Mr. Speaker, it is with pleasure that I rise in the House to speak on the prebudget consultation report.
Today is December 16, 1999. There are 14 days left in this century, a century that was to have belonged to Canada. It is important at this time that we reflect on what is occurring not just within our borders but around the world.
The rate of global change facing Canadians is unprecedented. The challenges facing Canadians and the potential opportunities available to Canadians have never been greater. How are we doing in this environment? The Liberals say that the fundamentals are strong. The ex-patriot Canadian economist John Kenneth Galbraith once said that one should beware of governments who claim that the fundamentals are strong. That is an important bit of advice to heed at this time.
In this new globally competitive, interconnected environment the fundamentals are not simply esoteric statistics or unimportant numbers. These are not distant trivia that we can afford to ignore. We cannot afford to ignore what other countries are doing to create environments for economic growth.
Let us look at those fundamentals the government boasts about. We have an unemployment rate that is 70% higher than that of the U.S. We have the highest personal income tax rates of any country in the G-7. We have the second highest corporate tax rates in the OECD, of those 31 countries. Last year we were third highest but we are now second highest. Germany, a social democratic country of the same brethren as the New Democratic Party in this country, saw fit to reduce its corporate tax burden and create federal levels of economic growth and opportunity in Germany.
For the first time in the history of our country, our level of personal debt on average in Canada is $43,200. For the first time that is surpassing the average disposable income of Canadians. In fact, we have the fastest growing levels of personal debt of any country in the G-7. While the government boasts about being in the black, Canadians are in the red to a greater extent than they have ever been in the past.
Personal disposable income in Canada has dropped by 8% since 1990. During the same period of time Americans have enjoyed a 10% increase. There has been a widening of the gap by about 10% in terms of personal disposable income between ourselves and our neighbours to the south.
The fastest growing economic engine is in the U.S. We have an opportunity being a country that borders the U.S. to benefit from that growth, but not if we continually focus on the policies of the past and ignore the opportunities to build policies based on the realities of the future.
Let us look at some other fundamental areas. Productivity growth rates in Canada have been lagging behind those of the U.S. In Canada the equities markets on the Toronto Stock Exchange have had a relatively anemic growth compared to the robust growth in the U.S. During the same period of time the TSE was required to grow by 100%, the Dow Jones Index in New York grew by 300%. As Americans are getting richer, Canadians are getting poorer.
Under this government since 1993 there has been a 10 cent drop in the Canadian dollar relative to the U.S. dollar. The Prime Minister's response was typically erudite, that it would be good for tourism. The logical corollary of his argument would be that if we were to reduce the dollar to zero, we could become the greatest exporting nation in the world. That logic simply does not work. Most Canadians realize it is impossible to devalue our way to prosperity.
The brain drain issue is a very important fundamental. It involves the choices being made by some of the best and brightest young people in Canada. According to the report by the Conference Board of Canada last summer, the number of people leaving Canada and seeking opportunities in the U.S. has grown from 16,000 people per year a few years ago to 96,000 people per year.
We see a very disturbing trend, the devouring of corporate Canada. At the end of the 20th century, which was a century that was supposed to belong to Canada, it is important to pause and think about some of these things. It is sad that at the end of the 20th century Canada no longer really belongs to us. That is largely due to the fact that the government fails to accept some of the market driven realities of a globally competitive environment.
I will give the House an idea of the impact of the devouring of corporate Canada. Back in 1994 the value of U.S. acquisitions of Canadian companies was $5.6 billion. In 1998 the Canadian corporate value purchased by Americans had grown to $16.1 billion. This year it is $25.6 billion. That is no accident. It has a lot to do with the reduction in the value of the Canadian dollar.
Let us look at some of the causes of the reduction in the Canadian dollar, that 10 cent precipitous drop and decline in the take home pay of Canadians since 1993. A lot of that has to do with tax issues.
Back in the 1970s and 1980s Canada was able to maintain approximately the same level of economic growth as the U.S. During the same period of time we had a positive yield in that our interest rates were marginally higher than those of the U.S. yet we were able to maintain that similar level of economic growth and prosperity.
However in the 1990s and particularly since the election of this government, we have seen a gap between the currency values of the two countries and for the first time in a long time Canada has a negative yield. We have lower interest rates in Canada. We are using monetary policy to compensate for some of the weak fiscal policies of this country.
Part of the reason the Bank of Canada needs to do that is that for the first time ever as a percentage of GDP in Canada, we are at 38% of our GDP in taxes. Compare that to the U.S. which is at 28% of GDP in tax revenues. It is not sustainable. Effectively we are heading toward a government that simply will not be able to continue the devaluation of the Canadian dollar. The Bank of Canada will not be able to continually use that mechanism. We need strong fiscal mechanisms and levers to be implemented now.
Some of the victims of this devouring of corporate Canada include the Canadian icon MacMillan Bloedel, Poco Petroleums Limited, MetroNet Communications, JDS Fitel, Club Monaco, Noma Industries, Newcourt Credit, Midland Walwyn, Peoples Jewellers and Shoppers Drug Mart. Shoppers Drug Mart, Canada's drug store, is now owned by KKR, Kohlbert Kravis and Roberts out of New York. This is not a good trend for Canada.
It is very easy for us to do what the Liberals typically do in this kind of situation and that is to try to demonize America, to try to demonize the free market system and to try to somehow create a bogeyman in the people who are logically taking advantage of the situation that exists here. The fact is that in a globally competitive environment, the responsibilities lie with each government to create the levels of economic growth and opportunity for their companies and individuals to succeed and compete globally.
In that kind of environment the government is clearly failing. It is exposing the nape of Canadian investors, Canadian business people and Canadian individuals to the ferocity of global competition without providing the economic growth levers and productivity enhancement initiatives that they need.
This is in stark contrast to the previous government that had the courage and vision to implement a free trade agreement that this government has embraced and accepted as being good policy in retrospect. The previous government not only had the courage to eliminate the manufacturers' sales tax which was impeding growth and impeding the ability for Canadian enterprises to compete and succeed globally and replace it with the GST, it also deregulated financial services, transportation and energy. All of these are policies that this government embraces. All of them are policies that have been credited by economists as having been largely responsible for the ability for this government to eliminate the deficit.
If we look at what the achievements of the government have been, the only thing the finance minister can point to is the elimination of the deficit. If we accept, as most economists accept, that the elimination of the deficit was largely due to the structural changes made to the Canadian economy by the previous government—