Mr. Speaker, as I said before question period, I had three themes concerning the government's fiscal and economic policy and the first one, which I have already completed, concerned its meanspirited nature.
The second theme, which I will mention now, concerns what could be characterized as a deceptive, gimmicky or perhaps sometimes bordering on dishonest approach to economic and fiscal matters.
We all know in this House, for example, that the government raised the income tax at the lowest rate for Canadians, even though for some reason it persists in characterizing that as an income tax cut. We all know that it blatantly broke its promise not to tax income trusts, resulting in a $30 billion meltdown of the hard-earned savings of Canadians.
Let me turn now to the fiscal update. My text for the more recent cases of gimmicky behaviour comes from an article that appeared in the press only today by one John Williamson, president of the Canadian Taxpayers Federation. Mr. Williamson, generally speaking, is no great friend of Liberals, at least when we were in government. He tends to be on the small “c” conservative side. His article characterizes the gimmicky approach by the government quite well. The article is entitled “Canada's Minister of Gimmick”. If anyone has a doubt, the minister of gimmicks is the Minister of Finance.
Mr. Williamson gives three examples of why the Minister of Finance is the minister of gimmicks: first, gimmicky behaviour on net debt; second, gimmicky behaviour on the so-called automatic income tax reductions; and third, deceptive behaviour on control over government spending.
On the net debt issue, as I said to the finance minister in committee, if we have a debt of $480 billion and we pay down $3 billion a year, one does not have to be Sir Isaac Newton to figure out that it will take 160 years to pay down that debt. By throwing out some arcane statistic, the minister seeks to deceive the Canadian public into thinking that he is doing more than he really is. John Williamson refers to this as “phantom debt relief” and “a political gimmick”.
In the second case mentioned by Mr. Williamson:
The proposal to pay off $3-billion in debt each year will save taxpayers approximately 10 bucks annually -- a trivial amount.
Again we have a gimmick. Much is made of this automatic reduction in income tax as the debt is paid down. I am not saying that is a bad thing but, as John Williamson, president of the Canadian Taxpayers Federation, points out, it amounts to 10 bucks a year, a trivial amount and not all that the finance minister would trumpet it to be.
The third and final point mentioned in this article, and I quote Mr. Williamson here again, is that the policy “to keep spending under control” is “a policy already in tatters”. He goes on to say:
But the ink on the update wasn't even dry and the Conservatives already betrayed the commitment to keep spending "below the growth of nominal GDP”.
This is supposed to be the low spending, frugal government but what did it say in its first fiscal update? it projected an expenditure increase of 7.1% in 2006-07. That is a rate significantly and substantially in excess of the growth rate of nominal GDP, thereby breaking this other promise about keeping government spending growing at a slower rate than the economy.
In addition to the meanspiritedness, I would emphasize the gimmicks or the lack of honesty, whether we are talking about an income tax rate that is in fact going up and the government says that it is going down, the huge broken promise on income trusts, or this gimmicky behaviour that tries to deceive Canadians on the subject of net debt income tax and the control of government debt.
Having dealt with meanspiritedness and deceptiveness, my third theme would be the lack of productivity. On this point I would suggest that the government talks a good game on productivity, prosperity and competitiveness, all those good words, but its actions do not correspond with its words. I will give two primary examples of that point.
First, if a government really cared about Canada's productivity and competitiveness, the last thing in the world it would ever do is cut the GST. Yes, put money in the pockets of Canadians, but do it in a way that enhances productivity, prosperity, investment and savings, not through reducing consumption taxes. I do not think there is an economist on the planet, with the exception of the Prime Minister, who would disagree with this statement.
It is not a trivial sum of money. It would cost $12 billion a year if the government were to cut two points off the GST and $60 billion over five years. That is a huge chunk of the government's margin for manoeuvre over the last five years. All of that $60 billion over five years would be committed to something that does absolutely nothing for Canada's productivity and competitiveness. The money could still have been put into people's pockets through income tax or other measures that would have increased people's spending power and, at the same time, enhance the productivity and prosperity of the nation.
The second reason why the government's words ring hollow is that not only has it given the worst possible tax cut from the standpoint of productivity, but it has cut all the previous government's investments in those things that really matter for productivity and competitiveness, things like innovation, research and education. The $7.4 billion in cuts, which the government chose not to identify, were mentioned in question period today. The government clearly has cut in areas of maximum impact for the productivity, prosperity and competitiveness of the nation, things such as access to post-secondary education, research and innovation, all of which are keys to Canada's future prosperity.
The Conservatives are totally out to lunch on the productivity and longer term prosperity of our country, both on the tax side where they chose to make the consumption tax cut the least conducive to productivity of any possible tax cut, and on the investment side where they slashed critical investments in post-secondary education and innovation.
All in all, I am sad to say that the government receives a high grade on meanspiritedness, deceptive behaviour and on the lack of clear focus on the productivity and growth of our country. I am pleased that these points were made very well by the hundreds of Canadians we heard from across the country in the business of the finance committee. Once again, I thank all of those Canadians for taking the time to visit us.
I am also pleased that we on the opposition side of the House were able to work together to overcome, at least in part, the meanspiritedness, the deception and the lack of productivity of the government. We, as the majority in the House of Commons, were able to come together on many motions involving the GST, investments in post-secondary education and innovation, as well as reinstating the meanspirited cuts that the government has imposed on Canadians.