Mr. Speaker, I apologize for my lapse of judgment. The fact is that it would be important to have the Minister of Finance here to listen to these views because they are important views which reflect the people whom we represent not only in our own constituencies but across Canada.
His opinion of parliament is so low that he has not presented a budget to the House since February 28, 2000. Some 22 months, over 600 days, have gone by, which is far too long for a country to go without a defined and accountable economic plan. The government's opinion of parliament is so low that it does not believe it owes parliament a budget every year.
An annual budget imposes a discipline on the governance system. It provides important fiscal information to the domestic and foreign communities. It enforces deadlines on the public service, a feature well known to any municipal council in Canada, and provides accountability to parliament and to the people represented by parliamentarians. Constitutionally it enables the House to pronounce judgment on a government by debating and voting on the motion to approve government policy.
It imposes a discipline on opposition members by forcing us to present to the public our views on alternatives to government policy. Perhaps the government's view of the opposition is best summed up by Jeffrey Simpson's label of friendly dictatorship when he describes the Liberal government.
I am prepared to share with my fellow members of the House some of my views and our party's views as to what should be done in the upcoming budget notwithstanding the disdain that the Minister of Finance has demonstrated for the people of Canada represented in the House. Clearly Canada needs leadership at this very difficult time.
The events of September 11 remind us of how desperately important it is for governments to be there during times of crisis to provide some guidance and reassurances to people. However we should not make the mistake of assuming that the events of September 11 caused the recession or caused this economic downturn. It deepened the recession, but we were heading to a recession long before September 11. We had the worst quarterly results in Canada in the last six years prior to this recession.
In a post-September 11 environment we are probably in one of the greatest periods of economic uncertainty that Canada ever faced. This is a time when the finance minister had to be dragged kicking and screaming to introduce a budget in the House. During this time of economic uncertainty the finance minister has done very little to provide some level of reassurance or certainty. He consistently fudges his numbers, inadvertently or otherwise, and provides very little firmness in terms of the estimates to the House and parliament.
Some estimates are that there would be a surplus of perhaps $1 billion while other estimates are saying $13 billion. Bank of Nova Scotia chief economist Warren Jestin is saying a deficit of $5 billion. We need to have a budget and we need some guidance to move forward to firmer ground with this range of potential outcomes.
The industry minister is more optimistic than the finance minister, but the industry minister would not let a problem like lack of cash prevent him from pursuing some new opportunity to spend money and invest in opportunities that might not make a great deal of sense.
The government coasted for nine years and relied on the success of previous government policies such as free trade, the GST and deregulation. When the economy grew as a result of Progressive Conservation policies the finance minister actually took credit for growth. When our economy grew as a result of our closer integration to the U.S. economy and that juggernaut that performed so well during that period, the finance minister took credit.
He is now saying it is not his fault that we are in an economic downturn. It is the fault of the U.S. economy. He cannot have it both ways. The government cannot have it both ways. There has been a lack of accountability for their own actions. That is what has been fundamentally missing. He is again trying to avoid and duck responsibility when Canada faces a recession.
There has been no post-NAFTA vision from the government and it is little wonder that the government has been ill equipped to provide a post-NAFTA vision because that party when in opposition was opposed to NAFTA. Donald Macdonald, who chaired the commission that led to NAFTA, actually stated that the current Prime Minister and the current government would not have pursued NAFTA in the vigorous and courageous way that Brian Mulroney and his government did at that time.
I am proud to say that our party had the courage, vision and foresight to pursue aggressively and lead the agenda that helped attach the hands of Canadians to the economic opportunities that led globally in the 1990s. However I am disappointed in the current Liberal government for its lack of vision and its inability to provide any level of vision and policy in a post-NAFTA environment.
The greatest economic changes in the last hundred years have occurred in the past nine years. If we look at any barometer or gauge, whether it is technology or integration of economies, notwithstanding what occurs in terms of trade agreements, but globalization led by technology and the telco revolution, there have been so many changes, challenges and opportunities and there has never been a more expensive time for Canadians to have a caretakership, cruise control style of government.
Under this government our dollar has lost approximately 13 cents U.S. Under the previous government, over a nine year period the dollar only lost one penny. We are now seeing our dollar trading at record lows. The low dollar is the price Canadians are paying for nine years of cruise control, visionless government.
Every time the dollar drops Canadians take a collective pay cut. The Liberals were applauding the finance minister yesterday when there were questions asked about our low dollar. They do not really care about Canadians taking a pay cut because they live in an insulated little world where people can actually vote themselves a pay raise if they need it. Canadians cannot do that.
In 1998 in response to a question about the low dollar the Prime Minister said it was good for tourism. The logical corollary of his flawed argument would be that if we were to reduce the dollar to zero we would be the greatest exporting nation in the world. The minister said in 1998 that the problem really was not the Canadian fundamentals, the problem was that the market just did not get it. Three years later the market is still not getting it. I think Galbraith said it best when he said that we should beware of governments that say the fundamentals are good.
The biggest flaw in our current fundamentals is our lagging productivity growth, particularly relative to that of U.S., and not just the U.S. but most OECD countries. Our dollar, better than almost any other gauge, reflects our productivity levels.
The government, instead of pursuing the types of policies that can strengthen productivity, has been tinkering with policies. The best example of this is that instead of actually pursuing a tax reform package that could revolutionize productivity in Canada, that could actually put Canada on the leading edge as opposed to the bleeding edge, the government believes in tax tinkering based on polls and focus groups. More than anything else right now we in Canada need major broad based tax reform, starting with our profit insensitive taxes and capital taxes in particular. For every $1 in capital tax revenue collected by the government our economy loses $1.50 in productivity. There is no more expensive tax than capital taxes in regard to productivity, growth, opportunity and prosperity. Our federal capital tax revenue is about $1.5 billion per year. I would suggest that should be a good starting point in terms of tax reform.
Profit insensitive taxes in general, including payroll taxes, have to be given a more serious look. Not using payroll taxes, employment insurance in particular, which is in and of itself a regressive tax to begin with because it levels off at $39,000, should be addressed.
Our capital taxes have to be addressed. Other countries are addressing theirs. I was in Germany for a conference last week and learned that in Germany all capital taxes will be eliminated in 2002. In fact we are in the minority of industrialized nations that tax companies not just simply for the profits they make but on the capital they have.
When we tax capital we reduce investment. When we reduce investment we reduce productivity. Our dollar reflects that. Locking up our equity and capital in a capital gains tax prison is not a way to spur productivity. Other countries like Ireland and the U.S., and social democratic countries with vision, like the U.K. and Germany, are pursuing tax policies and tax reform packages that have significant potential to make a difference and turn productivity numbers around.
The approach of the industry minister and the government is one that is focused on spending. Could anyone actually disagree with the notion of broadband availability across Canada, in every small town and every rural community? No, of course no one could disagree with that notion, but let us look at it objectively. The fact is that in most of our cities now we have broadband availability yet the majority of people living in those cities still does not use broadband. The fact is, if the minister is speaking of the problem of a digital divide existing in Canada, the issue is not strictly rural-urban. The issue is a socioeconomic divide that exists even in our major cities.
It is an inconvenience in rural communities to access the Internet, but it can be done. I do not disagree with the notion of moving forward aggressively with this sort of plan in time, but in the short term it simply is wrongheaded. In fact the greatest single economic issue facing Canada right now, in a post-September 11 context, is the issue of a perimeter and the security of our external borders to ensure that the $2 billion of trade per day with the U.S. from which we benefit is not jeopardized. There is no better defender of our economic sovereignty than continued access to the U.S. trade that we need as Canadians. This is not a security issue alone. It is an economic issue.
Before I go further, I should have mentioned from the beginning that I will be sharing my time with the member for Brandon--Souris.