Debates of March 27th, 2000

The Budget

[Bev Desjarlais, NDP, Churchill, MB]

Madam Speaker, I have a question for the hon. member. He was praising what was in the budget for education. I am wondering if a more substantial approach in the budget for education might have been to give students who are in debt up to their eyeballs a break and maybe allow them to deduct their student loans.

However, the government says it will make it a little easier for those who are getting scholarships or bursaries. That is very commendable, but why not put something in the budget that gets to the core of the problem and allows students who are in debt up to their eyeballs because of the government's approach to cutting education dollars to claim that as a tax deduction?

[Julian Reed, Liberal, Halton, ON]

Madam Speaker, I remind my hon. friend about the millennium scholarship fund which is designed to assist students to go to university, especially those who come from families with lower incomes. I am very sympathetic to the real problem the member raised. We are certainly doing everything we can within the limits of the available funding. As the Minister of Finance said, as soon as we can do more we will.

[Garry Breitkreuz, Reform, Yorkton—Melville, SK]

Madam Speaker, the hon. member made a comment. He told us to talk to the recipients of grants. Obviously if people are receiving a lot of money they will say it is just great.

I have a question. Why not talk to all the people who are donating the money? What about all the people who have to donate money to that project? Why not talk to them? They are the taxpayers of the entire country. He tells us to talk to the people who are getting jobs because of it. What about all the people who are having their jobs destroyed because of it?

In my province of Saskatchewan farmers have to move off the land. Their livelihood, their jobs are being destroyed because of high taxation. They have to donate money to these billion dollar boondoggles and they are getting fed up. How about talking to the people donating money and losing their jobs because of mismanagement?

[Julian Reed, Liberal, Halton, ON]

Madam Speaker, the citizens of the great riding of Halton are the people who donate the money. We have the honour of having one of the highest per household incomes and therefore the highest levels of taxation in Canada. I talk to the people every election time.

[Ken Epp, Reform, Elk Island, AB]

Madam Speaker, I want to ask the member a question along the same lines. I think my colleague was overly kind when he said the people who are donating. The fact of the matter is that the taxman reaches into our pockets and takes the money. We are considered very bad citizens if we do not fully comply with his request.

I am not against taxation per se. Farmers in western Canada are going bankrupt partially because of the huge tax load and now the added high fuel costs with huge federal taxes. Taxes are killing farmers and this is the money that is being used to presumably create jobs. It is killing thousands of jobs across the country and killing the small business of farming in Saskatchewan and Manitoba.

[Julian Reed, Liberal, Halton, ON]

Madam Speaker, I was a farmer. It was a non-profit business but it did not start out that way. I have great sympathy for farmers in western Canada and what they are going through. I am not an accountant, but if I were an accountant at tax time, it would seem to me that the taxes farmers pay are input costs that are deductible.

[Garry Breitkreuz, Reform, Yorkton—Melville, SK]

No they are not. They are built right in.

[Julian Reed, Liberal, Halton, ON]

Which ones are not deductible?

[Garry Breitkreuz, Reform, Yorkton—Melville, SK]

Excise tax on fuel.

[Werner Schmidt, Reform, Kelowna, BC]

Madam Speaker, I find this debate very interesting and enjoyable. The only thing that confuses me every once and a while is how far away from the facts the hon. members across the way seem to be from time to time.

I wish to address the budget from a principled point of view. It has to do with what exactly is a budget. A budget reveals the values and the priorities of the government. It also reveals, indirectly and directly, the character of the people who wrote or constructed it.

I wish to present four very elementary principles of what a budget should do. First, it should be achievable. Second, it should be sustainable. Third, it should help Canadians achieve their goals and objectives. Finally, it should help Canadians realize their dreams.

How did budget 2000 fair on those principles? First, is it achievable? I suppose if interest rates do not rise very much, it is achievable. We will grant that one. Is it sustainable? I would suggest that, no, it is not sustainable unless Canadians are prepared to stop loading onto future generations the expenditures on programs that they enjoy. It may also be achievable if it stops the brain drain by reducing taxes. The way it stands now it will not do that. The taxation regimes are so burdensome that people are taking their money out of Canada and investing it elsewhere. So it is not sustainable.

It will not allow Canadians to achieve their goals and objectives either. I know that more than 50% of the money we earn should be discretionary. If I am to achieve my goals and objectives, I should have discretion over how that money is spent. When the government takes 55% of that then I have lost 55% of my discretion over my money. I cannot achieve the goals and objectives that I want. I cannot own my own home, I cannot give my children the post-secondary education that I want them to have and I cannot have the entrepreneurial application of capital so that businesses can be developed. It will not help Canadians realize their dreams of their children and grandchildren having a better life than the one they enjoy.

The budget fails on at least three of the four principles we talked about.

I asked myself the question: What is the vision of the government? Is it to pay down the debt? A little while ago, the hon. member opposite said that the government was paying down the debt. That is such a nominal amount that if we divide the amount of money that it is putting toward paying down the debt, which is roughly $3 billion a year, it will take 200 years to pay down the debt. That is a 200 year vision to pay down the debt.

The other question I have is: Is the government's vision to reduce taxes? I looked at it and it sounded really good. Over five years we will have a reduction of $58 billion in tax cuts. Notice that it is not a reduction in taxes. It is a cut in taxes. What it did not say was what the increase would be in taxes over that same time period.

Let me give members a specific example. EI premiums will go down but CPP premiums will go up. Guess what? The EI premiums went down less than the CPP premiums went up. The end result is that the individual pays more in taxes than before the cuts took place. That is some cut.

What would the Canadian Alliance do? I could criticize the budget in some many different ways but I will not do that. The Canadian Alliance is committed to principled and substantive fiscal responsibility, in particular tax relief. How do I know that? I know it by solution 17.

Solution 17 is a single rate tax. I will not go through all the particular features and specifics of that but I will deal with a few of them and some of the benefits.

What hon. members opposite and what we as colleagues in the Canadian Alliance are saying is that we want specifics but we also want to know why we have those characteristics. The first of those is to increase the base tax exemption to $10,000. That would take some 1.9 million taxpayers off the tax roll. We would have a single marginal tax rate of 17% and we would eliminate the 5% surtax. What would that do for Canadians? Right off the top, it would eliminate the discrimination of single income families versus dual income families. Why should a single income family be penalized and the advantage given to a dual income family? It is unfair, it is inequitable and it does not build strong families.

There is another part to this. It will also help to reduce the brain drain. It will probably not stop it, because taxes are still too high, but it will at least help to discourage the brain drain. It will also encourage the entrepreneurial spirit of young people. It will allow individuals to apply their capital to build enterprises here in this country and develop the skill and talent that will make more money and increase the economy.

We will have a universal child care deduction of $3,000 per child. What will this do? It will support the freedom of choice. If there was one thing that democracy did it was to give us freedom of choice. We want that. Here is a tax plan that will do that. It will leave the money in the hands of the parents so that they can choose the kind of child care that they believe is best for their children, not some kind of state run system where the government tells them this is where they should send their kids.

That particular tax plan also suggests that the RRSP contributions should be increased to $16,500. What is the benefit of that? The benefit of that is that it improves the incentive for individuals to look after their own retirement. What is the great benefit of this? It makes it totally and completely transferable and we do not have all of these complications of succession duties or of transfer of funds from one generation to another.

It has all the advantages for which we could possibly dream. It has the general corporate tax reduced from 28% to 21%, seven percentage points. That is a tremendous increase and allows these businesses to hire more people. That is the kind of job creation scheme we should have. We should not be doling out money. We should be giving it to entrepreneurs so they can develop the kind of expansion in their business and hire the people that they need. That is the kind of tax plan we need. The small business tax was reduced from 12% to 10%. It is a similar set of arguments, only this time for small business. That is what the Canadian Alliance would do, and it is solution 17.

How does it differ from budget 2000? First, it differs remarkably by being specific, clear and sustainable. That is the big difference. It will give to Canadians the tools whereby they can achieve the goals and objectives they have for themselves and for their children and grandchildren. It will allow them to build and to realize some of the dreams that they have.

Some people say that we are dreaming in technicolour and that it cannot possibly ever be because solution 17 is not that good of a plan. Let me read to the House the conclusion by the people who put together the examination of that plan. This was not a group of Reformers who are now Canadian Alliance. It was not our people who did it. This was an independent group, the same group that does the numbers for the Government of Canada, the Liberal government. The conclusion reads:

The tax reduction proposals...are well focused on the needs of Canadians today. They expand the economy, and most powerfully: personal disposable income, consumption and our standard of living. They create jobs. By lowering the marginal tax rates they are particularly effective in stimulating work effort, and stemming the brain drain and other productivity enhancing features. By powerfully reducing the level of personal income tax, particularly for Canadians of average and above average income, they are well directed at providing a more competitive tax environment in Canada relative to the U.S.

These are not my words and they are not the words of the Canadian Alliance. These are the words of an independent group that looked at that plan and said that it will work. We should listen.

The tax reduction proposals of the Reform Party, now the Canadian Alliance, are affordable. If all the tax reduction proposals are introduced as a combined package over the 2001 to 2004 or 2005 period, there would still be a fiscal surplus in each and every year. That is very significant and we should pay very careful attention to it.

It is time for a change. It is necessary to recognize that there is an alternative to the Government of Canada today, a government that is there to build an achievable and sustainable budget that will indeed reduce taxes and leave in the hands of the taxpayers the disposition of their disposable income so that they can achieve the goals and objectives for themselves and for their children.

[John Herron, Progressive Conservative, Fundy Royal, NB]

Madam Speaker, I agree with many of the comments my hon. colleague made in his speech.

We do not see the division that we had perhaps in 1988 that actually created the growth in our economy with respect to the free trade agreement. As I mentioned earlier in my speech, our trade with the Americans was around $90 billion and it is now $260 billion.

If we had any kind of a downturn in the economy, particularly in the American economy, does the hon. member think our economic fundamentals are in order now? Do we really have a plan to actually reduce taxes so that we can ensure that we are still competitive here in Canada? Is there a plan for us to actually pay down the debt?

[Werner Schmidt, Reform, Kelowna, BC]

Mr. Speaker, there is as far as the Canadian Alliance is concerned. I think the underlying assumption that the hon. member has made is a very significant one. He is almost implying that the Canadian economy could exist independent of the American economy or independent of any other nation in the world.

The world has changed dramatically in the last while. It is now a global economy. A major part of our economic benefit comes from trade with other nations. The major part of that is of course the American economy, the United States, our excellent neighbours to the south. We benefit from them and they benefit from us. It is a mutual and beautiful symbiotic relationship.

If there was a downturn in the American economy would it affect us? Of course it would. It is simply nonsensical to suggest that it would not affect us. Do we have a plan to deal with that situation? I wish I had an hour to tell the hon. member about that, but I will tell him how much the output costs are of every job creating scheme that has been created by his government the Conservative Party, when it was in power, or when the Liberals were in power. Does he realize that for every tax dollar that is given away in the form of job creation schemes, there is an output cost? For payroll taxes, it is 27 cents. For every dollar that is put out in a job creation scheme, 27 cents is lost in output costs. For the sales tax it is roughly 17 cents. For capital costs it is $1.15 for every $1.

Is it any wonder that people are discouraged when they see all these millions of dollars going there? In fact, Jim Mirrlees, who developed the optimum tax theory, has clearly indicated that by applying that to the Canadian billion dollar HRDC system it actually costs the Canadian economy $529 million in order to give away $1 billion.

What is the net gain? It is not nearly as much as what the government is suggesting. It kills jobs in other places. It kills expansion and it does not last.

[Peter Adams, Liberal, Peterborough, ON]

Madam Speaker, I listened to the member's speech and I disagreed with it almost from the beginning to the end.

I believe very strongly in the balanced approach. He knows well that the economy depends on all sorts of things. I believe in paying down the debt. We have paid down $20 billion in market debt and almost $10 billion in internal debt. I believe in tax cuts. We have made tax cuts once we had balanced the books.

I do strongly believe in reinvestment. Government has a tremendous role which Canadians support in our society. This government is reinvesting in Canadians, both Canadians who are making money and in Canadians who are at risk, are having great difficulties or are in ill health. It is a balanced approach.

The member keeps using a term that I do not understand. What is this Canadian Alliance he keeps speaking about?

[Werner Schmidt, Reform, Kelowna, BC]

Madam Speaker, that is absolutely tremendous. I would love to enlighten the hon. member as to what this Canadian Alliance is. I will tell him what the Canadian Alliance is. The Canadian Alliance is the alternative to the Liberal government. This is a brand new party that has just been created. It received 91.9% support in Calgary last Saturday night, March 25, if the hon. member needs to know the date. That is the Canadian Alliance.

With regard to the balanced approach, yes, I am totally involved in the balanced approach. Let us pay down the debt so we have a balanced budget.

[Howard Hilstrom, Reform, Selkirk—Interlake, MB]

Madam Speaker, I am very pleased to speak to the budgetary policy of the government.

I note that many members today have said that Canada's growth in regard to the other G-7 countries is very good, in the neighbourhood of the third best I believe. I certainly agree that the economy is doing well. I would probably disagree with the government as to how much is a direct result of its actions. Let us look at this growth and what the government does with the money that comes to it which is to be used for programs and other things in Canada.

Let us start with health care. It is my understanding that health care is funded at about a 1994-95 level. Thousands and thousands of Canadians are left standing in waiting lines because there is no MRI machine, bed or some other facility for them to receive the medical treatment they need. Education also seems to be underfunded. Why?

On a first nations reserve in my riding of Selkirk—Interlake, the Fairford Indian reserve, why are hundreds of people living in construction trailers? We could fly out there today and see people living in construction trailers with no bathrooms, at eight or ten degrees below zero. If there is money in the government and it is running massive surpluses, why are people living in construction trailers? I do not understand it.

This may be part of the answer to my second question. The Corbière decision referred to off reserve aboriginal people having the right to vote in reserve elections. Why is the money going to the assembly of chiefs to look at this issue instead of the very people that are off the reserves and need the funding in order to exercise that franchise on the reserves?

It shows that the spending is wasteful and the government has its priorities wrong. That first nation which I spoke of is a real sad situation. Church services are currently being held in a small building because the original church burned down.

Those are sad commentaries on how the government is handling its budget. I will now go on with some straightforward suggestions and programs it could be utilizing.

Agriculture has some real bright spots but it also has some problems. It is the government's responsibility in dealing with the budget to deal with problems. The 2000 budget certainly did not offer any long term plan for the future of farming in Canada. There was an announcement of $400 million between the federal government and the provinces for Manitoba and Saskatchewan. That had been announced previous to the budget but it was announced again so the government could get double mileage out of it.

The government left out every other province and farmers are hurting in the other provinces as well. At least Alberta had the backbone and common sense to say that it could not leave its farmers unprotected from foreign subsidies. In place of the federal government taking some action regarding the farmers, the Alberta government said it was going to pay out $4.29 an acre and give the farmers some help. This was done in time for spring seeding. The money is already on the way.

The budget failed to do a number of things. It failed to provide meaningful or timely emergency compensation to farmers that were suffering from other countries' trade distorting subsidies. That is something that could have been done.

Of the previous money the government had already made out under AIDA, that was a fine, good program in the that it had money in it but the delivery has been a disaster. Around 25% or 26% of that money has been delivered when the promise was that for 1998-99 it would all be delivered in time for seeding in the previous year and this spring. We still have not seen that.

The ongoing scandal at the federal human resources department is another example that the government does not know how to deliver program money. When it wants to use money for political purposes, it can simply shovel the money out the door.

The government has an opportunity in a budget to reduce taxes. In regard to agriculture, the federal excise tax on gasoline could have been reduced. It is four cents. Farms particularly in western Canada but also in other parts of the country have large fuel bills. Fuel is one of their major expenses.

In Ontario just south of here the Oxford County Federation of Agriculture has estimated that farmers will pay between 48% and 50% more on their fuel costs than they did a year ago. In my riding of Selkirk—Interlake we were buying fuel at approximately 28 cents to 29 cents a litre. When I last looked at a bill a few weeks ago it is up in the range of 40 cents to 45 cents. The hurt that is being felt in Oxford county is being felt right across the country.

The Liberal government does not quite get it and its individual members of parliament do not understand. Last Sunday the member for Oxford was quoted as saying that a reduction in fuel taxes would do little to help farmers so just leave the taxes on. I do not know how that rationale applies, “We cannot help you very much so we will not help you at all”. It is time to say give me a break because the government should be doing everything possible, even the little things, to help farmers, aboriginal people and people with low incomes. There are thousands of places where the government could be doing a much better job.

The government continues to charge user fees. The auditor general has indicated time and time again that he is not sure who the beneficiary is or who should actually be charged a user fee. In the cases of the ones being applied against agriculture, they are not being reduced. They are continuing to be applied and that further reduces the income of farmers who are having a tough time.

Fighting high foreign subsidies is also something the government could be doing. In our trade with France for instance, it has a surplus of about $2.5 billion over what Canada exports to that country. It would seem to me that is a fairly strong negotiating tool that we could use in our negotiations with the European Union and France to get them to lower their subsidies.

The standing committee on agriculture had an interesting presentation from the National Farmers Union. Its economic theory sounded a lot like that of the New Democratic Party. It does not believe that subsidies have any effect on the amount of grain that would be produced by a farmer. I do not think even Liberal members believe that economic theory. It was a pretty interesting presentation.

I can only sum up by saying that the government does not seem to be listening to farmers. I will conclude by saying what farmers do want. They want a voluntary Canadian Wheat Board. They want a commercial contracts based grain transportation system. They want simple, predictable long term safety net disaster programs. They want good health care and good education. They want a future for their children in agriculture.

Farmers do not want the Firearms Act, Bill C-68 of years ago. They do not want the Canadian Wheat Board allocating rail cars causing inefficiencies. They do not want the Liberal government ruining trade relations with the United States thereby driving down their incomes even further.

As a Canadian Alliance member, I am really pleased to be in the House serving the constituents of Selkirk—Interlake.

[Peter Adams, Liberal, Peterborough, ON]

Madam Speaker, the member mentioned taxes on gasoline and I know he did not mean the GST because farmers get it back as a rebate. Excise tax on diesel is four cents a litre, the lowest in the G-8 countries. It is 10 cents a litre on gasoline. Because this is a business cost, farmers get some of that back. I would support lowering these taxes.

The member misquoted one of my colleagues. I see the problem this way. Frank McKenna took three cents a litre off gasoline a few years ago resulting in the price going down for a day or two. The following week it was back up at the same level. The three cents which had been taken off was not going to the consumers but it was going to the oil companies which were already making too much money.

I wonder if the member would ask his provincial government to regulate the price of gasoline in his province in such a way that the taxes that were cut by the federal government would genuinely flow not to the oil companies but to the farmers whom he claims to represent.

[Howard Hilstrom, Reform, Selkirk—Interlake, MB]

Madam Speaker, certainly the federal excise tax of four cents is on Canadian farm fuel. The hon. member asked about the G-8 countries. The farm subsidies in the G-8 countries are much higher and as a result, the cost of their fuel is incorporated into those subsidies whereas ours is not. We need to eliminate the four cents.

In regard to regulating fuel, I think the member is going back to the old days of Pierre Trudeau and the wage and price controls. We remember the fiasco that caused. The big government of the Pierre Trudeau era is not the kind of regulation we want in this country, a controlled economy which does not work.

[Peter Stoffer, NDP, Sackville—Eastern Shore, NS]

Madam Speaker, does the hon. member for Selkirk—Interlake and his new party believe that the dismantling of the Crow rate was a good thing or a bad thing for farmers?

[Howard Hilstrom, Reform, Selkirk—Interlake, MB]

Madam Speaker, the dismantling of the Crow rate has been a good thing for farmers. What was bad was the Liberal government reduced subsidies after getting rid of the Crow rate in other areas much faster than our competitors did. The reduction in the subsidies was a big problem.

[Roy H. Bailey, Reform, Souris—Moose Mountain, SK]

Madam Speaker, I have in my office a photocopy of a cheque stub belonging to a young farmer who lives just north of me. This young man took off some grain during damp weather. Two semi trucks arrived from the grain terminal and he received 61 cents a bushel cash advance. By the time the trucking and the freight was paid this individual picked up a cheque for $1.47. That is as true as I am standing here.

I ask my colleague from Selkirk—Interlake, if this present trend continues in the west, what will it take to save it from complete abandonment of the agriculture industry?

[Howard Hilstrom, Reform, Selkirk—Interlake, MB]

Madam Speaker, part of the answer lies in the answer I was giving to the member from the NDP. When the Crow rate disappeared, farmers in western Canada saw a big livestock industry being created with our feed grains being used on the prairies.

We are raising a lot of the hogs and cattle that were formerly being raised in Ontario and Quebec due to western Canada having the competitive advantage and eastern Canada having the advantage of the Crow rate to get our cheap feed grain. Now we have the packing plants and the production in the west, which is helping. Ontario and Quebec still have a lot of that production, which is also good.

With respect to the current farm income crisis, certainly the government should be supporting our farmers closer to the levels at which our foreign competitors, the U.S. and EU, are supporting theirs.

[Steve Mahoney, Liberal, Mississauga West, ON]

Madam Speaker, it has been a delight to listen to some of this rather curious debate.

This is either the last day of the Reform Party or the first day of the Canadian Alliance, however one wants to cut it.

When we talk about the budget and saving money, I have a couple of questions to put forward in a rhetorical sense and members opposite can decide whether they wish to respond.

I would like to know, for example, if the former leader of the Reform/Canadian Alliance Party is sleeping in Stornoway tonight. I am not trying to be difficult. I would not want to see that man and his lovely wife out on the streets of Ottawa. Lord knows, we have a homeless problem and we do not want to exacerbate it. Is the moving van in the driveway and is the new leader of the Canadian Alliance moving in? Maybe they are all going to bunk together and have a pyjama party. That is a possibility.

There is another question which has not been addressed, which impacts on the fiscal responsibility of the government and opposition parties. Who has been paying the salary of the individual who is the immediate past leader of the Reform Party? Who has been paying the salary, which is not only an MP's salary but is also a salary that is afforded the Leader of the Opposition, along with a limousine, which of course he was not going to use? We remember that. With the limousine there is a chauffeur. That is why they call them limos, I am told.

Who has been paying for all that for the past three months as that individual travelled the nation to sell his vision of a new united alternative? In all fairness, the party which stands in this place and purports to hold the feet of the government to the fire on fiscal and financial matters should be responsible enough to tally up the bill for living in Stornoway, that illustrious bingo hall down the road, and for using the limousine for the past three months while the member openly campaigned from sea to sea to sea for his own purposes, to further his own career.

What about all the staff time? Was his staff working in the leader's office, concentrating on the business of parliament, of a member of parliament or of the Leader of the Opposition? Or, were they in some surreptitious manner helping this individual to sell his so-called vision?

I wish that one day we could turn the tables and have someone from this side of the House ask a question of the Leader of the Opposition. I would like to ask him to explain what I suspect would be hundreds of thousands, if not millions of dollars spent on campaigning to bury the old Reform Party and somehow launch the new.

[An hon. member]

There is the real boondoggle.

[Steve Mahoney, Liberal, Mississauga West, ON]

That is right. There is the real boondoggle. Good line. I wish I had thought of it.

Madam Speaker, I will be splitting my time with the member for Don Valley West.

Another point that needs to be looked at, once we get over the fiscal situation, are the principles. Just a short time ago a member opposite stood to talk about principles. It seems to me that the Canadian Alliance and principles is an oxymoron. Or, could it be that its members have discarded their support of the National Rifle Association and Charlton Heston? Or, could it be that while they buried the Reform Party, they buried that policy which calls for the elimination of any form of subsidy to the Canadian farmer? Is that possible? Have they actually gone into the shower and rid themselves of all of those so-called principles and policies? I think not.

Could it be that they are somehow hoping to ride into town on the wave of the new Reverend Day, who will come here with guns blazing, shouting his particular brand of political right wing extremism and the Canadian public will forget about everything they have said in the past few years?

[Ken Epp, Reform, Elk Island, AB]

Madam Speaker, I rise on a point of order. As a member of the finance committee, I would say that we are here to discuss the budget. I would really like you, Madam Speaker, to ask this member to be relevant to the debate.