Mr. Speaker, I rise to say a few words on this very important budget debate today. I remember the Minister of Finance in London last fall saying in his financial update that we were into the age of a surplus.
When we get into the age of a surplus we can start looking at the values of a society in terms of where we want to invest our money and in terms of the new fiscal dividend. It is a new era. It is a new age. It is a new chapter in terms of where the country wants to go.
Because of that I looked forward to this budget with a great deal of interest as the dawning of a new age, a new era, a new direction for Canada. Because we have turned the deficit corner what would the fiscal dividend be used for?
We listened to the Canadian people and we heard a great deal of optimism about reinvesting in people, health care, education, a children's agenda and the farm crisis, all kinds of things for ordinary people and bringing down some taxes that affect them such as the GST, bracket creep and others as well.
If we go back to 1995 we notice that the fight against the deficit was carried out by a radical slashing of social programs, the most radical slashing we have ever had in Canada. It was much more radical than any Conservative government under Brian Mulroney or John Diefenbaker or any other Tory in the history of the country had ever done. The Minister of Finance slashed and burned social programs in Canada to the point where social programs such as health care are in jeopardy today.
Then came last night. Last night the minister rose in the House to present his budget. I thought for a while I had a health problem. I thought I had a hearing problem. I kept hearing the Leader of the Opposition but I kept seeing the Minister of Finance. I checked with my colleague from Kamloops and he was adjusting his glasses. He was looking around. He saw the Minister of Finance but he thought he was hearing the Leader of the Opposition.
What we had last night was a very important paradigm shift by the government, moving in a sharply conservative direction from the past history of Canada, from the past history of the Liberal Party. We had a very conservative tax cutting budget.
I checked more closely and watched the Leader of the Opposition. He was embarrassed. He was blushing. He looked very red in the face because what the Minister of Finance was saying remained the things the Leader of the Opposition had been advocating for the last two or three years. Meanwhile the Minister of Finance was boasting and bragging about the new direction in which the country was going.
A friend of mine has some very appropriate buttons. I should not mention another member's name in the House but I can read what the button says: “Paul Martin for UA leader. Paul Martin for leader of the United Alternative”. The Leader of the Opposition may have competition for the leadership of a new conservative party.
What we have seen very importantly is a paradigm shift. We had the deficit fought on the back of social programs. We expected that once we got to a surplus position the social programs would be reimbursed, that health care would be reimbursed, that education would be reimbursed, and that people who had paid for the fight against the deficit would all of a sudden get the positive result of a fiscal dividend. However the opposite happened.
We now have the smallest government we have seen in the country since 1949-50 in terms of government spending and government programs. The 2000-01 fiscal year spending on government programs will amount to 11.6% of the GDP. That is down some 5.3% from 1992-93 when government spending was 17.5% of the GDP in Canada.
Investment in government programs has dropped by $4 billion since 1993-94, the year Brian Mulroney left office and the current Prime Minister came into office. In the budget speech the government boasts about this radical downsizing of the public sector and federal government programs. That is a drop of $4 billion at a time when inflation is gradually increasing costs, when government revenues are going up and when the affordability is there to expand government programs for health care, education, homelessness and farmers. There is a cutback of $4 billion in terms of government programs which help ordinary people.
There is a shift in values. I ask where those good old time Liberals are, the Lester Pearsons. After its start in Saskatchewan he started a national health care program that brought in the Canada pension plan. Where is Pierre Trudeau? Where is Paul Martin Senior, the national father of many of our social programs who boasted about building social programs and expanding them when they became affordable? Where are those old time Liberals?
In the House today many Liberals are hanging their heads in shame as they think back to the legacy of the Liberal Party which tried to build some social programs and to invest in government policies. Those programs are now gone. Where have they gone? Some of them are in the Senate. Others have just gone out of politics, but where is the legacy of the old Liberal Party?
We have had a radical downsize like we have never had before in terms of government programs and social programs. Instead of spending about 75% in terms of health care, education, the farm crisis, children and senior citizens, in the budget for fiscal year 2000-01 about 25% of the surplus is going into these programs and 75% will go into tax cutting and cutting back on the national debt. It is exactly the other way around to the way the priorities should be. We should be reinvesting in people.
I want to look at some of the interesting facts. In the next four years they are projecting tax cuts of $58 billion. The spending on transfers to the provinces for post-secondary education, health care and other social services will be $2.5 billion: a billion this year, a half billion next year, a half billion the third year and a half billion the fourth year. That is $58 billion for tax cuts and $2.5 billion for health and post-secondary education. For every dollar that goes to cut taxes, some two pennies go into increases in health care.
What does that mean?
Two days ago I was visiting a person in the Pasqua Hospital in Regina. I talked to some of the nurses about the crisis in and the shortage of health care. No matter where we go, whether it is the Pasqua Hospital or any hospital in the country, we get the same story about health care being in crisis.
The federal government in the days of Paul Martin Sr. and Lester Pearson funded health care on a 50-50 basis with the provinces. What is it today? Today, under the son of Paul Martin Sr., about 13 cents or 14 cents on the dollar comes from the federal government, depending on the province. It is no wonder that Liberals hang their heads in shame in the House today with this kind of track record.
What does it mean in my province of Saskatchewan? Over the next four years this $2.5 billion will mean $80 million to the province of Saskatchewan. That is enough to fund health care for one day, two days or three days in those four years. I suspect it will be the same in Manitoba, New Brunswick, Nova Scotia or any of the smaller provinces in the country. That is what the Liberal Party is giving us, funding for health care for an extra three days in the province of Saskatchewan.
In fact the effects of this budget will be even worse in Saskatchewan. Because of the changes in the tax system our province will be at a net loss in terms of what it receives in transfers from the federal government. There will be an extra $80 million in transfers, but a loss when it comes to the change in the tax system because our tax system, except for Quebec, is piggy-backed on the federal tax system. It is no wonder there is a great deal of shame across the way.
Years ago the Liberal Party would boast about the role of government and the public sector in building a strong network of social programs to help Canadians who need help. The Liberals are now changing on a dime. They are intimidated by the Leader of the Opposition, intimidated by the Reform Party. They have slashed $4 billion from government spending since they took office from former Conservative Prime Minister Brian Mulroney.
It is no wonder the Canadian Medical Association is saying that there is not enough money in the budget for health care. It is no wonder the people are worried about an American style of health care, two tier health care coming into the country. What the Minister of Finance did last night was open the floodgates to the possibility of the American style of two tier medicine. The federal government is not paying its fair share of the cost. At 13 cents or 14 cents on the dollar, when it used to be 50 cents, the government is inviting the provinces, in particular Alberta, which has the cash, to implement a two tier system of health care.
I remind the House that in the United States 48 million Americans are not insured for health care. They are mainly poor people, black people, people living in inner cities and people living in rural areas. That is the kind of vision the Minister of Finance has in mind for Canada. It is not the Canadian way. It does not reflect Canadian values. It is not what Canadians are telling MPs from one end of the country to the other. That is not the way we want to go in the New Democratic Party.
We need more money for health care. We need more money for education. We need more money to invest in ordinary people and in services for people. That did not happen last night. Last night there was a shift in the values of the Liberal Party, which is adopting the agenda of the Reform Party. That is why the Leader of the Opposition was blushing. He did not know what to say. All he could talk about last night in front of the cameras was HRDC and how the government had spent money in those programs over the last two or three years.
I turn for a moment to education and the children's agenda. A number of months ago the Prime Minister spoke of a children's agenda. Where is that children's agenda? It is not there. Where is the extra money for education? The extra money, except for a small portion of that $2.5 billion over four years, is not there. It is not there at all.
If we want to build a stronger country and a more competitive country, if we are concerned about the so-called brain drain, then the place where we should start investing immediately is in the children's agenda, in child care, in early childhood development and in post-secondary education so that we can invest in human resources, training and education to create in the future a workforce that is second to none in the world and one which will build this country into a strong country in the next century.
That is the vision and that is the direction in which we should go. Instead, the income gap is widening. There are more and more people living in poverty. There are more and more kids living in poverty, more and more kids without opportunities some 10 years after we passed a resolution to eradicate child poverty by the end of the last century. Now we have the money. Now we have the surplus. What does the Liberal government do? It decreases spending in proportion to our GDP rather than increase it. It is the agenda of the Leader of the Opposition and members of the Reform Party. They have intimidated the Liberal Party, which has responded in kind by bringing in their agenda, which is not the way that Canadians want to go.
I would like to speak about the farm crisis. We have the worst crisis in the farming sector in Saskatchewan and Manitoba since the 1930s. We have had protests. We have had people being forced off the land. We have had bankruptcies. We have farm stress. We have had people committing suicide. We have had people on hunger strikes. We have had tractor demonstrations. We have had questions put by members of this party in the House of Commons for the last year. We have had delegations led by Premier Romanow and Premier Doer.
With all the protest, the lobbying and the questioning that is going on, what did we get from the federal government? We got a measly $240 million last week, when all the major farm organizations in the prairies were saying that they need a minimum of $1.3 billion for Saskatchewan and Manitoba if they are to survive, seed crops next year and the year after and maintain the family farm. That is all they got. There was nothing added in the budget.
Last night there was nothing in the budget about a long term farm program, which prairie farmers are saying should be based on the cost of production. That would give them some guarantee that they would get back at least their costs and a decent income in the years that lie ahead. Where was that vision? That vision was not there, despite the fact that European farmers are being subsidized to the tune of 56 cents on the dollar by the treasury in Brussels and American farmers are subsidized by 38 cents on the dollar, while our Canadian farmers get 9 cents.
Agriculture has taken the biggest hit next to social programs from the Minister of Finance and the Liberal government with the elimination of farm support programs and the Crow rate over the last few years. Now that we have a fiscal surplus, what is there for farmers? Mere peanuts for farmers and nothing in terms of a long term vision.
This is a paradigm shift in Canadian politics. We are seeing the Liberal Party shift to the right and adopt the agenda of the Reform Party in terms of fiscal conservatism, in terms of the law of the jungle and people having to make it on their own in terms of the marketplace.
It does not matter where we look. Take, for example, the CBC. There was not a penny last night for the CBC. There was very little for arts in terms of a vision for our country, taking our country back and standing for Canada and our identity.
There was very little for international development in terms of playing a role in the third world.
There was nothing for parks.
I want to mention taxation. There were some good things done in terms of indexing the taxation system and increasing the basic exemption. After our party has been pushing, year in and year out, for a fair and progressive move for the ordinary Canadian citizen, the Liberals finally listened to this party and to the Canadian people and indexed the taxation system.
At the same time they had to throw something to their wealthy friends. They are going to change the capital gains system so that instead of being taxed on 75% of capital gains, people will be taxed on only two-thirds of their capital gains. Someone who is a wealthy person and makes $200,000, $300,000 or $400,000 a year in capital gains will get a major tax break compared to the ordinary citizen.
It is the same with RRSPs. We can now invest 20% of our RRSPs in foreign markets. That is a considerable expenditure by ordinary Canadians, amounting to billions of dollars a year. Now the government, despite what the Canadian people are saying, wants to increase that to 25% and then to 30%. The taxpayers of this country are subsidizing people to invest in the economies of the United States, Asia or Europe, and yet it is the taxpayers' money. These things are going in the wrong direction.
In the remaining time that I have I want to put a bit of a human face on the budget that we saw last night. We have been in touch with a few people this morning and we have heard different reactions to the budget. For example, we spoke with John, who is a currency trader in Toronto. He is one of those guys in red suspenders. He was very happy last night. In fact, this morning he had a bit of a hangover from popping all the champagne. He was happily toasting the Minister of Finance because he made $200,000 in capital gains. With that kind of capital gains he will have an extra $8,000 in his pocket because of the change. It was not a bad budget for John. It was no wonder he was popping the champagne and munching on caviar as he watched the Minister of Finance deliver a budget that was good for him because of the capital gains exemption.
We also heard from Donna. Donna is not like John. Donna is a high school teacher. She earns $60,000 a year and comes from a one earner family of four. Next year she will get a tax cut of $1,007. By 2004 she will have a tax cut of $1,477. What does this tax cut do in terms of lost services for Donna? She has children in university. She sees tuition fees going up, and yet there are no increased transfers for education and health.
In 1990-91 the average arts tuition at the university where her son went was $1,496. In 1999-2000 that tuition had gone up to $3,370, a hike of 125.9%. The reason is that the federal government has not kept up its transfers to the provinces for post-secondary education.
The Liberals have help from their friends in Ontario, like Mike Harris, whom they seem to worship nowadays. By the way, Mike Harris increased spending on government programs at the same time that this government decreased spending. We have a government that is even more Conservative than Mike Harris. Donna is a net loser as a result of the budget of last night.
We heard from André, who is a student. What is in the budget for him? Nothing at all. Tuition fees will not go down, they will go up. There is nothing new in student loans for André.
We heard from a retired couple. Milfred and David live in Kamloops. They make $30,000 a year. They will see their personal taxes reduced by $546 a year, or $1.50 a day. Through the tremendous generosity of the Minister of Finance, by 2004 they will be able to go to Tim Hortons to share a couple of cups of coffee, if they are small cups. They would sooner see that money invested in the health care system and education for their grandchildren than in $1.50 to buy a cup of coffee at Tim Hortons.
Doug is from my hometown of Wynyard. He will make probably $2,000 or $3,000 next year. He may get an $8,000 payment from the federal government. He will not be paying any income tax. There is nothing in the budget for him. There is nothing more for farmers. There is nothing for their cost of production. There is nothing for him.
This budget is very unfair in the way it treats ordinary people. We need a vision in which we invest in people, social programs and health care; not a budget and a government which governs for the wealthy.