Mr. Speaker, it is a pleasure to address the budget.
We in the Canadian Alliance have always said that Canada has the natural, historic and human resources necessary to attain the highest levels of wealth, security and democracy in the entire world. With these attributes Canada can achieve its true potential. We have confidence in Canada's people, in its potential and in our future prospects. My colleagues and I entered politics and were elected on this belief. Not only were we elected on this belief, we have acted upon this belief.
Thanks to this party, thanks to my predecessors in this party, the preconditions are in place for Canada to achieve its potential: balanced budgets, lower debts and low inflation. There is unprecedented fiscal room to do the right thing. Canadians are a well-educated people with a strong entrepreneurial history. There is every reason to be optimistic about possibilities for the future.
Unfortunately, the choices made by the government, the previous finance minister in particular, threaten our potential and this budget continues in that tradition. Prudence in budgeting has been laid aside for the padding of ministerial budgets. Surplus funds have been turned into slush funds for prime ministerial hopefuls. Canadian families and workers will remain overtaxed and overburdened.
We say real progress could have and still can be made. We can control the growth of runaway spending while providing for real program priorities. We can lay out a plan to further reduce our debt. Finally, we can and we should continue to cut taxes: personal taxes, family taxes and business taxes. We should cut all of them, including the mother of all deficit fighting taxes, the GST.
Let me turn to the opportunities that this country has. Canada has it all: a beautiful, pristine and wealthy natural resource environment and an educated and motivated population that has come from all parts of the globe. Left to their resources and their abilities, Canadians have a history of achievement and of freedom. We have an unprecedented opportunity to make the best of these endowments and make this country the most wealthy, most secure and most democratic country on the face of the earth.
National budgets are a time to examine how Canada cannot just compete but also win at these competitions, creating opportunity, wealth and a better life for us and the children and grandchildren that we want to see stay in this country. Canada can achieve these things with a new kind of thinking, the kind of thinking that propelled this party from nowhere to the national political stage, the kind of thinking that has pushed the government to frequently act against its own instincts and ultimately for the betterment of our population, and the kind of thinking that led provinces like Alberta and Ontario to create the real economic growth that this country has seen over the past decade.
Some progress has been made in the past 10 years, but that progress, at least federally, came only at the urging of my party and its former leaders fighting Liberal resistance and ridicule every step of the way. My party emerged on the scene largely due to the fiscal mismanagement of the Liberals and previous Tory governments.
Preston Manning used to say that the best thing to do when one is in a hole is to stop digging. This party's zero in three plan outlined a way to eliminate the deficit. You will recall, Mr. Speaker, that the Liberals mocked our promise to eliminate the deficit by focusing on spending reductions and focusing on a plan that went over three years. Yet faced with pressure from my party, from financial markets and ultimately from Canadians themselves, the government finally started to do something in 1995. What it did bore some semblance to what my party proposed in its zero in three plan, but of course, being delayed, what the Liberal government did was much more harsh. However, following our lead, the budget was indeed balanced in three years.
Once the budget was balanced, my predecessors also reflected Canadians' desire to address our massive national debt. We called for a legislative plan to reduce the debt. After dithering, the government finally started to set aside contingency and prudence reserves that were an ad hoc way to address the debt.
Today, although the national debt remains massive, the long course of debt reduction has at least begun, thanks to my party pushing the issue up the government's agenda, and I should say in the process reflecting only where it was on the population's agenda.
Finally, let me address taxation and the government's reluctant shuffle to lower taxes. Very reluctant, very hesitant and incomplete as it is, this move came only because of the leadership of others, for example, Mike Harris and his progressive tax-cutting government in the province of Ontario, and my predecessor who carried pressure for his historic introduction of Canada's first single rate of tax when he was finance minister in Alberta, and who brought it to this House of Commons, the member for Okanagan—Coquihalla.
The government responded to the public and political pressure by announcing some tax cuts at the eleventh hour, days before the calling of the 2000 election campaign. I will deal with these tax cuts in a few moments. The reality remains, and let us be very clear, that without this party, without all the efforts that its members of Parliament past and present have done, and without all of the Canadians who have supported it and worked behind it, Canadians would never have seen a dime in tax relief from the Liberals. They would never have seen any reduction in debt and they would never even have seen a balanced budget, at least not before there had been a fiscal calamity.
Dealing with deficits, debt and taxes was only a start. Now it is time to get the job done. Getting the job done will require new and ambitious thinking – the kind of new thinking my party brought to Ottawa, the kind of new thinking the Liberal Party is incapable of understanding.
Thinking about things from a new and different perspective is not about reading the polls and having focus group tests. It is never easy because it takes courage, conviction and the strength to know that taking a new and innovative course is going to make change for the better.
Genuine leaders are the ones who do the right thing. The right thing to do now is to get on with the job, to get beyond reversing the mistakes of the past, to get beyond not repeating those mistakes, to get beyond cycles of taxes and spending followed by cycles of cutting later on, to get on with the goal that a budget can pursue making Canada specifically the most wealthy country in the world.
If Canada is going to reach that potential, it is going to require leadership and the right kind of leadership; leadership that understands the proper role of government, leadership that recognizes the power of free markets and of the private sector, leadership that recognizes that prosperity is best achieved by a government that spends right, that taxes less and that empowers private citizens more.
Free enterprise is a powerful thing. It drives and sustains economic growth, it rewards individual initiative and it empowers people to realize their potential. These are the values on which Canada was built, the values on which our economy was historically built.
We need policy again that focuses on economic growth, strong enough to provide the revenues needed to provide jobs and deliver core social services. It is often said that the best social program is a job. Likewise, the best guarantee of a strong social safety net is a strong economy. We can have the health care system Canadians demand and we can have the military Canadians need, only if we lay the foundations for economic growth.
However in the last years as finance minister, the member for LaSalle—Émard failed to lay the foundations for long term growth. He failed to give Canada the government that would realize our potential. He failed to get on with the job.
Instead of getting on with the job, what the former Minister of Finance did was return to the Liberal ways of tax and spend. With tax and spend came waste, mismanagement and indeed, corruption. How did this happen?
In the mid-1990s and at the prodding of my predecessors, the federal budget emerged from an era of deficits into an era of prudence. However that prudence did not last long. The former finance minister figured out how to turn the virtue of prudence into the vice of padded. He vastly underestimated government revenues. He vastly overstated projected government spending. Each successive budget more blatantly disguised the size of the surplus. The former finance minister turned the virtue of taxpayer surplus into the vice of slush funds.
A government that had temporarily been in restraint began to get reckless. This led to three critical problems, the problem of misplaced priorities, the problem of waste and mismanagement, and the problem of overtaxation. Let me deal with these one at a time.
The first problem with turning surplus into slush was the massive increases in largely wasteful public spending. The former finance minister went on a dangerous spending spree in his final three budgets. To be clear, the biggest beneficiary was not and never was health care.
He increased spending on the non-defence operations of government by $7.4 billion over the past five years. By comparison he spent on all transfers, including health, to other levels of government only $4.5 billion. In other words, for every $1 spent on social transfers which include health, the former finance minister spent at least $1.65 just on hiring binges and departmental slush funds. In simple terms, the former finance minister put hiring bureaucrats over funding health care.
The second problem with turning surplus into slush is that the slush invariably leads to lack of control over public spending.
The former finance minister's last few budgets gave Canadians very poor value for money: a 500-fold overrun in the net cost of the firearms registry; $1 billion spent fraudulently in an inadequately administered Human Resources Development grants; millions of dollars in advertising contracts that are now under investigation by the RCMP; and literally untold and undisclosed millions in GST fraud.
Finally, the third problem with turning surplus into slush is that Canadians are still severely overtaxed. The former finance minister's addiction to spending resulted in taxes that were higher than ever. Canada's ballooning surpluses, always higher than admitted at budget time, are all the evidence we need that we are being grossly overtaxed.
The former finance minister took more money from Canadians than any other finance minister in the history of the country.
The public relations rhetoric around tax reductions announced prior to the last election is just that. It has perpetuated the greatest of all Liberal myths: Liberal tax reduction.
Working Canadians have rightly asked, “If Martin cut taxes, then why can't I see it on my pay cheque?” The answer is that most of these tax cuts were nothing more than future tax cut promises or forecasts. Short term relief has been overshadowed by new levies like the air tax and massive increases in Canada pension plan contributions.
Worse, the former finance minister broke faith with Canadians on taxes that were brought in temporarily to reduce the deficit. He chose to keep increases in gas taxes that both he and his predecessors raised to address the deficit. He chose to keep capital taxes that were brought in for the same purpose. He chose to build up a massive government slush fund by collecting billions more in employment insurance premiums than he needed to run the EI program.
Worst of all, the former finance minister failed to take any action on the GST, a tax he and his party promised to scrap, abolish and kill, a promise that got themselves propelled into government.
If I could summarize the approach brought us by the former finance minister in two words, those two words would be “overtaxed” and “underserved”. Canadians pay too much tax and receive too poor value for this money. That is ultimately the result of the former finance minister turning prudence into padding and surplus into slush.
The policy of slush is also a threat to our prosperity. The government's recent reckless fiscal policy is costing Canadians. Wasteful programs are misusing hard earned tax dollars. Misplaced priorities mean health care has been underfunded for years while corporate welfare and departmental budgets have grown unchecked. However the real cost to Canadians of the government's recent record has been the failure to address the slide in Canada's living standards.
Canadian living standards have been falling steadily behind the United States for 20 years. Canadians take home pay has shrunk compared to the United States. Even in years where our economy has performed better, Canadians have fallen farther behind.
On productivity, according to the Canadian Manufacturers and Exporters Association, Canada has put in one of the poorest performances on manufacturing and productivity growth among major industrialized economies during roughly the past half decade.
How has the government dealt with that? How has it masked the strategy of its apparently rosy budgets with poor economic performance? The strategy of the government has been to compensate for its dubious fiscal record in economic policies by turning Canada into a discount wholesaler. Only through a steady deteriorating currency, only by a steady drop in the Canadian dollar has the country managed to keep its exports high. By devaluing the dollar, the government has been able to devalue its debts but it also has been in the process of devaluing the assets, devaluing everything Canadians own.
This poor record on living standards and productivity threatens to undermine Canada's potential and its future prosperity, and to do what it is doing already; that is, seeing what assets we have slowly bought up by the United States and by other foreign countries.
Yesterday, the current finance minister had a unique opportunity to set himself apart from the fiscal course set by his predecessor. In his first budget, he had a golden opportunity to demonstrate how he would chart a different course. He could have chosen to correct his predecessor's destructive course, return to sound long-run financial management and return hard-earned tax dollars to Canadian families and workers. Or he could have chosen to continue his predecessor's destructive course, continue financial mismanagement and continue to overtax Canadian families and workers.
In fine Liberal tradition, the new Minister of Finance decided to do both--though he did more continuing than correcting his predecessor’s errors.
The budget did some things right, and we want to be fair and acknowledge some of the ways the current finance minister corrected his predecessors errors. We applaud the finance minister for reversing the course of his predecessor and following our lead by eliminating the capital tax, a fight fought in the House of Commons by our member for Peace River.
We applaud the finance minister for reversing the course of his predecessor and following our lead by addressing resource tax inequities, a cause undertaken by our own natural resource critic, the member for Athabasca, who is unable to be here today because of illness.
We applaud some other changes like the disability tax credit. Our member for Nanaimo--Cowichan fought hard for improvements to that.
The 2¢ reduction to the EI was fought hard for by the hon. member for Medicine Hat and the finance minister's 2¢ contribution to Canadian taxpayers which workers can use to see a movie in a second run theatre once a year.
We also applaud the minister for other changes such as small business tax changes and increases to the RRSP limits. We even recognize the finance minister for reversing somewhat the course of his predecessor in following our lead by at least reducing to some degree the destructive air tax, a cause fought for and will continue to be fought for by our member for Port Moody--Coquitlam--Port Coquitlam.
Our reservations on these items are only that they will take years to implement in some cases and in many cases such as the air tax, they do not go far enough. These taxes should have been eliminated.
We also support the health accord signed by Ottawa and the provinces. We support the injection of funds into courthouse services provided by the provinces. As well, we support the flexible federal-provincial conditions negotiated for on funds into new areas. We support accountability through a non-bureaucratic health council. We also support allowing the provinces to continue to find innovative ways of delivering health services using public, non-profit and private delivery options.
We will be watching the federal and provincial governments to complete the accord and ensure that it provides improved patient results, the kind of changes Canadians want to see, more doctors, more beds and shorter waiting lists.
We also support measures to reduce spending on existing programs to find money for new programs. Our support for that comes with some hard questions.
First, why are there no reductions now after the finance minister spent months looking for them?
Second, why was only $1 billion set aside for future spending reductions? Recent scandals alone have uncovered three times that amount: the gun registry, the sponsorship programs and the HRDC programs. Eliminating corporate welfare could yield many more billions.
Third, why is the government so suddenly concerned with accountability. Could it be that a retiring Prime Minister is suddenly concerned about the scandals swirling around his government and his precious legacy?
Fourth, is this a public relations exercise or is it a serious attempt at cleaning up a record of waste, mismanagement and corruption?
In many ways the current finance minister in fact continued his predecessors errors. Let us go over the number of things he did wrong and the number of things he could have done.
First, on national defence, we support the injection of new funds into our military. We note however that this increase is not even the $800 million per year that the government advertises but rather $600 million a year as the government first will demand $200 million in reductions in spending from the military to get the new money. We are concerned therefore that this is little more than a band-aid approach to a problem that needs more serious medical attention.
The Canadian Alliance has consistently called for an immediate annual injection of $2 billion into our military. Even that would have to be very well spent given the current demands placed on our military. Otherwise this means that additional dollars will do little to equip or prepare our troops.
On child care, the government has decided once again to invade provincial jurisdiction by promising money for licensed day care spaces. This is entirely the wrong approach. The last federal plan failed because provinces would not sign on, and we see no reason why they would do so this time.
We favour encouraging parental choice. Many two parent families do not use institutional day care arrangements and thus do not benefit from this grandiose scheme. Single income families are once again shortchanged. We would prefer a universal tax deduction for children in all families so that parents, not the government, can make the choice of how they wish to care for their children. A universal child deduction is also a better way than the refundable child benefit that completely ignores the costs of children in middle income families and creates high marginal tax rates for low income families.
It is throwing money at Kyoto. The government ratified Kyoto without a plan. Now it is planning to spend billions of dollars without a plan. The budget announces $2 billion on top of the $1.6 billion already spent. However, Canadians can look in vain in the budget to figure out how this money will actually be spent. Is it a slush fund for the Minister of the Environment or is it a slush fund for the Minister of Natural Resources? This is the kind of unspecified spending that leads to problems like we have seen in HRDC, the gun registry and on the sponsorship contracts. It is part of a pattern of grand schemes, no plans and billions wasted.
The government tried to announce $5.4 billion in agriculture spending. Frankly, farmers have already seen these numbers before. I have already seen several announcements of these numbers just since I became Leader of the Opposition and that was less than a year ago. The government's plan in agriculture has become clear: announce a grand scheme with dollars recycled from previously failed programs; design programs with sufficient stringent conditions that few farmers need actually qualify; and then pretend that bold action has been taken. The government is doing nothing to address the real challenges farmers face, whether from unfair international trade disputes or from natural disasters.
I could go through a list of things. It is amazing that the government could provide a budget that starts with about 30 pages of spending promises and new spending initiatives, yet in an instant we can name major areas of the economy in our society that were completely omitted, such as agriculture for all intents and purposes. The softwood lumber crisis continues to devastate almost every province in the country and still no action. The criminal justice system in general, but on child pornography, a rampant crime, there has been no discussion of resources or initiatives to deal with this problem.
The current finance minister also continued the course of his predecessor by not doing some other things. He continued the course of his predecessor by failing to cancel the $1.5 billion gun registry. He continued the course of his predecessor by failing to invest in GST fraud investigation. He continued the course of his predecessor by failing to eliminate corporate welfare and industrial subsidies.
In summary, the current finance minister did correct the course laid out by his predecessor by doing some things right. It is indeed a short list. Most of the items in the budget continue the path laid out by the former finance minister, a path marked by turning prudence into padding and surplus into slush.
I would like to stop for a minute to reflect upon what the finance minister termed this. He termed this approach “the approach of the northern tiger”. I say no, that is not what it is. The finance minister knows what he is doing. He is borrowing his term from success stories we have seen across the globe in recent decades: the Asian tigers, Hong Kong and the others, the Celtic tiger of Ireland and all these various tigers that prowl around the globe.
What those tigers had in common was disciplined public spending, a reliance on genuine free enterprise, and aggressive programs to push taxes as low as possible. That is what being an economic tiger is all about.
The government is not a northern tiger.