Mr. Speaker, I just love it when the member asks me questions because he opens so many doors.
First of all, the Laffer curve is spelled L-a-f-f-e-r, after Professor Laffer, an economist who invented that particular theory. It is very simple. Sometimes when I am talking to students in classes I give this example. If a professional hockey team charged zero dollars per ticket, the arena would be full and the team's income would be zero. If the team charged $1 million per ticket, the arena would be empty and the team's revenue would be zero. I wish we could use graphics here because I am used to teaching and in the old days I liked to use a chalkboard. If I had that I would draw something that looked like an inverted parabola. Obviously there is someplace over there where the revenue for the government is maximized. That is the rate. There could be a lower rate, usually at two places, and then the tax rate is reduced, the revenue goes up to a certain point and then it goes down again.
The member's statement that with zero taxes there would be no revenue was absolutely right, but what a simplistic way of looking at it. I invite him to buy a book, or to borrow one from the library, and read about the Laffer theory. It is a very good one and it is one to which the Liberals should pay attention.
The member talked about Prime Minister Mulroney pulling the rug out from under the finance minister of the day. That pales in significance when compared to the present Prime Minister pulling the rug out from under the feet of the finance minister when, unprecedented in Canadian history, there was a budget presented by the Minister of Finance that turned out to mean nothing. Prior to now, budgets had to be kept secret. There could not be a single leak from the budget documents. If there were, we would demand the resignation of the finance minister.
This time around, the finance minister gave his speech, and it is supposed to be that those are the rules that govern Canada from the day of that speech. Lo and behold, a week later the budget meant nothing because the Prime Minister had made a deal with the NDP changing the budget by some $6 billion, which means that the budget speech really is meaningless.
The finance minister, the Prime Minister and the whole Liberal government through that exercise alone have lost a great deal of credibility among Canadian people and certainly among those in the economic and financial fields.