House of Commons Hansard #67 of the 38th Parliament, 1st Session. (The original version is on Parliament's site.) The word of the day was budget.
Interparliamentary DelegationsRoutine Proceedings
The Speaker
I have the honour to lay upon the table the report of the joint parliamentary delegation which attended the 13th Mexico-Canada interparliamentary meeting held in Mexico City from January 24 to 27.
Dominic LeBlanc LiberalParliamentary Secretary to the Leader of the Government in the House of Commons
Mr. Speaker, pursuant to Standing Order 36(8), I have the honour to table, in both official languages, the government's response to 14 petitions.
Norman Doyle Conservative St. John's North, NL
Mr. Speaker, I have a petition from a number of my constituents in St. John's East who wish to draw the attention of the House to the fact that marriage is the best foundation for families and the raising of children.
They want to draw attention to the fact that we passed a motion in June 1999 calling for marriage to continue to be recognized as the union of one man and one woman to the exclusion of all others. As a result of that, they are now calling upon Parliament to pass legislation to recognize the institution of marriage in federal law as being the lifelong union of one man and one woman to the exclusion of all others.
Inky Mark Conservative Dauphin—Swan River, MB
Mr. Speaker, I have the honour to table two petitions this morning on behalf of the good people of Dauphin—Swan River—Marquette.
The first petition calls on Parliament to take all measures necessary to ensure protection for children from child pornography and sexual exploitation.
Inky Mark Conservative Dauphin—Swan River, MB
Mr. Speaker, in the second petition, the petitioners request that Parliament take immediate steps to develop internationally recognized protocols designed to restore confidence in Canada's beef products and open international beef markets to Canadian producers.
Dominic LeBlanc LiberalParliamentary Secretary to the Leader of the Government in the House of Commons
Mr. Speaker, Question No. 15 will be answered today. This is a supplementary response.
Dave Chatters Conservative Westlock—St. Paul, AB
Since January 1, 1997, have any past Members of Parliament been hired or appointed in any capacity by the government and, if so: ( a ) who was the member; ( b ) what was their salary at the time of hiring and any subsequent increases; ( c ) what have the job descriptions been; ( d ) what advertisements were used to solicit applications for these positions; ( e ) how was the interview process conducted for all positions; ( f ) who approved the hiring; ( g ) how many applicants were interviewed; ( h ) when was each position created; and ( i ) what were the annual expenses of each indivudual?
Bill Graham LiberalMinister of National Defence
Mr. Speaker, National Defence undertook to examine contracts let by Public Works and Government Services Canada, PWGSC, on behalf of National Defence to determine whether Members of Parliament from the 36th and 37th Parliaments have been hired or appointed as civilian employees by the department.
An examination of these records indicates that no contracts were let by PWGSC on behalf of National Defence with Members of Parliament from the 36th and 37th Parliaments.
It should be noted that no records are maintained, nor is any information available on persons employed by firms who may have a contract with the Department of National Defence. Similarly, while National Defence contracts as well as those contracts issued by PWGSC on behalf of National Defence, permit subcontracting, it is ultimately the prime contractor that decides whether or not to subcontract. Since the Crown is not privy to these subcontracts, no contractual relationship is created between the Crown and third party subcontractors. As a result, records are neither created nor retained by National Defence concerning contractual arrangements between a prime contractor and its subcontractors.
Dominic LeBlanc Liberal Beauséjour, NB
Mr. Speaker, I ask that all remaining questions be allowed to stand.
Request for Emergency DebateRoutine Proceedings
The Speaker
The Chair has notice of a request for an emergency debate from the hon. member for Battlefords—Lloydminster. I will hear from the hon. member now.
Gerry Ritz Conservative Battlefords—Lloydminster, SK
Mr. Speaker, in accordance with Standing Order 52, I seek leave to make a motion to adjourn the House for the purpose of discussing the continuing crisis within Canada's livestock industry.
This crisis must again move to the forefront as the American border remains closed to live Canadian cattle, and efforts made by the United States department of agriculture to reopen the border are now being delayed by a temporary court injunction recently brought down in Montana.
To that end, I would ask that your attention to this matter is urgently required and would be greatly appreciated by the livestock producers of this country.
Request for Emergency DebateRoutine Proceedings
The Speaker
The Chair has considered the request from the hon. member for Battlefords—Lloydminster and is prepared to grant the debate requested. Accordingly, the debate will take place this evening following the ordinary hour of daily adjournment of the House.
The House resumed from March 7 consideration of the motion that this House approves in general the budgetary policy of the government, and of the amendment.
Charlie Penson Conservative Peace River, AB
Mr. Speaker, I am grateful for the opportunity to speak today on the budget. I will be splitting my time with the member for Fleetwood—Port Kells.
Last week when the budget came down a lot of us were concerned about the way it was structured. In fact, I would almost term this budget 2008 instead of budget 2005 because so many aspects of it are back-end loaded. Given that this is a minority Parliament, I think this is a significant issue. There is a real likelihood that this government will not be here to implement the very programs that it is talking about in 2007, 2008 and 2009. That is probably a good thing in that Canadians will have an opportunity to shake things up in the near future.
To start with, for the government to bring in a five year budget is a problem for me. I would prefer to see a one year budget. I would like to see what the government intends to do in this next year. I think that is the most responsible position that a government can bring forward, because to some extent the rest of it is pie in the sky.
Even if the government were to be re-elected, there is no assurance that what it is introducing in this budget for the subsequent years will be implemented. In fact, we have seen just the opposite of that in many cases, where events overrun that five year timeframe and the government's priorities change significantly. Therefore, I think it is of little use to be projecting five years ahead.
Let us look at the budget for a moment. The budget the government did bring forward for this period of five years has been very severely back-end loaded. The government talks about changes to the income tax personal basic exemption, from $8,000 to $10,000. There is only a $100 change this year and next. The rest is all back-end loaded into the last three years of the budget.
What this really means is that the average Canadian would have a $16 tax cut as a result of this change this year. I hope Canadians do not spend it all in one place. Would that not be a major change in the economy? The fact that $16 is all that is really being talked about here is quite significant.
The same applies to the proposed corporate tax cut. It goes in the right direction, but it is not enough and it is not timely. Corporate tax rates are going from 21% to 19%.
I have been involved with both the industry committee and the finance committee. We have had a lot of different studies on this very subject of what should happen on corporate tax rates. Why have Canadians been stuck in a mould over the last 40 years where our GDP or our standard of living has been only about 85% of that of the United States? Some people say that we should not compare the two standards of living, but the United States is our major trading partner and competitor and I think it is relevant. In fact, group after group that has come to our committees over the years has said exactly that.
What does it mean when we say that our standard of living is only 85% of that of the United States? It means that the average Canadian family is taking home $24,000 Canadian less than the average American family takes home. What could Canadians do with that $24,000? They could put an extra $2,000 a month on their mortgages. That is pretty significant. That is the kind of opportunity we have given up as a result of the Liberals being in control for the last almost 12 years.
In fact, we have seen a number of other areas slip as well. We have seen Canadian investment on a constant decline. We have seen the world share of direct foreign investment in Canada decline every year for the last 30 years.
In fact, we have seen Canadians increasingly looking outside our country for opportunities, so we then have a net outflow of foreign investment. That is not good for the country. Investment in Canada brings in innovation. It brings in the newest technologies. When Canadians have an opportunity to upgrade their factories and their businesses with this new technology, they are able to compete better. We have to ask why it is that people are looking outside Canada or in other places for investment.
It comes back to the mismanagement of the economy by this Liberal government. The Liberals have a very short term vision and it is not good enough. Canadians are looking for opportunity. They are looking to realize their full potential. They are not able to do that under this administration, which is wasting billions of dollars of Canadians' money on the wrong priorities and in not getting off Canadians' backs and letting them achieve their potential.
Our standard of living is 85% of that of the United States. If we look at it structurally, what is the reason for some of this?
I would say that its genesis goes back about 30 or 40 years to the Trudeau era. Canadian unemployment rates are now consistently about 4% higher than those in the United States, even though for about 100 years preceding this we could chart the different sectors of the Canadian economy and the U.S. economy, the growth, the employment and the unemployment, and they looked very similar because we went through the same business cycles.
In the 1970s substantial changes were made to the unemployment or employment program, which structurally have factored in about a 4% difference between the U.S. and Canada, Canada being 4% higher. We have seen growth in the size of government over that same period.
Why is it that up until about 30 years ago all levels of government spending in Canada were at about 30% of the economy? In the United States it was about 30% as well. Let us look at the situation 30 years later. The United States government takes up 29.5% of the GDP of the country. Canada's has now moved to 41%. In 30 years we have increased the government's role in the economy by about 12%. If that was all constructive spending, maybe that would be good, but we see a lot of areas where it is not. We are into all kinds of areas such as subsidizing corporations and I do not think that is what Canadians want.
This budget should have addressed a number of issues that it did not. In prebudget hearings, our finance committee had a lot of input from Canadians who were saying that they are being taxed too heavily, but the government did not appear to listen on the issue of capital taxes, which were identified as a job killer. Why is it that a government would tax people on the size of their business, on the capital of their business, even though it does not make any difference if it is a profitable business or not? This has really inhibited growth and investment.
On corporate taxes, as I have said, the government is saying it will move them down from 21% to 19% over the next five years. There is nothing for the first three years. It is all factored into the last two years.
Even so, there is something called the effective corporate tax rates versus what shows up on paper, and there are a whole lot of other areas that enter into how corporate taxes are considered. These would be things like capital gains tax, capital tax and all of that, but the effective corporate tax rate difference between the United States and Canada means that Canada's corporate tax rates are roughly 31.5% right now. That is the effective rate when everything is factored in. In the United States it is 20.1%. That is a spread of more than 11%. That is not good enough when we have to compete with the very country next door that has opportunities which Canadians do not enjoy.
On the capital gains tax, we still have a 50% inclusion rate on capital gains tax. That again is described as a job killer, an investment killer.
On the capital cost allowance, there were numerous requests to change the capital cost allowance so that companies could write off certain sectors a lot faster when they make investments. For some investments in technology, for example, the technology is gone in a few years because it becomes outdated.
On unemployment or employment overcharges, we still see this government overcharging employers and employees every year.
Our personal tax rates are the highest in the OECD and there are surpluses that somehow magically are predicted to be low when the government brings down the budget but then when year-end comes they are about four times as high. The government is doing the same thing again this year.
This type of accounting is what was heavily criticized in the corporate sector, yet it is this same government and the same Prime Minister who, when he was finance minister, criticized the corporate sector for corporate malfeasance in this area, and they are in the same category year after year. For seven years the Liberals have underestimated and lowballed the surplus and they have done it again this year.
I would say that this budget, while it contains some good things, has many glaring errors in it and does not go nearly far enough.
Robert Thibault LiberalParliamentary Secretary to the Minister of Health
Mr. Speaker, I thank the member opposite for his comments. Obviously he knows the subject very well as a member of the finance committee. I just want to point out a couple of things and ask him for his comments.
I understand his concern about the five year budgeting. I share it and I have shared it for a long time, but in this instance I think there is a difference that we have to recognize. In many instances in the past we had five year projections but we would not meet them in year one, year two, year three, year four or year five. They would never come to pass. We have seen that with many successive governments.
We have a different situation now in that we have had eight consecutive surpluses, so the targets have been met. Also, this budget does build in prudence. Should the interest rates go up or should unemployment go up or should growth go down, there is some $24 billion in prudence built in.
The member points to the question of changing priorities. It is true that in certain instances in the past few years we have seen hurricane Juan, SARS, BSE and softwood lumber. They have required a lot more spending but it was done within the framework, so I believe that room is still there.
Charlie Penson Conservative Peace River, AB
Mr. Speaker, that is a good question. I do believe it is important to build in prudence and contingency reserves in the budget. There are things that come up from time to time that we cannot possibly anticipate. That is true.
The member talks about the government's record over the last seven years of having a surplus every year. While that is certainly true and those surpluses are a lot bigger than the government projected during its budgets, any government can have a surplus if it taxes people more than required. That is really what these surpluses represent: an overtaxation of Canadians.
The responsible thing would be to try to pinpoint as closely as we can the amount we need. We can build in the contingency reserve, but we must pinpoint as best we can what is required and not overtax Canadians. I will point out one of the areas where this overtaxing of Canadians has happened. It is in the foundations. There is $7.7 billion sitting in the foundations that is not available to Canadians for tax relief, so that is overcharging them in this area.
The government has to be responsible. I do not think it is the government's role to be our banker and build up huge reserves. It should be using the amount of money it needs for expenditures, and it should dovetail that as closely as possible with the amount it taxes Canadians so that it is at a net balance and does not built up huge surpluses over the years.
Paul Crête Bloc Rivière-Du-Loup—Montmagny, QC
Mr. Speaker, I listened with interest to my colleague's speech. I would like him to clarify the position of the official opposition. For the past few weeks it has not been clear where the official opposition stands on this budget.
Since the Conservative Party advocates cutting spending and being more serious about how to allocate public funds, can the hon. member guarantee that the members of his party will vote against this budget that increases spending by 12%?
Furthermore, in his arguments he said that far too much money has been accumulated in the EI fund. Yesterday I was very surprised to see the official opposition vote against the Bloc subamendment to sanction the government in connection with EI. Of the $45 billion surplus in the EI fund, some $30 billion comes from employers. The opposition knows this all too well.
Can the hon. member assure us that, in light of this situation, all the members of the Conservative Party will vote against this unfair budget or are they simply going to give in to their fear of an election?
Charlie Penson Conservative Peace River, AB
Mr. Speaker, I would like to address some of the issues the member raised. He talked about how the Conservative Party would cut spending, but that is not quite true.
What we would do is set priorities for what we think Canadians want. When we ran in the last election campaign of June 28, let me point out to the member that our package for the next five years was talking about $58 billion in tax cuts plus increased spending on things like the military and health care and some of these areas.
Here is what I think a responsible government would say: “These are our priorities. We need to spend more in certain areas, we need to cut in areas where we do not think Canadians' priorities are reflected, and we need to keep taxes as low as possible”.
That is where we are at. We think it is all a matter of setting priorities. When we talk about cutting spending, we mean cutting spending in areas that are not high priorities for our constituents. We do not mean cutting spending in areas that we think are high priorities.
The member talks about the Bloc's subamendment and why it was not supported. Of course there were a number of things in that subamendment, including the Kyoto file, which many people think is a lot of hot air. They think that spending money to buy credits in Russia is probably not a very good use of Canadian taxpayers' money.
Nina Grewal Conservative Fleetwood—Port Kells, BC
Mr. Speaker, I am pleased to rise today on behalf of the constituents of Fleetwood--Port Kells to participate in the debate on the 2005 budget.
This year's budget demonstrates that the tax and spend Liberals are back. The Prime Minister is engaging in false advertising. The numbers do not lie. The Prime Minister is a spendthrift. No other Prime Minister in Canadian history has been so fast and loose with our money.
Last year the finance minister claimed that this budget would demonstrate unequivocally the principles of financial responsibility and integrity. He promised Canadians to better control spending. That is another broken promise by the government, another promise made but again not kept.
Last year the finance minister projected program spending of $148 billion for 2004-05. It now stands at $158 billion with a month to go. That is a $10 billion overrun and an increase of $17 billion over the previous year. So much for controlling spending. At 12%, this is the largest single spending increase in over 20 years and the fourth largest in the last four decades.
Since 2000, program spending soared by 44% and, judging from this year's budget, Canadians should hang on to their seats because they have not seen anything yet. By 2010 program spending is projected to rise to $195 billion.
I could almost forgive this runaway spending if there was some demonstrable evidence that Canadians' lives were improving as a result, but that is not the case. My constituents in Fleetwood--Port Kells are at pains to see how all this spending has made any difference. Despite multi-billion dollar spending, child poverty continues to grow, health care further deteriorates, roads and bridges remain congested, public transit cries for funding , and there continues to be a strong demand for good, well paying jobs.
After this budget, hospital waiting lines will continue to get longer. Students will continue to plunge deeper into debt and our soldiers will be stretched as thinly as ever.
People in my riding depend upon Surrey Memorial Hospital for their health care. Our community is fast outgrowing its hospital. The hospital, built in the 1970s to accommodate about 50,000 patients a year, now handles between 70,000 and 72,000 patients annually and has the busiest emergency ward in western Canada. Surrey Memorial's facilities now cope with the demands placed upon it by our community's soaring population. There have been recurring complaints about waiting times, a lack of beds, insufficient staff, sanitary conditions and questionable procedures at the hospital's overcrowded ER.
The root cause of the problems we now face goes back to the Prime Minister and the cuts he made to the CHST in the mid-1990s as finance minister. These cuts left successive B.C. governments to find extra billions for health care. The new money for health care in this budget will not provide Surrey Memorial Hospital with the money it needs.
The agreement, which the Prime Minister hyped as a fix for a generation, will only allow B.C. to increase health expenditures by 3% annually over the next six years. Not only will this amount not fix health care, it will not even cover rising costs resulting from inflation and population growth, while the dollar figure spread out over such an extended period amounts to little more than a band-aid solution to our critically ill health care system. In fact, it seems as if this budget is for the year 2008 or 2010.
Transportation is another issue of critical importance to my constituents. Just last month I stood in this chamber demanding a commitment for the construction of the South Fraser perimeter road and the twinning of the Portmann Bridge and expanding our ports, among other things. Years of failing to build enough new transit and road capacity are exacting a heavy toll on commuters. Travel times in the lower mainland have increased by 30% in the last decade with the region's population expected to grow by another one million by 2021. Severe traffic congestion will only get worse.
The people of B.C. pay over $1 billion annually to Ottawa in fuel taxes but the Liberal government refunds less than 4% of that amount for reinvestment in our highways and public transit. Rather than direct gas tax revenues to infrastructure, the government has forced provincial and municipal governments to meet federal Liberal priorities.
Two years ago the Prime Minister promised civic leaders that he would not waste any more time ensuring cities receive a share of the gas tax by Christmas. Now it is March and there is still no money. The Prime Minister dithers, just like he has on other important files, including the foreign policy review, appointments to the Senate and the non-existent national child care agreement.
Media reports indicate that when the gas tax deal is finally revealed, B.C. will receive $635 million over five years, mostly at the back end of the program. This money will translate to less than 10% of what British Columbian drivers will contribute to federal coffers over that same period. The government will continue to hoard its money for pie in the sky programs while ignoring the very real needs of my constituents in B.C.
With all the billions the government plans to spend, all it could offer low and middle income taxpayers was a tax break of $16. A tax break indeed.
Canadians pay the highest taxes in the world. A single person in Fleetwood—Port Kells with a taxable income of $35,000 will pay $5,850 in federal taxes, a rate of 16%. If we factor in all taxes at all levels of government, federal and provincial income taxes, gasoline taxes, sales taxes, GST and property taxes, the tax grab is really $17,175 in total taxes, a rate of 49%.
A family of four in Canada has $2,000 less to spend per month than that same size family in the United States. If the government had lived up to its promises of 2000, the federal government would cost $30 billion less than it does today. If, instead of ramping up spending, the Liberals had delivered tax cuts, Canadians would have had their taxes cut by a third.
If we removed the cover page from the finance minister's budget, we could dust it off as a throne speech. It is replete with generalities, vague references, no meat and no potatoes. This budget is packed with billions in new spending for which no blueprints or road maps exist. There are too many unfocused commitments, no plans for how the government intends to deliver a national child care program, meet its Kyoto commitments, provide funding for cities and deal with farm problems. The budget also contains very serious errors and omissions.
Last week's horrible tragedy in Alberta, four RCMP officers murdered, is a terrible reflection on the government's weak-kneed approach to marijuana grow operations and crime. B.C. has an estimated 16,000 grow ops and 4,000 of them are in my riding alone. What more must happen before the government moves to staunch the proliferation of grow ops and gives law enforcement agencies the resources they need to combat growing crime?
The budget fails to deal with affordable housing, proper shelter that fulfills a basic human need. No mention is made of any programs or measures to deal with violence against women and no solution for the softwood lumber crisis.
I have called for more transparency in government spending. I want to see an end to these so-called arm's length foundations in which the government funnels billions of dollars that are spent at the discretion of the Prime Minister and cabinet. How the money is spent is beyond parliamentary scrutiny.
I want to see an end to the slush funds and the hidden government surpluses used for political manoeuvring. Those surpluses should be in the pockets of taxpayers so they can provide for their children's education and retirement years.
I want to see an end to the bulging surplus of close to $40 billion in the employment insurance fund. That surplus belongs to employers and workers who contributed far in excess of what was needed.
As one commentator put it, when everything is a priority, nothing is a priority.
It is with our Prime Minister, Mr. Dithers, who, in his poll obsessed world, has been unable to show the leadership to present a budget this country and the residents of my riding of Fleetwood—Port Kells demand.
Benoît Sauvageau Bloc Repentigny, QC
Mr. Speaker, I listened carefully to the honourable member's speech and would like to ask her a question. If I understood correctly, she and the members of her party oppose the Liberals' budget. First, she described very clearly why she opposed the government's budget. Then the Conservatives voted against the Bloc Québécois' subamendment on the budget, nevertheless.
There are two parts to my question. First, what are the member's main objections to the Bloc Québécois' subamendment to improve the government's budget, on which we voted yesterday? Second, if her party is opposed to the government's budget, can she assure us that most of the Conservatives will vote against the government's budget and will not find some way of getting out of it?
Nina Grewal Conservative Fleetwood—Port Kells, BC
Mr. Speaker, will we see federal funds to enhance health care at Surrey Memorial Hospital? Will we see federal measures to attack our growing crime rate? Will we see measures to address our urgent transportation needs, such as the South Fraser perimeter road or the Portmann Bridge bottleneck? Will we see improvement to highways leading to the ports? I think not. The budget does not represent the priorities of Canadians.
While the government is spending money at an unprecedented rate, increasing overall spending by 12%, the largest increase in more than two decades, the Canadian standard of living is falling further away from the U.S. In the last two years it has dropped another 2% to 84% to that of the U.S. This budget will do nothing to close this gap. It will do nothing to increase Canada's productivity. Corporate and personal taxes are still too high. The $16 tax cut offered by the government is an insult to people struggling to put food on the table.
Peter Stoffer NDP Sackville—Eastern Shore, NS
Mr. Speaker, I appreciate the comments from my colleague from British Columbia but the question asked by my hon. colleague from the Bloc Québécois was quite simple. If she is dead set against the budget and she finds a million things wrong with it, will she and her party, all 99 of them, show up tomorrow and vote against the budget?
She talked about corporate taxes being too high. It is interesting to note that the insurance companies reported record profits under the current tax system. The banks will be reporting record profits under the current tax system. However, instead of giving, for example, a tax break to all Canadians and removing the GST off home heating essentials, that tax break will be given directly to the corporations which will make even more money.
She is right when she says that Canadians are suffering under taxes but why not give a proper tax break to all Canadians by removing the GST from home heating essentials? If she is so dead set against the budget, will she and her party en masse vote against the budget tomorrow?
Nina Grewal Conservative Fleetwood—Port Kells, BC
Mr. Speaker, the government is creating a legacy of broken promises. The Prime Minister said that he would change the way Ottawa works and cronyism but those things did not happen. Since then he has given patronage appointments to Glen Murray, Sophia Leung, Allan Rock and Dave Haggard, among many others. He promised a gas tax deal for the cities by Christmas 2004. The cities are still waiting three months later.