Mr. Speaker, it is a pleasure for me to rise to speak to budget 2006. As we have just seen in this House, this is a budget that is generating a lot of excitement and it is good to speak to it. This is the first budget from the Conservative government and one that we are very proud of.
The Government of Canada spends a great deal of Canadians' money. In fact, this budget will spend $188 billion, taxed from the pockets of working Canadians. This is not government by tax credit. The government is spending $188 billion. This is a government that is very much engaged in programs and in areas of responsibility that assist Canadians. We do not want to be over-involved, and that is a balancing act that we are determined to win.
Of the $188 billion of spending, less than half of that is actually discretionary. It is like a family when they have money coming in the door from income. There are some things they have to spend money on whether they want to or not. They spend money on their mortgage or their rent. They have to spend money on food. They have to spend money on the necessities of life like clothing, transportation, educational costs, all the things that families have to spend money on. There is of course some area of discretion.
We went to Canadians during the last election campaign and we told them that if they chose us to run their finances, to spend their money to do the things that would administer the country on their behalf, then these were the things we were going to make a priority, and we listed our five priorities. This budget delivers on those five priorities. It is focused on the things we told Canadians we were going to do.
Why is that important? It is important because the faith and trust in political leadership has eroded. It has gone down a lot over the last few years. It is important that leaders tell people what they are going to do, and then actually follow through and keep their word. That is what this budget does.
It restores some accountability and some discipline to federal spending, and I am going to talk about that in a minute.
This budget provides tax relief for working class Canadians which is important because their tax burden has now outstripped the money that they spend on the necessities of life. That is not fair. It is not right and it is not necessary. We also reduced the national debt and are committed to balanced budgets. These are very important principles.
I would like to start with a determination to be accountable. The previous government would routinely make five year, pie in the sky promises, most of them to be delivered half a decade down the road. We think that Canadians should only have to spend money on what can be delivered today, what they know is going to happen now, and not down the road after many years. Basically, in this budget, our plans are over a two year period. We will only put in measures that are affordable and ready to be implemented.
Over the last five years, government spending has grown by an average of 8.2% annually. That is close to 10%. I ask Canadians watching this debate: How many of their incomes have grown by close to 10% per year over the last five years? The answer is none.
Last year, the party opposite, that was governing our country, actually spent an increase of 14.4% over that one year, nearly a 15% increase in spending. How many Canadians had a 15% increase in their income in order to support that level of spending by government? The answer is none. We have been much more moderate. Spending growth in this budget is 5.4% and next year it will be down to 4.1%. That is important.
We also want to ensure that when we do spend, we are not just throwing money out there to have bragging rights. We want to ensure that the spending actually buys something for Canadians. It gives real results if there is some value for money. We are re-evaluating the programs where there is spending taking place. Some of those programs get a D on this evaluation. A lot of them get an F. We are not going to continue to spend hard-working Canadians' money on programs that are not getting results for them. We are going to re-evaluate and spend money that actually gets results.
We will also be reducing Canada's debt by $3 billion a year. We are considering putting any surplus after that $3 billion in debt reduction into the Canada pension plan and the Quebec pension plan. These plans have huge unfunded liabilities. The bulk of the benefits from these plans is going to be borne by younger Canadians who are not even taxpayers yet. We want to help them all we can to be fair to them in meeting their obligations down the road.
We also will improve the financial accountability on how money is spent. We believe the Auditor General should be able to tell Canadians how their money is spent when it goes into crown corporations and into federally funded foundations. This should not be hidden as the Liberals hid it. It is Canadians' money and they have a right to know how it is spent.
This budget also recognizes that Canadians pay too much tax. The average working Canadian's burden for the necessities of life has risen about 1,000%. Let us guess how much the tax burden has risen in the same time. It is 1,600%. That is the tax they are being overtaxed.
We want to make sure there are some tax reductions to even it out, to give Canadians the right to spend their own money as much as possible, so our budget plan delivers on our commitment to cut the GST by one percentage point. That will be effective July 1. We also will benefit all Canadians with this tax cut, not just those who earn income. Every single Canadian is going to benefit from this reduction in the GST. In fact, the benefit will be close to $9 billion back into the hands of Canadians over two years, even those who do not pay any personal income tax. Although the GST rate is being cut, we are going to keep the GST credit at current levels to protect low income and modest income Canadians.
That is not all. The budget also proposes a comprehensive plan to reduce personal income taxes for all taxpayers. That means there will be a new Canada employment credit for all working Canadians. Effective July 1, the first $500 of income that a working Canadian earns will not be taxed. That will then double in 2007 to $1,000. This will help all working Canadians to keep more of their own money and to meet the costs of employment.
We will also permanently reduce the lowest personal income tax rate. Starting on July 1, it will go from 16% to 15.5%. This is the rate that applies on the first $36,400 of income. It benefits the low income earners who need this decrease in taxes the most.
The Liberals claim that this is a tax reduction they wanted to put into place, but they did not put it into place. They announced it and did some technical things to make it happen, but they never passed it into law.
This is now going to become the law of the land. The personal income tax rate on the lowest tax bracket will actually permanently be reduced from 16% to 15.5%. If the Liberals had wanted to do that, why did they not do it? They had 13 years.
We will also legislate an increase in the basic personal amount of income Canadians can earn tax free. Again, the Liberals claim they wanted to do it. They started to do it, but they never passed it into law because it did not matter enough to them to actually do it in time to pass it into law. It was a deathbed promise to try to get more votes during the election. Thankfully it failed, because now we have a government that means business about tax reduction for Canadians.
Also, we want to help the job creators of this country, the economic engines, people who engage in business and economic activity, so we are going to eliminate the federal capital tax as of January 2008. If businesses have capital needs, they should not have to pay extra tax in order to bring money into their business.
We are going to eliminate the corporate surtax starting in 2008. This was a tax the Liberals brought in that was supposed to help reduce the deficit. It was not needed in the last few years and yet the Liberals kept it on. We also are going to reduce the general corporate tax rate from 21% to 19% by 2010.
This will make us competitive with our largest trading partner. We do 85% of our business with one country and that country has a better tax regime than we do. Our businesses cannot compete. They do not have enough cash in their hands. They cannot keep enough of their own earnings in order to compete. We want to make sure we change this so that we are on a level playing field, so that we can vigorously use our talent, our innovation and our entrepreneurship in this country to succeed and to create prosperity for all Canadians.
We did not stop there. In budget 2006 we also recognized small business as the backbone of our economy, so we are going to increase the amount of small business income that is eligible for the 12% tax rate from $300,000 a year to $400,000 a year by next year. And we are going to reduce that 12% tax rate to 11.5% in 2008 and to 11% in 2009.
We want to free the economic engines of country to create good jobs for Canadians and to create prosperity for all of us.
Canadians know that with a small population our education and skills are very important in making us competitive in the global market. We know that education and skills training are key to our economic future. That is why we are going to invest significantly in training and education.
Starting immediately, there will be a new tax credit of up $2,000 for employers who hire apprentices. In January 2007, a new apprentice incentive grant will provide $1,000 a year to apprentices in the first two years of an eligible program. That is in addition to all the other tax reductions for working Canadians.
Many tradespeople have to provide their own tools in their work. We are now going to allow a deduction of up to $500 for the cost of tools.
We are going to help post-secondary students with a tax credit for the cost of textbooks. We are going to fully exempt all scholarships, bursaries and fellowship income for students.
In addition to that, we have allocated $1 billion for urgently needed investments in post-secondary educational infrastructure. In fact, the federal government spends $8 billion a year on education. As of this budget, that has been increased by $800 million more in this year.
On aboriginals, we note that under the past government aboriginals lived in the most appalling third world conditions. We are determined to change that. In this budget, we will spend $450 million to upgrade water, housing and education facilities on reserves and also to help aboriginal children. We will provide $300 million for off reserve housing and $300 million for badly needed housing in the north. We also have allocated $2.2 billion to lay to rest this terrible situation of the residential schools problem. Thus, in this budget, there is $3.2 billion allocated to aboriginal spending.
Over the next few years, and beginning now, we will be holding discussions with aboriginal leaders as to further programs that will assist aboriginals, and we will be funding those in future budgets. We do not believe in the Liberal way of having a big meeting on the eve of an election, on an electoral deathbed, allocating big bunches of money with no plan at all. We will make plans. We will put them into place. We will fund them. We will make the lives of aboriginals better in this country.
We also want to support our primary economic sectors that are facing serious challenges, both at home and abroad. That is why this budget provides $2 billion in support for the agriculture sector over two years, including an additional special $1 billion immediate investment to assist farmers.
I compliment my colleague, the Minister of Agriculture, who has been meeting for months across the country with stakeholders in this important industry, hearing their concerns and bringing together a plan to address the immediate needs and the future needs of this critically important industry.
We also commit $400 million over the next two years to the forestry sector, in addition to delivering what the Liberals could not for years, which is an end to the war on softwood lumber that was robbing our communities of income and robbing many Canadian families of jobs. We have put that to rest.
We will also invest an additional $400 million for the sector, particularly to help support worker adjustment as this new softwood lumber agreement comes into effect, to strengthen our industry's long term competitiveness, and to combat the pine beetle infestation, which was ignored by the previous government and is destroying our forests at an alarming rate. We are going to get busy and do something about that.
We have already had some discussion about our measures to help families with children. This of course is a priority for all members of this House. We have, I think, reasonable disagreements on how to go about it, but as members know, our party believes that all parents need help. We want to have universal assistance and support for every single parent and family in this country, so we have introduced, as we campaigned on, our universal child care plan. It will give $3.7 billion in funding over two years for a universal child care benefit. It will give families $100 per month for each child under the age of six to assist them in raising their children, in caring for their children, in providing for whatever care families think is most appropriate for their own family situation. It will benefit 1.5 million families and over 2 million children.
As well, we are mindful that many parents, some parents, choose full time institutional day care. We will invest $250 million a year, starting next year, with real plans to increase the number of child care spaces by 25,000 spaces each year. We are now building plans to make sure those spaces actually are created, unlike the Liberal deathbed plan to throw out money with no requirement that actual spaces be created. We are going to create spaces so that the segment of families that need them will actually have them.
We are also going to increase the child disability benefit so that more families can have that assistance for children with disabilities. We are going to also keep our promise to introduce a tax credit of up to $500 on fees for fitness programs for children under 16.
Mr. Speaker, there is so much more in this budget and, although you say I have one minute, I have three more pages. How can that be?
We are going to protect Canadians.
We have plans to address the fiscal imbalance in a meaningful way and open up discussions with the provinces.
We are going to apply the fiscal discipline that we talked about, that Canadians are needing.
Budget 2006 keeps promises. It is a promise-keeping budget. Ours is a party that believes when we say we are going to do something, we actually keep our word. That is what Canadians are like. They are honest people who keep their word. They want their leaders to do the very same thing. We focus on the priorities that Canadians elected us to deliver. It sets the stage for future action, as future budgets and future financial resources become available, to continue to build an even better Canada for all Canadians.