Debates of Feb. 18th, 1999

The Budget

[Monte Solberg, Reform, Medicine Hat, AB]

Madam Speaker, I have a follow-up question. In the same article the accountant points out that his calculations do not take into account the hike in Canada pension plan taxes which took effect on January 1 and will go up again on January 1 of successive years.

Would the member comment on the fact that this is not taken into account in the budget and the fact that Canadians will actually be $2 billion worse off over the next three years because of hikes in CPP and bracket creep? In fact there is no tax relief in the next three years. Taxes are going up.

[Christiane Gagnon, Bloc, Québec, QC]

Madam Speaker, we know there will be an increase so the fund will be built up, because our young people will not be able, because of their numbers, to build up the pension fund.

This represents a total lack of sensitivity toward those who contributed significantly to reducing the deficit. We thought there might be some sensitivity. This government does a lot of studies that produce nothing concrete to help people earning less than $30,000 or $40,000.

This budget is very disappointing. In addition to going after provincial jurisdictions, the government goes after the low income earners, those who are entitled to expect something, those who have contributed are the ones affected. The middle class contributed enormously to the deficit. They are being crushed under the weight of taxes. They are losing manoeuvring room in order to help the economy.

This government is attuned to the rich, the three wealthy provinces that will benefit from the budget and the class of individuals earning above $100,000. Anyone earning $100,000 and paying perhaps $3,000 in taxes is not going to be prevented from buying the essentials.

However, someone earning $30,000 with two or three children can often use the few hundred dollars they get from a tax break to make ends meet at the end of the month or on weekends to buy what they need to feed, house and clothe their children.

[Paul Devillers, Liberal, Simcoe North, ON]

Madam Speaker, I will be sharing my time with the member for Vancouver Kingsway.

It is with great pleasure that I rise to speak to the budget brought down this week. It is the Liberal government's sixth budget since it was first elected to office in 1993. We have not seen two balanced budgets in a row since the 1950s.

Let us go back to the 1997 election campaign for a look at the Liberal Party's election platform. We set out to do what we are doing today and what we will continue to do in future budgets during our term of office.

As for the surpluses, we said that 50% would go towards social and economic programs; 25% towards tax relief; and 25% towards paying down the national debt. That is what we have done in the last two budgets and that is what we will go on doing.

Who is not happy with our budgets? The opposition parties who, unfortunately, will never be satisfied with what the government does. This is perhaps a weakness in our system. The opposition parties always have to be unhappy. They can never say they are satisfied with the government's achievements.

I do not wish to be too critical of the opposition parties, for that is the nature of our system, but there are also special interest groups that are dissatisfied with the budget. There is the accountants' association, which says we should put more money into paying down the debt. Bay Street says there should be more tax relief. Doctors' associations in Ontario say we should have put more money into health care.

This goes to show that this is really a balanced budget. When we are criticized from all sides by special interest groups, I think it means that we in the government have done a good job.

Another group that is not pleased with the budget is the separatist government in Quebec. They have misgivings about the changes made to the method used to calculate the Canada social transfer. However, what they fail to mention is that, in the next three weeks, Quebec will be receiving $1.4 billion in equalization payments. With social transfer and equalization payments combined, Quebec, which accounts for 24% of the Canadian population, will be receiving 29% of all federal transfers. Some injustice. Some humiliation.

As the Prime Minister pointed out yesterday in Montreal and again today in the House, this $1,4 billion payment will enable the PQ government to balance its budget. But then again, that too will be blamed on the federal government.

But I have to confess that I am biased. I believe the government is doing a terrific job. So rather than hearing it from a biased individual, I will quote from today's editorial in the Orillia Packet and Times in my riding, a Hollinger owned newspaper, not necessarily given to being friendly to the Liberal Party:

Balance.

That's the most striking element in Tuesday's budget announcement.

Paul Martin's second straight balanced budget—something not seen by Canadians since the early 1950s—seems to be a hybrid of political thought. It could even be used to demonstrate that, despite its flaws, Canada's political system is working.

This budget has the distinction of being balanced at the centre of the political spectrum. Its influences are obvious: the frugality and fiscal responsibility preached by Conservatives and Reform are balanced with strong social conscience represented in significant increases in health care funding.

The right is represented again in the small tax relief presented to Canadians. It acknowledges that Canadians are struggling under a heavy tax load, but it does so with a trickle, rather than a gusher.

We believe this is a responsible, moderate budget.

It will not solve every pressing issue on the spot. But that is the stuff of political fiction. Problems as complex as those faced by the federal government will not be solved overnight. But they can be solved.

There is hope sewn into the lining of this budget.

That speaks volumes on how this budget was conceived and how it is perceived in the community.

Another issue I will touch on is the question of the reaction of the provincial government in Ontario. The Harris reformatories will be saying because of the funds being put back into health care in this budget, it is an admission by the federal government that the difficulties in the health care system were caused by cuts in transfer payments.

I believe the Ontario electorate will not be fooled by that rhetoric. I believe the Ontario electorate will be able to understand the figures. They will know that for the next year the cuts in transfers prior to this budget from the federal government to the province of Ontario were in the order of $831 million. They will also know that the Harris reformatory tax cuts amounted to $4.8 billion. If we divide the responsibility for any difficulties that may be being experienced in Ontario health care, the apportionment can be easily struck at one-seventh responsibility for the federal government cuts and six-sevenths responsibility for the Harris tax cuts. Those are the priorities of the Harris reformatory government and that is how it chose to use the resources.

I do not believe that the electorate will be deceived. Nor do I believe that the electorate will pay any attention to Premier Harris when he makes comments like what I read in the newspaper today. He was referring to the Harris-Martin tax cuts.

There is no comparison between the way this government under our finance minister dealt with the issue of tax cuts with the deficit and the havoc that the Harris government, the reformatory government, has imposed on Ontario by allowing the massive tax cuts before it was in a position to balance its budget. There is no question that this will be taken into account by the Ontario electorate in the upcoming provincial election.

In summary, it appears evident to me that this budget will be widely accepted by Canadians and so far it has been widely accepted by Canadians. I congratulate the government for once again bringing in a balanced budget with a significant surplus and properly applying that surplus in a balanced fashion.

[Charlie Power, Progressive Conservative, St. John's West, NL]

Madam Speaker, I want to ask the hon. member who makes many references to the Harris reformatories if they have anything in common with the Liberal suppositories that we have been hearing about since budget day.

[Paul Devillers, Liberal, Simcoe North, ON]

Madam Speaker, I do not believe that was a question. I would say it was a smart—no, I would not say that.

[Réal Ménard, Bloc, Hochelaga—Maisonneuve, QC]

Madam Speaker, I listened carefully to the speech by our colleague and I think he has not grasped certain elements of the political situation.

First, can he admit that, since 1993, funding has been cut by $33 billion? Even though the provinces were counting on this amount to balance their budgets and provide public services, they never received this $33 billion.

The member talked as if happiness was the absence of misfortune. I would like to say that we cannot operate on that basis in a society.

The first question I would like him to answer is this: Does he recognize that his government has acted indelicately, in a way that is inconsistent with the spirit of federalism in which two governments should respect each other's jurisdictions?

Second, can he stand in his place and tell me where it says in the Constitution Act of 1867 or 1982 that the federal government is authorized to intervene in health care? Would he be prepared to put his seat on the line on the constitutional jurisdiction of his government to intervene in the area of health care?

Some $80 billion will be spent on health, whereas the federal government has no business there.

If our colleague wants to help out his neighbour, there are areas where the federal government can act. Liberal members are like one long film we might call The Silence of the Lambs : always agreeing with what the government does.

In terms of employment insurance, the government could improve the situation of the unemployed. With the banks, it could pass legislation on community reinvestment. But it did not—

[An hon. member]

Question.

[Réal Ménard, Bloc, Hochelaga—Maisonneuve, QC]

I suggest our backbencher remain calm.

I would ask the hon. member if he could tell us where it says in the Constitution that this government is entitled to intervene in health care—

[Some hon. members]

Oh, oh.

[Réal Ménard, Bloc, Hochelaga—Maisonneuve, QC]

—and I wish the backbenchers were a little more critical of their government.

[Paul Devillers, Liberal, Simcoe North, ON]

Madam Speaker, first, we pointed out three or four years ago that the social transfer formula was not fair and that changes were needed.

First, we notified all the provincial governments. As for the issue of federal government jurisdiction in health care, it was clear in the health agreement signed by the first ministers two or three weeks ago. It was made clear that the government was prepared to invest in this area and to transfer the money to the provinces with no strings attached and without interfering in provincial jurisdictions.

As for research, this is a federal-provincial jurisdiction.

[Sophia Leung, Liberal, Vancouver Kingsway, BC]

Mr. Speaker, on February 16 the finance minister presented the 1999 budget. The budget is fiscally responsible and it invests in Canada's social priorities. It provides tax cuts and health care funding. The budget is good news for my constituents of Vancouver Kingsway and for all Canadians. Today I would like to address three aspects of the budget that will increase our standard of living and enhance our quality of life: health care, research and development, and tax relief for all Canadians.

Health care is the first priority of this budget. As a member of the finance committee I have heard from many Canadians that more resources should be devoted to health care. This is also a key issue in my riding. This year's budget has answered this demand. It has been called the health care budget because it greatly increases federal government support for health care. An additional $11.5 billion will be transferred to the provinces through the Canada health and social transfer over the next five years. In addition to the CHST enhancement, the 1999 budget allocates $1.4 billion over the remainder of the fiscal year and in the next three fiscal years. Those funds will improve access to quality health care information and increased support for research and innovation in health care.

The second important aspect of this budget is research and development funding. While the government is strengthening the health care system, it is also working to expand and integrate research in health care. Our government recognizes that innovative ideas are essential to maintaining a successful and competitive economy. Medical research can ensure the highest quality of health care for Canadians now and in the future.

This budget provides significant increases in funding to the Canadian Foundation for Innovation for biotechnology research and development, to the Natural Sciences and Engineering Research Council of Canada, to the Social Sciences and Humanities Research Council of Canada and to the National Research Council. There will be increased support for the successful network of centres of excellence, technology partnerships Canada and the Canadian Space Agency.

The third important aspect of the budget is tax relief. It is because our government has acted responsibly in recent years that we are in a position to implement tax reduction measures. Last year tax measures for low and middle income Canadians were introduced. Now we have begun to offer broad based tax relief to all Canadians.

Every Canadian who pays taxes will get a tax cut this year and 600,000 Canadians will not have to pay any income tax at all. Important initiatives include the phasing out of the 3% surtax on personal income, increased benefits to middle income families and increased child benefits to two million modest and low income families. The basic personal exemption has also been increased to $7,131. For the first time since 1965 nothing has been borrowed to pay for the tax relief.

While I do not have the time to discuss other elements of the budget in detail, I would like to mention several important areas. Highlights include support for learning opportunities and employment, broadening the child tax benefit and continued debt reduction.

I am happy to report that this budget will have a great impact on the province of British Columbia. That is where I come from. It will add $270 million a year during the next five years to B.C.'s provincial revenues in addition to tax breaks to individual British Columbians.

The cap on B.C.'s share of transfer payments has been lifted. For many years B.C. was one of the three provinces getting a lower per capita share than other provinces. Now the finance minister has lifted the cap so that over the next three years all provinces will receive the same amount on a per capita basis. Over five years it means that B.C. will get an additional $1.4 billion plus $471 million for health care. This is tremendous.

Tax breaks will result in B.C. taxpayers sending $200 million less to Ottawa in 1999. Even B.C.'s finance minister called this budget good news. It is great news for all of us.

As an MP from Vancouver Kingsway and a member of the finance committee I am proud of the budget our government has delivered. It will ensure that Canada maintains a strong economy and invests strategically in key economic and social priorities. Finally, it provides tax relief for all Canadians.

I congratulate the Minister of Finance, the Prime Minister and all my colleagues for the thoughtful and well planned budget for Canada.

[René Canuel, Bloc, Matapédia—Matane, QC]

Mr. Speaker, I did listen to my hon. colleague, but she kept repeating what the finance minister had said. The members opposite are parrots. And the Liberal members from Quebec even applauded.

I can understand my hon. colleague. She is from British Columbia and everyone there got something. The people of this very wealthy province are now even wealthier.

I must tell my colleagues from Quebec who were applauding that I cannot understand them. They are servile—

[Some hon. members]

Oh, oh.

[René Canuel, Bloc, Matapédia—Matane, QC]

“Servile” means “servant”. They are little people. They cannot understand that Quebec is the loser here, the big loser.

[An hon. member]

Come on.

[René Canuel, Bloc, Matapédia—Matane, QC]

My question to the hon. member is this: Why is it that, three or four days before the Minister of Finance brought down his budget, the Minister of Human Resources Development, whom I had invited to New Richmond, did not show up? There were about 800 workers and unemployed people—

[Michel Gauthier, Bloc, Roberval, QC]

He is afraid of people.

[René Canuel, Bloc, Matapédia—Matane, QC]

—who, in the spring, will have to do without benefits for two whole months. There will be no food for their children. The hon. member boasts about the fact that those who earn $250,000 or more will see their taxes cut by 3%, thus saving $8,000 a year.

[Sophia Leung, Liberal, Vancouver Kingsway, BC]

Mr. Speaker, perhaps I should reply to the member in Chinese because today is Chinese New Year.

I think we all know that Canada has been very good to Quebec. You always gain more than B.C. Even now with this budget we gave you much more and we never complain.

[An hon. member]

C'est le problème de Landry

[The Acting Speaker (Mr. McClelland)]

In an attempt to keep everyone on each side of the aisle, let us refer to each other through the Chair.

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

Mr. Speaker, I appreciate the opportunity to address the member from British Columbia.

This budget missed the boat in an essential area. The government does not listen very often to anybody from any other political party. But I would like it to listen to independent reviews that are taking place right now on Canada's productivity.

What are these reviews saying? This budget fails because it fails to address the central issue of Canada's failing productivity. Why is Canada's productivity failing? Our tax structure is too high and companies do not have the ability to invest in themselves. We cannot compete with our brothers and sisters to the south because our tax structure is too high.

Will the member bring to the attention of the finance minister the fact that the government's budget failed because it did not adjust the egregious tax structure we have in Canada that is choking off the private sector—

[The Acting Speaker (Mr. McClelland)]

The hon. member for Vancouver Kingsway.

[Sophia Leung, Liberal, Vancouver Kingsway, BC]

Mr. Speaker, I thank my colleague for the good point. Yes, we would like to increase our productivity. That is one of our recommendations in the report of the finance committee. We do focus on that.

Research and development is what we will address. We have given $800 million to the centre of innovation. This year we are giving an additional $200 million to the centre. That will create many jobs. We will have more resources to encourage productivity, to have more research and development for Canada. In the meantime this will prevent brain drain.