Mr. Speaker, it is indeed a pleasure to rise today to speak to the government's budget implementation act, Bill C-32, mostly because it gives the members of the Canadian Alliance another chance to poke holes in that big myth out there that the Liberal government is a prudent manager of the nation's tax money, to use the finance minister's term.
The fact is that a number of words may be used to describe Liberal economic management. I would use unimaginative, intrusive, counterproductive, ad hoc and so on, but prudent is not a word that fits the real story of this budget or any other in the last few years.
Bill C-32 has a number of components that taken in isolation can be argued to have or not have merit depending on the application. As a whole, they reveal two things about this Liberal government. It really does not have a clue about what it takes to build a greater country and it has no intention of giving up its ability to dictate and intrude in the lives of Canadians or in the activities of the provincial governments. He who has the money makes the rules.
Let us look at these pieces. On the positive side of the ledger is a provision for one year versus the now standing six month maternity leave. This is a nod to the fact that parents should attend to the raising of their children in the first crucial months of their young lives. However, since only about 30% of Canadian mothers qualify for the six month maternity leave now, it really begs the question: Why increase it? Why not put 60% into the six month slot? This leaves single income families, self-employed parents and many part time workers out of that loop.
There is a better solution, solution 17 to be exact, and I will get to that a bit later.
There are provisions in this legislation to give the Minister of National Revenue more authority—scary fact—to pounce on Canadians who are either trying to avoid the GST-HST levy or are having trouble figuring out what to charge it on. The rules keep changing. I know the members opposite will say it is the former. This measure is just meant to catch the unscrupulous. When did a qualification like that ever slow down a tax collector? The examples of ordinary, law-abiding Canadians, small business people, who find themselves in a kangaroo court over paperwork screw ups or whatever are legion. We cannot expect that to improve until the whole system is overhauled.
In any case, what happened to the Liberal promise to scrap or get rid of the GST? Seven years later the GST is dinging Canadians for over $46 billion a year. Out of that figure, it gives back $24 billion in rebates, which makes one wonder why it takes that much in the first place. Why not reduce it to 5% or take it off things like reading materials or whatever? That would require imagination and political will and we do not see that. Let us not forget that the Liberal government was supposed to scrap the whole thing anyway. We should not expect any action on this very soon. We will have to continue to pay it.
I want to make another point about the GST before I move on. In the 1995-96 budget the finance minister pre-booked nearly $1 billion for transitional assistance to provinces that were going to harmonize their sales tax with the GST. The problem was that at the time no one had signed on to this harmonization scheme and of course no money changed hands that year.
In 1996-97 the Canada Foundation for Innovation received $800 million before it even existed. In 1997-98 the millennium scholarship fund received $2.5 billion. This money walked out the door despite the protests of provinces, opposition parties and even the students it was supposed to help.
In 1998-99 almost $4 billion in pre-booking went on, including $2.5 CHST funding that does not actually get to the provinces all at once but over four years. That is not a very big amount when we break it down over four years. We cannot make a big splash unless we are willing to throw a big wad of taxpayer money overboard.
The big problem is that the finance minister's shenanigans throws into question the real state of the country's books. The auditor general attaches a reservation to the accounts, which is the harshest criticism an accountant can level at the government. He saw that the Liberals were deliberately overstating the deficit and using taxpayer money for the very political purpose of making grand, empty gestures and claiming to be wonderful managers. There was no money for tax cuts or debt reduction. Just monuments and increased spending.
Members opposite like to defend the government's largesse by saying that it is spending on education. In reality, only 7% of university students in this country get in on the millennium gravy train and many of them have discovered that the taxpayer money from the feds only displaces money from other sources. That is a big point. There are bursary and scholarship programs out there already. Why invent new ones unless we are trying to build a monument to somebody, and the Liberals do such a poor job of it.
I know a 14 year old student from my riding who has qualified for a $16,000 scholarship to a very good school in Montreal. His parents have recently found out that they have to pay $4,000 in income tax for him to qualify for that scholarship. The government gives with one hand and rips it back with another. The family is beginning to find out that they cannot afford to send their child to that school. It is cost prohibitive because of the tax law. This is absolutely ridiculous.
In section 3 of this bill, the federal government has to take back the Canada student loans. A story circulated a few months ago that banks would get over $100 million to pay for defaults and costs. I can tell the House that my constituents were upset to hear that the billion dollar banks would be bailed out with taxpayer money. It turns out that the federal government pays a premium to these banks for them to co-operate in the student loans program. The situation remains murky as to who pays what in the end. The new program may cost $155 million versus the $75 million under the previous set up. This is more taxpayer money flushed. The Montreal Gazette reported on that.
We are aware that students are carrying $9 billion in loans right now and, despite publicity to the contrary, most students do pay back their loans. They are good citizens.
Considering the long term value to the economy of higher education, one would think that the Liberals would come up with a better plan than to place responsibility for doling out this money in the hands of the overworked HRD ministry, as we see in part 3 of the bill.
If the federal government feels compelled to join with the provinces in the education field, or compete with them, which seems to be the Liberal way, then it should offer a plan to alleviate student debt rather than add to it.
In view of the HRD track record, what assurances can we have that money will only go to people in need and to encourage our best and brightest to pursue legitimate courses of study? After all, this is the same government that defends the funding of dumb blonde joke books, porno films and displays involving dead rabbits.
There is a bright side, I guess, for the students, and I suspect the burdensome finance minister's tax system has a secondary purpose. By driving our best young graduates down to the United States, he assures them that they can make more money, get to keep more of it and pay back their Canadian student loans with a more valuable dollar. Our dollar is worth less than 67 cents today.
If I thought the finance minister was that clever maybe I could find an excuse to applaud him. However the real reason for the complex, archaic, confusing and unworkable tax system, which Bill C-32 barely tinkers with, is that it continues to allow the Liberals to indulge their overarching ambition to control the lives of as many people as they can.
Taxes are not just government revenue, they are power; power to pick losers out of the marketplace and keep them limping along, and power to reward loyal supporters. The old adage that the government picks losers and losers pick government is certainly reinforced in a lot of the things being brought out in question period lately.
It is not a prerogative that the Liberals are about to give up because they distrust individual choices. They fear entrepreneurship and they despise the fact that provinces, like Ontario and Alberta, are succeeding with 21st century politics while the Liberal government is stuck trying to make its 1960's policies work.
Part 6 of the bill includes provisions for eliminating bracket creep. It also raises the foreign content restrictions on RRSPs. That is great for the Liberals. Welcome to the 1990s. These ideas have been kicked around for the last 10 or 12 years. If we allow them to borrow more of our policies like that, we might even nudge them into the next century, though of course they would not be on that side of the House to enjoy it. The Canadian people will leave them behind.
The Liberals seem to think that the tax changes they are making are in isolation in the country. Unfortunately they are not. We are still coming up short when it comes to the G-7 ratings and most of the other countries around the world. They are making changes far faster than we are, and in the right direction.
My colleague from Medicine Hat has long been advocating the removal of the foreign content restriction on Canadian savings plans. While this country has incrementally lost ground to the U.S. economy, Canadians have been penalized billions of dollars in lost opportunities. Now that the stock markets everywhere are becoming increasingly volatile, the Liberals say “feel free to risk your retirement in other countries”. They are a day late and a dollar short, but even worse, they have the nerve to turn their stubborn vices into a new found virtue.
We have been warning them for years that bracket creep was eroding the values of Canadian tax deductions, even while their own experts complained that Canadian net incomes were falling. Finally they decided to come clean and try to take the credit for reforming one aspect of a flawed tax system. Some $10 billion have been unfairly raked in by bracket creep alone. One million low income Canadians were dragged onto the tax rolls while another two and a half million found themselves paying outrageous rates on their few dollars of earnings.
The Liberals will want us to congratulate them for lower taxes but I am afraid we will have to hold our applause. Like all promises by this government, lower tax rates are today's headline and tomorrow's excuse.
Solution 17 will work to fix all this, and part of that solution 17 is increasing the basic personal deduction to $10,000 for both the husband and wife. A $3,000 credit for every child, real values.
Anyone who believes the government's budget spin should take a reality check. People should look at their pay stubs and judge for themselves. The real measure is whether or not we are gaining or losing.