Mr. Speaker, I am very pleased to rise to resume our opposition to the budget bill. Earlier in the original debate, I characterized the budget as being meanspirited, dishonest and visionless. In the days that have elapsed since that original statement, those three characteristics have only increased in magnitude.
In terms of meanspiritedness, at the time I referred to cuts to the most vulnerable in Canadian society, such as the cut to the Kelowna agreement, the cuts to the child care agreements, the abandonment and elimination of some of the most productive programs in natural resources, in energy efficiency, such as EnerGuide, and the increase in income tax applied to the lowest income Canadians. All of this is meanspirited.
Since that time, the meanspiritedness has gone up a notch, if that is possible, with the announcement of all the cuts a few weeks ago by the Minister of Finance and the President of the Treasury Board, cuts that are difficult to exceed in terms of the degree to which they impact the most vulnerable in our society. These include cuts to literacy programs, to museums and to the Status of Women. The original contention that this was a meanspirited budget has simply escalated in the intervening days and weeks.
It is no less the case today than it was before that it is also a dishonest budget in the sense that, while it purports to cut income tax, it in fact raises income tax. Relative to what Canadians were actually paying in 2005, the income tax rate has gone from 15% to 15.5%. In addition, rather than taking Canadians off the tax rolls, as the budget purports to do, it does the reverse. It adds Canadians to the tax roll by reducing the basic personal amount that Canadians are allowed to deduct at tax time.
Therefore, it is a meanspirited budget and it is a dishonest budget.
However, what I really want to focus on today is that it is a visionless budget. It is visionless in terms of the central challenge facing any government of our country, and that is our long term prosperity, competitiveness and productivity. The government does not seem to understand that the world does not owe Canada a living, therefore, it has to be the central responsibility of any finance minister to prepare our country for the competitive world that we face in coming years. The budget does absolutely nothing to that end. In fact, it is counterproductive.
If we look at the four largest spending items in the budget, none of them has anything to do with productivity or competitiveness. The four include a big increase in defence spending, GST cuts, narrowly based tax credits, scattered all over the place, and the child benefit of $100 per child. We can debate the merits of these four items and in some cases there may well be merits, but not one of them has anything to do with improving the prosperity, the competitiveness, the productivity of our country as we enter a period of challenges vis-à-vis the emergence of China and India as global economic powers and the aging population.
A responsible government has to take concrete actions to deal with this economic challenge to our country. The government in its budget did nothing. Worse, we know the finance minister will have his November economic update and he will talk about productivity and competitiveness. The problem is that the fiscal cupboard is bare. He has spent the vast majority of the money in this budget in unproductive ways, on GST cuts, universal child benefits, defence and narrowly based tax credits, none of which have anything to do with productivity. Now having spent the money, the horse having left the stable, he is going to try to tell us that he really cares about productivity and competitiveness, having devoted his funding to things that have nothing to do with this.
It is worse again because he still has two liabilities out there on which he has not yet spent money, neither of which has anything to do with productivity, but which will claim large amounts of future budgets. I refer, first, to the second GST cut of $5 billion or $6 billion a year, depending on when he does it. I refer also to the fiscal imbalance where the Prime Minister made commitments in the election to fix it. He has not given any money yet to the provinces. In fact, he has taken money away.
Those two fiscal items of fixing the fiscal imbalance and cutting the GST will weigh heavily on future budgets. Neither of those two items have anything whatsoever to do with productivity.
The notion that GST cuts, which are cuts to consumption tax, do nothing for productivity, every economist in the world, with the exception of the Prime Minister, agrees, whether it is the OECD, the IMF, or recently Dale Orr, the chief economist for Global Insight who said:
Some in the business community and some in the media are quick to identify a productivity/economic growth agenda with tax reductions.
This is a bad mistake.
It is a bad mistake to think that GST cuts have anything whatsoever to do with improving the productivity and the competitiveness of our country.
I would also add that we recently had two weeks of hearings of the finance committee across the country. I asked this question and I did polls of our witnesses, one in Vancouver and one on the opposite coast, in St. John's. In each case there were about eight witnesses, with widely disparate interests and priorities. I asked them if they thought it was a good idea to do the second GST cut that would crowd out so many other possible initiatives which would cost approximately $6 billion in additional funding per year. All the witnesses in Vancouver and St. John's were unanimous in saying that the government should not do the second GST cut because there were so many other much more important things that could be done with those funds.
A recent survey of leading Canadian business executives asked about priorities for income tax cuts, which we the Liberals wanted to do, versus a GST cut. Support for GST cuts has plummeted in recent months among the chief executives surveyed, while support for income tax cuts has gone in the other direction.
I have no hesitation for one nanosecond, and neither does the official opposition, to oppose the budget. It was meanspirited on the day it was given. The degree of meanspiritedness has been ratcheted up by these cuts to literacy and other programs, affecting the most vulnerable Canadians. It is dishonest because it purports to cut income tax when it raises income tax.
Perhaps most important and fundamental for the future of our country is it is a visionless budget which does nothing for our productivity and future prosperity. It does not acknowledge that the world does not owe Canada a living and it spends the money in unproductive ways with future huge liabilities for fiscal imbalance in the second GST cut, leaving very little money left for the Minister of Finance's economic update. Given that he has spent the money and given these liabilities still have to be paid, the statement will be words, but they will be hollow words because he has spent the money in unproductive ways.
For all these reasons, we on this side of the House will oppose the budget.