House of Commons Hansard #47 of the 37th Parliament, 3rd Session. (The original version is on Parliament's site.) The word of the day was budget.


Budget Implementation Act, 2004
Government Orders

May 4th, 2004 / 10:20 a.m.

New Brunswick


Claudette Bradshaw for the Minister of Finance

moved that Bill C-30, an act to implement certain provisions of the budget tabled in Parliament on March 23, 2004, be read the third time and passed.

Budget Implementation Act, 2004
Government Orders

10:20 a.m.

Scarborough East


John McKay Parliamentary Secretary to the Minister of Finance

Mr. Speaker, it is an honour and a privilege to speak to the bill and hopefully try to persuade hon. members that this bill is worthy of their support.

I thought that I might start off my conversation about Bill C-30 with an incident from my pre-political life. When I was a lawyer practising law in the east end of Toronto and the Durham region area, from time to time I used to do some real estate work, particularly for companies that were moving executives from place to place but also for a variety of other real estate clients.

One of the persons who was recruited by the Canadian Cancer Society was a physician from I believe Denver. We went through our usual real estate transaction and then I fell into a conversation with him about what he was going to be doing in Toronto, what research he was going to be conducting, and things of that nature. He was specifically hired as a physician researcher to track demographic and other patterns with respect to cancer. The question I asked him at the time was what the greatest indicator of health was. His comment was “The size of your pocketbook will directly relate to how healthy you are”. I thought it was kind of a crude comment, to be perfectly honest, but he went on to indicate that, by and large, wealthier people live longer, live healthier lifestyles, are more satisfied, have better access to medical services and are more up on trends that would enhance and lengthen their lives. That story sort of stayed with me.

I would put it to members that a government that creates wealth, in absolute and in relative terms, will also have the happy coincidence of creating health in its population. Over the course of the last number of years, that is exactly what the government has done. In fact, the wealth of this nation has been enhanced and increased, and we are, as a result, a healthier population.

It is not merely the $37 billion that the government has infused into the health care system. That is important money and significant money and if the Prime Minister gets an opportunity to meet with the premiers in the next few months, we are committed to putting that on a fiscally sustainable path. Similarly, the $2 billion that was allocated in this budget for additional funds into health is important money but I do not know if it actually tells the full story.

My argument will be that over the term of the government, indeed going back to 1993 when the prime minister and the then minister of finance started the arduous task of turning this nation away from a precipitous decline into third world status to now running seven surplus budgets in a row, the wealth of this nation has, in absolute and relative terms, grown, and therefore the wealth and the health of Canadians has increased, especially over the last seven years where we have run surpluses.

In all candour, the record is not uniformly good but in my view the good outweighs the bad. Strangely enough, there is an almost exact parallel between when the government started to run surpluses and the indices of wealth actually beginning to turn around.

There are essentially two ways to create wealth: people either work harder or work smarter. The way in which we have done it lately has been in improved labour participation. One of the interesting facts, when we start to parcel out the employment numbers, is that Canadians have actually been participating in the labour force in record numbers. We have actually increased our participation in the labour force and as a consequence we have improved our productivity numbers. Productivity numbers can also be improved by actually getting more involved with technology and improving the way in which goods and services are produced.

It is a gross generalization, but by and large our increases in standard of living have come because of the former, namely labour participation rather than the latter, which is increases in productivity due to investments in machinery and equipment. We have started to work harder with more labour participation and more numbers of people working rather than necessarily working smarter.

From 1980 to 1996, which is a 16 year period in which this government had the last three years of that period of time but the Conservative government had the bulk of that period of time, we ranked dead last in productivity in the G-7. Then from 1997 to 2003 we shot up to third. We are essentially in a dead heat with France and Japan. Going from dead last to third, is it any coincidence that simultaneously the government is running budget surpluses?

I will not argue that the standard of living tells us everything. Neither will I argue that it says nothing. What charts do say, however, is that ever since the government started to run surpluses our standard of living has in factual terms increased. We are wealthier and therefore we are healthier.

When we break it out by labour force participation, that is, working harder, during the period of 1960 through to 1996 we were fourth in labour participation. However, from 1997 through to 2003 we exceeded everyone, the U.S. included, and now we rank first. The joke is that Americans live to work and Canadians work to live. In fact, we are number one in the last five or six years in the labour participation rates of all of the G-7 nations.

That is both good news and bad. It is great that our labour participation rate has been good, but it is not sustainable. Demographics tell us that our labour force is aging and therefore people will be withdrawing and not contributing to the GDP as they have in the past. Our growth in productivity, which has been largely sustained by a participation in the labour force, is not a sustainable pattern over time.

From 1980 through 1996 our standard of living growth was second last. In other words, from 1980 to 1996, again a similar period of time of 16 years, we were second last in the G-7 in terms of standard of living growth. However, from 1997 through to 2003 we were first with an annualized rate of 2.7%. Is it simply a coincidence that those years were the same years that the Government of Canada ran surpluses and introduced the largest tax reductions in the history of the nation?

The effect of that has moved us from seventh in the OECD in 1996 to fifth in the year 2003 and second in the G-7. We still lag behind the U.S. by a substantial margin. However, we have started to close the gap. We are still about 14.5% behind the Americans in terms of standard of living, but we have substantially improved that from 18%, which is where it was in 1996.

A standard of living is not a measure of everything, that is, quality of life and other things that people consider to be very important, but it does measure something. The something that it does measure is of considerable importance to most Canadians.

The real question is, can we sustain this growth? The short answer is that our increases in productivity need to be less focused in labour participation and refocused on increases in working smarter.

How do we get smarter? The most obvious way is to get an education or to improve the educational attainment of the nation. Education is what unlocks the productivity chain. Adding just one year to the average education attainment in our country will add 5% to the GDP per capita.

Canadians are a fairly well educated lot. We have the second highest post-secondary attainment of any G-7 nation. However, it is not just any education. It has to be specific education. Not to put too fine a point on it, we need more degrees in science and fewer in law.

Budget Implementation Act, 2004
Government Orders

10:30 a.m.


Peter Adams Peterborough, ON

Good idea.

Budget Implementation Act, 2004
Government Orders

10:30 a.m.


John McKay Scarborough East, ON

I knew I would get the endorsement from the hon. member for Peterborough.

Scientists grow the wealth pie; lawyers carve it up. We need more people to grow that pie, and I am the lawyer. The Government of Canada has invested billions in post-secondary research and put Canada's universities back in the game. It has a strategic focus. We can talk to any university president and they will talk about the exciting research going on in their campuses.

I had a conversation a few months back with Robert Birgeneau, president of the University of Toronto. He was telling me how his university along with Queen's, McGill and UBC. and others are really back in the game. They can now say to a young graduate with a Ph.D. in biometrics or something of that nature that the University of Toronto is the place to be. This is leading edge research.

The reason has to do with the foundation moneys and the research chairs that are available. Young researchers can pursue what they want to pursue and have a comparable situation to any other university in the world. I think that is a significant accomplishment on the part of the government.

The second way to unlock the productivity genie is in the investment of machinery and equipment. Here we are dead last. However, the good news is that in the late nineties our investment in machinery and equipment actually rose quite briskly.

The budget addressed a tax competitiveness issue implementing an accelerated depreciation of certain categories of high tech equipment to more realistically reflect their useful life. We heard this time and time again as the minister made his way across the country listening to representations of Canadians that the depreciation schedule, the capital cost allowance schedule in the Income Tax Act of Canada, made no sense vis-à-vis the actual useful life of, say, a computer or something of that nature. That issue was addressed in the budget.

The other cause for concern is that the government is doing its bit for research and development but business is not. There are all kinds of excuses why Canadian business does not proportionately share more in the research and development cost, but the simple statistical fact is that it does not. That is why, aside from all of the other Nortel disappointments, the Nortel story is really worse than merely just shareholders' losses and dubious accounting.

Nortel accounted for a very significant portion of Canada's research and development, in my recollection, somewhere in the order of about 25%. Research is what got Nortel through its lofty status as a world class company. Then the money boys, if you will, put it into a death spiral. The phrase is, I believe, unlocking shareholder value. We certainly did that.

The bad news is that a lot of the private research and development that was happening through Nortel is at least at risk. I do not know whether it will cease to happen, but it is certainly at risk and that is of concern to us all because that in turn leads to greater productivity, and the kind of productivity that we as a nation need in order to sustain our way of life.

The bad news is that the private sector is the laggard and the public sector is the leader in the G-7. We need a better mix if our productivity is to be maintained. If we were to get the right mix, then productivity gains would flow. There are limitations, however, on what a government can do, but it can be responsible for sound macro-economic policy.

I am assuming that the goal of any government of any political persuasion is to increase the health and wealth of its citizens. The major way in which it does that is by setting a macro-economic framework which will enable businesses and people to flourish within the larger nation. In financespeak it is called the fisc.

What does all this mean? When we talk about the fiscal framework, it is just fancy talk for what we expect in inflation, debt to GDP ratio, interest rates and so on. Sometimes this is a lot more alchemy than chemistry. Everything any government does has to fit within that fiscal framework or else the government descends into chaos and the nation with it.

Let us take a look at the fiscal framework, or the fisc, and see how we are doing. On inflation, the band has been extended for another couple of years of a 1% to 3% inflation target. If it were to get out of control and the government ends up printing too much money, then we would have bubble wealth. It is an illusion that we have money, but it is really paper money. Deflation can be equally worrisome.

Therefore, when a government is setting its budget target it has to be concerned about what is going to happen with inflation. For instance, a 1% decrease in inflation will cost the government $1.9 billion in lost revenues. That $1.9 billion is 1% of the government's revenue. That is a lot of money. However, expenses would be down by $500,000 million, for a net shrinkage of government resources of $1.4 billion. That is simply on a 1% mistake on inflation. The range expectation is somewhere between 1% and 3%, and as long as we stay within that range, the assumptions of the budget will work.

The other assumption is loan interest rates. Currently, the Bank of Canada's overnight rate is around 2%, which is in the realm of historical lows and it has a huge economic multiplier for those Canadians wishing to purchase homes, cars or things of that nature because they are within the ability of a lot more Canadians to purchase.

For instance, in my own community, I have a number of impoverished Canadians who live in low income housing, yet I noticed signs outside those places advertising space for rent. That is because a number of the people have left and bought homes, which they could only dream about before. This is a result of low interest rates. The vacancy rate in Toronto, and particularly in my riding, has shot up. It used to be that one could not get an apartment for love nor money. Now we are around a 3% vacancy rate.

A 100 basis point reduction in interest rates improves the government's revenues by $1.1 billion. Revenues go down by $400 million, but expenses also get reduced by $1.4 billion. So effectively, it works out to about a $1 billion or $1.1 billion increase in revenues, just on the basis of a 1% reduction in interest rates.

There is a logic in the government's approach to fiscal framework. The budget contains support for learning with the Canada learning bond, enhanced RRSPs, and the new $3,000 grant for low income families. The budget encourages research and development. There is another $900 million for the three granting councils. There is $60 million for Genome Canada. There is also the depreciation rate that I was mentioning that is more in line with the actual useful life of computer equipment.

We are in the final year of our $31 billion tax cut package. This year will be the year in which our corporate taxes actually dip below the American rates. Our efficient financial markets are quite critical and I encourage members to read the Wise Persons' report, which hopefully will set the framework for a national securities regulation. Our support for cities in the amount of $700 million this year and $7 billion over 10 years on the GST is again significant support on the part of the Government of Canada.

In closing, I want to recommend the budget to all members present. It is a sensible and logical budget and one which hopefully will increase the productivity of our nation, therefore, the wealth of our nation and health of our nation.

Budget Implementation Act, 2004
Government Orders

10:40 a.m.

Canadian Alliance

Jay Hill Prince George—Peace River, BC

Madam Speaker, I have had the opportunity to do a couple of things here today. I have been writing cards of thanks to the volunteers who assisted me at a trade show in my riding for a couple of weekends in April. I also listened to the remarks of my hon. colleague from across about the budget. I thought about some of the remarks made to me by quite a number of constituents as they went by the trade show booth during those two weekends in Fort St. John and Dawson Creek.

One question was posed to me by my constituents, and I can truthfully say it was couched in considerable disappointment and anger, particularly as they were looking at sending in their tax returns and given the news concerning the waste of tax dollars by the government.

I note the member said that there were basically two ways to improve wealth: work harder or work smarter. Obviously, the Prime Minister, the hon. member's leader, has found a third way to improve wealth other than work harder or work smarter, and that is to avoid tax. This was brought home to me by a number of constituents who were struggling to pay their taxes, especially if they owed additional taxes. They posed this question to me. “Why should I pay my taxes when the Prime Minister's company, now turned over to his family, Canada Steamship Lines is registered offshore in order to avoid paying taxes?”

It put it to the member as a serious question posed to me in all seriousness by a number of people in my riding. In many cases they are considering their options. Why should they look at re-electing and trusting an individual who is doing everything he can and has in the past to avoid paying taxes but expects them to pay theirs?

Budget Implementation Act, 2004
Government Orders

10:40 a.m.


John McKay Scarborough East, ON

Madam Speaker, I hope in the conversations with his constituents, the hon. member mentioned that tax brackets were reduced and thresholds were increased. Canadians are paying, in absolute terms, fewer taxes than they have in the past. I am not absolutely persuaded that the hon. member would have tried to put that forward to his constituents. However, I hope he at least mentioned that the brackets were reduced to 22% and the threshold was increased to $35,000 for low income Canadians, which is 26%. Also, the threshold has been increased to $70,000 for middle income Canadians. The upper bracket is at 29% and the threshold is up to $113,000. However, I do not really have a huge expectation that he did that.

With respect to his specific question, there is no doubt that all governments of the G-7, in fact all governments of OECD, are concerned with the siting of corporations in jurisdictions that have tax advantages. Frankly, Canadian corporations are no different than American, Australian or British corporations, all which have to site themselves according to the tax jurisdiction that makes them the most competitive. If they do not, frankly they literally go underwater. There is no ability to do that.

Literally, hundreds if not thousands of Canadian corporations site themselves in jurisdictions where the tax treatment is somewhat more favourable. That is simply a survival tactic. There is not a government in the western world that is not concerned about this. In fact a commission has recently been struck among the Australians, the Americans, the British and ourselves to review this problem.

The problem is one cannot do anything by oneself. If Canada has a sudden attack of virginity, frankly all the corporations in Canada, which currently site themselves offshore, will simply remove themselves. We will lose head offices, those businesses and everything that corporations bring to the wealth of this nation.

I would like to have the problem solved so everybody pays a share of the tax that is appropriate. However, as long as those jurisdictions exist, a corporation does what it has to do to survive. If it does not take advantage of those kinds of tax jurisdictions, it will simply not survive.

If the hon. member has a realistic solution to this worldwide problem in which Canada can participate along with other nations at an exactly equal level, then I am in favour of listening to it.

Budget Implementation Act, 2004
Government Orders

10:45 a.m.


Bev Desjarlais Churchill, MB

Madam Speaker, I thought I had heard just about everything in the House. I thought the government and the Liberals had reached an all time low on a number of issues. However, with all due respect to my colleague from Scarborough East, to stand before us today and tell Canadians that somehow it is okay for corporations not to pay taxes and support the country providing them the resources or the business opportunities and to say that it is somehow okay that they go somewhere else because they will not survive and that the government cannot do anything about it is absolutely a crock of you know what, Madam Speaker.

The state of California has taken a position that it will not allow that any more. It is going to put in place legislation that will not allow those corporations to get state business if they go offshore and find tax loopholes, because they will not be supporting their local economies. Where would our country be if all Canadians took the position that they were not going to pay their fair share?

The government has said that it cannot do anything because the corporations will not survive. What it should say is that the corporations have a responsibility, that they are accountable to the Canadian people and have to pay their fair share. That is what should happen. The statement by that member proves that there is no way the government should be in for a day longer, let alone another week or month.

Budget Implementation Act, 2004
Government Orders

10:45 a.m.


John McKay Scarborough East, ON

Madam Speaker, I commend the hon. member on her charming naivety. The truth of the matter is that with the globalization of capital, literally hundreds of millions of dollars can leave any jurisdiction in a flash and site itself somewhere else.

The hon. member stands and says that we should not do that. Convince literally all those business in Canada that have to compete on a worldwide basis. Convince those corporations, which are world leaders and leading edge companies, that they should somehow or another pay a disproportionate tax burden to what their competition does. She is welcome to her charming naivety, but the reality is all those corporations and all that wealth will disappear in an instant.

Budget Implementation Act, 2004
Government Orders

10:45 a.m.

Canadian Alliance

Myron Thompson Wild Rose, AB

Madam Speaker, since 1993, when we first arrived here, one of the biggest complaints from constituents has been that they are being penalized for staying at home with my children.

There is a dual system of taxing. If both parents work and have equal income, they receive tax breaks. However, if a family earns a single income because one parent chooses to stay at home, they pay a whole lot more. Over the 10 year period I have been here, they have questioned this unfair tax plot. They want to know when it will change. They want to know why it is never mentioned. They want to know if the government objects to people staying home to take care of their children. They want to know what the problem is.

Budget Implementation Act, 2004
Government Orders

10:50 a.m.


John McKay Scarborough East, ON

Madam Speaker, probably the largest social initiative on the part of this government has been the Canada child tax benefit which gives money to people below certain income thresholds. Whether they are below certain income thresholds because of two people in the family working or one person in the family working, the Government of Canada does not inquire. The Government of Canada is not interested in whether Canadians arrange their affairs so there are two people working in the house or one person working and another person staying home. It is an inquiry that the Government of Canada does not make. Upon filing of the income tax return, though, if one hits certain thresholds, then one would be entitled to a Canada tax benefit.

In addition, one gets the spousal exemption which brings one's threshold down as well. That has been deemed to be the better way in which to respond to the member's inquiry.

Budget Implementation Act, 2004
Government Orders

10:50 a.m.

Canadian Alliance

Rahim Jaffer Edmonton Strathcona, AB

Madam Speaker, it always gives me pleasure to rise in the House and speak to various legislation.

I listened to the hon. parliamentary secretary with some concern about some of the things he was saying. I know he tried to paint as positive a picture as he could about the government's financial record and its ability over the last decade, because the Liberals have to take responsibility for everything that we are seeing today.

One thing I took exception to and which I have seen over the years that I have been here is the way the Liberals forecast numbers. One of my hon. colleagues tried to address the case of the tax rate and the Prime Minister having his company registered overseas, but especially with regard to the surplus. The parliamentary secretary talked a lot about the surplus and how there have been repeated surpluses and how it has been good for the country.

I take exception to the fact that the surplus has never been reported to Canadians in an open and honest way. That is of a great deal of concern for me. When we look at the first 10 months of the fiscal year the surplus was pegged at about $5.5 billion. Then, all of a sudden, as the budget promises started to be put in place over the last few months leading up to the introduction of the budget, that surplus was whittled down to about $1.9 billion. This tells me that the type of government the Liberals try to portray themselves as, as a prudent, fiscal government, is far from that fact.

The fact that the Liberals have not been honest with the surplus numbers really begs the question that there are some huge missed opportunities in this particular budget, especially when it comes to tax relief and investing in certain areas that I think are priorities for Canadians. That is something the parliamentary secretary failed to address.

I have talked specifically about missed opportunities and about trying to trust the government's numbers. This is a huge problem in this place, but also for all Canadians. I can give examples of some of the numbers that we have seen.

I will start with when this Parliament began not too long ago and the Prime Minister was answering questions for the first time in the House. We had asked over and over again in the House how much money had been given to the Prime Minister's shipping companies over the course of his being in this place when it came to government grants from different departments.

The initial number from the government was $137,000 in answer to a question by my colleague from Edmonton Southwest. We had to do a further study on that. We had to put a question on the Order Paper. We had to look in other ways to try to access information because the numbers were not right when they came from the government. We learned later that the number in fact was $161 million.

How can the federal government put out numbers like that? How can we trust any of the numbers the government puts out when it comes to the budget or the surplus? That is an incredible gaping hole when it comes to accountability.

There is another example of mismanagement by the government when it comes to numbers. I think everyone now knows the frustration level is at an all-time high when it comes to the gun registry. We must remember what the government said that program would cost Canadians. The Liberals said it would cost $2 million.

The Auditor General has said that it is actually well over $1 billion in the management of that program. In fact, it is even going higher and by the end of this year it could be up to $1.5 billion and approaching close to $2 billion.

How can Canadians trust the government in any of its numbers when we continue to see this sort of abuse in the way that the Liberals report numbers and the way they manage Canadians' money? Those are two examples.

The final example that we know of is the one that has been in the news and which we are trying to get to the bottom of, if the government decides to allow us to get to the bottom of it because we are all expecting an election. We do not know whether we will find who in fact was responsible when it came to the sponsorship program and the money that was lost there.

The Auditor General again appeared in front of the public accounts committee yesterday saying that there is $250 million for which there is no accountability. Some of it was spent on things that really were very questionable in the way those contracts were awarded, and that $100 million of that money just disappeared when it came to ad companies, especially in Quebec. It is astounding.

On that particular problem we have heard so many different numbers from the government. It was not so long ago that the minister in charge of the public accounts said that in fact the Auditor General was wrong, and that the amount was only about $13 million. Where did he get that number from? He pulled that number right out of the air. He did not know what he was talking about.

That is another example of things we have seen where it makes it difficult for Canadians and especially for us on this side of the House to take the government seriously when it comes to its numbers. What sort of respect do the Liberals have for Canadians when they think they can abuse them in that way, especially with regard to their hard-earned tax dollars?

The hon. member talked so greatly about the budget implementation act and encouraged all members to support it, but how can he expect us to support it? I have news for him. Many of us on this side of the House have difficulty supporting the government in any way, including the implementation of the budget, given the fact that we have seen such abuse when it comes to the way the Liberals deal with taxpayers.

I want to talk specifically about a few areas that were huge missed opportunities in the budget specifically as they pertain to my riding of Edmonton--Strathcona, but also some bigger themes that have been of real concern to Canadians from coast to coast.

As the Conservative Party critic for revenue, I have been very active in trying to push for fairness and equality for taxpayers in this country. I have put forward some policy in my party and some legislation in the House to try to create the office of taxpayer protection.

I have seen countless abuses when it comes to the Canada revenue agency and its dealings with honest, hardworking taxpayers. Many times when it decides to audit people, it usually goes after hardworking Canadians who really pose no risk when it comes to paying their taxes. It is amazing. About 40% of Canadians are maybe trying to avoid paying their taxes and are left out of the mix and CRA does not go after them.

We have been trying to put forward some legislation that will increase accountability when it comes to how the tax department deals with Canadians and how the government spends their money.

I mentioned briefly a missed opportunity in the budget. There is another number that I failed to mention initially. The Liberals talked about the tax package that they introduced of about $100 million that was to be given to Canadians over five years. The parliamentary secretary said that we are in the last year of that package. Again those numbers are not accurate.

If we asked average Canadians if they had seen some of those tax reductions on their paycheques, if they had actually saved more money at the end of the day, most of them would say that they have been paying more. If the government did reduce some level of taxes, we would find increases in many other areas. In the end, Canadians unfortunately are worse off than they were before.

Over the time that the government has been in office, taxes have actually risen. We have seen about 38 variations of taxes. Some would call them user fees. These have been increased over the years that the government has been in power.

One of the ones that comes to mind is the air security tax. That tax has been a direct hit to our travel and transportation industry. The government could have reduced that tax completely. We and others have encouraged the government to reduce that tax, and it has been reduced slightly over the last couple of budgets. When that is factored in, it sure hits Canadians at the end of the day.

We have talked endlessly about fuel taxes. We had a motion in the House last year and the current Prime Minister voted for it. The current Prime Minister endorsed the plan to give a portion of the fuel taxes back to municipalities, back to Canadians. The government collects quite a significant amount of money when it comes to fuel taxes.

In the budget we see marginal investments for infrastructure, yet the Liberals are touting it as a huge plan for the cities. If we look at how much the current government collects in fuel taxes and the fact that the Prime Minister and his government endorsed a plan to give a portion of the fuel taxes back to the municipalities, it is a complete failure. This issue has not been addressed in the budget.

When it comes to infrastructure we know that the government has reduced the municipal GST rebate. The parliamentary secretary spoke about that. Of course the municipalities will say that is a good start and a move in the right direction because it will give a portion of the money that the cities need to invest in their infrastructure.

When I am in Edmonton I see some of the challenges in infrastructure and think of the many more investments that could have been made with the money collected from the fuel taxes. I know that Canadians are really not happy when it comes to the government on that particular front.

There was another area that unfortunately was completely absent in the budget. I hear about it from people in Edmonton—Strathcona, a large group of Canadians. The parliamentary secretary talked about labour participation and the challenges we are going to have when it comes to the aging population. That is a particular group that was completely left out of the budget.

I am distraught when I hear the seniors in my riding who call me on a regular basis to say it is so difficult for them to make ends meet. They are on fixed incomes but all their costs are going up when it comes to medication, transportation, health costs obviously, and rent in some their housing arrangements. Their pensions are not even indexed to inflation. They have huge challenges when it comes to trying to maintain their own standard of living. The government has continuously ignored seniors, and if not, we have seen at times the government attempting to claw back some of the benefits for seniors which is incredible. It is one of the most vulnerable groups in society. Seniors are the ones we owe the most to when it comes to thanking them for building the great country we have, yet it is that type of disrespect they receive from the government.

It is a huge concern for me in looking at the surplus numbers and what the government could have done to address some of the concerns for seniors. The fact that I am hearing from many seniors on a regular basis is something we should be concerned about. We should be doing something more for them. We on this side of the House have proposed policy to address some of the concerns for seniors. We just do not understand why the government has chosen to ignore them.

The parliamentary secretary also spoke about education. There were some efforts in the budget to increase the ability for students to access more money through the student loans program. There are still some fundamental problems with the loans program in the way that we approach education. I am very concerned about that.

The University of Alberta is in my riding. I hear from a lot of students as well as the administration in that university on some of the challenges they have. I get many calls from students who are being forced into default because of the lack of flexibility in the student loans program.

I also get calls from students, even in the case of the budget, where the government has increased potential limits under the student loans program but it still has not addressed the issue of the parental contribution amounts. Some students unfortunately do not get support from their parents when they go to school. They do it on their own and I admire and respect that.

Unfortunately, in trying to adjust the amounts of loans one can actually apply for, the government still has not addressed the issue of parental contribution. That leaves some students in the same place they were before and they cannot access the funds they need for their education. I would encourage the government to review that.

Our party has put forward a policy. We would like to see that particular element of the Canada student loans program eliminated so that students could be judged on what sort of program they want to take and not have it based on the portion of contribution their parents should make to their education. I hope that is something the government will address.

We have not dealt with the biggest problem that students are facing and that is being able to pay down and manage their debt. We are seeing tuition fees across the country rise at incredible rates, especially in professional designations.

Even though the government has addressed the issue of trying to access funds, it still has not addressed the issue of trying to reduce the overall debt for students when it comes to their education. They are graduating nowadays with some of the largest amounts of debt in the western world. That is something we need to address. We must work with the provinces to try to reduce that overall cost so that students can have a fair start once they get through their education.

There is nothing in the budget or any commitment from the government on that. If anything, we saw over the last number of years, especially when the current Prime Minister was finance minister, a $25 billion cut from the health and education transfers. This made it very difficult for the provinces to make up that difference in spending and unfortunately health care and education suffered. Now the Liberals are trying to say they are the great saviours of health care and education but when we look at the transfers, they are barely at the level they were at when the Liberals first took office.

Health care is a top priority for many Canadians. They would like to see effective commitments when it comes to funding but also the ability to work with the provinces to ensure that no one is left out of the public system, that no one is left out of the universal system. All Canadians must have good and equal access to a system that should work efficiently.

In the messages we have heard from the government over the last week, I would say that there is in fact a hidden agenda when it comes to health care. On the one hand, we heard that the minister is in favour of private services and that he is going to work with the provinces to allow that evolution of private services. Then, in the next couple of days after that, we heard another mixed message that in fact the government would never allow private services.

I would argue that under this Liberal government's watch we have seen the evolution of that two tier system becoming quite a bit more significant because of the government's lack of commitment in health care. We have seen more private services evolving all across the country. The government has not been able to stop this on its watch, if that is its goal, as in some of the messages we have heard.

I would say that we do not know clearly what the Liberals' position is. They have stated two distinct and separate messages over the last couple of weeks. It only begs the question: there must be some sort of hidden agenda. They are trying to pull the wool over the eyes of Canadians before an election and then right after the election put forward a whole new set of policies when it comes to health care. I would argue that this is completely unacceptable. Canadians want to have a public system that works, is well funded and universal and gives accessibility to all Canadians regardless of their ability to pay.

That is what we on this side of the House stand for. We are going to continue to fight for that and to hold the Liberal government accountable. As much as the government has increased some of the funding, which was not even new money but the $2 billion promised prior to the tabling of the budget in the House, there really is not a commitment when it comes to a long term vision.

Again, concerning the 10 year plan the Prime Minister has spoken about, it would be nice to see what some of the arrangements under that 10 year plan are so that Canadians can actually see that and know what is coming down the pike, but I think it is not in the interests of the government to show that.

Prior to the change in this budget on the security side, I had been in charge of the portfolio of Canada Customs and Revenue Agency. As the House knows, customs has been moved out of revenue and put under the new department in charge of public security. This is a change that we had encouraged the government to pursue. We applaud that change. It was really unfortunate that our front line customs agents, who worked so hard and did such a great job, were never given the tools they needed to protect Canadians when it came to border security. It was only after September 11, 2001, that we saw a real effort to try to address some of the security concerns due the lack of attention from the government over the last number of years. Prior to 9/11, in the government's philosophy, the primary role of customs was that of tax collector, not border security. We in our party had a huge problem with that.

The government has now moved that under the public security banner. Now we have to address how well some of the security measures are working. I know the government was moving very slowly when it came to making sure that the resources were given to our customs agents in getting computer access to names of potentially high risk people trying to get into the country. When it comes to resources to actually protect agents and to deal with high risk situations at the border, we still have not see those sorts of commitments from the government. The government talks about $500 million for beefing up border security, yet in many of the ports of entry there still is not the proper type of equipment to make sure that Canadians are protected and, as I said, that our customs agents have the tools to do the job.

There is still a lot that needs to be addressed. The House has heard this theme from our side of the House over and over since we have had the chance to debate the budget implementation: This budget was a budget of missed opportunities. There were some great opportunities given the size of the surplus, as I have said, to address areas of tax relief and areas of debt reduction, but also to make investments in areas that Canadians feel are very important.

I did not have the opportunity to address the area of the military. Some of my colleagues will mostly likely do that in the future. I know that this is an area for which Canadians have said that even with the investment under this budget we have seen only enough money put forward to cover our operations in Afghanistan and now in Haiti. We have not seen the real long term funding that is required for the personnel of the armed forces to do their peacekeeping jobs or the jobs they are called on to do in a way so as to be able to protect themselves and deal with the challenges they face in some of the tougher areas of the world.

I appreciate the opportunity to speak to this today, but I think it will be very difficult for the official opposition to support the budget implementation bill at this stage.

Budget Implementation Act, 2004
Government Orders

11:10 a.m.


Roy Cullen Etobicoke North, ON

Madam Speaker, I listened to the remarks of the member for Edmonton--Strathcona about the budget. I have a couple of comments.

My first comment is with respect to the surpluses that this government was able to accomplish after three years in office and then continuously since. In fact, I think this budget is the seventh consecutive surplus. It seems to me that predicting a surplus and then meeting or beating it is a better policy than setting certain deficit reduction targets or surplus targets, as it was under the previous Conservative government, and never meeting them. That was the case, of course, under the Progressive Conservative Party before we took power in 1993. It set various targets but never met them, whereas our government set targets and met them or beat them. Psychologically that was an important item for Canadians, I think, because part of the challenge was to engage Canadians in the whole fight against the deficit. The Canadian public rallied around that mission and we accomplished it.

The member talked about the lack of investment in infrastructure. While I would agree with him that we need to do more in terms of investing in infrastructure, in the last five years, if I remember correctly, our government has put up something like $12 billion for infrastructure spending. That of course leverages money from the provinces and the municipalities, so I think his facts on that are somewhat erroneous.

With respect to health care and seniors, first of all, our government has been very clear that we are committed to the principles of the Canada Health Act that talk about universal access and accessibility for people at a reasonable cost. Those commitments are very much enshrined in the policy of this government.

I want to ask the member for Edmonton--Strathcona what his view is of the role of private health care in Canada in terms of the national health care system. Before I do that, I should also comment that there were some specific things in this budget for seniors, and especially the huge investments our government has made in health care, such as the Canada health and social transfer of $37 billion. Another $2 billion was announced recently and the $37 billion was from the 2003 health accord. Those investments in our health care system of course are going to be a benefit not only to seniors but to all Canadians.

I share a concern similar to the member's. There are a number of seniors in my riding who are on fixed incomes. Their property taxes are going up and they do struggle. Over time when we have the fiscal capacity I would like to see us do more in terms of the old age pension, but that is a very expensive item to tinker with and we do not have the resources now.

I will come back to my question. What is the member's view of the role of private health care in our health care system in Canada?

Budget Implementation Act, 2004
Government Orders

11:10 a.m.

Canadian Alliance

Rahim Jaffer Edmonton Strathcona, AB

Madam Speaker, I am happy to address the question, but I would like to make a couple of quick comments on some of the things the hon. member spoke about, especially when it comes to the numbers and being able to be above numbers so at least they are there on a positive level when it comes to surplus. Liberals have continuously lowered expectations for Canadians, saying that the surplus will be much lower than it is. By doing so, they are playing around with the numbers to their advantage.

That was my big point about how we need greater accountability. That money belongs to Canadians, and unless the government is going to make the investments to show that it is using the surplus in an open and honest way for Canadians, the government should be returning it. There have been ideas about it, such as some of that surplus being legislated into paying down the debt or into tax relief. That is something that I would like to see coming from the government. There has been no movement on that front.

The member also mentioned infrastructure and the $12 billion over the course of the Liberals being in office. Let us compare this to the amount collected on fuel taxes, especially if it were a dedicated tax where the money collected from fuel taxes was supposed to go back into our highways and roads and into infrastructure across the country. The numbers do not add up for the amount of revenue from fuel taxes and the amount that has actually been spent on infrastructure. That is why I had to criticize the Liberals, because they are still really far off the mark when it comes to acceptable levels.

On the question of private health care, all Canadians have had to accept the idea of private health care because under the watch of this government we have seen a proliferation of health care services going private across the country, whether we like it or not and whether Canadians support it or not. This is because of the fact that the government has not shown leadership, first, when it comes to investments in transfers into the provinces and when it comes to stable funding for health care and education, but also because there has been no leadership in coordinating stable policy with the provinces. If anything, the government has had a very antagonistic approach when it comes to the provinces.

I know that in my province of Alberta, where the premier and the government have tried to look at innovative ways to provide health care for citizens, the government has penalized them in the past and has held back transfers, and that was when it had the gall to cut the transfers to begin with. It is outrageous that the government would accuse anyone else of privatizing our health care system when, I would argue, it is the Liberals who have put us in the situation we are in, where a private system is inevitable unless we change this government.

Again, I want to reiterate that we have had mixed messages from the health minister. On one day he says he is in favour of working with the provinces to allow for privatized services. On the next day, because of the backlash from many of his caucus colleagues, he says they are only in favour of a public system. I would say that for once we are finally seeing before the election what we have seen in the past. They have a hidden agenda on health care, they are not going to be up front with Canadians until after the election, and then it will be too late.

Budget Implementation Act, 2004
Government Orders

11:15 a.m.

Canadian Alliance

Dick Harris Prince George—Bulkley Valley, BC

Madam Speaker, I listened to the member for Etobicoke North. He is like all other Liberal members. They make an attempt to trumpet their interest in the infrastructure problem we have in this country. He talks about the $12 billion that his government has put in since 1993. As my colleague from Edmonton mentioned earlier, that is simply a fraction of the billions of dollars in fuel taxes that the Liberals have scooped for other programs when in fact, as my colleague pointed out, fuel taxes were first implemented to be directed to new infrastructure programs and the maintenance of existing programs.

What the member for Etobicoke North failed to mention--and no Liberal will mention this--is that under the 10 year reign of the Liberal government, under the former finance minister who is now the Prime Minister, this government drove the national infrastructure deficit up to an astounding $53 billion. Liberals allowed it because they took money out of fuel taxes and directed it to politically friendly programs through their program increase in spending every year. That infrastructure deficit went up to $53 billion. They cannot deny that fact. To stand up and trumpet the $12 billion they put into it is really smoke and mirrors.

I am sure that my colleague from Edmonton has seen the infrastructure deficit in his neck of the woods. I would like him to comment on these smoke and mirrors comments the Liberals are so quick to put forward.

Budget Implementation Act, 2004
Government Orders

11:20 a.m.

Canadian Alliance

Rahim Jaffer Edmonton Strathcona, AB

Madam Speaker, I would like to thank my hon. colleague from Prince George for his question and his comments. I think he is absolutely right.

Earlier, one of my other colleagues from Prince George talked about the idea of Canadians being so frustrated when it comes to sending so much money to Ottawa. We are in the tax season where people are filing their taxes. People are sending so much money to Ottawa in so many different ways, whether it is personal income taxes, GST payments or fuel taxes, but seeing very little value come out of those investments.

I think that is the level of frustration we are seeing. I have looked at Edmonton and other cities while driving around and seen the needs when it comes to infrastructure. There are pot holes, bridge repairs and a number of other problems right across this country. Edmonton is not the only city that is suffering from that.

Then we look at the amounts of money that have been collected, when it comes to the fuel taxes levied in this country and the amount that is coming back to our cities and rural areas across the country. It is theft. That is all I can call it. This was supposed to be a dedicated tax to allow for these sorts of investments, but we are not even seeing a fraction of that come back.

When this particular government, over the time it has been in office, starts to gloat about the idea of putting as much money as it has into infrastructure, especially when the amounts that are collected are much higher, it is a real shame. We can imagine the types of things that the local municipalities and provinces could do with that sort of money if it was coming back into their communities because they are the ones paying the fuel tax.