Mr. Speaker, the federal Liberal government continues to be the number one obstacle to growth in this country. Today we were reading about the latest evidence of Canada's weakening economy. According to an internal federal report, hikes in personal incomes taxes have contributed to a significant decline in the after tax income of Canadians. Stagnant family incomes, a poor middle class and rising poverty were identified as the consequences of Canada's high tax policy. In short, the report concluded that Canadians on average have become poorer in the 1990s.
One of the lesser told stories is the negative impact on the economy brought about by the Liberal government's cost recovery program. There is nothing wrong with a cost recovery program based on reasonable fees, increased efficiency and smarter performance, but credible evidence suggests that the present program is the Liberal government's latest attack on the private sector.
A recent report prepared by the Business Coalition for Cost Recovery, which represents small, medium and large size firms that employ 2.2 million people and contribute $330 billion to the national economy, detailed the devastating impact the federal cost recovery program has had since 1994. Canada's manufacturers have been subject to a massive 153% increase in regulatory fees. User fees charged through cost recovery are among the fastest growing costs of doing business in Canada. The $1.6 billion in regulatory fees charged to businesses in the 1996-97 fiscal year cut Canada's GDP by at least $1.3 billion and cost at least 23,000 Canadian jobs.
The cost recovery fees, as currently structured, are undermining the productivity and international competitiveness of Canadian businesses. For of all the problems caused by cost recovery the government is only gaining 20 cents in revenue for every dollar in fees charged to businesses.
As I have noted on numerous occasions in the House in recent months, if the Liberals were truly concerned about productivity and increased business investment they would have used this budget to place an immediate moratorium on new or increased regulatory fees until a complete overhaul of the cost recovery program were complete. Instead they chose this complicated and inconsistent cost recovery structure that unduly interferes with the very private sector we need to grow for a stronger economy.
These regulations and fees comprise a hidden form of taxation and their excesses need to be curbed to guarantee sustained growth for Canada's economy. I challenge this government to start addressing the root causes of low productivity such as the heavy regulatory burden of the federal cost recovery program.