Mr. Speaker, first, with respect to the planning deficit, there is no question that September 11 had an impact. However the truth is we were already sliding into a recession and we knew it as early as last spring. People started to sense that the economy was going south. The government had a massive surplus. Instead of setting it aside for a rainy day or doing something with it to start paying down debt, it spent it ahead of time, which ensured that we did not have the capacity to deal with the recession.
My friend said the government spent it on tax relief. I want to refute that. He mentioned $17 billion. I think my friend would have to agree that the $17 billion is comprised of things like cancelling future tax increases and the lack of indexation of the income tax system. That is not a tax cut. That is a cancellation of a future tax increase. That will not have the impact an actual tax cut has.
My friend mentioned something like the Cape Breton fund of $110 million. First, I mentioned a whole lot of different situations. People are without hope in many areas in the country. The way to address that is not with some specialized fund here and there. These funds have been fraught with disaster in many instances in the past. The TAGS program is one example. Entire villages were trained to be scuba divers and hairdressers. We need is a long term plan that creates enough economic growth that jobs are created and ultimately we find living standards go up.
With respect to living standards, the hon. member did nothing to address the fact I raised, which was that living standards actually fell from 1999 to the year 2000, and that relative to the United States, we are not keeping up. The United States brought in $100 billion in tax cuts. That will make it very difficult for Canada to compete.
As my friend knows, since September 11, and he mentioned this himself during finance committee hearings, companies that were looking for a place to set up in North America, and at one time might have been attracted to Canada because they would have had easy access to the U.S. market, will now seriously consider setting up directly in the United States. We have to redouble our efforts now to cut corporate taxes, to speed up corporate tax relief and get rid of the capital tax, which was the recommendation of the finance committee. The hon. member sits on that committee and was part of making that recommendation. It was not addressed at all. It is a hugely punitive tax with respect to productivity, job creation and that kind of thing. Those things were not addressed.
On those grounds, I completely refute what my friend said. I would suggest that the government has a long way to go if it really wants to increase living standards in Canada.