House of Commons Hansard #129 of the 37th Parliament, 1st Session. (The original version is on Parliament's site.) The word of the day was budget.
Mario Laframboise Bloc Argenteuil—Papineau—Mirabel, QC
Mr. Speaker, in response to the September 11 attacks and the resulting economic slowdown, the best the Minister of Finance can come up with is to tax the airline industry, which has been the hardest hit by these events, thus dealing a blow to the airlines and to regional development at the same time.
What was the Minister of Finance's logic in increasing taxes on the industry which suffered most from the events of last September 11?
Paul Martin LiberalMinister of Finance
Mr. Speaker, on the one hand, the member must know that we saved the industry $62 million annually, which will be covered by the new charge to travellers.
On the other hand, the member must realize that confidence in the airline industry as a whole is very important. Our comprehensive security plan will ensure that confidence.
Bryon Wilfert Liberal Oak Ridges, ON
Mr. Speaker, over the past few months the Government of Zimbabwe has continued to crack down on opposition forces. A proposed media ban will restrict journalists who violate new regulations. New land seizures are continuing and the independence of the judiciary has been violated.
I ask the Secretary of State for Latin America and Africa, what steps is Canada considering to signal our strong disapproval of these measures? Are we likely to impose travel and investment sanctions against the Mugabe government, similar to what is being considered in the United States?
David Kilgour LiberalSecretary of State (Latin America and Africa)
Mr. Speaker, we are very concerned about the worsening situation in Zimbabwe. The people of Zimbabwe deserve to live without harassment, violence and intimidation.
Canada will consider anything that might help to reduce that. These measures can probably only be done through international organizations such as the UN, the Commonwealth, or SADAC.
Elsie Wayne Progressive Conservative Saint John, NB
Mr. Speaker, every presenter that came before the defence committee this past year, all military experts, retired officers, the CDA, stated that our military has been financially neglected by the government. They also stated, as did the auditor general, that $1 billion a year for the next five years is required just to stabilize the military.
We have asked some of our men and women since September 11 to go in harm's way. How can the Minister of Finance justify his paltry contribution to the military?
Art Eggleton LiberalMinister of National Defence
Mr. Speaker, we would not send our troops into any theatre of operation without making sure that they have the support they need, the resources they need, the tools they need to do the job.
There could be a lot of arguments about figures. There is not a minister here who would not like to have more money. The finance minister provided $1.2 billion yesterday, much needed money, much of that going to fight in the campaign against terrorism.
Judy Wasylycia-Leis NDP Winnipeg North Centre, MB
Mr. Speaker, it is interesting that health care is the number one priority for Canadians, yet yesterday in the budget address the finance minister spent only two minutes talking about health care and announced that health care would get a measly 2% of new spending.
Maybe the finance minister was too busy worrying about not giving his opponents any advantage in the Liberal leadership race, but it is Canadians that are hurting as a result of this kind of mentality.
In the budget, why did the government not make health care its most important priority?
Allan Rock LiberalMinister of Health
Mr. Speaker, as a result of the agreement reached between the Prime Minister and the premiers in September 2000, the increased transfer to the provinces this year for health is $2.8 billion, far more than any other similar announcement in yesterday's budget. It is the single most important priority for the government. If members count the money we are transferring for equipment, for primary care changes, for telemedicine, it is well over $3 billion to the provinces this year alone. It will be $4 billion next year and $5 billion the year thereafter.
Health care is priority number one for the government.
Presence in GalleryOral Question Period
The Speaker
I would like to draw to the attention of hon. members the presence in the gallery of Governor Thomas Ridge, Director of the Homeland Security Council of the United States of America.
September 11Oral Question Period
The Speaker
I believe that there is an agreement that the House will observe one minute of silence in memory of the victims of the tragic events of September 11 in the United States of America.
[Editor's Note: The House stood in silence]
The House resumed from December 6 consideration of the motion that Bill S-10, an act to amend the Parliament of Canada Act (Parliamentary Poet Laureate), be read the third time and passed.
Parliament of Canada ActPrivate Members' Business
The Speaker
Pursuant to the order made on Thursday, December 6, the House will now proceed to the taking of the deferred recorded division on the motion at third reading stage of Bill S-10 under private members' business.
Call in the members.
(The House divided on the motion, which was agreed to on the following division:)
Parliament of Canada ActPrivate Members' Business
The Deputy Speaker
I declare the motion carried.
(Bill read the third time and passed)
Parliament of Canada ActPrivate Members' Business
The Deputy Speaker
I wish to inform the House that because of the deferred recorded division government orders will be extended by an additional 13 minutes for a total of 32 minutes.
The House resumed consideration of the motion that this House approves in general the budgetary policy of the government; of the amendment; and of the amendment to the amendment.
Stockwell Day Canadian AllianceLeader of the Opposition
Mr. Speaker, as I had indicated, unfortunately the government did not follow the advice of its own committee and in fact increased spending by over 9% this year. That is on top of last year's 7%.
It is not as if the government did not have an opportunity to find a place in which it could have reduced spending. The auditor general's report pointed to a pool of some $16.3 billion. The report said that we could go fishing in that pool and find waste, inefficiency and bad management. The government refused to go fishing in that pool. It did not come up with one dime in the budget to reduce waste. That is absolutely incredible.
With our limited research capabilities, which are nowhere near the research capabilities of the government, we identified some $6 billion in savings that could have been found had the government had the will to do it. It did not have the will to do it, only the will to spend. Rather than cutting waste it protected every last dime of previous government spending and added new initiatives on top of it while still ignoring debt, the tax situation and health care.
As Nancy Hughes Anthony of the Canadian Chamber of Commerce said:
What we see is a lack of discipline in spending, which could lead the country back into deficit.
That is a stark warning. Reckless spending increases of the government have eradicated the surplus so that there would be no debt payment. We are one small economic shock away from being propelled back into a deficit. As a former finance minister I know that when one produces a budget of $130 billion and one says magically we will end up on the zero line, especially with the record the government has of exceeding every spending, we are in a time of great concern.
The second major failing of the budget was a failure to adequately address defence and security needs. The government talked about $7.7 billion in increased security measures. We must remember this would be expanded over at least five years and $2.2 billion of that would be for air security, which would actually be a tax on all people using the airlines. We must keep that in mind.
There is $500 million for the ongoing costs of Operation Apollo. However, in terms of national defence itself, our armed forces, the auditor general said last week that we needed $1.3 billion this year just to maintain and update the current state of the dilapidated equipment.
In reflection of the ministerial statement that our armed forces are in a state of preparedness, the auditor general talked about 10 years of reduced funding for the armed forces. What an indictment for the auditor general to say that we should take the statement about military preparedness with a grain of salt. It is not an indictment of the troops, who are the most courageous and dedicated of any in the world, but an indictment of the government that refuses to fund them.
The government has made a stealth decision to gut the Canadian forces and to leave them incapable of playing a significant role on the international stage or in NATO. There was a great opportunity to signal a rebuilding of our armed forces. The government failed our Canadian forces. If it continues on that wholly inadequate level we see a time coming when it would have to announce further reductions and further limitations to our Canadian armed forces mandate. We do not want to see that happen.
The government talks about money for the RCMP, CSIS and extra money for the coast guard but far short of what the needs are. Our coastline and perimeter stand weakly protected, not from a lack of commitment by those people in the coast guard but by a lack of funding and resources to do the job they need to do.
It is significant the government could say that CSIS received more funding than the other areas of security, which it did, but its funding with the supposed increase that it received is back to 1994 levels.
Another thing that is disturbing is that much of the funding for the armed forces and security is given grudgingly by the government. It is only after pressure from the Canadian Alliance, our citizens and the security forces. What is with the government that it refuses to stand on guard with those who want to stand on guard? It is time it stood up for the security forces of the nation.
There was an area of security where the government listened. It was the issue of air marshals. When we first raised this issue, the minister said that there was no way in the world we would use air marshals. He said that having air marshals on airplanes was not the Canadian way. He said that we would have CF-18s flying around Toronto with missiles to shoot down planes that might be hijacked. That apparently was the Canadian way. However he said no to air marshals.
He has finally listened. He listened to the Canadian Alliance, the pilots, the people using airlines and our security forces. He must have been listening to the Americans because they said no flights would be allowed into Reagan national airport unless there were air marshals aboard. He finally realized that Canadian lives were as important as American lives. We are glad he recognized that.
The government has been dragged kicking and screaming on issues related to national security into standing up for Canadians and policies called for by the Canadian Alliance. We appreciate some of the slouching toward our policies by implementing some of the anti-terrorism legislation, partially creating a security perimeter with the United States, bringing in improved refugee screening and signing a safe third country agreement with the United States. We acknowledge that it made partial steps in that area. We thank Canadians for working with us to impress upon our government the need to do that.
The third major failing of the budget was the absolute failure to reduce taxes and to increase the job killing payroll taxes as workers struggle through a recession.
I do not know where the government get its guidance. All the literature on this issue shows that we do not invigorate an economy by raising taxes. Nobody has done it yet. The government is trying to prove that maxim wrong.
We all know that on the eve of the last election the government, previously resistant to tax reduction, grabbed a Canadian Alliance platform related to tax reduction. We proposed $150 billion in terms of reduced taxes. It said that it would bring in a $100 billion tax reduction.
When we look at it in its true light, when we count the forgone revenue and when we eliminate the smoke and mirrors from what it said, it was actually a $47 billion tax cut, not a $100 billion tax cut. We proposed a $150 billion tax cut and we still do.
We are moving into recessionary times according to all economists who are looking at it and measuring it, and we see no further tax relief. There is a $450 million tax on airline passengers, $440 million in new tobacco taxes and a one time windfall of $2 billion in deferred taxes which the government will collect next year anyway.
Most insidious of all are the payroll taxes which would go up by $153 per worker on average this year. That means hardworking people would be going home with a paycheque $153 smaller than it was before. That is no way to treat a recession and that is no way to treat hardworking taxpayers.
There is no reduction at all in personal income taxes in 2002. Despite the October 2000 so-called mini budget we still have the highest rate of personal income taxes in the G-7. It is absolutely unacceptable.
In a nation where we have millions of square miles of hope and opportunity shared by only 30 million citizens, we should be the most prosperous people on the face of the earth, with much abundance left over to properly share with others.
Because of the overpowering, overregulating, overtaxing approach of the government, we are left diminished and we are left with the highest rate of personal income taxes in the G-7. It is absolutely inexcusable.
These are the kinds of trade-offs that the government has made, funding its pet projects instead of looking at how it can lighten the load for the workers of our nation. By doing so it makes sure that students who are trying to get a first job or single parents who are trying to make ends meet by working in a restaurant part time will not be able to find the employment that they look for. That is what these Liberal payroll tax increases mean for ordinary Canadians.
As for that $450 million per year tax on airline travel and the money that will be taken in from that tax over the next five years, even the government admits it will outstrip the requirements of spending on airline and airport security. Look at the boldness with which it taxes people. Not only does the government say the tax is to cover that security, it wants to make a profit on the taxpayers, on the people travelling on the airlines. That is a shame in terms of how we treat an industry looking to send out signals of confidence to a public looking for ways to fly with confidence, both financially and with security. That tax may, like other Liberal taxes, become a cash cow that will bring in money to the government for who knows what spending project for who knows what leadership candidate hopeful.
The government has imposed that tax on a travelling public at a time when airline travel is down and some of our airlines are struggling to survive. Is it not interesting that it will be the smaller, more competitive airlines, the ones that operate on the tighter margins and offer the short hops of travel, that will have the most disproportionate ratio in terms of the $25 return tax put on those particular airlines? Once again, the government moves in a way that brings increased pressure to bear on the smaller airlines that are trying to be competitive and provide a service for Canadians.
If the government really had a handle on its waste, there would have been fiscal room for real tax reductions that would have helped the economy and increased private sector job creation.
We would have liked the EI premiums to come down enough to offset the CPP increases. The government could have done that. The EI fund continues, with a giant surplus approaching almost $40 billion, again funding the pet projects of Liberal hopefuls in a variety of fields and forgetting about the people who are trying to be hopeful about their own futures and trying to provide for their own families.
The capital tax still stands at a much higher rate than its comparable tax in the United States. At a time when we are trying to encourage businesses to expand, to invest here in Canada, expansion that would hire more people, we have a capital tax in place that is a disincentive. Why is that? Economists are saying that for every one dollar this tax raises, it has a dampening effect of $7 on the GDP.
What on earth are the Liberals thinking? Are they so addicted to taxing and spending that they cannot see through the blur of their own addiction and see the needs of people, individuals and businesses that could be the most competitive in the world but cannot because they are hampered by these Liberal policies? The government, true to its Liberal ways, thinks that the only way out of a recession is to try to spend your way out. That is not the way to do it. That is a complete failure to address the need for tax reductions in the budget.
Every walk of life would be affected if the Liberals would change their philosophy when it comes to taxes. I meet with farm families across the country. I sit at their kitchen tables as they tell me with tears in their eyes that their sons and daughters are leaving the farm because they do not see a future there. Think of what tax reduction in that sector alone would do, not just for the incomes of the farmers themselves. We proposed tax reductions for the fuel farmers that use to sow their seed and reap their harvests and the Liberals voted no. We proposed tax reductions for small and medium sized businesses, value added businesses in the agriculture sector, which would put a greater demand on agricultural products, and again they refused. We proposed reduced taxes on things like fertilizer and again they refused.
Every facet of Canadian life in terms of productivity would be positively affected if these Liberals could get a grip on how they approach citizens and could see that citizens, if left to their own positive devices, can make their way ahead and actually produce and have the type of innovation and production that would vitalize and invigorate the economy and would not have the stagnating effects that Liberal policies have.
The fourth and perhaps the deepest failing in the budget is the wasted opportunity to get fundamentals right and lay the groundwork for a more productive and competitive economy. There is no reduction this year or for the next three years in the still sky-high level of national debt. Every citizen who pays a mortgage stands today in wonder at how the government could just suspend its mortgage payments, mortgage payments on the children of our citizens.
There are no measures in the budget to increase the confidence of markets in the Canadian dollar. The markets need a sign that there will be in the long term some tax reduction which will mean business investment will be able to flourish, but when a government makes the decision to suspend its debt payment program it sends out a very alarming signal. It sends out a signal that it will keep taxing people, that it will take the taxes and not reduce debt.
When debt is paid down, interest payments are freed up. Those interest payments could be used for things like important social programs. The government just does not get it. That is a wrong signal to send out to the economy.
There is no question that the aftershocks of September 11 deepened our economic trouble, but the fact is that we were headed for a serious economic slowdown before September 11. The Canadian Alliance critic for finance, economists and others were pointing out months before September 11 that the government was taking the country down the road to deficit. We pointed that out months ago. Now the finance minister and the Prime Minister have the nerve to stand under the dark cloud of September 11 and make it sound like it is September 11 that now propels us toward a deficit. No, it is their uncontrolled spending and their refusal to be prudent that is hurtling us toward a deficit.
Spending was already well out of control before that. Even during the last election economists were looking at what the Liberals were throwing out there and were predicting that the government was on course to a deficit.
If the finance minister, the Prime Minister and the Liberal government lead us back into deficit they will not have the international economy to blame. They will not have international terrorism to blame. They will have their own shortsighted, selfish policies to blame and that is all.
Financial markets and citizens want to see spending come down and debt reduction continue. If they do not see these things it casts a negative judgment on the value of the Canadian dollar. The Prime Minister thinks a low Canadian dollar is fine and it is a good policy. Maybe he has separate pension provisions above and beyond what most Canadians have, because retiring Canadians and Canadians who are retired now need to know that the low Canadian dollar policy of the Prime Minister is sapping the buying power of their life savings. Their future purchasing power is being diminished daily and went down a bit when markets closed yesterday with the Canadian dollar dropping in response to the budget. That is a wrong-headed policy.
The national debt load stands at $547 billion. That is an important point. It is higher than in 1993 when the government took office. I know the Liberals blame the spending of the previous federal Tory government for increasing deficit and debt. I will not debate them on that point, but it needs to be pointed out that because of their weak approach to the debt over the last few years, and now because of their approach not to pay down debt at all, we imperil our economic situation. Canadians need to be reminded of that every time the finance minister and the Prime Minister stand up and talk about how they have reduced the deficit.
Canadians need to be reminded of how they did it. They ripped money away from provinces for health care and education under the CHST grant and they tore money away from our national defence, the two greatest areas in which they reduced spending. They took 36% away from those grants and transfer payments and in their own areas of spending maybe 6% to 7%. It was an absolutely irresponsible approach.
The government thinks it can avoid making these debt payments now, shortsightedly, hoping current interest rates will last for several years. There is no guarantee of that.
In the last election we called for a legislated debt paydown plan because we had a sneaking hunch that if times got a little tough the Liberals would bail out on paying down debt and fall back into their addictive ways of spending. We sensed that over a year ago when we proposed that paying down debt be legislated, but they laughed at us. They said “Just trust us. We are Liberals, you can trust us. We'll continue to pay down the debt. We don't need a law to tell us to do that”. That is what they said. They said that they did not need a law. They said that their promise was as good as a law.
I was raised by my parents, as I am sure my colleagues were, to indeed believe that one's promise is as good as a law, but when the spending got tough their promise broke. Now we see why they did not want it to be a law to have to pay down debt: right now they would all be in court for breaking that law. That is why they did not want it.
It may not be a written law, but it is a policy and it is a clear principle of the Canadian Alliance that debt is a serious item. It needs to be legislated and that is exactly what we would do. We would legislate its paydown.
Unfortunately, voters forgot the Liberal legacy of broken promises and now we are paying the price. They received votes in the last election partially because they were promising to pay down debt. Now they have broken that promise. We need to remember the legacy of broken promises of the federal government.
I have been a minister of finance. I know what it is to table a law that forces the paydown of a debt. I commit to taxpayers today that the Canadian Alliance will always treat debt seriously, will always see it as a deferred tax on our children and our grandchildren and will never put foolish political spending ahead of the hopes and the dreams of our children and our grandchildren.
The government has gone totally in the opposite direction on that. This kind of decision is typical of the lethargic Liberal policy of drift and decline that typified the 1990s. The 1990s was a decade of drift for Canada. It was their present member for Markham who, before he was elected and fell under the Liberal gag order, called the last 10 years a “decadus horribilus”. Roughly speaking, that means a nasty 10 years. That is what he called it until he got elected and they gagged him.
Real income levels stagnated while countries like Ireland overtook us. Our dollar has lost 25% of its value against U.S. currency since 1993. There is now a 22% gap between Canadian and U.S. standards of living. That amounts to a difference of $29,000 for an average family. This is unacceptable. U.S. productivity has grown 50% faster than Canada's over the past decade. The Canadian Chamber of Commerce said that the 1990s will stand out as the poorest decade relative to growth since the 1930s.
All these figures point to Canada's greatest economic challenge: to stop the slide in our standard of living and try to catch up. I believe we can not only catch up but overtake the American competitive edge and other OECD economies. We do not have to lag behind. Canada can and should outpace other OECD countries.
I am upset that the Mexican peso outpaced the Canadian dollar last year relative to the American dollar. I am upset about that, but I am glad for the Mexican people. I have met their president and he cares about the value of their purchasing power. However, I am upset that the government's policies have caused the Canadian dollar to fall behind the Mexican peso in terms of growth relative to the U.S. dollar. I am upset when an Ireland or a New Zealand or a Singapore beats Canada in competitiveness. That is upsetting to me. It does not have to be that way. I am glad for those other countries, but I am sad for Canada and sad about the policies of the government that have put us there.
Canada cannot afford to stand still. The flight southward of capital and of some of our best citizens continues. Ninety-eight thousand highly educated, highly motivated, highly skilled Canadians are moving south this year alone, 98,000 people who could produce, who could create wealth, who could create opportunities. They are moving south.
We need to get our priorities straight. We need to continue on the track of debt reduction, tax reduction and spending reduction that the government has totally abandoned. Rather than take the bold steps to strengthen our economy and to secure our future, the finance minister, along with the rest of the government, continues to be adrift. The ship of state is adrift without a chart or a compass even as we enter the storms of a recession.
Canadians deserve better than another decade of drift. Canadians deserve and can have a decade of destiny where Canada takes charge of its future and shows that we can compete and outpace any country in the world with the right government and the right policies.
In difficult times, Canadians want and deserve a government that will make tough decisions and not offer familiar excuses about global economic trends or the effects of American policies.
This is the choice we face: return to these tired old ways of simply protecting political power, increased government spending, high taxation and a massive debtload or chart a course for a more limited, more effective government, lower and more competitive taxes and a debt that can be eliminated in the lifetime of the members of the House.
We have the choice before us: another decade of drift or a decade of destiny. Sadly, the government has chosen the easy and the lazy path of drift.
The following is what Michael Bliss, a distinguished historian, wrote this morning about the government's high spending status quo budget:
--the budget is a masterpiece of avoidance, the response to difficult times of a government that hasn't a clue where it wants to go.
He went on to say:
The Liberals are actually marking time, running on the spot, drifting down the river, as they await the unfolding of such momentous events as the war against terrorism, the recession, and their imminent leadership campaign.
Even in these tough economic times, other jurisdictions are showing leadership and they are continuing to take bold initiatives to set the course for their provincial economies. The federal government could learn from this. If the overall Canadian economy does recover next year, it will be in large measure to the actions taken outside of Ottawa, taken by provincial capitals across the country.
The federal government has this air of superiority. It considers itself the major leagues and it considers the provinces the minor leagues. It was the provinces that set the economic pace in the last decade and they continue to do so. It is he federal government that comes in on the hard work of provinces, scoops that surplus, spends it indiscriminately and does not learn the lessons of true economic reform and economic rigour.
British Columbia is coming out of a home grown economic slump created by the free spending and high taxing policies of the NDP. The new provincial Liberal government of B.C. is promising and has come forward with dramatic tax cuts to make B.C. competitive with Ontario and Alberta. To make sure it can afford these tax cuts, it is implementing huge efficiencies to its own government bureaucracy and across the board spending cuts.
The B.C. government recognizes what the federal government does not: providing fiscal stimulus through fiscal discipline and through tax relief provides long term growth to the economy, while increasing government spending only provides a short term boost and imposes a future tax, a deferred tax on the young people of our nation.
Similarly, Alberta is continuing in its quest to become the first province to pay off its entire provincial debt. That is a goal worth pursuing. Why does the federal government not get hold of a vision like that?
I had the honour of working with the premier of Alberta and an elected team who put people first. I was the minister of finance when Alberta became the first province to pay off its net debt so that it owned more than it owed and to be the first province to have a single rate of tax, and it proved that we can do that through recessionary times, when commodity prices are down, when there is a worldwide crisis on like the Asian crisis. If we still show fiscal discipline and still be committed to keeping taxes low for our hardworking people, we can still move ahead even in tough times.
It takes discipline to stay the course toward that type of objective. We cannot be spending addicts like the federal Liberal government.
Why could this federal government not have cut its spending at least enough to make a modest payment on that debt? Our finance critic has already identified $6 billion of wasteful, inefficient spending that could have been applied toward paying down the debt and to other areas. It would have taken pressure off other programs and it would have taken some of the burden off the shoulders of our children and grandchildren who now must carry, who knows how many more years, the result of the federal government backing off on any commitment to pay down debt. The federal Liberal government lacks the vision to chart a clear course for the country toward prosperity .
Ontario is continuing its course toward growth and prosperity. The federal Liberals do not like to hear it, but Ontario is moving in the right direction in many areas. In the midst of tougher economic times, Ontario remains committed to staying out of deficit and, in the same process, reducing taxes and putting money into health care, not taking money out of health care like the federal government did.
The Ontario government, like many other provinces, looks for bold new initiatives in terms of reducing taxes. Take, for example, the Ontario government and its commitment to promote choice and competition in education by providing federal tax credits to parents of children attending independent schools. That is a policy borrowed again from the Canadian Alliance platform and it helps fulfill the national interest. It recognizes a public good being performed by parents, something the federal government neglects to do in many areas.
Canada also has an obligation under international human rights law to prevent religious discrimination. Ontario's new policy of providing choice to parents of all religions and all denominations helps Canada comply with these areas of recognizing and not discriminating against individuals in terms of their particular choices.
Even in tough economic times, the provinces continue to lead. The minor leagues lead the major.
We see no bold, decisive action from the government. We see no further progress toward debt and tax reduction that would strengthen our dollar and improve our international competitive position.
In this post-September 11 environment, we have not seen a serious or profound consideration of our economic arrangements with our friend, our ally and our greatest trading partner, the United States. There is no new thinking in that area whatsoever. Surely, after September 11, the one signal the government could have sent, without opening even wider its spending floodgates, is that we are serious about our continental partnership with our American neighbours.
There was much talk yesterday about open borders and border security but there was no sense of a long term vision about where the continental partnership between the United States, Mexico and Canada could and should go.
The government does not like to admit this, but the prosperity it enjoyed, ironically in its first years in office, was in large part due to measures taken before it came to power. In 1993 the Macdonald royal commission urged Canadians to take a leap of faith toward free trade with the United States. The Liberal government of the day did not want to embrace that destiny of free and fair trade. The Mulroney Conservatives did embrace free trade. It was also supported by the new and rising Reform Party of the day. However free trade was bitterly opposed by the Liberals, including the now Minister of Finance. It was this policy of free trade and NAFTA that helped create the very prosperity that the government then took to balance its federal budget, along with of course raiding health care and raiding our armed forces.
September 11 has driven Canada and the United States more closely together than ever. Now is the time for us to take another leap of faith to an even more robust economic relationship with our American allies. The time is right. It is not enough to improve border crossings, as important as that is, just to maintain the status quo. We need to create an even closer union where the border can be truly invisible to consumers and businesses alike.
Even Pierre Trudeau had the foresight to appoint Donald Macdonald to think about the long term future of the Canadian economic union. It was that thinking which finally lead to that leap of faith in free trade which caused Canada to become more prosperous.
If we had a government that truly understood human hopes, human action and human nature, we would have policies in place that would cause us not to just catch up to but to leap ahead of the United States and to really discover the opportunities of being a truly favoured nation in this world.
Where is the long term visionary thinking of today under this Prime Minister? There is no vision, only half measures. He said himself that he is not a visionary. I say again that we agree with that.
There are a few hundred million dollars for border guards or special pass programs but no long term vision for our North American partnership, even though market, social forces and security concerns are forcing us into a new north-south relationship. The universal forces at work are propelling us in that direction.
Let us get a vision so we can steer our path and not be forced into it so we can take advantage and maximize opportunities rather than just being pulled along in the drift of this.
The government's lack of vision is perfectly described by F.R. Scott's meditation on another long-serving Liberal Prime Minister, William Lyon Mackenzie King. F.R. Scott said:
He seemed to be in the centre Because we had no centre, No vision To pierce the smoke-screen of his politics. Truly he will be remembered Wherever men honor ingenuity, Ambiguity, inactivity, and political longevity.
Let us raise up a temple To the cult of mediocrity, Do nothing by halves Which can be done by quarters.
The government, with its half measures and quarter measures on the border, is avoiding defining a vision of the Canada-United States relationship, one that would be positive for Canadians.
The time has come for a new vision, fit for the post-September 11 era and fit for a new millennium.
We must put all the options on the table. We need to consider a truly common and free market, with common tariff and common customs policies in a formal customs union. Where is the vision for this? We need to talk about these things. We need to imagine a Canada where the Canada-U.S. border is as transparent and as invisible as the French-Spanish border or the Dutch-German border. The French, the Spanish, the Dutch and the Germans did not cower in fear of losing their national identity as they marched toward freer trade. Canadians do not fear that either. I have yet to run into a Canadian in my travels from coast to coast who has said, “Please send Sheila Copps to protect me and my identity”. That has not happened yet.
Yes, I recognize--
The BudgetGovernment Orders
The Deputy Speaker
Order, please. Let us just remember that we are not to refer to each other by name but in fact by our portfolios.
Stockwell Day Canadian Alliance Okanagan—Coquihalla, BC
Mr. Speaker, I have yet to run into a Canadian from coast to coast who has said “Please, quickly send out the minister of heritage to protect me, so I can save my Canadian identity”.
Canadians know who they are. Canadians stand proud. We do not stand in fear of moving ahead in prosperity and progress or of losing our identity. We will always know what it is to be Canadian. Canadians do not have this fear. The only fear we see is the Liberal fear of losing power, if our citizens actually gain more power for their own future direction and prosperity.
The United States and Canada need not fear such an open border. We will both have confidence that the continent is protected, if we move ahead with the protections that we have suggested, with a security perimeter that keeps criminals and terrorists out of both countries and allows freedom of trade back and forth across an open border.
We need to consider moving closer together on monetary policy. Why is there no discussion on this? Why is neither the Prime Minister nor the Minister of Finance bringing forward the elements of this so we can look into this and discuss it? Because the government waits for the winds to blow. It holds its fingers in the air. When it hears the winds blowing strong enough and feels them strong enough, it reluctantly sails in that direction, sometimes in the direction of a freer economy and a freer nation.
We seriously need to start discussing dollarization or a common currency. Why in this day and age are we not discussing these things? Why do we continue to fall back on pet political projects for political friends rather than the true issues of propelling ourselves forward in prosperity and in hope.
If we want to send a signal that we are thinking boldly about the future, that we still have the courage to dream great dreams, these are the kinds of issues we must discuss. We must be discussing these now. International events are forcing the discussion. Why do we not lead them instead of being dragged into them?
These events will be thrust upon us as terms not advantageous to us in five or ten years if we do not move on these areas now, get the discussion going, talk to Canadians and look at our opportunities.
Sadly, with this budget, with their runaway spending, their failure to address the real defence and security needs of Canadians, their return to tax increases, their abandonment of debt paydown and of any attempt to restore economic fundamentals, let alone to consider anything dramatic or new like transforming our continental relationship, the Liberals seem to have chosen the path of drift.
Today, tomorrow and the next day the Canadian Alliance will be asking Canadians to help us chart a different course. We will be asking them to help us have a discussion on these economic and security issues to force the government to come to terms with economic reality, to change its direction, and to take our economic destiny into our own hands.
Let us eliminate the waste in government by starting with the cuts to the $16.3 billion of poorly managed programs that the auditor general has identified. Let us give our brave Canadian forces the tools they need to do their job. Let us continue with tax reductions especially, in this time of recession, to those job killing payroll taxes. Let us continue to pay down the debt and restore confidence on the fundamentals of our economy. Let us allow the provinces to be innovative in areas like health care, where they can allow market forces to help them deliver the services that their citizens need without being slapped and without being hobbled by a federal government that truly does not care about co-operation. Let us have the courage to consider another leap of faith to a stronger, closer economic union with our great friends and allies in the United States.
The government wasted a tremendous opportunity to chart a new course for freedom and prosperity with this budget. Canadians deserve better. With their help we can make this country better.
We can make this a country where the government provides not a roadblock, but a sign post for prosperity, a sign post for hope.
I ask all Canadians to join with us and make Canada a most favoured nation, a nation of unlimited horizons and boundless frontiers. Let this be a nation where the young still have vision and the old still dream dreams. God keep our land and may this country remain the truth north, strong and free.
David Collenette LiberalMinister of Transport
Mr. Speaker, three months ago today the world witnessed terrorist attacks on the United States of a magnitude unlike anything seen before. In the next few minutes I would like to talk about how the Government of Canada has responded to those attacks. I will be sharing my time with my colleague from Davenport as we enter the debate.
The impact of these attacks continues every day. There is no question that things have changed as a result of the 11th. To some degree we have lost our naivety as a society and we have lost our innocence, and that is to be lamented. However every challenge that comes forward in life has to be met with resilience. That is what the government has done since September 11th.
The Government of Canada reacted quickly and effectively on several fronts after the events of September 11 in order to deal with the serious threats stemming from these horrible crimes.
I am pleased to provide details today on the $2.2 billion in air security initiatives that were announced in yesterday's federal budget. This is part of our response to the events of September 11.
Everyone knows what the government did on the 11th in the closing of our skies and in working with our American friends to ensure that all planes coming across the Atlantic and the Pacific were put to Canadian destinations. The people on those planes were processed and received with great hospitality by the people of Canada.
In the hours afterward, as we grappled with that particular problem, my officials were working with those of the FAA in Washington to come up with new, tougher security measures to ensure we did not have a repeat of the events of the 11th.
We also announced that immediately cockpit doors were to be locked for the full duration of the flights. That was long overdue. As the House will remember, earlier this year I asked pilot organizations across the country to consider closing these doors. In fact, I issued an order that at the first sign of any trouble those cockpit doors were to be closed. We had to follow this with the complete closing of the cockpit. That is something again which will affect lots of travellers who interact with the crew, and young children, in particular, who on their first flights are allowed to see from the cockpit the icebergs off Greenland, or the St. Lawrence river valley or the Rockies as they fly over them. These things meant a lot to the travelling public and to the pilots in terms of interacting with passengers but that is all gone.
We came forward immediately and said that we would bring in nearly $58 million worth of explosives detection equipment. We actually ordered that equipment. We also said we would spend $1 million to do a very quick study to ensure that new methods were put in place to look at technologies and practices for airport security operations.
We immediately allocated $3 million for new inspectors at Transport Canada and the resources necessary to support their activities. In recent days we introduced Bill C-42, the public safety act, which is designed to strengthen the government's ability to improve the safety of Canadians, to prevent terrorist attacks and to respond quickly if significant threats should arise.
Most of that bill comprised of Aeronautics Act amendments that were in the works, that had stakeholder consultation and that were brought forward in advance because there were some changes that absolutely were required to deal with the events of the 11th. One, which was spun off from Bill C-42, was to make the manifest information from Canadian flights available to our friends in the United States, something to which they had full entitlement but something we could not provide under Canadian law.
Canada already has one of the best civil aviation systems in the world and an enviable safety and security record. Following the terrorist attacks, it was necessary to take immediate measures to increase the level of aviation security in Canada, and we reacted accordingly. However, as I have often repeated in recent weeks, we can and we must continue to do better.
Yesterday, my colleague, the Minister of Finance, detailed in great measure some of the responses that we have made on the airline security front.
First and foremost is the Canadian air transport security authority. This authority will be different from the status quo and will be different from the regime that the Americans have put in place. We are combining the benefits of involving the private sector and of having some element of decentralization, but with centralized standards and certification. We are not bringing all these people in as federal employees or as public servants. We are making them federally regulated employees. They can continue to work for security firms and airport authorities, but they will be regulated by the federal government. They will have to meet strict standards of performance.
This is a good compromise from the positions of airlines, airport authorities and others. It is a compromise in terms of organization but it does not compromise the values of safety in which we believe so much.
This organization will be responsible for all pre-boarding screening at airports. It will improve the effectiveness and consistency of screening services across the country. It will be responsible for the acquisition, maintenance and operating of screening equipment. It will certify and test security officers responsible, and certification will be awarded on the basis of new security and training standards set by the authority in accordance with Transport Canada's enhanced regulatory requirements.
The authority will set conditions for its employees under service contracts. These conditions will include appropriate performance standards, minimum wage rates, maximum hours of work and conditions relating to retention, including ongoing training.
We shall continue to establish standards and regulations for the delivery of aviation security services and to monitor for compliance.
A lot had been made of accountability in this Chamber, as there rightly should be. What we have announced will be accountable to those people sitting in the House of Commons and the Senate because this will be an agency that will report directly to me, as minister, and the Minister of Transport stands here as a member of the government, accountable to all members in the House.
Even before the authority is in place, the government will be providing up to $10 million this fiscal year to implement immediate improvements to airport screening practices.
Even prior to the authority being set up, the government will provide up to $10 million during the current financial year to make immediate improvements to security measures in airports.
Also to help the authority meet its objectives, the government is going to provide up to $128 million a year extra in pre-board screening services. That funding represents an increase of 78% over the airlines' expenditures last year for pre-board screening.
In addition we shall be spending $1 billion for explosive detection systems equipment right across the country. That will cover 99% of all airline passengers in the country. That is going to be incredible coverage and will give Canadians a real sense of security.
This morning I held a news conference at the Ottawa International Airport. My officials demonstrated the new equipment. New X-ray equipment will be brought forward. The incredible technological breakthroughs that have been made in screening equipment will now be available here in Canada.
Also we are going to be providing $35 million over the next two years to airlines to help cover the cost of security modifications to existing passenger aircraft resulting from new standards and regulations currently in development.
The government will make annual contributions for costs associated with aviation security related policing at major airports. The new authority will provide funding for aviation security related policing to airport authorities which will make appropriate arrangements with police forces. We will be making one time payments of $20 million this year for heightened policing and security at airports resulting from the terrorist attacks.
A lot has been said about armed police force on aircraft. This is something we would rather not have done. In a civilized society we do not want to be in a plane at 37,000 feet with any firearm available even if it is in the hands of the RCMP. That is fraught with danger. It is something the airline industry grappled with. In particular, the Air Canada pilots grappled with that. They changed their views over the course of the last few weeks. We were sensitive to the changing views of the aviation industry.
It was with reluctance that I recommended to my colleagues that we put armed personnel on planes because it will be a confidence building measure for airline travellers. Some weeks ago we already agreed to this particular measure for flights into Washington.
I could go on at length but I want to assure all my colleagues that we had a very good airline security system before September 11, but it was not good enough. What was announced yesterday by the Minister of Finance and by the government will improve it. We will have the best airline, airport and aircraft security system in the world.
Jason Kenney Canadian Alliance Calgary Southeast, AB
Mr. Speaker, I would like to thank the minister for his remarks and his hard work. We may not always agree with policy outcomes on the part of the government but I think we all recognize that the minister is diligent in his responsibilities.
I want to ask the minister about the new $24 round trip assessment on passengers. First, is it not already true that a very large share of passenger ticket costs are taxes imposed by government, the air transportation tax, the GST on top of it and that share of the aviation fuel tax which companies pass on to their consumers? Is it not true, for instance, that in short haul low cost fares a very large percentage, upward of half of the price of a ticket, is already taxation? Perhaps he would comment on that. Does this not add an additional burden?
Second, what assurances can he give us that the funds raised by this additional assessment, this levy, will be segregated and will all go to the direct airline security costs and those costs alone and that the funds raised by this additional tax will not be shunted into general revenues and used for other general government purposes? This is a serious concern we have when we look at way the EI surplus is managed. Perhaps the minister could address this. How do we know this tax will not be shunted off into general revenues?
David Collenette Liberal Don Valley East, ON
Mr. Speaker, the hon. member makes two very good points.
First, with respect to the air transport tax, that was eliminated some years ago when we commercialized NavCanada. NavCanada then charged back its fees through the airlines and the airlines did add that to the ticket price. However that covers the air navigation system. The airlines themselves were responsible for the screening and other security costs. We estimate that there will be savings of about $72 million for the airline industry.
On the second point the hon. member makes, he is absolutely right. We cannot have anyone, not just members of parliament but members of the public, believe that this charge will be used for other purposes.
Yes, it will go to the consolidated revenue fund. Yes, it will pay for all of the related security measures that are being introduced. However as the equipment is bought, and we are talking about $1 billion for EDS equipment alone over the next few years, obviously that charge will be reviewed. In fact I talked to the Minister of Finance about this during question period, between questions if members can believe that given today's question period. He acknowledged the fact that there absolutely will be a review.
This will not be a revenue generating device for the federal government. This really is something to pay for all of the security measures. It is something we felt--and I believe Canadians will support us on this--should be borne by the travelling public and not come out of general tax revenues.
James Moore Canadian Alliance Port Moody—Coquitlam—Port Coquitlam, BC
Mr. Speaker, I want to draw to the attention of the transport minister this fact. These are not numbers pulled out of the sky; these are actual numbers if one were to buy an airplane ticket today flying from Edmonton to Calgary, or from Dallas to Houston. Edmonton to Calgary is 154 miles and Dallas to Houston is 225 miles. These are one way tickets.
The base fare for the Edmonton-Calgary flight is $70. The base fare for the Dallas-Houston flight is $95 adjusted to Canadian dollars. After all the fees, taxes, GST, security charges and airport improvement fees in both jurisdictions, adjusted to Canadian dollars, the Canadian ticket costs $108.30 and the American ticket costs $95 even and that is after all the taxes. That works out to taxes and fees on the Canadian ticket of 35.3% of the cost and on the American ticket, 14.9%.
Canadians are paying more than double the fees, taxes and surcharges that Americans are. It is a huge disincentive obviously to Air Canada which is trying to increase its capacity to fly transborder. Relative to what is happening in the United States this puts Canadian carriers at a huge--
The BudgetGovernment Orders
The Acting Speaker (Mr. Bélair)
There is no time left. With the indulgence of the Chair, the hon. Minister of Transport.
David Collenette Liberal Don Valley East, ON
Mr. Speaker, I do not want to get into a debate about particular airfares because there is all manner of special fares between certain points. I cannot acknowledge that what the hon. member has said in good faith is accurate.
Is the hon. member advocating that this be paid for out of general tax revenues? Is he advocating then that this be added to expenditures of the government? How can the Alliance member advocate this when his leader a few minutes ago, and I sat through his leader's speech, wants the debt brought down and does not want us to go into deficit? Is the hon. member advocating that we go into deficit, or is he really advocating a position that is different from that of his leader?
He talks about Air Canada and says how this is going to affect it. I remind him that Air Canada issued a release last night supporting the government's approach to finance the security measures in this way.