Mr. Speaker, it with pleasure today that I rise to speak on the prebudget report of the House of Commons finance committee.
I am a member of that committee. I ultimately was disappointed in the fact that the report of the committee failed to address some of the most significant issues facing Canadians. People talk about the disengagement that Canadians feel toward federal politics today. In particular, young Canadians are disengaged with politics in general, particularly federal politics.
I think part of the reason why Canadians are disengaged is that for the last nine years there has been nothing in which to be engaged. We cannot be engaged in a non-debate. For there to be debate about the future of the country, there has to be a government with a vision, with some ideas and views about the future and with some policies, some of which would be agreed with or disagreed with but all which would represent change and a different approach.
Whether we look at the governments of Pierre Trudeau or Brian Mulroney, in both cases we could have agreed or disagreed with their visions, policies or ideas. However Canadians were engaged in debates about the future of their country under both the Trudeau and Mulroney governments. There were important debates about issues, for instance under Mulroney, about free trade, the GST and the deregulation of financial services, transportation and energy.
If we look back, those courageous and visionary steps by the Mulroney government, particularly free trade, the GST and the deregulation of financial services, transportation and energy, helped lay the groundwork for the economic growth, prosperity and the elimination of the deficit, which has occurred under the watch of this caretakership, cruise control, Sunday drive sort of government which we have had opposite now for nine years.
It is sad, not just from the perspective of bad public policy for Canadians but from a political perspective, that we are disengaging a whole generation of young Canadians in political debate and discussion because of this sort of lackadaisical approach to vision, courage and public policy of the government.
I would argue that over the last 10 years there have been more changes globally in terms of economic change, much of which has been precipitated by technological change, trade agreements, technology and greater integration of economies. Companies, individuals and governments have radically changed the way they do things. One of the few countries in the world that has not kept up with that change and has done nothing during a period of unprecedented rapidity of change globally is Canada under the Liberal government. In that 10 years the government effectively has been more focused on next week's polls than on the challenges and opportunities facing Canadians 10 or 20 years from now. There has been great economic damage to the country as a result of that.
The fact that the Canadian dollar has lost 20% of its value under the watch of the Liberal government is the price tag that Canadians are paying for a government that has not updated or reformed its tax system, its regulatory policy, its competitiveness policy, or its research and development policy. When other countries have been investing in education and health care, this government has made the wrong choices, has slashed transfers to the provinces for health care and education and at the same time has not tightened its own belt or addressed wasteful spending in its own government.
Canadians could have a well-funded health care system and a strong military if we had a government that had the wisdom to invest in the priorities of Canadians and the courage, competence and integrity to cut wasteful, non-core spending. However this is not that kind of government.
We are all familiar with the HRDC scandal and the fact that under the government billions of dollars were wasted, misdirected and lost for a time, and the Auditor General helped us identify this at the time. However from a basic competence issue, this is a government that lost billions of dollars for a period of months. It is pretty hard for a Canadian to consider how a government loses billions of dollars. What happened in the next budget presented by the finance minister? The minister for HRDC received a $1 billion increase as a reward for her gross incompetence.
We are all familiar with the public works scandal and the millions of dollars that were wasted, misdirected and misappropriated by Minister Gagliano, who was of course punished by being sent off to Denmark to represent our country. I do not know what Denmark ever did to Canada to deserve that kind of treatment, but I hope it does not reciprocate by sending us one of its worst crooks.
Whether it is Public Works, or HRDC or a gun registry, billions of dollars have been wasted. Over $1 billion has been wasted for a misguided, poorly designed long gun registry program that from the beginning was destined for failure and has achieved that end in a very flamboyant way, and we have a government that has worked assiduously to hide the information about that waste from Parliament.
This is a government that is looking for the trust of Parliament to ratify and implement a Kyoto agreement. It is atrocious. This is a government that could not organize a two car funeral, let alone implement a Kyoto agreement in terms of domestic engagement within Canada.
There are significant problems that need to be faced by the government on fiscal and social issues. I would argue that the productivity issue is absolutely key for us to have the sort of prosperous economy that Canadians need to provide the wealth to afford the kind of health care, education and social investment that Canadians value and treasure as Canadians.
We have a tax policy that attacks hard work and investment. We should be celebrating success. Instead, we apologize for it. We have to address some of the fundamental flaws in our tax system, both on the corporate and personal side. On the personal side, we have to address our marginal tax rates. There is something fundamentally wrong with a tax system that pummels people as perniciously as this one does.
For instance, let us look tax bracket when people go to the $30,000 range. When they cross what I think is the $35,000 tax bracket and their incomes have increased a little, and those are not high incomes, they lose all their child tax benefits. They are taxed at a higher marginal tax rate. The impact is that they make less money ultimately than they did at the lower pre-tax income. What a terrible way to punish Canadians or Canadian families who are trying to bootstrap themselves, achieve success and pull themselves forward into a more prosperous and sustainable life for themselves and their families. That is the reality of our marginal tax system.
If we look at what happens when we go up every marginal tax bracket, what we do to Canadians is absolutely immoral and fundamentally wrong as they are try to succeed and prosper in Canada. It is little wonder that our tax system and some of our other antiquated economic policies are sending tens of thousands of young Canadians to the U.S. seeking greater opportunities and prosperity.
The top marginal tax bracket in Canada is hit at about $100,000, which is equivalent to about $62,000 U.S. The top marginal tax bracket in the U.S. is not hit until about $380,000 Canadian.
We cannot maintain that level of disparity between our tax systems if we expect to keep Canada's best and brightest here. We are gutting the future competitiveness and productive capacity of our country if we cling to an antiquated, out of date, anachronistic tax system that simply does not work to create greater levels of prosperity, opportunity and promise for Canadians.
We need regulatory reform. Out of date and oppressive regulatory burden works in a very similar way to how oppressive and out of date tax policy works. Canada has a regulatory policy that encourages bureaucrats, without parliamentary scrutiny, to develop and introduce by stealth every year hundreds of new regulations. Hundreds of regulations are introduced with very little parliamentary scrutiny or perhaps no parliamentary scrutiny at all. This adds significantly to the cost not just of Canadian businesses doing business, but also adds significantly to the cost for Canadian consumers when they are paying for these regulations ultimately through higher prices for goods and services without making a case for why these regulations make sense.
The government is not making a case for these new regulations nor is it forced to make a case for them. They are introduced by stealth without any level of parliamentary, bureaucratic or governmental scrutiny. That is costing Canadian businesses and consumers significantly.
We need to take a serious look at our competitive policies as a country. We have to consider what other countries have done in the past 10 years.
In the last 10 years Canada has achieved a 5% growth in GDP per capita. During the same period of time, Ireland has achieved a 92% growth in its GDP per capita. Why is that? Because Ireland was willing to reform its tax system. Ireland was willing to tear down barriers to success, opportunity and investment in Ireland.
While this government increased barriers to success, increased a tax burden through much of its mandate and failed to reform, simplify and streamline its tax system, Ireland and most countries in the industrialized world reformed and updated and improved their tax environments. They knew to attract capital and investment and to be competitive and improve productivity, they had to have more competitive tax regimes.
In the old economy high taxes redistributed wealth. In the new hyper competitive global economy high taxes redistribute people and capital. Capital and people, particularly talented people, have never been as mobile as they are right now.
It is not an option for us to choose whether we want to reform our tax system. We have to do it. The price tag Canadians will pay for a government that has done nothing for 10 years to improve the Canadian economy in a substantive way and make the kind of courageous structural reforms that are necessary will be demonstrable and evident in 10 years, 15 years or 20 years.
We have to address not just the tax burden but tax structure. Reforming our tax structure is extremely important. The Mulroney government had the courage to replace a manufacturer's sales tax, which was hurting industry and our competitiveness, with the controversial goods and services tax. It was one of those taxes fought vociferously by members opposite, a tax now embraced by them. On international travels the Prime Minister has even claimed having invented the GST because he likes it so much. The fact is the GST, the free trade agreement and the deregulation of financial services, transportation and energy have enabled this Liberal government to pay off the deficit.
Canadians need to have the same opportunities for growth, prosperity and opportunity that other countries have because their governments have made courageous choices to reform regulatory authorities and have taken some steps forward to change their economies.
One issue which the federal government ought to be working on but is ignoring is that of a national securities commission. Canada is the only industrialized nation without a national securities commission.
Having a securities commission in every province and territory in Canada represents a significant impediment to capital formation for Canadian entrepreneurs and businesses. Trying to raise capital, encourage investment and receive the kinds of investments necessary for businesses to buy the productivity enhancing equipment and technology they need to be more successful and more competitive globally is made more difficult by the tremendous barrier to capital formation of having all these securities commissions in Canada and the tremendous bureaucratic overlap and inconsistency across Canada.
In addition, the recent corporate governance crisis has impacted and reduced the confidence that Canadians and also Americans and any capital market participants or investors around the world have in the capital markets. This makes it even more compelling for Canada to have a national regulator which would work with the provinces to achieve a national regulatory authority. It would ensure that there were standard rules across the country in terms of the regulation of our capital markets and our securities industries.
Canadians could then depend on a regulator with the resources required to regulate and make sure that Canadian companies and capital market participants were playing by the rules. Currently, that is very difficult to do with the mishmash of securities regulations and the balkanized resources that we have in Canada.
When I speak of a national securities regulator, I am not talking about taking the OSC across the country. I am not talking about a federal regulator. I am talking about a truly national regulator that respects and works with the provinces to achieve input and develop a consensus. It is very possible that we could achieve that, with respect for the provinces in a cooperative federalism.
Some people see a federal regulator as the answer. I do not think that is either realistic or a good idea particularly. I do not think that simply imposing the OSC on everybody is the best way to move forward.
In terms of the health care debate, the government has delayed, dilly-dallied and avoided making decisions on health care for far too long. It is the government which in 1995 unilaterally slashed transfers to the provinces, turning health care into a crisis in every province in Canada. At the same time, it did not tighten its own belt. Only when the health care crisis reached such a point that Canadians were in a turmoil about it did the government, because of political pressure, pretend to act with the Romanow commission. It really has not acted yet; it simply sought more advice.
There is the Mazankowski report, which is a very substantive report from the provincial government of Alberta. There is the LeBreton-Kirby report. I call it the LeBreton-Kirby report in deference to my colleagues in the other place, particularly Senator LeBreton. She made a significant enough contribution to that erudite and perspicacious report that she deserves equal billing to Senator Kirby. And there is the Romanow report.
I would say that of those three, while the NDP may crow about the Romanow report being the one that was most substantive, I believe the Romanow report was in fact the least responsible of the three. There was absolutely no addressing of where the money would come from. I thought it was incredibly irresponsible for Romanow to develop a set of proposals that only focused on more money with no significant and substantive reform.
Regarding greater accountability for the provinces, the provinces were not at fault when the federal government failed to be accountable and slashed the transfers to the provinces and threw health care into a turmoil. It is not the provinces that have an accountability problem today. We have to be able to speak the truth about the future of health care in Canada if we are going to ensure that Canadians have a sustainable health care system that they deserve.