Mr. Speaker, I begin by thanking the members who contributed to this debate. It is certainly a great opportunity for members to reflect what constituents are thinking in their ridings. Collectively it really reflects what Canadian priorities are in varying degrees.
I want to spend a few moments and point out what I consider to be the obvious. Canadians who are watching this program might not realize that the budget process itself under the Minister of Finance has been very open and transparent. It is really an exercise that some years ago was conducted behind closed doors with a lot of secrecy.
Now we have a process where we are engaging Canadians in the debate. Members of parliament are going back to their ridings and holding town halls on what should be the budget priorities for the government.
It is by encouraging and engaging members and Canadians that the whole budget process has certainly become a much more effective one.
Tonight's debate reflects many different views. Some members in this House talked about what their constituents have been saying to them. Some of them said that the government now needs to invest in program spending substantially.
Other members have said freeze program spending at its current level. Other members have said to cut taxes substantially right across the board. Others have suggested that any tax cuts remain something that is targeted, more moderate, focusing on lower and middle income Canadians.
Others have said to cut EI premiums more substantially and members again have said we need to reinvest more money into the employment insurance program. Others have said to pay down debt substantially and other members have said we need to pay down debt but we need to be quite cautious and we should not be too aggressive. There are other priorities.
Economists from right across this country have provided forecasts and some insight into where the Canadian economy is going. They have rarely developed any sort of consensus. There is as much disagreement among the economists themselves, again depending on the model they use.
I think it is important to note that this debate is possible because as a country we finally managed to turn the corner. We have turned the corner from an era of deficits to an era of surpluses. We have turned the corner from a time when we were continually increasing the debt to a time where we are now decreasing the debt; a time where program spending was being cut to a time where we are now talking about reinvestment in Canadian priorities, reinvestment in health care and reinvestment in education.
The last number of speakers talked about reinvestment in the military and the importance of supporting our Canadian armed forces. There is agreement that there is a need to look at the quality of life that members of the Canadian armed forces are experiencing.
The focus is now on how we allocate this fiscal dividend. What do we do with the money that we have? Estimates have varied. I would like to make a few points about the actual amount. Economists have come forward and I have heard over the last couple of days figures ranging from a $6 billion, $7 billion to a $15 billion to $20 billion surplus per year.
It is important that I comment on the accusation that the $9.7 billion surplus recorded in the first eight months of 1998-99 points to a very large surplus at year end. That is not exactly true.
The surplus is expected to increase in December. That is when revenues are typically strong. But a simple extrapolation of the remaining months of the fiscal year would be highly misleading. We know that monthly deficits are expected in the final quarter of this fiscal year. Why? Because we know that the recently announced reductions in the employment insurance premium are effective January 1. That will have an impact on the final surplus number.
Revenues are typically depressed in January due to the payment of GST low income credits and refunds. We know that corporate income tax returns are expected to be down significantly in the February-March settlement period. Exchange funds earnings which are reported in March will also be significantly lower. Personal income tax refunds pertaining to the processing of the 1998 tax returns will further depress revenues in March 1999.
The income tax relief measures that were announced in the 1998 budget will take effect. These measures will cut personal income taxes as well, so we have a reduction in government revenues again.
These factors will all serve to bring the underlying surplus for 1998-99 below that recorded in 1997-98. It is important that Canadians realize and understand this and that members of parliament also understand that we cannot simply extrapolate a surplus of one month and take it throughout the entire year. Like businesses, we do have a cash flow and we have a cycle throughout the year so that revenues go up and revenues go down. In the end we will have to wait for that final number. There are additional pressures in this final quarter that will impact on the final number. While the surplus may be less than that recorded in 1997-98, this government will continue to build on past successes.
I have heard from members of the Reform Party, members of the Bloc, members of the NDP and from members of the Conservative Party that we need to focus on Canadian priorities. The Standing Committee on Finance toured the country asking Canadians what they would like to see in the upcoming budget. I believe the government will reflect what those Canadian priorities are because we know that budgets are much more than balancing numbers. Budgets are about people.
We will continue to reflect those Canadian priorities. We will continue to maintain a balanced approach. We will continue to follow through on the plan that we have adopted since coming to office. I know that the members of the NDP throughout the debate this evening commented on the fact that there is no plan that this government is following.
I want to reiterate that since coming to office there has been a plan, there continues to be a plan and what we are seeing is the successes of that plan. We now have a balanced budget. We are going into a surplus. We are reinvesting in Canadian priorities. We are providing tax relief. We are paying down the debt.
We are certainly doing that prudently. We are ensuring that we do not jeopardize the successes Canadians have experienced. We want to do more. We would certainly like to do everything we can, but we do not want to jeopardize this and neither do Canadians want to jeopardize our success and be too extravagant. We have lived for some 30-odd years with continued deficits and continued increase in debt.
We are committed. We have faced many challenges before. We have had to make tough choices. Government is about making choices. I think that the budget will certainly reflects choices that Canadians can agree with and certainly support.
I reiterate that this particular exercise is certainly a very useful one. I thank members who participated in this prebudget debate in ensuring that the government and the Minister of the Finance had the opportunity to hear their input. I certainly welcome any questions that may be addressed to me.