My hon. friend says it could have bought a report for that. It is a good point.
Given what we have seen in the last few days with the missing report, some of the scandal that has come out of public works, and the Canada Lands Corporation scandal if I can call it that, we have good reason to wonder what is going on with the $400 million in repayable loans that has been handed out to different companies through ACOA. We know the government is prone to helping its political friends with taxpayers' money. What has happened to the $400 million? If the government cannot answer the question the money should not be spent. The government could get funding for its security measures from this area instead of driving up spending by a whopping 9.3%.
As an aside, between 1996-97 and 2005 the government will increase its overall program spending by around 33% or somewhere in that range. The overall level of spending will go up dramatically. We should be concerned about that. I will say more about some of the big reasons we should be concerned about it in a few minutes.
There is another example of how the government has been lax with taxpayer money: the GST home heating rebate. The auditor general's report pointed out that “At least 4,000 Canadian taxpayers who did not live in Canada and 7,500 deceased people received cheques”. It also said “about 1,600 prisoners could have received cheques”. It is pretty obvious the government does not have its eye on the bottom line when it comes to expenditures.
An example I hear about over and over again in my riding is the firearms registry. It is an especially sore point with people who are being required to register their firearms. My hon. friend from Yukon is here. I have no doubt he is getting lots of calls about the issue. People are concerned because they think the firearms registry will be completely ineffective. I agree with them 100%. They think it will breed false security. They have concerns about privacy. Their other big concern is how inefficient the government is when it comes to big registries.
I talked about the home heating rebate and how frequently the government got it wrong. I will tell the House about other things I am hearing from people in my riding.
A fellow contacted me the other day who said he had already registered handguns on the handgun registry. He is now being asked to re-register them. Why is that? I did some poking around to find out. It is because the government has lost the information for about 300,000 registered handguns. That is unbelievable. Speaking of things that go missing, there is still the half million dollar ACOA report that went missing.
There have been more mess ups in the firearms registry which I could talk about endlessly. Recently my hon. friend from Yorkton-Melville got up in the House and told the story of a man in Vancouver who heard a knock at the door. The man went to the door to find a SWAT team. Someone had told the SWAT team the man had unregistered firearms that he owned illegally. The SWAT team came to the door only to find a man who was able to produce a certificate showing he was registered with the government.
My point is this: The government is famous for being inefficient when it comes to the delivery of programs and services. There are billions of dollars it could find if it wanted to reduce overall spending. The firearms registry is costing around $640 million. It was supposed to cost $72 million when the government announced it in 1995. It is now approaching a billion dollars. The government is completely out of control when it comes to these issues.
I could give many examples but I will touch briefly on some of the big areas where there is tremendous waste. Aside from ACOA there is waste in other regional development programs and western diversification programs. All these departments have oodles and oodles of waste. We completely disagree with the idea that government should be involved in funding businesses. It is crazy but that is what the government does.
We disagree with the ridiculous spending that occurs in departments like CIDA. We have deep concerns about it. The previous auditor general said many programs did not have proper monitoring or accounting so the government could not tell whether the programs were working. This seems a rather obvious criteria for going ahead and funding a program. The government should know if a program it is funding is working. However that is another example.
Let us look at Indian affairs. Auditor generals have said much of the money that goes to Indian reserves and band councils disappears. A colleague told me the other day about problems on one of the reserves in Alberta. The chief is being paid $400,000 and there is no money left for some of the health care services on the reserve. That is obviously a concern. Perhaps the government should propose deep reform of Indian affairs before it advocates spending more money.
There are many other examples. I could talk about them all day. The Department of Canadian Heritage devotes much of its efforts to handing out grants and subsidies. There are deep concerns about whether that is the best use of taxpayers' money.
I will not go into all the examples. Suffice it to say the government has not done a good job of managing the public's money. It has not been a good steward of precious taxpayer dollars. We disagree fundamentally with the idea of raising spending as dramatically as the government has done in the budget.
That is one of the big reasons we oppose Bill C-49, the budget implementation act. However it is not the only reason. I will say more about that in a moment.
Another thing that concerns us, which I mentioned at the outset, is that the government has no vision or strategy for making Canada more productive and competitive in the world. This is obvious in the budget which does not even give a nod to the need to dramatically reduce taxes.
People on the government side will say they have reduced taxes. To be fair, they have reduced some taxes. Others have gone up. The government has reduced income taxes a little. That is fine. However we need to understand that we are not in a closed environment. Canada, the businesses that set up shop here and the people who earn their livings here are in competition with other countries around the world, primarily the United States. Having the United States on our southern border should be a huge advantage but because of the business environment in Canada it is not.
What happens is that instead of people mining that $11 trillion economy, the largest economy in the world, with 25% of the world's GDP coming from the United States, instead of using it to our advantage, too often we are becoming victims of that big economy because people are leaving Canada and going to the United States to set up shop. We could do so much more in Canada. What I mean by that is that we should be lowering taxes. We should have a long term strategy for lowering taxes of all kinds, personal income taxes certainly, but also getting the high marginal rates down and much more aggressively than the government has already proposed.
We think corporate taxes have to come down. I know that members on the government side will say that overall corporate tax rates are lower in Canada than they are in the United States, but that is only one of the factors when it comes to determining where a company will set up shop. We need to be quite a bit lower in order to lure some of these companies and this investment into Canada or to keep companies here that are already here. It is only one of the factors.
Another factor is access to the U.S. market since September 11. A large business casting about for a place to set up a new factory or plant might have considered Canada before September 11, but now because of increased uncertainty about the ability to have access to the United States from Canada because of border restrictions and that kind of thing, it will say that this tiny little difference in tax rates on the corporate side really is not enough of a difference to cause it to stay or to set up shop in Canada. Those companies will go to where they have access to the U.S. market. They will go directly into the United States.
We need to have a strategy which guarantees that Canada will be a leader when it comes to luring investment from around the world and keeping investment here. Part of that is lower taxes of all kinds. On capital gains taxes the government will say it has lowered them, but it has not lowered them anywhere near enough to encourage investment in Canada and to lure people to Canada as opposed to other places around the world.
It is almost as though the government, and I would characterize the government as operating this way on just about all issues, always manages the issue by taking it off the front burner and putting it on the back burner. It does not fix the problem. It does just enough to remove it as a constant irritant in the public's mind. It just pushes it off onto the back burner where it simmers and is not dealt with completely. It simmers away until it starts to boil over again and then the government again manages it a bit and it goes away for a little while. That is how the government deals with many issues.
We believe that taxes have to come down dramatically across Canada, but what else should the government be doing? One thing it should be doing is dealing with issues like internal trade barriers. In the Canadian constitution it is left to the federal government to establish the rules for commerce in the country, but for some reason over a period of 100 years in Confederation the provinces have started to set up interprovincial trade barriers.
I saw one report from the Fraser Institute, from a number of a years ago now, which indicated that internal trade barriers were costing the country between $6 billion and $40 billion a year in productivity. That is a tremendous amount of wealth that we forgo because of internal trade barriers. I think it is time for the federal government to assert its authority when it comes to commerce and knock down those trade barriers.
When we do that we should do some other things too. We should re-balance the federation and allow the provinces some freedom in areas that they currently do not have freedom in. I think that would be a good quid pro quo, but again, this is a federal power that the federal government has ceded to the provinces over a number of years and in my judgment it should not have done that.
There are many other things we could do. We should be freeing up trade with our trading partners because that benefits everyone. One of the big frustrations for me is to know that on the one hand Canada claims to care about continents like Africa, and my friend across the way spoke a few minutes ago about the Africa fund, but it is also true in Canada that we have tariffs in place, for instance, against textiles and agricultural products from developing countries.
If a developing country's biggest exports are textiles or agricultural products, which very often they are from these developing countries, it cannot easily get things into Canada. Why? Because we have tariffs in place. We never do allow those countries to become developed countries. We stand in the way of that, so how can we make any claim to be truly compassionate about these other countries when we do those sorts of things?
Again, the quid pro quo is that we should have access to their markets and we should be allowed to sell products into their markets. In doing that, every economist will tell us that free trade improves both parties when they engage in these voluntary exchanges. It does not matter whether we are trading with somebody in the next room or around the world. It makes no difference. The fact is that trade always leaves both parties better off. We should be encouraging that. I think that the government has not done a good enough job on encouraging trade around the world.
To be fair, I realize that sometimes, for instance, the United States does not play fair when it comes to trade. The softwood lumber dispute is a perfect example. I would even point to the tariffs it has raised on steel, which are not affecting Canada because we are part of NAFTA, but the big tariffs it has placed on steel imports from around the world into the United States to me demonstrate that the U.S. has lost its way to some degree when it comes to free trade. However, having said that, I will say that Canada could do a lot more to push trade issues. If we did those sorts of things, Canada would be a lot wealthier.
Another thing we need to do is undertake regulatory reform. I will tell the House about something that people should do once in a while just to get a sense of how overregulated Canada is. Some day people should go to the Government of Canada website on the Internet and look at the website that displays regulations in Canada. It is absolutely amazing. It is a website without end. It goes on and on and on. There is no question that this costs business in Canada today tremendous amounts of money.
When President Reagan was in office in the United States the Americans undertook regulatory reform. They reduced regulations dramatically. I have forgotten just how many. I think they cut something like 50,000 regulations. They knew at the time that there would be a direct impact from doing that. Of course the direct impact is that the compliance costs for business go down so they have more money for other things, rather obviously. One of the things they did not realize is that by reducing those regulations they dramatically improved the efficiency of the trucking industry in the United States, because there were so many regulations that bogged down the ability to move trucks across state lines and that kind of thing. As a result of that, the concept of just in time delivery was born or at least realized in the United States and it had a dramatic impact on improving the output of the economy, the productivity of the economy. It was not something that people really predicted, but it was a result.
The same sorts of things can happen in Canada if we start to take that issue seriously. That is something else the government should be doing when it comes to bringing down budgets. It should be producing budgets always with an eye to making Canada more productive. The former chair of the finance committee often spoke of the need for a productivity covenant in Canada. Although we crossed swords from time to time, I think my friend was on to something when he proposed that. Unfortunately his own government has not adopted it.
We do need a government that takes the issue of productivity seriously. These are some of ways in which we could start to deal with it: lower taxes; reduce spending; deal with regulatory reform; knock down interprovincial trade barriers; and promote free trade. Those things all make the economy much more productive.
Why is it important to make the economy more productive? Because that is how real incomes are raised. The only way we can become wealthier is to produce more. It does not mean we have to work harder, but it means that we have to produce more by using our enterprise and our knowledge and by using capital to invest in machinery and equipment that will allow us to produce more goods and services. If we do that, everyone benefits, but do we know who benefits most? It is people on the low end. It is counterintuitive, I know, but it is people on the low end of the income scale.
Why is that? Because, rather obviously, an already wealthy person who has enough to look after all of his or her needs does not benefit nearly as much when the economy picks up or when the nation produces more goods and services. It is the people on the low end, the people who are unemployed or underemployed today, who are working in entry level positions at middle age, for instance, who could be doing much better if there were more activity in the economy, so that instead of three people chasing one job we would have three jobs chasing one person. If we had that kind of an environment, that kind of an economy, people on the low end, who are struggling to find work that will allow them to look after their families, pay for the basics, buy homes and those sorts of things, will benefit the most.
That is one of the big reasons why the government should never take its eye off the ball when it comes to improving productivity. It is not just because we get those big boxcar numbers in terms of our overall GDP. Yes, we want to see the GDP grow bigger and we want to see more wealth created, but really it is the people who have not had the opportunities thus far who would benefit the most.
I have often used this example in the House, and at the risk of doing it to the point of boring people I will do it one more time. The best example of how this can work is what happened in the United States during the recent expansion. At the height of the expansion, the poorest quintile, the poorest 20% of the black population in the United States, which is the poorest population overall in the United States broken down by ethnic groups, by race, had an unemployment rate of 7%. That was the same average that we had across Canada at the very same time.
We would think that the unemployment rate of those people would be 15%, 20%, 25%, but because the economy was so hot in the U.S. and it was producing so much wealth, what we found was that all these businesses could not find workers so they went into areas of high unemployment and offered jobs to people. They said to people “We know you don't have any skills, perhaps, in this line of work, maybe you didn't finish high school or maybe you've been on welfare your whole life, but we will give you a job because we need workers”. These people, who had no hope previous to that, who could not find jobs and were trapped in this cycle of poverty, finally were given jobs and given contacts. They got a paycheque and of course they got some hope, which is what governments should be doing.
Another example is Ireland, a perfect example. It is a country that for 150 years had as its biggest export its people. Ireland decided to change how it structured its economy, saying that it could not continue to try to get by on the sort of semi-socialist economy it had. It was losing people. It had unemployment rates that were through the roof. It was a disaster. It was running big deficits.
Ireland took a different approach, saying that it would buy some labour peace, settle down and see if it could work out something with the unions. Ireland bought labour peace. It balanced its budget and dramatically lowered taxes. As a result, it saw billions of dollars of investment flow into Ireland, to the point where it now, with 1% of Europe's population, gets 20% of all the new investment. There is so much money coming in the door in Ireland right now that it is able to provide its people not only with very low taxes, cutting the corporate rate from 40% to 10%, but it also has so much money coming in now it provides all its people with free university education.
That is what can be done with an economy that is really on fire. The way to do that is to give the rest of the world an incentive to come to that country and invest. That is what Ireland did. Just ahead of St. Patrick's Day we thought we should pay a compliment to the people of Ireland on the fantastic job they have done in turning around their economy. They really are a fantastic example. I will point out, too, that Ireland is a country that is stuck out in the Atlantic, a long ways away from big markets and a long ways away from having resources. It does not have resources like we do.
If we applied that same approach in Canada, can we imagine what would happen? We are a country that is blessed with resources, really unparalleled in the world. We sit north of the United States with an $11 trillion economy, the biggest economy in the world. Can we imagine if we applied the same sorts of policies in Canada? Our economy would go through the roof. It would be unbelievable. People from around the country who have never had a chance at getting a good job all of a sudden would be breaking down doors for people to hire them to work at different things.
The government cannot seem to get out of the rut it is in. It only moves in fits and starts when it absolutely has to and put band-aids on whatever is the problem. It never fundamentally takes on this challenge. That is a shame because if it did Canada would blossom as a country. Unfortunately we do not see any sign of that happening.
I want to talk for a moment about the air traveller security charge which is part of Bill C-49. The official opposition is very concerned about what the government is doing with the air traveller security charge. This charge, by the way, will raise the cost of a ticket to $24 for a round trip fare. Previous to this about $72 million a year were being spent by airlines to provide security for the travelling public around Canada. This will raise the average cost per passenger for security from about $1.10 to $24. That is a huge increase. On a one way fare it would go up $12 or over 1,000%.
The impact that has on short hop flights rather obviously is dramatic. If someone was paying $60 for a ticket and now has to pay $24 more to meet the security charge, all of a sudden there is a big incentive not to fly. People will find other ways of travelling or they simply will not go. That is bad for the economy. That is a disastrous thing for the economy and certainly a disaster for airlines like WestJet that really rely on a lot of the short hops. We think the government has made a grave error.
Actually I am pleased to announce that many government members are deeply concerned about this matter. The member for Hillsborough from Prince Edward Island spoke up when he was on the finance committee. He thought the government was out to lunch in this regard. I have some quotes which I cannot find right now, but he pointed out at the finance committee that this would have a dramatic negative impact on small airports like the one at Charlottetown where people have to make short hops, or Victoria to Vancouver or Calgary to Edmonton.
These short hops for some people will not be economical any more so they will simply not do it. Airlines like WestJet and some of the smaller airlines will face real challenges in staying afloat because of this issue. The government has made a big error.
That is not to say there should not be increased security. Of course there should be. Our party believes that we should first of all respect the recommendation of the transportation committee that any increase in funding for air travel security should be funded both by a security fee and out of the consolidated revenue fund, out of general revenues, because public security is a public good. It is not like a special program that only a few people use. It is really a public good.
We need to remember, as my friend has pointed out in the past, that when the airplanes hit the World Trade Center many people were obviously killed in the buildings themselves. All of the public is in danger when someone hijacks a plane. The entire population of a country could be in some kind of jeopardy when such things happen. We argue it is a public good and therefore at least to a large degree should be funded out of general revenues.
I simply say this is an important fact with which I am not certain the government has ever come to grips. In my riding of Medicine Hat there is a small airport that will be dramatically affected by the security charge. I can assure everyone of that.
People in the past have flown from Medicine Hat to Calgary. Now it may not be economical for them to do it. They may just drive instead, and that would be a real blow to regional carriers. We are quite concerned about that.
When this whole issue was first debated in the finance committee a number of things were raised and good amendments were brought forward which unfortunately were defeated by the committee. One of them was a proposal by the Canadian Alliance that these fees be determined on the basis of distance.
My friend spoke a minute ago about not wanting to do that and suggested that people who go on longer hauls would subsidize people on shorter hauls. I understand his argument, but rather obviously it would minimize the impact of the security fee in terms of being a disincentive to travel. A small percentage more will not necessarily deter those who are already paying $3,000 for a ticket to go across the country, but a $24 fee on a $60 trip could absolutely be a very big deterrent to people travelling. That is something we proposed which the Liberals in the finance committee denied.
We also proposed that there be greater accountability when it comes to the authority that is to oversee the new fee and security at the airports. We asked that a representative of the travel industry be put on that authority. Unfortunately Liberal members voted it down. That is regrettable because it would have ensured some accountability. It would have put people on that authority who understand the issues and who can see the direct impact of that kind of security charge.
Along with my friend across the way we also voted in favour of having a labour representative. My friend spoke on that a moment ago and pointed out that people who were a part of the labour force understood better than most the problems when providing security in an airport. It was a very good point. Unfortunately the government has moved an amendment to change that, which is regrettable because it would have been good to have someone from labour on it as well.
These are some of the very specific things we regret in Bill C-49 when it comes to the air travel security charge. We think that the government has not done the country a service by bringing in that security charge without some of the amendments I have just talked about.
As I said at the outset, overall I am alarmed by the budget. I have said that in every speech I have given on the budget. It really misses a tremendous opportunity to improve Canada's competitive position. It misses the opportunity to deal with reckless spending. It misses the opportunity to act aggressively to bring about fundamental change in how we provide security in Canada when the country is demanding it.
We have not done a good job in the past. The government has ripped the heart out of funding for the RCMP, CSIS and national defence. It has not even begun to address the funding issue for some of those agencies even yet, even after the budget. Those are some of the things it could have done and did not do, and that is regrettable.
I will simply conclude by issuing a charge to the Liberals across the way. The government will be in power for a couple more years at least before an election. I urge them to take the opportunity, with the official opposition supporting them, to bring about some of the changes I have talked about that would make Canada a leader again when it comes to providing well-being for its people.