Debates of Feb. 29th, 2000

The Budget

[Pat Martin, NDP, Winnipeg Centre, MB]

Mr. Speaker, the Liberal members on the other side are doing a very good job cheerleading and boosting their budget, but I can guarantee that not everybody in the country is doing cartwheels in quite the same way.

We have received a series of critical faxes from organizations like the Canadian Medical Association, the Canadian Health Care Alliance, the Canadian Federation of Teachers and the Canadian Chamber of Commerce that point out the irony of this.

In a budget, in which the primary focus and concern was to fix health care, we have seen a meagre and paltry $2.5 billion. I remind the hon. member for Vancouver Quadra that in the province of Manitoba that amounts to about $20 million per year over four years. This is an amount of money that is almost insignificant. It does not register in the total overall health care spending.

Of all the initiatives and the lofty ideas the member had in terms of spending and reinvesting in the knowledge sector and post-secondary education, what does he suggest Manitoba should do with its $20 million for health care, post-secondary education and social allowance?

[Ted McWhinney, Liberal, Vancouver Quadra, BC]

Mr. Speaker, I accept the challenge. I think the MPs from Manitoba should do what I have been doing for the last six or seven years.

I have no reproach for engaging myself in boosterism. I explained what pure research was in the House. I explained it to my caucus. I persuaded people. I and my office staff spent 250 hours of work on the TRIUMF project. We had the good fortune to have a science minister who, although a very distinguished lawyer, was not a scientist in the natural science sense but who took the time to understand.

The main thing is that we have made a revolution in Canadian society. Our research and advanced education was lagging behind in significant sectors. We went to the Prime Minister and said that he must invest. I make no apologies for that. I would offer the same advice to our colleague opposite who asked the question. Go out and fight for knowledge. He should go out and fight for projects he believes in but he should bring reasoned empirical arguments.

When I went to the science minister and said that these were the facts, he read the documents, listened to the arguments and he approved. That is the way to do it.

[Aileen Carroll, Liberal, Barrie—Simcoe—Bradford, ON]

Mr. Speaker, at the outset I offer my congratulations to the Minister of Finance for crafting a budget of remarkable scope and balance. The minister has remained to true to his course and, as well, has responded to continued input from the Liberal caucus.

I have spoken in my riding of Barrie—Simcoe—Bradford to many groups at various times about how committed the government has been to realigning the federal balance sheet, getting our finances in order, eliminating the deficit and planning for the day when we would be able to return dividends to Canadians for their investment in successive Liberal governments.

Canadians, including my constituents of Barrie—Simcoe—Bradford, have invested in this government. They have given us their trust to restore our nation's finances. They have shown confidence in us to build a stronger, more innovative economy. They have trusted us to improve the quality of life for them and their children.

The time has now arrived when we begin to repay Canadians for supporting our plan.

A key component of my government's plan is to cut taxes. This will mean more money in the pockets of Canadians, stronger economic growth, continuing job creation and the enhancement of a more competitive edge for Canada globally.

The five year reduction plan that will restore full indexation to the personal income tax system is an essential ingredient of this budget. Core tax rates are reduced for the first time in 12 years. Personal income taxes are being reduced on an annual basis by an average of 15% in 2004-05. This plan will reduce taxes by a cumulative total of at least $58 billion over the next five years.

Full indexation is a fundamental break with the past and is a measure requested by many of my constituents. I am heartened that the Minister of Finance has heard those of us who have advocated for this tax change, and I thank my constituents who persisted in raising this issue on various occasions over the last three years.

Full indexation will stop the automatic tax increases and benefit erosion that have taken place under our Canadian tax system since the mid-80s. For the first time the real value of benefits, such as the Canada child tax benefit and the GST tax credit, will no longer be eroded by inflation.

For the first time in 12 years a federal income tax, the middle tax rate, will be lowered. The plan reduces the middle tax rate to 23% from 26%, starting with a two point reduction to 24% in July of this year. Eventually this will cut the taxes for 9 million Canadians.

The bottom line is that Canadians will be able to earn more income tax free and more of their income will be taxed at lower rates. This is the dividend Canadians have earned for their patience and fortitude in supporting the Liberal plan to get the federal fiscal house in order.

The plan enriches the Canada child tax benefit so that by 2004 an additional $2.5 billion annually will be provided to low and middle income families with children. This measure alone provides increased income for more than half of my constituents in Barrie—Simcoe—Bradford.

The plan eliminates the 5% deficit reduction surtax on middle income Canadians with incomes up to $85,000, and the plan raises to 25% this year and 30% next year the permissible foreign content of investments in registered plans and RRSPs. This is a measure that I and many of my colleagues have been promoting. I am very pleased that we have seen its accomplishment.

For students, I, along with many of my colleagues, was alerted by post-secondary institutions and student associations that the level of taxation on scholarships did not synchronize with the objective of reducing student debt load. Consequently, the government listened and it responded by increasing to $3,000 from $500 the amount of tax free income from bursaries, fellowships and scholarships, such as the Canadian millennium scholarship.

Other tax reduction measures include a reduction in capital gains from 75% to 65% effective immediately. In fact, this plan is so munificent that the opposition, which has been militant in its pursuit of a tax agenda, cannot even come up with a response. Even Owen Lippert, spokesman for the conservative Fraser forum, complimented the budget and the tax cut plan on this morning's edition of Canada A.M. . Mr. Lippert stated that the government must have been listening to him. If the Vancouver based Fraser Institute likes this budget then the opposition Reform and Conservative Parties are obviously taking a long walk off a short peer as they scramble to take issue with it.

There are other equally vital priorities as well. Canadians have reported repeatedly to pollsters, the media and to us, their elected representatives, that there must be an increase in support for post-secondary education and health care. The government has responded by increasing the Canada health and social transfer payments by $2.5 billion. Next year the CHST cash allotment will reach $15.5 billion, a 25% increase over the past two years. This infusion brings the federal transfer to the provinces above the original full funding level. The initially removed moneys have now been replaced and enhanced. The onus is now very much on the provinces to ensure that these allocated moneys become moneys dedicated to the intended purposes.

An editorial last week in the Toronto Star pointed out that the Ontario government, amidst its constant criticism of the federal government, has neglected to dedicate the full amount of $1.5 billion transferred in last year's budget for health care. The Ontario government has still not utilized $700 million for health.

While Ontario's share of the new money in this year's budget will not solve all our problems, distinguished health care systems analyst, Michael Dechter, stated again this morning that it would be enough to hire thousands of nurses. We Ontarians should therefore be looking for significant improvements in our health care delivery system.

As well, the budget reinforces the government's grasp of the essentials of research and development and the need for Canada to excel in all areas of skills, technology and knowledge. The government created the Canada Foundation for Innovation in 1997 and we continue to make it one of the cornerstones of our plan by infusing the CFI with an additional $900 million in this budget.

In addition, the creation of the sustainable development technology fund will foster innovation by helping companies develop new technologies and bring them to market. In this regard I exhort Canadian companies to follow our lead and reconfigure their entrepreneurial spirit which has focused far too frequently in recent times on the need to cut costs rather than to develop new products.

Canadian companies have not invested sufficiently in the development of unique products and processes. As a result Canada stands 12th worldwide with regard to company operations and strategies. While Canada sits second only to the U.S. in overall connectedness, our businesses are not making optimal use of our connectivity. Canadian CEOs place a greater priority on cost reduction rather than on capturing markets in every corner of the globe through e-commerce.

As the Minister of Finance said yesterday in his budget speech, the private sector must change its concept of risk. This budget assists them in every facet. It is vital that the private sector meets the challenges of the 21st century and meets the bar the government and this budget have set.

I am also delighted that this budget recognizes that our Canadian forces have endured severe financial restrictions in recent years. I have promoted the serious need to reinforce the programs and resources of our forces, and quite frankly the successful result read in the House yesterday was a victory for many members of our caucus. This infusion will allow our military to continue to represent Canada with distinction in our peacekeeping and peacemaking roles.

Another victory for all of us is the recognition that the municipalities have an enormous role to play in the ever growing responsibility of environmental protection. The green municipal enabling fund helps communities assess where their environmental needs are the greatest. The budget also creates a revolving fund, the green municipal investment fund. The administration of these two funds will be the responsibility of the Federation of Canadian Municipalities, a highly respected organization. From this initiative we hope to generate the best approaches to renewable energy, water conservation, waste management and urban transit programs.

I have dedicated much of my time since my election to the study of environmental degradation and the search for remedies. These initiatives permit immediate implementation of measures that communities can activate and thus make practical use of the knowledge, experience and recommendations of the environmental science and engineering professions.

I am honoured to be an active participant in the Liberal government and to represent the constituents of Barrie—Simcoe—Bradford. I am confident that we will continue to enjoy the support of Canadians so that we can further build on the frameworks we have structured concerning all these things.

[Ken Epp, Reform, Elk Island, AB]

Madam Speaker, I have been listening to the Liberal speeches today with a lot of interest. Obviously Liberal members have bought into the plan, and I understand that. That is part of their party plan. The budget has been presented. Many Liberal members I am sure sincerely support everything in the budget. I suppose all of them will vote for it. We expect that.

Would the member be so bold as to be really candid with us and say something about the lack of planning to actually reduce the debt? The debt is standing at $576.8 billion. The government has said it will pay $3 billion a year against the debt out of its contingency fund if at the end of the year it has found no other way to spend it. In the event that the government actually does not spend it, that means it will take almost 200 years to pay off the debt. Meanwhile we are paying $40 billion a year in interest.

Would the member, in her great candid spirit, tell us what she thinks and what members of her constituency think with respect to actual debt repayment and reduction of the interest thereby?

[Aileen Carroll, Liberal, Barrie—Simcoe—Bradford, ON]

Madam Speaker, debt reduction has always been a priority of the government. We have from the beginning addressed it by a 50:50 approach: 50% on new spending and 50% on tax reduction and debt reduction. We have helped to create a economic milieu in the country whereby the economy has grown. It continues to grow at such a pace that it factors into the debt ratio. This has declined, as the questioner knows, and will continue to do so. Yes, we have reduced it by $3 billion for each of our years. Yes, we continue to set aside a contingency fund which most likely will be able to be applied to the debt at the end of this fiscal year.

In phrasing his question the hon. member made reference to the fact that perhaps members on this side of the House were singing from a song sheet that someone else prepared. We prepared that song sheet. We had a finance minister and a cabinet listen closely to a caucus wherein we are free to speak of all things vital to us, to reflect what our constituents tell us about health care, to hear from our constituents and to feed into a budget. This budget is a result of that. It reflects an open caucus where every person on this side of the House feels that he or she has been a part in setting the budget.

The official opposition, to the best of my knowledge, for a party that wants to be grassroots does not run a caucus in any way like the caucus of the Liberal government.

[Ghislain Fournier, Bloc, Manicouagan, QC]

Madam Speaker, it is often said that the Minister of Finance is a smooth talker, but his glib words are at our expense, and they will not pay the bills.

I have been listening to the members opposite all afternoon. They all agree that they have spent money. That is true—Human Resources Development Canada has been practically throwing it out the window, while the Government of Quebec has been investing it wisely.

After the federal government cut tens of billions of dollars in health, education, and social programs, the provinces unanimously demanded $4.5 billion a year. But all they are getting from the federal government is $2.5 billion over four years, which boils down to $600 million for Quebec—crumbs.

[Aileen Carroll, Liberal, Barrie—Simcoe—Bradford, ON]

Madam Speaker, it is important to note that we have restored to 1993 levels and even above federal contributions to health care. Quebec receives about 28% of total transfers. That is quite a bit considering that it represents 24% of the population.

As well, we have seen the health minister emphasize the need for efficiencies. We are back to a large percentage of the funding of health, but there is a need for all provinces to come together to make a more efficient system. It requires all their input.

[John Solomon, NDP, Regina—Lumsden—Lake Centre, SK]

Madam Speaker, I will be sharing my time with the member for Winnipeg North Centre and I will take 10 minutes to make my remarks regarding the budget.

When I look at the budget I try to measure and gauge it with respect to where it sits in terms of the priorities of my constituents. As a matter of fact I undertook to poll my constituents and I did so in January. I sent them all letters and asked them to priorize where they would put the surplus for this fiscal year. I want to share with the members of the House exactly what my constituents told me and asked me to tell the government with respect to priorities, which my party and I did.

There is one thing almost everyone in my constituency agrees on: the restoration of federal health care funding. Eighty-three per cent of them indicated that they wanted health and education transfers restored and for the government to make up for the losses.

The Liberals talk about restoring to 1993 levels. They have taken $600 million out of health care funding in my province of Saskatchewan in the last five years and have restored it by $18 million this year. We are short $582 million, yet they are saying that it is as big as it was in 1993. They neglected to tell Canadians that since 1993 the population of Canada has increased by about one or two million people. I am not sure of the exact number, but over one million people, to be safe, and they have cut back in terms of health care.

The number one issue in terms of measuring the budget with my constituents' priorities is that it fails the test of what they believe is the highest priority of our national government with respect to this important social program.

As the number two priority my constituents also wanted to see money for a long term farm aid program until such time as the international subsidy war was dealt with at the WTO. I look in the budget and what do I see? There is not one dime for agriculture in terms of a long term program. We see a short term, inadequate amount of $180 million. We in Saskatchewan are grateful for that, but meanwhile the treasuries of France, Spain, Great Britain, Germany and the United States of America keep subsidizing their farmers to the full extent. Thereby western grain farmers are at a disadvantage being at the lower end of an uneven playing field. They are finding it very difficult to compete as a result of the prices being driven down.

The third most important item to my constituents was a personal income tax cut. Sixty-eight per cent believe they should have a GST cut of one point or a modest decrease in their personal income tax. The budget addressed the personal income tax cut. I think that will be a very positive step in the long haul. One out of three is not bad, although my constituents wanted something a little more substantial in terms of the GST.

Fourth, 66% of my constituents polled believe that we should have some kind of additional significant program to the tune of over $2 billion to address child poverty. We see in the budget a modest attempt to do so, but neither my constituents nor I think it goes far enough. There is a big gap in terms of differences in our priorities.

Most important, we sent out thousands of questionnaires and had almost 1,000 returns, which was not bad for a mail-back. Not one constituent indicated that we should further subsidize the NHL. Yet the Liberal government in the first week in January announced a big subsidy program for NHL hockey players. I wonder what its priorities are. I see the Minister of Industry is in the House. I can understand the pressure applied to him from the local hockey team and the local supporters, but surely there must have been some sense in the budget of the priorities of Canadians before this was undertaken.

I do not want to talk only about my constituents' priorities and how they differ from those of the government. I want to try to measure the budget from a fair perspective. How do we measure whether or not a budget is fair? I confer with my constituents, which I have done, and in their view they do not believe this is a fair budget with respect to western Canada.

The real test of whether the budget is fair is whether it is providing some progress for Canada. The true test of progress is not in our country. It is not whether we add to the abundance of those who have much but whether we as a government, we as a country, provide enough for those who have too little. Under this test the budget does not pass. It does not provide substantial support in terms of tax cuts, child poverty programs or health care financing to help those who have too little, but it will provide huge tax cuts for the very wealthy.

In this current fiscal year the Liberals gave millionaire hockey players a $16,000 tax cut. They gave Canadians zero in this fiscal year. The next fiscal year which is the budget we are speaking on, they are going to give the hockey players another $9,000 or $10,000 on top the $16,000.

The millionaire hockey players in this country will now have a two year tax break of about $26,000. What do we get as average Canadians? What do average Saskatchewan residents get? They may get $250 a year, 20 bucks a month. That will not not buy a daily cup of coffee.

In my view health care has been put on the wait list. Education has been put on the wait list. We have letters from the Saskatchewan school trustees saying that this is an inadequate budget.

The president of SSTA, Gary Shaddock, in expressing his disappointment to the Minister of Finance said, “This was supposed to be the children's budget. Several things outlined in the budget are positive for families but the budget did not do enough to address the national children's agenda and provide a strategy of how Canadians will support their children in the future”. For somebody from the SSTA who is a very responsible parent, a very responsible citizen of this country, to say this about the budget in a non-political fashion in my view condemns this budget even further than what we have already outlined.

Agriculture is on the wait list. We have tax cuts in terms of personal income tax cuts. There is some progress there, but in this calendar year it is basically the wait list for Canadians with small and average size incomes.

We have seen no action in this budget on defending our economy with respect to energy prices. I have stood in the House a number of times since the House resumed in February to ask the government what action plan it has to defend our economy and to defend Canadian consumers from international price gouging by the refiners and other vertically integrated oil companies. There is nothing in this budget.

Regarding highways, in Saskatchewan this government takes out about $180 million a year in excise taxes. What was put back in this budget for highways? Not $180 million, not even $100 million, not even $5 million. Not one cent in this budget has gone to highways in Saskatchewan after the government has taken away the transportation subsidies. The roads in our province have declined and deteriorated in an accelerated fashion and there is not one dime.

It is getting to the point where we need a government with some kind of conscience. We need a government that believes in having a balance to the economic powers that run our economy. The fact is the very wealthy corporations and the very wealthy families run the country's economy. It is the government's obligation, duty and responsibility to be the balance to those powers that run the economy. One of my constituents said, “Leave the rich alone in this budget and help out the rest of the country”.

I believe very strongly that this government has failed in its test. It has wait-listed seniors. There is no substantial support for seniors in their very severe challenges with respect to inflation. It has wait-listed education and health care. It has wait-listed tax cuts. It has wait-listed agriculture. It has wait-listed an energy plan to defend our economy. It has wait-listed any kind of national highway program.

My view and the NDP's view is that the government has failed with the most incredibly poor budget we have ever seen in this country. It does not help people. It helps the very rich and the very wealthy families and corporations. As a result, I can assure every one of my constituents who have written to me that I will stand in the House and I will vote against the budget. I think it is the wrong budget for Canadians and for western Canada in particular.

[Roy Cullen, Liberal, Parliamentary Secretary to Minister of Finance]

Madam Speaker, I could speak to many of the items the member Regina—Lumsden—Lake Centre commented on.

Regarding the federal transfers, as I said earlier the federal transfers have gone from $37.4 billion in 1993-94 to $38.6 billion in this year alone. We are back to the days of the 1993 transfers.

With respect to Saskatchewan, in 2000-01 the federal transfers to Saskatchewan will exceed $1.2 billion. They will account for about 22% of the Saskatchewan government's estimated revenues. They will equate to about $1,174 per person and over the next five years will total about $6.3 billion. I think that is pretty fair.

With respect to the income tax cuts, the member should check the budget closely because it is targeted to middle and low income Canadians. For example, a one earner family of four with an income of under $35,000 will receive more in benefits than it pays in the year 2004. I could go on and on.

There is the agricultural aid. We can all empathize with the plight of the farmers on the prairies but in the last three or four budgets we have put in over $2 billion and $240 million was announced recently.

The member should be more candid and fair in his critique of the budget.

Would the member comment on the increase in the Canada child tax benefit which will increase to $9 billion a year? Will that not help children?

[John Solomon, NDP, Regina—Lumsden—Lake Centre, SK]

Madam Speaker, I would like to point out the facts exactly as the member has asked me to do.

The Liberal government has taken $30 billion out of health care since 1994 and this year it is putting $1 billion back in. For every 30 bucks it has cut, it is putting one dollar back. And the Liberals call that reinstating funding for health care. That is appreciated. I guess $1 billion is better than no billions but the government has cut $30 billion in terms of the total losses to health care in the last five years.

Saskatchewan receives a little over $1 billion in all the various transfer payments. The question I would ask the member is how many billions does the government take out in terms of income taxes, licences, GST and other fees for the federal treasury? I can say it is a heck of a lot more than $1 billion. It is billions more than $1 billion. We are sharing that with the rest of the country. We are happy to do that and we are getting some of it back but not all of it, so let us call a spade a spade.

There is a debt in the country. Every single Canadian, whether born this minute or 79 years old, is paying $1,400 a year in interest on the Liberal-Conservative-Reform debt. A family of four is paying $5,600 for the Liberal-Conservative-Reform debt and the Liberals are giving a $250 a year tax cut. Are they crazy? I think they are. It is ridiculous.

We have to look at the budget. I give the Liberals credit. They are masters at doing and saying things to make people feel good. There may not be any kind of substance to their actions but they can do their spinning and promoting. They have 155 MPs and hundreds of millions of dollars as we found out during the last month, to do those sorts of things, to make people feel good about things that they are supposed to be doing, might be doing or may want people to believe they are doing. On every occasion it is a feel good approach. There is never any substance to address the hard core issues facing Canadians.

The final point the member raised was with respect to agriculture. Yes, they have paid $2 billion with provincial shares into agriculture in the last two or three years. Saskatchewan out of $2 billion may have received about $400 million or $500 million. The vast majority went to Ontario, Quebec and Atlantic Canada.

My final response to the member's question is that the government has done a good job for farmers in Ontario. I see my colleagues from the rural Liberal caucus in Ontario. They have done a good job getting money for their farmers but they have failed to address the western agricultural issues and that is where we are falling down in western Canada. They should provide more money to farmers, whether they are in Ontario, Quebec, or western Canada. The government needs to address the huge issue of the restructuring of agriculture in western Canada as soon as possible.

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

Madam Speaker, I am pleased to share this time with the member for Regina—Lumsden—Lake Centre and put on record our concerns with the budget.

We have heard a lot today from Liberal members about the opposition getting in touch with reality. I would suggest that members across the way on the Liberal benches should stop and think just what this budget means in terms of the priorities of Canadians.

If they take a moment to study the facts and determine what the reality is, they will hang their heads in shame. Yesterday a lot of folks gathered here. They represented all kinds of organizations, particularly those in the health care field. People advocating for patients were here. People representing nurses and doctors were here. Ordinary citizens were here waiting with bated breath to hear what this government would say and do about their number one priority, health care.

The reaction in this building in the circles of folks gathered together to witness this government's response on that important issue was like being at a funeral. It was like a wake. People were devastated. One cannot imagine the sense of disappointment that was felt yesterday and which continues today.

People believed that at least the government would take their concerns seriously when it came to health care. They truly believed there would be something significant on health care in the budget. One cannot imagine the dismay, disappointment, fear and worry among those folks gathered here and all across the country when they learned that the response by this government on health care was to put in a one time short term allocation of funding to be shared by health and education, and maybe even other social programs if one reads the budget carefully, over four years. My leader was absolutely right in saying that the government is prepared to give two cents for every dollar in tax relief. It is a 2% solution when this country has a health care crisis.

There was that disappointment yesterday and today that concern is reflected in every media outlet. There is without exception nothing but absolute opposition and rejection of the government's approach to health care. I challenge members opposite to tell me and to point to one patient, one health care organization, one advocate, one health minister, one premier who is going to stand and say that the government did the right thing on health care.

Look at the media. The finance minister of Manitoba said, “This is a band-aid solution”. Health care advocates in Manitoba said, “Health cash a morsel”. Seniors in Manitoba said, “What about us?” Activists from the Council of Canadians said, “If I were the health minister I would be resigning”.

I wonder if he is so embarrassed that he might not be thinking about resigning given the way his hands have been tied and his efforts have been shackled by this government. Or is it all one big conspiracy and one big plot to ensure that this government does not do what is required on health care and allows for the dismantling of our public health care system? Is that the case? Is that what we are really dealing with today?

The CMA said, “Budget health care funding falls short”. That is putting it mildly. The CLC says as we have all said in this House, “The budget just keeps medicare on a waiting list”. The Hospital Employees Union in British Columbia said, “Federal budget response to medicare crisis anemic”. The words go on and on. The critique is absolutely clear. No one in this country is impressed with what was announced yesterday on health care, the number one issue of Canadians.

Fortunately that disappointment, dismay and outrage is turning into action and a determination to fight back. Members opposite on the Liberal benches should understand what their front benches have done, what the Prime Minister is trying to do and be prepared to rethink their positions. Maybe they will take heed of the call today for a caucus revolt. That is what we are all hoping for. Maybe some of those Liberal backbenchers will wake up and realize that they have been hoodwinked and they will stand and say “No. This is not my priority and I am not going to stand for it”.

Today we had the ambulances in front of the building. We had the hospital beds clearly depicting two tier health care in this country. We had a call from the Canadian Union of Public Employees for a Liberal caucus revolt. I quote from its press release: “Liberals call themselves the saviours of medicare. Well, let's see some action”.

Those people are looking for some backbone. They are looking for a bit of commitment. They are looking for a long term commitment and a lifelong involvement in the funding of health care. Just as I said in the House earlier today, they are fed up with these short term, one time, little supplements that the government dishes out to keep people happy. It is like a pay bonus instead of a pay raise. It is like a one night stand instead of a lifelong relationship with medicare. We cannot sustain medicare with that kind of irrational, irresponsible public policy making. It is not even public policy making; it is tinkering with the system and it is playing with the fears, concerns and passions of Canadians. I say shame on each and every one of them sitting across the way.

There is no question that what we saw in the budget really is a pittance. Some would say it is peanuts. It is a paltry amount, two cents for every dollar the government is prepared to give in tax cuts for a system that is in crisis because of Liberal cuts.

Let us go back to 1995 and remember the $6 billion the government took out of cash transfers. Let us remember that the Liberals are responsible for the biggest bite out of health care financing in the history of medicare. Let us remember what kind of chaos they put our system in. Let us remember what kind of obligations they now have to fix the mess and get on with building medicare for the future.

I cannot believe that there is not more concern being expressed by Liberals in this day and age. I cannot believe that we are hearing this kind of damage control and silly arguments coming from the front benches of the government. Obviously they realize that they have made a mistake. Otherwise we would not be hearing the kind of irrational arguments coming from the benches over there.

First the Prime Minister stands in the House and says “It is not true. We fully restored health transfer payments”. They fully restored the payments? Who believes them? Every premier in the country has identified a shortfall of at least $4.3 billion. Some would put it even higher. There is a shortfall in cash of more than $4 billion.

Then what do the Liberals do? They say “Don't worry. You have to look at tax points too”. Today the Minister of Health stood in the House and said that this government put in $40 billion. Do you know what he has done? He has put in everything but the kitchen sink. He has put in cash, he has put in equalization payments, he has put in tax points. What else?

[Roy Cullen, Liberal, Etobicoke North, ON]

Why wouldn't you?

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

Members opposite ask “Why wouldn't you?” Do they not remember what our medicare system is all about and how it stays together? Do they not know that the cash is the glue for medicare, that if we do not have cash on the table then we cannot hold the likes of Klein and Harris accountable and responsible to adhere to the principles of medicare?

Why else will Klein stand any day now to unleash his privatization forces and announce his legislation to contract out hospital services to private companies? Why else are Premier Harris and health minister Witmer saying today that now they have the ammunition? Now they have what it takes to open up the Canada Health Act. As quoted in the Ottawa Sun , “Frankly, the writing is on the wall, and it says this: `Go private”'.

Hon. members opposite have created the climate for those people who want to undo medicare to take hold and take force and shape the country. That should be the argument above all that will make the government wake up and realize that if it does not show a significant commitment to health care in the country, if it is not prepared to start moving toward at least a 25% partnership and eventually back to a 50-50 partnership, we do not have a hope in heck of preserving medicare and stopping those forces of privatization.

I say to hon. members opposite that it is not too late. It is time to act because we are on the precipice. The very future of medicare is at stake. We must act now.

[Paul Szabo, Liberal, Mississauga South, ON]

Madam Speaker, there is no question that health care is the top priority for Canadians. As has been pointed out many times in the debate today, the government has restored the CHST cash and tax point transfers to the provinces to the same levels, and in fact a little higher than they were in 1993. That is significant. Not only have we done that absolutely, but we did it at a time when government spending is still $4 billion lower than it was in 1993. By that fact alone we have shown that we have identified health care.

Over the next couple of years there will be additional transfers. The $11.5 billion from the 1999 budget over five years, plus the additional amount that was identified in budget 2000, means that there will be $15.5 billion in each of the next four years. That is a 25% increase in just two years. Again, it is an indication of the commitment.

The member will well know that the transfers to the provinces are not colour coded and are not just for health. They are also for post-secondary education and social assistance. The member will also know that the provinces do not have to spend those dollars precisely on the areas in which they are given the money. In fact, if we take the example of Ontario alone, it had cuts in the CHST of some $800 million, but it turned around and gave a $4.3 billion tax cut. There are the priorities.

The member will also know that the National Forum on Health identified that there was probably over $11 billion of inefficient spending in the health care system, which is under the management of the provinces.

Given that we have balanced budgets for the current year as well as for the next two years and given the fact that the member says we should give more money to the provinces, could she tell the House where would that money come from the things which are provided for in this budget? How would she finance increased transfers for health?

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

Mr. Speaker, let me say that what we just heard from the member is exactly what Canadians do not want to hear. The Liberals are blaming everybody but themselves. They will not look at their own public policy and make a deliberation on what is important for Canadians and what is important for something as vital as medicare. That is number one.

Number two, I am glad the member raised the issue that we have heard in the last couple of days about not worrying about this budget because there might be more money on the table next year, depending on how much the provinces co-operate and what the needs are. If that is not evidence of damage control, I do not know what is. First we have this nonsense about fully restoring cash payments. Then they throw in the tax points. Then they say they are going to work on next year to see if there is more money down the road.

It is obvious that in actual fact the Liberals are embarrassed by the situation and find this budget totally lacking in terms of dealing with the health care crisis.

I suggest that the hon. member look very clearly at the whole issue of cash transfers. That is the glue that holds the health care system together. That is what is needed to hold the likes of Klein and Harris to account. He should look at the fact that with the little cash that has been thrown in with this budget the federal government's share of funding for health care is 15%. That is what matters. It is not all the other stuff they are wanting to use suddenly to deflect away from this issue, it is the cash and the transfers that the government cut in 1995.

The answer to the member's question is that the government should make an absolute and firm commitment to start fully restoring the cash transfers that it cut in 1995 and ensure that base on a sustained an ongoing basis. There should be none of this one time only, short term band-aid stuff that it is throwing out, ignoring the realities of the situation. That is absolutely critical.

I suggest that he look at the facts, which show that even with the increases cash transfers for health and education will still not be at the level they were in 1993-94. In fact, cash transfers will remain $3.3 billion lower than when the Liberals were elected.

It is absolutely clear that the federal government is not paying its fair share. The obligation, the responsibility, the mandate of the government is to be engaged in health care financing in a 50-50 partnership.

[Jerry Pickard, Liberal, Kent—Essex, ON]

Mr. Speaker, at the outset I would like to say that I am sharing my time with the member for Durham. I am sure that the member for Durham and myself are nothing but proud. We are very proud of this budget. We think this is a great budget, and there is no question about it.

The House needs a touch of a history lesson. I remember in 1993 when my distinguished colleagues opposite were in the position of running a government; a government that was running a deficit of $42 billion; a government that in eight short years had tripled the debt in this country; a government that had unemployment at 11.5%; a government that did not know which way to go.

It was so bad that its members divided into three groups. Some members did not want to be called Tories any longer, so they decided to be Reform. Others decided they did not like what was happening in the Tory Party, so they called themselves the Bloc. The Tories remained with two people in the House.

When we stop to look at that historical time, we say thank goodness that a reasonable, well informed government came to the House to straighten out the ship. Quite frankly, it was the current Prime Minister, the Liberal cabinet and the Liberal government.

In a few short years nobody expected us to eliminate the $42 billion deficit, but that is exactly what we did. We did that and we did it by doing certain things: by reducing the public service, by cutting spending dramatically and by making sure that we were more efficient in everything we did.

Each and every person in this country knows that if a person has a budget, a family, a mortgage and a job, everything cannot be done. Everything cannot be completed in one year. We tracked budget after budget, first, to get the economics right, to get the trade moving in the country, to encourage business and to encourage programs which help all Canadians. That is exactly what we did.

Now we come to a parting of the way. We have managed well. The economy, the GDP in this country grew so well that we were number one in the G-7 countries last year. We know there is absolutely no question that the tax revenue in this country is high, and we are now able to share with Canadians.

Quite frankly, at this point in time I want to say thanks. I want to say thanks to every Canadian who has been supportive of us, to every Canadian who has bitten the bullet and to every Canadian who has put forth a tremendous effort to make sure we were supported in getting this ship going the right way. That has been the case. Every time I am in my riding there is not an individual who says “You guys are not doing a great job and the finance minister has not done a fabulous job at finance”. They are all supportive. They look at the trade missions that our Prime Minister has made and the increase in the economy and say it is just fabulous.

We come to a budget where we, as the Liberal Party, can say thanks to all Canadians for biting the bullet and we can return to them some of the tax dollars that have been increasing.

The indexing of the tax system is a major move which will return to low income Canadians, to families with children, a great benefit over the next four years.

Yes, it will not happen in one year. It will happen over four years. But the reality is that over the next four years those Canadian families will receive a 21% tax cut. We will see the average Canadian get a 15% tax cut and low income Canadians with families in the neighbourhood of 18%. Yes, tax cuts are there, but at the same time, not only are we de-indexing and putting tax cuts in place, we are moving into programs that people in the country have told me are important.

I just heard some members going on about health care. I am really surprised that they do not understand what is being done with health care right now. I am really shocked that they do not realize that the Minister of Finance's announcement yesterday put $3 billion more into health care this year. This is $3 billion more than what was there last year. Cash transfers last year were $12.5 billion. This year they are $15 billion. This year we will have the highest transfers to the provinces in the history of the country. There is no question about those facts.

We balanced. Yes, the $2.5 billion that went into the budget is added with the budget last year which put in several billion more. This is something that the opposition is not really taking into account or dealing with in a fair way. We have to know the facts. The facts are that we have increased the budget in health care by $3 billion in transfers to the provinces this year.

I think that the best spin doctor in the country, Mike Harris, was really misleading people in Ontario when he had his press conference today. The fact is, Mike Harris is getting more money than ever before.

The interesting point I noted a couple of days ago was when Dalton McGuinty, the Leader of Liberal Party in the Ontario caucus, pointed out very clearly that Mike Harris did not spend all the tax dollars that he got last year. He got a transfer of $1.5 billion of which he only spent $800 million. Half of that money is still sitting there and he is out complaining. What a deception to the people of Ontario. What a bad policy decision he made.

Quite frankly, I put Mike Harris in exactly the same bracket that I put Brian Mulroney. I will tell the House why. When Brian Mulroney was here he pumped up our debt, pumped up our debt and pumped up our debt. Well Mike Harris in Ontario has pumped up the debt, pumped up the debt and pumped up the debt to where right now Ontario is $19 billion further in debt than it was before. He is certainly a bad example to speak to Liberals about policies and directions that we need to follow.

I have one other issue that I wish to cover and I see that I have two minutes to do it. Something that is extremely important to the people in my riding is infrastructure: infrastructure funding for highways, infrastructure funding for municipal services and infrastructure funding for low income housing. There is no question that when I look at this budget, we are delivering those dollars big time.

Anybody sitting across the way knew that today was the day of the budget questions to the finance minister. What did members opposite do? They shrivelled in their seats. They were afraid to ask the minister questions. Each question they asked they looked pitifully bad.

This is a good budget. People across the country have said that it is a good budget. The finance minister knows it is a good budget. These guys were chicken to ask questions today on the budget. That is an interesting point.

[Rick Borotsik, Progressive Conservative, Brandon—Souris, MB]

Mr. Speaker, I direct my question to the hon. member if he will listen, which he does not usually do. I find it rather interesting that he has taken a great deal of time and energy to put the blame obviously on a previous government. I remember the term Brian Mulroney and the deficit and the rest.

I wonder if the member would like to talk about where deficits really started, where they really came from. If my memory serves me correctly, in 1974 a former prime minister by the name of Pierre Trudeau put this country into a deficit position. Would the hon. member like to finally take some responsibility for the fact that it was his previous government in 1974 that actually started that particular ball rolling?

In my speech I will talk about how it was the Mulroney government and the Wilson government that actually brought us out of that hole and started the process to get his budget balanced.

[Jerry Pickard, Liberal, Kent—Essex, ON]

Mr. Speaker, I would love to respond to the member's question.

I know he does not have the facts straight because he was not here. When one is not here I guess we can understand how one can be fed that garbage in the dark and not understand what really happened. He is right. We did have a debt of $168 billion under previous governments.

[Rick Borotsik, Progressive Conservative, Brandon—Souris, MB]

Trudeau started the ball rolling.

[Jerry Pickard, Liberal, Kent—Essex, ON]

Under Mr. Trudeau, exactly. That is not a problem. When we have a mortgage on a house, it might be a mortgage of $25,000, which is all right, but we have to realize that it was Michael Wilson and the Conservative government that took that small mortgage of $168 billion and made it $500 billion plus.

We have to realize that in eight short years those turkeys put this country's finances down the tubes and they are willing to stand here today and blame someone else. They are the most inefficient and incompetent people I have ever seen.

I sat on the finance committee and talked to them every day. They chuckled to themselves. I remember when they threw Don Blenkarn out as the chair of the finance committee because he disagreed with what was going on.

When we stop and think about the stupidity that went on, it is not hard to say that they have nowhere to go. All Canadians know it. They sat here and filled this whole side and half of the other side. They had a huge majority government and ended up with a telephone booth of two. They are now trying to come back with 10. Canadians know what they did. The Reform knows what they did too because the Reform called itself a different name. The same policy, different name ran west.

[The Acting Speaker (Mr. McClelland)]

Because it is so close to Easter, I took the fact that the hon. member called a party a bunch of turkeys as a term of endearment. I suspect that was a compliment.

[Alex Shepherd, Liberal, Durham, ON]

Mr. Speaker, I am happy to share my time with the illustrious previous speaker, the member for Chatham—Kent—Essex.

I want to report that I took the time last night to fly back to my riding to conduct a morning after exercise with my business community. It was very positive. The people told me that they positively endorse the actions of the Minister of Finance and the government. They were very supportive of us.

On the way to my meeting, I happened to listen to Premier Harris blabbing away about what a terrible thing it is and so forth. When I got to the meeting I was happy to find the provincial member of parliament, who is also a Tory. I basically said that this was not about blaming each other for the problems of health care. I said that health care was a problem but that if it was all about money it would have been fixed ages ago. I said that it was about re-engineering the health care system.

We do not actually control the administration of the health care system. What was agreed on in that room, and I think with the government as well, is that we are willing to sit down with the provinces, but that we should stop all this nonsense about blaming each other. I think the people of Canada are fed up with it. I think they want us to get on with it. We have an aging society. I think we can deal with these problems. It is a commitment of the government to deal with the issue of health care now and in the future and it has made a significant downpayment on it.

I want to specifically thank the Minister of Finance who made a very bold and brave move in ending bracket creep. It is a lot easier not to deal with this. It is a lot easier to do interim measures that deal with bracket creep as it goes along.

Many people in our society do not understand bracket creep. Bracket creep is a complex tax issue. It is an insidious tax. Although inflation keeps going up, the Bank of Canada tries to keep it within one and three percentage points, and it has been very successful. The taxation system is not indexed to address this issue. As a consequence, people pay more taxes but in real terms are not making any more money.

Bracket creep is a very insidious tax, a tax by stealth, if I may. From a political point of view, it is easy to leave it alone because people do not understand it. People sort of know it is happening to them but they cannot visualize what it is because a lot of them do not fully comprehend inflation.

We took the leadership and the wherewithal to reduce bracket creep. It was a previous Tory government which said it would reduce the indexation to 3% and shove it to the people and let them pay the tax. This was the Tory government's idea of inventive taxation.

This country and our economy is very much poised on the brink of a major economical breakthrough. It is not just me saying that. We recently received a report from the Canadian E-Business Opportunities Roundtable. I will cite some of the things it has talked about in its report. It talks about Canada being one of the most connected countries in the world. The Minister of Industry, who is with us here today, has been very supportive of this agenda. This think tank of academics and high tech people are saying that Canada can be the most connected country in the world by the year 2004. It gives me great pleasure to be part of a governmental structure that is putting its money where its mouth is to make that happen.

We realize that over $28 billion in gross revenue will be generated from e-commerce, which translates into 95,000 jobs. That industry is poised to go even further. It is poised to reach $155 billion in revenue and create 180,000 jobs. Jobs are being created in the high tech sectors and Canada can be a major player in this. We are well on our way to making that happen.

A couple of things stand in our way. This roundtable and others have made mention of some of the problems that we face. We have to invest in research and development. The NDP talked about the medicare system and how we need to put more money into medical health care and medical research. We have done that in this budget.

The United States has 7.4 researchers per 1,000 population, while Canada has only 4.7. This tells us right away that we have a significant problem to deal with in trying to catch up with our major trading partner to the south. This budget addressed some of those things.

We have set aside $900 million over the next four years for research chairs in excellence. We have set aside $700 million to develop environmental technologies and $9 billion more to top up the Canadian Foundation for Innovation and genome research. We have made major investments in our research facilities. We are putting a lot of money into those areas where knowledge based workers get basic training so that they do not have to go south of our border to get opportunities.

We have all talked and heard about the whole concept of brain drain. With the brain drain the Canadian taxpayer is really subsidizing the U.S. economy. People might be amazed when I say that, but let us look at some of the statistics.

Twenty to thirty per cent of the graduates of the Calgary DeVry institute go to California, Washington, Colorado, Minnesota and Texas. Nortel Networks is telling us that it is losing 300 to 500 engineers per year to the United States and elsewhere. This is a huge growing industry. The telecommunications industry in Canada is worth $72 billion.

We are subsidizing the U.S. economy because of the people travelling across the border and going further south. I say this out of specific interest because I have two sons who are studying information technology. They are getting offers from south of the border and are thinking about possibly going there.

Why do people leave? People on the other side of the House say it is a simple, that we are taxing people too much and that is why they are leaving. In fact a lot of studies have concluded that taxation was about 18th on the list of very important items that people identify as reasons for leaving this country with their vocations. Probably one of the most important is opportunities to deal with new technologies, to get resources and so forth. It is in those areas we have to compete with our southern neighbours.

I say that we subsidize the American economy because of this. In the period from 1982 to 1996 it is estimated that we lost $6.7 billion by people leaving our country. Some $3.7 billion of that is related to our investment in the post-secondary education of those people who leave.

In 1996, 52,608 Canadians became temporary worker immigrants in the United States. This resulted in a loss to our tax base. This is the other side of it. These people are highly taxed people because they are making lots of money. It is why we have taken some initiatives to change stock options. I heard the NDP say it was terrible thing and that we should soak the rich. These people are not necessarily rich but they want opportunities. Stock option plans give them the opportunity to invest in their companies and be part of a success story. We want to be part of it as well.

In the budget there is a $500 million rollover for people selling stock in small and medium size companies. High tech companies can roll that over without paying capital gains. That is not letting the rich off the hook. It is just common sense to have that money reinvested in our economy to create jobs and opportunities for Canadians.

I am very happy to be part of a governmental system that has provided opportunities to push Canada along the road to success. We are getting our corporate tax rates down as well from 28% to 21% for small and medium size businesses. That is coming this year. For larger businesses it is over a four year period. These are ways to make our economy more competitive with that of our trading partners. I think it a positive and a good thing, and I am very supportive of it.

[Ken Epp, Reform, Elk Island, AB]

Mr. Speaker, my question is for the member who just spoke and it concerns taxes. As long as we have been here I think we have proposed that taxes should be cut. We have proposed that the debt should be reduced, thereby reducing interest payments and freeing up more taxpayer money to pay for the programs we value. The economy should be kick started by giving substantial tax cuts, not the kind the Liberal government keeps giving.

My question is one of curiosity. Maybe I will speak slowly and the member can answer me quietly so that no one else will hear. During the run-up to the budget the Minister of Finance and the Prime Minister, in responding to questions about tax cuts, quite often totally denied that tax cuts were in the works. The Prime Minister on one occasion even said that they would not cut taxes, that it was not the Canadian thing to do. I would like to know exactly what helped to change their minds. I am curious about the process and I am very glad they are moving toward reducing taxes. When we form the government we will go the rest of the way and do it right.

[Alex Shepherd, Liberal, Durham, ON]

Mr. Speaker, I am very happy to help the member. The process is that we have a democratic party on this side of the House, a party that listens to its caucus, a party that is interested in ensuring that its members get out and talk to their constituents and bring those views to the caucus process. It is very democratic. We do not see ejection of members because they disagree with their leader and so forth. We basically have a very democratic process, so the member is actually watching the will of the people of Canada.

I mentioned earlier that I was talking to my constituents today about the budget. They are very supportive. I took the plane back to Ottawa and when I got in the Chamber I was surprised that members for the Reform Party were talking about the flat tax. The flat tax was their argument eight years ago. I thought somehow I had entered a time warp or something when I got on the plane. I thought, my God, what happened.

The only person in North America still talking about the flat tax is Steven Forbes who just fell out of the Republican leadership race. No one in North America is still supporting the flat tax except those people over there who do not seem to have awakened to discover that people do not want it.

[Elsie Wayne, Progressive Conservative, Saint John, NB]

Mr. Speaker, I have two or three questions for the hon. member for Durham. The first one has to do with high technology and the people we are losing to the United States because the government has never brought in a national shipbuilding policy, which is a high tech industry. We are still waiting.

They do not have to put out a contract for 12 frigates. They can put out a contract for one because high tech is moving and changing every year. We could have a phase in and phase out. It would be something new, different from what my government did. They should have done it but they did not do it. There was not a penny for shipbuilding.

Another has to do with defence. They will get about $2 billion more, but does anyone know that the CF-18 refit will cost about $1.3 billion, leaving next to nothing for helicopters to replace the Sea Kings? People have lost their lives with the Sea Kings. I am really worried about this budget.

Another is health care. The budget brought down an increase for health care. Do we know how much the Atlantic region will get? It will be 2%. Ninety-eight per cent of every penny that comes in for health care will go from central Canada out west and two per cent will go to the whole Atlantic region. I have major concerns about what came down.

According to the formula, unless it will be changed, only 40 university research chairs will go to the Atlantic region out of 2,000. Does the government think it will gain any seats in Atlantic Canada? It has two or three now. It will not have them after the next election.