Mr. Speaker, I am delighted to rise on debate on Her Excellency's Speech from the Throne.
As the member for Parkdale—High Park said in her articulate defence of anti-Catholic government funded pornographic art, this budget was filled with all kinds of marvellous Liberal-style investments. It was a return to old fashioned liberalism, namely the arrogance of a tax and spend philosophy which believes that politicians and bureaucrats in Ottawa know better how to spend a scarce dollar than do a homemaker, a small business person, an entrepreneur or a taxpayer. That is the philosophy of the Speech from the Throne which we heard earlier this week.
The government devoted a couple of words in the speech to some token talk about tax relief, but it also said that the government has already cut taxes. We know we cannot believe the completely specious commitment to tax relief from the government given the fact that it has not yet delivered any tax relief. In fact what it has delivered are tax increases. It is tax grief for Canada, not tax relief.
If the government has lowered taxes, then why is it bringing $40 billion more into the federal treasury than it was six years ago? Why is it that federal taxes are up $4,200 or 30% for an average family since 1993? Why is it that federal revenues as a percentage of our gross domestic product, the most objective measurement, are at their highest level ever at over 18%?
Why is it that we continue to see, according to the major economic firm Wood Gundy that “the net impact of the last five Liberal budgets has been to raise Canada's tax bill some $6 billion in 1999-2000 above what would have been paid under the 1993 tax regime”? Wood Gundy also said “from a tax competitiveness standpoint, Canada ranks dead last in the G-7. While virtually every other G-7 economy lowered its personal income tax burden over the last 15 years, Canada's rose sharply, both as a percentage of GDP and of household income”.
But we do not have to quote the experts or look at the stats that the government ignores because we do not have to make this case to Canadians. They know when they get their paycheques. They know when they look at their pay stubs that they are going home with less than they did in 1993 when this government came into power with a pledge never to raise taxes.
I remember the Prime Minister saying when he was asked if he would raise taxes, “Well, I can't rule it out, there might be a war or something”. Well there has been a war. It has been a war on Canadian taxpayers and they are paying more than they ever have before.
The huge and growing tax burden has had a tremendous impact on Canadians. Just in the last couple of days while we have been debating the throne speech our dollar has gone down again by another half cent. That is the ultimate measurement by the international markets of the value of our economy, of our currency and it ultimately reflects the fiscal policy of the government. It is a reflection of the impoverishment of Canadians, Canadians who are coming home today with about $900 less after tax than they did in 1989, Canadians who are working harder but coming home with less while the average American taxpayer is coming home with an average after tax disposable raise of $2,000 over the same period of time. Americans are getting richer while Canadians are getting poorer.
The Liberal government loves to bash the United States. The United States has its fair share of problems, but I do not think we should take pride in becoming poorer as they become richer. I do not think we should take pride in what the Minister of Industry said last February, that had Canadian productivity, competitiveness and growth kept pace with that of the United States over the past two decades the average family in Canada would be $28,000 a year better off. That is apparently the moral high ground that the government takes in its posturing and its bashing of an economy which is growing much faster than our own.
We do not have to debate the statistics; we have to look at real people's lives to see the impact this is having. I spent all four weeks of September in nine of the ten provinces and in nearly 30 communities speaking to business people, entrepreneurs, chambers of commerce and small business folks. I was on university campuses and in high schools. Again and again in every region of the country I heard that we have a huge and growing drain of talent and entrepreneurialism out of this country, not just to the United States but to other more competitive, faster growing and lower tax jurisdictions.
This summer the Conference Board of Canada released a major study wherein it indicated that the number of Canadians who are going to the United States increased from 17,000 in 1986 to over 98,000 in 1997. The government denies it. The Liberals put their heads in the sand and say the problem does not exist.
Why then is it that nearly 70% of our computer science graduates are now leaving this country? These people will be creating untold future wealth and economic opportunity, and contributing to a tax base to finance health care, education and pensions. We want these people here, contributing to our tax base so that we can afford to pay down the debt, to grow the economy, to pay for health care and to pay for a civil society. We are literally eating away at the productive capacity of our economy.
I was on a university campus this summer where 120 of the 130 kids who graduated from computer science last year took placements outside Canada because they could not find economic opportunities here. The capital was not here to invest and create new cutting edge, information technology businesses and economic opportunities for those kids.
But this is not just a question of stats and dollars and taxes; it is a question of lives. Every one of those kids who has left the country represents the hopes and dreams of Canadian families who believed that if they worked hard, played by the rules, paid their taxes and invested in their children's education they would see their children and grandchildren raised happily and in prosperity in Canada. What do we have instead? We have thousands and thousands of broken dreams because of the broken economy delivered by this government's high tax, high regulatory, high debt, high spending policies.
We in the official opposition have a proposal to cut the tax burden overall by 25% through a whole suite of broad based tax cuts that would lift over one million low income people off the tax rolls, people who ought not to be paying taxes in the first place, single moms with minimum wages, and low income, fixed income seniors who are paying taxes today but were not six years ago because of the government's heartless and insidious bracket creep tax on the poor which forces low income people onto the tax rolls. That is our top priority. We want to relieve those people entirely of their tax obligations, which finance government investments like Bubbles Galore .
Reformers also believe it is critically important that we generate new investment and capital formation to create opportunities for those young people who are leaving today, as well as to cut the insidious tax on wealth creation called the capital gains tax. Canada has an effective capital gains tax rate of nearly 40%, while in the United States the effective rate has been lowered to 18% and Congress has just passed a law that would take it to 11%, fully indexed.
The United States is not going to stop there. The chairman of the federal reserve, the leading economic authority in the world today, has called on Congress twice publicly to eliminate the American capital gains taxes, as has been done in Ireland, Hong Kong and so many other jurisdictions. How can we believe that we can retain capital in this country to create wealth, jobs and quality of living as long as we have this enormous and growing differential?
Yesterday the finance minister made a specious claim. He said that the Reform Party would have to cut spending, and he picked some absurd number out of the air like $50 billion or some such fictitious nonsense, in order to finance our $25 billion in total tax cuts. The finance minister knows perfectly well that if he did not increase spending, as he plans to do, we would see surpluses of about $25 billion a year within five years.
That is not all. Every jurisdiction in the world that has cut tax rates has seen revenues grow. Ireland has cut its corporate tax rates from 40%, the highest in Europe, to 10%, the lowest, and it has seen an explosion in revenues and economic growth. It is the fastest growing economy in Europe.
The United States cut its taxes in 1962 and in 1982, its high marginal rates and capital gains rates. In both instances it saw an explosion in revenues from those sources.
Right here at home, of course, Mike Harris and his common sense revolution cut income taxes by 30% and saw a massive growth in revenues from the income tax.
The moral of the story is that tax cuts are necessary to grow the economy.
The government says we have to wait for growth before we can cut taxes. We will never get to that kind of real growth if we wait to cut taxes. It is time that we got our priorities right. It is time that we let those young people who are leaving stay here to build a brighter future so that their parents can see their dreams realized here at home in Canada.