Debates of Feb. 18th, 1999

The Budget

[Ken Epp, Reform, Elk Island, AB]

Mr. Speaker, I will be sharing my time with colleagues, as will most of the Reform members from here on today.

It is sad to stand up today to talk about this budget. It is sad because it is such a failure. It is sad because it is a missed opportunity. It is sad because of the fact that what could have been done and what should have been done was not done. As we have said over and over, as result Canadians will be paying more and getting less in all instances.

I will not talk a lot about getting less because some of my colleagues have covered that material very well and I do not want to repeat it. However, I do want to emphasize that we are getting less particularly in health care.

In 1993 when the government took power, and ever since then, it has been proclaiming from the house tops that it is the saviour of health care in Canada. They are empty words. We need to judge people by their actions and not by their words. Every Canadian knows that since the Liberals took power five years ago our health care system has deteriorated and deteriorated big time.

There have been some instances of individuals not being able to get the treatment they need in Canada. They are forced to take their money to the United States in order to get the health care they need. Thankfully those who do are able to pay for it. The government, by failing to continue a health care system which was built on good principles and by reducing the amount of funding to health care, has literally destroyed it.

I want to tell the House a personal story. It is rather close to my heart these days since it is only a little more than a week ago that we had my aunt's funeral. She was an older lady, a very gentle but fastidious person. When she had a stroke she went to the hospital. What happened when she was in a public hospital?

As I said, she was very fastidious but when she had to leave her bed for personal reasons she would ring the buzzer. Because of her stroke she was not able to help herself. No one came so she rang again and still no one came. Finally she tried to get out of bed herself and landed on the floor in a heap.

That happened not once, not twice, not three times but four times. The family could not always be there. They all lived a distance away from where she was. Eventually they too practised the two tier health care system the government has provided. They took her out of the public hospital and moved her into a private extended care centre run by a religious group where she got good, loving attentive care and people looked after her. Fortunately she was able to allocate some of her pension money and the family helped as well.

What has happened to our health care system when people who need it push the buzzer and no one comes because the funding for staffers has been cut? This was not to be the topic of my speech today. It was just by way of introduction to show that we are getting less. In this particular case it hit very close to our family.

I want to talk about the issues of debt and taxes. Here again is a huge missed opportunity. It is not just the Reformers who are saying this. Many people are saying it. I am on the finance committee and we heard from a number of expert witnesses, ordinary people, a number of lobby groups and economists. They came before before committee and testified. It was a most intriguing session when we heard from some of the top economists of the country. Their message was crystal clear: we need to reduce taxes. How do we do that? By having a plan for reducing the debt.

Sometimes for recreational reading I read the Fiscal Monitor . Not many people do that. I looked at the Fiscal Monitor to see what is happening to our debt. I also looked at the budget the finance minister read the other day and I looked at our debt. It is very distressing. This is what has caused the greatest break in our economy. There is nothing that has reduced our productivity more than our burgeoning debt and the burgeoning taxes that are required to pay the interest on the debt. Until this year we were paying around 30 cents of every dollar collected in income tax simply on interest on the debt, much of it leaving the country.

If I were to be in my usual jovial mood, I would now say that I want to congratulate the government. I always do this in my speeches. I always try to find at least one place where I can thank government members. I would like to thank them for resisting the temptation to spend, spend, spend everything when the surpluses came in. They are only spending about two-thirds of it now, but I would like to thank them for not spending everything.

I have looked at the projections of the Minister of Finance and his department. Many members first came here in 1993 and will realize that the 1993-94 budget referred to a debt of $508 billion. It grew to $545 billion and to $574 billion. Then in one of those first year budgets the projections were $593 billion, $610 billion and $619 billion. Those were the projections unless the deficit could be beat.

Thankfully the Liberal government was at the right place at the right time. It lucked in and won the lottery. If it had not been for the fact that there was a vigorous free enterprise economy in Ontario and a similar one in Alberta, there would not have been any growth to speak of and it would have been in deep trouble.

As a result of some forward looking provincial governments that were able to attract business to help industry, the economy grew and the debt did not grow as much. What distresses me most is that the debt is now projected to be $579.7 billion. What is it for subsequent years? It is projected at $579.7 billion and $579.7 billion.

The Minister of Finance has absolutely no vision or plan to reduce the debt. If we happen to have a surplus and do not need our contingency fund, he says that will go toward it.

The problem is that the Minister of Finance and the Liberal government are back loading and forward loading the surpluses we know exist. In the same Fiscal Monitor I read that the surplus this year for the first three-quarters is $11.2 billion. That is the surplus as advertised by the finance department on the web. Members can look it up themselves. Yet they are projecting that the surplus this year will be around $3 billion. What are they doing? They are forward loading and back loading. They are not dealing with the present reality. As a result our debt will continue.

I remember hearing an economist, I think it was at committee, say that the most positive economic signal that can be sent to our investors and our businesses would be a tangible, manageable plan for reducing the debt, which would reduce interest payments.

Public debt charges are projected to go up. Even though they are keeping the debt the same in their planning, every year the public debt charges go up. It is in the document. All members need to do is to look at the budget that was tabled in the House two days ago and there it is: $40.9 billion, $41.4 billion, $42.5 billion and $43.3 billion. That is what we will be paying in interest on our debt. That is what is killing our economy. That is the missed opportunity.

[Paul Szabo, Liberal, Mississauga South, ON]

Mr. Speaker, I do not know where to start. Maybe I should focus on one aspect, and that is the debt. The member seems to want to talk about the debt. He started off by dealing with the growth of the debt.

The member will well know that when the government was formed in 1993 it inherited a deficit scenario of some $42 billion. That deficit had to be dealt with each and every year. The annual deficits are added to the national debt. Yes, it went up. Yes, interest charges went up, but we had to deal with the deficit to stop the leakage. Now we are getting surpluses.

The member said that a particular economic publication indicated the surplus would be something like $7 billion. That may very well be. The member will well know there was a one time transfer on behalf of health of $3.5 billion which, based on consultations with the auditor general, will be expensed in the current year. That takes the projected $7 billion down to $3.5 billion, which is precisely what the government is projecting.

If the member uses numbers from a month ago to somehow compare to the forecast as was outlined in the budget, does he not think that he should also take into account other charges against that surplus spending of the fiscal dividend which will be charged against the current year so that in fact what has happened is exactly what should have happened?

[Ken Epp, Reform, Elk Island, AB]

Madam Speaker, I agree that the numbers should accurately reflect the reality. This is where the rub comes in. What does the budget say? What is the number that is being communicated by the Liberals? What number are they using in terms of what they are putting into health care?

The number is $11.5 billion. We hear it all the time. That is because the little number of $2 billion which they are actually putting in, in the coming year, is so small. After cutting $20 billion out of health care, how would the Canadian people accept that they would only put $2 billion in? They got into their little corner and asked what they could do with this number. Like my leader said the other day, they just came up with a magic number to multiply it by. They multiplied the number by five for the next five years.

This is an annual budget. I do not mind them giving projections, but I think it is downright dishonest to say they are putting $11.5 billion into health care when in fact this year $3.5 billion is being put into the year before and $2 billion into the planned year. Those are the actual numbers. To say $11.5 billion in the face of that is just not accurately communicating to Canadians what the facts are.

[Eric C. Lowther, Reform, Calgary Centre, AB]

Madam Speaker, I appreciated a comment of the hon. member and I wanted to touch on a similar theme. He just alluded to the way the government announced the health care spending but did not mention very strongly that it was over five years.

I am concerned that Canadians are aware of the taxes they are paying. With GST and EI and CPP there is some way for the public to be very much aware of that. The one area I was hoping to see—and we actually discussed it in the prebudget debate in the House—was the fact that income tax brackets were not indexed to inflation.

I know the hon. member is a man of high integrity and when he speaks it is from his heart. The issue is that because they were not indexed Canadians are actually paying $10 billion more since they stopped indexing the personal income tax system or $692 per taxpayer. This is a hidden tax.

It is one thing when people know the taxes they are paying and can react, but when they are hidden and buried in bracket creep that is particularly offensive to me. It must be to Canadians when they find out about it. How could they believe anything when they find out there is a hidden tax that is not up front, that is a big revenue increase for the government which they hear nothing about?

[The Acting Speaker (Ms. Thibeault)]

I must interrupt the member. The time has expired. The hon. member for Elk Island on a very brief comment.

[Ken Epp, Reform, Elk Island, AB]

Very briefly, Madam Speaker, that is the point exactly. Originally it was set up in such a way that people paid a certain proportion of their income in taxes. But that proportion has gone up because of inflation, yet it does not reflect it accurately.

What this government is giving is mediocre. Again, it is using the figure $675 as an increase in the basic exemption, which actually is not used any more but that is what the government is calling it, when as a matter of fact $500 of that for most taxpayers was announced last year. It is $175 this year. The government makes it look good when in fact it is pretty mediocre.

[Gerry Ritz, Reform, Battlefords—Lloydminster, SK]

Madam Speaker, it is great to rise today on behalf of my constituents and speak to the budget that was brought down on Tuesday. For most of my constituents they are finding it a very muddled document that is not really quite sure what it wants to do.

It is touted as the health care budget and we are waiting to see the proof of the pudding. This document claims to restore health care funding but in fact it hardly starts the process of putting back into place what existed before members opposite came to this place in 1993.

While Canadians were piling extra billions of dollars into government coffers, waiting lines for health services went up by 28%. Members opposite like to blame the provincial governments. If the provincial governments were solely to blame, it still would not explain why federal expenditures on health have fallen from the promised 50% base line as outlined in the original Canada Health Act to the measly 11% that exists today. It does not explain why the much talked about five principles are in a shambles while this government did nothing but download to its provincial counterparts.

Where is the portability when we see one government failing to fully reimburse another for treating its residents? Where is the universality when the wealthy are put at the front of the queue or skip off to the United States to get their service, leaving 180,000 Canadians waiting weeks and months for operations here in Canada?

Members of this party find it ironic that Liberals have attempted to frighten Canadians with that bogeyman of a two tiered American style health system when in fact they have encouraged through their action or inaction the creation of this very thing.

The problem began in the first days of this government. The present Prime Minister was elected in October 1993 and his finance minister brought down his first budget in 1994. Since this was greeted with roaring disapproval, the Liberals decided on a new tack for 1995. They would make the appearance of cutting the deficit their central theme. What a good idea, one near and dear to everyone's heart, but not the way we would have pursued it.

The government started to see the economic recovery and decided to do two things: rake in the maximum amount Canadians could stand to give and download the responsibility of paying bills on to provincial governments. That is a reality. The numbers are there for anybody to see. I am gratified to see many commentators starting to say the things we have been saying for the past few years.

This government has never got its wild spending habits under control. It has never admitted to the anchor that its high tax regime imposes on all Canadians. It cannot get it through its collective head that Canadians want to be in charge of their own destiny. Leave the money with them and let them decide.

This government lays claim to a balanced budget because it pulls $42 billion more in revenues from the economy than it did in 1993. We are paying more while provinces, individuals and institutions are getting less. Members opposite will say to look at the tax cuts.

The 3% surtax will be cut in half this year and eliminated in the year 2000. Average taxpayers will see a few dollars per week from that one. The basic personal credit is up $340 over 1998 and will go up another $240 next year. This translates into another couple of dollars per week for hardworking Canadians and that sounds really good. It works out to about a cup of coffee a week. The reality of this cut is on average $79 a year. We know the EI rate is going down a whopping 5%, from $2.70 per hundred dollars to $2.55. The CPP is certainly going to offset that with the increases we are seeing there.

Everyone was saying the EI rate should have gone down even more. Business is calling for it. It is a tax on jobs. But the finance minister has been banking that $7 billion a year surplus and the Liberals will have us believe that these nickel and dime returns should have us all thanking our lucky stars to get anything at all. That is the reality again. This government would have us believe that their tuna fish ideas are seen as caviar by the peasants out there.

If we add all this up, what do we get? As it turns out Canadians will pay $2 billion more in taxes while these little tidbits of so-called tax relief are phased in. We pay more, we get less. We pay more CPP premiums with no guarantee that anything will exist in 20 years. We still have bracket creep working its magic on our incomes while this government ignores outdated brackets and disincentives that have existed in our tax code for decades, especially for small business.

What do we get for this? Do we get more health care? Do we get more economic activity? Do we get more national wealth? No, we get more politics, the last thing we really need.

Two weeks ago were treated to the spectacle of our government leaders trumpeting the creation of a social union deal. Did this amazing document re-establish the primacy of the two levels of government in their respective spheres of jurisdiction as set out in our Constitution? No. It put on display the arrogance of the Liberal government and the desperation that provincial politicians feel when they see billions of dollars up for grabs. They need it. They have programs to run.

There was no thought to leaving that money in the hands of the taxpayers, or to giving it back from where it originally came. These politicians traded away the right to spend the money and take the credit as if there were two kinds of taxpayers and government was all about the size of the program and not how good it is. He who has the money makes the rules.

Why does the federal government not concentrate on what it is supposed to do? The budget just released puts $175 million into DND. That does not rebuild a single soldier's house, add a single soldier, sailor or pilot to the forces, nor does it buy a single piece of equipment. The Canadian forces as we see them now are overcommitted. They cannot train up to the proper standard without the proper equipment. They cannot replace worn out equipment. They have lost $7 billion from what previous governments told them to expect, and this administration has the nerve to give them this pitiful increase.

Members opposite will say to look at the wonderful job they do. That is the whole point. Despite broken promises by this government and unfulfilled commitments, despite the downloading of responsibility, despite the fact this government does nothing but take while it asks for the moon, these hardworking Canadians get the job done.

The Canadian taxpayer is in the same leaky boat. We are so used to high taxes, hidden costs and government programs that are supposed to alleviate every problem under the sun, that I am afraid we are complacent about the antics of this government in this budget. This budget repeats what we have seen in the last three. The minister's projections are wrong. He finds himself with more of Canadians' money than he even thought possible so he pumps up government spending. The debt continues to fester, taxes continue to suppress our potential, a key element, and the Liberals continue to claim that they are being prudent, generous and compassionate. They are none of these things.

In the past, Canadians slowly became outraged as they saw finance minister after finance minister miss the mark on the deficit and charge them for it in increased taxes. Now they are slowly becoming outraged that this finance minister misses the mark on spending and charges them for it. It is not their imagination. It is being exposed everywhere. The numbers are there. They are documented very well.

Think tanks, research institutions and economists are all asking where the surplus went. They are all answering that the finance minister is hiding it from the Canadian people so he can pursue a political agenda of his own. For how long are Canadians going to accept this outrage? For how long does this minister think he can make taxpayers pay more and receive less?

This Liberal government has failed on health care. It has taken out far more than it intends to put in. It has failed to perform the federal role it is supposed to focus on. And it is losing the trust of Canadians by manipulating the national books.

Over the last few months we have heard a great deal about productivity but I do not see much about that from the Liberal spin doctors. I do not suppose that is because it is another missed opportunity by this government. The Canadian Federation of Independent Business classed this budget as a missed opportunity. We have been losing ground on these issues for years. This finance minister trots out the typical line that things are looking up and that adding a few dollars will address the situation. Everything looks better after you have hit rock bottom which is where we seem to be headed.

The Organisation for Economic Co-operation and Development has warned this government that Canada is failing, not rising upward on the issue of productivity. These studies indicate that our tax burden is just too great. The window dressing in this budget does nothing to solve that. Again nothing for business, the engine of the economy, the job creator. It says that the United States is surging ahead in this area with half the unemployment rate, but here we have the finance minister bragging about job creation. Eighty per cent of those jobs are created by the small business sector, not by government programs.

Our unemployment rate is twice that of the U.S. Is that good enough? Our standard of living is falling; disposable income continues to fall. Why is this acceptable? Why is being 17th in the world good enough? It is not. There is so much more that has to be done.

What did the minister do about the small business deduction? Nothing. It is still mired in 1980 values. What has he done about corporate taxes, payroll taxes, user fees? Nothing in this budget. Where is the burden of personal income tax? Among the highest in the world, and this budget does a little tinkering with it. We pay more and get less.

We need a government in this country that is committed to openness, accountability, freedom and wealth creation for everybody. Instead we are stuck with a government that is obsessed with manipulation, social engineering and bureaucracy. I do not see anything productive about that.

[Alex Shepherd, Liberal, Durham, ON]

Madam Speaker, I know the opposition is on a great theme here. I presume they cannot get too many ideas in their heads at one time as they keep repeating the same phraseology which is basically pay more, get less. There are two aspects of this, paying and getting. In other words they believe that one simply pays for services and that is what one gets.

When they came to the House years ago they were concerned about the debt. What they have said during the last two days is that we should forget about the debt, forget about the obligation to pay the debt. They are happy to leave it for another generation of Canadians so let us just forget about it. We want to get every dollar into this that we put into it. It is services for every dollar that we put into it.

People watching this debate know if they have a mortgage on their house that some of that money and hopefully a lot of it every month is going to make principal payments on their debt. These payments meet their obligations. Therefore their children will not have to live in that house and pay the mortgage which the parents have enjoyed. Those members are showing total irresponsibility by ignoring that aspect.

The member also talked about small business. Does he realize that Canada taxes small businesses at the lowest rate of the G-7 countries? I guess he is not very happy to know this as well.

One of the other members mentioned the CPP and called it a tax even though we all know it is a pension. The federal government does not have its hands in it one way or the other. It is money contributed by employers and employees for their pensions. Once again those members would be happy to run away from, shirk their responsibilities, transfer that liability on to another generation and walk off with the gravy.

Do those members think they could get beyond the two little things in their minds, that is pay more, get less? Could they deal with some of the substantive problems in the country?

[Gerry Ritz, Reform, Battlefords—Lloydminster, SK]

Madam Speaker, there was a lot verbiage but I am not sure there was too much meat. I remember an ad years ago with a little lady standing at a hamburger counter saying “Where is the beef?” I guess that points to what the member was talking about.

The biggest problem we have in the country is underperformance. People are penalized to get out and make things happen. We have a tremendous problem with brain drain. There is a little bit of money in the budget to address that issue, but it is a significant problem. Taxes are driving people out of this country. We cannot bribe them to stay here. They will gradually migrate to where there is more tax incentives and work incentives.

We have a burgeoning underground economy. It is created by overtaxation. People have to make a living, put bread and butter on the table for their families and they do it in any way they can. If it means cheating Uncle Sam a little bit they are more than willing and prepared to do that. Many people said it was the GST that created the underground economy. It is not.

My background is in construction and the whole premise of the underground economy is not the GST. It is 7%. As a contractor I can pass that on and claim it back. That is not the problem. It is the income tax that I pay. It is the income tax that the plumbers, electricians, concrete finishers, carpet layers pay. It is the heavy tax load on everything. The not profit sensitive tax, a lot of them have become user fees and programs and things like that, drive the burgeoning underground economy. That is not being addressed. There must be fairness in the taxation system.

The member also talked about the debt and the deficit. We are paying $41 billion or $42 billion a year in interest on what has been a runaway debt. The prudent approach has added another $130 billion to that debt in the last number of years. Thank God we finally got our deficit under control, but it has been done by taxpayers; 70% of the deficit control was done on the backs of taxpayers. They are looking for some sort of relief from this overburden. They are looking to the government for some direction and leadership.

This budget is a small step in the right direction. We need to take large strides. We are going into a worldwide economy. Canada can be a leader. We do not have to settle for 17th place.

[Alex Shepherd, Liberal, Durham, ON]

Madam Speaker, just to conclude, paying Uncle Sam? I do not think the member knows what country he is in, let alone much about our tax policy.

I am very happy to engage in the debate and talk about what I think is maybe an unsung part of the budget which has to do with productivity. Some of the members across the way have touched on this issue.

Madam Speaker, I will be sharing my time as well.

Usually when we start talking about productivity a lot of people go to sleep, not least of which is the opposition. But productivity basically means how efficiently we use inputs of production. I am trying not to sound like an economist but what I mean by that is labour and labour components either to make manufactured goods or to provide services. We use labour, technology, capital, equipment and so forth.

The object of the exercise is to utilize those things more effectively and more efficiently. That is to say how can we use less of a component of these goods to produce more and more services? That is often what we call productivity.

People in the labour movement often hear business people talking about productivity and they feel a bit threatened about losing their jobs. But that is not what I am talking about at all. How can labour, as one of those component factors, utilize its time more effectively and more efficiently?

Why is this important? It is important because Canada is definitely falling behind many of our major competitors, not the least of which is the United States. I believe the Conference Board of Canada's recent report claimed that Canada's productivity lags behind our American counterparts by as much as 20%.

This is important because it impacts our standard of living. The televisions we have, the furniture we use, the cars we drive are all factors of productivity statistics. A lot of people believe that Canada is hiding its poor productivity rating behind its lower valued dollar vis-a-vis the United States. In other words, if our dollar suddenly increased in value we would have some significant job losses and losses to our effective competitiveness in the world markets because this productivity number would suddenly become very important and very glaring to a lot of people as to how we have not been keeping up with some of our competitors.

This budget addresses that issue. It addresses that issue in some very fundamental ways. It does that by increasing our funding by about $1.8 billion. These are some of the areas in which that money has gone, $200 million to the Canadian opportunities strategy and $55 million a year for biotechnology research and development. I do not have to tell a lot of people out there how important biological research is. Canada has developed many products and we have done that, and I would not use the word assistance, but by governments and businesses working together to find common solutions to find new technologies where Canada can be very competitive.

We have increased funding of $75 million for what we call the granting councils, the National Research Council and the Medical Research Council. We talk about medicare and funding. Members have been talking about giving the money back to the provinces, but this is another fundamental way in which the government is assisting with finding new technologies to solve some of our medical problems.

Canada has been a major leader in the world in discovering new technologies to find new drugs and other medical cures. I do not have to tell members we are well asserted as an incubation tank for that because our population is getting older, possibly more rapidly than in any of the G-7 countries. We are very concerned about finding cures for some of our medical problems.

We have put $60 million into a three year program to develop smart demonstration projects. This allows communities to find ways to use the information highway to more effectively utilize the resources they have.

In my community I think of all the hospitals being wired together which would enable a resident in one hospital being able to wire information back and forth to another hospital some miles away so that a patient in one location could have access to the expert care they need.

These are the kinds of technologies that will make Canada a better place to live and help keep our brain power. Some people say that Canada is a country full of great resources but our greatest resource is still the resource we have between our ears.

I am very proud to be a part of a government that has provided some additional funding for these areas. It provided $60 million for GeoConnections. This is a mapping system to allow our communities to plug into each other and to understand their regions. I do not have to tell the House that Canada is the second largest country in the world. The knowledge of who we are and where we are is very important for us to be successful.

I will speak a bit about some of the additional funding that has gone into the technologies partnership program. There is an additional $150 million that has gone into the technologies partnership program. Some of that money went into a company close to my riding called Cametoid. This is a company that makes paint for the Challenger rockets that the United States is sending up. This is a unique technology that was made possible by this government's providing the additional funding. These are not grants. They are not give away programs. It leverages some of the risk capital that the company needs to take on some of these projects. Some banks ask what they are going to give them for collateral. Here we are selling products to the United States. The company has about 20 direct jobs and 17 indirect jobs.

I was on the floor of the De Havilland plant when the minister was there to give the technology partnerships grant. That is money that is coming back to us. It is paid back to us through a royalty payment system. I talked to those workers and they said that manoeuvre saved 2,000 jobs in the city of Toronto. That is a very positive way that we are increasing the knowledge base that exists in our country. We are keeping Canadians employed and we are keeping them at home.

Why is this a problem? As I mentioned, the OECD has stated that even with solid improvements in Canada, it is likely that our country will slip below the average in the standard of living of the OECD countries by 2015.

From 1973 to 1995 the average annual rate of real domestic gross product increased in Canada. It went up 2.6%. Productivity went up 1%. Canada's score sheet in some of these areas has not been as good as some of our neighbours. Labour productivity and growth averaged about 1% per year during the 1990s. The average of the OECD countries is 4%. Why is that? Frankly, I do not know. Some of my colleagues will say it is because of our tax laws. That is not quite the case. The business sector is somewhat responsible for this.

In the United States the business community supports its university systems in the area of research and development. That is not the case in Canada. I am not saying we do not do any of that but our businesses only marginally support our university environments. As a consequence, Canada's funding is heavily reliant on government grants to granting councils. Another positive way which governments could make a contribution is to the networks of centres of excellence across the country which allow our scientists to communicate with one another, not in the lifestyles today but the lifestyles five or ten years down the road.

It takes a long time for that kind of technology to seep through and be effective. We have to find better ways for Canadians to use the technology that is available. I am very proud to be a part of a government that has made a significant down payment on that reality.

[Keith Martin, Reform, Esquimalt—Juan de Fuca, BC]

Madam Speaker, I thank my hon. colleague from the Liberal Party for his speech.

I want to ask him some questions. I do not think that some of the members across the way get it. If the member is listening to the assertions put forth by independent think tanks not only within Canada but from around the world, they send one clear message. Canada is not competitive because our tax structure is choking the life blood out of our private sector.

As an example, a family of two earners in the United States earns 42% more than the equivalent family in Canada. That can be extrapolated to private sector companies. How can companies compete in Canada with their counterparts in the United States if they are saddled with a tax structure that is at least a third higher than what they have to compete with south of the border?

The central failure our party is trying to impress on the government in this budget is that the government's budget has failed to address the issue of productivity because it has failed to address the issue of high taxes. The member from Vancouver mentioned we want to be productive and therefore the government is investing in research and development.

That is not the issue. If the private sector is given the money to invest in its companies it will invest in research and development. The fact is it cannot because the tax structure is too high.

Again I ask the member from the Liberal government will he go to the finance minister and ask him to lower taxes substantially and do it as soon as possible. Then our private sector would have a fighting chance to compete in the global economy.

[Alex Shepherd, Liberal, Durham, ON]

Madam Speaker, I am sure the member was here during the budget speech but he seems to have missed the fact that there have been substantial tax reductions in the budget in some of the low income areas. Also we have removed the 3% surtax. Why he does not understand this is beyond me.

I will address the great model they always want to use, the United States. That seems to be the only comparison. It seems to be the whole world actually when they get into comparative economics.

The reality is that in the numbers quoted some of those people in the United states pay the highest per capita rate for health care. Often it is not funded through their governmental system. They have higher crime rates and so forth too. We do not quote those things. We quote the taxation system.

Through the judicious hands on the lever of this government interest rates are lower. Interest rates are lower in Canada than in the United States. I do not know where the member has been if he does not think a major factor of productivity in any business is interest. The reality is that Canada is still and continues to be an attractive place in which to do business.

[An hon. member]

What about personal tax?

[Alex Shepherd, Liberal, Durham, ON]

We are on the track of lowering personal income taxes and we have had a major down payment on that in this budget.

A combination of lower taxes and greater investment in research and technology is part of this program and I think that will do the job.

[Yvan Loubier, Bloc, Saint-Hyacinthe—Bagot, QC]

Madam Speaker, I was surprised to hear the member for Durham say that the budget contained all sorts of tax breaks.

Who gets the biggest tax breaks? I will tell you, Madam Speaker. Those earning $250,000 and over. Their tax bill will be reduced by $3,800. As for those earning $30,000 to $70,000, the middle-income earners who have footed most of the bill for cleaning up the nation's finances, their tax break is between $50 and $300 a year.

This is an insult. I would suggest that the member for Durham really read the budget documents and quit being a doormat like his colleagues.

[Alex Shepherd, Liberal, Durham, ON]

Madam Speaker, I have taken a close look at the budget. I know we have increased personal exemptions for all taxpayers.

All taxpayers have shared in this tax reduction package and the 3% starts at $65,000. The hon. member talks about $200,000. I suggest he check the tax rates. If he does not have any constituents in all of Quebec who do not make over $65,000 I would be shocked.

There have been across the board tax cuts and I am sorry he does not understand that.

[Joe Volpe, Liberal, Eglinton—Lawrence, ON]

Madam Speaker, I paid careful attention to the budget debate on the monitor in my office and when I was in the House.

I do not mean to make light of interventions that colleagues make. I know they are studied and I know they are very sincere but I often think of dark clouds looking for that silver lining so that they can avoid it.

That in essence is the substance of the debates that I have heard from the opposition side so far.

I am especially struck by the desire to manipulate two contrary views, especially by one party opposite. On the one hand, the critic for health turns around and says that there are two words to describe what the contributions are and they are “not enough”. Then his colleague over to his right—and I mean that figuratively as well as geographically—turns around and says that we did not cut enough taxes and we did not take out more from that spending.

I do not know what it is that they want to do, but I want to remind colleagues that the Canadian public has been telling all members of parliament on that side as well as on this side that its priorities for government spending, government activity and government involvement in the life of all Canadians has had to be involvement in a health care system, a health care system that is at least from the federal government's perspective, constrained by what it can do jurisdictionally.

Canadians have asked all of us parliamentarians to look for solutions to ensure that the priorities of all Canadians, and again health is the number one priority of every man, woman and child in this country, be given the same status when we fulfil the most basic, the most important and the most significant functions of all parliamentarians in this House and that is to set a budget that establishes those priorities.

What do we have? People are whining that we are spending too much and doing too much to meet the demands and needs of Canadians everywhere. People have been saying that we have problems with our health system, notwithstanding the fact that in agreements with the provinces in the past we provided sustainable, predictable continuous funding. We gave the provinces the authority to go ahead and do what they would in establishing health priorities through their administrations. We moved back.

Notwithstanding that, the Canadian government recognized that it had to do something more directly for Canadians. In collaboration with the provinces, it struck a deal a couple of weeks ago, a social union. It is a reflection of the ability to work together with other jurisdictions. To do what? To meet the priorities of Canadians. In what area? In health. What were they looking for? Some said $2 billion would be more than enough to meet all the immediate needs. But no, the Government of Canada and the finance minister said we would give $3.5 billion today to meet the urgent and critical needs in health care.

What does the opposition say? “Not enough. It didn't go to my province. My province didn't get what it wanted”. Guess what? Wake up. The Canadian public got what it wanted, in fact it got more. Not only did it take the $3.5 billion—

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

Madam Speaker, I rise on a point of order. I would like you to inform the member that raising his voice does not make his story any more believable.

[The Acting Speaker (Ms. Thibeault)]

That is not a point of order.

[Joe Volpe, Liberal, Eglinton—Lawrence, ON]

The hon. member is absolutely correct. He has just proven that in politics one has to raise one's voice enough to wake the dead. Stones must hear the good message. I am glad that the stones opposite have also heard that the number is $3.5 billion today. It is an additional $8 billion over the next five years. That is much more than anybody had anticipated.

Yet what have we heard? The opposition said we took out $20 billion. That number was only $16 billion two weeks ago, and two weeks before that, it was only $6 billion. The amount of money that has been withdrawn has been growing exponentially as the opposition has seen the government meet the priorities of Canadians head on.

The Canadian government, through its finance minister, through its health minister, through the other cabinet colleagues, in co-operation with the provincial premiers of this vast nation has struck an agreement that would also ensure that those moneys would go directly to the citizenry. None of this bureaucratic in between let us manipulate this ministry hideaway. None of that sort of business. The business of the health of Canadians was going to be met by every single province.

Not only that, they agreed that the federal government ought to spend and in fact is spending an additional $1.4 billion. I cannot count that high but I can spell the number. It is a lot more than a million, $1.4 billion directly in health outcomes. What are they? This is what the opposition is lamenting. That is why I say it seems like this dark cloud is avoiding the silver lining. For health, research and development in the basic sciences, $550 million. Whether they choose to appreciate that or not, there is not a person in the basic science research and development community who does not think that this exceeds their wildest dreams.

[An hon. member]

We are losing them because of high taxes.

[Joe Volpe, Liberal, Eglinton—Lawrence, ON]

It exceeds their wildest dreams. Wake up. Look at the numbers. Call the universities. Call the doctors.

Members opposite should ask their own physicians face to face if they are doing something with $550 million additional moneys for health and they will tell them yes. Ask them if this is money well spent and they will tell them yes. And if they then ask them shall we cut more taxes, they will say no. Why? Because the money that we spend this way collectively brings us greater results. Greater results where? In meeting the priorities of all Canadians, all men, women and children of all ages from all provinces.

If we are going to meet the priorities of Canadians everywhere, not only do we do this, but we take a look at the information system. That is at the base of making evidence based decisions which will lead to better administrative systems in health, which will lead to better outcomes, which will lead to more research, which will lead to services that will produce the healthy society Canadians demand, need and want.

We are going to spend $328 million in that area, and the opposition asks “Why? It might infringe on somebody else's jurisdiction”. Wake up. The people in the other jurisdiction found out two weeks ago and said they wanted us to do this, they needed us to do this and in fact they demanded that we do it. Did we meet their demands? Of course we met their demands.

First nations everywhere have been at a disadvantage. All members on this side of the House recognize that. Some members on the other side are willing to admit that maybe a problem exists. But our cabinet reacted to reality and said yes there are problems, let us address them. How can we do it? We have already put a mechanism in place. Can we put the money there? Shall we find it? How much do we find? How much did the Prime Minister and cabinet find? What did the health minister look for? He looked for and saw $190 million over three years to ensure that we meet the health needs of all aboriginal communities. The opposition said no, we should not do that.

I do not understand those people any more, I really do not. They say that there are other issues. There are other issues and the government has been looking, it has been researching and it has been listening. That is a good word. Some hon. members might look up. It has been listening to the Canadian public. It says we need to spend an additional $287 million for prenatal nutrition programs, for food safety, for environmental safety, for rural health and for diabetes.

I ask all colleagues in this place, is that money well spent or not?

[Lorne Nystrom, NDP, Qu'Appelle, SK]

I really hesitate to ask a question, Madam Speaker. I do not want the member to get too worked up in the House.

It is the member's party that had the biggest cutback in the history of this country in terms of health care in February 1995. Even with the additions in this budget, it will be 2004 before the same expenditure is made that was made in 1995 in terms of transfers to the provinces for health care. Nine years later we get back to 1995.

Is the member not ashamed and embarrassed to sit in a government that was so conservative that it had the biggest cutback in terms of social transfers in the history of this country? Is he not ashamed of that?

I know the member from Scarborough who sits behind him, the fellow with the beard, hangs his head in shame when I talk about that issue. Does the hon. member share the same opinion as the member from Scarborough?

[Joe Volpe, Liberal, Eglinton—Lawrence, ON]

Madam Speaker, what the hon. member really meant was, do I take any pride at all in the fact that a Liberal government could get the provinces together, including the NDP provinces of British Columbia and Saskatchewan, and at the same time Ontario, and get them to agree that we needed to establish fiscal responsibility and give them in return complete control over a budget that involved health and give them the opportunity to administer those funds as they see fit? Should I take pride in the fact that my government is capable of meeting the priorities of Canadians by working with provincial governments of all political stripes? The member might be surprised. My answer is yes.

[Richard Marceau, Bloc, Charlesbourg, QC]

Madam Speaker, I listened with great interest to the remarks made by my hon. colleague.

The reason he sounded so enthusiastic is because his native province got the biggest share of the budget pie last week.