Mr. Speaker, after watching the Minister of Finance previously deliver six innovative budgets from outside the Chamber, it is an honour for me to stand here today to speak in favour of his seventh budget and to participate in the budget debate.
When I decided to speak in support of this budget, I thought back to a time when federal budgets focused on deficits and a ballooning national debt while Canadians had to deal with deep spending cuts; a time when the tax burden on Canadians, particularly low and middle income Canadians, was increasing at an alarming rate; a time when the national unemployment rate was over 11%; a time when Canadians were worried about their future and the prospects for their children.
Today we have a federal budget that is able to address very different issues. Under the leadership of the Prime Minister and the Minister of Finance, we have a budget today that allows the government to build on the foundation secured by the many sacrifices made by Canadians in Windsor—St. Clair and across Canada.
This budget, the first of the new millennium, takes decisive action to take advantage of Canada's better finances to improve our lives. The balanced approach of this budget works to return hard earned income to Canadians, improve the quality of life for Canadians, prepare the Canadian economy for the new millennium and make our workplaces more productive and competitive.
The balanced approach of this budget addresses several areas of concern and challenges facing this country. Since I only have a few minutes I cannot highlight the entire budget but one area which I would like to discuss today is that of tax relief.
Tax relief is a very important issue in my riding of Windsor—St. Clair. Since my election last April, many of my constituents have told me that tax relief is important in order to improve their quality of life. This budget goes a long way to address this concern by approaching tax relief in a fair and balanced manner.
Budget 2000 introduces a plan that will reduce taxes by at least $58 billion over the next five years. On an annual basis, it will reduce personal income taxes by an average of 15% by 2004-05. This five year tax reduction plan delivers immediate and growing tax relief to my constituents in Windsor—St. Clair and to all Canadians. This is very much the case for middle and low income Canadians, as well as families with children.
Low and middle income Canadians will see their net personal income tax reduced by an average of 18% annually, perhaps even more if our economic circumstances permit. Families raising children will enjoy an average reduction in their net personal income tax of 21% annually because of the added assistance provided through the enrichment of the Canada child tax benefit.
The combination of tax relief measures and the government's last three budgets and the five year plan will reduce the federal portion of personal income tax for all Canadians by an average of 22% annually by 2004, even more for families raising children.
As a key element of the tax reduction plan, the budget immediately restores full inflation indexation of the personal income tax system. This will stop the hidden tax increases known as bracket creep. This means that the real value of federal benefits, such as the Canada child tax benefit, the CCTB, and the GST credit, will no longer be eroded by inflation, thus protecting the integrity of these programs which were designed to help low and middle income families, especially those who are struggling to raise children.
In short, the government is providing meaningful and permanent tax relief for Canadians, relief that is sustainable because it is built on a solid foundation of fiscal responsibility and not borrowed from future generations through deficit financing as we have seen with some provincial governments in this country.
In another key measure, the middle income tax rate applied to income between $29,590 and $59,180 will be cut. Effective July 1 this rate will be reduced to 24% from the current 26%. This middle rate will be cut another full point to 23% by 2004 or sooner, if possible. Under this plan Canadians in Windsor—St. Clair and across the country will earn more tax free income and more of their income will be taxed at lower rates. The plan also enriches the CCTB so that by 2004-05 an additional $2.5 billion annually will be provided to low and middle income families in my riding of Windsor—St. Clair and across Canada.
As a result of these and other measures, a typical one income family of four earning $40,000 will have its net federal personal income taxes reduced by $1,623 a year by 2004, a reduction of 48%. A typical two income family of four earning $60,000 will have its net federal portion of personal income taxes reduced by $1,546 a year by 2004, a reduction of 27%.
The government's commitment to tax relief goes beyond tax reductions to individuals and families. The budget 2000 tax plan also helps Canada to become more competitive internationally by encouraging investment and innovation. Measures include reducing corporate tax rates by 7% for businesses in the highest tax sectors to the lasting benefit of our economy in Windsor—St. Clair and all of Canada.
Capital gains taxes which tend to freeze up vast amounts of capital are being reduced as well. Now only two-thirds of these gains are taxable instead of the previous three-quarters.
Opportunity for our young innovators will be found in Canada now that our tax system will promote creative wage and benefit packages, including incentives such as share options.
Today Canada enjoys a new economic reality. The federal deficit is history. The national debt burden is in decline. Canada's unemployment rate is at its lowest level in more than 20 years. The disposable income of Canadians in Windsor—St. Clair and across Canada is on the rise.
The balanced approach of budget 2000 continues to build on Canada's fiscal and economic success. The government has clearly recognized that tax relief is an important part of a balanced approach to dealing with the problems of success that we are thankfully facing today and into the future.
The government is committed to taking these better finances and transforming them into better lives for all Canadians. Budget 2000 delivers just that. Budget 2000 is good for Windsor—St. Clair and it is good for Canada. I ask all hon. members of the House to give their full support because it is the right thing to do.