Debates of March 2nd, 1999

The Budget

[Jay Hill, Reform, Prince George—Peace River, BC]

Yes.

[Paul Szabo, Liberal, Mississauga South, ON]

Mr. Speaker, those who were listening to the speech probably heard the message from the member that Canadians are paying higher taxes.

I quickly wrote down what I saw in the last couple of budgets. I saw an increase in the child care expense deduction from $5,000 to $7,000 for those who provide child care for preschool children. I saw a total elimination of the 3% surtax that was intended for deficit elimination. I saw a $675 increase in the basic amount of the non-refundable tax credit for all Canadians. I also saw that 600,000 Canadians were no longer paying tax.

On top of that, and the member has not taken it into account, I saw the government provide each and every Canadian with the opportunity to invest in RESPs for their children's education, another $400 a year annual credit.

I also saw a $1.7 billion increase in the non-taxable child tax benefit. I could go on but being an accountant I sat down and I calculated that Canadians in fact are paying less in taxes and getting more non-taxable benefits than they ever have since 1993.

What does the member mean by bracket creep? Does he understand?

[Jay Hill, Reform, Prince George—Peace River, BC]

Mr. Speaker, it is interesting that the hon. member should ask that question. I asked the question who is the bracket creep some four years ago. I wanted someone on the other side to take responsibility. Someone on the other side has to be this fellow, this mystery man named bracket creep that keeps ripping more and more taxes out of Canadian pocket books.

The fact is bracket creep sees that people are taxed more and more heavily because it is not indexed to inflation. Taxes are not indexed to inflation and therefore people are put into a higher bracket and taxed more heavily. This results in more and more revenue flowing into government coffers.

The hon. member mentioned the tax credit for child care for preschool children. It is interesting that the member raised that issue.

Mr. Speaker, I see you are on the edge of your seat. Are you having a problem? Maybe the House could help you out with it. I am not sure what the problem is.

[The Acting Speaker (Mr. McClelland)]

The problem is we have another question coming.

[Larry McCormick, Liberal, Hastings—Frontenac—Lennox And Addington, ON]

Mr. Speaker, I take this opportunity to remind my colleague from Prince George—Peace River that his Reform Party health critic said that the $50 million designated for rural health care is an excellent investment by this government.

We are investing in Canadians, rural Canadians. I know this member represents a rural part of Canada. So these moneys along with telehealth and telehomecare will make a great difference.

Does the member for Prince George—Peace River agree with his colleague from Macleod?

[Jay Hill, Reform, Prince George—Peace River, BC]

Mr. Speaker, are you going to give me enough time to adequately respond this time? Or, are you going to be on the edge of your seat the whole time I am standing here and make me nervous about how much time I have left to respond?

[The Acting Speaker (Mr. McClelland)]

The hon. member of Prince George—Peace River has a minute and 30 seconds and it is counting down.

[Jay Hill, Reform, Prince George—Peace River, BC]

Mr. Speaker, in that case I will try to be brief. Obviously the Liberals must get something right in their budget. Some small part of their budget must do some good for Canadians. That does not overcome the sad fact that the Canadian people are the ones who are paying over and over again for every small increase in health care or whatever.

We have said repeatedly in this place for five long years that the government has never got its priorities right about spending. It would have much more money to invest, as it likes to call it, in health care if it would quit spending money so foolishly and quit going over budget all the time like it is doing again in 1999.

[Dennis Mills, Liberal, Broadview—Greenwood, ON]

Mr. Speaker, I rise on a point of order. In his speech the member referred to the Department of Revenue Canada as geniuses. I think he would like to correct the record on that. He tried to say that was a reality and we all know that is a myth.

[Jay Hill, Reform, Prince George—Peace River, BC]

Mr. Speaker, if that was a point of order I need my cowboy hat.

The fact of the matter is that I was being very sarcastic in referring to Revenue Canada as geniuses. If those geniuses over there cannot figure out then they are not geniuses.

[Jason Kenney, Reform, Calgary Southeast, AB]

Mr. Speaker, I do not know how to match that enlightened exchange. I left my cowboy boots off but I will do my best to get into this pay more, get less budget.

I am shocked and appalled at some of my hon. friends opposite who purport to know what wealth creation is all about. They know how to balance a budget and to meet a payroll. One of my friends from Mississauga South claims to be an accountant. My condolences to him.

These people should know how to read a set of financial documents. They should be able to understand what a surplus is, what a deficit is, what a tax is and what a spending increase is. Apparently they do not.

I have spent the last several years of my life studying public finance. I may not be any great expert, but I can say that the budget document presented to this place by the finance minister three weeks ago was not a budget. When it comes to presenting in a transparent fashion the public finances of the country the budget was a joke. No serious financial analyst in the country would give the budget a unqualified grade in terms of the transparency of its reporting of public spending and government taxing.

That has to be the starting point of this debate. Even though most laymen do not want to spend much time sifting through the details and the numbers to come to the bottom line, the reality is that we as parliamentarians must be able to read that document and understand what the heck is going on in terms of spending, taxing, debt borrowing and debt.

We cannot do that because the finance minister has become the laughing stock of public accounting. He included spending in this year's budget that will happen two years from now. In some areas of this year's budget he included spending that happened two years ago. He called spending increases like the child tax credit entitlement a tax cut. There are some tax increases which he calls spending cuts. As a starting point, it is virtually impossible to get to the bottom of what the budget is all about.

We as the opposition do not have to make an argument about the fact that the budget will actually increase the taxes of Canadians and will result in fewer government services than was the case in 1993. We do not have to make that case because people know it intuitively. They know it through their experience.

People know they are paying more taxes now than they ever have before in their lives because of the irresponsible fiscal policies of the government. They know that the standard of health care which they receive is at a lower level than they can ever remember.

We do not have to make a political argument to the 186,000 Canadians who stand today on waiting lines for essential health care services. We do not have to make a political argument to the 1.2 million low income Canadians paying taxes today who were not paying taxes when the government came to power in 1993. We do not have to make a political argument about the effect of the budget and its predecessor budgets on middle class single income earner families that are paying more and more and more year after year, even though they are working harder and trying to play by the rules.

We do not have to make that argument because they see it on their paycheques. They see it when they go to the emergency rooms. They see the deterioration of public service as a result of the government's misplaced spending priorities. They see that they are struggling harder and harder just to get by. It really is not a question of making a political argument.

I heard the member for Mississauga South just now and earlier during question period the hon. Secretary of State for International Financial Institutions suggest that among other things the budget would somehow take 600,000 low income Canadians off the tax rolls by allegedly raising the basic personal exemption.

Again, as I pointed out in question period, with the new Liberal math they forget to tell us the whole story. Part of the story is that since 1993, 1.2 million low income Canadians, those who can least afford it, many of whom are under the poverty line, single mothers and single parents struggling to get by or seniors on fixed incomes, have seen themselves pushed on to the tax rolls by the government's pernicious back door tax grab called bracket creep, by the pernicious tax on inflation.

If these people get a cost of living adjustment in their pension cheques or their minimum wage income from working in the labour force, if they get an automatic COLA, a cost of living adjustment, they end up paying taxes not because they are making more in real terms—they are making the same in real terms—but because the government decides to generate more revenue to finance its insatiable appetite for spending in a way that is not transparent, in a way that Canadians cannot see it and in a way that parliament cannot approve it.

In a study released last week by the Canadian Taxpayers Federation, an organization with which I have some familiarity, it was reported that since 1986, since the then Progressive Conservative government brought in bracket creep and deindexed the tax system with respect to any inflation under 3%, the government has generated an annual revenue haul of $12 billion. That is just as a result of bracket creep. Next year Canadians will end up paying $1,300 more than they did before as a result of the consequence of bracket creep.

The government has added 1.2 million people on to the tax rolls. It has pushed millions of modest income Canadians into higher tax brackets. Then it claims, lo and behold, that by some absolutely token adjustment in the basic personal exemption in the budget it will be lifting 600,000 Canadians off the tax rolls.

Government members forget to tell us that they have not indexed the tax system to inflation. They have not eliminated the pernicious tax grab called bracket creep. It continues its nasty work of increasing taxes on Canadians so that 300,000 more Canadians will be paying taxes two years from now as a result of the effects of bracket creep.

Let us just do some simple math here. Liberals may have to get out their calculators to follow it. If we take the 1.2 million people the Liberals have added to the tax rolls since 1993 and subtract their figure of the number of people who will be taken off the tax rolls as a result of the increase in the personal exemption, we end up with a net of 600,000. If we add to that 600,000 new taxpayers the 300,000 who will end up back on the tax rolls as a result of bracket creep, what is the net number? Maybe some of my friends opposite could not follow the math, but 900,000 low income Canadians will be paying taxes two years from now. These are the Canadians the government claims to speak for in terms of those who need the most help from society.

I do not need to make the argument because grassroots Canadians make it every day. As revenue critic I get flooded with letters from people who tell me about it. For example, a constituent of mine, James Mitchell, e-mailed me recently to say:

I just read about the federal Liberal budget. I am married, have two small children. My wife has chosen not to work but to stay at home and raise them. I make $80,000, which is sort of a middle class income, and therefore the government treats me as a cash cow. As an employee I have no deductions. My wife has been forced to dip into RRSPs. I don't get a tax credit for her or for our children. We are living from paycheque to paycheque and have no savings. I am appalled that the Liberal view is to spend instead of reduce taxes. While I was born and raised in Calgary I feel that there is no hope in this country for a family like ours. I am now making plans regrettably to move to the United States where I will be able to save for my future and provide for the education of my two children and at the same time maintain and improve my standard of living.

That is a tragedy, a tragedy that was reiterated by Arthur Friedrich who wrote to the National Post yesterday. He is a steelworker who indicates that at one point he was a campaign worker for the minister of heritage. He says that he will be moving to the United States as well. He started work as a steelworker. He goes through his family's fiscal situation and winds up by saying that he is being bludgeoned by the tax system and deeply wishes that things were different. “I like Canada and really wanted to stay, but I no longer see any future for my children in this land”. This is the tragedy of the Liberal government's pay more, get less approach to fiscal mismanagement, and it must end.

[Larry McCormick, Liberal, Hastings—Frontenac—Lennox And Addington, ON]

Mr. Speaker, I have a question for the hon. member from Calgary.

We are all allowed to make mistakes. Reformers brought forward their budget for one or two years. I believe it has been here for a few years. I wonder out loud why they are no longer bringing forth a budget document or, if they have one, why they are hiding it. It was a great idea to have this shadow budget until the world collapsed on them.

In their budget the Reformers would slash and burn and sacrifice the future of Canadians. They would sacrifice health care of Canadians. It is not fair for them to turn their backs on our seniors, our youth and our unemployed just for the sake of tax cuts to make some certain area of the country more wealthy.

We on this side of the House believe in our country and in its citizens. Reformers almost made a mockery of my saying that we invest in our country and in our people.

I ask the hon. member the same question I asked another member. He is a person who represents a very urban area. The budget offers many possibilities of funding programs for people in remote areas of the country and in rural Canada. When I stand in the House I am speaking for all people in the country. I want to represent all people in the country. What about the $50 million designated for rural Canada which the Reform Party health critic says is an excellent program? Does the hon. member believe in it?

[Jason Kenney, Reform, Calgary Southeast, AB]

Mr. Speaker, I appreciate the question. I can advise the member that unlike any other opposition party, at least in my political lifetime, the Reform Party has year after year presented a detailed alternative to the government's fiscal plan.

If the member would like it, he can get it from the website at www.reform.ca or by writing me postage free at the House of Commons. The document he would be looking for is called “Taxes and Health Care: A Prebudget Submission of the Official Opposition”. We go through in some great detail the kind of choices we would make.

Yes, we would spend more on health care, more than the government has. We would completely replace the $16 billion cumulatively that has been taken out of the health care system by the hardhearted misplaced priorities of the government. We would do it not by raising overall spending.

Liberals cannot imagine. They say how can you increase one program without increasing overall spending? It is magic. The word is called priorities. We think health care is a higher priority than the kind of corporate welfare that was increased in this budget by grants, subsidies and loans to corporations, their friends in the big corporations.

We think health care could be increased not by increasing overall spending but by cutting low priority spending and the kind of pork barrel ministry of the minister of heritage and by reducing subsidies to bloated crown corporations and by privatizing redundant crown corporations that can operate more efficiently in the private sector and by eliminating grants and handouts to interest groups.

Billions could be saved, taken from low priority wasteful pork barrel spending and put into the high priority program area of health care.

[Judy Wasylycia-Leis, NDP, Winnipeg North Centre, MB]

Mr. Speaker, the member has not been very clear about his solutions to the problems of the health care system today.

Given all the comments of his colleagues around support for a parallel private health care system, support for core and non-core health services being available outside medicare, what is the position of the member's party with respect to support for for-profit companies? What does the Reform Party think about money from the federal budget going into a province like Ontario to fund, to line the pockets of large American based corporations like Olsten to provide home care?

What is the real position of the Reform Party when it comes to the steady slide toward an Americanized two tier health care system?

[Jason Kenney, Reform, Calgary Southeast, AB]

Mr. Speaker, our position is that we support a universal, accessible, publicly administered health care system that is administered by the provinces with national standards agreed on by the provinces in a co-operative fashion.

What we are opposed to is the kind of multi-tier health care system that governments like this federal Liberal government and the NDP governments in Saskatchewan and British Columbia have given us which have forced Canadians on to these waiting lists in such a way that if they want to get their critical care tended to they now feel they have to take their private dollars and go to private clinics in the United States.

That is wrong. That kind of two tier NDP style health care should come to an end by properly protecting the public system.

[Dennis Mills, Liberal, Broadview—Greenwood, ON]

Mr. Speaker, I listened carefully to the members for Prince George—Peace River and for Calgary Southeast. The member for Prince George—Peace River said tell the story, tell the whole story, we are not shooting straight.

I listened to the member for Calgary Southeast. Not once in his remarks did he offer any constructive alternative. Leadership is all about dealing in hope. The reality that Canadians surely understand is that six years ago we had an unemployment situation of 11.4% when we assumed power. When this budget was announced it was 7.8%.

I am not proud. None of us are proud of that 7.8%, especially in remote areas of our country where we have unemployment numbers far in excess of that and especially the huge numbers related to youth unemployment.

Let us be candid. We cannot be proud of those numbers. When we talk about dealing in hope, we talk about where we were six years ago and where we are heading. What is the trajectory of where this government's financial plan is headed? I believe the Minister of Finance has the trajectory going the right way.

Very few Canadians realize that one of the things we have had to do in order to create an economic climate that would cause businesses to invest in Canada and those businesses here to further invest was create a climate of stability, a climate where those jobs that have been created in the last few years, almost a million and a half, would remain.

That does not happen unless the expenditure plan of this government came under some control. Quite frankly I am surprised that the Reform Party does not take credit for this. The reality is that because of the pressure of Reform in the last six years in my humble opinion the cuts around here have been so drastic in so many areas. This was done all in the name of putting the fiscal framework of this country back together. I think quite frankly that we have gone in many cases away too far with the fiscal discipline in this place.

In this budget we are just beginning to see a return to a sensitivity toward some of those things that really built this nation. We are beginning to replenish the health care system in this country.

By the way, I say quite openly, I still think we have a long way to go. The reality is we had to do it in the context where at the same time we could keep the economic confidence of this country moving forward. We all know how fragile economic confidence is. I think the Minister of Finance has been faced with a very tough balancing act. He has had to get that trajectory of fiscal responsibility going the right way but at the same time we all know that average Canadians, low income Canadians and seniors have carried an awful lot of economic pain on their backs.

As I said earlier in my remarks, today is the day when we should be dealing in some hope. The member for Calgary Southeast should have stood here today and acknowledged the fact that the fiscal framework was heading in the right direction.

I agree with the member for Calgary Southeast when it comes to comprehensive tax reform. I totally agree. I think this is one issue for parliamentarians in all parties. The separatists have already said in committee if they ever did become a separate country the first thing they would do is have comprehensive tax reform. I believe the economy is going so well now, even though there are better times still needed, that separatism is almost dead.

I spent last week in Quebec City and it is hard to find a separatist. They are all coming home. They are all coming back to the reality that Canada is a much better place whole than divided. That to me comes from an economic climate that is improving.

I stand in the House today satisfied that we are heading in the right direction. Do we have to do more? Yes. We have to do a lot more, especially in Atlantic Canada. We have too many young people in Atlantic Canada who have absolutely no work and there does not seem to be any opportunity for work.

I know the Reform Party calls it, not patronage, but pork barrelling. I would be proud to push, press, prod the Minister of Industry to move some of that innovation money to Atlantic Canada where those highly educated young Atlantic Canadians could get involved in computer programming, creativity, computer manufacturing and become a leadership section of Canada in the whole realm of information technology. Would I take $1 billion and move it to Atlantic Canada and reinforce that sector out of the information technology fund, the knowledge based fund? I would do it in a second. I know the Reform Party calls that pork barrelling. I do not call it pork barrelling when we see a region of this country that needs extraordinary help because its natural resource fell away from it through no fault of its own. That is what I would do about that problem of youth unemployment in Atlantic Canada.

I say to the members across the way that we still have a long way to go, but the fact of the matter is we are seeing all kinds of hope right now. The fiscal framework is moving in the right direction. The health plan is being replenished. There are actually little sparks of hope for comprehensive tax reform in this budget. There was at least an attempt by the Minister of Finance to get lower income Canadians off the tax rolls. It did not go far enough in my opinion, but those are the kinds of things that a constructive opposition would acknowledge and then complement with some specific ideas of its own.

So far here today I can honestly say that all I have heard have been dealers in gloom. That is not leadership. They should be dealers in hope and they failed that test today.

[The Acting Speaker (Mr. McClelland)]

There seems to be a lot of interest in questions and comments, so we will keep our questions and comments to one minute on the question and one minute on the response.

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

Mr. Speaker, the hope the member talks about should be the hope of the millions of Canadians who have been driven into the ground by the oppressive tax regime of this Liberal government. That is the hope the Reform Party holds out for Canadians, that some day when this government is replaced by a fiscally responsible government, by a government that recognizes the hard work and the sacrifice made by hardworking Canadians, we will give them the tax relief this government will not.

We want to talk not in rhetoric as the previous members did but in facts. Let us look at the Liberal record since 1993.

Since 1993 the average working Canadian has seen his paycheque decrease by over $2,200 in increased taxes, increased taxes per Canadian worker.

The average Canadian household has seen a decrease in disposable income by over $4,000. That is over $4,000 that families cannot spend on food and clothing and education, let alone try to save any money.

We have also seen the overall taxes increased by this government by 40—

[The Acting Speaker (Mr. McClelland)]

The hon. member for Broadview—Greenwood.

[Dennis Mills, Liberal, Broadview—Greenwood, ON]

Mr. Speaker, it is not rhetoric. I say this humbly to Canadians that we came to the responsibility, the trust for this government with 11.4% unemployment and it has been reduced to 7.8%.

There has been a cost to Canadians to create that economic climate to maintain jobs, plus the 1.5 million that had been created. There has been a cost. The member is right. I have acknowledged that he is right. One of the single biggest issues that we have to face as a whole parliament is comprehensive tax reform. In the process of getting there, do not knock the hope that we are moving in the right direction. That is a very principal point.

[Jean-Guy Chrétien, Bloc, Frontenac—Mégantic, QC]

Mr. Speaker, a little under a year ago, during a question period in the House, the then leader of the Conservative Party, Jean Charest, today the ally of the member for Broadview—Greenwood, said that any problems in health care and in Canada's hospitals were the fault of the Prime Minister of Canada.

Does the member for Broadview—Greenwood realize that, since the Liberal Party has been in office, it has cut $41 million in health care alone in the Chaudière—Appalaches? The Eastern Townships region, where the riding of my colleague, the member for Sherbrooke, is located, has also been cut $41 million.

For the Lac-Mégantic hospital, this represents $1.8 million; for the Asbestos Region hospital, it represents $8.7 million; and for Bernierville's Saint-Julien hospital, it represents $5.6 million. The Liberals are the ones responsible for the mess in the health care system.

Since the Liberal Party came to office, it has cut no less than $33 billion in health care, up to the year 2003. Is that cause for hope?

[Dennis Mills, Liberal, Broadview—Greenwood, ON]

Mr. Speaker, the Liberal Party is the party of hope. The Bloc Quebecois is the party of despair.

We know very well what our challenge is in Quebec. Our challenge is to show Quebeckers that it is better to be a part of the whole of Canada than trying to fight and be an island alone by itself.

After spending the last week in Quebec I can say to members opposite that their joust about being separate from Canada is over. I talked to hundreds of Quebeckers last week and separatism is dead, and sovereignty association is not far away from being dead.

[Jason Kenney, Reform, Calgary Southeast, AB]

Mr. Speaker, I have a lot of respect for this member as the most outspoken advocate of comprehensive tax reform in this place, but I want to ask the member to be honest with us.

He says that he is satisfied with this tiny, little increase in the basic personal exemption when what we continue to see in budget after budget are more loopholes, more complexity, more compliance costs and a more Byzantine tax code year after year. Does he not think it is time we started—

[The Acting Speaker (Mr. McClelland)]

The hon. member for Broadview—Greenwood.

[Dennis Mills, Liberal, Broadview—Greenwood, ON]

Mr. Speaker, the day the member for Calgary Southeast was elected to this Chamber I actually celebrated his victory because I thought from day one that when he got here he would press all of us to get into comprehensive tax reform.

He should have been doing that three months before the budget. Instead we played around with pepper spray and gossipy conversations on airplanes.

I pray that this member, who understands tax reform better than all of us put together, will make it his personal mission in the next six months that we get on to comprehensive tax reform so that it is part of the next budget.