Mr. Speaker, I am pleased to make some remarks on Bill C-71, an act to implement certain provisions of the budget. Throughout the debate so far, and this includes what I have heard in my riding, one clear theme has emerged: if we want tax reform, vote Reform. That is the first message.
I will take a few minutes to talk about the government's no relief tax policies as shown in Bill C-71 and the effects they are having on Canadians. I want to talk about Canadians who live in the Prince Albert riding, not Canadians in general.
We are having difficulty retaining our youth and our talent. I recognize that they are not always the same, that talent is talent at every age but youth is confined to youth. This phenomenon affects our ability to engage in entrepreneurship and takes away our young people with talent, older people who have been trained in the university system, in the arts and technologies, and our business people.
These people are leaving Canada. Patriotism and pride are not enough to keep them. Patriotism and pride do not feed them or their children. They do not pay the mortgage. They do not make the car payments. They do not pay for fuel and they do not pay the taxes. People are voting with their feet and with their moving vans. That is what is happening in the country under the Liberal government and its high tax policies.
A person may well ask who are the beneficiaries of the high policy. It is the foreign recruiters and moving companies. Very few other people, if any, are benefiting from high taxes aside from possibly tax collectors.
I also want to talk about the negative effect high taxes are having on the protection and maintenance of health care and social services not only in Canada but in Saskatchewan in particular. In that regard I have a letter that I wrote to my constituents which has been copied by another hon. member of the House. It shows the effect of high taxes on Canadians.
What are the Liberals calling this budget? They are calling it the health reinvestment budget or the health budget, but as usual their numbers do not add up. We can just take a look at what the Liberal government's so-called reinvestment in health care amounts to in this budget as evidenced in the details.
In 1993 when the Liberals took power the Canada health and social transfer was $1,453 per taxpayer. When we take into account the latest budget the amount will be $1,005. That is quite a decrease, $448 to be exact or a 31% drop compared with 1993. In 1993 it was $18.8 billion in total. This restores it to $14.5 billion, which is still $4.3 billion less than when the Liberals came into power.
To put this into further context, we should not forget the six years of bracket creep when people had inflationary raises. Also inflation reduces the power of those who have not even managed to get a so-called inflationary increase in their wages. We begin to see the effects this is having on individual Canadians.
The Liberals will be putting back $11.5 billion over the next five years. Big deal. They are taking three dollars from the system for every dollar they put back in. The hon. member for Macleod illustrated this very effectively with a blood bag and a syringe to show how much less is in that blood bank after the Liberal budget of this spring.
The government will raise the income threshold at which the Canada child tax benefit begins to be phased out by $9,590 from its current level of $25,921. When it was announced in the 1998 budget and implemented in July, replacing it with the working implement supplement, the new Canada child tax benefit began clawing back benefits at lower levels of income than the existing system. When it was announced in 1998 the clawback began when a family's after tax income exceeded $25,921.
What effects are Liberal high tax policies having on Canadians with no tax relief in sight? Let me give one example that happened to me recently. I had a request from a family who wanted to see me in my office. In came a young father, his wife and their little child. What did they say? The man was completely mad; he was really upset. The wife was near tears and the child was just plain cute and did not know what she was growing up into.
They are both working trying to put their lives together and to maintain a lifestyle that is suitable for a married family. It turns out with two incomes they are unable to make ends meet. They are looking at possibly losing their car. If he loses his car, he loses his job.
What was he complaining about? He was not complaining about the gross amount of his salary. He was complaining about high taxes, high Canada pension plan premiums and high employment insurance premiums.
The employment insurance surplus was $19.1 billion at the end of 1998. The public accounts indicate that the surplus is considerably larger. We know there is nothing less than that in the account. The premiums were reduced all the way from $2.70 per $100 of insurable earnings to $2.55 per $100 of insurable earnings. These are nickels and dimes. These people are going under and they are crying out for relief from those kinds of things.
The Canada pension plan contribution rate increased to 7% from 6.4% in January 1999, which is an annual increase of $1.4 billion taken out of the pockets of Canadian taxpayers, whether they are business owners and their businesses are having to pay their portion or people who are actually on the frontline doing the work. The Canada pension plan rate has increased every year during the Liberal tenure. It started at 5% in 1993. By the end of 2003 it will rise to 9.9%, which is a 98% increase.
Personal income tax increased through bracket creep. It was never eliminated and it was not mitigated in this budget. We will see another $900 million taken out of the pockets of Canadians through bracket creep.
The tax pain is causing the brain drain. What good is it for the government to promise good health care when the effect that high taxes have over time is to actually diminish the tax base required to support the health care and social services Canadians desire?
I want to turn to how high taxes contribute to an overall depleting effect on our tax base. It does this by driving away our youth and our talent. That is a sad reality. John Roth, chief executive officer at Nortel, stated just last week:
Taxation is testing the allegiance of some of Canada's best and brightest.
That results in a reduced tax base. Peter Foster in yesterday's Financial Post wrote:
Taxes must come down if we want long term revenues generated by economic activity to increase.
Does the Prime Minister not know this? Surely he must. Maybe he just does not care. We wonder what his answer would be. He seems to think that high taxes are part of the Canadian way of life. If he really thinks that, he is living in a dream and it is not the Canadian dream. The rest of them are living in a nightmare.
The Prime Minister might think that high taxes are just part of the Canadian way of life, but he knows they cannot keep increasing. The tolerance threshold has been reached and surpassed this year. The government continues to ignore the actual effects of high taxes on society as we began to see in the past few years. We are watching our youth and our talent go elsewhere.
Those of us who travel back and forth to western Canada or other parts of Canada talk to young people who have been recruited by foreign firms. They are going to find out what improvements are available to them in other tax regimes and they are not looking back. They are not only going south. They are going in other directions. I want to paraphrase a letter that was written to my constituents, and borrowed by another member. The so-called brain drain phenomenon is created by high taxes and is a growing cross-generational problem. Many Canadians think of the brain drain primarily in terms of the younger generation who are heading south to more favourable tax and employment conditions. However, events taking place in northeast Saskatchewan this month highlight a new reality. The brain drain is not limited to youth. It is a serious problem that crosses generational boundaries.
Consider first the recent commentary from influential Canadian entrepreneurs Paul Desmarais and Jim Pattison concerning the insidious effects the high taxation policies of successive Liberal governments, including the Mulroney Conservatives, are starting to have on our country.
Montreal's Paul Desmarais calls Canadian taxes exorbitant and a drain of potential income for Canada. “When the government is too greedy”, he says, “people find other solutions”.
Jim Pattison, also a self-made billionaire from Vancouver, calls high taxes the number one issue for every senior executive in the country. Although he remains in Canada out of a sense of loyalty, he says he does not blame those who leave in favour of lower taxes and a stronger dollar.
One could argue that the opinions of wealthy businessmen are irrelevant to the debate over taxation of the broad Canadian population. However, it is not only boomer billionaires are who are speaking out, people at all income levels are raising their voices in protest, including those whom we assume are the meat and potato beneficiaries of our current tax system, our professionals.
This fact was reinforced to me as I prepared to sponsor a forum on health care in my riding involving my colleague, the member for Macleod, who is the Reform Party's health critic.
In the course of conversations with physicians, other health care professionals and concerned constituents, I was surprised at the interest shown in discussing, not health care, but the havoc the Liberal government tax policy is wreaking on our society.
In a letter and subsequent telephone conversation, one doctor, whose name is being withheld at his request, was invited to discuss health care. He said:
As a physician working in this country for 24 years, I now discover that I have no alternative but to leave this country...over the past five years I have seen friends and colleagues leave this country in disgust due to the brutal levels of personal income taxes...I now pay 54% in taxes and contributions to government...and could not afford to ever retire if I remain in this country...it is obvious that the governments of the day have no interest in meaningfully reducing personal income taxes.
He went on to say that he and at least two of his colleagues were planning to move within the next few months.
This poses a further, more immediate problem. Who will practice medicine in Saskatchewan? How can Saskatchewan, already facing a shortage of rural doctors, ensure a quality health care system when its doctors say they are being taxed out of the country?
The brain drain is neither a phenomenon of youth nor a minor issue. It is a symptom of stress and the predictable result of a bad tax system. We must take it seriously by providing sustainable tax relief or suffer the crippling long term effects into the new millennium.
What I see from this is that the doctor was not even looking for more money. He was not looking for better working conditions or a new place to go. He was not asking for a new hospital, a new office or new operating equipment. He wanted to live a life commensurate with his actual income which is taxed to the point where it is not the income he thought he would have and not enough for him to retire on without being required to work the rest of his life to try to turn his practice over to someone else.
Social science has identified at least one fundamental characteristic of human motivation and that is that humans are motivated to avoid pain. If one is to be motivated to avoid pain then one moves away from it. If the Canadian tax system is causing taxpayers pain they will move away from the tax system, and that is to other countries where the tax regime is not so onerous.
It is easy to understand why our youth and talent are leaving Canada for the U.S. and, I might add, for other places. It is to avoid the pain of paying high taxes here.
Neither loyalty to Canada, nor our good lifestyle, nor the natural beauty of our country is enough to keep them if they cannot make a living. That is a base need of all people.
I also want to mention that we are paying a lot more but getting a lot less. It is the impact that taxes are having on services. We see this dismal aspect in the budget every time we think about the services that Canadians are getting for the taxes that they are paying.
As I pointed out, despite the increase to the health and social transfer, which was not very much, we should remember it was the Liberals who gutted and savaged these things. We have to question their priorities.
I want to talk about an issue that arose in my riding as a result of what the government would call tax cuts or tax savings, which I think is poor spending. The government will open a joint office with the Saskatchewan government, ostensibly to save money. This office will serve a very large rural area with a lot of aboriginal people who use that as their service base.
We will no longer have a federal presence in the town I come from, which has a population of around 5,000 people. To go from there to the next town where there is an employment insurance office takes one hour each way.
These people come into town to use the services, to buy their groceries, to visit the doctor, to visit the dentist, to visit the lawyer, to do their dry cleaner and maybe even their laundry. Whatever services they needed they could get in that town. All of a sudden, those who most need employment insurance services will be forced to drive at least another hour one way to access those services. That means those Canadians who may now be off the government's tax roll, thank goodness, are all of a sudden having to pay their own way.
I have to wonder what the net benefit will be of this. Businesses in my home town will be losing business because these people will drive right by. There is another negative effect of the system, but do they get their tax dollars back? Nothing doing.
How does the government find creative ways to spend the money it says it is saving? We will now have two people driving out a couple of times a week to sit in an office. They will both probably need to have laptops because desktop computers no longer do the job. We all know laptops are more expensive.
They will probably need a vehicle to drive. I have heard a rumour, but I would not doubt it, that they will be driving a Jeep Cherokee to get there. They will be paid overtime for travel. As the weather in northeast Saskatchewan is notoriously unpredictable, more often than not, they will have to stay overnight, in which case they will probably be paid right through the night. They will be on overtime for the rest of the week. They will have their hotel and meals bills paid. What kind of a saving is that going to be?
Consequently, I think we are definitely paying more. We keep on paying more and we keep on getting less under this regime. It is so frustrating for the people in my riding. I had to say these things on their behalf because they have had it.
The young family that came into my office to express their despair at the situation in which they find themselves, both working, paying for child care, paying high taxes, paying high employment insurance premiums and paying high Canada pension plan premiums, where do they find themselves? They are going to lose everything because this Liberal government is simply continuing to collect taxes and Canadians are getting fewer and fewer services for the money they are putting in.
The last two things they asked me was how they could get politically involved and how they could fight the system. I gave them a name and it sure was not the name of the Liberal organizer in my riding. I do not think they would have wanted it even if I had given it to them. They agree with what I said when I started at the top of my speech if Canadians want tax reform, vote Reform.