Mr. Speaker, let me say right at the outset that the 1999 budget as tabled by our finance minister on Tuesday truly reflects the social and economic needs of all Canadians.
The budget highlights this government's commitment to continued co-operation with the provinces, on behalf of all Canadians, in order to safeguard and strengthen our society into the 21st century.
The budget was developed through an open and consultative process in which all members of the government were involved. The Ontario caucus, which I chair, fought hard to promote the interests of all Ontarians and all Canadians. I am pleased that our strong and united voice has been heard.
Canadians have told parliament that our health care system needs more funding to better serve those in need.
That is why, for instance, the 1999 budget announced that the provinces and territories will receive an extra $11.5 billion over five years for health care. This is the most substantial one-time investment ever made by the government.
The Ontario Liberal caucus fought hard for accountability measures to ensure that the new funding will be spent on health care and not for other purposes. Such assurances have been obtained from the Premier of Ontario and all territorial and provincial leaders.
The budget is good news for Ontario. It ensures that the federal government's health care investment will be distributed on an equitable per capita basis. Thanks to a policy of inequity introduced by the last federal Conservative government, Canadians have been treated differently under the CHST depending on where they live. Given the population of Ontario, we have not been receiving our fair share. The budget provides for a gradual narrowing of these disparities. Increases in CHST makes it possible for Canadians to obtain equal per capita entitlements by 2001-02. This will benefit provinces such as Ontario.
Transfers to Ontario will grow significantly over the next five years. New health money means transfers are projected to grow from about $9.5 billion this year to $12 billion over the next five years. Per capital CHST entitlements will grow from $830 million to $985 million by 2003-04. This means almost $5.3 billion more for Ontario over five years.
There are significant funds in these increased transfers to Ontario that could be deployed to assist the homeless in Ontario if this were the priority of the Ontario government. They have that flexibility.
Ontario will also benefit from $1.4 billion invested by our own government to promote health care research and prevention. In Ontario federal research dollars will support the work of two doctors from the Children's Hospital of Eastern Ontario whose research on genes will help patients suffering from Parkinson's disease, strokes and other related diseases. Researchers at Carleton University and Kingston General Hospital will also directly benefit from upgrades to MRI machines which will improve the detection of breast cancer. Mr. Speaker, I know that would be of great interest to yourself.
We are in a position to strengthen our health care system because of the prudent fiscal discipline undertaken by this government. After inheriting a federal Conservative deficit of $42 billion, we needed the help of all Canadians to put our finances in order. The sacrifices made by many will allow Canada to enjoy a prosperous future in the 21st century.
In 1998-99 we will balance the books or better. This is the first time since 1951-52 that the Government of Canada has been deficit free for two consecutive years. We are also on track for balanced budgets or better in both 2000 and 2001. This will mark only the third time since Confederation that the Government of Canada has recorded four consecutive balanced budgets.
Cuts in income tax are vital to the government's objective of building a better future today. Accordingly, the federal government is committed to making major tax reductions as equitably as possible.
For the first time since 1965, individuals are given a tax reduction without borrowing being required. The largest cuts planned in the 1998 and 1999 budgets will be for low and middle income Canadians, out of concern for fairness.
The 1999 budget builds on the $7 billion in tax cuts that were delivered last year by providing $7.7 billion in tax reductions over the next three years. The 1998 budget benefited low income Canadians by increasing the amount of income they can earn annually before paying income tax by $500. The 1999 budget increases the amount by $175 to $675 and extends it to all Canadian taxpayers. This means that effective July 1, 1999 the basic amount of income that all Canadians can earn annually on a tax free basis will rise to $7,131. In addition this budget also fully eliminates the 3% surtax.
This government is committed to substantially reducing taxes in the fairest possible way. Nonetheless for tax relief to be permanent, it must be affordable and not jeopardize the soundness of Canada's finances.
The 1999 budget also shows a strong commitment to keeping the debt to GDP ratio on a downward path. Last year Canada's debt to GDP ratio saw its largest single yearly decline since 1956-57, from 70.3% to 66.9%. For the current year, 1998-99, it will fall still further to around 65.3% and by 2000-01 the debt ratio should be down to just under 62%. This falling debt burden is allowing us to reallocate funds that would otherwise have been needed for interest payments on the debt. We increasingly will be able to free up resources for targeted social programs, tax relief and for investments in a more productive economy.
However, we need not be obsessed with paying down the debt. As our economy continues to grow, our debt ratio will shrink naturally as well.
The 1999 budget is based on a fact that applies the world over. Technology is changing at a phenomenal rate, before our very eyes. It is totally changing the nature of the labour and business markets and it is changing the skills and knowledge we require to remain competitive at home and abroad.
The new economy makes investing in knowledge and innovation essential for the creation of well-paying jobs and improving our standard of living. It is for this reason that the government has committed to spend more than $1.8 billion in knowledge spending. This money will help strengthen research and development and aid those companies producing leading edge products and services.
Last week I rose in the House to announce that the unemployment rate in Canada had fallen to 7.8%, the lowest in almost nine years. In 1998 Canada created 453,000 new jobs and led the G-7 with the highest job growth rate.
While these results are encouraging, we must continue to focus on reducing our unemployment rate even further. The best way to create jobs is by providing Canadians with the knowledge and training they need to adapt to our changing global economy.
On a final note, I would like to congratulate the Minister of Finance and the Secretary of State for International Financial Institutions for responding to an important initiative that I have promoted. This budget will amend the Income Tax Act to allow offshore investment funds to engage Canadian service providers without jeopardizing their tax status.
Essentially Canada has responded in kind to measures introduced in the United States to eliminate tax impediments for offshore investment companies that wish to conduct their back office work within the United States. Canada has done the same, allowing offshore investment companies to set up back offices in our financial centres to perform administrative work and investment services. This will help to create jobs and stimulate economic activity in the Toronto financial services sector and throughout Canada.
In conclusion, this budget is good for Ontario and good for Canada and it positions us very well to enter the next millennium. It is for this reason that I am proud and very pleased to support it.