Debates of May 15th, 2006

The House resumed from May 12 consideration of the motion that Bill C-13, An Act to implement certain provisions of the budget tabled in Parliament on May 2, 2006, be read the second time and referred to a committee, and of the motion that this question be now put.

Budget Implementation Act, 2006

[The Speaker, Liberal, Peter Milliken]

When the bill was last before the House the hon. member for Edmonton--Sherwood Park had the floor and he had three minutes remaining in the time allotted for his remarks. I therefore call on the hon. member for Edmonton--Sherwood Park.

[Ken Epp, Conservative, Edmonton—Sherwood Park, AB]

Mr. Speaker, it is a privilege to begin the debate this week in this exciting new Parliament with a new government that has a forward looking vision for the country and not a backward looking one like the Liberals of the past.

I might also mention in passing that I may hold the record for the longest interrupted speech. I do not remember which Parliament it was or the exact dates but I recall being in the middle of a speech when the end of the day came and my speech was resumed just a few days less than a year later. I began that speech by saying, “When I was interrupted, this is what I was saying”.

I do not think I will have time to review everything I was saying last Friday but I was talking about families and the fact that the government has a vision and recognition that parents make the best choices for their children. I put forward the proposition that the best caregivers in the world are the mothers and fathers of children, which is what we are promoting with our budget and policies.

I had the privilege this past weekend of attending several functions but the one that touched my heart the most was a bicycle and run fundraiser for people with cerebral palsy. This touched my heart because it reminded me so much of my sister who had cerebral palsy and spent her whole life without ever being able to speak. She was totally dependent and lived for 55 years. She passed away six year ago. It was a wonderful privilege to be with these people who are raising money to look after family needs.

This budget has exactly the same vision. We need to do a better job than the Liberals have ever done in providing for families who have these special needs. I do not think people who have not experienced it have any idea of either the mental or emotional pressures or the financial pressures on families that have members with disabilities and need total care.

In this budget I am very pleased that the Minister of Finance and the Prime Minister had the foresight and wisdom to increase the maximum annual child disability benefit from $2,044 to $2,300 effective July 1. That is one of many good things in this bill. I urge all members in the House, whether they are for the government or against it is irrelevant as long as they want good things, to support the budget implementation bill.

[Paul Szabo, Liberal, Mississauga South, ON]

Mr. Speaker, I share the member's enthusiasm for family but why is it the government decided to eliminate the young child supplement under the Canada child tax benefit program of $249 right out of their pockets? Why is it the childhood allowance that is being provided is a taxable benefit that will not translate into dollars in the pockets of low income Canadians relative to high income Canadians according to the Caledon Institute? In terms of families generally, why is it the government increased the income tax from 15% to 15.5% on the first tax bracket, which will impact low income Canadians?

Those are three examples in the budget of how low income and modest income Canadian families will be worse off. Why is it the government does not have any compassion for low and modest income Canadian families?

[Ken Epp, Conservative, Edmonton—Sherwood Park, AB]

Mr. Speaker, it is just the opposite. It is finally a compassionate Conservative government that is addressing the issues facing families.

The member said that these benefits are taxable and that there will be less in it. Many families do not pay income tax because they are living in poverty. The GST reduction benefits them because with what little money they have they will have less GST to pay.

The benefit of the new $100 child allowance is taxable but that is reasonable. If people are making enough money that they are in a high tax bracket, then that should be taxable income. Why should certain people not have to pay taxes on it? We have increased the threshold so the total tax bill will be less, notwithstanding what the member said.

The benefits and the tax rates that we get in this package actually result in less taxes being paid by every individual and every Canadian family in the country. The member across the way has his numbers wrong. The fact is that most people who will benefit from this will pay less taxes in total than they would have under the Liberal plan.

[Larry Bagnell, Liberal, Yukon, YT]

Mr. Speaker, that was a nice try at a defence but it is just not true.

Wealthy people who have a spouse making no income can have that money and it will not be deducted. Therefore it inordinately affects poor people. Poor people who do not have income are getting other benefits that are then clawed back. As the member remembers, the Caledon Institute cited that a poor person could get as little as $200 of the $1,200, which is 55¢ a day and covers day care for 14 minutes.

The Liberals provided so much out of the national child benefit to support parents staying at home. The Conservatives are saying to Canadians that for 14 minutes a day, 55¢, they can quit their job and stay at home.

Perhaps poorer people will get a little more money in total but the fact that the government would increase the income tax level for poor people and not do that for others, the fact that it would remove the child tested income supplement as part of the national child benefit that affects poor people and the fact that this is discriminatory, that corporations and people who do not need the break get much more of a break than other people, is really unconscionable.

[Ken Epp, Conservative, Edmonton—Sherwood Park, AB]

Mr. Speaker, the fact is that by increasing the thresholds all Canadian families will be paying less income tax.

Under our plan there will be some 600,000 Canadians families off the tax rolls entirely, while the Liberals kept ripping them off. Even though they lived in poverty by the government's own definition, the Liberal government was still taxing them and charging them income tax. Under our plan, over 600,000 Canadian families will be off the tax rolls and that is a real benefit.

[Yvan Loubier, Bloc, Saint-Hyacinthe—Bagot, QC]

Mr. Speaker, this morning I am pleased to speak on the subject of Bill C-13, the bill to implement certain provisions—those concerning taxes—in the budget tabled by the Minister of Finance nearly two weeks ago.

In light of this bill, part of this budget is positive, but the Bloc Québécois considers part of it to be very negative. As we have said, eliminating the fiscal imbalance is, of course, not part of the bill to implement fiscal measures. Rather, it is a commitment on the part of the government—a commitment that seemed firm two weeks ago—to settle this issue by the next budget in spring 2007 at the latest.

When a friend or an acquaintance promises you something and puts it in writing, it is difficult for you to say you do not believe him. Spoken words may fade away, but written words remain. You have to give him the benefit of the doubt.

The fiscal imbalance is Quebec's top priority. Reaching comprehensive, definitive, short-term solutions to this issue was one of the things we demanded from the new government. That is why we supported the budget. Otherwise, we would have been inclined to vote against it because the other measures it puts forward do not coincide with Quebeckers' top priorities and issues.

As for the fiscal imbalance, the Prime Minister's disappointing statements this weekend cast some doubt. We hope that this is only temporary and that the Prime Minister and the Conservative Party will pull themselves together and speak more firmly about eliminating the fiscal imbalance.

On the weekend, the Prime Minister said that the provinces had not agreed among themselves, thus complicating the debate and making it harder to reach a solution. This is the first thing he said on the weekend. I remind him, simply, that there was no consensus because of one province, Ontario. That day, the representatives of Ontario left the meeting of the Council of the Federation whining that Ontario was not getting any benefit from its membership in the Canadian federation and that there had been a considerable shortfall every year. As Ontario does not receive equalization payments, it was shortchanged by the group statement, which concentrated on the reform of equalization payments.

I remind Premier McGuinty—I think everyone knows it—that, if there is one province that benefits from federal economics, it is Ontario. Year after year, it generates incredible trade surpluses, because Quebec, the Maritimes, the West and British Columbia buy goods and services from Ontario much more often than Ontario buys them elsewhere in Canada. Federal economics is very profitable for Ontario. It is not a poor province. It is rich thanks to its trade relations with Quebec and the provinces of Canada. So Mr. McGuinty can stop whining that Ontario is losing while the other provinces get special treatment. It is totally wrong. I hope the Prime Minister will put Ontario in its place when the day comes to propose a definitive solution to the fiscal imbalance.

In addition, the Ottawa area and the involvement of Ontarians in the public service and contracts awarded by Public Works and Government Services warrant an examination. There are more research centres on the Ontario side than on the Quebec side. Mr. McGuinty is bellyaching without cause. He has no reason to complain about Ontario being given poor treatment. Ontario wins on all counts through its membership in this system.

If Ontario continues to whine like this, the Prime Minister will have to be firm and come up with a solution that will be accepted by all Canadian provinces, including Quebec, to correct the fiscal imbalance.

The surprising thing about the Prime Minister's speech this weekend was that he was setting the scene by suggesting that the federal government has much less of a surplus than in previous years.

In that context, Quebec and the provinces would not want appear too greedy in their demands.

I would simply like to remind the Prime Minister that we are following him closely and we will stay hot on his heels until he finds a comprehensive solution to the fiscal imbalance. Such a solution will involve reform of federal transfer payments in the areas of post-secondary education, health, welfare and so on. They will be transformed into transfers of tax fields that are much more predictable and stable, and much more likely to deliver stable tax resources to Quebec and the provinces so that they may meet their core mandates.

Second, correcting the fiscal imbalance must be based on equalization reform. In calculating the per capita equalization payment for Quebec, the reform should ensure that the base is the average of the 10 provinces; that is, the tax capacity of the 10 provinces to collect income tax from their citizens and not the average of only 5 of the 10 provinces. If this is to be representative of our entire country's wealth, in order to determine whether equalization payments should go to any province, we need a true average, not an average that has been miscalculated for the past 25 years, based on only 5 provinces.

Parameters such as property tax must also be changed. Something is wrong here. For 15 years, Quebec has been fighting against Statistics Canada's calculation method, which makes for muddled, incredibly complicated assessments worthy of the cleverest economists I have ever known. Yet it is easy to determine the actual property value of a province or Quebec using the real figures. This approach shortchanges Quebec in particular and gives an unrealistic picture of each province's land wealth. Reform is needed.

We must be guided by these two parameters as we reform the tax system involving the federal government, Quebec and the provinces, in order to correct the fiscal imbalance.

Once again, if the Prime Minister tries to backtrack, he will hear from us. He has claimed since he was elected that he always honours his commitments, but this is the most important commitment of all.

I am also referring to a major disappointment directly connected to the budget: the payment of $1,200 for every child under six.

My colleague from Trois-Rivières worked very hard to try to persuade the government, and I did the same with the Minister of Finance. We would have liked the $1,200 to be converted into a refundable tax credit, simply because the government would not be interfering in the jurisdictions of the Government of Quebec and the provinces with a direct transfer that impinges on the prerogative of Quebec, in particular, with regard to family policy, and because families would not have to pay tax on the $1,200.

The government opted for the suggestion to pay $1,200 in cash, $100 a month, for every child under six. It exempted the national child benefit from the cuts in family benefits. But the national child care supplement, which helps the most disadvantaged families, will be abolished starting next year.

I was rather struck by the speeches of my Conservative colleagues, the Prime Minister, even the Minister of Human Resources and Social Development, who stated that their principal clientele consists of families with a stay at home parent. When we examine the specifics of the budget, it is precisely these families who will suffer because of the elimination of the national child care supplement. The family without day care expenses and by implication the one with a stay at home parent—the family focussed on by the Conservatives--will be losing out on $486 per year, plus income tax, because of the disappearance of this program next year.

With one hand they are giving and with the other they are taking away. They claim to be helping this type of family, but really it is the main victim of this budget. If this $1,200 transfer had been a tax credit, three things would have happened.

First, the $9.6 billion budget for this measure would have been respected, without going outside the fiscal framework. Second, low, middle, and moderately-high income families would have paid practically no tax on the $1,200 per child. Third, the families targeted by this measure would have benefited from it. Now we are in the situation where richer households are the main beneficiaries. This is not acceptable. They cannot say one thing and do another. This is a major disappointment.

The Bloc Québécois has a message for families with regard to the $1,200: put aside a few hundred dollars because, next spring, there will be a nasty surprise when they fill out their income tax forms. At that point, after having spent the $1,200 per child, they will realize that they have to pay tax on that amount.

With regard to social housing, the Bloc would have preferred the government to be more generous. Clearly, the $800 million taken from the 2005 and 2006 surplus is a good start. Not a penny had been invested in social housing by the government since 1993. So $800 million is better than nothing. However there are billions of dollars—nearly $4 billion, I believe—going to waste at the Canada Mortgage and Housing Corporation. That money could be used to develop social housing. In any case, the Bloc has not waited for the government. My colleague from Quebec City, who has to compensate for the inertia and incompetence of the new members for the Quebec City region—in particular, Conservative members—will be tabling a bill which would put the CMHC surplus to use to build social housing.

Let us now speak of employment insurance. We were expecting at least some awareness of this issue on the part of the Conservative government. We know that it is not part of its core philosophy, but it seems to me that we have been fighting for employment insurance reform for quite a long time. When the Conservatives were in opposition, we even fought certain battles together. Sixty percent of the clientele, a figure which is rising where women and young people are concerned, has been excluded from the EI program since the previous government decided in 1996 to put the axe to it, tighten the eligibility criteria and set up a totally brutal program which strips the dignity from people already suffering from the scourge of unemployment. There is nothing on employment insurance.

The Bloc and the government have been discussing the POWA for three weeks. I myself have been in conversation with the Minister of Finance in particular. The aim was to persuade this government to reintroduce the program for older worker adjustment as it existed in 1997. This is urgent. In his budget speech, the Minister of Finance made a commitment to consider this program. It must not just land on his plate and stay ignored for years. He made a commitment to doing a feasibility study. As we see it, the purpose of a feasibility study is to estimate the annual costs of this program, to ascertain whether those costs could explode in more and more spending, year after year. This cost study must be done quickly.

In 1997, when the POWA was abolished, it was costing Canada $17 million per year. That money was used to rescue households composed of persons aged 55 and over who were victims of mass layoffs. Had this program been in place this year, its projected costs have been estimated at around $100 million for Canada as a whole. That is a generous estimate. In fact, the amount could be some $75 million or $80 million more than $100 million. That is not expensive, and it could help to prevent tragedies, especially in single-industry regions or regions that rely on virtually one industry, where there is only one principal employer.

Because of emerging countries and globalization, there are massive layoffs. It is obvious that companies have to re-organize, become more competitive, and prepare to face these new emerging countries and international competition. The victims of this, though, are often older workers.

Last week, a citizen from Acton Vale wrote to me about this. An Airbus employee, she had worked for 28 years for the same company. However, because of the need to upgrade and become more competitive, the company had to reduce its workforce, quicken the pace, and ensure that employees produced more than before, one and a half times more.

These people have given 28, 35 or 40 years of their lives to a company where the work is tough, like companies that manufacture textiles, clothing and footwear—military footwear in particular. They have devoted all those years to a company. They are tired out and on the verge of retirement at 55 years of age or more. They cannot find another job very easily because they have always done the same work—and their spouses have always done the same for the same company. So they find themselves in difficult situations. These people, who worked all those years, exhaust their meagre employment insurance benefits and are then forced to liquidate all their assets to survive the period between 55 and 65 years of age, when they can retire.

As a result, they lose all their dignity. After having contributed to corporate profits and to the development and growth of their regions, they find themselves terribly squeezed at 55 years of age. They are told they are on their own and no one shows any appreciation for them.

In my view, we should show more gratitude and compassion for them than we do now. I cannot believe that there is no way to find $100 million in a budget of $198 billion to help these older workers victimized by mass layoffs.

In the manufacturing sector, we expected to see an assistance plan to improve competitiveness and help these companies along. The sectors that are considered weakened, like furniture, clothing, textiles and softwood lumber, need a little help in view of all that has happened over the last few years. But there is nothing for them in the budget. That is a big disappointment for us.

The same is true for the Kyoto protocol. Canada is currently losing all credibility when it comes to dealing with greenhouse gas emissions. In economic terms we have always referred to the Kyoto protocol as a minimum minimorum accord. Minimorum is the smallest minimum on a curve. The budget needed to go much further in order to ensure that future generations are not penalized for the way we have destroyed the environment in the past.

This is an urgent problem around the globe. Mr. Suzuki, among others, keeps saying so. We have to implement measures that go further than the Kyoto protocol. We currently have a government that thinks that the challenge of achieving this minimum minimorum is too great.

There is another irritant. I will not have enough time to go over it all. Let us talk about the Canadian Securities Commission. For 15 years now they have been harping on about the Canadian Securities Commission, which, as hon. members know, comes under the jurisdiction of Quebec and the provinces. The federal government needs to keep its nose out of it. The Canadian Securities Commission would only promote Toronto and Bay Street. In fact, it is the only province that has been completely stuck on this idea for about 13 years now.

I could have mentioned culture, which is also a great disappointment. My colleague, the hon. member for Saint-Lambert, said enough about it. We expected $150 million, but got $50 million for two years.

If it were not for the firm commitment on the fiscal imbalance, we would have gladly voted against this budget. For the rest, we hope the government will understand and not go back on its plan for the fiscal imbalance, that it will implement measures on employment insurance, and set up POWA quickly, including the special EI pilot project, which will end on June 30.

[Steven Blaney, Conservative, Lévis—Bellechasse, QC]

Mr. Speaker, my question is for my colleague from Saint-Hyacinthe—Bagot.

I listened carefully to his speech. His words were refreshing—he talked about a positive budget and a good start.

I believe this to be an accurate description of the past 13 weeks, unlike the past 13 years of Liberal powerlessness, inertia and incompetence with a Bloc opposition.

However, he left out one thing, and I would like to know his opinion about it. With respect to the fiscal imbalance, we know that our government took immediate measures: the $670 million that will soon be paid out to eliminate the fiscal imbalance, the 6% increase in transfer payments for health, and equalization.

What about equalization? How does my colleague think that equalization can be used to develop and improve the prosperity of Quebec and the rest of the country?

[Yvan Loubier, Bloc, Saint-Hyacinthe—Bagot, QC]

Mr. Speaker, I thank my colleague from Lévis—Bellechasse for his question.

I would just like to rectify one thing. I did not say that it was a very positive budget, but that it was a budget that included a commitment in a fundamental area for Quebec. I also added that we were keeping a close watch on the government. We are worried about the fact that, on the weekend, the Prime Minister backed down from his resolve to fix the fiscal imbalance. If I were in his shoes, I would not get too cocky or too arrogant, the way some of his colleagues have done. He did not do so this morning, but I wish to warn him. Our support for the government actually depends on this commitment.

Equalization, as far as Quebec and the other Canadian provinces that benefit from it are concerned, is the only program entrenched in the Constitution. This means that public services of equivalent quality can be offered from east to west in Canada. It is in the Constitution. On the other hand, in order to measure the ability of the provinces and Quebec to offer these uniform, equivalent services from east to west in Canada, there has to be a true measurement of the various governments’ capacity to collect taxes from their citizens.

At present, however, the equalization formula presents several problems, given that it is not meeting this objective. First of all, a Canada-wide average is calculated, which determines whether or not a province or Quebec is entitled to a per capita equalization payment. Currently, this average is calculated on the basis of five provinces. Why not take the 10 provinces into account? If we want to know the true fiscal capacity, the 10 provinces have to be weighed and each one’s fiscal capacity assessed in relation to this Canada-wide average established on the basis of the 10 provinces and even the two territories.

Furthermore, some parameters do not work. Unbelievable intellectual somersaults are performed to measure property tax, for example, when—it is easy to check—property tax is real in every municipality.

This is the sort of correction that has to be made to equalization.

I would simply like to remind my colleague of one last thing. The positive measures contained in the budget are acceptable as far as short-term transfers are concerned, for such things as post-secondary education. The amounts provided fall far too short of the mark, however, to correct the fiscal imbalance as the Prime Minister has undertaken to do. We are talking about $10 billion to $12 billion a year for all of Canada. Equalization that allocates $285 million more falls short of the mark.

[Paul Szabo, Liberal, Mississauga South, ON]

Mr. Speaker, the member spent some time talking about the $1,200 child tax allowance. He suggested, as did the Caledon Institute, that the allowance was skewed in terms of the value of the benefit to wealthier Canadians than to average Canadians.

As a solution the member suggested that consideration might be given to including it as a refundable tax credit. I would like to ask him about this. With refundable tax credits, yes, the money would flow even if there was no income. The money would get there, but the recipients would have to wait until they filed a tax return and actually received the refund cheque or a reduced payment made when filing their taxes.

Maybe it would be better to make it part of the Canada child tax benefit program which is a non-taxable amount which is paid monthly and is streamed more to low and modest income Canadians. In fact, higher income Canadians would not even qualify for it. I wonder if the member would care to comment on the possibility of including it in the Canada child tax benefit.

[Yvan Loubier, Bloc, Saint-Hyacinthe—Bagot, QC]

Mr. Speaker, I thank the hon. member for his question.

In fact, the refundable tax credit would have been preferable to a cash transfer. However, I disagree with his statement that families should have had to wait until the end of the year, when they prepare their tax return.

I will give a good example. The government can determine family income levels when the time comes—and even in advance—to provide tax credits, GST credits, for example. Those credits are paid quarterly. The same principle could be applied with the refundable tax credit.

I heard the Prime Minister or the Minister of Finance say that the Bloc Québécois does not want Canadians to receive a cheque with a flag on it.

They are aware of it, they started the propaganda with the Canadian flag all over the place, and more than once. But that is not the point. There could have been a refundable tax credit, payable by cheque with a Canadian flag or two—if they want 10, they could put 10 on—or even on a whole flag, but quarterly like the tax credit for the GST. That would be no problem.

The benefit would have been twofold: the jurisdictions of the provinces and Quebec would have been respected and the amounts would have been totally tax free. This is not currently the case.

As I was saying, the families not paying for child care, in which one parent stays home—the folks the Conservatives are targeting—will the big losers. They will get $486 less a year if they have two dependent children under six and were getting the national child tax benefit. This is what is incongruous in the Conservative approach.

[Denise Savoie, NDP, Victoria, BC]

Mr. Speaker, I thank my colleague opposite for his remarks.

This weekend, I spoke with families in my riding who said they were coming out behind with this change to the national child benefit supplement and this $1,200. This budget does nothing to help those families, not just in terms of child care, but also in terms of housing. Of course there is the $800 million that comes from last year’s NDP budget, which had already been approved, but no more, even though we know that the Canada Mortgage and Housing Corporation is making billions of dollars in profits.

This budget is also silent on the Kyoto protocol. We know that Canada is going to lose its credibility in that respect. This budget is a step backward in numerous areas.

My question to my colleague is this. Given that the Bloc supports a number of values that are important to me and to a lot of Canadians and Quebeckers, why and how could it have supported a budget like this, which is truly a step backward? I find that hard to understand.

[Yvan Loubier, Bloc, Saint-Hyacinthe—Bagot, QC]

: Mr. Speaker, I know that my colleague shares our analysis from a social point of view, particularly with respect to helping the most disadvantaged families. I have just stated our point of view: we would have preferred to see this $1,200 payment in a different form.

However, there are two things I would like to say. Last year, we voted against the $800 million in the NDP budget because with that bill, the NDP got conned as if they were schoolchildren. There was no firm commitment from the government. It even said that there had to be a $2 billion surplus at the end of the year, and it also said: unless the government had other priorities.

The New Democrats were conned. They were patting themselves on the back about Bill C-48, when they had achieved absolutely nothing.

Second, when a friend or a colleague makes a commitment and makes a firm promise to carry out the projects that are dearest to our hearts, do we come down on them when that firm commitment has been given? We wait to see whether the commitment is honoured. That is our fundamental reason. Perhaps there are those who behave differently in society, but we are civilized people.

[Maxime Bernier, Conservative, Minister of Industry]

Mr. Speaker, I take the floor today as the member for Beauce and as Minister of Industry to discuss the importance of the budget for my constituents and for all Canadians. I will be sharing my time with the hon. member for Wetaskiwin. My great thanks to him for expressing his point of view.

Last February 6, the Prime Minister formed a new government, a government that has a clear mandate to meet the important challenges facing all Canadians. The budget has given shape to many of our commitments, and we will continue to keep our word.

The first decision of this government has been to move quickly to enhance accountability to Canadians and ensure that government operations are more transparent. The federal accountability action plan, released last April 11, presents a wide range of reforms which were necessary after 13 long years of Liberal regime.

We promised to cut back the GST. The budget provides for a one-percent reduction of the GST as of July 1. We also promised to introduce the universal child care plan in Canada. As of July 1, Canadian families will receive $100 per month, or $1,200 per year, for each child under age six, to pay for child care expenses. In addition, there are concrete measures to improve health care and combat crime in Canada.

The hon. finance minister has tabled a budget which fulfils the commitments made in the last election campaign. Like the great majority of Canadians, I am very pleased to support this budget today. I would like the opposition to give the budget its support as well. In addition to respecting our priorities, this budget contains more tax reductions than the last four federal Liberal budgets combined.

Allow me now to speak of the budget measures which more particularly concern the department I head, the Department of Industry. First of all, the budget establishes a much more transparent planning framework, as it has a realistic two-year planning horizon, instead of the five years used by the former government.

Furthermore, it puts the government’s finances in order by providing for control over increases in the rate of spending. Our expenditures will target concrete, tangible results. Taxpayers’ money will be spent under strict guidelines, thereby helping us find ways to save.

For years, the previous government generated surpluses at the expense of taxpayers. It then looked for ways to use those surpluses and its tax revenues by interfering in provincial fields of jurisdiction.

This government, however, recognizes that this money belongs to Canadian and Quebec taxpayers, including the people of Beauce, and that it should be given back to taxpayers. Sound financial management also means that we must pay for costs from the past. Thus, the government intends to reduce the federal debt by $3 billion a year. Yes, you heard correctly, $3 billion each year. Our goal is to reduce Canada's debt-GDP ratio to 25% by 2013, which is one year earlier than planned.

The federal government's communication of financial information will also be improved, in order to give Canadians the transparency they expect from us, their elected members.

Let us take a moment now to talk about productivity and competitiveness, two terms that are very important to me as Minister of Industry. Tax rates have a considerable impact on the productivity and competitiveness of businesses in Canada, Quebec and the Beauce region. My background is in business and I know that every entrepreneur will have their own suggestions for dealing with the economic factors that affect their business. However, I can assure you that all entrepreneurs in my riding and throughout Canada agree on one thing: the importance of reducing the tax burden and the importance of reducing taxes. The 2006 budget does just that.

The new Conservative government's budget facilitates the competitiveness and productivity of Canadian businesses by leaving more money in the hands of entrepreneurs so that they can properly manage their business.

They know better what is good for their businesses than we do here in Ottawa. That is why we are cutting taxes so that they can reinvest this money and create jobs.

Canadian businesses are applauding our decision to cut back the corporate tax rate, which will fall from 21% to 19% by 2010. These businesses are also applauding our decision to eliminate the corporate surtax by January 1, 2008.

Some of these tax changes particularly affect small and medium-size businesses, which drive the economy in the regions and create jobs everywhere in Canada.

After years of half-measures and programs developed by the previous government that never kept its promises, and after listening to concerns of small and medium-size businesses about tax rates, our new Conservative government took action. It took action in this budget. First, we are going to raise the maximum revenue threshold for eligibility for the small and medium-size business tax rate from $300,000 to $400,000 by next January. Better yet, we are going to cut the tax rate for small and medium-size businesses to 11.5% by January 2008 and then cut it again to 11% by 2009. These tax cuts will enable businesses to create jobs and be more competitive on the international scene.

Our new government knows as well that the innovative companies which help our economy grow must sometimes work for years—sometimes many long years—before they are able to penetrate international markets. These companies will benefit from our decision to allow non-capital losses and investment tax credits to be carried over for up to 20 years. This includes the scientific research and experimental development tax credit, which is one of our government’s most important measures to support innovation.

Another important aspect of the budget is the support our government provides for research and development in Canada. This budget provides $100 million a year in additional funding for this area, which is crucial for the Canadian economy.

This new funding includes an additional $400 million a year for the three large granting agencies that support much of the research done in Canada. The Canadian Institutes of Health Research and the Natural Sciences and Engineering Research Council will each receive an additional $17 million a year, and the Social Sciences and Humanities Research Council will receive an additional $6 million.

Beyond these commitments, our government has selected two other approaches to meet the needs of our research institutions. First of all, we are increasing the funding paid to universities to defray indirect research costs. The budget dedicated to indirect research costs will rise from $260 million to $300 million a year. Second, the government is undertaking to build a dynamic research community by contributing $20 million to the Canadian Foundation for Innovation’s Leaders Opportunity Fund for 2006-07 and 2007-08.

I am very happy to talk today and let the House know about an important commitment in our budget, namely fiscal balance. There is another reason why I am pleased to support this budget: our new government understands the importance of restoring the fiscal balance in Canada. Unlike the former government, our government’s budget contains a clear and precise road map for getting there.

Our government has been working hard since the first day and is fulfilling its commitments. We have already accomplished much for Canada in a short time. The 2006 budget shows that we are determined to get even more results for Canadians. This is why I am asking all the members in the House to support the budget.

[Larry Bagnell, Liberal, Yukon, YT]

Mr. Speaker, the member mentioned some good points, but I would ask him to refrain from silly rhetoric such as saying that the previous government did not keep its promises. We cut taxes by $100 billion in the biggest tax cut in history. The member is insulting his own party's tax cut of $20 billion if he goes down that road.

What I would appreciate the member confirming as the industry expert is what the Canadian tax rate is compared to the American tax rate. In the past, Conservative members have suggested that Canada was worse off. If we look at the chart on page 32 of the budget plan, we see that it suggests that with no changes or with the changes to this budget, in both cases, Canadian taxes and Canadian taxes for manufacturers would be lower than United States taxes, both under the previous regime and, even better, under this regime.

Would the member confirm that under the previous regime and also under his own tax plan Canadian corporations would have a lower corporate tax rate than the Americans?

[Maxime Bernier, Conservative, Beauce, QC]

Mr. Speaker, our latest budget contains tax cuts of $20 billion over two years. As I said earlier, it is very important for the competitiveness of the Canadian economy. If we make a comparison with the U.S. and the rest of the countries in the world, we realize that Canada is in a very competitive situation where corporate tax rates are concerned. This is a very important fact. As you know, capital is mobile in Canada; it goes where performance is the best. By having the lowest tax rates, rates that are competitive with the Americans, we are able to attract foreign and Canadian money that can be invested and that can create wealth in Canada. The tax cuts proposed in the budget will thus enable Canadians to keep an appreciable and substantial advantage over the U.S.

Regarding corporate tax rates, the reductions will also end up making our corporate tax system more competitive overall and not just on tax rates, which will enable our Canadian companies to increase their productivity.

[Thierry St-Cyr, Bloc, Jeanne-Le Ber, QC]

Mr. Speaker, I have three simple questions for the minister on this budget.

First, since he seems to be quite familiar with figures in this budget, I would like to know what in terms of equalization will be the amount per capita that will be allocated to Quebec compared to the maritime provinces. It would be interesting to see whether the additional amount will correct the existing imbalance.

As far as the fiscal imbalance in general is concerned, this government promised to resolve it. I would like the minister to tell us how much we are talking about, how much it should cost—without going into details about the final negotiated sum. What can we expect from this government? We have already seen the Prime Minister go back on this issue over the weekend and that concerns us.

My last question has to do with the productivity of businesses. This is what I would like to know: for businesses that are currently having great difficulty, the manufacturing sector in particular where there are companies that are not making profits or paying taxes—what is in this budget to help them?

[Maxime Bernier, Conservative, Beauce, QC]

Mr. Speaker, to answer my colleague's first question on the advantages to Quebec in this budget with respect to equalization, the new budget ensures that Quebec will get $185 million more than it did last November, if we look at the state of public finances at the time. If we compare this to the previous budget of the former Liberal government, Quebec will receive $741 million more. This is quite advantageous.

As far as the fiscal imbalance is concerned, we are turning over a new leaf to resolve it. It should be noted that in our budget, the budget of the new government, in 2005-06, there is an $8 billion surplus, but we also have non-allocated surpluses. In an effort to be transparent, we are thereby showing all Canadians that the surpluses that were not allocated in our budget can be allocated to resolve the fiscal imbalance, resolve problems of productivity, problems the environment might cause, problems in several sectors. These non-allocated surpluses represent $600 million for this year and $1.4 billion for next year. This bodes well for the negotiations to resolve the fiscal imbalance.

[Larry Bagnell, Liberal, Yukon, YT]

Mr. Speaker, I rise on a point of order. I want to apologize. In my last intervention I quoted the wrong page. It was page 75.

[The Acting Speaker, Conservative, Royal Galipeau]

The Chair thanks the hon. member.

Resuming debate, the hon. member for Wetaskiwin.

[Blaine Calkins, Conservative, Wetaskiwin, AB]

Mr. Speaker, it is an honour to be speaking on the government's budget implementation bill. I am pleased to have an opportunity to speak to Bill C-13, which will implement the provisions of the new government's budget that was passed in the House last week.

I want to begin by congratulating the Prime Minister and the Minister of Finance. I want to thank them for keeping their promises made to Canadians during the election campaign. This is one of the first steps in restoring accountability to our system.

Canadians are tired of being courted by politicians trolling for votes, only to be left in the lurch once the ballots have been counted. It is time to rebuild the relationship between voters and the government, and that rebuilding process began on January 23.

The Prime Minister has set out five achievable priorities and he has taken action on them. This budget puts the mechanisms in place to achieve those goals and one of the key elements of this budget is tax relief.

There are 29 different tax cuts that will deliver $20 billion in tax relief over the next two years. There is more tax relief in this first Conservative budget than in the last four federal Liberal budgets combined. To top it off, there is $2 in tax relief for every $1 in new program spending. That is a ratio that puts people over programs and it is a ratio that Canadians can feel good about.

For 13 years, Liberal budgets let Canadians down. Year after year, Liberal budgets featured little more than empty promises and wasteful spending. Canadians have been working harder and longer, and saving less, just to pay for Liberal scandals and boondoggles. Who could forget the sponsorship program, or the extravagant and ineffective long gun registry, or where the HRDC money went?

What did Canadians get for all their long hours of hard work from successive Liberal governments? They got to pay too much in taxes for too little in return and watch their tax dollars go to programs deemed wasteful and unnecessary. Finally, families are going to get a tax break, and this is near and dear to my heart. Families were promised help and the Conservative government has delivered.

This new government will increase the amount that all Canadians can earn without paying federal income tax. This budget reduces the lowest personal income tax rate from 16% to 15.5% effective July 1. On average, families will pay less personal income tax in 2006 than proposed by the Liberals in 2005.

This government believes that it is time to give back the hard-earned money that Canadians sent to the government and it is time to give that money back to Canadians. How are we going to do that?

First, there is the universal child care strategy, a key campaign promise and a throne speech priority. When it comes into effect on July 1, it will provide families with children under the age of six with $100 per month per child.

We are introducing a tax cut to promote physical fitness among children, effective January 1, 2007. This credit will provide up to $500 in fees for physical activity programs for each eligible child under the age of 16.

Aboriginal women, children and families will benefit from the $450 million aimed at improving education and socio-economic conditions, as well as water supplies and housing issues on reserves.

Low income Canadians, those whose incomes are too low to pay any income tax, deserve tax relief too, something our predecessors clearly did not believe in. All Canadians will benefit from the reduction in the GST, whether they are purchasing big ticket items like a new car or a new home, or if they are just purchasing everyday essentials.

Workers will benefit from the new $1,000 Canada employment credit starting July 1. This new tax credit gives Canadians a break on what it costs to go to work, recognizing that people incur expenses while they are going to work for such things as home computers, uniforms and supplies. This government has focused its spending on key federal priorities with programs that will get results and provide value to taxpayers for their money.

However, more than any other group in Canada, farmers have long borne the brunt of the Liberal lack of foresight on developing effective programs. Farming is part of our heritage. It is certainly part of my heritage and that of the majority of constituents in Wetaskiwin. For far too long, agriculture has been overlooked by Liberal governments. We promised help for farmers. We have delivered help for farmers, farm families and farming communities.

This government recognizes not only the importance of agriculture but the difficulties facing farmers today. To support Canadian farming communities, the government is providing $1.5 billion this year alone. This includes $500 million for farmer support, plus a one time investment of $1 billion to assist farmers in the transition to more effective programming for farm income stabilization and disaster relief.

Agriculture has received more money in this budget than any government has ever given to the sector in one budget before. Falling prices and trade disputes are causing farmers and producers real financial hardship. Current insurance and income support programs are not coming close to meeting the needs.

Canadian farmers need our support now more than ever. That is why one of the government's first actions was to accelerate disbursement of $755 million in payments under the grains and oilseeds payment program. That is why the government is taking action to restore and sustain a strong, vibrant farm sector that will provide farmers with the income they need to stay in business.

Our government commits $2 billion in funding over two years, $1.5 billion of which will be allocated in the budget. We are delivering on the promises we made in the election campaign for farmers, families and all Canadians.

This year Canada Day will be better than ever, thanks to the tax breaks the government is implementing, effective July 1, 2006. We can look forward to a cut in the GST from 7% to 6%; implementation of the universal child care benefit, which gives $1,200 per year to families for each child under six; an increase in the child disability benefit from $2,044 to $2,300; the creation of the Canada employment credit, $1,000 tax credit for computers, uniforms and supplies; reduction of the lowest tax rate by 0.5%, from 16% to 15.5%; and implementation of the tax credit for the purchase of monthly transit passes. That is not bad for just 100 days.

It will be a happy birthday for all Canadians and I urge all members in the House to support Bill C-13.

[Paul Szabo, Liberal, Mississauga South, ON]

Mr. Speaker, I thank the hon. member for listing the budget items. I want to focus on one and it has to do with health care, which has always been the number one priority of Canadians.

The Conservative election platform did talk about health care from the standpoint of wait time guarantees. The member will know that it really involves the Government of Canada providing additional financial support, so that Canadians can be transported to other provinces or, indeed, even to the U.S. for medically necessary health care, which is subject to the wait time guarantee.

The member congratulated the Prime Minister and the finance minister for keeping their promises, but he will recall that not only was the wait time guarantee in the platform but it was also one of the five priorities. Yet in the budget, there was not one penny of new health care funding for wait time guarantees.

There is additional moneys going to the provinces for health with regard to the $42.5 billion accord that was signed, but as was confirmed by the Minister of Health on Sunday on TV's Question Period, there is no new money in the budget, and he feels that there is sufficient moneys within the accord.

Will the member withdraw the congratulations to the finance minister and the Prime Minister because not only did they not deliver, they broke one of the most important promises they made to Canadians?

[Blaine Calkins, Conservative, Wetaskiwin, AB]

Mr. Speaker, I will not withdraw my congratulations to the Prime Minister or the finance minister. As a matter of fact, I will recongratulate the Prime Minister and the finance minister for providing us with one of the best budgets that I can remember in recent history.

There is $5.5 billion allocated for wait time reductions across the board in the budget. There is $52 million for the cancer initiative and there is $1 billion in new funding for pandemic research. There is a lot of money already there.

In my home province of Alberta right now, and I am very proud to be from Alberta, it is taking new initiatives and investing the money to find ways to make the system more efficient and more effective. Everybody understands that health care is very expensive and it is a very near and dear issue to most people. Canadians want health care when they need it.

There is nothing worse than sitting on a waiting list, knowing we have some ailment, knowing that we cannot move because a hip or a knee needs to be replaced, or waiting for cancer treatment. We have to get people the help they need when they need it. That is why I am very pleased that one of our top five priorities is to establish those wait time guarantees, working in consultation with the provinces, and ensuring we have the funding to deliver on that guarantee.

[Denise Savoie, NDP, Victoria, BC]

Mr. Speaker, I also deplore the fact that many previous governments did not keep their election promises. In this regard, I have a question regarding post-secondary education. Last week, the Minister of Human Resources claimed that the Canada social transfer included, and I quote from Hansard:

—$16 billion for education—

However, only $8.5 billion are available for this transfer. These funds are for social assistance and a number of other programs, not just post-secondary education. It seems, once again, that we will have to make a leap of faith and that the government has not kept its promise in this matter. During the election campaign, the Conservatives also made a very clear promise concerning a fund exclusively for post-secondary education.

In the interest of transparency, will my colleague elaborate on the figures before this House?