Mr. Speaker, today I would like to take a different approach on reviewing Bill C-72, which is an act to amend the Income Tax Act and implement measures announced in the February 1998 budget. I did hear some of my colleagues talk about the 1999 budget. I am going to focus my attention on the 1999 budget.
I want to say right off the bat that it is very easy for an opposition politician to criticize. We can criticize almost anything. It is also as easy for a government member to put a spin on something that is very positive. That is part of the government-opposition interchange.
It is interesting when a member of the government does a critique of its own budget. That has happened. I am not going to embarrass him by identifying him specifically, but there is a current sitting member of the Liberal government who is a well respected accountant. He came from an accountancy background to this place. I have talked with him personally. I find him to be a logical reasonable individual.
The member said that he would try to do a critique, a review of the budget each time it came out. He has no axe to grind. He has no reason to put a spin on the proposal. He is a straightforward accountant. For the benefit of Canadians, I would like to go over the things that he says about the 1999 budget. Next year there will be an implementation bill just like this one for the 1999 budget.
On the issue of the surplus that has been reported in the current budget, there is an $11.5 billion surplus just reported in this budget. This MP says, and says it very plainly, that the $11.5 billion surplus comes from increasing tax revenues, not from spending cuts. Let me quote that specifically again. The surplus in this budget comes not from spending cuts, which is what the government has been saying over and over again, but from increasing tax revenues.
As an accountant he went through and picked out the figures. This is very useful. He also made a condemnatory statement when he said “These figures here I think have been massaged”. A Liberal member of the government commenting on the Liberal budget said again “These figures here I think have been massaged”.
He turned his attention to spending. The first budget from the Liberals came down in 1994. The last budget was in 1999. He went back and looked at the spending in 1994. This is discretionary spending, something the government could do something about. In 1994, $56.7 billion was spent. In 1999, $54 billion was spent. We heard over and over again about the huge amounts that spending had been reduced by. The difference is $56.7 billion down to $54 billion, a grand total of $2.7 billion, not the figures we have been hearing.
Then he turned his attention to taxes. He did exactly the same thing. He went back to 1994 and to see what the government took in in taxes, and this is a public document and a public record, and the projection for 1999. He found that in 1994 the government took in $116 billion in taxes. In 1999 it proposes to take in $157 billion in taxes. That is an increase of more than $40 billion.
We will go back to the original statement. The original statement was plain, that the surplus in the budget comes not from spending cuts but from an increase in revenue.
I have listened to my colleagues across the way say that it is because the economy is working so much better and they are getting more tax revenue. There is some truth in that statement. There is more revenue because the economy is better, largely because of provinces that are now booming. The provinces that are booming are provinces that have actually had a significant change in their taxes.
The member talked about the debt. He said “My government promised to put revenue excess to pay down the debt”. He looked at the figures. Accountants really have a talent for this. He looked at the figures and found that there is no reduction in the debt. To the member across the way who said that the government has reduced the debt by $30 billion, this is what his compatriot said. There is $580 billion of debt now and that is shown right through to 2000-01. As plainly as I can state it in the member's words there is no reduction in the debt. It is difficult to refute when the figures are so plain.
On the issue of the way the accounting is done is where the member's comments become so perfect. As an accountant he said “The finance minister has hidden some revenue”—interesting words for an accountant—“in things like the $3 billion contingency fund”—which is an emergency fund—“or into lump sum payments for health care which will not be spent until next year”. The member then followed that statement by saying “This flies in the face of good accounting”.
Hark to the words of the auditor general who said exactly the same thing “this flies in the face of good accounting”. The auditor general will not sign off on this method of accounting, nor will the sitting Liberal member who is an accountant. This money will not be spent this year. It should not be booked this year. It should not artificially reduce the deficit.
I digress from the member's comments and ask why would the finance minister not want Canadians to see the surplus? Could it possibly be because there is a lot of pressure on him to spend that surplus now, to go back down the deficit road? I think so. Could it possibly be that the finance minister wants to hold on to any surplus so that it could be used closer to an election? Possibly. Interesting questions.
The Liberal MP, an accountant, then turned his attention to public debt charges. This is interesting. We are told debt charges are going down. The cumulative debt and cumulative interest are going down. That makes sense. The interest rate is going down. In 1997 the public debt charges were 40.9% and in 2001 the public debt charges are 43.3%. They rose. His comment was “He is showing”—that is the finance minister—“cumulative interest going up, yet we know market debt is going down. Something does not add up”. These are not my comments and not my criticism. These are the comments and criticism of the Liberal MP who is an accountant.
On the surplus he says plainly that the government expects an $11.5 billion surplus. He said “I think if it”—the budget—“was based on generally accepted accounting principles, yes, there is a surplus and the public has a right to know how much it is”. We come back to the issue of the hidden surplus. I query again why would the surplus be hidden? The Liberal accountant MP asked the question, not myself. I do not know who asked the question, but he was asked whether the current budget gave a clear and accurate picture of government finances. His answer was an emphatic no. The answer from that sitting Liberal MP was no when asked whether the budget gave a clear and accurate picture of government finances.
It is interesting to look at the way the government balanced its books, which is something I do not believe the public has a good grasp of. The budget was a health care budget. My prime interest in being in the House is health care. We saw all the advertising and heard all the talk about an $11.5 billion increase to health care funding over the next five years. That in itself was wonderful news. We would expect bells to ring across the country when the public heard about it. How could anyone criticize it?
I am not now speaking for the accountant across the way. I am speaking for myself. Since 1993 I have watched cash transfers to the provinces drop $21.4 billion in the previous five years. Let us think of the cumulative effect on the provinces of them dropping $21.4 billion in five years. In the next five years they are to rise $11.5 billion. Is there any wonder why there is no cheering? Is there any wonder why there is no excitement? Is there any wonder why there are still long waiting lines for health services?
I listened to a colleague across the way haranguing the Ontario provincial premier on Thursday on the issue of health care. He said that the provincial government in Ontario had done terrible things to health care. The figures are plain; $1.3 billion were put into health care by the Ontario government while the federal Liberals took out $3 billion.
How could an individual Liberal in good conscience say what he said? It is a great difficulty. I will say it again as plainly as I can. Over five years $21.4 billion was taken out of health transfers and over the next five years $11.5 billion will be put back in. When I speak to kids in grade eight they say to me “Doc, the math doesn't equate”.
The budget is very easy for an opposition politician to critique. I have chosen to use a Liberal MP's critique of it to say that all is not as it is spun. Are there good things in the budget? Let me take a few moments to say yes, there are. Are there things that I will not critique? There are. I believe there are things that my Liberal accountant colleague across the way would say are positive in an attempt to say there is some balance. None of these words were my critique, except for the health care critiques. They are the ones that are probably the most condemnatory.
Let me summarize the comments of the Liberal MP accountant. I have not identified him so that he will not be embarrassed. In summary, the budget surplus comes from increasing tax revenues, not from spending cuts. The debt will the same from now until 2001 according to the budget projections. The Liberal MP stated on the accounting that the finance minister had hidden some revenue. This flies in the face of good accounting practice. On the public debt charges, something is going on that does not equate.
When asked if the budget gave a clear and accurate picture of government finances, and I wish I had asked him, the answer was a simple straightforward categoric no. The auditor general said it. The Liberal MP said it. The accountant MP said it, and I will rest my case with his words.