Debates of Dec. 11th, 2001

The Budget

[Paul Martin, Liberal, Minister of Finance]

Mr. Speaker, the defence budget is some $11 billion. Yesterday's budget added $1.2 billion to that. This means that over the course of the next five years the defence budget will go up by $7.2 billion.

Before the Alliance, or the Reform Party, try to claim an interest in defence, I remember that in 1993 in the House the Reform Party said that we should cut defence spending. In 1994, the Reform Party said that we should cut defence spending. In 1997, the Reform Party said that we should cut defence spending. In--

[The Speaker]

The hon. member for Macleod.

[Grant Hill, Canadian Alliance, Macleod, AB]

Mr. Speaker, it is interesting when we compare these quotes across the floor, but the auditor general made it very plain that there was wasteful spending by the government.

I would like to know about the priorities of the government. When the finance minister could find money for film producers and he could not find a single solitary dime to pay down our debt, what priority is that?

[Paul Martin, Liberal, Minister of Finance]

Mr. Speaker, over the course of the last four years we have paid down $35 billion worth of debt, $17 billion in the last year.

Canada has dropped its debt to GDP ratio more than any other G-7 country. We are the only G-7 country not to be in deficit this year.

[Grant Hill, Canadian Alliance, Macleod, AB]

Mr. Speaker, that shows exactly how bad we were. In comparison to the G-8, we are the second highest in the G-7. Is that the record the finance minister is proud of? I am ashamed of that record.

Do members know who should really be crying? It is the children of the country who will have to pay for the soaring debt.

Why did the finance minister not find one solitary nickel to pay down our debt? Could he explain that to the kids?

[Paul Martin, Liberal, Minister of Finance]

Mr. Speaker, Canada is the only G-7 country not to be in deficit, the G-7 country with the largest debt paydown of any of them and the only country among all the industrial countries to have had a decline of 20% in its debt to GDP ratio.

The fact is that this government has managed the nation's finances well, which is why we have been able to come through this downturn as well as we have. That virtually is what every economist in the country has said today, the day after the budget.

[Gilles Duceppe, Bloc, Laurier—Sainte-Marie, QC]

Mr. Speaker, it was all very well for the Minister of Finance to say, as he did yesterday, that we must do everything in our power to overcome the economic effects of September 11, his budget does nothing to fight the slowdown.

Not only did the minister not provide any new measure to jump start the economy, but the unemployed will again have to pay the price.

Does the Minister of Finance realize that his budget of inaction heavily penalizes workers who could lose their jobs, because the government is also going to seize their overpayments, without improving the employment insurance plan?

[Paul Martin, Liberal, Minister of Finance]

Mr. Speaker, when we look at the stimulus to the Canadian economy, the $17 billion reduction in income tax and $9 billion this year in new spending, we are looking at a figure of $26 billion, or 2.4% of our GDP.

No other G-7 country or industrialized country can claim such stimulus to its economy. We are doing this to create jobs.

[Gilles Duceppe, Bloc, Laurier—Sainte-Marie, QC]

Mr. Speaker, that was last year's response, because he is talking about last year's measures.

It is important right now to boost the economy. The Minister of Finance is refusing to do anything with the hidden surplus of $6 billion, two-thirds of which comes from the employment insurance fund, from which he is appropriating money. By giving back to the unemployed more of this money, the government would have directly stimulated the economy, instead of helping to increase the number of unemployed.

Will the Minister of Finance recognize that, in the context of a slowdown, his political decision to ignore the unemployed is a really bad economic decision?

[Paul Martin, Liberal, Minister of Finance]

Mr. Speaker, it is important to look at the stimulus in the economy this year. There the infrastructure program, which begins immediately, but there is also the affordable housing program, which is being implemented immediately, and the green municipal investment fund for sewers, which we have doubled. In addition, there is the new $2 billion structure for strategic infrastructure.

These are stimulating the economy.

[Yvan Loubier, Bloc, Saint-Hyacinthe—Bagot, QC]

Mr. Speaker, the man who is living in the past and who, over the past five years, was off by $60 billion in his forecasts, is again hiding a $6 billion surplus this year.

How can the Minister of Finance justify such fiddling with the books, when we expected real measures for employment, education, health, the aboriginals, the elderly and economic recovery?

[Paul Martin, Liberal, Minister of Finance]

Mr. Speaker, this is exactly what we did.

We earmarked $185 million to help aboriginals because of the fetal alcohol syndrome. We invested in infrastructures, in highways. We also allocated money to improve our border operations. We invested in affordable housing. We put money in all these areas to help Canadians and our efforts are paying off.

[Yvan Loubier, Bloc, Saint-Hyacinthe—Bagot, QC]

Mr. Speaker, it is hard for the public to understand the Minister of Finance when he speaks. His own department's figures indicate a $13 billion surplus for the first six months of the year.

Yesterday, the minister maintained that his surplus, before implementing any budget initiative, would drop to $7 billion by the end of the year.

Can the minister explain to the public how the federal government will lose $1 billion per month in the last six months of the current fiscal year? Because this is what the Minister of Finance is saying when he anticipates such a small surplus at the end of the year.

[Paul Martin, Liberal, Minister of Finance]

Mr. Speaker, the vast majority of economists agree with us that our anticipated surplus will be the actual surplus.

However, if we are wrong and the surplus is larger than that, the money will be invested in infrastructures, in job creation. It will not be used to reduce the debt. This is the system that we put in place.

[Alexa McDonough, NDP, Halifax, NS]

Mr. Speaker, the budget was supposed to target safety and security. There are security measures related to airports and borders, and we support that, but for Canadians the concept of security is much broader than that. It includes health security, environmental security, job security and income security.

Why is the finance minister's vision of security so narrow? Why does his concept of security exclude the most fundamental priorities of Canadians?

[Paul Martin, Liberal, Minister of Finance]

Mr. Speaker, there is no doubt that the concept of security is much broader than simply personal security. That is why the government has remained faithful to the historic transfer of health funding to the provinces: $2.8 will be transferred this year: over $3 billion will be transferred next year: and over $4 billion will be transferred the year after that.

At the same time we have doubled the amount of money going into the environment, with the municipalities, moneys that will fix up waterworks, clean air and make sure that the quality of life for Canadians constantly is improved.

[Alexa McDonough, NDP, Halifax, NS]

Mr. Speaker, the finance minister talks about his clear-eyed vision for Canada, but what clear-eyed vision for Canada includes 1.3 million children still living in poverty, two million families still living in substandard housing, 800,000 workers who contributed to employment insurance who do not qualify and 16,000 Canadians dying prematurely every year from air pollution?

How can the finance minister brag about his clear-eyed vision, when it is so evident that he is suffering from a severe case of short-sightedness?

[Paul Martin, Liberal, Minister of Finance]

Mr. Speaker, if the hon. member simply wants to take a look at what the government has done, the Minister of Human Resources Development has improved the employment insurance situation substantially to help the very workers she has talked about. We have brought the national child benefit to a record high. Our transfers to the provinces are at a record high. When we brought in indexation, we brought it in to help seniors and to help families with small children. The bulk of our tax cuts have gone to medium income families and low income families.

If anyone is short-sighted, it is perpetually the NDPers. Would they like to borrow my glasses?

[Scott Brison, Progressive Conservative, Kings—Hants, NS]

Mr. Speaker, all Canadians want more resources for improved airline security. The question is where should that money should come from. Instead of listening to the auditor general and cutting wasteful, out of control spending in 16 government departments, the finance minister chose to impose a $2.2 billion tax on Canada's struggling airline industry.

Why did the finance minister not ground wasteful Liberal spending instead of further grounding Canada's airline industry?

[Paul Martin, Liberal, Minister of Finance]

Mr. Speaker, there was a $7.7 billion security package. Of that, the Canadian government and Canadian taxpayers are picking up $5 billion of the costs.

The $2.2 billion that will go to air travellers will be paid by those who are the most frequent users of airlines. At the same time, we have picked up and absorbed $72 million of air security costs that previously were paid for by the airlines, money they can use to either improve their balance sheets or reduce their airfares.

Under these kinds of circumstances and given the government's financial constraints, to ask air passengers to pay for--

[The Speaker]

The hon. member for Kings--Hants.

[Scott Brison, Progressive Conservative, Kings—Hants, NS]

Mr. Speaker, it may have been a good idea for the finance minister to have asked some of his ministers to reduce some of their wasteful spending.

The U.S. government will soon be charging U.S. travellers a $5 security charge for each round trip flight in the U.S. With the finance minister's new budget, the Canadian government will be charging a $24 security tax for round trip domestic travel. Why is the Canadian government charging air travellers three and a half times what the U.S. government is charging its travellers?

[Paul Martin, Liberal, Minister of Finance]

Mr. Speaker, the hon. member's facts are simply wrong. When we look at the security charges and when we look at the taxes, the Canada and United States numbers are very comparable. The American situation is much more complex. It charges segment by segment

If we want to compare Montreal-Toronto or Toronto-New York, or any comparable fare between Canada and the United States, we will see that in fact the charges being imposed by government for taxes and security are roughly comparable.

[Jason Kenney, Canadian Alliance, Calgary Southeast, AB]

Mr. Speaker, the finance minister has led us into the teeth of a recession. Unemployment is going up. The dollars is at an all time low. In the face of this he could not find a penny, not a penny, for stimulative tax relief for working families.

Why can the finance minister find hundreds of millions of dollars for pet political projects like handouts to TV producers, but not a single dollar in stimulative tax relief for working families? Why not?

[Paul Martin, Liberal, Minister of Finance]

Mr. Speaker, the Canadian people are entitled to have the Canadian Alliance members put some consistency into what they are saying. The Leader of the Opposition stood and said that what we should have done was pay down debt. Now the opposition critic has stood and has said what we should have done was pay down taxes. They cannot have it both ways.

The fundamental fact is that over the course of the last eight months the Canadian Alliance has asked for $36 billion in additional spending. If we had done that, we would be in a double digit deficit. There would be no tax cuts and there would be no debt reduction.