Debates of May 15th, 2006

Budget Implementation Act, 2006

[Blaine Calkins, Conservative, Wetaskiwin, AB]

Mr. Speaker, this is a matter that deals with a social transfer. It is a massive block of money that is sent from the federal government to the provincial government, so it can choose how it wants to allocate that money in the province. The member is absolutely correct. It can go to education and other programs. That is the old way of doing business, which is to have one government passing money on to another level of government with strings attached and have governments squabble and quibble over the money.

I am proud and very happy about this budget as somebody who received a post-secondary education for eight years and had to apply for loans the whole time. As a former faculty member at a post-secondary institution in my home province, post-secondary education has been very important to me. I never got any money back or a tax credit for $10,000 worth of books that I bought, but finally, this government is putting money back in the hands of those students. I had money given to me for bursaries that was clawed back in income tax. We are addressing--

[The Acting Speaker, Conservative, Royal Galipeau]

The hon. Minister of Industry is rising on a point of order.

[Maxime Bernier, Conservative, Beauce, QC]

Mr. Speaker, I simply wish to point out that in my speech I said that the amount of $400 million was allocated to three granting agencies for research and development. The actual figure is $40 million per year.

[Gary Merasty, Liberal, Desnethé—Missinippi—Churchill River, SK]

Mr. Speaker, I will be splitting my time with the member for Ottawa—Vanier.

To begin with, I must provide some context so members of the House can begin to understand how the Conservative government's budget is failing the people of Saskatchewan.

First, the population of Saskatchewan is approximately one million. Second, approximately 200,000 of the total population are aboriginal people, first nations on and off reserve and Métis. That is approximately 20% of the total population. Dr. Eric Howe, a University of Saskatchewan professor, and others have stated that by 2040 approximately 50% of Saskatchewan's population will be aboriginal. The aboriginal population is booming.

What is more, in the short and medium term the percentage of aboriginal people poised to enter the labour force will increase much more dramatically. Labour force planning in the next five to ten years will be absolutely critical, with aboriginal youth being a key ingredient in the planning.

The future of Saskatchewan's economy is dependent on all levels of government working together to invest in the booming aboriginal population to ensure the successful transition into the labour force in Saskatchewan. All of Saskatchewan is watching and wanting to work together to ensure the future viability of that great province.

The Saskatchewan legislature, aboriginal leaders and people, and Saskatchewan businesses are upset at the federal government's lack of vision and depth of understanding regarding Saskatchewan's needs.

Let us look a little deeper into how Saskatchewan has been left out. I will begin with child care.

Last week over 100 protesters showed up at the office of the Minister of National Revenue in Saskatoon calling upon the government to respect and build child care spaces. There are 168,000 children under the age of 12 in Saskatchewan, 110,000 working moms and only 8,000 spaces. The lowest income earners have the least amount of choice when it comes to working. They often have no choice but to work and are the most in need for child care spaces.

Saskatchewan's average income is about $35,000 per year. The $1,200 per child under age six payment is taxable. The income tax hike affects the lowest income earners the most. The lowest income earners will lose their child tax benefit. When we put all of this together, the net impact is that the most vulnerable low income and hard-working families will only get 55¢ a day.

Let us look a little deeper yet. The government is proposing to utilize a tax credit system to build child care spaces. Questions immediately arise about this proposal. Which big businesses will build these spaces in Saskatchewan? With most businesses in Saskatchewan employing less than 10 people, how can they build spaces? How will spaces be built in inner city neighbourhoods? How will spaces be built in rural Saskatchewan? How will the tax credit system work on reserve? The answer is it will not.

Switching gears to the tax situation, the disappointment with the Conservative plan is also felt in the business community. At an annual meeting of the Saskatchewan Chamber of Commerce in North Battleford, the chair of the Canadian Chamber of Commerce, Russel Marcoux, CEO of Saskatoon's Yanke Group of Companies, said that income tax cuts are one of the best ways to improve the standard of living for Canadians. However, the Conservatives have taken the exact opposite approach. They threw more of Canada's poorest on to the tax rolls by lowering the basic personal exemption and hiked up taxes for workers earning up to $36,000 from 15% to 15.5%. Remember that the average full time income in Saskatchewan is $35,000. These tax hikes directly hit the Saskatchewan people like they had a big target on their backs.

Moreover, most of the government's tax measures require money to be spent on certain things and not others. For example, it offers a tax credit for sports, but what about parents who cannot afford equipment or fees to participate? What about kids interested in the arts and music, kids who want to paint, play a guitar or a piano? What about kids who want to celebrate their culture by participating in powwows or Ukrainian dancing? Are those parents and children less deserving? Why can we not build community, recreational and cultural facilities?

Moreover, why do all these tax measures require money to be spent? Why can people not just have more of their own money in their pockets?

Switching gears to forestry, it is also no secret that Saskatchewan will be hurt by the softwood agreement. The province has stated that Saskatchewan could lose up to 50% of our export market and is disappointed that the government gave up $15 million owed to the Saskatchewan forestry industry by the Americans. Not only that but the government will tax heavily the Saskatchewan forestry companies that get their refunds on the money that was illegally held by the Americans in the first place.

What is worse is that the government is not offering any help to this struggling industry. It has allotted $400 million for pine beetles, which is a serious concern, but has left Saskatchewan out in the cold, even while mills in Big River and Prince Albert are shutting down and the mill in Meadow Lake is struggling. Even worse is that the government may have cut $300,000 from research grants for the Saskatchewan Forest Centre in Prince Albert resulting in research and innovation being lost at an incredibly vulnerable time for this industry.

The lack of concern that this budget and the government show for Saskatchewan's forestry industry, communities and workers is the worst thing to happen at the worst possible time.

Switching to agriculture, it is now apparent that the government will not offer any direct immediate assistance for farmers. We have seen the massive protests but still farmers are being offered nothing this spring. This happens at a terrible time. Severe flooding in Saskatchewan's northeast grain belt is keeping farmers off the fields, or they are getting stuck in them. Farmers across Saskatchewan need help to pay creditors and high input costs, costs like high fuel prices, to which the Prime Minister has only said, “Get used to it”.

What is even more mystifying is that the government has really no details on a strategy going forward for agriculture. I hear the environment minister talking about how her hands are tied in moving forward in accomplishing anything and about needing to take planes, trains and automobiles off the road and a made in Canada solution. I will give her a hint. If 35% of gasoline in Canada contained 10% ethanol, greenhouse gas emissions could be reduced by 1.8 million tonnes, which is the equivalent of removing more than 400,000 vehicles from the road.

Building a real biofuel strategy would be a great move forward. It would provide a real solution that would be made in Canada, right in Saskatchewan's towns, giving value added opportunities for a high quality product from our producers in Saskatchewan.

Switching gears again to aboriginal issues, rooted within the aboriginal communities is great disappointment with the government. Aboriginal leaders and premiers have slammed the government for killing the Kelowna accord, an accord which provided $5.3 billion for various initiatives on and off reserve.

The late Harold Cardinal, who wrote the book The Unjust Society, talked about how hard aboriginal Canadians worked to get the attention of the government over the years. He stated:

“Well, boys, what you have to say is good and you must be commended for the intelligence you have shown through your extremely good presentation”...“but we know your problems and what should be done, and we're certain that you will be pleased with our carefully considered decisions”.

Kelowna was the joint intelligence that all parties came up with. The government has thrown that away with its “we know what is good for you” attitude. This is very problematic to the aboriginal people. A real credibility gap has emerged where aboriginal people are very wary of the government's intentions.

By killing the accord, all of Saskatchewan is hurt by the loss of opportunity. A targeted investment in first nations Métis on and off reserve education and post-secondary skills training would have created new opportunities for an emerging youthful Saskatchewan labour force, keeping in mind the context I opened with.

Economic development funding would have leveraged millions in business activities. Aboriginal businesses are one of the fastest growing tax bases in Saskatchewan, with exceptionally high rates of returns on strategic business investments. Housing would have pumped millions into the industry and provided more training opportunities.

The budget also completely excludes the Métis people and leaves out survivors of the Ile-à-la-Crosse boarding school despite campaign commitments from the Prime Minister and the previous member of Parliament in my riding.

As I stated earlier, Saskatchewan people have worked hard to re-establish the province as a place full of promise, optimism and pride. All residents of Saskatchewan realize that by betraying the Kelowna accord and ignoring forestry, agriculture, child care and higher education and by raising taxes, our work as proud Saskatchewan people is made even tougher. The government cannot ignore us in Saskatchewan. The budget falls far short of what Saskatchewan people need.

[Rodger Cuzner, Liberal, Cape Breton—Canso, NS]

Mr. Speaker, I listened to the comments put forward by my colleague in his presentation. I respect his understanding for the aboriginal issues and the work he has done to date. I would like him to take a moment to speak to the on ground issues regarding the actions or inactions of the government through the budget in not investing in aboriginal issues, in not supporting the Kelowna accord. We could talk in broad terms about the immense amount of dollars that have been taken from that file, but how do the actions of the government impact on people on the ground and aboriginal people across this country?

[Gary Merasty, Liberal, Desnethé—Missinippi—Churchill River, SK]

Mr. Speaker, an investment in aboriginal people is an investment from which residents in Saskatchewan and all of Canada could benefit. Success in that demographic means success for all. It is absolutely critical at least in the Saskatchewan context and by extension across the country that there be investment in post-secondary education. It is key.

A small study which was done in Saskatchewan determined that approximately 585 young people needed to be trained for transition into the workforce just to get to a 50% employment rate in northern Saskatchewan. That speaks volumes to the need for investment, an investment that begins in early childhood. Early childhood learning opportunities are absolutely essential to framing the future success of individual youth. Education is the key to addressing many other issues.

[Dave Batters, Conservative, Palliser, SK]

Mr. Speaker, I listened intently to the comments by the member for Desnethé—Missinippi—Churchill River. Being a member from Saskatchewan, I felt the need to address some of his comments.

It seems odd to talk about concern for first nations people when that member is a member of the party which held government not long ago. In the waning months of the last government, a terrible tragedy unfolded at Kashechewan in Ontario. The then minister of Indian affairs went to Kashechewan and saw what was unfolding. There was E. coli in the water. He came back to Ottawa and apparently eight weeks passed without the then minister doing anything whatsoever about the problem. I remember in the last Parliament that many of my colleagues and I were in utter disbelief that one could see such a tragedy but come back and do absolutely nothing.

Could the member reflect upon what he thought about the Kashechewan tragedy? The current government has provided $450 million for improving the water supply and housing on reserve and I could go on. I would like to hear the member's comments on Kashechewan and that tragedy.

The choice in child care allowance is of real benefit to people in remote communities, in rural Saskatchewan, but definitely in northern communities which the member represents. It is not like we are going to have a lot of child care spaces at the YWCA in La Ronge. Does the member recognize that under the Liberal plan there would have been no spaces created, but under the Conservative government's plan we are going to see choice in child care?

[Gary Merasty, Liberal, Desnethé—Missinippi—Churchill River, SK]

Mr. Speaker, I do not think it is odd at all to talk about aboriginal issues. They are very critical to be addressed at any point in time in the life of this and future Parliaments.

Child care is something that we are extremely concerned about, but let me back up a bit. The current government has not promised $450 million for water. It has talked about $150 million this year, and $300 million next year for housing and for education, which we do not know anything about yet because there is no plan.

What we see is a government that has no plan on child care for aboriginals, that is building more jails, that has made no education investment and no health investment. It is an atrocity to see no government response to the TB outbreak in Garden Hill, for example.

[Mauril Bélanger, Liberal, Ottawa—Vanier, ON]

Mr. Speaker, I am pleased to speak today to Bill C-13, the budget implementation act.

I am going to tell my colleagues about a number of flaws in this bill. We have been talking about this for several days now. We talked about it during the debate on the budget itself and we will debate it today and for the rest of the time the budget implementation act is debated. It concerns various subjects, for example agriculture, the environment, post-secondary education for aboriginal people, which we have just heard about in this House, housing for homeless people and the arts. I have talked about these quite often. There is huge disappointment, when it comes to the arts, as compared to what was proposed. We were expecting that this government would honour its own commitments and the commitments made by the previous government.

There is also the child care issue. As members will recall I have spoken in the past of the problems that the government’s decision to cancel all the agreements that the previous government made with all the provinces will cause for the official language communities. The scheme proposed in the budget is not going to ensure that quality child care centres are created for the minority communities of Canada.

I mention all that before taking another direction. That is, a more philosophical approach that a country should take in a budget. I will try to move to a more macro level, a more national level, with regard to the direction a budget takes. I will begin by looking at the early 1970s.

Members will recall that in the early 1970s, Canada started to run up deficits and accumulate debt, both during that period and up to the early 1980s. In 1983, before the change in government, it had accumulated a debt of about $198 billion.

The new government of Mr. Mulroney was in power from 1984 to 1993. I will talk about the debt. I will not talk about the annual deficit. During all those years, annual deficits continued to be accumulated, year after year. By late 1993, we had reached an accumulated debt of nearly $500 billion: $498 billion. Then we started to get worried, quite rightly. The government led by Mr. Chrétien, with the member for LaSalle—Émard who was the Minister of Finance at that time, tackled that question.

For 30 years, Canada essentially had a fiscal imbalance, running up a debt year after year. After three years of major effort—it was a very difficult time, and everyone had to tighten their belts—we managed to eliminate the annual deficit in 1997-98.

After 30 years, we had finally achieved a balanced budget, although it was a fragile one. At that point, as a nation, we had an opportunity to try to redirect public funds and balance revenues and expenses. Any country naturally has to encourage some spending on social programs, the environment, defence and other programs.

The government balanced revenues and expenses, in order to manage the debt. This is always difficult. We were able to start paying down the debt, something many of us had long dreamed of doing. Canadians who have a mortgage dream of reducing it and eventually paying it off. Alberta succeeded in paying off its debt under Premier Ralph Klein. And we have to say that getting rid of its debt has been good for that province. It eliminated not only its deficits, but also its debt.

After 1997-98, the government struck a balance between paying down the debt using the surplus and reducing taxes using government revenues. The government knew that Canadians wanted a gradual reduction in tax rates and increased spending in certain essential areas such as health, post-secondary education and research. That is the direction it took.

The current government seems to be deviating from this course, and may even have abandoned it entirely. I find this a bit worrisome.

According to the government's proposal, they will reduce the debt by a maximum of $3 billion per year, except for this year, because the budget surplus is about $8 billion. Starting next year, they will reduce the debt by only $3 billion per year.

If I may, I would like to tell a little story. I am honoured and pleased to be a grandfather. My granddaughter was born the year Canada stopped accumulating debt, that is, the year we balanced the budget and stopped running a deficit.

Since then, the Government of Canada has paid back $60 billion of its debt. If I understand correctly, we will pay back another $8 billion this year. All told, we will have paid back $68 billion of our debt since she was born.

However, at $3 billion per year, she will have to live to be more than 150 before her country becomes debt-free.

I believe it is not right that we who have benefited from this enormous debt all our lives should bequeath it to our children and grandchildren. We must deal with our debt more aggressively.

All in all, I find that the government's decision to reduce the debt by only $3 billion per year could one day place us in a very unstable situation. That is why I am urging the government to reconsider.

The situation Canada is enjoying now, vis-à-vis our neighbours to the south, is quite telling in terms of the way we have managed to successfully reduce our debt burden. According to the graph provided to us by the government in the budget, between 1995 and 2005 only two countries in the G-7 have actually decreased the debt burden as a percentage of their GDP, Canada and the U.S. They are the two best performing countries right now.

However, over the last two years, in particular, Canada reduced its debt, not by a lot, but last year by $1.6 billion and the year before substantially more. This year we reduced it by $8 billion. Whereas in the United States, which are the numbers presented to us in the budget, the debt last year increased in the neighbourhood of $500 billion or 4% of GDP. If we do not account for the social security numbers, this year it is in the neighbourhood of $600 billion or 4.6% of GDP.

In comparison to Canada's situation, the United States' fiscal situation is deteriorating and at some point that will come home to roost in the United States. What the Americans do then may seriously affect us and our standard of living. In anticipation of the day that the United States of America cannot carry on accumulating debt at the rate it is doing, we had better prepare ourselves by continuing to reduce our own debt at a faster clip than what is proposed in the current budget.

That is in essence the approach that I would encourage the government to seriously consider. To let the debt remain as it is and only pay off $3 billion would lead to a very interesting situation, which the Minister of Finance confirmed in his projections that, for the first time in a long time, our debt service and costs will increase. They were $34.1 billion last year. They are projected to be $33.7 billion this year but they will go back up next year to $34.8 billion.

This is the impact that the non-reduction of our debt at a faster clip engenders. This is where we are making a collective mistake in that while we can afford to reduce our debt at a faster clip we should. Instead of taking the $4 billion buffer that we have and reducing it to $3 billion, we should go back to a $4 billion or even a $5 billion annual increment so we can reduce the debt and be more responsible toward our future generations.

[Rodger Cuzner, Liberal, Cape Breton—Canso, NS]

Mr. Speaker, a great deal of my colleague's presentation was focused on the responsibility taken by the previous government in paying down debt. One aspect of debt repayment that stands out in my mind was when the previous government honoured the offshore accords and issued upfront payments to both the province of Newfoundland and Labrador and to my home province of Nova Scotia for offshore royalties.

Approximately $800 million was put forward to the province of Nova Scotia and it very wisely applied the money to its debt. Prior to that, the province of Nova Scotia had the worst per capita debt in all of Canada. Paying down the provincial debt has had a significant impact. The issuance of that cheque to the province of Nova Scotia and its application on the debt has loosened up approximately $40 million annually that may be used for roads, hospitals and education.

What would the $68 billion that has been applied to the debt over the years equate to in a free balance on the budget each year? Where should Canadians have expected that amount of money to have been invested?

[Mauril Bélanger, Liberal, Ottawa—Vanier, ON]

Mr. Speaker, the $68 billion that was paid back saved the Canadian taxpayer and, I would imagine, the Crown, somewhere between $3 billion and $4.5 billion annually.

The $8 billion projected that would be paid off in the fiscal year that ended at the end of March 2006 should generate, if a 5% rate of return is taken, about $400 billion in savings on servicing our debt as early as next year. That is the virtuous circle that our party has managed to create in this country in paying off debt, as opposed to the vicious cycle we were in where debt was accumulating faster than the government could handle it.

My colleague opposite should be very careful when he shouts things out because he comes from a government in Ontario that did exactly opposite of what should have been done. Instead, it reduced revenues and increased debt, which we will now have to pay for the rest of our lives.

I was trying to avoid partisanship in saying that the country has a responsibility for the next generation. Whether it be a Conservative government or a Liberal government, we have a responsibility toward our children and our grandchildren. I am saying that we have to be careful in taking a direction of not reducing our debt as fast as we can in a balanced approach. I am saying that the government is veering away from the approach that we had and which the country adopted of paying off debt, reducing taxes and at the same time increasing spending toward more reduction of taxes and more spending and less paying off debt.

We had a tripod balance there that worked. We had best be careful because if we do not reduce debt, the next time we have a recession it may hit us very hard and then we would be back into the vicious cycle of scenarios that we had for about 30 years until 1997-98.

[Raynald Blais, Bloc, Gaspésie—Îles-de-la-Madeleine, QC]

Mr. Speaker, I would like to hear what my Liberal colleague has to say about the fact that there is nothing in the budget for employment insurance.

Can my colleague say what amendments he would like to see made regarding employment insurance?

We are well aware than in various regions of Quebec, and particularly in the region I represent, this is an extremely important issue. I would like to hear him on this subject, and hear what he is asking for.

[Mauril Bélanger, Liberal, Ottawa—Vanier, ON]

Mr. Speaker, I will be pleased to sit down with my colleague and discuss this.

My remarks today essentially relate to the entire question of an overall balance in terms of what relationship there may be between a government’s revenue and expenditures and management of the debt for the future and the direction that a country should take when it comes to tax policy.

I am perfectly aware that some places in Canada need more assistance than others when it comes to the employment situation and seasonal jobs. I entirely agree that our programs should accommodate the needs of every region of Canada to the extent possible.

[Jim Flaherty, Conservative, Minister of Finance]

Mr. Speaker, I am delighted to have this opportunity to speak about our new government's first budget. I will be splitting my time with the hon. member for Brandon—Souris.

Public life is about reflecting the essence of the objective, economic and daily realities in the lives of our fellow citizens, the way we work, the way we live, the way we care for those we love and the way we strive for better lives and a better Canada.

Our government’s first budget is guided by these realities and by important principles. Those principles are clear and specific.

First, government has no absolute right to more and more of the hard-earned money of working Canadians. When government is too large, taxes are too high and surpluses are endemic.

Second, there is only one taxpayer who carries the provincial, federal and municipal load, not three separate taxpayers unrelated to each other.

Third, government must be respectful of the dollars it spends. Taxpayers expect and demand that spending be focused, transparent and accountable. We must ensure Canadians receive good value for the money they send and the money we spend. Our budget honours these principles.

Our budget reduces the tax burden on individual Canadians by $20 billion, more than the last four federal budgets put together.

The budget delivers more than twice as much tax relief as new spending. For every new tax dollar we spend, our government is returning $2 to hard-working Canadians through initiatives such as the 1% GST tax reduction, the new Canada employment credit, a permanent reduction in the lowest income tax rate as of July 1 and increases in the basic tax exemption for all Canadians.

These tax cuts are broad, are evenly directed and help millions of Canadians from coast to coast. The budget delivers tax relief people can see, tax relief that makes a difference, tax relief on which Canadians can count.

Our tax relief plan will exempt 655,000 low-income Canadians from federal income tax.

All of this is within our government's ironclad commitment to balance the federal budget. We are doing all of this while investing more in health care, child care, defence and national security, policing, safe communities and protected borders and more for farmers across Canada who deserve and merit transitional support during these challenging and unbalanced global commodity pricing periods. We can do all this because we will reduce waste, redundancy, overlap and unchecked growth in the federal government's spending.

I will speak about spending for a moment. Over the past five years, total program spending has grown by an average of 8.2% annually. In one year, 2004-05, growth in spending increased by 14.4% under the previous government. These are simply not sustainable or desirable levels of growth in spending. Our budget brings that down to 5.4% for this year and 4.1% for next year.

Our government is taking a targeted approach, and is determined.

We are reining in spending and looking inward to ensure that we as a government have our own house in order. We will review all programs and departments to ensure compliance with a few basic principles: first, that government programs are focused on results and value for money; second, that programs are consistent with federal responsibilities; and third, that when programs no longer serve the purpose for which they were created, they are ended. We will identify $1 billion in savings over this year and next and report by the fall.

Our government will be transparent and open with Canadians concerning the country’s public finances.

The days of surprise surpluses are over. The tax system does not exist to fund large federal surpluses that give licence to spend the people's hard-earned money as if it belonged to the Government of Canada. Government works for the people, not the other way around.

The budget our government delivered on May 2 embraces that kind of relationship between a government and the taxpayers to whom the government is accountable. This is a budget that demonstrates strong support for Canadians and their families. The budget provides Canadian families with children under six a $1,200 a year universal child care benefit so they can make their own choices on child care. It helps apprentices in the trades. It encourages young Canadians to participate in physical fitness and sports programs. It helps students with university education deductions. It reduces the tax burden on small business.

It is on the farm, in the classroom, on the factory floor, in research labs, small businesses on construction sites, community centres and church basements of all denominations where Canadians move the country forward every day. That is where we should be removing the burdens of excess taxation and encouraging independence, initiative and hard work because they are at the very core of what drives and enriches Canadian lives.

Government should help in areas that cannot be faced alone by hard-working Canadians in those areas where a framework of equality and opportunity surely reflects our values as caring citizens, neighbours and human beings, very much in the Canadian tradition, in education and health care, in securing safe communities and public health and supporting persons with disabilities, in defence and in removing the capital gains tax from donations to cultural, social and health charities. The government has a role to play and we have embraced that role in the new budget.

As the finance minister and minister responsible for the Greater Toronto Area, I am honoured to be part of a new government that embraces the kind of shift from the old paradigm of Ottawa overspending and Ottawa knowing best. Instead, we are focussing now on priorities that produce results for people in their daily lives. Infrastructure is for example.

Our budget provides more than $16 billion over the next four years for infrastructure.

This is a long term investment that will mean better roads, more efficient borders and modern public transit through increased capital funding and tax incentives for transit riders. The ultimate goal of these investments is to get people and goods moving in order to keep Canada competitive. An essential part of our first budget is about making Canada more competitive and more productive. In fact, there are 23 specific initiatives in the budget designed to move us forward on this front.

Productivity and competitiveness are about innovation, fair and reasonable tax rates, education, research and development and enhanced workplace productivity. We are embracing a new beginning, a beginning where the taxpayer is respected as opposed to being overburdened, a beginning where the federal, provincial and territorial governments can work together, like we did on softwood lumber, to restore a fiscal balance to the federation and a beginning where we support families, reward initiative and foster productivity in all regions of Canada.

With the budget, we have turned a new leaf. We have turned a new leaf away from excessive taxation and wasteful federal spending. We have turned a new leaf away from condescension to the provinces and feigned and unnecessary hostility toward our greatest ally and trading partner to the south. We have turned a new leaf away from government that puts being big ahead of every other value or attribute.

Our government is focussed, deliberate and fiscally responsible. Our government is managing a few priorities at a time. We will not over-promise and we will not overspend. Our government knows its place and respects its core accountability to the taxpayers of Canada. We are keeping our promises to Canada. They entrusted us to focus on priorities and deliver results.

[John McCallum, Liberal, Markham—Unionville, ON]

Mr. Speaker, my questions for the minister are about the basic honesty, or lack thereof, of the budget and about benefits being distributed evenly.

It appears to me that this is really a meanspirited budget, which plays to the Conservative base. Far from eschewing the principle of Ottawa knows best, this is a social engineering Ottawa knows best budget, which rewards those who play sports, but not those who play music. It takes money from aboriginal people. His own official confirmed the other day at committee that the budget liberates on the order of $5 billion not now going to aboriginals, the least privileged group in the country. It takes money from lower income Canadians by raising only the tax rate applied to lower incomes. It threatens to cut off the homeless, which is not surprising coming from the finance minister who wished to jail the homeless.

First, when he says the budget is even-handed, why is it that at every turn it is the least privileged Canadians who are cut, the ones who are gouged, simply because they are not likely to vote Conservative?

My second question has to do with honesty. His own budget document confirms a hike in the lowest income tax rate. A few days ago his own officials at committee confirmed that. Everybody knows that. Why can the minister not simply come clean and acknowledge, notwithstanding any other possible virtues of the budget, the basic fact that the low income personal tax rate will go up and not down?

The other thing he should acknowledge is the fact that, if we do the math, the tax relief since 1997, when the Liberals balanced the books until the new government took office, amounted to $16 billion per year. His budget has $6 billion of tax relief per year. Not only has the income tax rate gone up rather than down, but over the years of balanced budgets, our government provided a whole lot more tax relief to Canadians than did this budget.

[Jim Flaherty, Conservative, Whitby—Oshawa, ON]

Mr. Speaker, the member opposite knows no compunction. What nerve for the member opposite to say that the Liberal budget reduced taxes more than this budget. If we add the last four Liberal budgets together, plus the fall update, it does not amount to the tax cuts broadly given to Canadians in this budget. What total nonsense from the finance critic. What more nonsense when he implies that lower income Canadians will pay more income tax.

Six hundred and fifty-five thousand of the lowest income earning Canadians not only will pay less federal income tax, they will pay no federal income tax. They have been removed from the rolls all together. The net results on income tax, with all the measures we have taken, is that every income group in Canada will pay less income tax. The member opposite must know that, if he has read the budget. That is the reality and the truth. That is the effect on the lives of Canadians.

The member opposite, in his first question, mentioned civil discourse. Let us have civil discourse on the facts. All Canadians will pay less income tax. That is the fact. All Canadians will pay less GST. That is the fact. The tax reductions are almost $20 billion. That is the fact.

I know the member opposite does not like it because he is faced with one of the most popular budgets in recent Canadian history. That is because we are responding to the needs of Canadians and keeping our commitments to Canadians, unlike the party opposite did in its 13 years in government.

[Marc Lemay, Bloc, Abitibi—Témiscamingue, QC]

Mr. Speaker, after hearing the question from my colleague opposite, I listened very carefully to the answer from the Minister of Finance.

I will try to be brief. I am the Bloc Québécois critic for Indian and northern affairs. Our committee adopted and reported a motion to implement the Kelowna accord, which was crucial to the development of the first nations and the aboriginal peoples.

I do not need to have all the figures read to me, but $400 million was earmarked for far too many things on reserves. I understand that $300 million is earmarked for off-reserve housing, but does the Minister not think that this $400 million for use on reserves is inadequate? The government had enough money to increase that figure to over $500 million, which is the minimum needed, if only—

[The Acting Speaker, Conservative, Royal Galipeau]

I am sorry to interrupt the hon. member for Abitibi—Témiscamingue.

The hon. Minister of Finance has the floor and will have to give a very brief answer.

[Jim Flaherty, Conservative, Whitby—Oshawa, ON]

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

The funding in the budget for aboriginal needs is substantial. There is the off reserve housing funding and the trusts being set up in that regard. They are dependent only on a sufficient surplus of $2 billion in the last fiscal year, so that money will flow. There is important funding for education and for health needs of aboriginal persons on reserve. The minister responsible, my colleague the hon. Minister of Indian Affairs and Northern Development, is working diligently to create the--

[The Acting Speaker, Conservative, Royal Galipeau]

Order, please. Resuming debate, the hon. member for Cypress Hills—Grasslands.

[David Anderson, Conservative, Parliamentary Secretary (for the Canadian Wheat Board) to the Minister of Agriculture and Agri-Food and Minister for the Canadian Wheat Board]

Mr. Speaker, I am pleased to have this opportunity today to address the budget.

While the Minister of Finance is here, I would like to acknowledge the tremendous work he has done. He has done great work on the budget over the last few months. What is truly amazing about the budget is that the Minister of Finance did it on short notice. Last year, when the former finance minister across the way was doing the preparation for the budget, it seemed like it took months and months, and he was running all over the country. After all that time, he still was not capable of coming up with a budget that was acceptable to Canadians.

In the election we saw the consequences of the previous government actually coming forward with three separate budgets during the last year. Those members did not think one was good enough. Last summer they had to make a separate deal with the party to their right physically in the House, but obviously to their left, and they came up with another budget. In the fall, they had to take another run at it to try to bring forward more proposals acceptable to Canadians. Of course, as we moved into the election campaign, we found out how interested Canadians were in their budget proposals. Because of that, they had to turn the government over to what we think is a much more confident and capable group of people.

I would like to talk a little about the budget today. Obviously there are some highlights of the budget. One that I am being told about at home and that is very important to people is the reduction in the GST. That has caught the imagination of people across my riding. They know it is going to have an impact on every one of them. Every single person in the country will be able to benefit from that. People are excited about it.

My area is an agricultural one. The people there are very excited to see the commitment the government has made toward agriculture. A lot of them have waited for many years for a government that would begin to pay attention to them and listen to them when they talk about the problems they find in their sector.

This government has stepped forward. During the election campaign we came forward with what we thought was a good election platform on agricultural issues. That was not good enough for the finance minister. Instead of giving just $500 million, as we had promised, in additional aid to the agricultural sector, he tripled it. He brought it up to $1.5 billion. That brings farm aid this year to levels that have rarely been seen before.

It is an interesting budget, a good budget and an exciting budget. There are a lot of different things about it that Canadians really like.

The budget is definitely a budget of opportunity. It offers comprehensive tax relief for virtually everyone in this country. For individuals there are tax breaks that will be valued at over $20 billion over the next two years. That is actually more than was contained in the last four budgets combined. Canadians are beginning to become aware of the fact that this government is not like the previous government, which promised and promised and talked ad nauseam about what it would do but never got around to doing it.

One of the most obvious places that happened was in agriculture, where often we would hear the same money being announced up to five different times. The Liberal government would come forward with an announcement that would sound like a big deal. It would re-announce the money a little bit later, some of it going into the same thing and some being redistributed. It would come back time and again, re-announcing that same money. We are not prepared to do that. We are going to move ahead. We are a government that keeps our promises and moves ahead. We are doing what we said we would do.

As a result of the $20 billion in tax relief that the Minister of Finance has so graciously brought forward for Canadians, there will be 655,000 low income Canadians removed from the tax rolls altogether.

As I said, the budget delivers twice as much tax relief as it does new spending. It delivers more tax relief than the last four budgets combined. It has 29 separate tax incentives and deductions for Canadians. Whenever I talk to people in my riding about the budget, they tell me they are excited to hear about the fact that virtually all of our deductions have to do with their lives, the things they deal with and their daily issues.

Obviously the goods and services tax is one with which they are familiar. We are committed to reducing that by 1% by July 1, 2006, and then by another percentage point later in the mandate. I have heard some questions about why we did not just cut the GST immediately when the budget was presented.

The main reason is that the business community asked that we wait to allow its members to have the time to adjust their cash registers, accounting systems and those kinds of things to make the change. It has been interesting. The people I have heard from most on this issue have been the car dealers. They think people are actually holding off until after July 1 to buy cars. We might not think this cut is a big deal on a $30,000 car, but people will save $300 and they are excited about that. The car dealers are having to figure out whether they will absorb that loss themselves or if they are going to have people put off their purchases until after the change. It has been fun to see people excited about that.

There are many other things that we are doing. The Canada employment credit we are coming forth with is a tax credit of up $500 on employment income. People who are forced to spend money on uniforms and those kinds of things are going to be able to get a tax credit for what they are spending.

We are reducing the lowest tax rate to 15.5%. Of course, the Liberal government will claim it was doing that, but it came up with all kinds of promises that it never came through on. This budget confirms that the lowest tax rate will be 15.5% from January--

[An hon. member]

It was 15%.

[David Anderson, Conservative, Cypress Hills—Grasslands, SK]

I notice that the members across way do not seem to like to hear the truth. They are a little concerned by it. As usual, when they do not have content, they make up for it with a lot of noise. I guess we are becoming used to that in the House.

It is actually a great treat to be on this side of the House and realize that we are going to be able to implement what we bring forward. We know that the Liberal government had its opportunity. We hear many of the Liberals still making a lot of noise and wanting to continually be after us, but they had their chance. Now Canadians are apparently more than willing to give us the opportunity to come forward with our legislation and our plan.

We are going to increase the basic personal exemption amount. That is something that low income Canadians really appreciate as well.

There are a few other things that I think are really great. During the campaign, one of the things we talked about was apprenticeship programs and what we wanted to do to try to encourage young Canadians to become part of that. I think this is a really good initiative, as I thought it was during the campaign, and we are moving ahead with it. It has a couple of components.

One is a new tax credit of up to $2,000 for employers who want to hire apprentices. I think that is a great initiative. We are going to set a $1,000 grant in place for first year and second year apprenticeships. Young people who want to get into apprenticeship programs will have the opportunity to access some of these grants.

We are putting in a $500 deduction for tradespeople for costs in excess of $1,000 for the tools they need to acquire as a condition of employment. If I were a young person, this would be exciting for me. I think young people are excited about the fact that they will be able to go into an apprenticeship program and acquire tools and get a tax deduction for doing that. I think this is long overdue as well.

To wrap up, there are many other good things in the budget that help out families, farmers and people who want to get a job. The universal commitment to parents who have children under six is another big issue and a good initiative that we think is necessary. We look forward to moving forward with the budget and enjoying the support of Canadians as we do.

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

Mr. Speaker, the hon. member keeps repeating, as have other members of the Conservative Party, this nonsense about there being more tax cuts in this budget than all previous budgets combined. That is just idiotic nonsense.

I wonder whether the hon. member could tell us, since the year 2000, what has been the cumulative effect of the tax relief afforded in budgets 2000 through to 2005? Does he still, after doing that mathematical addition, maintain his position that this budget in 2006 has more tax relief than all those previous budgets?

[David Anderson, Conservative, Cypress Hills—Grasslands, SK]

Mr. Speaker, I am only too happy to stick to the issues here. I am not sure that we need to get into the name-calling or into basically saying that people are idiots because they do not agree with the Liberals. We have seen too much of that over the years. They seem to have the attitude that they are somehow entitled to be in a position of power here.

I will talk a bit about my area of southwestern Saskatchewan in a short answer to my friend's question. I am proud to represent the good people of Cypress Hills--Grasslands. After 13 years of Liberal incompetence and the corruption and the things that we have seen, people in my riding are definitely not in the same shape they were in when the Liberal government took over 13 years ago.

In fact, the farming sector is in an absolute crisis situation, primarily because the previous government had no interest in helping out Canadians in my part of the world. The Liberals were ready to step up to the plate for their special interest groups, but farmers were not one of them. I have a large agricultural riding, and the folks in my area had basically been left alone by the previous government. Now we have to fill in the gaps and try to prop up the industry so it can get back on its feet again. We look forward to doing that.

There are a lot of other things in the budget that are really good. Members should be thanking us for the child care proposal we have put forward. This government will pay every parent in this country with a child under the age of six $1,200 per year to be put toward the child care they choose. People where I come from tell me this is a good idea. They know full well that the fantasy plan the Liberals came forward with, and which had no results, was not working for them. While the Liberals would spend millions of dollars on their friends and those they liked, the people where I come from, the people in rural communities, were not seeing any money. They were left alone until we came forward with this proposal of $1,200 per child. People in my part of the world are thankful. They say they are very grateful and are glad that we are in power. They say they look forward to supporting this government in the future.