Mr. Speaker, I will be sharing my time with the hon. member for Medicine Hat.
It seems obvious in listening to the debate that the government must have been advised by first year economics students. They are the only ones who would have advised certain elements in the budget.
The biggest flaw in the budget is that there is no real tax relief for working Canadians. In fact they will be paying more to Ottawa, to big government in January, in fact $1.7 billion more. The vaunted government tax cuts that we have heard from the other side will have virtually no effect. They will come into effect but they will have no real import on the economy.
The government is offering a miniscule cut to EI premiums, a tiny .5 cents for workers and seven cents for employers. This means that anyone making $39,000 or more a year will save a grand total of $19.50, and employers, for every employee who makes over $39,000, will save only $27.30. This, despite the government's rhetoric, is hardly a stimulative boost to the economy.
We have heard a great deal of debate today and during question period about what is a payroll tax. EI premiums are only one part of payroll taxes. Obviously the other part is CPP premiums and they are on the rise by quite a bit. Any person who makes $39,000 a year and who saves $19.50 in EI premiums will have to fork out $172 more in CPP premiums.
Thanks to the government's alleged largesse, the average Canadian worker will be out $152.50 this year. That is a tax increase of $152.50. That is how much a Canadian worker's paycheque will shrink. This is what the government calls tax cutting.
The record of the government since the 1993 election unfortunately is worse. Canadians have seen their payroll taxes increase by $610, or by 32%, since 1993. Obviously if we follow the logic, even the logic of a first year economics student, Canadians are poorer but the government is richer. The only reason the budget is balanced is because of the continued raiding of the EI surplus, a fund that has been built by the sweat of Canadian workers.
The EI account, by all accounts, is huge. The government would admit this. There is some dispute as to exactly how large it is. My colleague says it is about $40 billion a year. This money has been squirreled away to safeguard the system against a possible recession. That is fine and that is the way it ought to work. The trouble is that the chief actuary of the fund has said that to survive even the worst recession, the EI fund needs at most $15 billion in the bank.
The government has refused to say if it agrees with the number, and if not, what the number actually should be. Obviously if the government does not agree with the chief actuary, it is incumbent upon the government to table its own numbers in the House.
With $40 billion in the EI account, which simply is rolled into general revenues and spent on whatever program the government desires, we have almost three times more money than would be needed to outlast the worst recession. By the finance minister's own account, this recession should be quite short and not too deep. We do not know that, but that is what the government's position is.
Let us follow the logic for a moment. There is $40 billion sitting in the EI account. It would be quite easy to cut premiums in a very large way. In fact the chief actuary is so helpful, he is telling us how much should be in the account. He has laid it out. He said the break even point is as follows. We could cut the premiums from $2.20 per $100 of insurable income for employees to $1.75.
If the finance minister had done this instead of cutting only a measly nickel, then Canadians would have saved $195, which is more than the concurrent rise in CPP premiums. Canadians would have actually had a tax cut. The system at this rate would break even and the account would still be left with $40 billion.
Let me try to go through the government's position as far as I can understand it. The Liberals say there is enough money in the account, so do not worry, but they cannot cut premiums any more because they are not sure if there is enough money in the account. With all due respect, if the surplus is so large, there cannot be more than enough money and not enough money at the same time.
Logically, only one of these positions can be true. If the government does have a huge EI surplus, then premiums can be cut to the near break even point of $1.75 for employees and $2.45 for employers. If the government does not have a huge surplus, where is it? Where have the Liberals wasted it? Where did it go? This is a legitimate question that the government has tried to avoid.
I suspect that the government has no intention of ever really answering these questions. Unfortunately, that point has been clearly made by the tenor of the debate back and forth here.
The simple fact remains that payroll taxes are going up. This is bad for Canadians. This is bad for the economy. Unfortunately, it is very bad for the hardworking Canadians and those who, because of the lack of a stimulus part in the budget, will be losing their jobs.
In fact, the Minister of Finance agrees. Back in this House on May 3, 1994 the finance minister said that payroll taxes are a cancer on job creation. If they are a cancer on job creation and the minister has not admitted but has come pretty close in stating that we are in a recession, obviously it should follow that there should be a stimulus part in the budget and that payroll taxes be reduced.
The message the government should be sending to small businesses and large businesses is to go out and create jobs. The role of government is not to create jobs; it is to provide the environment in which jobs are to be created. The government has failed on that account.
The message from the government is just the opposite. The Liberals are saying they are going to make it harder to create jobs. The government will talk about what is a payroll tax. Is EI? Is CPP? The government will try to fudge things. The bottom line is there has been a major increase in payroll taxes.
In summary, the budget has been a major disappointment for Canadians. Hardworking Canadians will see their paycheques shrink. This is very unfortunate. In the House we go back and forth many times, but the hard reality is there are people suffering out there. There are people trying to make ends meet. There are people worried about their kids.
The government is involved in a public relations exercise. The budget is not truly a budget that will lead Canada into the next century. Some have argued that the budget is all about leadership issues. Others have argued that it is just a temporary way of holding down the fort until a real budget can come forth in the next six to eight months. That is very unfortunate because Canadians deserve better.