Mr. Speaker, it is a pleasure to rise today and speak to this motion. The Canadian Alliance motion calls on the government to reallocate financial resources from low priority and wasteful areas into things that really do have an impact and meet the needs of Canadians, such as increasing security. It also calls on the government to keep spending in line with population growth and inflation, something it has failed to do over the past couple of years. We have seen spending increase dramatically under this government, even though it already has more than adequate money in the budget, especially considering how much money is spent on things that are wasteful.
The motion also calls on the government to reduce EI premiums by 15 cents per 100, which is only fair considering the tremendous amount of money it is taking out of the hides of workers and employers today. It is well beyond what is necessary to fund the EI account.
In the motion, we are also calling for a cut in capital taxes, something which was touched on briefly a minute ago.
It is often said that the falling dollar is both the cause of and reflection of where Canada's economy is today, and that is very true. I want to focus for a minute on the dollar as a reflection of the problems that we have today.
In November alone, the Canadian dollar hit five new lows. What is that reflective of? It is reflective of the Liberal recession which we are in now. It is reflective of an economy that chronically underperforms. Why does it underperform? Because the government when it wakes up every day, if it indeed wakes up, chooses not to make the right public policy decisions that would allow Canadians to become more productive, which would lead to a higher standard of living and allow them to realize their hopes and dreams.
There is a lot of talk in the country about issues like a common currency. While that is interesting, and I personally like to discuss these things from time to time, in some ways it allows the government to escape when we talk about it. It takes away from the analysis that should go on of the government's policies to date.
From 1993 until today, the Canadian currency has fallen 14 cents relative to the U.S. currency. It has gone down to under 63 cents today. Why is that? A moment ago I said it is a reflection to some degree of the performance of the economy. It tells us a bit about the government's ability to make public policy. It is bit like the canary in the mine shaft. When we see it falling as dramatically as it has in the last little while, that should set off alarm bells.
I would argue that there are things the government should be doing in the upcoming budget, but also it should be doing them day to day to ensure that our economy is more productive. This in turn will lead to a strengthening of our standard of living and ultimately to a stronger currency as well.
There is only one way to increase our standard of living and that is to our overall productivity. How do we increase productivity?
A minute ago we talked about taxes on capital. Capital formation is one of the critical elements when it comes to improving productivity and therefore the standard of living of a nation. However the government imposes tremendously high capital taxes, which prevents capital formation, which in turn prevents us from being as productive as we could be. This again prevents our standard of living from rising.
The government imposes high capital taxes, high personal income taxes and high corporation taxes. This in turn prevents the improvement of technology because we punish the activities that lead to improvements of technology. The improvement of technology is one of the keys to improving our productivity as a nation. Again, that is tied completely to our standard of living. We need to clear away the barriers to improving technology.
The same applies to the improvement of human capital. We need to remove the things that stand in the way of improving our human capital, our knowledge as a nation.
What are some of these things? A minute ago I touched on capital taxes. The government imposes huge, burdensome capital taxes which punish companies for the crime of collecting capital, which companies then use to innovate, to hire people and to do all kinds of things to secure their companies and to ensure that they are in good competitive positions. When they do that, the government taxes them and therefore makes them less competitive, which drives many of them out of the country or ultimately perhaps even out of business. It certainly impedes their ability to form capital and become innovative.
When it comes to the improvement of technology I want to talk for a moment about how the government punishes those who would improve our ability to compete in a technological sense. We have very high personal income taxes in Canada. They are still about 20% higher than those in the United States and are very high relative to anyone else in the G-7. In fact they are still the highest on average in the G-7, even factoring in the government's tax reductions which, by the way, are not $100 billion as it would like people to believe. They are about $47 billion over five years, which really is not a lot when we consider how high they have been.
Taxes were at record heights when the Liberal government came to power and it raised them even higher. Now the Liberals are reducing them a bit and they want credit. We should not give them credit because taxes are still extraordinarily high. They punish people for the great crime of working hard and being innovative and all those things that lead to improvements in technology. We have to start to lower those high personal income tax burdens much more aggressively than the government has already done.
Capital gains taxes are still way out of line. The government has begun the process of lowering them. Even the Liberals understand that we cannot continue to have high capital gains taxes when our competitors around the world have much lower ones, for instance in the United States. Of course when we have much higher capital gains taxes here, people who have the skills and abilities will move. They will go to some of the lower tax environments. Since September 11 it is even more important that we deal with that issue now. I will touch on that in a moment.
I want to say a word about high taxes on payrolls. Our party's finance critic has argued very strongly that we need to lower EI premiums by 15 cents per 100 at a bare minimum to ensure that companies and individuals are not penalized for the great crime of hiring people. That is important during a time of recession. Remember that we are in the Liberal recession right now and we need to find ways to climb out of it. One of the ways to do it is to stop punishing companies and individuals for the crime of hiring people, but that is what we do in Canada when our payroll taxes are too high.
The best way it has ever been explained to me is that every time we talk of a tax we should think of it as a price. Payroll taxes are a price on hiring other people to work. When we have high payroll taxes, there is a high price for hiring people. Therefore, we should lower them. This is a perfect time to begin that process, when we are in a recession that the Liberal government has helped to bring about.
I mentioned a minute ago that it is especially important to deal with these things now. Why? Because before September 11, companies were thinking of locating in Canada to set up business because we had access to the North American market and perhaps our cost of doing business was lower which in some ways had to do with our cheap currency. Many of those companies were considering setting up here, but since then, they have discovered that it is not as easy to move goods and people across the border into the U.S. and tap that $11 trillion market. They have suggested that perhaps they do not want to locate in Canada. I have heard anecdotally of half a dozen companies that have decided to go into the U.S. instead of coming to Canada and bringing all that tax revenue and those jobs with them.
It is critical that we start to address these things in an aggressive way and not just push them off to the back burner so they do not become critical problems any more, just ones we can push off for a little while. It is time for the government to address things aggressively with a mind to making Canada a world leader again as we used to be. Sadly, we are not seeing those types of signs coming from the government.
I urge members of the House to support today's motion. I urge them to remember that when the government sets out a budget, what it is really doing is charting a plan that will lead to the future prosperity of Canadians. Would it not be a shame if the government allowed this opportunity like so many others to pass it by.