Mr. Speaker, I am pleased to rise in the House today on behalf of my constituents of Don Valley East to speak to the motion proposed by the hon. members of the opposition. As proposed, the motion calls upon the federal government to recognize the existence of a so-called fiscal imbalance in Canada.
For the record, I fully reject the notion that a fiscal imbalance exists between the federal, provincial and territorial governments. It is a fact that Canada is one of the most decentralized federations in the world and while some provinces have a much greater income than others, we have a system of equalization payments to ensure an even and balanced distribution of wealth across the entire country. That is why the Prime Minister met this week with provincial and territorial counterparts to modernize the equalization and territorial financing formula.
The new equalization formula will increase support for the provinces and territories by $33 billion over the next 10 years. Only last month the Prime Minister and the provincial and territorial leaders reached a historic 10 year plan to strengthen health care.
The health care deal gives the provinces and territories exactly what they wanted and needed, a predictable long term source of revenue so that each jurisdiction can plan to spend health care dollars according to their own priorities. In total, the federal government will provide $41.3 billion over the next decade.
Furthermore, the federal government is working with the provinces on a new deal for municipalities. Canadians have made it clear that they want their communities, towns and cities to be great places to live, be safe, have affordable housing, good public transit, clean air and water, and abundant green spaces. Working with the provinces and territories to increase local revenues, the government will make available a portion of the federal gas tax over the next five years.
In 1993 the federal government faced the daunting task of eliminating a massive deficit that left little room for either the federal or provincial governments to manoeuvre in any direction. However, now that the federal government has been a responsible manager and reduced the deficit, and made it a thing of the past, we have an opportunity to work on a number of social challenges in effective partnership with the provinces and territories.
We have a good example in the national child benefit. Even when the federal government was fighting the deficit, the federal government established this program.
By 2007 the national child benefit will deliver $10 billion in yearly support to low and modest income families for their children. That is not to say that there is not much more that needs to be done to help families help their children. The time has come for a truly national system of early learning and child care, a system based on four key principles that parents and child care experts say matter.
As our society ages, Canadian families are caring not only for young children, but increasingly for elderly spouses and grandparents as well. Again, the federal government recognizes the vital role of Canadians who care for the aged or infirm relatives or those with severe disabilities.
That is why the throne speech made it clear that we intend to improve the existing tax based support to these groups. However, our action and investment agenda, reflecting real needs by people, does not end here. We have to do more to ensure that Canada's prosperity is shared by the aboriginal people, the first nations.
Yes, we have made progress but for these communities it is overshadowed by unacceptable gaps in educational attainment, in employment, and in basics like housing, clean water and in the alarming incidence of chronic diseases such as diabetes.
I have highlighted a dramatic and demanding range of obligations and opportunities for federal action and investment. There is another action agenda that we must not overlook which falls fully under the federal responsibility. In today's world we face both potential threats to security and growing demands for us to provide assistance on the international stage.
In April of this year we introduced Canada's first ever comprehensive national security policy which will ensure a more focused and integrated approach to securing our open society.
Enhancing Canada's security means that we have to invest more in our military as part of defending ourselves at home, in North America and in the world. Canada will never be the biggest military force, so it must be smart, strategic and focused.
That is why our government will be increasing the regular forces by some 5,000 troops and our reserves by 3,000, so that they may be better prepared and equipped to meet the challenges. I know that many in the House will champion further new investments in the months ahead.
It seems to me a convincing case that there are many real obligations and opportunities that have concrete claims on federal resources. There is one last core issue I want to contribute to our consideration today, our aging population.
We are rapidly reaching the point, many see it as 2011, where the baby boom generation will move from workers to retirees. This has significant implication for our future fiscal planning. It is in looking ahead to this and other challenges that our government has set out the objective of reducing the national debt to 25% over the next 10 years from the current 40% it is today. We are doing this to free up future resources, including reducing debt charges, so they will be available when they are needed for aging Canadians.
It is this type of prudent planning that Canadians expect and deserve of their federal government. That takes me to a very critical issue. We must be careful not to assume that the current surplus will remain the same. Within the ever changing economic environment, this is not possible. This is simply unwise and a false assumption.
Let us remember that while we have achieved seven consecutive federal surpluses, they follow 27 years of federal deficits which generated a huge national debt that still consumes more of the federal budget in interest payments than any other single spending item. Let us remember that by the mid-1990s about one-third of every dollar the federal government spent was borrowed money.
We face spending pressures not just today, but pressures that can grow as demographics and economies evolve. The best way to prepare for these pressures is to apply a prudent, balanced perspective on our current finances. It is this prudent, balanced perspective, based on solid evidence rather than wishful fantasy, that leads me to challenge the concept of a fiscal imbalance.
Yes, we must assist our provincial partners in areas of national concern and we are doing that. Our bottom line commitment to providing funding where and when needed has been made compellingly clear in recent weeks on health care and equalization. In planning these investments our government has made sure they can be delivered within the fiscal framework of balanced budgets. To do otherwise is foolish as we would return to unsustainable spending and destructive deficits.
Deficits are the surest way to jeopardize the long term economic health of every level of Canadian government. Canadians will not tolerate that risk. Canadians want careful considered investments in economic and social policies that will make us a more prosperous and secure country. These can be done through productive and positive debates instead of irresponsible claims of a fiscal imbalance.