House of Commons Hansard #130 of the 37th Parliament, 1st Session. (The original version is on Parliament's site.) The word of the day was budget.
Joe Clark Progressive Conservative Calgary Centre, AB
Madam Speaker, that was an interesting, if not misleading, review of history. Would the hon. member indicate why the budget proposed no new spending for agriculture?
Joe McGuire Liberal Egmont, PE
Madam Speaker, if the right hon. member for Calgary Centre had been listening I indicated that we were. The Farm Credit Canada initiative will be making $360 million of new money available to agriculture.
We will also create a sectoral council for agriculture. The amount of money will be doubled to $60 million for those sectoral councils. Agriculture is like most businesses and the human part of the business will be addressed by this new sectoral council in agriculture.
Scott Brison Progressive Conservative Kings—Hants, NS
Madam Speaker, yesterday in the House of Commons during question period the Minister of Finance stated in response to a question:
What is important in a budget is the way in fact it is received by the public.
That admission by the Minister of Finance speaks volumes about his priorities. According to the minister the budget ought to be judged by polls and by public opinion. That is why the minister's budgets tend to focus on next week's polls and tend to ignore the challenges and opportunities facing Canada in the 21st century.
At a time when Canadians deserve leaders who look years, even decades ahead, this finance minister has barely looked weeks ahead. It is often said that the world changed on September 11. With the budget the government is pretending that the world began on September 11.
The budget does nothing to address some of the serious issues facing the Canadian economy prior to September 11 such as agriculture. There was an agricultural crisis before September 11. At a time when the government speaks of security, what could be more important to national security than the ability for us to produce our own food?
If only the Minister of Industry had been minister of agriculture perhaps then the Prime Minister would have stepped into the Liberal leadership sandbox and demanded $110 million for Canadian farmers.
In terms of health care Canadians, who are waiting months for MRIs and years and months for major surgery, know that there is a crisis in the health care system in every province in Canada not because of provincial governments but because of this government's callous cuts to health care and its lack of priorities.
There is a productivity crisis. Lagging productivity levels have reduced the standard of living of every Canadian. Yet in the budget we see no reduction in investment killing capital taxes and no reduction in job killing payroll taxes.
In fact in none of the minister's budgets have we seen forward thinking, courageous and visionary policy initiatives, the types of policy initiatives that were hallmarks of the previous government.
During times of global economic growth a lack of vision is easy to overlook. The Canadian economy would not have enjoyed the high level of growth throughout the nineties that it has enjoyed had it not been for the foresight, risk taking and innovative policies of the previous government.
That government took big steps. It thought big. It focused on what was good for Canadians, which did not always win votes but was certainly the best way to build a stronger country.
The government and the finance minister like to take credit for the elimination of the deficit. However the overwhelming majority of economists give full credit to the previous government. In fact the 1998 The Economist magazine world preview said that the credit for deficit reduction in Canada belonged largely to the structural changes made by the previous Conservative government. The Economist magazine went further and listed specifically free trade, the GST and deregulation, all of which were policies that the current finance minister and the current Prime Minister fought vociferously in opposition. Clearly having fought these policies in opposition they cannot take credit for the results of these policies now in government.
When asked by my leader last fall during the general election to name one accomplishment of his government during one of the leaders' debates, the Prime Minister could not after seven years in government name one accomplishment.
The question we must ask is what has the government accomplished in eight years of government. We have identified why the government and the finance minister cannot lay claim to the elimination of the Canadian deficit. The government has not initiated any visionary policies that have paved the way to a more prosperous country.
If we look at the performance of the Canadian economy under the government we see a lost decade during which Canadian productivity and growth fell behind those of our competitors.
Under the government the Canadian dollar has lost 20% compared with the U.S. dollar. The Prime Minister's answer is that a low Canadian dollar is good for exports. The logical corollary of his argument would be that reducing the Canadian dollar to zero would create the greatest export nation in the world. Clearly the Prime Minister's arguments when it comes to economic matters are seriously flawed.
Woody Allen once said that 80% of life is just showing up. For eight years the Prime Minister has just showed up, and Canadians are paying a price for a Prime Minister who just shows up and does not do very much more.
Eighty-five per cent of our trade is with the U.S. Thirty-five per cent of everything we consume is from the U.S. A 20% drop in the Canadian dollar represents a significant reduction in the standard of living of every Canadian family.
Under the government we have seen personal disposable income drop while we have seen American disposable income increase. Wealth is relative, and as Americans have been getting richer Canadians have been getting poorer. It is not just the U.S. Almost every one of our competitors in the G-7 have initiated major tax reform and major initiatives that focus on improving productivity and prosperity. Canada has been left behind by a government that watches the polls, but does not address the policy issues that could create more growth and opportunity for Canada.
The 1990s under this finance minister and this government have been a decade of lost opportunity. The global economy has undergone a greater level of change in the last 10 years than perhaps in the last 100 years and the government has done very little to address those changes.
The government has always focused on politics to the detriment of policy. Never was this more evident than in this week's budget. This is a part time budget from a part time finance minister. Good government means making tough choices. The finance minister is so conflicted by his principle role as a Liberal leadership contender that he refuses to make the types of decisions and choices that would ensure continued prosperity and growth for Canadians.
Last week the auditor general, in her scathing report, identified 16 government departments with out of control spending. She identified $16 billion of spending that could have been controlled better by the government and areas where a reduction in the spending of taxpayer money by the government would not have reduced significantly the quality of life of Canadians.
The report went on to identify chronic problems the Liberal government had with controlling its grants and contribution spending. She indicated that the HRDC jobs grant fiasco now echoed throughout every federal department with the mismanagement of projects being systemic.
Perhaps most importantly, in the first line of her first report, the auditor general cited “the erosion of parliamentary control over how government raises money and spends it”. The finance minister's response to her criticism that under the Liberal government there has been an erosion of parliament in its ability to control the raising and spending of money was to introduce a budget in the last week the House of Commons was sitting before the holidays, with only four days of debate before the House rises. However that was not good enough for the Liberals. They have been trying to reduce that to two days so that they would not have to come in to work the morning after their Christmas party.
The minister does not want debate. He does not respect parliament. His government does not respect parliament. He supports what the auditor general has called his government's erosion of parliament. If the minister had taken the auditor general seriously or if he had any respect for parliament, he would have led the charge for his government to reform parliament and bring the estimates back to the floor of the House of Commons where they belonged, where ministers would be required to defend their estimates in parliament.
That minister would not dream of doing that. Why would he? Even though it would be good for parliament and democracy, it would not win him many votes in the Liberal leadership race. The minister knows that his prospects as a candidate for the Liberal leadership race would not benefit from clamping down on the out of control spending of the ministers and lack of accountability to parliament.
To pay for some of the new security imperatives, which represent the priorities of Canadians, the minister had choices. He had choices in terms of how the government could pay for these increased priorities. Clearly when faced with tough choices, Canadian families, individuals and households target wasteful spending and priorize to afford those things that are most important.
Security and defence reinvestment are top priorities for Canadians. Airline security was of particular importance for Canadians and for the Canadian economy. The fact is that improved airline security could be paid for by the finance minister if he were to listen to the auditor general and target wasteful spending by Liberal ministers on their pet projects within their departments. Instead airline travellers in Canada will be paying $24 in a new security tax to the government for every round trip domestic flight and $48 for every round trip international flight.
Comparatively, U.S. travellers will be paying $5 for every round trip. That is three and a half or perhaps even seven times more expensive for Canadian travellers than for U.S. travellers. It is the same security but it is three and a half to seven times more expensive in Canada because this is another Liberal government tax grab by a finance minister who refuses to tackle wasteful Liberal spending in departments that are pursuing their own pet projects. Instead he is willing to lay a $2.2 billion tax on what is perhaps Canada's most vulnerable industry, the airline industry.
If the finance minister's low dollar does not keep Canadians here in Canada over the holidays, his new tax certainly will. A family of four would pay up to $200 in new security taxes just to fly to Florida and back over the holidays to see relatives.
Instead of paying for improved security by giving his department a liposuction to remove some of the fat from his bloated government, the finance minister has decided that ordinary Canadians ought to pay more and that this Liberal tax and spend government should once again introduce more taxation and attack Canada's most vulnerable industry.
Why did he make that choice? He did it again because he is internally conflicted between what he ought to as finance minister and what he knows he should do to shore up support for the Liberal leadership.
In fact, his quick release following his budget address of a comprehensive list of backbench Liberal MPs who could claim to have received something in the budget reflects that true agenda. The auditor general speaks of waste, while the finance minister speaks of pet projects and which pet projects his backbench Liberal MPs can brag about funding.
This is not the first time that the finance minister has put his politics ahead of the prosperity of the Canadian people. In his pre-election mini budget in October 2000, a $1.4 billion home heating oil lottery resulted in only $240 million actually reaching families and individuals who were deserved of that program. Over $1 billion was misdirected, in some cases to prisoners, in some cases to people living outside Canada, in some cases to students who were living in university residences and in 7,500 cases to dead people.
If the government had not blown that over $1 billion on this initiative, that money could have been contributed to the cost of improved airline security. Good government is about making good choices and about protecting the taxpayer money, not wasting it.
Not only has this budget failed to reduce wasteful spending, it has increased spending in many non-core, non-priority areas at a time when Canadian agriculture needs increased levels of funding. In the face of crisis, Canadian farmers could have used the $160 million that the government provided to filmmaking for the heritage minister. The $110 million that went to the industry minister for his broadband project could have benefited Canadian farmers and probably done more for rural Canada than that minister's leadership-based broadband project.
In terms of defence, the auditor general cited the need for $2.6 billion just over the next two years for operations and maintenance, and that was before September 11. The government is providing $600 million over five years. The government that has taken over $10 billion out of the Canadian military wants to be congratulated for putting $600 million back in. The government has taken money out of the military with buckets and is putting it back in with teaspoons. It is not even keeping up with the demands of the military prior to September 11. Certainly this anemic infusion of capital at this time does nothing to prepare Canadians for a new reality after September 11.
Perhaps the biggest disappointment in the finance minister's latest, most disappointing budget was that prior to the budget we had economists, including private sector economists, including Don Drummond, former associate deputy minister of the Department of Finance and currently the chief economist for the TD Bank, projecting that Canada would be in deficit next year. Warren Jestin, the Bank of Nova Scotia chief economist, projected perhaps a deficit this year. The finance minister knew that Canada was looking at a deficit position, if not this year clearly potentially next year.
After the budget, Ted Carmichael, chief economist at JP Morgan, said that the government would in all likelihood be in a deficit. In fact, he said that we would be in a deficit the current fiscal year.
When the finance minister was faced with that stark reality that Canada was facing deficits again, what did he do? Did he cut wasteful Liberal spending? No. Even prior to the budget we saw government spending, excluding defence and excluding transfers to provincial governments and individuals, increased by 13% this year.
Instead of slapping ministerial fingers for an overrun of spending by $2 billion last year, this minister actually found more money for non-core spending this year and ignored the fact that we were cruise controlling toward a deficit position, if we are not there already.
For the first time in six years, this year the Canadian government will have to borrow to cover its costs. The government is going to private capital markets to raise $1.9 billion this year and $1 billion next year. That is based on accounting practices used in the U.S., Japan and Germany. Based on those accounting practices, Canada would be in a deficit right now.
The Minister of Finance would indicate that he does not support those accounting practices, but in 1997, when those accounting practices made his numbers look better than they actually were, he supported those and spoke publicly about how his numbers looked good based on those accounting practices. Now today he will deny that.
The TD Bank economists are accusing the finance minister of “fancy accounting footwork” to avoid the appearance of deficit next year. Instead of addressing the issue in this budget and cutting back on some of the non-core wasteful spending that does not reflect the priorities of Canadians, the minister has failed his first test of leadership in leading a government directly back into a deficit position.
Through no fault of his own, the government was able, with the support of Canadians, to find its way out of deficit. Now under the leadership of the finance minister and Liberal leadership candidate, Canadians are facing the spectre of a deficit in a very short period of time.
We have already established that this budget was a failure from a substantive perspective. We should take a look for a moment at how the budget did in terms of the minister's criteria for a successful budget. I will quote the minister again from yesterday when he said “What is important in a budget is the way in fact it is received by the public”.
Clive Addy, a retired general, said that he found the budget very frustrating.
Lewis MacKenzie, a retired major-general, said:
It's really disappointing... Any time the military gets anything they're happy, but the fact is it's been taken away over the last several budgets.
He went on to say:
We're about $2 billion more in the hole in two years ago than we are now, so we're in serious trouble.
In terms of agriculture, Darrin Qualman from the National Farmers Union said:
The news here isn't just that there's nothing new-- like no new money, no cash injection--it's actually [a] dramatically reduced amount of spending on agriculture.
Bob Friesen from the Canadian Federation of Agriculture said:
There's probably more words in this budget than there has been for a while. (But) there are no numbers.
Jamie Muir, the health minister of Nova Scotia said that he was disappointed. He said that the budget did not send more health dollars to the province. He said “We're really in a worse position than we were last year”.
Marc Lévesque, senior economist at the Toronto-Dominion Bank referred to the travel tax and said that if was regrettable that the new travel tax was implemented because one would have expected that the government could have shuffled around spending priorities to find money to accomplish security.
Cliff Mackay, president of the Air Transport Association of Canada, said that what the government decided to do was load another $2 billion of costs on to the Canadian travelling public. It is really going to hurt the market.
Clearly, the finance minister has not just failed Canadians with the budget. I would argue that the finance minister has failed his long term political aspirations to ascend to the leadership of the country.
John McCallum LiberalParliamentary Secretary to the Minister of Finance
Madam Speaker, the hon. member talks with pride about the big steps taken by the previous Tory government. His own leader mentioned the big step yesterday when he boasted that he inherited a $36 billion deficit in 1984 and by--
John McCallum Liberal Markham, ON
By 1993 he had left a $42 billion deficit to the Liberal government. That is his idea of a big step, from $38 billion to $42 billion. Some big step.
Our big step under our finance minister and our Prime Minister was to take that $42 billion deficit, reduce it to zero and turn it into surpluses.
If that is the kind of big steps the Tories like, I do not think we want to go back in that direction.
Not only that, but the hon. member totally mangles his facts. He talks about callous cuts to health care when in fact we had a $23 billion increase in health care over five years and $3 billion this year alone. He criticizes the government for no tax cuts when we had $100 billion in tax cuts last year. Business groups, such as the BCNI and the Chamber of Commerce, exclusively recommended no tax cuts in this budget.
My last point is on perhaps the worst offence because I thought the hon. member knew something about how budgets were done. The projected deficits or surpluses are not made by the government; they are made by economists. Not only are the economists not predicting deficits, but as was indicated in the budget speech, even if we take the average of the four most pessimistic economic forecasts, the government is not going back into deficit this year, next year or the year after.
Scott Brison Progressive Conservative Kings—Hants, NS
Madam Speaker, I would urge the hon. member for Markham to speak with his seatmate from Chicoutimi about the legacy of free trade, GST and indeed regulation.
The fact is that the previous Conservative government has nothing to apologize for to Canada regarding those policies. Those were the policies that actually made it easy for the member's government to coast. I cannot be absolutely certain of this, but I would bet that the hon. member for Markham voted for those policies in 1988. As a private sector economist, he would have been hard pressed not to support the vision articulated by that government in that free trade election. During that period of time, when that government was fighting the vociferous opposition and the partisan barbs of the Liberal opposition, it forged ahead and continued to carve the types of policies that have ensured that Canadians have been a full partner in the prosperity that the world enjoyed in the 1990s.
The member mentioned the $38 billion deficit that the Mulroney government inherited in 1984. I am glad he did. He may be familiar with the concept of GDP, gross domestic product, as a former economist, but as a Liberal politician he has probably forgotten these concepts quite quickly. The fact is that in 1984 that deficit represented 9% of Canada's GDP. That deficit was reduced to 5% of Canada's GDP by the time that government left office.
The fact is that I have heard the member's seatmate from Chicoutimi standing in the House of Commons boasting about the accomplishment of the government in reducing Canada's deficit as a per cent of GDP by half. I would urge the member to listen to what was at least the wisdom of the member for Chicoutimi--Le Fjord on that issue. I think that the member for Chicoutimi--Le Fjord should pull the member for Markham aside and brief him about the accomplishments of the previous government, those accomplishments that the member for Markham wrote so glowingly about as a private sector economist for the Royal Bank of Canada.
I would also go further and ask the hon. member for Markham not only to revisit the history of the previous government, but to spend some time studying those policies so that his government might become a little more adept at taking some political risks and doing the right thing for Canadians as opposed to focusing on the short term, poll driven, focus group economics that is going to drive Canadians and Canada into the ground.
Jason Kenney Canadian Alliance Calgary Southeast, AB
Madam Speaker, I would like to commend my hon. friend from Kings--Hants for his remarks. We share a perspective on many of these issues, including the need for re-prioritization.
In order to transfer resources to high priority spending areas, my party has identified items of low priority spending which could be reduced such as regional development schemes like ACOA, western economic diversification and FORD-Q and reductions in transfers to crown corporations like the CBC. We are also opposed to the retrograde changes in employment insurance which his party voted for and which is now one of the principal drivers of increased costs in the budget.
Could the member comment on whether he supports eliminating spending on corporate welfare, regional development programs and subsidies to crown corporations?
I understand that his party is in favour of the implementation of the Kyoto accord which many economists have predicted could cost the economy between 3% and 10% of the gross domestic product. Does the member support the implementation of the Kyoto accord regardless of its economic cost?
Scott Brison Progressive Conservative Kings—Hants, NS
Madam Speaker, in terms of government waste, it is not difficult to identify areas of government spending that can be reduced by the Liberal government.
I am sure the hon. member would agree with me that the $1 billion wasted on the Liberals' failed gun registry would be a good place to start in terms of reducing spending and prioritizing spending to reflect the needs of Canadians.
In terms of economic development strategies, there is a divergence in opinion between the hon. member and me. My party does have a history of supporting regional development strategies. We believe in effective regional development strategies.
Today the government has failed to adapt to the realities of this century some of the economic development strategies introduced 10 to 15 years ago. The government should be taking a leadership role in adapting our economic development strategies to involve more private sector initiatives and the venture capital community in the decision making process. This would ensure that not just government bureaucrats are involved in the decision making, but that there is some level of economic thought and private sector analysis of business opportunities. That is where the government has failed. I am certain the member would agree with me on that.
In terms of the Kyoto agreement and environmental policy, I fear that there is another divergence. The hon. member does not seem to realize that bad environmental policy ultimately is bad economic policy. If we fail to internalize the externalities of bad environmental policy now, ultimately the cost of fixing those issues down the road will be far greater.
I would argue that we cannot extricate economic policies from environmental policies. They have to be integrated. Every policy and every initiative that we put forward as a party and every initiative that the government puts forth should be evaluated both from an economic perspective and in lockstep from an environmental perspective. The hon. member has not thought this through. If we ignore environmental issues and the imperatives of strong environmental policy, ultimately the economic cost of correcting those mistakes will outweigh dramatically the short term cost savings of ignoring them.
Paul Szabo Liberal Mississauga South, ON
Madam Speaker, on budget night I had the opportunity to view a program where representatives of various parties received telephone calls on CPAC.
There was one call from a gentleman on a CPP disability pension who was getting about $10,000 a year. He also had a dependent child. He indicated that the budget should have done something for him so he did not have to pay $600 on his $10,000 income. The member who spoke said that this was shameful and outlined some of his party's policies on how we should extend other tax concessions so that some of his rich friends do not have to pay as much tax.
The member suggested that we think it out. I wonder why he did not think it out and suggest to the caller that if he made only $10,000 and had a dependent child, that he could have claimed the equivalent to spouse exemption as well as his own exemption which would accumulate to more than $10,000. The person would not pay any tax at all. The member should have advised him to refile his tax return and to continue to claim the equivalent to spouse exemption and not pay the tax. In addition he would receive the GST credit and the Canada child tax benefit. There was good news for that caller but the member decided he was going to play partisanship rather than help Canadians.
Scott Brison Progressive Conservative Kings—Hants, NS
Madam Speaker, perhaps one of the other panellists or I should have suggested that he call a CA, like the hon. member for Mississauga, who could have advised him.
The pathetic part of this is that the government makes tax policy so complicated that someone making $10,000 per year needs to call a CA to get advice. I am certain that is in the interest of the hon. member who was a CA, perhaps still is a CA, and after the next election may be resuming his practice.
The fact is the budget did not do anything for Canada's disabled. It left an awful lot of low income Canadians out in the cold by refusing to address the fundamental issue of taxing people at the low end of the income scale. The government ought to raise the basic personal exemption to at least $12,000 as a start.
The BudgetGovernment Orders
The Acting Speaker (Ms. Bakopanos)
Order, please. It is my duty, pursuant to Standing Order 38, to inform the House that the questions to be raised tonight at the time of adjournment are as follows: the hon. member for South Surrey—White Rock—Langley, Air Canada; the hon. member for New Brunswick Southwest, Auditor General's Report.
Business of the HouseGovernment Orders
The Acting Speaker (Ms. Bakopanos)
I have received notice from the hon. member for Dufferin--Peel--Wellington--Grey that he is unable to move his motion during private members' hour on Thursday, December 13. It has not been possible to arrange an exchange of positions in the order of precedence. Accordingly, I am directing the table officers to drop that item of business to the bottom of the order of precedence.
Private members' hour will thus be cancelled and the House will continue with the business before it prior to private members' hour.
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.
Larry Bagnell Liberal Yukon, YT
Madam Speaker, I would like to congratulate my colleague from the Northwest Territories and the strong position she made earlier today. I will not repeat all the excellent points but I did want to say that the three northern MPs have been working very well together for those people north of sixty. Over the last year we have co-operated in a lot of initiatives, along with our three colleagues from the other place, and we have moved the northern agenda forward. A great deal of credit goes to my colleague from the Northwest Territories.
I am happy to rise today to talk about things in general related to the budget because general things affect all Canadians and they affect my constituents in the same way.
Madam Speaker, I also want to mention that I will be sharing my time with the member for Elgin--Middlesex--London.
I was happy to see a number of things in the budget, especially in the environment under which the budget had to be prepared. Everyone knows there were immense security demands on the government by Canadians but also because of the recession that was accelerated by September 11, that there were reduced revenues, less business taxes and less individual taxes. Governments have a lot less room to manoeuvre. Under these difficult situations, it still managed to put in a number of good things related to the environment and poverty that I will speak about later. I was very happy to see those things in this particular budget.
Everyone knew this would be a security budget. After September 11, I think every member of parliament in the House received phone calls, letters and talked to constituents who expressed fear, fear for themselves and fear for their families.
I cannot help but remember going to the U.S. embassy just down the street and looking at the tens of thousands of flowers and cards and reading the cards from children who expressed the fear they were experiencing.
I am sure all Canadians realize that steps had to be taken and the only thing we are debating today is the nature of those steps and the amount of those steps.
However, $7.7 billion worth of steps were taken in the budget for things such as air security, borders, the RCMP, intelligence and defence. What I was really happy about in those expenditures is that a number of them went for one of the things that I have been pushing very hard for which is the border.
The expenditures for the borders serves the second objective of the budget, the economy, which of course was hit hard by the recession accelerated by the events of September 11. As the finance minister mentioned today, a lot of us were pushing for improvements to the border at a number of committees.
I was delighted to see $1.2 billion in the budget dedicated to borders and a number of other things: for example, $58 million to speed up passage of pre-approved persons at the border; $107 million for specialized equipment; $135 million for multi-agency integrated border teams; and another $600 million, in consultation with provinces, territories and municipalities, for border infrastructure. Of course some of these things were needed before September 11. Once again this is an incredible boost to the economy: improved highway access at aisles to the border, processing centres for commercial vehicles and even the soft electronic infrastructure needed to help facilitate trains and trucks to get across the border.
I am happy the security money went not only for security but for those items that could really improve the economy at this important time. For my own riding, it was very important that the border and air security was emphasized and dealt with because tourism is often the biggest private sector employer in my riding. It is absolutely essential to tourism that people feel safe in the air and when they cross the borders into Canada.
I want to mention a couple of things that were not lost under these stringent economic conditions and reduced resources that the government had to work with in preparing this budget. The first one is health care. As everyone has heard a number of times, we had the biggest transfer in history last fall when the Prime Minister and the premiers agreed on what health care would need over the next few years. Over $23 billion was allocated to not only health care but to early childhood development.
Another thing that was not lost, which a lot of people were worried would be lost, was the biggest tax cut in history, the $100 billion in tax cuts. At a time like this that will give a tremendous boost to the economy. In conjunction with that, we are now experiencing low interest rates. Although that is monetary policy, not very much could do as much as those two items working together to stimulate the economy in a time when the whole world is in a recession accelerated by the terrorism attacks. I also want to emphasize that most of those tax cuts go to lower and middle income people.
The thing I mostly wanted to emphasize today, over and above those security items that everyone knew had to be expended, is that the government could still keep on with its agenda of moving forward on a number of things that are very important for people, especially the poor and especially on the environment.
Obviously we could not go as far as we wanted to go because we had to make security expenditures, but they have not been forgotten and we have still made progress on the most important items. A perfect example, and something that is very important to my riding, is the $185 million for aboriginal children. They are probably close to the most vulnerable in our society and I lobbied hard for that before the budget. I was absolutely delighted to see that was not lost under all the other constraints.
Who could argue with the support for students with disabilities or the very large increase in foreign aid?
After September 11, I, and I imagine most MPs, heard from a number of constituents who encouraged Canada to keep up with and even increase its investment in foreign aid because of the needs in Afghanistan and in other parts of the world. I was delighted with the huge increase in our funding to Afghanistan of up to $100 million and also the $500 million Africa fund.
Another item of spending that has been mentioned is the money for apprentice mechanics, which a lot of MPs have talked about. I think everyone agrees with that. Something else in the budget, which a lot of us have talked about for a long time, is help for lifelong adult learning. This will help people in today's economy to keep up with the changing technologies.
I was also delighted to see support for culture. Culture is a big economic factor in my riding. Cultural industries are big and they are growing and to see the government's continued support for that was important.
I was really excited to see the element of wind energy, which is something else I have championed in the House before. It is very important for reducing our greenhouse gases in a positive way. In the north, I think Yukon has been leading. We have two windmills on a mountain beside Whitehorse and they are working very well. Hopefully this will increase wind energy in Canada. In fact there is a provision for microhydro, which we also have in the Yukon, and even woodlots.
In the area of support, I was excited to see support for the Federation of Canadian Municipalities because they often provide inventive things for the budget. A number of their proposals related to the environment. Even though we are under incredibly tight financial constraints, the $25 million green municipal enabling fund and the $100 million green municipal investment fund were actually doubled in the budget. I know the people I shared this weekend with in Dawson City, the FCM board of directors, will be very excited that their programs have been carried on, even their brownfield redevelopment strategy.
Finally, as has been said many times before, it is exciting to see the $2 billion in infrastructure addition. Who could argue with that? Anyone who does argue with that should go to rural and northern Canada where people have no sewers, no fresh water and no indoor water. Before the infrastructure program was brought in, some people were still using wood stave pipes for water or sewer.
I hope we can keep the budget debate in context. A reporter I ran into on the street on budget night put it clearly. He said that it was too bad the terrorists caused the demands on security. From the frustration we see in the debate, I know all of us would rather have spent that money on something else.
However, the budget was done in the context of a new world, a world we did not create, a world we did not want and a world with elements of evil that we did not bargain for, but now we will have to deal with and defeat.
Jason Kenney Canadian Alliance Calgary Southeast, AB
Madam Speaker, I appreciate the remarks of my hon. friend from Yukon for whom I have considerable regard.
Does he believe his constituents in Yukon are at all concerned about the size and level of Canada's $547 billion national debt? Does he think they are satisfied with the budget's commitment to pay zero dollars down on the debt in the next four fiscal years?
Is he not also concerned with reports from organizations, such as the Toronto-Dominion Bank, J.P. Morgan Securities, Nesbitt Burns, the C.D. Howe Institute and others, saying that this budget was likely to move us into a deficit, and that indeed it would have had the finance minister not moved $2 billion of current year revenues from small business tax sources into the next fiscal year?
Is he not at all concerned that some of the leading private sector economists are calling this a deficit budget and that there is no debt reduction here?
Larry Bagnell Liberal Yukon, YT
Madam Speaker, the short answer is, no.
I have a great deal of respect for my colleague. I think we are probably in general agreement on debt reduction. I too think that when the resources are available, when we are not in a terrorist tragedy like this one and when the recession has not reduced government taxes and individual taxes so that we do not have much room to move, we should pay off as much debt as possible.
We are a very wealthy country. We have a lot of resources. Our people all across the country are very talented . Why should we be paying interest to someone else? That money could go to social programs to help the poor, to help education and to help health care.
I am not concerned about this particular budget . Under the circumstances and with what we had to deal with, I am very happy.
The hon. member asked about my constituents. None of them have expressed any concerns recently, that I can remember, about what the government has done since it came to power, with the incredible removal of the deficit, which was a very difficult challenge. All Canadians had to sacrifice and contribute toward removing the deficit and begin paying off the debt for the first time in years. In the last election platform, we had the biggest first year debt reduction proposal of any party. I think my constituents were quite happy with that.
John Harvard Liberal Charleswood—St. James—Assiniboia, MB
Madam Speaker, the budget has been dubbed a security budget. I think it is true that it is a superb security budget, but it is a lot more than just a security budget.
Let us take, for example, a couple of the major infrastructure provisions: $2 billion for a strategic infrastructure foundation; and another $600 million over five years for new border infrastructure items, which is very important. I will ask the member for Yukon about that in a moment.
There is a lot more to the budget than I think a lot of the speakers this afternoon realize, particularly the speakers from the opposition side. They gloss over or totally ignore the other things in this budget: $1 billion over the next three years to promote leading edge research and sustain Canada's innovative use of the Internet; a $200 million investment to help Canadian universities; a 7% increase in the annual budget of the granting councils; a $25 million investment over five years to sustain and enhance the research program of the Canadian Institute for Advanced Research; $24 million over two years to support sector councils. I could go on and on.
There is a lot more to the budget than security. I think the reason this budget, as the other ones have been in the past, has been so well received and popular with Canadians is that it is fair, it is balanced and it contains a lot for most Canadians.
On the item of infrastructure, does the hon. member for Yukon not find it important that infrastructure has been included this way in the budget? It is important to his territory, I am sure.
Larry Bagnell Liberal Yukon, YT
Mr. Speaker, I thank the hon. member for his question. I have already tried to emphasize in my speech the fact that when the infrastructure program first came out from the government years ago, I do not think anyone could argue about the number of people it put back to work. In our area, a small part of Canada where some people might feel ignored by or distant from Ottawa, virtually every community got infrastructure money and every community needed infrastructure money.
As I said, before the program there were, and there may still be, communities and municipalities with wooden pipes. I was so embarrassed yesterday when I heard a Canadian, not someone from the House, say that infrastructure was not needed. That person should travel to the rural parts of my riding and see sewage and water dealt with inappropriately or talk to the member for Nunavut about housing. Then and only then should that person make a comment about infrastructure.
I am glad the member brought up the issue of universities and research. That is an instrumental part of our future. I did not mention it in my speech but I had hoped to. Since I directed a science department I have always been a big supporter of increasing technology and research as the foundation of our future. Without it we will not be competitive in the world when things are being invented every day and ways of work are being invented. For that reason, I was also delighted to see in the budget, even under tight constraints, the extra money for learning and skills development.
The last point was the Internet. Once again I was absolutely infuriated, and I do not get mad very much, when some members of the House abandoned rural and northern Canada and said that these areas do not need access to the Internet like people in big cities do. I am very supportive of having the Internet for these areas.
Gar Knutson Liberal Elgin—Middlesex—London, ON
Madam Speaker, it is a great honour to rise to participate in this debate on budget 2001.
Let me begin by saying from the outset that I hope many of the initiatives in this week's budget will in fact be judged by history to be unnecessary and, in a certain sense, a waste. It may sound strange to hear me say that I hope much of the money spent in this budget proves to be a waste, but we live in a strange world these days, a world that became a whole lot smaller on September 11, a world that while not at war, at least in the usual sense, is experiencing many warlike factors. Everyone who gets in a plane, goes across the U.S. border or even visits Parliament Hill can experience in a small way how the world has changed. We are in a great battle right now against an enemy whom we do not know. We do not even know where the enemy is and we do not know how numerous our enemies might be.
Having pointed out the obvious, I will say let us all hope that these extra precautions we are taking, which I think are necessary in today's context, in a historical context will prove to be unnecessary. I am one of many people who believe that the ultimate solution to our problem in terms of international conflict will not be found in more money for guards and guns. That will not solve the problem.
We need to step outside the box. We need to ask ourselves why it is that certain groups of people who perhaps live far away in some other part of the world hate the west. Why is there is so much conflict in other parts of the world and how will it affect us both in the near term and the long term? As well, what can Canada do to make a contribution to solving those underlying conflicts?
I am one who believes that we must deal with the underlying problems, such as abject poverty in many places in the world where people are living in refugee camps, have grown up in refugee camps, have lived there for 20, 30 or 40 years and have no hope of ever getting out of those camps. Unless we deal with some of those problems, we will not deal with the issue of violence that is now affecting us, as we saw on September 11.
Let me turn for a minute to the economic issues that were in this week's budget and talk a bit about the context. Currently the economy is sending us mixed signals. On the one hand, there is job loss and rising unemployment, which I think all of us would agree is worrisome. We may be in a recession. It is somewhat of an academic distinction, but certainly the economy is slowing down and we do not have the same sense of optimism that we did six months or a year ago. However, at the same time many sectors of the economy are actually doing quite well. For example, housing starts are very strong. The automobile manufacturing industry, while experiencing a slowdown from last year, is still forecasting its second or third best year ever. On a more macro level, interest rates are low and continuing to fall, which will increase consumer demand. Also of note is the low world price of oil, which translates into low gas prices at the pumps. Again, that puts more money in people's pockets which in turn will spur consumer demand.
My point in bringing these factors to the House's attention is to state that I am an optimist. I am with those who think that the economy will turn around in the second part of next year. I believe the government has made wise assumptions in terms of its forecasting and that one thing we do not want to do is overreact to this downturn and make what is a worrisome or a bad situation even worse.
Having spelled out a bit of the context of this unusual budget for an unusual time, let me talk about what I think is worth noting. Certainly the $2.2 billion over the next five years for security for airports, as I have mentioned, I think is a necessary expenditure but in a certain sense it is a necessary evil. It is a choice that was made between trying to deal with the lesser of two evils. Do we do nothing? Then when an airplane is blown up or something worse, perhaps, would we realize that we should have done something? Or do we do something in the hope that the money we spend will prove to have been unnecessary? I think this money has to be spent. Like others have said, I think all of us wish it did not have to be spent, but the fact is that it does.
Our enhanced border infrastructure is an example of a good thing that may come out of a bad situation. We are investing a lot of time, energy and resources into making the border more passable, for example, for trucks carrying automobile parts. That would have a big impact on my community. With or without the crisis of September 11, it may prove to be one thing that is worth spending money on. I am hopeful we will look back and say that for this it was money well spent.
Certainly our investment in strategic infrastructure will be money well spent. It is probably something that we should have done even without September 11. It is something that makes sense to do in terms of stimulating the economy in light of a slowdown. For my own community, a small item in the budget is one that can have a big impact on some communities and that is the extra money for fishing harbours. In Elgin county there is a major fishing harbour in the town of Port Stanley. I am hopeful that some of the money announced in the budget can find its way to my own community.
Our commitment for research and innovation should be applauded. A member opposite was speaking earlier about the Kyoto accord, about competition and about paying a price for environmental regulation. Fundamentally all of us would agree that ultimately this country competes on our general level of knowledge and the general level of skills and training of our population. Money spent on research and innovation would allow us to do things, whether it is paying for social programs or incurring more environmental regulation, without suffering a drop in our standard of living.
Also of note is the increased funding for international assistance or foreign aid. As I said earlier in describing the context in which we are living in terms of September 11, I think this money could prove to be part of the solution. It is not the total solution because there is no silver bullet for dealing with the issue of international conflict. If the money is spent wisely, in bringing people together, in education, in alleviating some of the horrendous hardships people are living with in today's world while they see other people living in tremendous luxury, if it is spent in order to bring the rest of the world up to the standard of living that we enjoy, there are reasons to be hopeful that the levels of hatred and conflict would drop and I think all members should applaud it.
Last, I also commend the government for spending more money on environmental initiatives. Wind power may not seem like a big deal, but it is the cleanest known source of energy in the world today. It is a technology that Canada has been relatively late in adopting. The Europeans have been way out in front of us on this. It is just one small example of Canada catching up.
In closing, I would also like to commend the government for keeping its commitment to the $100 billion tax decrease that we announced last year. Things like the low interest rates, the drop in taxes and low gasoline prices will stimulate the economy and make it reasonable to expect that the economy will turn around in the second half of next year and we will be back on an agenda of innovation, prosperity and growth. People who may have just recently lost their jobs have a lot of reasons to be optimistic that the economy will turn around. They should not give up hope. Canada is on a very strong track right now and will continue to be.
Jason Kenney Canadian Alliance Calgary Southeast, AB
Madam Speaker, I would like to thank my colleague for his remarks, but I have to address something that really is not immediately pertinent to the budget because he raised it. That is his view that abject poverty and people in refugee camps are the root causes of terrorism.
Would my hon. friend not recognize, for instance, that of the 19 hijackers who inflicted such horrific violence on our American friends on September 11, not one of them came from an impoverished background, not one of them had ever lived in or, as far as I know, set foot in a refugee camp and that in fact every single one of them came from reasonably privileged backgrounds in some of the wealthiest countries in the world, many of them having had the benefit of western education and having lived in the developed world for many years and having been financed by millionaires and billionaires?
I keep hearing this remark from Liberal MPs, which is really a reflection of what ethicists would refer to as environmental determinism, the notion that people's conduct is explained not by categories such as moral and evil but rather by the circumstances in which they were raised. Is this notion not completely vitiated by the facts before us about the backgrounds of those terrorists?
Second, he talked about the $100 billion tax cut. Does he not recognize that the ostensible $100 billion tax cut does not take into account the $26 billion in increases for CPP premiums over the same period? The government also claims as a tax cut the indexation of the tax threshold rates. In other words, the government has decided not to continue a tax increase and is counting that as a tax cut. Would he not join me in understanding that to be, shall we say, creative accounting in the government's scoring of its tax cut?
Gar Knutson Liberal Elgin—Middlesex—London, ON
Madam Speaker, certainly I do not have enough time to debate the member on the issue of moral determinism.
Let me say that I agree with the member's basic point that fundamentally people make choices. At the end of the day it is my view that the 18 skyjackers are responsible as individuals. They made the choices. We cannot blame what they did on their upbringing.
I also point out that people make individual choices in a context. The context we live in today quite clearly is that many people enjoy a very high standard of living while the vast majority of people do not. While those 18 people may have come from well to do families, I think the conflict of east versus west is at least to some degree rooted in a difference in standard of living. We can debate to what degree it is but I think it is part of the problem. Unless we deal with the fact that we live in a relatively prosperous part of the world and enjoy very prosperous conditions while others do not, we are going to give people reasons to hate us. How it will actualize itself is very difficult to predict.
On the issue of the tax cuts, the fact is that our plan will put $100 billion in people's pockets that they otherwise would not have had. Whether it is in the form of an actual cut that could have been made or whether it is in the form of indexing the tax system against inflation so that people are no longer paying taxes on inflated dollars that are not real, it is still a tax cut.
As for the issue of CPP, I do not think an increase in the contribution to CPP benefits can be considered a tax increase. It goes into a separate fund. It is financed in the market. It is to do one particular thing, which is to pay for people's retirement plans. If people were putting money into an RRSP, that would not be considered a tax increase, nor should a contribution into the CPP fund be considered one.
Peter MacKay Progressive Conservative Pictou—Antigonish—Guysborough, NS
Madam Speaker, in response to the last issue of CPP not being a tax increase and being in a separate fund, that is initially what the EI fund was supposed to be about and we know what happened there. It has ballooned into a huge surplus and has been used however the finance minister wants to use it.
Many people have indicated that the economic stability of a country is somewhat measured by the stability of the dollar. Under the finance minister we have seen the dollar go to record lows. The value of the dollar is a reflection of the value and merit of the finance minister's job. How does the hon. member explain the fact that the Canadian dollar under his finance minister's management has gone to record lows?