Mr. Speaker, the 2003 budget is a budget marked by milestones and major new commitments. While we have heard many comments in this budget debate up to now, some of the overview has to take into consideration the accountability with which the budget was designed.
It is a budget that is not only based on accountability but continuity, maintaining the prudent and balanced approach to fiscal planning that has contributed so much, so directly to Canada's economic stability and success. It is a stability that must be predictable in the global world in which we live, the ups and downs of the economy, and that in fact leads investors to conclusions that they may or may not invest. The approach in the budget is to make it absolutely clear that the country is on a sound financial foundation.
The country is moving forward in a progressive and dynamic way. We are doing so from a position of considerable strength. There will be no return to deficit financing, something Canadians made very clear and a pledge the government has kept. Maintaining a balanced budget and reducing the debt will remain the anchor of our fiscal strategy.
Canadians seek a society which is built on their commonly held values, an economy that maximizes opportunity for all and an honest and transparent accounting of government's efforts to achieve those goals. This is the challenge Canadians have brought to their government and this is the challenge the government has seriously taken up.
Budget 2003 responds to this challenge in three ways. First, it builds the kind of society with its typically Canadian values by making investments in individual Canadians, their families and their communities. Second, it builds the economy that Canadians need by promoting productivity and innovation while staying fiscally prudent. Third, it builds the accountability that Canadians deserve by making government spend more transparently and more accountably.
Budget 2003 recognizes the critical link between social and economic policy and how an integrated approach produces policies that will benefit all Canadians. It is based on sound financial management and a responsible stewardship of our resources.
Stewardship is a word that we do not use lightly. Stewardship involves making contracts with people and organizations, that in good faith we will abide by the agreement, that we will work together on the values and on the objectives that we have in the budget. It is this sense of stewardship that is rooted in the budget that will provide Canadians with the tools they need to realize the great potential our country offers.
The budget provides important new investments to build the society Canadians value and the economy we need. Canadians have also made clear that these investments must be backed by enhanced accountability to Parliament and to the public.
We started on the right track in 1994 through a vigorous review of all government activities. It resulted in the largest scale down in government spending since our post World War II demobilization. It was hard but it allowed us to create new efficiencies in many areas and it enabled us to eliminate the deficit.
Government programs should be subject to a regular review to make sure that they still fulfill an important purpose, that they are meeting the needs of Canadians and that they remain justifiable amid new and emerging priorities. In particular with the nature of the global environment where there is such change and such flux, Canadians and investors need to have that sense of predictability.
Federal departments and agencies should be regularly challenged to demonstrate both efficiency and the relevance of their programs. If they cannot or do not meet those tests, then they should reallocate their funding elsewhere.
The government wants Canadians to know better than ever where and how their tax dollars are being used and that they are being used wisely. To that end, it is determined to make its management of taxpayer dollars more efficient, transparent and accountable by doing the following things: first, by systematically reviewing programs to make sure they are still responding to the needs of Canadians; and second, by allocating resources from where they are less needed to higher priority areas.
There is more to sound fiscal management than avoiding deficits and reducing debt. The government must also manage tax dollars responsibly while delivering cost effective and efficient and effective services. That is why budget 2003 announces that the government will launch an ongoing review of all non-statutory programs to ensure that they continue to be relevant, effective and affordable.
Over a five year cycle, Treasury Board will examine the non-statutory programs of all federal departments and agencies. In doing so it will be guided by questions similar to those used for the federal government's program review in 1994-95. They are as follows.
One, is the program still relevant to the needs of Canadians? Two, are the program's resources being used in the most efficient and effective way to deliver the agreed upon and appropriate results? Three, is it necessary for the federal government to operate this program at all or could it be transferred to other levels of government or to the private or voluntary sector? Four, is there scope for considering more effective program structures, alternative structures and service delivery arrangements? Five, are department and agency management practices appropriate and of sufficient quality?
In the Minister of Finance's economic and fiscal update last October, the government promised to reallocate funding from lower to higher priorities. Budget 2003, as an illustration, delivers on that commitment by requiring departments and agencies to reallocate $1 billion per year from existing spending starting in 2003-04 to help fund the cost of new initiatives announced in the budget.
In budget 2003 the government takes several additional steps to make itself more accountable to taxpayers. Consider for example its management of employment insurance contribution rates. Budget 2003 reduces the EI employee premium rate for 2004 by 12¢ to $1.98 per $100 of insurable earnings from $2.10 in 2003. This will be the 10th consecutive annual reduction in the rate, representing annual savings for employers and employees of $9.7 billion in 2004.
The budget also announces that the government is beginning consultations with Canadians on a new transparent process for setting EI contribution rates for 2005 and beyond. This is something that has been raised by the Auditor General and it is something the government is addressing in this budget.
Budget 2003 follows up on the government's commitment to review the air travellers security charge to ensure revenue from the charge remains in line with the cost of the enhanced air travel security system over the next five years. Now that the review has been completed, the government is in a position to announce in this budget a reduction of the charge to $7 from $12 each way for domestic flights, and that is by more than 40%.
Accountability is also the anchor of the new health accord. The accord sets out a new accountability framework which includes a commitment facilitated by a new health council to report regularly to Canadians. To improve the transparency and accountability of federal support to provinces and territories, the government will create two new transfers a Canada health transfer in support of health and a Canada social transfer in support of post-secondary education, social assistance and social services, including early childhood development.
The government will also make a number of changes to improve the accountability and governance arrangements of arm's length foundations. In combination with clarifying the policy principles underlying the use of foundations, these measures will ensure their continued effective and appropriate use.
Starting with the budget, the government's financial statements will be presented on a full accrual accounting basis. This will make the government's financial reporting more comprehensive, consistent, clear and up to date. The Auditor General of Canada and the Canadian Institute of Chartered Accountants have called for this reform. There are several benefits to moving to accrual accounting.
First, all tax revenues are accounted for in the fiscal year to which they relate rather than when they are received. As a result, the government's books for each year will provide a more accurate and timely reflection of the year's economic development.
Second, full accrual accounting recognizes the depreciation of the government's physical assets. This will lead to better recording of assets, better policies for maintaining those assets and better decisions about whether to buy, lease or sell buildings and equipment.
Third, there will be more complete recording of the government's liabilities, such as the potential cost of environmental cleanups and retirement benefits for veterans. This will encourage departments to develop better plans for managing them. In short, with a more accurate picture of costs, revenues and liabilities, Parliament and Canadians will be in a better position to hold the government accountable for its management of their tax dollars.
Good regulations are also essential to the functioning of our economy and society. The Organisation for Economic Co-operation and Development, the OECD, has recognized Canada's success in this area. There is always room to improve, particularly in promoting a healthy marketplace and strengthening investor confidence. To this end, budget 2003 includes up to $30 million a year to create a coordinated national program to strengthen enforcement against serious securities and corporate fraud offences as well as to support the redesign of Canada's regulatory environment.
Budget 2003 delivers a wide range of action on the top priorities of Canadians while maintaining our commitment to prudent fiscal planning for balanced budgets. The budget takes serious steps forward in our quest to build the society Canadians value, the economy Canadians need and the accountability Canadians deserve. The challenge now is for Canadians to work together to build an even greater Canada, a Canada of economic excellence, fiscal responsibility and social equity.
I will sum up by outlining a couple of other areas which I think need to be addressed. There have been many claims that the budget does not come to grips with the issue of urban Canada. Having been a member of municipal councils for over 25 years, I would like to address a couple of points.
It is often missed that we operate within certain principles that are based on the need to reach out not only beyond our urban areas to our rural areas but in fact to the world. To do this we have talked about sustainable development, that we do not burden future generations by creating a legacy that is unsupportable, that their natural environment is exploited to the extent that there will be no quality of life for future generations.
Sustainable development is a concept that should bind Canadians together, not only with the world, and in the budget we are talking about investing in larger amounts for international development, but it should bind the regions of our country together. We do that by establishing other principles such as Kyoto. The budget recognizes the Kyoto commitments. The Kyoto commitments are investments that will lead us to sustainable development that will bind our regions and our cities together.
I would like to make reference to a few of those programs for those who think that cities have not been addressed to the extent they should have been. The budget has an investment which will allow us to increase our support by $300 million to science, research and development activities through the Canadian Foundation for Climate and the Atmospheric Sciences.
The value added that comes from research and development in new technologies, which will give us a better handle on climate change, will be done mainly in cities but will benefit the regions of Canada. As well, another $200 million will be dedicated to further investments in long term climate change technologies. Finally, we have a comprehensive strategy for climate change challenges by integrating these actions with other strategies. In climate change, that is in the area of binding our principles around Kyoto together with our principles of sustainable development.
We also have support for small businesses, which I can relate to, with an increase by 2006 in regard to $300,000 of income, which will be made available as a result of a special small business tax rate of 12%. That reduction represents more money to the small businessman to reinvest back into their businesses. Removal of the limits on the small business capital tax rollover is included in the budget. The budget also has a mechanism with respect to qualified limited partnerships. Again, small businesses in cities and throughout Canada will benefit from these kinds of mechanisms.
In regard to housing and daycare in the cities, on top of commitments that have already been made, the budget allocates additional moneys for the development of housing and for support for day care. Not to quote out of context, but we really should know, for example, that the Canadian Council on Social Development takes the commitment made by the government to day care as an extremely important, proactive and dynamic move to recognize the needs of poorer families within our country. As well, the national child benefit has been improved. Finally, the issue with respect to affordable housing and building for those who need it most has been addressed in the budget.
We have listened to Canadians. This budget is accountable, it has listened to Canadians and it is prudent. It has involved Canadians in establishing the kind of predictability they have faith in. While the budget cannot and has not been all things to all people, it is a good start. As the finance minister said, this is a down payment. A down payment is a statement of claim and faith that payments will continue to be made with respect to what equity is being built into. We are building equity in the people of this country who we trust. We will work together to build strength and to meet the demands of the global community and of the future that we all face together.