One of the Liberal members opposite has commended me on my oratory today. I appreciate that. It is tremendously kind.
I thank the Liberals opposite for not changing those excellent policies of the previous government because, frankly, they have been the policies that have enabled the current government to eliminate the deficit, along with the support of the Canadian taxpayers who have been pummelled under this government's leadership. It could be said that the government opposite is a government of sound and original ideas. Unfortunately, its sound ideas are seldom original and its original ideas are seldom sound.
We are speaking today to Bill C-25, an act to amend the Income Tax Act, the Excise Tax Act and the Budget Implementation Act, 1999. This is a collection of tinkering measures that fail to address some of the significant tax reform issues challenging Canadians.
Under this government we have seen declining productivity and investment and, in fact, an exodus of not just Canadian talent, in terms of the best and brightest young people we have in Canada, but also an exodus of investment in what is sometimes called the corporate takeover of Canada. We have seen a huge loss of Canadian economic sovereignty under this government.
It is important to note that sovereignty is not about economic symbols. It is about economic performance. While the government will continually go back to symbolism and try to defend its record based on particular symbols, it is missing the basic message or mantra of the new economy which is that individuals, wherever they live in the world, are prosperous or poor based on the degree to which their governments create environments for their citizenry to participate fully in this new challenging global economy. This government is clearly failing to recognize the opportunities and challenges of this new economy.
Canadians deserve much better. Canadians deserve a government with a clearer vision, a government willing to take some risks on economic policy and forge ahead of where the polls are indicating the government should be right now and actually do some of the things that Canadians need to be done to prepare them for well into this millennium.
Based on the last three budgets, it is clear that the Liberal government is big on labels. We saw in the 1998 budget that it was the education budget and 12 months after that budget, over 12,000 Canadian graduates declared bankruptcy.
The 1999 budget was the health care budget. In the year following that budget, we still see the Canadian health care system in a shambles and health care reeling in every province in Canada, not because we have bad provincial governments but because the federal government has abdicated its responsibility to defend the Canada Health Act and has not provided the type of funding necessary for the provinces to maintain the principles of the Canada Health Act.
The year 2000 budget was the tax cut budget. Before this budget, Canada had the highest personal income taxes in the G-7. After this budget Canadians face the highest personal income taxes in the G-7.
What about corporate taxes? Prior to this budget Canada had the second highest corporate taxes of the 31 countries in the OECD. After the tax relief measures of the budget are fully implemented over a five year period, Canada will have the fourth highest corporate taxes of the 31 OECD countries. That is assuming that other OECD countries will not reduce their corporate taxes, when in fact 27 of the 31 OECD countries are already planning to reduce their corporate taxes.
While the Liberals pontificate about Canada heading in the right direction with their tax policies, I remind them that a tortoise heading in the right direction on the autobahn is still roadkill. The Liberals' tortoise tax reform is a hindrance for Canada and is holding Canadians back when we should be unleashing the Canadian potential not just to compete globally, but to succeed globally in this new economy.
Under the Liberals we have seen a reduction in our personal disposable income of about 8%, during a period of time when the Americans have enjoyed an almost 10% increase in personal disposable income. I suspect that I have to remind members opposite that it is impossible, wealth being a relative thing, for Americans to have become richer while we have been getting poorer.
This is one of the reasons we are seeing the dollar drop by approximately eight cents since the election of the government in 1993. The dollar is one of the best indicators of economic performance. It is like a share value in Canada. It reflects the confidence not just of Canadians, but of investors from around the world. Every time the dollar drops, Canadians have a pay cut. It reduces the standard of living and the purchasing power of Canadians who increasingly in the globally interconnected economy can purchase what they want and need from companies and individuals almost anywhere.
Our productivity growth has been the worst in the G-7 in recent decades. There has been a secular decline in our productivity growth rate, particularly relative to the United States. Again, that needs to be addressed. Broad based visionary and courageous tax reform and reduction is only one way, but it is a very important way to address that issue.
I will speak to some specific issues in Bill C-25. We support the demutualization of life insurance companies. That is a step in the right direction. It has already been the case in the U.S. and there is a broad based level of support within the life insurance community for this. Demutualization stands to benefit a lot of policyholders. Effectively in some ways it makes them shareholders in some of these companies. There are some benefits to that.
In 1999 there was an increase in the basic personal exemption by $675 to approximately $7,100. That is a baby step in the right direction. To be taxing Canadians who are making $7,100 is purely too low a figure. Comparatively in the U.S. one does not start paying income tax until one's income reaches approximately the equivalent of $11,000 Canadian. We are supposed to be a kinder and gentler nation yet with the recent budget, we will be taxing people who earn only $8,000. The increase is a step in the right direction, but just a baby step.
Again bracket creep was not eliminated in the 1993 budget. A lot of these little tiny baby steps on tax reduction were eliminated by bracket creep in the years since then.
On the issue of the deficit surtax there was an announcement in the 1999 budget for a reduction in this tax and we supported that. It should have been done earlier.
The 5% deficit reduction surtax was not touched in the 1999 budget. In the 2000 budget there was a commitment to decrease it by 1% per year. Of course the government is reticent to reduce the 5% surtax because it is a surtax on who the government considers to be high income Canadians. It is part of the politics of envy the Liberals try to create in Canada and an attitude of anti-wealth or anti higher income which is a recipe for failure in Canada.
Canada's highest marginal tax rates are higher than all but two of our trading partners. Canadians are taxed at the highest marginal tax rate when they hit an income of $70,000 per year. In the U.S. one does not hit the top marginal tax rate threshold until $420,000 Canadian. That says to an MBA graduate or someone entering the computer industry, software industry or e-commerce industry who is starting at that pay almost immediately after university that we do not want them here, that we do not want their talent or their innovation. Unfortunately when we say that to them all their potential to build better futures for themselves and their companies and a better future for a country will benefit other companies outside of Canada. It will benefit countries other than Canada if we are not very careful.
In this legislation which has to do with the implementation of the 1999 budget there has been a bunch of tinkering, a series of baby steps that do not really address the holistic and systemic issues facing Canadians. It indicates the anemic approach by a tired government which Canadians are growing concerned about. They watch this complacent government and the near toxic levels of arrogance which emanate from the government benches. They know they are paying a significant price for a government with no vision and no courage to lead Canada bravely into the 21st century.