Debates of Oct. 30th, 2006

Budget Implementation Act, 2006, No. 2

[Judy Wasylycia-Leis, NDP, Winnipeg North, MB]

Mr. Speaker, I want my colleague to know that I will concede that I do not speak for every economist in this country. I will speak for the facts about what most economists say when they analyze what happens to our debt to GDP ratio when a lump sum is put against it, as the government just did with its $13 billion and is likely to do again next year because it has lowballed the surplus once again. We are already at $6 billion at the five month mark, which is $2 billion over anticipated revenues.

What happens when that is put against the debt is that the debt to GDP ratio is reduced at about the same rate it would be if we had put that money into areas that grew the economy. That is a known fact. That is the kind of balance we in the NDP are asking for. That in fact is what Ireland did.

The member should also know that while there was a government in Ireland that was committed to reducing taxes, it was also committed to putting money into education, for example, so that post-secondary education is available without charge. Ireland in fact has done what we have called for, which is a balanced approach so that we invest in our economy, address taxation on a targeted basis, where productivity and competition are increased, and ensure that the debt to GDP ratio is going down at a reasonable rate.

[Sukh Dhaliwal, Liberal, Newton—North Delta, BC]

Mr. Speaker, the member for Winnipeg North has given a very passionate speech. In fact, I am a great believer in and a strong supporter of the agenda for social vision that we should have for this country, but at the same time we must have strong fiscal management.

I am certain the member knows that when the Liberals took power away from the Conservatives in 1993 Canada was going down and was in debt by $40 billion. We had to do something and we did it. At the same time, we restored social benefits, whether it was child care agreements with the provinces, health care or home care for seniors.

However, she talked about what economists have been saying for the last 13 years. She should look at the report in The Economist magazine, which said that workers were taking home 11% more income than they were in 1993. The hon. member can look at that magazine's report from last year which said that Canada was the second best country to invest in, next to Denmark. I do not believe that the hon. member is giving a fair statement when it comes to the record of the Liberal Party.

[The Acting Speaker, Conservative, Royal Galipeau]

There are 45 seconds left for the answer.

[Judy Wasylycia-Leis, NDP, Winnipeg North, MB]

First, Mr. Speaker, I would like to point out that most economists and analysts in this country will give credit to NDP governments, whenever they have been in power, for running good, sound fiscal programs. In fact, recent surveys show, by the government's own statistics, that of those governments that balanced their books, 49% were NDP, 39% were Conservative and only 23% were Liberal.

The NDP has as good a track record as anyone in the House for being good fiscal managers. The Liberals, unfortunately, were not. They approached the deficit situation in 1993 like a bull in a china shop. They put all of their eggs in one basket. They took the biggest bite in history out of education and health--

[The Acting Speaker, Conservative, Royal Galipeau]

Resuming debate, the hon. member for Dartmouth—Cole Harbour.

[Michael Savage, Liberal, Dartmouth—Cole Harbour, NS]

Mr. Speaker, I am pleased to have an opportunity to speak on the budget implementation bill. I am following the member for Markham—Unionville, who took an awful lot of good arguments, so I will try to scrape together what is left.

I think that this particular time at which we are debating this bill we have the most attractive economy in the history of Canada. We can recall headlines in the Globe and Mail not too long ago which said that Ottawa is “awash in...cash”.

That cash is the cash of the people of Canada and it is the fiscal dividend of a decade of effective financial management. It was not an easy time in Canadian history. Canadians made sacrifices. In Atlantic Canada, we saw many sacrifices. The employment insurance system was changed. In my own community of Dartmouth—Cole Harbour, the Shearwater base was closed.

There were a lot of cuts. There were reductions in the CHST, health care, social services and post-secondary education, which were necessary in order to preserve those very things. Would we even have a publicly funded health care system today if we had continued in the ways of the Conservative government that we took over from in 1993?

Since we got the economy under control, the Liberal government has reduced taxes. We reduced the deficit prudently. We balanced our priorities, much like the previous speaker said we should. We in fact did that, bringing in things like the child tax benefit, which economists have attributed with actually having had an impact in reducing childhood poverty, although there is much that we need to do.

When the economy improved, we put money into post-secondary education, health care, the child tax benefit and a host of other things. Today we have an unprecedented opportunity and I believe it has been wasted. It is an unequalled opportunity to invest in the social infrastructure that makes Canada unique, to close the gap between the rich and the poor, between those who have and those who have not. This budget does not do it. In fact, it does not even speak to the millions of Canadians who need a hand up.

The major priorities of this government do not make sense. The GST cut from 7% to 6%, and perhaps eventually to 5%, has been called the “triumph of politics over policy”. No serious unbiased economist in Canada thinks it was a sensible thing to do, particularly from a productivity point of view. It does nothing to help low income Canadians.

In fact, the government could have put the money into the child tax benefit. We hear, and the government seems to believe it, that the GST is good for lowest income Canadians because they do not benefit from personal income tax reductions, but there are other ways of helping the lowest income people in Canada. There are many others who would benefit from lower marginal income tax on the lowest rate and increasing the basic personal exemption to where it was in the economic update that we introduced last year.

Even business groups said this. My colleague from Markham—Unionville indicated his survey. He mentioned St. John's and Vancouver. I know he did it in Halifax and I know it was unanimous. I do not believe that in Halifax anybody even dissented or abstained. They all said it does not make any sense. They said that we have all these priorities in Canada, such as regional development and child care, and that there all kinds of things we could put the money into instead of wasting billions of dollars giving it to people who buy expensive cars and furniture.

And there are other priorities. We all would like to have low income tax and we would all like to have a lower GST, but the job of government is to make priorities. Surely when a government is awash in cash those who most need the help should be at the top of the list. It did not happen.

As for child care, in our finance committee travels, which my colleague mentioned, we met with dozens of groups to talk about child care. I am not sure of the exact number. It could have been 25, 35 or 40. Overwhelmingly they preferred a plan similar to the previous Liberal government plan of putting the infrastructure in place, because money on a monthly basis does nothing if one cannot find a space.

Even with the government bringing in the universal child care benefit, the $1,200 a year, it should have been done in such a way that it actually went to the people who needed help, not the way the government did it, where in many cases it actually favours people with higher incomes versus low income families who are struggling to get along.

In the budget, the cut for the GST and the child care plan are flops. They do not help Canadians who need help the most.

What is missing in the budget? I would have to say, first of all, that regional development is missing. We heard all the time from ministers of regional development agencies that they would not in fact be hurt, and then we saw the cuts of a couple of weeks ago, cuts that take the social economy initiative out of budgets like ACOA's, for example, which means $7 million to $10 million for worthy organizations. Co-ops, for example, came before us and said it was crazy and did not make any sense, and they are right.

Next let us talk about post-secondary education, which is a particular interest of mine. This has to be if not the most pressing need for Canada, then certainly one of them. How can any government in Canada have five priorities but not have one of them include education? I think it is the biggest issue facing Canada.

We have an educated population. We have done a good job of educating Canadians, including in post-secondary education, but other countries are catching up. We all know the story of the emerging economies and how they are investing. Countries in the European Union are putting money into education as well.

We need to keep up the strength on the research side, as an example, which the Liberal government invested in once we controlled the economy. We have put in some $13 billion since 1998, taking Canada from the bottom of the G-7 to the absolute top in terms of publicly funded research.

That is an amazing accomplishment. It has reversed the brain drain. That is what we heard all over the place five years ago. Now we do not hear about it. In fact, there is a reverse brain drain. Universities across Canada will tell us about accomplished scholars, researchers and graduate students coming back to Canada, choosing Canada because of our investments in the granting councils and CFI, Genome Canada and others. It is a significant contribution.

In fact, the government's own budget books indicate that the federal government contribution to post-secondary education has stayed constant over the past 10 years. We often hear that it has been gutted. In fact, the contribution has stayed constant and, although it has not been in the direct transfer, in the CHST, it has gone into research and to students in forms like the millennium scholarship, the learning bond or the Canada access grants at 25%.

However, I would argue that is the challenge of Canada because of the changing nature of the world. Although enrolments have not declined, we do know that there are three areas in which Canadians are not getting to post-secondary education, be it university, community college, apprenticeships, advanced training or catch-up training. We know there are three areas of Canadians who are not accessing it: low income Canadians, aboriginal Canadians, and persons with disabilities.

Last fall, the member for Wascana, who was the minister of finance, introduced an economic update that addressed these needs in a huge way, but budget 2006 did nothing. Tax tinkering assists those who are already in university or community college; it does not help those who are not there to get there. I believe that should be a role of the federal government, both from a social justice point of view because we want all Canadians to have equal opportunity, and also in an economic argument, in that it is good for the county.

Canada is a unique nation. It is a nation that we are all proud of. There are many things that symbolize Canada, both to Canadians and to the world: this great geography of a vast land; our cultural diversity, Canada being the first nation on earth to proclaim multiculturalism as a national policy; and our linguistic duality.

I also think Canadians take pride in the belief that we believe government has a role to play in bridging the opportunity gap between the richest and those most in need. Even some Progressive Conservative governments in the past have stated that as a goal and have done some things to try to make it better.

The budget does not even pretend to help those who need help. The government is neither progressive nor fair. The government speaks to a narrow constituency with narrow views. Canada is a wide country, of huge dimensions, huge dreams and huge visions, and Canadians reject the government's view of their land.

[Brian Pallister, Conservative, Portage—Lisgar, MB]

Mr. Speaker, up until the tail end of that presentation I kind of enjoyed it. It was largely factual until that little partisan diatribe at the end. I thank the member and congratulate him for his comments and his participation on the House of Commons finance committee in the pre-budget consultation process. It has been engaging in a very inclusive and educational way. The member for Markham—Unionville who spoke earlier, has also been part of that process.

I would like to respond though because I am sure the members would not want any kind of misperception to be on the record concerning the polling to which the member for Markham—Unionville alluded in terms of polling people who came to the committee and asking them a question concerning the GST.

It is important to put on the record that the question and the way in which it was worded was essentially this: “Would you support raising the GST to 7% again if it meant that we could then fund your specific project?”. The member directed that question to each of the witnesses, as he did at numerous meetings across the country.

Naturally, as we all understand very well, the fundamental principle of concentrated benefits versus disbursed costs, it would be very logical that the people to whom he would direct the question, who would be there on behalf of specific interest groups and lobbying on behalf of their chief issue of concern, would naturally answer yes, that they would like to see the GST higher to support their specific project because they would like to see, obviously, benefits concentrated in the hands of those they are there to represent.

That is quite defensible, However what is not defensible is putting on the record that it is somehow an indication of a broad based concern that the GST was lowered. It certainly is not evidence of that and I am sure the member knows that.

As far as the comments concerning mean-spiritedness, the member did not address a number of issues which I guess is understandable because they certainly supply strong and compelling evidence of something more than a compassionate nature, certainly more compassionate than would be the case under the previous government, the transit pass program, the tools programs, the textbook programs, the kids sports programs and numerous others which the member chose note to address.

No member here has yet addressed those issues. Those seem to be very well received and I think acknowledged by most in the House as positive and progressive initiatives that would be well received by Canadians, most of which were issues that we raised as a party in the last election campaign which saw considerable support brought to our party as a consequence.

The member is essentially saying to the witnesses who asked for more money from the taxpayer that they should trust us with the money. What the members are saying, in contradiction to their previous position on the GST reduction which they supported the abolition of in the past, is that we should keep it higher. The Liberals are asking us to trust them with the money but that they will not trust Canadians with 1% less on the GST. I would like the member to explain why that is.

[Michael Savage, Liberal, Dartmouth—Cole Harbour, NS]

Mr. Speaker, I enjoy being on the finance committee. The hon. member is a good chair and I actually look up to him, but he is six foot nine so that is about what one might expect. However, what he says, unfortunately, is hogwash. We do not mistrust Canadians at all.

He mentioned many things in his 25 minute question, things like the tax break for students and the tax break for recreation. We actually asked a number of witnesses who were involved and liked those measures as well if they would prefer to see tax tinkering, little bits here, throw crumbs out to people or would they rather see investment in infrastructure, for example, recreation infrastructure through their municipalities, or the child care program as opposed to little bits of money. Most people, even people who were directly involved in the areas he mentioned, preferred the investment in infrastructure that all Canadians could use without a membership card and without having to pay a membership fee, that they would have access to whether it is education, whether it is child care, whether it is physical recreation.

It is all a balance but Canadians do not want little piecemeal solutions. We heard that from the Chambers of Commerce in Kingston and Waterloo. Canadians want solutions, they want vision and they want a government that understands their problems and will work on them. They have not seen it from the current government.

[Tony Martin, NDP, Sault Ste. Marie, ON]

Mr. Speaker, I appreciate the opportunity to put a few thoughts on the record because I believe, and I think everyone would agree, that one of the most important things that we have responsibility for as a federal government is laying out a budget and speaking to the priorities that we see needing to be looked at, invested in for the people of our constituencies and the country and doing that in a fiscally responsible and fair way.

Members will note and people listening to this debate will note that the budget that was brought down by the Conservatives earlier this year is not that dissimilar from the budget that was initially brought down by the Liberals of the previous Parliament. The only change in that budget came when we as New Democrats found a way to wedge ourselves into the debate and make some significant changes that reflected the priority that we would bring if we were government in this place to the budgetary process to which I will speak just briefly because I have such little time.

The things we brought to the budget at that time, which were so important to people across this province, were gas tax flowing to municipalities, foreign aid, the first affordable housing project in years and investment in post-secondary education. Those things were just the beginning of the kinds of things that I believe people want the federal government to be taking a serious look at, be willing to give leadership on and to actually invest in if this country is to move forward.

We as New Democrats, wherever we have governed, are shown now, by way of a federal government financial department release, to be of the most responsible of governments, balancing our budgets 49% of the time when we have had a chance. The Conservatives have only balanced their budgets 39% of the time, while the Liberals, lagging behind, balanced their budgets only 23% of the time.

When we talk about delivering budgets that reflect the priorities of communities, families and individuals across the province, we are not talking about breaking the bank. We are talking about being very particular in terms of where we spend our money and where we make our investments. We certainly would not be going down the road of huge, mega tax breaks to corporations and individuals in this province who really do not need them and, in the long run, as has been proven over time, do not really reinvest them in things that help communities, people and workers across this province.

As I scoured my community over the last month to hear what they would like to see in a budget certainly reflected the priorities of the New Democratic caucus and the New Democratic Party. They were concerned that the money that has begun to flow by way of the NDP budget of 1985 might not continue to flow. They want the investment in affordable housing, the investment in post-secondary education and the investment in communities through the flowing of the gas tax to continue.

They also told us that they were very concerned about the cuts announced recently by the Conservative government. They said that if that were an indication of where the government was going that they would be thinking twice and working hard to ensure the Conservatives would not be returned after the next election to be the government of this country.

In my own riding, the municipalities had real concern that the gas tax that has begun to flow would continue to flow because the municipalities have been the biggest victim of the download by federal government to provincial government to municipalities over the last 10 to 15 years as the previous Liberal government tried to balance its budget on the backs of communities and on the backs of the families who live in those communities who are now expected, through their property taxes, to pay for health care, affordable housing, public health care and a number of things that previously the senior level of government, which, as everyone knows, has most of the money, used to work with them in partnership to ensure every community had those things in place and everybody who lived in those communities were allowed to live in a dignity that reflected the richness of this country.

In my community, which is a border community, the government did not support the cut in the GST rebate to tourists who come into our country.

We are living in very difficult times now with the fear of terrorism and the agenda of the American government to put in place the western hemisphere initiative, to put gunboats on our Great Lakes, to build fences and to erect towers. All of those things send the wrong message but that is under the control of the U.S. government.

However, Canada has control over things like the GST rebate. The rebate is an enticement or a little bit of a carrot for Americans who are looking at Canada as possibly a good place to have a vacation and perhaps buy a few items. The Americans now receive a rebate on their GST but the government intends to cut that.

The Chamber of Commerce in my community, which came to one of the prebudget consultations I had in my community during the constituency week, said that its number one priority when it was looking at the budget and what the government was doing in my community, which is very tourism oriented, was to stop the cut of the GST rebate. The rebate is only one of a few things that businesses have in their arsenal to compete and do well in the tourism industry.

On behalf of my Chamber of Commerce and of all of those tourism organizations across my region I would ask the government not to cut the GST rebate and to put that rebate back in place because it is important and very helpful.

The other thing that often came up as I met with constituents and had my consultations was the fact that the government does not seem to be able to do anything about the ever increasing price of gasoline. Anyone who lives in northern, remote or rural Canada will know that transportation is essential to any economy in those areas. If people need to travel everyone knows that gasoline is one of those fundamental basics that everyone has to put out for.

If the price of gasoline continues to rise and to vacillate as it does, we have no confidence that we will continue to be able to compete in a positive way in today's economy. Energy and gasoline prices are killing industry across northern and rural Canada.

The forestry industry is one example in northern Ontario that is on the ropes. Some communities are finished because the government has not been able to get its head around and work collectively on something that will bring some common sense and reality to this issue of the burgeoning price of gasoline.

If the government is not willing to regulate, it should, at the very least, put in place some vehicle that could force those companies that deliver that product that is so essential to us to justify their increases. The NDP is not against people making a profit. We know that is what makes the economy in this country run. However, when it becomes gouging and profiteering, my party has a problem.

The other issue that was raised very clearly with me by a number of groups and individuals in my community is the cuts to literacy. The government recently announced cuts to literacy programs that are so very valuable to individuals who want to participate, to communities that want their citizens to participate and to the economy. Any good economist who has looked at the question of literacy will say that an investment in literacy produces threefold down the line. When these individuals learn to read, write and use computers they can participate in the workplace in a more positive way and become better and more productive workers which makes the company more efficient.

I do not understand what the underlying value was of the government, and in fact of the previous government, when it came to budget making. If members would look at the NDP budget of 2005 it would understand what the priority is for the New Democratic caucus here in this place today.

[Laurie Hawn, Conservative, Edmonton Centre, AB]

Mr. Speaker, I have a couple of things I would like to point out for the member. Perhaps he is driving an electric car and does not buy gas. If that is the case, I commend him, but I fill my tank fairly regularly and the price of gas has gone down considerably in the last little while.

This government would not take any credit for that nor would it take any blame for the cost of gas increasing.

The member talked about workers and supporting workers and he mentioned the forestry industry. Is he aware that $945 million went out this week to Canadian forestry companies which will clearly support the industry, the workers and the towns across Canada that rely on the forestry industry? Does he think that is an important thing for people in those communities today?

[Tony Martin, NDP, Sault Ste. Marie, ON]

Mr. Speaker, the member has raised two very important questions.

I do not think he would deny that the approach the gasoline companies seem to be taking in raising the price of gasoline is that they raise it to $1.25 a litre and then drop it back to $1.05 a litre, and we think, “Oh my God, we have ducked a bullet. Look how low the price of gas is”. He keeps forgetting that before Labour Day last year, the prices of gasoline was between 70¢ and 80¢ a litre. It is now up over 90¢ a litre in my community. Only a year ago it was hovering up around $1.25 a litre.

That is the game the companies are playing and the member has obviously bought into it. The people who live in my jurisdiction in northern Ontario have not. They understand. They know that when the prices of gasoline goes up to $1.25 a litre and then goes back down to $1.15, it is still higher than the 75¢ it was the month before. That is their trick. Somehow we have to find a way to bring the companies before us an ask them to justify this. We have to look at the patterns, look at the money they are making, the profiteering that is going on, and challenge them so that we can act as a government in the best interests of our communities and the workers and the people who want to drive an economy in this country.

In terms of forestry, certainly in northern Ontario we have seen no benefit and no effect. St. Marys Paper, the paper mill in my community, just last week filed for bankruptcy protection. I dare say that in northwestern Ontario there is not a community that has not been drastically negatively affected by the way the previous Liberal government and the current government have acted on their behalf.

We are killing an industry that should not be killed. It should be viable and vital to this country. Unless we do something about it, that is the direction we are going in.

[John McKay, Liberal, Scarborough—Guildwood, ON]

Mr. Speaker, I listened to the hon. member's speech. It had references to the cuts in literacy. I assume that he is concerned about the cuts to the housing programs, both SCPI and RRAP, and the cuts to museums and things of that nature.

I am just wondering if the hon. member would enlighten me as to why his party voted against the motion last week which stated in part:

--the government inherited the best economic and fiscal position of any incoming federal government and has not demonstrated the need, value or wisdom of its announced expenditure cuts which unfairly disadvantage the most vulnerable groups in Canadian society.

What does he say to the people for whom he is purporting to speak, those folks who are in favour of literacy programs, those people who are in favour of housing programs, those people who are in favour of museums? How could the NDP in all good conscience have voted against that motion?

[Tony Martin, NDP, Sault Ste. Marie, ON]

Mr. Speaker, it is very simple. We could not stomach the self-congratulation that was the very premise of that motion. That motion was a simplistic attempt at trying to bolster the fortunes of a party that the citizens of this country summarily threw out of office because it could not manage and could not be held responsible for the public funds for which it was given responsibility over some 13 years.

The member did raise a good point. Certainly the issue of literacy and the cuts to youth employment services, et cetera, that the current government has made will hurt the populace. We heard at our prebudget consultation that literacy is a human right. To read and to write and to understand what is going on is basic to a person's independence and enjoyment of life. Literacy impacts on so many areas: jobs, skills, reading prescriptions, seniors. Increasing literacy 1.5% has a 2.5% GDP return down the line.

[Paul Szabo, Liberal, Mississauga South, ON]

Mr. Speaker, I was present in the House when the finance minister addressed this bill. I noted a couple of things that he commented on and one important thing that he did not and I was wondering why. I thought I would rise to make sure that members are aware of it.

The government inherited a very healthy financial situation. In fact, the Auditor General reported in September that the surplus for the year ended March 31, 2006 was $32.2 billion.

It reminds me of the discussion we had in 1997 when we had the first balanced budget in a very long time. People were asking what we were going to spend the surplus on, but that really was not the right question. We have to determine the benefit to Canadians. Ultimately the experts, the economists who consulted with parliamentarians, basically came to the conclusion that the real fiscal dividend to Canadians was not the surplus itself, which is a one time thing, but it was the ongoing savings, that is, the savings on interest on our national debt.

Over the last number of years we have had surpluses each and every year and have paid down about $89 billion worth of debt. If we look at it in its totality, the national debt today is just a little smaller than it was when the Liberal government took office in 1993 because the previous Conservative government had left a fiscal situation which had us at a $43 billion deficit in one year. There was almost another $100 billion of debt created by the time we could balance the budget. Canadians should know that the national debt still is an important issue and that the real fiscal dividend is the savings in interest. The savings estimated from the surplus for the last fiscal year is about $600 million a year. That is $600 million in interest savings that will be available each and every year to take care of the priorities of Canadians. I certainly wanted to make that point.

In the budget the government delivered a 1% decrease in the GST. Canadians were aware that that was an undertaking and it was done. If a Canadian spends $1,000 that means a savings of $10, 1%. Canadians ought to keep it in perspective that the GST cut is not very significant unless they are large spenders. A person would have to spend $30,000 a year approximately to save $300 in taxes. When we consider the fact that the government increased income taxes by a half of one per cent on the first marginal rate, one breaks even if one spends $30,000 on GST taxable goods. There is a very false economy here.

In addition to the budget items, the finance minister also boasted of a billion dollars in cuts to program spending. Canadians would generally understand that cutting unnecessary spending or fat within the system is a good thing, but the cuts include a $5 million cut out of the status of women, $45 million from CMHC housing support, $18 million from the literacy skills program, $55 million from youth employment initiatives, $6 million from the court challenges program, $39 million from regional economic development and more. When we consider there was a $600 million savings in interest on the national debt each and every year, was it really necessary to make these cuts?

With respect to the cuts to literacy specifically, I looked at some of the information. It is hard to believe but 22% of adult Canadians struggle throughout the day with ordinary tasks because they simply cannot read. Approximately 5.8 million Canadians cannot cope with the demands of a typical workplace. Further, about 3.2 million Canadians cannot read the label on a medicine bottle, deal with a job application or read their child's report card. These are fundamental things. Why would the government attack the adult literacy program?

The President of the Treasury Board told us exactly why. He said in this place that in his view it is already too late to deal with those people; they cannot read, that is it and we cannot remediate adult literacy. That is nonsense. In fact, there are adult literacy programs in conjunction with all of the provinces and territories across this land and they are working. We had a partnership with them and these cuts mean that the partnership in many cases has been damaged and in some cases has been broken.

It is not good enough just to say in a macro sense that $1 billion in program spending was cut. Where did it come from? Why did we touch the court challenges program? Why did we touch the status of women where we are talking about important issues affecting Canadian women in society? The equality provisions and other things, to ignore them is simply irresponsible.

The minister talked about things like the transit pass tax credits. Experts have told us that 90% of that tax credit is going to go to existing transit riders and the rest to people who try to get on transit, but there are very few public transit systems in Canada today that have excess capacity to take on enough people to make this credit worthwhile. It is really spending $9 to try to save $1. It makes no sense.

If we look at many of the items, in totality the budget has no streaming. It has no vision, no plan, no integration. It is just a mishmash of one-off issues to buy votes and on which the finance minister had to deliver because that is how the election was run.

I have often said that the success of a country is not an economic measure; it is a measure of the health and well-being of its people. It is not good enough to balance a budget to make a surplus. We have to take the savings and efficiencies that were built in and invest them in ways to help the people who are most in need, such as seniors, youth, the disabled, the illiterate, women who are disadvantaged in the workplace. Those are the kinds of things that Canadians are looking to be addressed.

Canadians are not just looking to be given $100 to go away and take care of things themselves. This is a fend for oneself type budget. I always used to say that $1 in the hands of a taxpayer is better than $1 in the hands of the government because the government does not know how to spend it.

When we consider even the $100 a month so-called child care benefit, that is not going to create child care spaces. It is not going to take care of early learning and child care so that our children get a good head start. It is going to do nothing. It was put there as a proxy for the government to say, “We have done our job. Here is your $1,200 for your child for the year. Take care of it yourself”. Everyone knows that it costs $1,200 a month to care for a child in third party child care, not $1,200 a year.

What is worse, and the government does not say this very often, but it had better start reminding Canadians not to spend that money too quickly because when people file their income tax returns, they will find that the $1,200 they were given is taxable. Depending on people's marginal tax rates, some people are going to have to pay back a lot of that money, especially employees who usually have the precise amount taken off during the year and upon filing their returns either owe or get back $1. They are going to be faced with owing hundreds of dollars. That is when they will realize just how bad this is.

I want to raise what this budget does not include. It does not include one of the election promises that was number five in the throne speech, the guaranteed wait times on health care. There is not $1 in this budget for guaranteed wait times. Health care remains the number one priority of Canadians. This is totally irresponsible. How is the government going to explain to Canadians after promising that if people could not get services in their own communities it would pick up the cost to get them in another province or even in the United States? This is a promise broken. This is totally irresponsible.

[Dean Del Mastro, Conservative, Peterborough, ON]

Mr. Speaker, I listened with great interest to the hon. member's comments. He talked about cuts and quite frankly I suggest that his long term memory is not working very well because the Liberal cuts of the mid-1990s created real disparity in Canada.

Health care wait times doubled under the Liberal government. Far more children live in poverty today than before the Liberal government came to power. Far more people rely on food banks than before the Liberal government came to power. I would like the member to talk about the effects of the cuts the Liberals made to the provinces which bled down to people and caused real hurt.

The Conservatives may have targeted a few programs that we consider not to be efficient, but we did not spend any money on a sponsorship program that put money into our friends' pockets.

[Paul Szabo, Liberal, Mississauga South, ON]

Mr. Speaker, if the member wants to inform the House, he should inform it about the real facts. He is talking about when the Liberal government took over. The real fact is in the mid-nineties there was a $43 billion deficit. That is when we were characterized as a third world country in terms of our financial health. If we did not get our fiscal house in order, the situation that the Conservatives created would have continued to spiral down.

How could we get our fiscal house in order? It took some tough decision making and it took some cuts. In fact, the Government of Canada itself took a greater level of cuts, but I know Canadians absorbed a lot of the burden. There were a lot of cuts to important programs, but we have to look at how our economy looks today.

Today we have the best financial situation in the G-7. Our growth rate continues to lead the G-7. Our financial health is very good. Every dollar cut in those programs during the years when we had to clean up the mess left by the Conservatives was reinvested. We had $130 billion of income tax cuts and we invested hundreds of millions of dollars back into the health care system, even $42 billion to establish benchmark wait times.

We could do that because there was fiscal prudence and fiscal responsibility. When we have a problem, we deal with it. We have to take the pain: short term pain; long term gain.

[Laurie Hawn, Conservative, Edmonton Centre, AB]

Mr. Speaker, I always listen with interest to the hon. member. He is an experienced member, he is passionate and he is a good debater.

However, members opposite like to bring up revisionist history. I remind him that in 1993, yes, the Liberals inherited some things from the former Progressive Conservative government. However, he forgets to talk about 1984 when the Mulroney government inherited a literal socialist sack of hammers from Pierre Trudeau. It took nine years of Progressive Conservative government to bring in some measures, which were brought in against vigorous opposition by members across the way.

Starting in 1993, the former Liberal government used, to great effect, the GST and NAFTA to earn the balanced budgets for which they now take great credit.

I suggest that those measures and those surpluses that run to date really started in 1984 when the Progressive Conservatives, under Brian Mulroney, started fixing the sack of hammers left by Pierre Trudeau.

[Paul Szabo, Liberal, Mississauga South, ON]

Mr. Speaker, the nine years of Mulroney government ran a deficit each and every year, which left a $43 billion deficit in 1993 when the Liberals took over. I am sorry, but the hon. member cannot say that they did all those beautiful things, but drove our economy into the ground. That is what happened.

If the member wants to come up with examples, he should look at Brian Mulroney's $100,000 capital gains lifetime exemption. That was supposed to be an exemption to allow people to invest in small business in the Canadian economy so we could stimulate the economy. What did they do? They made it available to all kinds of investments, including offshore properties, art work and all types of things that had nothing to do with economic growth.

What is worse is that they made it retroactive. Anybody who had $100,000 capital gain on a piece of art work and who was a good Tory supporter instantaneously got $100,000 lifetime exemption against it. It was just a gift.

If the member wants to argue about the good the Mulroney government did, I will not criticize him at all. Yes, it did some good things, but in that regard, it was a giveaway to friends.

[The Deputy Speaker, NDP, Bill Blaikie]

Is the House ready for the question?

[Some hon. members]

Question.

[The Deputy Speaker, NDP, Bill Blaikie]

The question is on the motion. Is it the pleasure of the House to adopt the motion?

[Some hon. members]

Agreed.

[An hon. members]

On division.

[The Deputy Speaker, NDP, Bill Blaikie]

I declare the motion carried. Accordingly, the bill stands referred to the Standing Committee on Finance.

(Motion agreed to, bill read the second time and referred to a committee)

Criminal Code

[Vic Toews, Conservative, Minister of Justice and Attorney General of Canada]

moved that Bill C-22, An Act to amend the Criminal Code (age of protection) and to make consequential amendments to the Criminal Records Act, be read the second time and referred to a committee.

Mr. Speaker, I am very pleased to rise today to commence second reading debate on Bill C-22, An Act to amend the Criminal Code (age of protection) and to make consequential amendments to the Criminal Records Act.

Bill C-22 would fulfill one of the government's commitment to tackle crime. With the bill, we are proposing to raise the age of consent to sexual activity from 14 to 16 years to better protect youth against sexual exploitation by adult predators. Our focus is on the protection of youth. That is why we are renaming the “age of consent” as “the age of protection”.

There are many issues on which hon. members do not always see eye to eye, but the protection of children and youth against sexual exploitation should not be one of them. This is an issue on which I belive we should be able to speak with one voice, one that unanimously and clearly condemns those adults who prey on and sexually exploit our youth.

In 2002 POLLARA polled Canadians on whether they thought the age of consent should be raised from 14 to 16 years. Seventy-two per cent of those polled said, yes, it should be raised.

The Ontario College of Teachers, the licensing and regulatory body for the 200,000 teachers in that province, reported in August of this year that 84% of teachers polled supported the government's proposal to raise the age of consent from 14 to 16 years.

As college chair Marilyn Laframboise said:

Clearly, teachers who spend a good part of their daily working lives interacting with teens care about students' safety, protection and emotional development. Safeguarding young people against sexual predators makes sense.

Canadians have been asking for this for years and the government has heard and answered their call with Bill C-22.

Regrettably the sexual exploitation of children is not a new problem. How it is being committed is something that is changing due, in large part, to the rapid development and ever-growing use of the Internet and other new technologies.

There can be no doubt that the Internet has been a phenomenal innovation from which each of us has been able to benefit through instantaneous and worldwide communications and access to information and resources. As an educational tool for youth, the Internet has become invaluable, but it has also provided a new means through which pedophiles and others can sexually exploit children and youth.

Law enforcement agencies, including the Canadian Association of the Chiefs of Police, have long called for increasing the age of protection to help them combat online child sexual exploitation. Like them, the government believes that Bill C-22 would help us prevent the exploitation of youth by adults, including where it is facilitated through the use of the Internet.

Nowhere is this problem more dramatically illustrated than by the case of Michael Simonson in April 2005. Simonson was turned back by Canadian border agents after he told them he was coming to meet a 15 year old girl in Canada who he had met on the Internet for sex. He was arrested by U.S. authorities as he was returning and was charged under their laws that made attempted enticement of a minor an offence. A search of Simonson's computer showed extensive research into Canada's laws of consent and Internet luring laws. Of course there is no law against it in Canada.

After a guilty plea, Simonson was sentenced to 10 years in an American prison, followed by 10 years of probation. In Canada, he would have been scot free. The American courts are protecting Canadian children. That is a disgrace.

This is but one example of adult predators acting to take advantage of Canada's laws with respect to consent for sexual activity. Sex tourism of this sort should not, and cannot, be permitted in Canada. What a farce that Canada puts forward sex tourism laws and yet people from all over the world know it to be soft on the abuse of children in this fashion. Internet chat rooms indicate on a daily basis they know the laws. They come here because the government, until now, has refused to act on this matter.

To understand the scope of reform proposed by Bill C-22 one has to understand the current law on the age of consent.

First, what do we mean by the age of consent, or the age of protection, as we now refer to it? This is the age at which the criminal law recognizes the legal capacity of a young person to consent to engage in sexual activity. Below this age, a young person cannot validly consent to engage in any form of sexual activity. Where the activity involves exploitative sexual activity, that is prostitution, child pornography or where there is a relationship of trust, authority, dependency, or is one that is otherwise exploitative of a young person, the Criminal Code currently provides that the age of protection is 18 years. Bill C-22 would maintain this age of protection.

However, the trust provisions in the Criminal Code are very rarely, if ever, used because of the difficulty of having to rely on a child to demonstrate there was no trust exploitation. For all other types of sexual activity, the current age of consent is 14 years. In my experience people are often surprised to learn just how low this age of consent is and, indeed, to learn just how vulnerable 14 and 15 year old youth are to being sexually exploited by adult predators, including over the Internet.

Police point out that this low age is often known by sexual predators and encourages them to target Canada in search of younger victims who would not be able to consent in countries with a higher age of consent. I pointed out the prior case where that was exactly one such instance, where the American courts protect Canadian children because Canadian authorities cannot protect them under the existing laws.

The current Criminal Code provides an exception to the 14 year age of consent. Specifically a 12 or 13 year old can consent to engage in sexual activity with another person provided that the other person is less than two years older, is under 16 years of age and is not a relationship of authority, trust, dependency or one that is otherwise exploitative of the 12 or 13 year old.

Members will recall the case of the young native girl who was exploited in Saskatchewan not that long ago. The judge said that the accused thought the person was 14. After they fed that young girl liquor, they sexually abused her. The judge said, because the individual thought she was 14, that there was no offence. This is the reality of the law in Canada today.

While we do have this close in age exemption with the 12 and 13 year old, its objective is to prevent the criminalization of sexual activity between two young consenting persons. Bill C-22 would maintain this two year close in age exemption for 12 and 13 year olds. The proposed reforms in Bill C-22 build upon the existing current laws by extending the current protection for those under the age of 14 years to better protect 14 and 15 year olds against sexual abuse.

I appreciate that there may be different views on when young persons should engage in sexual activity, but the reality is many 14 and 15 year olds are sexually active, mostly with peers or cohorts. Bill C-22 recognizes this reality because our objective is clear. It is to protect youth against adult sexual predators and not to criminalize consensual teenage sexual activity.

Accordingly Bill C-22 proposes to create an additional close in age exception for 14 and 15 year olds. Under this new exception, a 14 and 15 year old could consent to engage in sexual activity with a peer so long as the other person was less than five years older and provided, as always, that the relationship was not one of trust, authority, dependency and was not otherwise exploitative of the young person.

Some may question the five year close in age exemption and may instead prefer it to be a two year or three year close in age exemption, such as we have for the 12 and 13 year olds. Again, we have to be mindful of our objective with Bill C-22. It is to prevent adult predators from sexually exploiting 14 and 15 years olds, not to criminalize consensual sexual activity between teenagers.

In my view the proposed five year close in age exemption reflects a reasonable cohort for 14 and 15 year olds and one that we would find in many Canadian high schools. I note the position of Beyond Borders, for example, which has championed this issue for so many years. It, in fact, indicated that a five year close in age exemption was the appropriate exemption. There were problems with the two year and the three year, but Beyond Borders, in its very eloquent discussion of this issue, indicated that this would get the bulk of those who want to exploit our children.

Similarly, Bill C-22 acknowledges the possibility that when the new age of protection comes into force, there could be an exceptional few number of individuals 14 and 15 years old who are already in an established or pre-existing relationship with a partner who is five years or more older and who will therefore not benefit from the proposed five year close in age exemption.

Accordingly, Bill C-22 proposes to provide a transitional or time limited exception for two types of relationships, specifically for individuals 14 or 15 years old who are already in a relationship with a partner who is five years or more older than when the new age of protection comes into force. Bill C-22 proposes a time limited exception where they are already married or they are living in a common law relationship as defined by the Criminal Code or, as proposed by Bill C-22, provided always that the relationship is not one of authority, trust, dependency or is otherwise not exploitative of the young person.

Section 2 of the Criminal Code defines a common law partner as a person with whom an individual is living in a conjugal relationship for a period of at least one year. Bill C-22 would also provide an exception for a common law relationship that has not endured the requisite minimum period of time but has produced a child or one is expected.

Some may be surprised that we need these transitional exceptions. Let me explain why. The provinces and territories, as part of their responsibility over the solemnization of marriage, have enacted a minimum age to marry with parental consent. This age is 16 years except in the Northwest Territories and Nunavut where it is 15 years. All jurisdictions except Quebec, Yukon and Newfoundland and Labrador provide exceptions to this rule by allowing persons under 16 or 15 years of age to marry with judicial order, or in the case of Ontario, Northwest Territories and Nunavut, with the written permission of a responsible minister. In these cases approval is generally based upon a consideration of whether the marriage is in the interest of the person or it is expedient to allow the marriage or because the female is pregnant.

Bill C-22 would therefore provide a time limited exception where an individual 14 or 15 years old is already married to a partner who is five years or more older, as at the time of the coming into force of the new age of protection. Thereafter, an individual 14 or 15 years old could still marry another person who is less than five years than that individual provided that it is not an exploitive relationship and subject of course to the provincial and territorial legislative requirements.

As to the proposed transitional exception for existing common law relationships involving an individual 14 or 15 years old and a partner who is five years or more older, it is important to appreciate that this exception will only be available if the relationship meets the prescribed definition of common law and it is not illegal or exploitive of the younger partner.

Bill C-22 proposes this requirement for the common law relationship exception but not for the marriage exception. This is because in contrast to marriage, there is not judicial or ministerial approval of the common law relationship involving youth to ensure that such a relationship is in the best interest or in the interest of the young individual who is 14 or 15 years old.

In other words, there is no prior assessment of whether the relationship is illegal or exploitative of the young person. As a result, Bill C-22 would only provide an exception for a common law relationship involving an individual 14 or 15 years old with a partner who is older by five years or more, if it meets the prescribed common law definition, and again the relationship is not exploitative or illegal.

What is the effect of Bill C-22's higher age of protection? It says to adults without equivocation, if they are five years or more older than an individual 14 or 15 years old, they would be committing a sexual offence if they engage in any sexual activity with that young person. It says to foreign adult predators that we will not allow them to come here to sexually exploit our youth. It says to individuals 14 and 15 years old that they deserve the same protection against adult predators as do individuals 12 and 13 years old.

It says to the international community that we take very seriously our international obligation and commitments to protect children and youth against sexual exploitation. By raising Canada's age of protection from 14 to 16 years, we will join other countries that already have a higher age of protection of 16 years or more, and we will more effectively meet our international commitments to protect youth against sexual exploitation.

It says to the police that we have heard them and we agree that we can do more to support them in their efforts to protect Canadian youth against sexual exploitation. I specifically want to commend individuals like Paul Gillespie, formerly of the Toronto city police, for his work and the work of his police officers in tackling that very difficult problem. I also want to specifically thank Chief Bevan of Ottawa who was there with us at the launching of this particular bill.

Bill C-22 proposes a higher age of consent which will give a much needed new tool to police. Police have told me that a higher age of protection of 16 years will help them to better protect those teens who are at risk of being targeted by on-line adult sexual predators.

Earlier this year, the United States national center for missing and exploited children released a report on the 2005 youth Internet safety survey, a survey of 1,500 representative national samples of youth Internet users aged 10 to 17 years. It found that of the youth who were targeted for sexual solicitations and approaches on the Internet, 81% were 14 years of age or older, 70% were girls and 30% were boys.

Similar findings have been made here in Canada. Cybertip.ca, Canada's national tip line for on-line sexual exploitation of children, and which I am pleased to note is being supported by the federal government under our national strategy to protect children from sexual exploitation on the Internet, reported in March of 2005 that luring reports represented 10% of all reports received during its two year pilot phase. Of these reports, 93% of the victims were female and the majority, or 73%, were between the ages of 12 and 15 years. These reports indicate that individuals 14 and 15 years old are at greater risk of being sexually exploited through Internet luring, and so we believe that Bill C-22 will enable police to more effectively protect youth aged 14 and 15 years from on-line predatory behaviour.

At the beginning of my remarks, I quoted the chair of the Ontario College of Teachers, and I do so again because her words describe so well what the government and indeed all Canadians believe: “Safeguarding young people against sexual predators makes sense”.

Bill C-22 will safeguard individuals 14 and 15 years old against adult sexual predators. Bill C-22 makes sense. It proposes a new and very clear line. All sexual activity with individuals 14 and 15 years old is strictly forbidden where the adult is five years or more older. This will in turn better protect individuals 14 and 15 years old against adult sexual predators because it will no longer be a question of whether they consented to such exploitive activity.

I would say that as a former prosecutor, knowing the difficulty that a young child has on the stand, trying to justify the conduct or to say that there was no consent, is a very difficult burden. We want to take that burden off the shoulders of the children and put it right onto the pedophiles where that burden properly belongs.

As I have said, Bill C-22 will give police a welcome new tool to help them in their tireless efforts to combat child sexual exploitation. Now is the time for Parliamentarians to join together in support of an objective that I think we all agree is a priority, namely the protection of children against sexual exploitation.

I call upon all hon. members to support Bill C-22, so that our actions reflect our words and our commitments. Let us say with one voice to individuals 14 and 15 years old that they deserve the same protection against adult predators as individuals 12 and 13 years old currently have, and let us unanimously condemn adult sexual predators. Let us do this now by supporting Bill C-22.