Debates of Feb. 25th, 2003

The Budget

[Tony Valeri, Liberal, Stoney Creek, ON]

Mr. Speaker, certainly we have to be very cognizant, and I am sure the hon. member is, of the fact that the $100 billion five year tax cut program is still unravelling. If the member is asking whether we should continue to maintain oversight of our tax policy and ensure that we continue to maintain its competitiveness, I agree 100%. I am speaking now as the member of Parliament for Stoney Creek. I certainly do not think the tax file is closed, if that is the question. I think we have made great gains in terms of what we have done in unfolding and announcing that tax package, but I certainly think that if we are going to be competitive globally we also need to look at various areas of tax reform and different types of taxation rather than the structure we have in place today.

With respect to the United States, this is also not a race to the bottom. We also need to have a vision for the country as to what our values are, what types of values that we want to ensure are funded effectively by governments, and what values people support. It is not just about taxation. Taxation is a very important element in the overall competitiveness of the economy, but we can have the lowest taxes in all the G-7 and if we do not have the skilled people, the research infrastructure and the general infrastructure to move product to market, we will be lacking in our ability to grow as an economy. Taxation is very important, but it is certainly not the only issue for me.

In terms of the comment about suggested spending, I think we also have to acknowledge that while the spending that has been announced is quite high, by some measures, and some people have characterized it as quite high, we have to look as well at where the spending actually has occurred. The majority of it is in health care, which reflects what Canadians have been asking for. Also, the spending is in the context of the fiscal framework and the fiscal framework continues to ensure that we have balanced budgets. We still have contingency. We will have prudence built in. We are not in any way, through this budget, jeopardizing the fiscal framework that has been laid out. To me, that is a critically important point.

There is also the aspect of reallocation and the ongoing so-called cyclical program review, which is also a very important point for me in this budget. It is to ensure that the programs are constantly monitored to ensure that the funds allocated to them are actually providing the kinds of outcomes that we had intended them to provide, and if they are not, then let us deal with the reallocation.

[Roy Cullen, Liberal, Etobicoke North, ON]

Mr. Speaker, I listened to the remarks by the member for Stoney Creek and wanted to get into the issue of customs unions, but I will leave that for another day. I am very pleased to enter the debate on the budget that was presented by the Minister of Finance on February 18.

Some of the very positive aspects of the budget need to be restated and reinforced. This is the sixth consecutive balanced budget by the government. Canada is the only country in the G-7 that is projecting surpluses for the next number of years. That is after contingencies and prudence being built into the budget forecasts.

Our economy is outperforming the United States and many of our trading partners. In 2002, 560,000 were created, more than any other G-7 country. The fiscal actions, which were started by the government and the former minister of finance in 1995 and earlier, are really paying off for Canada. We are seeing surpluses and economic growth which in 2003 is projected by a group of independent economists to be around 3.2% and in 2004 to be 3.5%. We have reduced the federal debt by $47.6 billion, which is saving the federal treasury about $3 billion a year in interest costs. Those funds can be redeployed for higher priorities. Our debt to GDP ratio is down from a high of close to 71% to 46.5% in 2001 and 2002 and it will sink below 40% over the next four to five years. The standard of living in Canada has grown faster than any other G-7 country.

These matters have been stated before, but they need to be restated in my view because we are living in some very fortunate times. Because of that the government, can spend on the priorities that Canadians have identified such as our health care system.

One aspect of the budget that we need to be careful about is the effect of the multi-year funding that goes out beyond year two into years three, four and five. Of course it is not a precedent to have multi-year funding. We have had it before. There are economic circumstances internationally. There is some uncertainty with the state of the U.S. economy. There is the geopolitics of a potential conflict in the Middle East. We need to be very prudent about projecting expenditures and committing to expenditures too heavily beyond year two and into years three, four and five.

I should add that the Minister of Finance has continued the previous practice of building a lot of prudence and contingency into the budget numbers. While our expenditure is up 11%, or $14 billion over the last year, as my colleague highlighted, much of that is in health care, defence spending and priorities that Canadians have told us should be on the top of the list. Even with that additional expenditure, federal program expenditure is still at a level of about 12% in relation to the GDP or the size of the economy. That is still at a low since after the second world war and is much lower than the 16% of program spending in relation to GDP which existed in the early 1990s.

This year alone new health care expenditure will be $5.1 billion and the government will reallocate $1 billion per year from existing spending. In other words all departments will be asked to revisit their current spending and policies and challenge whether it is relevant to move forward. In total $1 billion will be reallocated to higher priority spending from lower priority spending. The government has indicated the need for an ongoing examination of all non-statutory programs in the government on a five year cycle, which I totally agree with and support.

As I said, a good part of the additional spending in the budget is in health care, over $34.5 billion over the next five years. I congratulate the government for insisting on accountability measures because Canadians deserve to know where their health care dollars go and the kind of outcomes they achieve in Ontario compared with Yukon and Prince Edward Island. Canadians expect to know what has been achieved in terms of waiting lists, et cetera.

Also, the government insisted on targeted funding. I am glad to see some money attached to home care because this is a lower cost delivery mechanism. For example, in my area 20% of acute care beds are occupied by people who should not be there. They should be in home care, but none is available. We need to begin dealing with this. The budget and the agreement call for targeted funding for home care, so the provincial governments will have to move in that area, which will be very positive. It is a lower cost alternative and it is better in terms of patient care as well.

I am very pleased also to see that $320 million over the next five years has been dedicated to affordable housing. That is in addition to the $600-odd million that was announced previously. In my riding of Etobicoke North we have many individuals who are well exceeding the 30% rule of thumb of a percentage of their income being dedicated to rent. We need to move on affordable housing.

The government is also committing resources to the homeless as well. In my riding of Etobicoke North we have started a little ad hoc committee to see if we can identify some affordable housing projects and move them forward. We want to see if we can increase the inventory of affordable housing there.

The budget builds on the need for investments in research and innovation, more money for the granting councils and the Canada Foundation for Innovation. These are important because we have to keep investing in our future. Research and innovation are the areas where the best value can be added. That is where the high paying and good jobs will be in the future.

We have also committed more money to the Canada student loans program and to the Canada graduate scholarships program. These investments in people will definitely pay off in the future. I am glad to see the government is investing in people.

Small businesses are the engine for job growth in Canada. We see some very positive measures in the budget. In fact, the Canadian Federation of Independent Business has been very laudatory about the budget and what it does for small business. For example, it increases the small business deduction limit to $300,000. It eliminates the federal capital tax starting first with small and medium sized enterprises. That is a very progressive step. The capital tax is a regressive tax and basically taxes investment. Resource sector taxation will be improved. The rate will go down to 21%. I am looking forward to the technical paper that will spell out those changes in more detail.

With regard to EI premiums, the savings to employees and employers over the last 10 years by reducing EI premiums is close to $10 billion. The minister has also indicated that he will continue the work started by the former minister of looking at the rate setting process. We need to move to a more insurance based type of funding mechanism.

Venture capital will be helped. The Business Development Bank of Canada will receive $190 million to assist with investment in new ventures.

Poor and low income Canadians and families will benefit. More money will be put into the national child benefit program. When implemented, the first child will be eligible for $3,243 per year. That is a very generous sum and a positive development.

With regard to immigration, $41 million will be added over two years to attract new skilled immigrants and help them integrate into the Canadian labour market. My riding of Etobicoke North has a very large population of new Canadians. We need to help them integrate better into the workforce.

The government has indicated it will put some resources behind helping new Canadians receive recognition of their foreign credentials. There are many people with Ph.D.s and masters degrees from foreign countries driving taxis because their foreign credentials are not recognized. The government will put in $13 million over the next two years for this initiative.

The Canada Student Financial Assistance Act is to be amended to include eligibility for convention refugees. In my riding of Etobicoke North that will be very good news because we have many young people coming of age. They have not been able to access these loans.

On balance it is a good budget with more investments in Kyoto, the environment and infrastructure. However we need to be mindful of the need to be prudent and to be cautious moving forward.

[Roy H. Bailey, Canadian Alliance, Souris—Moose Mountain, SK]

Mr. Speaker, I have a question for the hon. member. I know he has probably done the same thing as people who make speeches in provincial governments or sometimes in cities. We often hear about the number of new jobs created. That figure is often very high because they never mention those who have lost their jobs. When we hear that, it is a distortion whether it is here, in the provinces or wherever. For instance, if the government created 500,000 new jobs but 400,000 were lost through factories closing, it would not be fair to say that 500,000 new jobs were created.

Could the member comment on that traditional way of presenting those figures? We always speak about jobs created but we never speak about the jobs that were unfortunately lost.

[Roy Cullen, Liberal, Etobicoke North, ON]

Mr. Speaker, maybe the member for Souris--Moose Mountain has a different understanding than I do of the data and the statistics. My understanding is new jobs created are net new jobs. Therefore the story in Canada on the job growth numbers has been an absolutely amazing. One could quibble over the numbers I suppose, but the jobs that are reported are the net jobs created.

Canada has outperformed the United States significantly and indeed all the OECD countries. In most cases these are full time jobs.

The economy is going on all cylinders: 3%, 3.2%, 3.5%. We have something for which to be very thankful. We have this kind of economic growth and the economy is creating these jobs irrespective of the mixed results in the U.S. economy. Often follow the U.S. lead, but in this case we have been outperforming the United States. I think that is good news for all Canadians.

[Reed Elley, Canadian Alliance, Nanaimo—Cowichan, BC]

Mr. Speaker, I was interested in my hon. colleague's comments.

As I look at the budget I have every sense that this is a feel good budget that has been produced somewhat by the government's acceptance of the Canadian Alliance's fiscal prudence approach over the years. The government has indeed accepted our proposals to cut down the deficit and bring us into balanced budgets. There is no question that the government is now rewarding itself through a lot of incredible spending in this budget.

One thing I have heard from a number of people who are cautious about this budget is that even though our economy has done well in comparison to other G-7 nations and certainly in comparison to the United States, we depend so much on the American market, 85% of our exports go there. What happens if the American economy suddenly takes a huge dive? We would be no longer able to export to the Americans because they would not be buying.

Does the member know of any contingency plan on behalf of the government that would account for this kind of scenario taking place and in light of this free spending budget?

[Roy Cullen, Liberal, Etobicoke North, ON]

Mr. Speaker, in the excitement of Diana Krall, who is from Nanaimo, recently receiving those awards, perhaps the member has lost sight of some of the major elements of the budget. I can understand that because I am equally proud of what she has accomplished.

First, with this budget, the Minister of Finance has continued the work previously done and has continued with the policy of putting in the contingency of $3 billion a year. Also prudence has been built in; $1 billion for the first year, then building to $2 billion. When we get to the years three, four and five there will be a flexibility of some $5 billion.

The surpluses are based on consensus view of economists on the growth that will occur in Canada. Those economists are looking at the scenarios in the U.S. economy. The consensus view takes out the economists who say that the growth will be very high and it eliminates the views of those economist who indicate the economy will perform at a lower rate. Therefore it is a consensus view taking into account the performance of the U.S. economy with a lot of prudence built into the budget.

[Leon Benoit, Canadian Alliance, Lakeland, AB]

Mr. Speaker, I will be splitting my time with the member for Vancouver Island North.

I am pleased to have an opportunity to speak about the recent budget. I will spend most of my time talking about the military funding, what has and has not happened there, and more importantly, what that means to Canadians. Few Canadians actually think about what our military does for them here at home and abroad.

Before I do that I must comment on a few things I have heard the Prime Minister and the finance minister say regarding this budget. I cannot let them go unchallenged. I have heard from several members that they are doing such a wonderful job, that they have eliminated the deficit and are now running huge surpluses. These comments I have heard again and again.

I would like to deal with the deficit and surpluses. There are two things I would like to say regarding the deficit. First, it was not the government that eliminated the deficit, but hard working Canadian taxpayers. That is something that Liberal members should remember. It is not their own money they are spending, it is Canadian taxpayers' money. They forget that when they brag about how much extra money they are taking from the pockets of hard working Canadians so they can run these surpluses.

Second, the deficit would never have been eliminated without the pressure put on by the Reform Party and the Canadian Alliance. In the 1993 election we campaigned on eliminating the deficit with our zero in three plan. What did the Liberals say? They said that we did not have to focus on that, and that if we were to eliminate the deficit in three years the economy would collapse, that it would be a catastrophe for the country.

So what happened? Because of the pressure from the Canadian Alliance and because public opinion moved that way, the government did exactly that. It eliminated the deficit in three years. Did the economy collapse because of that? It did not. In fact, it improved because of the fiscal responsibility. That never would have happened without the Reform Party and the Canadian Alliance. We were the only ones supporting that position during the 1993 election. We should take a lot of credit for that happening and I certainly am more than willing to do that.

Government members brag about the surpluses. They say, “Boy, is the government not doing a great job with its finances?” Maybe that is right, if we look at it only from the point of view that this is government money. The deficit has been eliminated and of course they forget the $550 billion debt we still have. They kind of ignore that because we are running these surpluses. So if we look at the finances of the government as such, I suppose we could look at it in a fairly positive way other than this huge debt, which of course they like to forget.

The reality is that these surpluses represent extra money being taken from the citizens of the country. That is something the Liberals forget almost all the time when they are talking about this issue. This extra money that allows the government to brag about its finances is putting pressure on the finances of Canadians.

What about seniors on fixed incomes? There is not a day in our constituency office where we do not have seniors on fixed incomes phoning in saying that they only make a little bit of money but still have to pay taxes. It does not seem right. They cannot pay the power bill. They cannot make ends meet. They may be forced to move into a lifestyle that they never thought they would have to. Canadian seniors are affected by overtaxation. Single mothers and fathers trying to make ends meet on small fixed incomes are still taxed. There is still money coming into this surplus from these people.

Students are facing increased costs all the time. In the budget the government talks about a few elite students who will get funding but there is nothing there for the majority of students. University students who work four months in a year still pay taxes. I have four children in post-secondary institutions and they still pay taxes on their incomes in spite of the small amount they are making and in spite of the fact they are students. This is unacceptable. This is so the government can brag about its finances. What about the finances of Canadians, especially low income Canadians on fixed incomes?

Government members ought to remember that when they are bragging about surpluses because surpluses are overtaxation. In spite of the drunken spending spree the government has put into this budget, there are still surpluses. Both of those things indicate overtaxation, too much money coming from the pockets of people who can ill afford it.

In spite of all this overtaxation, what does the military receive in this budget? Nowhere near enough. It receives $395 million for last year to pay for extra expenses that it simply could not meet for the fiscal year that we are in now, so it is paying for past debts. There is only $1 billion for next year, in spite of the fact that we will have an operation in Afghanistan. We still have the navy involved in Operation Apollo and we could well have another air force contribution in the area of Iraq, as well as an extra naval contribution in that area. That contribution will easily cost $500 million.

Of this $1 billion added to the budget for the next fiscal year, probably $500 million will go to extra deployments and it will have to be paid for out of that budget. Then only $800 million will be added to the base budget the year after that, and we will be picking up the tab and still be involved in operations in Afghanistan and possibly Iraq. This budget will not do what has to be done for the military.

It is important that Canadians remember what our military does for us. Many Canadians never really think about that and there are many others who do not think about it often enough.

What does our military do for us? Here at home it deals with natural disasters such as the flood in Manitoba, the Saguenay, and the ice storms. We have seen many natural disasters in the past where the local responders simply could not deal with it so we had to rely on our Canadian military. It has done a marvellous job in those circumstances although it is important to note, that to get our troops and equipment to the flood in Manitoba and to the ice storms, Canada's military did not have the ability to transport them. We had to beg the Americans for their strategic air lift to get our troops and equipment to deal with these natural disasters. That has to be a concern especially when that type of strategic air lift is in very short demand now.

If we were to have a natural disaster right now, for example, another ice storm or an earthquake in the lower mainland of British Columbia, how would we deal with it? We do not have enough people or the proper means to get them to the area in a hurry.

How would we deal with acts of civil unrest, for example, another situation like Oka or another event getting out of hand? That is what the military provides for Canadians. Most experts on the subject just say it is a matter of time before Canada is hit by a terrorist attack, by a chemical or a biological attack of some kind. We will certainly rely on our military to help deal with those situations. It also plays a role in helping to prevent those situations and that is important as well.

We have seen the marvellous search and rescue off our east and west coasts in the past year, unbelievably well done by military personnel we should be proud of. Many Canadians forget that this comes from our defence budget and it is extremely important to Canadians to know that in desperate situations they can rely on search and rescue right across the country.

Our military also helps protect our sovereignty, especially in northern waters and islands which many countries dispute are not Canadian. If we do not have a proper presence there in the water, in the air, and in some cases on land, then we will lose sovereignty over some of that territory. There is little doubt about that. As the northern waters open up and become an important shipping route, there will be a lot of dispute about whose waterway it is. Having a presence will determine in the end whether these are Canadian waterways and whether it is Canadian territory.

To protect critical infrastructure is another important role our military performs here at home. Our military provides invaluable service here at home.

Overseas of course, Canadians think it is very important that Canada has some influence on other countries, instilling Canadian values in countries that simply do not believe in important values like democracy and freedoms.

We have seen that in many countries around the world in the last while. Our Canadian military plays an extremely important role by first negotiating peaceful settlements to situations which come up. It means promoting Canadian values to countries around the world and in dealing with trouble spots where a military force is needed. It is important that Canadians do not forget about that.

The budget does not do the job for the Canadian military. It has been talked about at some length. I will continue to deal with that because it is an important issue for all Canadians.

[Bryon Wilfert, Liberal, Parliamentary Secretary to the Minister of Finance]

Mr. Speaker, there is much that I would like to comment on, but I was surprised to hear one particular comment from the member about the fact that the government spends like drunken sailors. The facts clearly show that is not the case. In 2000-01 spending was 11% of the GDP. Today it is 12.2%, the lowest since 1950. The budget projection figure will fall below 12% over the next two fiscal years.

The hon. member knows that the one blip this year in spending was because of health care. The agreement was for $34.8 billion over five years with $5 billion up front this year. We are no where close to the 1970s, the 1980s or the first half of the 1990s. Program spending amounted to around 15% to 20% during the seventies, eighties and early nineties. Today, it is down sharply. We are at 15.7%. It has not been that low since 1984 and it is predicted again to fall to 15.2% by 2005.

Total spending is down sharply, from 20% to 25%, to 15% of GDP. Those are the facts. To suggest that we are spending like drunken sailors is totally false.

We had massive deficits during the seventies and eighties. We have no deficit in this budget. We have no deficit projected for next year or the year after. If the member is going to talk about spending he should get his facts straight. At the same time the member suggested--

[The Deputy Speaker]

The hon. member for Kootenay—Boundary—Okanagan, on a point of order.

[Jim Gouk, Canadian Alliance, Kootenay—Boundary—Okanagan, BC]

Mr. Speaker, I rise on a point of order. I would like to point out that there are a lot of problems in the world right now. We are sending our military to deal with these problems. We recently sent out one of our navy frigates. When the hon. member refers to drunken sailors he is slamming our military.

[The Deputy Speaker]

Clearly, this is not a point of order. Members are engaging in debate. Should members choose to be more judicious, given the circumstances globally, it might be good advice for all of us to follow.

[Bryon Wilfert, Liberal, Oak Ridges, ON]

Mr. Speaker, I know in politics it is better to have a thick skin rather than a thick head, but I would suggest to you that I was quoting what the member opposite said and the other member ought to pay attention to what his colleague was saying. In any event, I would like the member to comment on the facts which deal with spending versus his view that we are spending far too much.

[Leon Benoit, Canadian Alliance, Lakeland, AB]

Mr. Speaker, I do apologize to sailors, whether they are military sailors or any others. To compare them and their spending to government spending is certainly a slag on them. I do not have any intention of doing that because government spending is totally out of control.

We have seen a gun registry estimated at $2 million. That was what the justice minister at the time said it would cost. It is a billion dollars now and it will go up to $2 billion before too many years into the future. There was GST fraud where a billion dollars was thrown away. The HRDC scandal was a billion dollars. A billion dollars here and there is real money and the member should acknowledge that.

There is wasted spending on political friends in that party. It goes on all the time and it must stop. It is out of control and in this budget alone there is more than $18 billion in new spending. The former finance minister in his previous four budgets had increases of about $7 billion a year in spending. That sounds like spending that is out of control.

I make no apology for bringing up the issue of government spending being totally out of control because it is. There is so little for our military. It seems like the government does not care about our serving men and women at all. They are asked to do way too much with way too little. The government does not care about that. It spends peanuts on the military compared to what it spends on other programs that will be eaten up by inefficient bureaucracy just like the gun registry program.

[Paul Szabo, Liberal, Mississauga South, ON]

Very briefly, Mr. Speaker, the member referred to single moms, and I think he was referring to lone parents. When it is considered what we have contributed in terms of improvements in the child tax benefit and the national child benefit, for lone parents, when the child is taken as an equivalent to married, plus the value of the child tax benefit, it means that they can earn $20,000 without paying a penny of tax. If they earn $30,000, they would pay about 10% tax. If they earn $40,000, they would pay only about $5,000 or 12% tax. I think this is important. Maybe the member would suggest at what level of taxable income he feels that Canadians should start paying any tax.

[Leon Benoit, Canadian Alliance, Lakeland, AB]

Mr. Speaker, the fact is that for single parents raising a child to pay taxes when their incomes get to just over $20,000 is disgusting. Maybe the member opposite has forgotten or has never known what it is like to live on $20,000 a year.

[John Duncan, Canadian Alliance, Vancouver Island North, BC]

Mr. Speaker, it gives me pleasure to speak to the budget debate today. When the budget speech was delivered here recently, I was overwhelmed by the misdirected government priorities. I say that from the standpoint of a loyal and patriotic Canadian and a lifelong British Columbian.

I am also speaking as the international trade critic for the Canadian Alliance. Eighty-seven per cent of our trade is with the U.S. Canadian jobs and prosperity are highly dependent on exports, more so than almost any other country in the world. One job in four in Canada is reliant upon our trade. We export 45% of our GDP and import 40% of our GDP. I think the average for the G-7 in both of those categories is well less than half that number, in the teens. We often think of trade dependency as being with major trading countries. There is a surprise there too. Mainland China, for example, is about 10% dependent on exports. The U.S. is at somewhere around 15%. We are way out there in terms of our exposure to the necessity of trade to support our prosperity.

Given this kind of reliance, given the $2 billion a day in two way trade across the Canada-U.S. border, and given our need to diversify our export destinations while at the same time addressing concerns of our southern neighbours who have expressed security concerns about border issues and ports of entry, I would have assumed that this budget would have spent a lot of time addressing these issues. Really, it did not.

For example, the budget commits $11 million over the next two years, $5.5 million per year, to additional regional offices and increased consular presence in the U.S. These are insignificant moneys. This is such a minor budget item given the small amount of money. It is much less than what was given to the Forest Products Association of Canada, for example, to run a public relations campaign directed at the opinion makers in the softwood dispute.

So many of these initiatives by the government are public relations oriented rather than substantive, security oriented or other measures. I have a real concern that the government is more interested in public relations than in actually managing domestic and international security and military issues in partnership with our colleagues in the U.S., our major trading partner.

The Canadian border and transportation infrastructure have long been neglected and this is coming home to roost. There are currently more trucks transiting from Toronto to Calgary through the U.S. than there are through Canada because the U.S. highways are better. I was on the Trans-Canada Highway immediately after September 11, 2001, driving from west to east. We all know what happened: The border crossings became impossible in that timeframe. I saw the impact on the Trans-Canada Highway of having all that diverted truck traffic, the Canadian through traffic, staying on the Trans-Canada Highway. I know that highway is not built for that kind of contingency. So here we are, even with our far from perfect border infrastructure, with our truckers accepting that penalty rather than using our Trans-Canada facility. Canada is losing huge economic opportunities and prosperity because of all of this.

Canadian municipal governments recognize this problem and see it with clarity, because they see what is happening with their neighbouring cities across the border, which are building up distribution centres and infrastructure and modernizing all of their facilities while ours are crumbling and falling apart.

This certainly speaks to taxation issues. I think what it really speaks to is who is collecting the taxes and who is delivering the programs, and the government is not sympathetic to changing the way that is done in Canada. It is obvious that municipal and provincial governments are much more capable of delivering what is really needed in much of that infrastructure. The federal government is occupying the taxation that those governments need in order to accomplish that task. It is not prepared to change that and is not at all sympathetic on that issue. This is creating what I call a transportation deficit, which this budget fails to address in its entirety.

A transportation deficit is no more or no less than an export deficit. It is cumulative. The longer we allow this situation to persist, the more difficult we make it to get back into the game. I liken the cumulative effect to what has happened to my province of British Columbia, in a sense, after 10 years of governance by a socialist government with a misdirected sense of priorities. That government took a very prosperous province and turned it into a have not province under our own federal equalization formula, creating a deficit and debt situation. It is taking the collective will of a lot of people to make sacrifices. In the meantime, we have lost a huge number of our young people to competing jurisdictions in the U.S., Alberta or other provinces. We may never get them back. This has long term consequences.

What governments do is important. The actions they take have long term ramifications and consequences. There was a chance to do some very significant and important things with all of the surplus capacity in this budget, and the government chose not to do that.

The border infrastructure question relies entirely on the $600 million border infrastructure program which was announced in 2002. It is a good start but is certainly not comprehensive. The message Canada is sending to the U.S. on domestic security, international security, border issues and military issues does tend to imperil our long term trading relationship.

I can give the House a very concrete example. Today the Bush administration is pushing us to the wall on the softwood lumber dispute, the largest trade dispute between any two countries in the world, in terms of our sovereignty over forest policy, undercutting the WTO and NAFTA processes, and in terms of basically selling out the consumer interest, all related to one specific set of circumstances for lumber. At the same time that this is happening, the U.S. and Australia have announced that their free trade talks have been going so well that the free trade agreement they expected to conclude at the end of 2004 is now anticipated to be concluded early in 2004. Are these issues related? Of course they are. One could ask why these relations are going so swimmingly with Australia and so poorly with Canada.

I am not able to get through my comprehensive speech so I will conclude by saying once again how disappointed I am in the huge lost opportunity that this budget presented.

[Leon Benoit, Canadian Alliance, Lakeland, AB]

Madam Speaker, the member referred to the softwood lumber negotiations between Canada and the United States and some trade negotiations between Australia and the United States. He alluded to something else being involved in the Canada-U.S. relationship. I would like him to expand on that.

[John Duncan, Canadian Alliance, Vancouver Island North, BC]

Madam Speaker, it is very apparent that countries are like people. If we want to do business with somebody it is important that we know who they are, that we understand them and that we have things in common. Australia and Britain for example, at the current time, are part of the coalition of the willing in the Iraqi question which is dominating the American political scene and also having a huge depressing impact on the level of economic activity in the U.S. Naturally the Americans are looking for a clear message from their friends, allies and trading partners. Canada's message has not been clear, therefore it confuses our trading relationship. To think otherwise would not be realistic.

I have become aware recently that the special military procurement arrangements that we have with the United States, which dates back to post-World War II, will now be shared with others. Those others happen to be Australia and the U.K. There is a direct correlation and it is not difficult to comprehend why that would occur.

All of what we do politically has consequences with our long term relationship in terms of trade. That is the point I was trying to make and I think everybody knows that some of these implications are upon us now.

[Sarmite Bulte, Liberal, Parkdale—High Park, ON]

Madam Speaker, I will be splitting my time with the hon. member for Mississauga West.

I am pleased to speak to budget 2003. I will begin by congratulating the government and the Minister of Finance on yet another balanced budget. In fact, it is the government's sixth consecutive balanced budget.

As the Minister of Finance noted in the opening part of his budget speech, Canada stands alone among its group of seven partners in keeping its finances in the black. This is the message we heard from Canadians and it was particularly loud in my riding.

Today I will specifically address the ambitious plan that the government has put forward to boost entrepreneurship. I do so as the chair of the Prime Minister's task force on women entrepreneurs and as a member of Parliament for a riding where there are hundreds of small and medium sized businesses. All one needs to do is walk down Bloor Street west, Roncessvalles Avenue, Queen Street west or Dundas Street west.

As the chair of the Prime Minister's task force on women entrepreneurs, I was delighted to see that women entrepreneurs, with whom we have already consulted, influenced that budget.

Before I go into actual budget recommendations, I will give a little background about the task force.

The Prime Minister's task force on women entrepreneurs was announced on November 18 at the innovation summit in Toronto. The mandate of the task force is to provide advice to the federal government on broad issues on women's entrepreneurship, to create a national strategy to help businesswomen and to make suggestions for specific initiatives that the government could consider, such as research and trade.

The task force is to examine the unique challenges faced by women owned businesses. It will consider the factors required to encourage women's entrepreneurship, assess existing resources and identify gaps in areas for possible future action. We have also been instructed to evaluate international practices and to find out if they are appropriate to the Canadian context.

One might ask why we would undertake a task force for women entrepreneurs. The reality is that women are creating businesses at twice the rate men are. Therefore if we can foster an environment that will assist women entrepreneurs to grow their businesses, increase productivity and participate in globalization, we will be creating a blueprint for all SMEs, small and medium sized enterprises, for the future.

Supporting women in business is good economic policy as small and medium sized enterprises drive the economy. It is sound economic development. What is good for women entrepreneurs is good for all small and medium sized enterprises.

The task force has already started its regional consultations by travelling out east. We have held consultations in Kitchener and in Toronto. Probably the most important consultation we have had to date is the first round table discussion which took place on December 17 in Toronto as a prebudget consultation in the presence of the finance minister. I am delighted to note that many of the issues raised at that meeting were subsequently incorporated into the budget.

I would now like to refer to the specific initiatives.

Almost unanimously the women entrepreneurs felt that the RRSP limits should be increased to better provide entrepreneurs with retirement income in lieu of CPP benefits.

Another suggestion that was made to help women entrepreneurs save for their children's education was that increases also be made to the registered education savings plan. There were specific increases to the RESP. On page 11 of the budget speech, the Minister of Finance announced that the budget encourages savings by Canadians by increasing registered retirement savings plans limits to $18,000 by the year 2006.

The second most important issue that was raised at this prebudget consultation with women entrepreneurs was the need for better access to day care. Many women entrepreneurs suggested either a national day care program or full deductibility of child care expenses. Perhaps it is trite to state that women entrepreneurs continue to bear a disproportionate responsibility for child care in the family. This is all the more important as women entrepreneurs cannot take advantage of parental leave or maternity benefits, at least not yet.

In the budget speech the Minister of Finance specifically noted “families need more than income support. They need real choices”. At that point he announced a new federal investment of $935 million in child care over the next five years.

Another important issue for women entrepreneurs was their access to capital. There is still a problem for women entrepreneurs in accessing capital but, more important, they wanted easier access to venture capital and felt the government should do whatever it could to encourage that. This is a frequent issue for start up companies, especially those owned by women. In fact, when we did our prebudget consultations in Moncton the lack of venture capital was noted just in general for all businesses, but it was specifically noted that if a women tries to obtain a venture capital loan, good luck, it does not happen. It is still the old boys network.

One of the recommendations that was made in Toronto at the prebudget consultation was increased funding through the Business Development Bank as a means to achieving this goal. I was delighted once again that budget 2003 addressed this concern. In fact, when announcing the extension of a further $190 million in equity to expand venture capital investment by the Business Development Bank of Canada, the Minister of Finance noted “We have heard many good ideas from”, inter alia, “women entrepreneurs”.

On page 129 of budget plan 2003 it is specifically stated that the capital from the purchase of the additional $190 million of BDC common shares will allow BDC to provide additional equity financing for knowledge based and export oriented businesses and to increase the financing available to women entrepreneurs.

During the December consultations it was pointed out that new immigrants face much greater hurdles in starting their own businesses, especially immigrant women. In addition to lacking familiarity with available support networks, barriers to accredited foreign trained professionals prevent them from fully utilizing their own credentials. I was delighted to find that in the budget speech the Minister of Finance addressed this issue with the announcement of $41 million over the next two years to help new Canadians to integrate quickly into our economy, whether it is through second language skills, faster recognition of foreign credentials or pilot projects.

There is another thing that some of the women noted at this prebudget consultation that I want to share. It is also something we are starting to hear in our consultations as we cross Canada with the task force. Some women noted that there is too great a dichotomy between being an entrepreneur and being a full time employee. It poses a considerable barrier for women when they are forced to choose between running their own business and working for someone else when they would have the full protection of the social safety net if they continued to be employed by someone else.

I have to say that while we still have a long way to go to address that concern, and perhaps the task force will be able to address that concern specifically when it comes up with its recommendations to the Prime Minister at the end of May or June 2003, budget 2003 actually starts to address this dichotomy a bit.

Budget 2003 also includes new initiatives that build on a five year $100 billion tax reduction plan to improve our tax system. Other initiatives include supporting entrepreneurs and small business by raising the small business deduction limit to $300,000 from $200,000, strengthening investment by eliminating the federal capital tax with medium sized enterprises benefiting first, and lowering the employment insurance rate for 2004 by 12¢ to $1.98 per $100 of insurable earnings.

I will conclude by saying that women entrepreneurs have been increasingly successful in recent years and with the task force and the recommendations that we hope to propose, we hope they will become more successful. I must add that budget 2003 will help to facilitate more women and encourage them to own, start up and grow their own businesses.

[Steve Mahoney, Liberal, Parliamentary Secretary to the Minister of Transport]

Madam Speaker, I want to ask a question based on the aspect of the work the hon. member is doing with women entrepreneurs. I led a task force on young entrepreneurs a few years ago. I travelled the country and found that the spirit of entrepreneurship is alive and well and quite a marvellous thing in this country.

There is a bit of a dichotomy with the government being involved in programs for entrepreneurs. They generally try to run away from government. They generally say to us that the best thing we could do for them as entrepreneurs would be to get out of their way. That was the case with young entrepreneurs.

Has the member found that with women entrepreneurs? Are there programs we could use at the moment to help women entrepreneurs, both young and perhaps a little older, to create value, to create jobs, and to help this great nation grow?

[Sarmite Bulte, Liberal, Parkdale—High Park, ON]

Madam Speaker, I had the privilege of sitting on that task force on young entrepreneurs which the hon. member chaired. One of the things that our task force found and which we are seeing as we consult women across the country, is that it is the role of government to find that right balance, to know when to walk away and when to assist businesses, to promote and to facilitate. Our role is more as a facilitator, to see how we can encourage small and medium size enterprises to grow and expand and take part in the global market.

Women entrepreneurs, especially the younger ones, still find that one of the challenges or barriers to starting their own businesses is the inability to take parental or maternity leave. As I said earlier in my speech, maternity benefits cannot be accessed by women entrepreneurs because they do not pay into the employment insurance system. Is there a way that we can try to encourage this? We are looking at that in the task force and it is something we have to address.

Another program that certainly has had praise from the few consultations we have had is the self-employment assistance program which is delivered through Human Resources Development Canada. We have heard it has had tremendous results and truly has encouraged women to start up their own businesses.

The member is right in that we have to be careful in finding the right balance but at the same time we should not be afraid of helping small and medium size enterprises. Quite often we are encouraging large corporations, such as the automakers by helping them build their plants, or helping Bombardier to be successful nationally. When we do this, it is not just about subsidies. It is about creating jobs. It is about driving this economy. It is about branding Canada nationally and abroad.

[Steve Mahoney, Liberal, Parliamentary Secretary to the Minister of Transport]

Madam Speaker, it is a delight and an honour to talk to you, the House and the folks at home about the things that are in the budget and some of the ways we try to communicate the value of what is in the budget. Communication is always a major challenge for government.

We all saw the headlines the morning after the budget. After listening to some of the commentators and the reaction notably from some of the mayors across the country, people would think we had just brought in the worst possible budget that could be imagined.

In the calm atmosphere that has followed the announcement, the press scrum and the hysteria around the budget, I would hope that people have had a chance to sit down and carefully analyze what is in it for them, how it benefits them as individuals or their communities if they happen to be mayors or councillors. I am not just spouting off something the government would like one of its members to talk about. I sincerely believe there are some initiatives that I know my colleague from the NDP opposite will agree are far reaching. These are initiatives in terms of affordable housing, infrastructure, commitments that help people who live in our cities in terms of the environment and clean air, our Kyoto commitment, alternative fuels, and the list goes on. These are all things that will benefit people whether they live in a large city such as Toronto or a small city, whether it is in the west or in the east.

One of the frustrations a government member has is getting the proper information out. I want to share a story to illustrate that.

We have all heard recently dramatic and substantial criticism around the so-called gun registry and its $1 billion cost. In fact, as I was going to committee yesterday I heard one of my hon. colleagues from the fifth party stand here in the House and quote the Auditor General to the effect that the Auditor General had stated that the government has wasted $1 billion on a gun registry.

If something is said often enough, people will believe it. It does not have to be true. I will take a few moments to share with the House the facts about the gun registry.

The total budget, not just for the registry but for the entire gun control program since 1995, and this is in the Auditor General's report, is $688 million. We are talking about over eight years. There is more than one aspect to the gun control program. There is licensing. There is communication. There is setting up the web pages and getting the system in place. There is the computerization. All of this is included in the $688 million over eight years. The total cost for the registry itself is one-third of that.

We have heard members opposite stand in this place and unabashedly say that it cost $1 billion for the gun registry. That is absolutely false. The total cost for the registry, and this came out in the public accounts committee yesterday, is one-third of the total of $688 million over eight years, or approximately $225 million.

Even the media who were in the room yesterday during the public accounts meeting heard the auditor agree with that. Then last night on the news what did we hear? We heard the reporters say that the gun registry cost $1 billion.

We throw our hands up and say how many times do we have to say something? It is like shouting into a wind tunnel. Words just come back to us and no one pays attention.

I understand the game. It is advantageous if a member is in opposition. I am sure I would be equally as forceful as some of the members opposite in trying to distort the real numbers for my own political purposes. I hope I would be a little more honest than that. The reality is that is what is happening.

The numbers are $225 million for the registry and $688 million for the entire gun control program supported by 74% of Canadians.

Be assured that members on this side will stand strong and firm to ensure that Canada continues to have a gun control program that will ensure our citizens are safe and that we know who has weapons in this country. We can try to prevent the tragedies that occur from the unfortunate use of guns. It will not solve all the problems. No one is trying to say that.

I just wish people would be more honest with the numbers, which brings me to the housing issue.

We announced in our last budget $680 million across the country, federal dollars, new dollars for the building of affordable housing. Affordable housing is determined to be a unit that a person paying 30% of his or her gross income can afford to pay.

We announced it as a bilateral housing strategy with the provincial governments. The municipalities are creatures of the provinces. The provinces have the jurisdiction. The province of Ontario, and I cannot say that I am happy about this, decided to pass the responsibility for housing for most of the dollars, the cost, on to the municipal sector.

If we look at the $680 million envelope, it breaks down to a $25,000 cash subsidy for capital toward the construction of a new home. That was to be matched by the provincial governments. Across the country we have entered into agreements that differ substantially because, as we are often told, individual provinces have their own criteria, their own requirements and their own needs. We responded to that.

In the province of Ontario, we struggled to sign an agreement, which we ultimately did, which said that the province would put in $2,000 to match our $25,000 and the balance of $23,000 would come from the municipalities. The municipalities, rightfully in my view, screamed that this was unfair, that the province was abdicating its responsibility to participate in the bilateral housing agreement with the federal government. Unfortunately we were required to sign the agreement but we negotiated some additions to it which I think benefit the municipalities.

One of the things we were able to do was to get the province of Ontario to agree to make 25% of the units that are built affordable by providing rent supplements. A rent supplement is an amount of money paid each month to the tenant to cover the cost of the rent. If a single mom can afford $600 a month based on 30% of her income and the rent is $1,000 a month, the economic rent, she will get a $400 a month rent supplement from the provincial government.

When we total up that provincial government commitment, it comes to about $180 million. At least we are getting close to matching Ontario's share of the $680 million, which happens to be $245 million. It is not the best deal in the world but it should get housing on the ground. It should break ground. It should see activity.

I must say that Ontario has been dragging its feet on implementing the agreement. One-third of the money and the units have been announced in the Waterloo region and nothing else has occurred. Yet the crisis is in the larger cities, in my city of Mississauga, in the city of Toronto, and in all the communities in the greater Toronto area.

Frankly the province is dragging its feet for whatever reason I am not quite sure. It is my hope that the province will see its way to having these funds flow, $680 million times two. Whether it is provincial or municipal, it is times two, an additional $320 million in this budget, bringing the total for new affordable housing to $2 billion. Anyone, whether it is the new leader of the NDP or anybody else in this place, who says that is not a substantial commitment to affordable housing does not know what he or she is talking about and is simply playing politics on the backs of the people who need the help and need the housing.

We are committed to it. We are going to make sure the housing is built all across the country. We are going to work with the province of Ontario to make sure that whatever commitments go to Ontario flow directly to the people who need affordable housing.

[Peter Goldring, Canadian Alliance, Edmonton Centre-East, AB]

Madam Speaker, I would first like to make some observations and comments. We have had $753 million in homeless funding over the last three years. Where did it go? There are no homes. Today in Edmonton an LRT station for homeless people is being opened. The shelters across Canada are bulging. People are sleeping in the street. Three years of homeless funding of $753 million and it has been an abysmal failure. Now the government wants to throw another $400 million into a system that is already abysmal, without a plan and without a strategy.

I would like to ask the member opposite a question. He previously stood in the House to make the statement that the affordable housing funding to be approved would be for families, not for singles. The $753 million of homeless funding has gone for naught because the homeless are on the streets. It should be recognized that the people who are homeless and living in shelters are singles. There was $680 million for affordable housing which did not go into it.

Who exactly will be housing those single people who are in such dire need? Will any of this new funding be appropriated for single people or is it all for family housing? The singles on the streets in Edmonton and those sleeping in the LRT station will still be there next year. Will that be the case?

[Steve Mahoney, Liberal, Mississauga West, ON]

Madam Speaker, I know the member is passionate. He is the king of rooming houses. He is interested in developing a nation of rooming houses. That is not the direction of the government.

If the hon. member does not know where that skimpy money of $753 million went, he should talk to the people in the city of Toronto or here in the city of Ottawa. He does not have to go far. Of course shelters are not the solution. However for the meantime, until we can get a full continuum of housing that will not only deal with shelters but also with single units and affordable housing for families, it must be delivered by the local community. The member knows that.

Our job as a national government is to put in place a national strategy. There is about a billion dollars for shelters for the homeless and a billion federal dollars for affordable housing, matched by the provinces and the municipalities, which translates into $2 billion. The hon. member can look at the numbers himself.

We have the renovation program. If we add up all the numbers we exceed $4 billion in a national housing strategy that I will admit has been slow to hit the ground. I alluded to the reasons why it is slow. The provinces have to ensure the money flows. The federal dollars are on the table. They are there to build housing. It is time the provinces and the municipalities got busy and did it.

[Paul Forseth, Canadian Alliance, New Westminster—Coquitlam—Burnaby, BC]

Madam Speaker, my friend across the way is always known for more sound and bluster than substance. I want to get back to some of the earlier comments he made. He deliberately confused public safety and gun control with the long gun registration program. Those things are not the same.

In the House we daily ask the government how much it would cost to get to the full operational status of the Bill C-68 program and thereafter how much it would cost every year. We have not been able to get the numbers. The minister had lots of chances to supply the answer and he did not.

When it came to the Auditor General, the problem with the numbers was that she asked the government for the documentation and the costs, but she was not satisfied with the information given, saying basically that she could not get the information from the government. The evidence of the Auditor General yesterday in committee was that she could not get the information.

Asked to verify the so-called puffed numbers that the government provided, the Auditor General could not verify that they were based on anything legitimate which came out of the department. We must be very careful when we talk about the so-called cost, what it may have cost or what the department is alleging it cost. The Auditor General clearly has said that within the foreseeable future the whole program would cost in the nature of $1 billion plus. That is where the vernacular in the common press comes from about the billion dollars.

When the member talks specifically about honesty with the numbers, he should accurately reflect what actually happened in the committee.