Mr. Speaker, at the outset I want to say that I will be splitting my time with my colleague from Bras d'Or—Cape Breton.
I want to say a few words on the bill before us today, the budget implementation act, Bill C-32. In many ways I suppose this is the wind up of the budget debate in the House that started back in February. It actually started before that with the finance committee holding hearings around the country last fall, taking ideas to the Department of Finance and giving Canadians the opportunity to have a platform to express their ideas of what should go into the budget.
The great debate really was what to do with the so called fiscal dividend. The prediction made by the minister in London last fall was that we would have a surplus of around $10 billion this fiscal year and $95 billion to $100 billion over a five year period. Since then we have had revisions: this was even too conservative; the surplus would be even higher; and the flexibility even greater than that in terms of the economy that is going pretty well full blast across the country.
The debate is about what we do with the money. We hear from the Reform Party members of course, who basically want to spend all the money on tax cuts. The Canadian people are saying that a tax cut is about their third, fourth or fifth priority. What Canadians have said to us as we toured around the country and in poll after poll is that the main thing they want is to reinvest the money in the Canadian people, particularly in the health care and education systems for our future and the future of our kids. That is where the Canadian people want to go.
We are seeing great opposition to that, not just from the Alliance Party but from the Liberals across the way. The parliamentary secretary knows that the Liberals have cut back on spending on health care by more money than any Conservative government has done in the history of this country. They have cut back on health care by billions and billions of dollars, to the point where the federal government is now paying, in terms of cash, 13 cents or 14 cents on the dollar compared to 50 cents on the dollar some 20 or 30 years ago when medicare was introduced in the country.
After the pushing and prodding by the CCF and the NDP, the Pearson government introduced medicare back in the 1960s. The deal at that time was that the federal government paid 50% and the provinces paid 50%. Under the current Liberal regime, the Liberal government pays 13 cents or 14 cents on the dollar in terms of cash for health care. That is why there is a crisis in health care from one part of Canada to the other.
It is the reason we are now being threatened with bill 11 in Alberta and the opening of the floodgates to a private health care system that would operate alongside a public health care system. In other words, it would be two tier American style health care as a result of a Liberal government not putting enough money into health care in Canada.
That is the major priority of the Canadian people in poll after poll and in calls to our offices, e-mails and faxes. When we talk to people on the street, they want more money in health care. They want to keep a single payer health system, a public health system. We do not want American style health care in Canada. That is the way we will go if we do not persuade the government to change its ways and put more money into health care. The money is there. It is not as if the money was not there like four or five years ago. The cash is there and it is a matter of what to do with this priority.
We are hearing a lot about education from young people and from people in general. They want more federal funds going into post-secondary education and training to prepare people for the new economy. I suggest that knowledge is power and extremely important in terms of building a strong economy for the future. That is the way we should be going in terms of more federal tax dollars going into educating and training people, building a strong economy, and building skills so we can be competitive with the rest of the world in the future.
These should be the two big priorities of the government across the way, but what does the government do? It put more money into cutting taxes in the last budget than it did into health care because it is afraid of the Reform Party, the so-called alliance party which keeps pushing the tax cut issue.
I think we should mention a word or two about the alliance reform party. It is now advocating a 17% flat tax across the board. Regardless of how wealthy we are, we would pay 17% in taxes. On first blush that might sound pretty attractive to some people. Then we find out that for people making $30,000 a year their tax cut would be $488. For people making $100,000 a year, their tax cut would be $7,988. For very wealthy people making $250,000 a year, their tax cut would be $25,988. People making that kind of money should be paying more.
We have historically had a progressive tax system. Currently the system has three different tax rates: 17%, 26% and 29%. The middle rate will be reduced gradually from 26% to 23%. That is progressivity: 17%, 26% and 29%.
When the very same conservatives that now call themselves the alliance reform party were in power, they made the tax system less progressive. There used to be seven or eight different tax brackets back in the 1970s and early 1980s. Now they want to eliminate progressivity altogether. A millionaire will get a huge tax cut. One should vote for the Reform Party if one is a millionaire.
One of the leadership candidates who is an extremist in more ways than one, Stockwell Day, has been pushing the idea of the flat tax and helping the rich for the last year or so. He is not just an extremist in that regard. He is an extremist in all kinds of social conservative ideas as well in terms of intolerance.
That is not the way Canadian people want to go. Canadian people want a progressive tax system. They want to reduce taxes for low and middle income people. They still want enough tax money from those who can afford to pay taxes to invest in health care, education, farmers, the fisheries and the basic industries that provide a job and livelihood for each and every Canadian. That is the way we should go.
It is also interesting how the government failed to eliminate some the loopholes in the tax system. On the weekend I read with interest an article in the Ottawa Citizen of Saturday, June 3, headlined “Taxman ordered to justify $2B deal”. There was the ruling of a judge in a court case on Friday. The Federal Court of Appeal ruled that George Harris, a Winnipeg activist, could take Revenue Canada to court to contest the tax collector's decision to allow $2 billion in family assets, believed to be those of the Bronfman family, to be transferred out of the country and the capital gains to be transferred out of the country tax free. This was a ruling back in 1991 which did not come to light until 1996. The government promised legislation, but the government has not really acted upon the promise to bring in legislation to ensure this kind of thing does not happen.
According to the Ottawa Citizen and the information in the courts, the Bronfman family transferred assets worth $2 billion, I gather stocks in particular, from Canada to the United States in 1991. The capital gains on those stocks were about $700 million. Some officials in the Department of National Revenue, in a secret meeting where no minutes were kept according to the court documents, decided that the Bronfman family did not have to pay tax on that $700 million of capital gains.
Where are the priorities of the government? It will tax the ordinary citizen who is making $10,000 or $20,000 a year. If that person fails to pay taxes he will get a tax notice. He will be penalized and will have interest added to the tax owed. The government will go after him hook, line and sinker until that tax is paid. One could be a widowed granny and the government will go after her, but the Bronfman family with $700 million in capital gains paid not one penny in tax.
Is that fair? Is that just? Is it a true, just and fair democratic society that has a system which is so unfair and so unjust?
I conclude by saying that the Liberals have let this happen. The reform party alliance would make it go even faster. Just this morning its finance critic said he wanted a tax reduction for the wealthy, for the rich. Even my friend from Calgary is hanging his head in shame when he hears those words. The wealthy and the rich, the Pocklingtons and the Bronfmans of the world, would get a tax cut from the reform party alliance.
That is not where the Canadian people stand. The grassroots people say they want tax fairness, tax justice and equality. They want money in health care and money in education to build a strong economy.