Madam Speaker, I will be splitting my time with the member for Guelph—Wellington.
I am pleased to speak to the federal budget that was tabled earlier this week. It is essentially a Canadian document. It is not radical; it is measured, it is well paced. It is irrefutably a strong pro-growth document.
This budget represents a long term strategy. The intention is not to create a boom tomorrow but it will provide sustained benefits for Canadians well into the future. I am pleased that the Minister of Finance has once again provided us with leadership, strategic thinking and prudent investment.
When the government was first elected in 1993 this nation had a $42 billion deficit and an unemployment rate of 11.5%. Canadians elected us because they wanted leadership, strategy and action. We have met that commitment and prudent planning has become our hallmark. Inflation is low, interest rates are low and our unemployment rates are at record lows. My riding of Kitchener Centre has an unemployment rate of only 4.6%.
Canadians understood in 1993 that we were between a rock and a hard place and that the government had to make difficult choices. Today the economic situation of the country has changed dramatically. It is because of the sacrifices made by middle class Canadians that the government is now able to give back to its citizens through tax cuts, indexation, investments in social programs, research and development and support for small and medium size business.
Yesterday I had the opportunity to speak with an economics professor from the University of Waterloo, Mr. Larry Smith. It is his view that restoration of indexation has restored a sense of equity to our tax system. He indicated that indexation was a prudent approach for stimulating our economy. Moving too quickly with tax cuts would be dangerous and may cause the Bank of Canada to have to raise interest rates.
I would like to take a few moments to highlight how this budget will benefit my riding of Kitchener Centre. Let me begin by stating that the focus of budget 2000 is the middle class. This budget is for the middle class families of Kitchener. Restoring full indexation to the personal income tax system protects against inflation. This will benefit every Canadian family.
I am pleased that Kitchener families receiving the Canada child tax benefit and GST credits will no longer see these things eroded by inflation. The government has set out a plan that reduces personal income tax. The middle tax rate will go down to 23% from 26%. This will cut taxes for nine million Canadians.
We have also increased the income thresholds at which personal income tax rates apply. We have increased the amount of income Canadians can receive tax free to at least $8,000.
On an annual basis residents of Kitchener will see personal income taxes reduced by an average of 15%. Low income Canadians will see an 18% reduction. For families with children, net personal income taxes will be reduced an average of 21%.
The Liberal government heard clearly from Canadians and I heard directly from my constituents how important the Canada child tax benefit is to families. By 2004 an additional $2.5 billion annually will be provided to low and middle income families with children, bringing the investment total to $9 billion per year.
Last October in the Speech from the Throne the Governor General stated, “The government will extend and make more accessible employment insurance benefits for parental leave, to help parents take more time from work to spend with their children”. We have now met this commitment. Maternity and parental leave will be increased to one year starting December 31, 2000. This leave will be made more flexible and accessible. This measure will provide additional benefits of about $900 million a year.
The government is also fulfilling an earlier announcement to provide $753 million to aid in finding solutions for homeless Canadians.
We have also invested in programs and tax relief for disabled Canadians. In Kitchener the Independent Living Centre has received funding from the opportunities fund. According to director Paula Saunders, those in the program found full time, part time and self-employment opportunities with a success rate of 80%. The government has renewed its commitment to the opportunities fund, investing $30 million a year to ensure that groups such as the Independent Living Centre can continue this good work.
The federal government has also allocated funding to cover 75% of the cost of diagnostic assessments for Canadians with severe learning disabilities.
Finally, in the area of assisting special needs people, the government has expanded the disability tax credit and the medical expense tax credit. In total these measures will increase tax assistance to persons with disabilities by an estimated $45 million annually.
This is not wasteful spending as the opposition would have us believe.
Kitchener is a hotbed for small business and high tech industry. We have strong dynamic companies in our area such as GFI Control Systems, Research in Motion, Devtek and Intelli-Tactics. The government's five year tax reduction plan will assist companies such as these to become more competitive. Our tax system is now more conducive to investment and to innovation.
Kitchener's high tech businesses will benefit from the reduction in corporate tax rates to 21%. Smaller area companies will also benefit from the reduction on small business income between $200,000 and $300,000.
We know the importance of risk taking and the greater access to finance for small businesses. Therefore we are responding by reducing the capital gains inclusion rate from three-quarters to two-thirds.
We are postponing the taxation of gains on qualifying stock options to when the shares are sold rather than when they are exercised. Finally, we will allow a tax free rollover of capital gains on qualified investment from one small business to another.
The government has been working hard to put in place the key measures to improve the economic environment for aggressive business growth and competition. This exciting news should be good news for all Canadians, especially young Canadians. They want to be part of a dynamic business industry where there is opportunity to learn, expand and prosper. If the economic climate is right and graduates see the growth of aggressive companies in their own backyard, such as Research in Motion, they will choose to stay in Canada.
Our students are an extremely valuable resource and we have made some important commitments to them in this budget. These commitments will also benefit institutions such as Conestoga College, Wilfrid Laurier University and the University of Waterloo.
Having met with student presidents from these schools, I have heard the need. I have heard them request that we move from a $500 tax exemption for scholarships, fellowships and bursaries. Students from across the country delivered a strong message. We have responded by raising the tax exemption limit to $3,000. We have also committed to maintaining the Canada student loans program.
Budget 2000 has allocated $900 million over five years through the granting councils to establish and sustain 2,000 Canadian research chairs by 2004-05. This is an important initiative that will attract world class researchers to Canada and it will keep world class researchers in Canada.
At a post-budget breakfast Dennis Grimm of PricewaterhouseCoopers commented:
Yesterday's budget is a plan to address the international competitiveness, productivity, brain drain, and the capital needs of Canada's technology triangle.
As a former regional and municipal councillor, I have seen firsthand the positive impact of the infrastructure program.
The mayor of Kitchener, Mr. Curl Zehr, said:
The federal budget provides a catalyst for partnering with the province and our municipalities, to begin to address some of our urgent infrastructure deficiencies such as transit and roads, environmental initiatives and affordable housing.
Truly we have set forward a plan on which Canadians can count and on which they can judge us by our actions. We wrestled down the deficit and now we are investing in the things which Canadians say they want. With a strong economy we will continue undoubtedly to be the best country in the world in which to live through the 21st century.