Liberal, Perth—Middlesex, ON]

Madam Speaker, I just listened to a maze of questions that led nowhere. The member never got out of the maze. The facts and figures he laid on the table were typical after the fact set-up by Reform Party. If there was any intelligence I could not find it.

I would like to know the basis of the facts he presented. This is the number one country in the world for the third year in a row. It is leading the G-7 in its fiscal responsibilities. It is looked up to all around the world. However people across the way are so close to the problem they are blinded by the reality.

I ask the member to give us some facts to support his statements.

[Gurmant Grewal, Reform, Surrey Central, BC]

Madam Speaker, the question by the hon. member suggests that he is out of touch with the books. He is out of touch with Canadians. He is out of touch with his constituents who will tell him that Canada is paying 56% more tax than the average of the G-7 countries. The average Canadian is paying 23% more tax than the average of all OECD countries.

The hon. member on the other side should spend some time looking at the auditor general's report. He will find the same facts and figures I am speaking about in that report. They will show that the member is out of touch. He should read those books and tell the finance minister what the auditor general is saying.

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

Madam Speaker, when I listen to the member for Surrey Central it sounds like he is speaking about a third world country. We have the best country in the world and there is an historical reason why that is so.

When I listen to the member talk about credibility I have to ask him for which party he ran for nomination in the last election. He lost that nomination and then went over to the Reform. That is credibility.

He made a comment regarding the auditor general's finding on $800 million which relate to the infrastructure fund for renewal of research infrastructure. That $800 million commitment was made in the last budget. The liability occurred in the last budget. All the member can criticize is the fact that we were up front with taxpayers. We said that we incurred an $800 million liability in the last budget and that we would experience a debt in that fiscal year. If that is not honesty in accounting, I do not know what is. There was a genuine disagreement with the auditor general. Most members of the public accounts committee disagreed with the auditor general.

The member opposite who likes to flip-flop from one party to another is trying to confuse the issue. When will he stand in the House to acknowledge the fact that Canada is the best country in the world in which to live? Immigrants and refugees from all over the world want to come to this country. When will he stand up for Canada instead of running it down continually?

[Gurmant Grewal, Reform, Surrey Central, BC]

Madam Speaker, I ask the member to withdraw the false statement he made in the House that I ran for nomination for another political party. I ran only for one party and that is the Reform Party. I believe in the principles of the Reform Party. I ask the member to withdraw the false statement he just made.

I would like to answer his question. His facts are not right because he never bothers to read the facts. The Canada Foundation for Innovation was formed in April 1997. The payment was made to the foundation on July 31, 1997. The books of the government closed on March 31. The $800 million is a commitment, not a liability. The government cannot put commitments on the books. Liabilities have to be put on the books. If the people who run private businesses did that they would be thrown into jail.

I would ask the member to check his facts before he speaks in the House. I would also ask him to withdraw—

[The Acting Speaker (Ms. Thibeault)]

The time for questions and comments has expired.

[Andy Scott, Liberal, Solicitor General of Canada]

Madam Speaker, I am particularly delighted to participate in the 1998 budget debate because the deficit which has plagued us for so long has finally been vanquished and despair among Canadians of all ages is giving way to confidence and optimism.

I pay tribute to the Minister of Finance whose leadership in the past five years in making this extraordinary feat possible—

[Gurmant Grewal, Reform, Surrey Central, BC]

Madam Speaker, I rise on a point of order. I am sorry to interrupt the hon. member during this debate, but a false statement has been made in the House which damages my personal character and personality. I ask the hon. member to withdraw the statement. He alleged that I sought the nomination for another party, which I did not do.

[The Acting Speaker (Ms. Thibeault)]

I advise the hon. member that I will be checking the blues and I will get back to him as soon as we check the statements made by the other hon. member.

[Andy Scott, Liberal, Fredericton, NB]

Madam Speaker, I would like to pay tribute to the Minister of Finance whose leadership over the last five years has resulted in making this extraordinary feat possible. Prospects for Canadians have not been as good in a very long time. It is through the responsible stewardship of the nation's finances that we have reached the enviable position we find ourselves in today. One need not go much beyond the various countries of the world that are glowing in their praise of what we have been able to accomplish in Canada in very short order.

This remarkable turn of events required discipline in terms of the leadership of the country but, most important, it required a considerable sacrifice from rank and file Canadians.

What the government did to balance the budget under the leadership of the finance minister was not based on ideology. Rather it was based on sheer necessity.

In 1993 we inherited a $42 billion plus debt. The recovery process was hard on Canadians, was hard on Atlantic Canadians. As a progressive Liberal myself, I am reminded of the challenges faced by the government to secure the long term sustainability of our social safety net. It has certainly not been easy.

However it had to be done. Re-engineering, restructuring, downsizing, reorganization and ultimately the reining in of government spending were necessary. Now that the fiscal house is in order, the far-sightedness of government allows us to begin the process of recovery and building a secure future for all Canadians.

The budget speaks to two principal objectives in that regard, the first being prosperity. Job creation is recognized as the basis upon which Canadians will share in a more prosperous economy. Illustrative of the prosperity strategy in the budget of 1998 is the Canadian millennium scholarship foundation. By putting aside $2.5 billion this year, by the year 2000 funding will be solidly in place to provide 100,000 scholarships both full and part time for each of the next 10 years.

There are other important prosperity initiatives in the budget: the Canada study grants, tax relief for students to retire their debt, encouraging educational savings, more R and D, and helping Canadians upgrade their skills in the area of life long learning. Prosperity for this generation and the next is based on knowledge, skills and education infrastructure.

Canada is a generous country, more especially so when Canada is prosperous. If we take away prosperity, equity is no doubt affected. If we take away equity, prosperity is tainted. Both equity and prosperity are what Canada therefore must stand for.

The second objective in the budget is equity. The Canadian millennium scholarship foundation, for example, makes it possible for Canadians, regardless of their ability to pay, to access educational opportunities. This is equal opportunity at its best.

By introducing the scholarship fund this week the Prime Minister has helped raise the bar for thousands of Canadians who will now be able to attend our universities and colleges. If there is any doubt as to what I have just said, hon. members should ask the president of the University of New Brunswick student association, the student association president at St. Thomas University in Fredericton and students anywhere in Canada, what equal access to post-secondary education really means.

Hon. members should ask Cynthia Hilliard, Ontario community college student, parliamentary association president who said of the budget that at long last we were seeing a government make a commitment to life long learning instead of giving it lip service. They should ask Lucie Bohac Konrad, executive director of the Canadian Youth Foundation, who said that overall it was a good day for Canadians and with the budget young people could look forward to some relief from the crushing burden of almost a decade of youth joblessness and increasing shares of education costs.

The 1998 budget contains several other equity pieces as well: tax relief for interest on student loans, education credit for part time students, child care deduction for part time students, tax free RRSP withdrawals for life long learning, increased child care expense deductions, enriching the Canadian child tax benefit, helping those caring for families, eliminating EI premiums for students under the age of 24, deducting health premiums for self-employed Canadians, and tax relief for volunteer emergency service workers.

There is also an important feature in the budget in terms of its regional impact. All initiatives in the budget assist Atlantic Canada significantly but none of them marginalizes Atlantic Canada. Atlantic Canada benefits by the improved educational infrastructure. It ultimately will benefit by stemming the brain drain. This then is the prosperity and equity agenda at work.

Two weeks ago I announced through ACOA a $7 million technology initiative at UNB, putting it at the cutting edge in Canada.

Before Christmas I participated along with St. Thomas University in the establishment of a criminal justice degree program at that institution. A week ago I announced a project in New Brunswick that will allow young Canadians with disabilities access to the labour market.

These are national programs that make sense in Atlantic Canada. I want to emphasize how important ACOA is to our region. I say so because Canada has such diversity that regional development instruments are required and regional agencies are a way for us to make national programs tailor made for regional needs. ACOA is critically important to Atlantic Canada.

I would like to address briefly my own ministry, a ministry with an annual budget of over $2.6 billion. To our office, to our ministry, public safety is overarching. That is the business of the Ministry of the Solicitor General.

This year we have two major priorities, dealing with organized crime and effective corrections. On the organized crime front, it seems to me that only an organization as large and as national as the ministry, in particular in this case the Royal Canadian Mounted Police, with that kind of breadth in Canada can take on a leadership role to deal with what is a significant issue in Canada, organized crime.

We have gone to great lengths in the last Parliament and in this Parliament to revive law enforcement agencies and the tools they need in terms of anti-gang legislation, proceeds of crime, the new DNA legislation. We have gone to great lengths to provide tools in law enforcement but we also have to recognize a huge obligation on the co-ordination side, given that we have access to all corners of this country.

In the area of effective corrections, we want to provide alternatives for low risk offenders so that those people who would be more appropriately dealt with in the community will be there, reserving of course the opportunity in the institutions available to the correctional service to deal with offenders whose crimes are more dangerous and more violent and who pose a greater risk to society.

By making that delineation more effectively, and great efforts have been made in the last Parliament to do so, we are going to get better and more efficient results.

We have to build up the infrastructure in communities to allow us to do that. That is a principal part of what we are going to be doing this year in the area of effective corrections.

Linked to these priorities of course is the all important matter of crime prevention. To break the cycle that leads to an overloaded justice system and overcrowded prisons, it is very important that we recognize the root causes for crime, be they poverty, economic circumstances or regional issues.

The fact is at the end of the day the country is going to be all the safer if we get to those root causes and not deal only with these issues after the damage has been done. The result of course will always be a safer, healthier community.

Also, inside the ministry there will be responsibility for aboriginal policing in corrections, national security and the integrated justice system.

The bottom line for the Solicitor General of Canada is the safety of Canadians. I am proud to say that Canada's law enforcement and corrections systems are among the very best in the world.

In conclusion, the 1998 budget symbolized by the Prime Minister's millennium scholarship fund is a perfect example of a national policy that pursues both prosperity and equity. This is the hallmark of the great Liberal Party.

[Jean-Paul Marchand, Bloc, Québec East, QC]

Mr. Speaker, I listened with great interest to the remarks made by my hon. colleague in praise of the last budget.

Can he acknowledge the fact that, in Quebec alone, the cuts made in transfer payments to the provinces and in employment insurance have resulted in the number of welfare recipients increasing by 200,000? According to a recent study by Montreal economist Fortin, there are now 730,000 more Canadians on welfare. This is not necessarily good news.

My colleague also talked about how great the millennium scholarships were, saying “Ask any student in Canada; they'll tell you how great the Prime Minister's scholarships are”.

Perhaps my hon. colleague could ask Nicholas Ducharme, the president of the Quebec students' association, who views these millennium scholarships as an ego trip on the part of the Prime Minister, in the sense that they constitute a monument to his political career.

After all the cuts made in health and education, if it really cared about the student debt load, this government might have given this money directly to the students and right away, not two or three years down the road and without creating yet another administrative structure, as suggested by Mr. Ducharme, this student who is the president of the Quebec student's association. Indeed, he suggested that the federal government should give the money immediately to the students through the existing grants and loans system, which is excellent in Quebec.

I would like to know if my hon. colleague thinks that the increase in the number of people living on welfare in Canada is a good thing and that introducing these millennium scholarships is really an ego trip on the part of the Prime Minister.

[Andy Scott, Liberal, Fredericton, NB]

Mr. Speaker, I thank my colleague for the questions. I can answer them relatively easily.

I do not think the exercise is an ego trip on the part of the Prime Minister. Quite the contrary. What this speaks to very specifically is that the future prosperity of Canada is inextricably linked to our ability to provide a well educated and to the largest extent possible publicly financed well educated students. It is not only a matter of economic priority, although I can see that is a significant piece of it. It is also a matter of fundamental fairness. I believe people who have the capacity and ability to go to university should have that opportunity.

In recent years the Canada student loans program was designed to offer that access. Because of the economic circumstances following graduation and because tuitions were increasing, Canada student loans could no longer serve that purpose. It was very important to deal with that. I am glad that the Prime Minister and the Minister of Finance did.

[Libby Davies, NDP, Vancouver East, BC]

Mr. Speaker, this morning we heard one of the government members describe the budget as remarkable. Just now we have heard another hon. member from the government describe this budget as an equity budget. I find this astounding.

I would like to ask the member to explain to the people of Canada that if this is an equity budget where in the budget is there a guarantee that pay equity will be provided for the women who work for the federal civil service. If this is an equity budget, why is it that only 7% of students will have access to the millennium fund? Why is it that there will be no increase in transfers for education to the provinces to ensure that tuition fees will not continue to skyrocket?

This is not an equity budget. I would ask the minister to explain to the people of Canada what he means by an equity budget?

[Andy Scott, Liberal, Fredericton, NB]

Mr. Speaker, I appreciate the opportunity to do just that. There are many elements and I have recited a large number of those in speaking to the budget. Access to university has significantly improved. The student associations in my constituency of the universities of New Brunswick and St. Thomas have said so glowingly and publicly.

We have not been able to deal with all the things that fair minded Canadians would like to see us deal with. Ultimately we would find ourselves in five years going through the exercise which we have just gone through if we thought we could accomplish everything that we would like to without regard for how much resources are available to accomplish those things.

I point to those things in the budget that speak to questions of equity and I applaud them.

[Bryon Wilfert, Liberal, Oak Ridges, ON]

Mr. Speaker, it is with great pleasure that I rise today to comment on the 1998 federal budget.

The Minister of Finance is to be congratulated on leading this nation from a state of economic stagnation and a deficit of $42 billion to a balanced budget, the first in almost 30 years.

Brian Neysmith, president of the Canadian Bond Rating Service, stated: “The Minister of Finance and the Liberals have accomplished what they actually set out to accomplish. They achieved a balanced budget. They achieved it ahead of schedule, and from that point of view, you have to give them full marks”.

I have been disappointed to see the members of the opposition take such partisan approaches to this accomplishment. Canadians clearly support this approach and the determination of the government to get our fiscal house in order.

Opposition members harangued the government about the deficit. Now that the books have been balanced and now that we have a balanced budget for the next two years, we hear cries of “shame” because it was not balanced the way they would have done it.

Harry Houdini is alive and well and living on the opposition benches. They would provide deep tax cuts, eliminate the debt and provide social programs, it seems, through various magic vanishing acts. The government, however, has to deal with reality.

The end results prove that the government made the tough decisions and with the support and understanding of Canadians it made Canada the first G-7 nation to balance its books.

Governing is about choices, it is about leadership and providing a clear vision for the future. This budget has mapped out a vision of economic and fiscal planning that will secure a bright road ahead for all Canadians.

I had the opportunity to host a post-budget breakfast in my riding last week. I had representatives from the chamber of commerce, community organizations, social agencies, young people and municipal councils. A common theme was heard during the discussions. We have our priorities straight. Debt reduction is front and centre, followed by new expenditures for skills development and health and selective tax reductions.

The three key elements were welcomed by the participants at my meeting, namely a two year fiscal plan based on prudent economic planning assumptions, as the current plan commits to balanced budgets over the next two years; the inclusion in the fiscal plan of a contingency reserve of $3 billion in each year; and the use of a contingency reserve when it is not needed to pay down the public debt.

This could mean that if the contingency reserve is not needed, up to $9 billion could be used to pay down the public debt. The minister has been cautious and prudent in his calculations. The debt to GDP ratio is the most relevant measure of a country's ability to manage its debt. It represents a true measure of debt burden. The government has already paid down almost $13 billion in market debt so far this year. More important, however, the debt to GDP ratio will be put on a permanent downward track through sustained economic growth and debt repayment plan.

The government is committed to bringing down the debt quickly and it has a strategy in place to do so. Given the effectiveness of the government in dealing with the deficit, I believe Canadians support this approach.

The St. John's Evening Telegram stated on February 25 that while the $13 billion payment will not cure everything overnight, it is a promise that the country will not be plunged into the debt more deeply in the future, that it will no longer mortgage our children's futures, and with the economic returns on the fiscal year yet to come in, even more may yet be applied to the debt.

The budget speaks to youth. As Lucie Konrad, executive director of the Canadian Youth Foundation stated, overall this is a good day for young Canadians. With this budget, young people can look forward to some relief from the crushing burden of almost a decade of a youth jobless recovery and increasing share of rising education costs.

The Canadian opportunities strategy provides a co-ordinated set of measures building on the 1996 and 1997 budgets to create opportunity by expanding access to knowledge and skills needed for better jobs and higher standards of living in the 21st century.

As a former educator I applaud the minister on placing a very high priority on providing greater opportunities for young people to prosper in the new knowledge based economy.

The budget demonstrates leadership by announcing the Canadian millennium scholarships and Canada study grants, tax relief on student loan interest and improvements to the Canada Student Loans Act, supporting youth employment through education, insurance premium holidays for employers for the young Canadians they hire in 1999 and 2000. These are investments in our future. Young people must be encouraged to dream and to seek opportunity in Canada.

The government has listened to the concerns of our youth. Heather Taylor of the University of Alberta student union stated that these educational measures in this budget are things for which we have been fighting for the past eight months. It shows the government is listening to students. It will have a huge impact on students.

The 1998 budget provides for the first time tax relief for interest on student loans. Beginning in 1998 all students will be eligible for a 17% federal tax credit on their student loan interest. Interest relief extensions will help about 100,000 graduates.

The editorial in the Toronto Sun on February 26 stated: “We applaud the finance minister. We think he has made the right choice in the first post deficit budget. The nation has a responsibility to help the 600,000 young Canadians who fear they will never have a good job or a decent career”.

The opposition has talked about a need for tax relief. The government will deliver $7 billion of tax relief over the next three years, tax relief for low and middle income Canadians through an increase in the basic personal exemption and the elimination of the 3% general surtax on Canadians with income up to $50,000. Those are two measures that will take 400,000 Canadians off the tax rolls and reduce taxes for 14 million Canadians by the year 1999-2000.

This government does not just talk tax reductions. It has taken clear and firm actions in this area. The government is continuing to provide targeted tax relief. I believe Canadians have examined the budget and have strongly indicated it is a balanced approach to the economic well-being of Canada.

I remind members of the opposition that we have a four to five year mandate. Obviously during that time we will be able to take other measures which I am sure Canadians will be supportive of. The next few years will continue to see tax relief and continued social spending in the area of health care. The impact of the 1998 budget over three years is clear. Forty per cent of new government spending focuses on investments in social and economic priorities and sixty per cent is targeted toward debt reduction and tax relief.

The government has demonstrated solid economic leadership that bodes well for the economic well-being of all Canadians.

[Howard Hilstrom, Reform, Selkirk—Interlake, MB]

Mr. Speaker, last Friday the Manitoba government brought down its budget which indicated that $150 million would go to pay down the debt. That figure is related to a timetable that brings down the debt to GDP ratio by the year 2028. It is a hard and fast timetable to get the province of Manitoba at a manageable level of debt.

Could the member advise this House of the government's timetable for reducing Canada's overall debt?

[Bryon Wilfert, Liberal, Oak Ridges, ON]

Mr. Speaker, I thank the hon. member for his question. When the government was able to bring down the deficit, it was because we were controlling our own spending. The government has indicated three, three and three in relation to the debt.

I suggest to the member that these figures are conservative. There is no question that if the performance of the economy continues to be bright, which I believe it will, we will be able to put more money toward debt reduction. I indicated in my comments that $13 billion was earmarked for the debt and it has already brought down the debt measurably.

I am confident in the strategy the government has put in place. Let us be clear that the finance minister has put a clear debt reduction strategy in place. The opposition wanted to know where we stood on it. We have placed it front and centre.

[Jean-Paul Marchand, Bloc, Québec East, QC]

Mr. Speaker, I would like to return to the issue of education my colleague raised in his potpourri speech.

As we know, education is a provincial matter. I would ask my colleague whether he thinks the federal government could improve on what the provinces are doing currently with loans and grants by setting up the millennium scholarship fund.

Second, I would like to know whether, given the existing student debt load, he thinks it would not be better to give students money now rather than wait three or four years.

[Bryon Wilfert, Liberal, Oak Ridges, ON]

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

There is no question that education is a provincial responsibility, although we know that the federal government provides significant dollars to the provinces for post-secondary education. There is nothing in this budget which would suggest in any way that the federal government is interfering with provincial jurisdiction as far as educational curricula is concerned.

The government is providing needed assistance to students in this country. The government is showing leadership. I cannot believe that anyone would be opposed to providing financial assistance, whether it is through tax credits or tax points, to students.

Clearly the response of students, both inside and outside of Quebec, has been very positive. Finally they are seeing true leadership in education. The government is providing the necessary financial assistance to students. That bodes well for students in the future. We do not want them graduating from university with significant debt, and the figure often quoted is $25,000 per student.

[Paul Bonwick, Liberal, Simcoe—Grey, ON]

Mr. Speaker, first I would like to congratulate the hon. member for his involvement in the past budget. He played a very integral role, as we saw in caucus, and he should be congratulated.

I was wondering if he would respond to some of the accusations which have been made by members opposite that perhaps the government was not in a position to invest in youth and education. Would he care to respond to that and tell us if we actually were in a position to do so?

[Bryon Wilfert, Liberal, Oak Ridges, ON]

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

I would point out that in fact the government is targeting very clearly skills development. The government clearly has looked at the role which youth will play in the next century and is providing the necessary dollars.

We have the Canadian opportunities strategy. Whether it is increased funding for advanced research, tax relief on student loans or assistance to employers through tax relief in terms of hiring in future years, the fact is that this government has made these things a high priority.

The human resources development committee met with representatives of student associations from right across the country. It met with representatives from the banks. It listened to what they had to say and it is now acting.

In this four to five year mandate I expect to see increased support for students in this regard.

[Gilles-A. Perron, Bloc, Saint-Eustache—Sainte-Thérèse, QC]

Mr. Speaker, if you will allow me, I will share my time with my charming colleague from Drummond.

I applaud this first balanced budget since the 1970s. Do not get me wrong, however. I am not congratulating my friends opposite. My congratulations go primarily to the provincial governments, which have had to manage cuts to their social, health care and education transfers. They go as well to the employers and employees who have suffered the adverse effects of the government's shameless dipping into the employment insurance fund in order to balance its budget. That is scandalous.

I applaud the people of Quebec and of Canada, the poor and the middle class, who contribute in no small measure to this government's revenues through increased taxes.

Let us move on now to my comments on the budget. Like most Canadian politicians, the experts and journalists, I find nothing or next to nothing in this budget. The proof is in the press reviews the following day, which said “That's it, that's all”. Journalists and experts were describing it as lacking substance and vision. The economists were calling it weak and insipid. I will leave it at that, otherwise I will be spending my ten minutes commenting on the budget.

It is so nebulous that those opposite have started a promotional campaign and are asking their ministers, their big guns, to visit the ridings and sell the budget. The President of the Treasury Board was in my riding last week to sell the finance minister's budget. What he finally said was that he was there to hear people's views on what the government should be doing.

I have some advice for the President of the Treasury Board. Quit wasting your time. This same finance minister started the practice of having the finance committee travel across Canada to take the public's pulse. I even held a prebudget meeting in my riding. All this work by the experts did not reach the finance minister's ears. He was deaf to it, or perhaps too busy worrying about Bill C-28.

The cross-Canada committee, as well as people from my riding, had some good suggestions for the finance minister. They suggested he stop cutting provincial transfer payments, put an end to the disgraceful waste of this government, clean up existing programs, index taxes and tax credits, reform taxation, lower the premiums paid by employers and employees to the EI fund by a significant amount, not a measly 20 cents, implement job creation programs, introduce an anti-deficit bill, and on and on.

What did the Minister of Finance do? He ignored these experts. He did absolutely nothing.

Yes, there was the Millennium Fund, and I would like to talk about that. What do we know about it? Not a great deal, except that it will perhaps be based on need, or merit, it has not yet been decided, and that its president will be Mr. Landry, the president of Chrysler Canada. This is a good opportunity for him to advertise his automobiles. That is all that we know.

There is one more thing that we know, and that is that this government has cut between $2.3 and $2.7 billion in education since 1993. Now it is preening itself over a $2.5 billion fund. This government is going to continue to make cuts of over $10 billion in education between now and 2003. But still it creates a fund.

What are the stated and unstated purposes of this fund? Is it a way of boosting the Prime Minister's image before he leaves active politics? Is it a springboard for the finance minister in the race for leadership of his party? The Prime Minister himself has admitted that one of the goals is to distribute or promote the Canadian flag. On February 26, the Liberals and the Reformers showed us in this House how good they are when it comes to promoting the Canadian flag.

There is another thing that is condemned by everyone and confirmed by the following media report: “It is the government's stated goal to provoke and to get directly involved in the affairs of provincial governments, under the pretext of helping our students, starting in the year 2000. But students need help now. The government should be ashamed of playing politics at the expense of our students”.

Let me provide some background on Quebec's loans and grants program. It was in 1964 that a true Prime Minister, a true Liberal, Lester B. Pearson, a Nobel Prize winner, set up the Canadian student loans program to help students continue their education.

At the request of the Quebec premier of the day, the Hon. Jean Lesage, who wanted to manage and implement a program that would meet Quebec's needs, Mr. Pearson decided, after giving the idea some thought and finding nothing wrong with it, to give Quebec the right, or rather the privilege, because it did not confer any special status, to establish and manage its own program. The other Canadian provinces could have availed themselves of the same privilege, but they chose not to do so, preferring to manage an already established program.

The result is that Quebec now has a unique student loans and grants program that is superior to anything that exists elsewhere in Canada. Quebec spends $600 million on a program designed to provide loans and scholarships to 170,000 students. Our province also invested $18 million in a scholarship program based on merit. The net result of this is that education costs in Quebec are lower than in the rest of Canada, and the average debt of Quebec students is $11,000, compared to $25,000 in the rest of the country. Ottawa must grant Quebec the privilege to opt out with full compensation.

I will conclude by referring to an article which said that in 1995, the federal Parliament adopted a motion recognizing Quebec's distinct character and formally guaranteeing Quebeckers that the departments, institutions and agencies of the Government of Canada would take that into account when making their decisions. The Liberals must live up to their commitments.