Mr. Speaker, it is a pleasure to take part in this very important debate on the budget. I echo the words of my colleague from Markham. We can take lessons from the past in terms of what the Liberal government has done. The member made reference to the education budget of couple of years ago. Promptly after the announcement of that budget over 12,000 young Canadians declared bankruptcy. I believe this is considered the budget of tax reduction, so we can expect the same in terms of taxpayers filing bankruptcy if its record is consistent with the past.
In the debate on the finances of the nation we have to move beyond some of what we said in the House in the past. I would like to go back a bit in history and talk about a budget introduced in this place in 1979 which spelled the defeat of the Conservative Party under the leadership of Joe Clark at that time.
Mr. Clark has been unfairly criticized as not being fiscally conservative. The record back in 1979 will show that. It is probably too long for some members of the House to remember. It was the first Conservative budget to be introduced in this place following World War II. The budget at that time, just to remind Canadians, was considered an 18 cent per gallon budget. The finance minister at that time, Mr. Crosbie, made a commitment that gasoline would be taxed at 18 cents a gallon and that the 18 cents were to be used to reduce the deficit and in the long term eliminate our debt. We would have been free of debt within a period of four to five years.
What happened to that budget? History tells us that it was defeated on the floor of the House of Commons and was never enacted. Since then our level of debt reached the point of strangulation. We have basically killed ourselves with the debt load.
I remind the House that there is no sense in pointing fingers back and forth because we are all responsible. Every government in the western world following World War II went on the bent of deficit financing, assuming we would grow out of it and as the economy grew we would pay down the debt. That did not happen.
In Canada we predicated the elimination of the debt on world oil prices. The prime minister who succeeded Joe Clark and was prime minister for 17 years, Mr. Trudeau, admitted that he had made a mistake. We had predicated our finances based on oil prices rising to something in the vicinity of $65 a barrel and thought that would lead us out of the debt problem, simply because of the revenues the federal government at that time would bring in from oil production from western Canada. That was basically an insult to western Canadians as well. That did not happen.
In the meantime our debt level has reached proportions that made it very difficult for every government to deal with. I remind the House that we missed the opportunity almost 20 years ago to deal with it. In fact, it was 20 years ago because in February 1980 when Mr. Clark was campaigning on an 18 cent a gallon tax, he was roundly defeated by the government that then went on a spending spree for the next five years.
When we finally regained office in 1984, the Liberal government bragged that it left the cupboard bare. There was no money to spend. Therefore we could not do what Canadian people wanted us to do. They had been conditioned to seeing the government spend its way into prosperity. That is self-defeating. It is like an individual who takes his credit card out of his pocket every time he wants to make a purchase, assuming at the end of the day that the bills do not have to be paid. We know they have to be paid.
The net result is that today we are strangled with a net debt of approximately $600 billion. I remind members of the interest on that. Without going through detailed charts and analyses, the calculation is very fundamental. If we take $600 billion at an average rate of 8% on the bonds holding that debt, it is costing the Canadian taxpayer somewhere between $40 billion and $50 billion in interest charges per year. Again this is arithmetic that a grade school student could understand. It is approximately $1 billion per week in interest payments for the Government of Canada. What could we do with $1 billion a week if we were debt free as a nation? In about a month's time we would cure our health care ills from coast to coast.
The member next to me from Markham who has a great deal of authority on what works and does not work in the economy is on the right path. He has been saying, as has our leader, that reduction in taxes is the key. We have to get the economy moving. We have to take off the restraints in the tax system that are holding back economic development vis-à-vis our neighbours, particularly the United States.
Today money has no boundaries. One can move money around in the blink of an eye. Money will seek the jurisdictions where it can do the best, work the hardest and the most efficiently. It cannot do it in a country being strangled with taxation.
The government in the last seven years has missed a golden opportunity. It brags about what it has done in the last seven years. Indeed there is some room for boasting. We have to give it credit for some of what it has done, but it could have done more. It did not have to do it at the expense of the provinces. The easy way out for the federal government, which we can see in this budget as well, was simply to download on the backs of the provinces.
It has not yet figured out that there is only one taxpayer. He is the same person, municipally speaking, provincially speaking and federally speaking. We all pay those taxes, so when it downloads on the provinces it has not accomplished anything. It has simply hidden under its own mistakes. That is what the federal government has done, and it has done it effectively.
Let us go through some of the reasons the government has achieved something in the last number of years. Let us look at some of its successes. Let us look at the deficit and why it was reduced. Three letters will explain it, GST. Suddenly, after seven years, it is admitting for the first time that it cannot eliminate the GST. Why? Because it is bringing in approximately $25 billion a year in revenue, almost the exact figure in terms of its surplus.
In other words, if the government eliminated the $25 billion-plus a year from the GST, we would be back into a debt position. Because of the initiatives the Conservatives took on free trade, deregulation and privatization, the government has a little bit of bragging room. It is not because of initiatives it took but hard decisions that we took when we were on that side of the House.
Before I conclude, I simply remind the Canadian people that the government did not invent debt reduction. It did not invent free trade. It did not invent the GST. It conveniently railed against those issues when political opportunity dictated that it was a wise thing to do.
Never once between 1988 and 1993 did the finance minister, who does a lot of boasting, stand in the House to vote for anything that meant a reduction in taxes or a reduction in the size of the growth of government.
Why this magic transformation after 1993? It was because reality set in. After 10 years of education between the seventies and the eighties the Canadian people suddenly realized, as Mr. Clark did in 1979 when he took office, that the debt problem was a real problem that would not go away, unless we want the IMF coming in here, knocking on our doors and running the country as it did in other jurisdictions such as Argentia. The government had no choice. It had to act and it did act. The question is how did it do it. It did not do it with any pain to itself. It downloaded on the provinces.
I look forward to continuing this debate. Hopefully I will have a chance to respond to some questions and comments from members on both sides of the House.