Mr. Speaker, it is a real honour to stand and introduce Bill C-13, the budget implementation act. The purpose of Bill C-13, of course, is to implement the measures announced in budget 2006.
The measures contained in this bill were outlined by the finance minister in his speech in this House on May 2. These measures will make a real difference to Canadians, because in implementing this year's budget, Bill C-13 focuses on our new government's promises and priorities, delivers real results to people and lays a solid foundation for Canada's future.
Before I talk more about how budget 2006 and the measures in this bill fulfill our promises to Canadians, it is important to note first that this government is aware of the variables involved in budget planning. I am talking about variables such as changes in commodity prices, especially in the energy sector, or the variable of an appreciating dollar under pressure from global current account imbalances, reflecting, for example, developments in the U.S.
That is why our new government's budget plan is based on and delivers fiscal discipline. It does this by providing a clear, responsible agenda to build a better Canada, starting by addressing the five priorities set out in the Speech from the Throne. These priorities are: cleaning up government by improving accountability; lowering taxes for working Canadians; protecting Canadian families and communities; supporting parents' choice in child care; and delivering the health care Canadians need by developing a patient wait times guarantee with the provinces.
I would now like to illustrate just how budget 2006 has supported each of these priorities and the promises we made to Canadians with respect to the priorities. At the same time, I will also show how the proposals contained in this bill fit into the big picture of helping to build a solid foundation for Canada's future.
First, budget 2006 responds to this government's priority of improving accountability. This budget builds on the reforms of the federal accountability action plan, the very first piece of legislation introduced by our new government.
Improving accountability means, for example, that our budget decisions will be implemented over the next two years. In contrast, Liberal plans were spread out over five years and most of the measures barely took effect until the back end of those five years. Of course, anything or nothing might happen if promises are made that will not be kept for five long years. By contrast, measures in the bill before the House today have been introduced by our government because they are affordable now, ready to be implemented now and will take effect by next year, not half a decade from now.
Also, budget 2006 proposes to restrain the growth of spending, which exploded upward to increase nearly 15% a year under the Liberals. It commits to a new approach to overall expenditure management. We are determined to ensure that programs are not just feel-good programs thrown out there for show in some kind of smoke and mirrors exercise, but that they really focus on results and deliver value for Canadians' hard-earned money.
To achieve better expenditure management, the President of the Treasury Board will identify $1 billion of savings in 2006-07 and in the next year, 2007-08. That is only one-half of 1% of total government spending in savings per year, but we think it is important that we continue to look for ways to save Canadians money. In the fall, in just a few weeks' time, the President of the Treasury Board will report his findings of where these savings can be achieved.
Also, our budget plans to reduce the public debt by $3 billion each year. As a result of this plan, the goal of lowering the debt to GDP ratio to 25% will be achieved one year earlier.
Budget 2006 also announces that the government will consider allocating a portion of any year-end surplus over $3 billion to the Canada pension plan and the Quebec pension plan. Of course, one of the main benefits of this action would be to improve fairness for younger Canadians by lowering contributions in the future for future generations of workers, and it would also help to fund the huge unfunded liability in those plans.
Financial reporting will be improved, with one example being federally funded foundations, which are now hidden from the taxpayers who fund them. This will be consistent with recommendations from the Auditor General.
This government recognizes that Canadians pay too much tax. According to the Fraser Institute, while the average family's income has gone up 1,100% since 1961, its taxes have shot up a whopping 1,600%, outstripping the growth in income. Budget 2006 delivers more tax relief for people than the last four federal budgets combined. It puts twice as much resources into tax relief as it does into new spending.
We feel this is only fair to Canadians who work hard to fund the programs of governments. In fact, 90% of the tax savings that we offer in this budget will go to individual Canadians and their families.
We just have to look at the budget measures proposed in Bill C-13 that will put more money in the pockets of Canadians. To begin with, this bill delivers on the government's commitment to cut the GST by one percentage point, down to 6%, effective this July 1. This GST cut will benefit all Canadians by close to $9 billion over two years from that one reduction, even those who do not earn enough money to pay personal income tax. Very importantly, to provide relief to low and modest income Canadians, the budget keeps the GST credit at current levels even though the GST is being cut.
That is not all. Bill C-13 also proposes a comprehensive plan to reduce personal income taxes for all taxpayers, starting with an increase in the basic personal amount. That is the amount that an individual can earn without paying any tax. We want to make sure that this amount grows each year and remains above the currently legislated levels into 2006, 2007 and beyond.
In concert with this plan, Bill C-13 also proposes to permanently reduce the lowest personal income tax rate from 16% to 15.5% effective January 1, 2006. It also confirms that the rate will be 15% from January 1, 2005 to June 30, 2006. Together, these measures will provide personal income tax relief of almost $2.8 billion in this coming fiscal year, 2006-07, and a further $1.9 billion in 2007-08.
We need to affirm and remind ourselves that working Canadians are the foundation of Canada's economic growth. However, choosing to work also means additional costs, costs for everything from uniforms to safety gear to home computers and various supplies. In recognition of these costs, budget 2006 will introduce the Canada employment credit. This is a new employment expense tax credit for employees' work expenses. The credit will significantly increase the amount of income that working Canadians can earn without paying federal income tax, to almost $10,000 by 2007.
Taken together, these measures will deliver almost $20 billion in tax relief for people over the next two years. As a result, about 655,000 low income Canadians, or two-thirds of a million Canadians, will be removed from the tax rolls.
Budget 2006 also recognizes that creating an environment for more and better jobs and for strong economic growth depends on having a competitive tax system. The engines of our economy, our wealth creators, both large and small, should not have to go into the market square with the ball and chain of heavy taxes tied around their ankles.
Budget 2006 proposes the tax relief that we promised to Canadians. In fact, the same promises were made by the former government, but they were never delivered. We will deliver tax relief that will enable Canada's businesses to go into a fair fight with their competitors. Bill C-13 proposes a significant business tax relief plan that will reduce the general corporate income tax rate from 21% down to 19% by January 1, 2010. The bill also proposes to eliminate the corporate surtax for all corporations in 2008 and eliminate the federal capital tax as of January 1, 2006. That is two years ahead of schedule.
These proposed cuts will allow Canada to regain the solid statutory tax advantage that we had prior to the 2004 tax changes with our biggest competitor, the United States. We are lowering taxes for working Canadians and also for Canadian job creators.
Another of our government's five priorities is to protect Canadian families and communities. Canadians are proud of our country and our country's tradition of safe and security communities. We will take vigorous measures to keep our streets safe and our borders secure. To ensure that Canada remains safe and secure, budget 2006 allocates funding to hire 1,000 more RCMP officers and additional federal prosecutors to more effectively deal with drugs and gun smuggling. The budget also proposes to arm border officers and eliminate work alone posts. We want to stop the bad guys, not provide them free passage into our good country.
The budget provides needed funds to further improve Canada's pandemic preparedness. On top of that, budget 2006 commits to a total investment of over $5 billion to strengthen Canada's security forces, starting with more than $1 billion coming over the next two years.
Perhaps the priority that is most widely talked about in the 2006 budget is the universal child care plan. Hon. members will no doubt all agree that one of the most important investments government can make is to support families as they raise their children. That is why budget 2006 announced the kind of investments that will make a real difference to parents by providing more choice in child care for families with young children.
As a result of these budget measures, total direct federal support to families will be approximately $11.7 billion for this fiscal year, with the vast majority of benefits directed to low and middle income families. An integral part of that support for families is contained in Bill C-13. Specifically, it proposes $3.7 billion in funding over two years for the universal child care benefit, which will give all families $100 per month for each child under six. This benefit will help some 1.5 million families with over two million children. As well, budget 2006 proposes to invest $250 million each year, starting in 2007, in a new planned and practical initiative to actually increase the number of child care spaces for those who need them, by 25,000 each year.
The fifth priority of the new government is to ensure that all Canadians receive necessary medical treatment within medically acceptable waiting times. Budget 2006 includes a commitment to work with the provinces and territories to develop a wait times guarantee for medically necessary services.
Budget 2006 also announces new allocations of the $11.3 billion in equalization and $2.1 billion territorial formula financing for this year. These new allocations are based on the latest available fiscal and economic data. They give certainty to the provinces and territories and ensures that they will all benefit.
Six provinces and one territory will benefit directly from this decision compared to what they were advised, back in November 2005, they would receive. The government is also providing one time adjustments to fully offset the equalization and territorial formula financing declines that would have been experienced by two provinces and two territories under this decision. Bill C-13 sets out payment levels based on this new data and provides the funding for these one time adjustments.
Budget 2006 goes above and beyond our five priorities. For example, the government recognizes the difficulty some Canadians face when they must deal with a disability. In 2003 the technical advisory committee on tax measures for persons with disabilities was established to provide tax advice for persons with disabilities. The committee released its final report entitled “Disability Tax Fairness” in December 2004. It made 25 policy and administrative recommendations.
The government endorses the work of the committee. Budget 2006 proposes to fully implement these policy recommendations. Indeed, the bill goes beyond the committee's recommendations. Here are the measures proposed in Budget 2006 to assist Canadians with disabilities.
Bill C-13 proposes to increase the maximum annual child disability benefit, effective January 2006. This benefit is a supplement to the Canada child tax benefit for children in low and modest income families who meet the eligibility criteria for the disability tax credit.
Effective July 2006, the bill also proposes to extend eligibility for the child disability benefit to middle and higher income families caring for a child who is eligible for the disability tax credit, including now all families that are currently eligible for the Canada child tax benefit base benefit.
We will also increase the maximum amount of the refundable medical expense supplement for the 2006 taxation year. The supplement improves work incentives for Canadians with disabilities by helping to offset the loss of coverage for medical and disability related expenses under social assistance when recipients move into the labour force.
The government understands the challenges that families can face when dealing with a disability. The Minister of Finance will appoint a small group of experts to examine additional ways to help parents save for the long term financial security of a child with severe disabilities. We have asked these experts to provide their recommendations very quickly, within six months, because we intend to move ahead to support Canadians with disabilities.
On still another front, this year's budget works to improve the environment in which we live. This includes funding to assist and build support systems. For example, Bill C-13 encourages charitable donations by eliminating the capital gains tax on donations of listed securities to public charities.
Unlike the previous Liberal government, which talked a lot about the environment while greenhouse gas emissions rose under its watch to 30% above the target, our government is committed to concrete actions that will deliver real results in Canada. We do not believe in spending billions of dollars offshore to keep on polluting here at home.
We will preserve natural areas by proposing to exempt donations of ecologically sensitive land from the capital gains tax.
These are only a few examples of the ways in which this new Conservative government is keeping its promises to stand up for Canada and for working class Canadians.
As members can see, the government's first budget takes real action to keep promises and address core priorities. The measures contained in the bill would make a real difference to Canadians.
In summary, budget 2006 focuses on the priorities of Canadians, the measures they elected this government to deliver. The budget does deliver real results for Canadians and does so in a financially and fiscally responsible way. I therefore encourage all hon. members to accord the bill swift passage in the House of Commons.