Mr. Speaker, let me just say that he beat an intellectual retreat. My friend across the way has to know that it was not the Canadian Alliance which put Canada in a position where we now see that not a single province in Canada has disposable income that matches even the poorest of the poor American states. It was not the Canadian Alliance that caused that situation. It was government members across the way.
Over the weekend the Standard & Poor's DRI report on Canada pointed out that disposable incomes in Canada continue to plummet relative to the United States. That report showed very clearly that the state of Mississippi, the poorest American state, has disposable income which is 10% higher than the wealthiest Canadian province, Alberta.
Why is that? It is precisely because of some of the disincentives we find in the tax system in Canada today that our country has fallen so far behind, which is why solution 17 makes so much sense.
I will simply address head on some of the accusations and misrepresentations I heard from across the way a few minutes ago. My friend across the way suggested that somehow solution 17 was unfair to people on the low end of the income scale. I simply have to point out that under solution 17, 1.9 million low income Canadians would be lifted right off the tax rolls. They would no longer pay the taxes which the government forces them to pay.
It is unbelievable to me that they stand there and pretend they are the champions of the little guy. The only little guy they care about is the little guy from Shawinigan.
The truth is that 1.9 million low income Canadians pay taxes today who should not and solution 17 would solve that problem. They would no longer have to pay taxes to the finance minister and to the Prime Minister to fund all the questionable causes, shall we say, that we currently fund. I want to deal with that one head on.
Second, I want to address the accusation that somehow what was inferred was that people at the high end of the income scale would pay the same tax rates as people at the low end. That simply is not true. They would pay a rate that is the same but the effective tax rate would be completely different.
I will illustrate what I mean with an example. Let us consider someone who makes $1 million a year in income and compare that to someone who makes $24,000 in income, say a single mom with one child. The difference between those two incomes is about 40 times. The person with the million dollar income has an income 40 times larger, but under our system that person would pay 1,000 times more tax than the single mom making $24,000. She would pay $170 and the person with the income of $1 million would pay roughly $170,000.
What the member across the way was suggesting completely misrepresents the situation. It is simply not the case. It is a desperate attempt by members on the other side to try to scare people away from a proposal which they know is intuitively appealing to Canadians. We know that is the case because we even have finance department polling which shows that people favour this kind of idea. They understand that Canada is in a competitive situation and that we have to start to remove some of the impediments to wealth creation which have caused us to fall so far behind.
I mentioned a minute ago that relative to the United States our wealthiest province has after tax disposable income on average that is lower than the poorest of the poor American states. That is not the only evidence we have to bring forward that the government has dropped the ball when it comes to finding ways to increase the productivity of the nation and through that the standard of living of Canadians.
One of the most revealing reports we have is from the OECD. It demonstrates very clearly that over the decade from 1988 to 1998 Canada languished in terms of producing real per capita output or, to put it another way, Canada's standard of living grew by 5%. Over 10 years, a lot of it under this government, our standard of living grew by a scant 5%.
How fast did it grow elsewhere? In France it grew three times that fast; in the United States, four times that fast; in Australia, four times that fast; in Norway, six times that fast; and in Ireland it grew by a remarkable eighteen times the rate that it grew in Canada.
My friend across the way from Hamilton says that is remarkable. It is. I want my friend to understand the reason for it. Is it that Ireland has so many more resources than Canada? Hardly. It has good management. It made the right public policy decisions.
In fact the DRI report I referred to earlier talked a bit about Ireland. It said that many things were similar between the situation Canada is in and the situation Ireland is in. We both have well educated workforces. We concede that. That is true. We are both next to big prosperous markets. In Ireland's case it is Europe; in our case it is the United States. We have these things going for us. We have access to those markets. We have a free trade agreement. Ireland is part of the European economy.
One thing that separates us, and DRI pointed it out, is that Ireland took the commonsensical approach of reducing taxes to attract investment. In Canada we have marginally lowered taxes so that we do not fall behind quite as fast.
What has been the difference? As I mentioned a minute ago, the economy in Ireland grew exponentially, 18 times faster than Canada's over that 10 year period.
What has been the impact on the Irish economy? We know today that a country like Ireland, which for 150 years lost population, is now actually starting to add numbers to its population. It is increasing in population for the first time in 150 years, just because of public policy decisions. It is in a situation now where with 1% of the population in Europe it now attracts 20% of all new investment in Europe.
It is an amazing story. In fact its economy is growing rapidly now and it is projected to grow just as rapidly into the next five years. It is bringing in so much revenue with much lower taxes that it now provides free university education for all its people. It is an amazing story.
What do we do in Canada? The government tries to convince people that it is addressing the situation by bringing down the last budget and arguing that it delivered $58 billion in tax relief. It simply was not so. The DRI report points to the flaws in what the government has done. In the $58 billion that it talks about we find that about $8 billion of it is the child tax benefit. It is a sweetening of the child tax benefit. It is a social program, and the Liberals are calling it a tax cut. It is hardly the same. A tax cut is when we leave the money in people's pockets in the first place. We do not take it out and then run it through—