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House of Commons Hansard #15 of the 39th Parliament, 1st Session. (The original version is on Parliament's site.) The word of the day was budget.

Topics

Questions on the Order PaperRoutine Proceedings

3:30 p.m.

Some hon. members

Agreed.

Motions for PapersRoutine Proceedings

May 3rd, 2006 / 3:30 p.m.

Regina—Lumsden—Lake Centre Saskatchewan

Conservative

Tom Lukiwski ConservativeParliamentary Secretary to the Leader of the Government in the House of Commons and Minister for Democratic Reform

Mr. Speaker, I ask that all notices of motions for the production of papers be allowed to stand.

Motions for PapersRoutine Proceedings

3:30 p.m.

Liberal

The Speaker Liberal Peter Milliken

Is that agreed?

Motions for PapersRoutine Proceedings

3:30 p.m.

Some hon. members

Agreed.

Interim SupplyBusiness of SupplyRoutine Proceedings

3:30 p.m.

Liberal

The Speaker Liberal Peter Milliken

Pursuant to order made on Tuesday, May 2, 2006, the House will consider and dispose of later today the motion relating to interim supply and the passage at all stages of the supply bill.

In view of recent practices, do hon. members agree that the bill be distributed now?

Interim SupplyBusiness of SupplyRoutine Proceedings

3:30 p.m.

Some hon. members

Agreed.

3:30 p.m.

Conservative

The Acting Speaker Conservative Andrew Scheer

Before moving on to the next item of the day, I would like to return to the point of order raised by the hon. member for Scarborough Centre on April 27, 2006 during debate on Bill C-2.

The hon. member for Scarborough Centre requested an apology from the hon. Parliamentary Secretary to the President of the Treasury Board for questioning his honesty and integrity.

It is the duty of the Chair to ensure that our debates are conducted with a high degree of civility and mutual respect in keeping with established practices in the House. As is stated in House of Commons Procedure and Practice at page 522:

Remarks directed specifically at another Member which question that Member's integrity, honesty or character are not in order.

In a ruling given December 11, 1991, Speaker Fraser reminded members that:

The Chair wishes to emphasize that a major element of this civilized conduct consists in refraining from personal attack. There is good reason for this. First of all, in a general sense, respect for the person is the building block upon which our society is structured. Second, few things can more embitter the mood of the House than a series of personal attacks, for in their wake they leave a residue of animosity and unease.

With that in mind, I would like to invite the hon. parliamentary secretary to respond to the point of order raised on April 27.

3:30 p.m.

Nepean—Carleton Ontario

Conservative

Pierre Poilievre ConservativeParliamentary Secretary to the President of the Treasury Board

Mr. Speaker, I believe we can put this matter to rest very promptly by simply saying that my remarks were directed generally at the past Liberal administration and not particularly at any one member.

I do not know this particular member personally, but I am sure he is a man of great integrity and my remarks were certainly not directed at him, his person or the office that he personally holds.

Thank you very much, Mr. Speaker, and I look forward to putting this issue promptly to rest.

3:30 p.m.

Liberal

John Cannis Liberal Scarborough Centre, ON

Mr. Speaker, as I said then, I say now, to put it to rest. I clearly heard that it was directed at me, personally. I ask that the response be to me, personally, not to the party as a whole. The member is just simply fooling himself by responding the way he did. His amateurish response is unethical and unacceptable.

3:30 p.m.

Conservative

The Acting Speaker Conservative Andrew Scheer

I did take the time to review Hansard. There was nothing on the record. During the exchange there was some heckling going back and forth from both sides. The member has clarified his gestures. He has indicated that he did not mean to question the member for Scarborough Centre and the Chair is satisfied with that clarification.

The House resumed from May 2 consideration of the motion that this House approves in general the budget policy of the government.

Financial Statement of Minister of FinanceThe BudgetGovernment Orders

3:30 p.m.

Liberal

John McCallum Liberal Markham—Unionville, ON

Mr. Speaker, there are three problems with this budget. They are broadly defined problems and each of the three has its own components.

It is a budget that provides short term gain for some and long term pain for all Canadians. It is a budget that will provide long term pain because it follows the long Conservative tradition of fiscal imprudence and incompetence. It is also a budget that has no vision. At best, it is all over the map with no coherence. At worst, it reflects the incredible smallness and small-mindedness of the top five priorities.

What Canadians expect, especially from a new government in great fiscal shape, is not smallness and small-mindedness, but a bold vision and a blueprint for sustainable growth for the future.

Nothing is more important for Canadians, for our children and grandchildren, than to lay the foundations for our country's future success and prosperity, and to tell Canadians how we can continue to thrive and prosper in a world of emerging Goliaths like India and China. This budget is nowhere on this fundamental issue. It is small. It is petty. It is without vision.

The budget also follows a second long Conservative tradition: taking money out of the pockets of poor Canadians and giving it to the wealthy.

My third and final topic will be the connection between honesty and politics in Canada.

Fiscal competence and debt reduction are core national assets. Slowly but surely, these assets have been built up over the past 13 years to the point where Canada's fiscal record and reputation are second to none in the world.

When Conservatives ask what we Liberals did over the past 13 years, I am proud to answer that one thing we did was to clean up their $42 billion deficit mess. With much sacrifice by Canadians, we balanced the books in four years and then the nation began to reap the benefits of these sacrifices. Since balancing the budget, Canada has enjoyed the strongest job growth of all G-7 countries, the biggest debt pay down, and the strongest growth in living standards. That is what we did over the past 13 years and I for one am very proud to have been a part of it.

As a result, the Conservative government inherited the best fiscal situation since Confederation.

Are Canadians not entitled to expect a good deal more from the first budget of a government that had the amazing luck to inherit a $10 billion surplus? I think they are.

The least that Canadians can expect from this new government is that it will not waste or squander the public funds it has inherited. This money is a vital asset that the government spent years building up and that could be wasted over time or destroyed in a nanosecond. This certainly has not happened yet, because the government inherited the soundest fiscal situation since Confederation.

But there are disturbing signs that the Prime Minister takes the nation's finances lightly. There are signs that the Prime Minister does not care about debt reduction and is preparing to join the ranks of the many Conservative leaders known for their financial incompetence, from Mr. Diefenbaker to Mr. Mulroney to Mr. Harris in Ontario.

When John Diefenbaker came to power, after a string of Liberal surpluses, the government ran seven consecutive deficits. The Mulroney-Campbell government bequeathed to the Liberals a $42 billion deficit and it took several years and a great deal of pain to clean this up.

Maybe the most fiscally incompetent government in all of Canadian history was the government of the Mike Harris common sense revolution, or more appropriately, the Mike Harris stick it to the common man revolution.

Financial Statement of Minister of FinanceThe BudgetGovernment Orders

3:35 p.m.

An hon. member

Didn't Flaherty have something to do with that?

Financial Statement of Minister of FinanceThe BudgetGovernment Orders

3:35 p.m.

Liberal

John McCallum Liberal Markham—Unionville, ON

I am coming to that. That was a government in which the two most important economic ministers of the current federal government, the Minister of Finance and the President of the Treasury Board, were both key players.

The Harris government laid off 10,000 public servants, closed more than 30 hospitals and fired 8,000 nurses. But better than that, of even greater incompetence, the Conservatives found they had made a mistake and they had to hire back many of those nurses.

So zealous were they to cut taxes before the money was in the bank and so blatantly did they fix the books that what happened after they lost power? The auditors came in and instead of finding the promised balanced budget, what did they find? They found a deficit, and it was not a small deficit. It was a deficit of $5.6 billion.

Now two of the prime architects of that financially disastrous regime are sitting across the aisle holding the two economic portfolios of the federal government. That fact alone should make Canadians quite worried about Conservative fiscal incompetence, but there are other reasons.

In the election campaign, when the Conservatives released their economic platform, they got the numbers wrong, so they re-released it. Then they got the numbers wrong again, so they re-re-released their election platform. Now that is incompetent.

Just yesterday, the Minister of Finance said that he was cutting income tax, when in fact he raised it. The nicest interpretation is that the minister is demonstrating crass incompetence. The most likely explanation probably cannot be said in the House.

The Conservative plan consisting of increasing income tax to reduce the GST is a poor financial measure and, once again, it is incompetent.

As Herbert Grubel, a former Reform finance critic, told me, reducing the GST may be a good political move, but it is a disastrous economic one. In other words, it makes sense only for a Prime Minister who puts political opportunism before the good of Canada.

The Conservative Party's refusal to identify its cuts on budget day is also fiscally irresponsible, but it is not a surprise. The Harris duo across the aisle know this trick well: cut the taxes today with vague promises of spending cuts some time tomorrow. This is a recipe for deficits if ever there was one. They certainly delivered a big one, $5.6 billion.

Our government disclosed over 100 line items of detailed expenditure reductions on our budget day last year. If the Conservatives had any degree of fiscal competence and fiscal responsibility, they would have done the same thing yesterday, but they did not.

Yesterday the budget eliminated what is called economic prudence, a technical term which is essentially money set aside to provide further assurance against running into deficit if something negative hits the economy, and something that is negative always might hit the economy. We have seen SARS. We have seen hurricanes from time to time. We have seen recessions. One hopes it will not happen, but even a terrorist attack could happen. Many things could happen. If we are skating close to the edge, if we have gotten rid of the prudence, there is nothing there to protect us should some unforeseen negative occurrence happen. Then the Conservative government would be much closer to deficit than our government under the Liberal leadership would ever have been. This is fiscally irresponsible, fiscally incompetent. It is playing fast and loose with the nation's finances.

The Prime Minister speaks disparagingly of surpluses and the associated debt paydown as excess taxation. When the Prime Minister or finance minister travels internationally to G-8 meetings I know they get lavish praise for balancing the books. I have heard it: “How did you get rid of your deficits? What magic formula does Canada have to get rid of deficits when other countries have failed to do so?”

Does the Prime Minister answer that question? The Prime Minister I assume, since he does not like fixed surpluses, would say, “No, George, this is not a success; we have a terrible problem in Canada. Our surpluses are much too big”. Or he could say:

“No, Jacques, we have a crisis in Canada. Our surpluses are much too big”. This attitude of the Prime Minister’s is ridiculous.

If he actually did say that to George Bush or Jacques Chirac, he would certainly be a laughingstock.

The Prime Minister fails to understand that surpluses and debt paydown are not excess taxation for today's generation. They are lower taxes or better government services for future generations. It is dangerous when the Prime Minister of Canada disparages debt paydown and when he does not care about future generations, especially when we live in a world of an aging population.

Maybe it is not surprising. The Prime Minister seems to care about only one thing: votes in the next election. Future generations will not be voting in the next election. That is sufficient reason for him not to want to pay down debt for the benefit of future generations, because they will not be voting come the next election.

All this is very worrying for Canada’s economic future. The country’s finances are so healthy now that the risk of deficit is not imminent. However, the government’s financial mentality and incompetence are such that I am worried about what the Conservatives will do with our vital asset, that is, our financial competence.

We who have built up this asset have to be extremely vigilant so that it is not destroyed by the government. Canadians cannot afford to return to the long-term problems that are engendered by the Conservatives’ usual deficits and their financial incompetence.

The other long-term problem posed by the budget is the absence of a grand design for the country. The budget does not ask the sole question that any responsible minister of finance would ask in 2006.

The question is as follows: how can a small country with some 30 million inhabitants continue to prosper in a world in which superpowers such as China and India are beginning to elbow their way in and former superpowers such as Europe and the U.S. are taking dynamic measures to advance their own economic interests?

The government seems to think that the world owes Canada a living. It does not.

In terms of any sensible plan that would answer this question, the government is either going in precisely the wrong direction on tax policy, or it is totally missing in action on everything else.

If the object is to enhance Canada's saving and investment, promote productivity and prosperity, then a hike in income tax to pay for lower GST is the worst policy in the world. This is not a controversial statement among economists and policy experts. The government is proposing to fritter away some $10 billion per year, an enormous sum of money, in a tax cut that does nothing at all for Canada's future prosperity or competitiveness. This is another triumph of political expediency over what is best for Canada. It is a disgrace.

I truly believe that the Prime Minister, himself an economist, should know better than to fritter away all the taxpayers' money in a way that does absolutely nothing for the long term economic health of Canada.

Financial Statement of Minister of FinanceThe BudgetGovernment Orders

3:45 p.m.

An hon. member

Did he graduate?

Financial Statement of Minister of FinanceThe BudgetGovernment Orders

3:45 p.m.

Liberal

John McCallum Liberal Markham—Unionville, ON

I am not sure if he has a degree.

By lowering income tax instead of the GST, he could have put the same amount of money, or more, into the pockets of Canadians. He could have done it more fairly, and in so doing, he would have given a boost to Canada's medium term prosperity. Clearly again this is a case of long term pain for all Canadians in the name of short term political expediency for the Conservative Party.

One does not need to have a Ph.D. in economics to understand that Canada will not compete with India and China on the basis of low wages. We do not even want to try. The only way we can compete is through our people, brain power, ideas, research, commercialization, entrepreneurship, higher learning, training.

The Conservatives’ measures in this area are tokens at best and, at worst, a complete shame. We Liberals had reserved $2.5 billion for research and development, particularly university research, marketing, the Canada Foundation for Innovation and new research centres. One of these centres is located in my own riding. Unfortunately, all that was cancelled in the budget. In exchange, the Conservatives are offering only $200 million, instead of $2.5 billion. This is quite pathetic.

As far as higher education is concerned, the Liberals had set aside funds to be paid to every college and university student. They could receive up to $6,000 in tuition fees for a four-year program. Once again, the Conservatives thought they should cancel this measure. What do they offer in exchange? A tax deduction for textbooks worth about $80 a year.

This is not just a token. This is an insult to hard-working students and to their parents who are hit with rising tuition fees, whereas we on this side of the House recognized this problem and offered to pay half of the fees in year one and year four up to a total of $6,000. The Conservatives are giving students an $80 tax write-off on textbooks.

Not only that but perhaps even worse, in the fiscal update we also had plans that were booked to provide even more generous assistance to disadvantaged Canadians, aboriginal people, people with disabilities and low income Canadians, who wished to go to university. In those cases the amounts were more generous.

All of that was cancelled by the Conservatives. Their pathetic $80 tax deduction for buying books is an insult compared with the substantial measures that we put in place in order to promote a learning economy that would be competitive in the world and also provide access to Canadians to post-secondary education.

While other countries work to create a tax system that fosters innovation, what does the Prime Minister do? He hikes income tax to cut the GST. While other countries pour billions into research, innovation and higher learning, what does the Prime Minister do? He withdraws from the race, offering tokens so small as to be insulting.

This is dangerous stuff. It is absolutely and totally irresponsible. It is a recipe for long term pain. Canada simply cannot afford to sit on the sidelines or to take a time out as other countries pass us by.

I come now to that second great Conservative tradition, to take from the most vulnerable Canadians and reward the better off.

With respect to tax policy, let me begin by correcting the budget numbers for the rather obvious error that every Canadian understands except, it seems, the finance minister and the Prime Minister. What we heard yesterday was an income tax increase and not an income tax cut, and that is a fact. They have offset this tax increase with a GST cut and the employment credit. On the basis of correct numbers, we find the budget takes money out of the pockets of Canadians earning around $30,000 and puts that money into the pockets of wealthier Canadians. It is absolutely false when the Prime Minister and the finance minister say that every Canadian received a tax break in this budget. That is only true if we make the wrong assumption that income taxes went down when in fact income taxes went up. That is not a very difficult assumption to correct and once we do that it becomes abundantly clear that lower income Canadians suffered a tax hike.

Financial Statement of Minister of FinanceThe BudgetGovernment Orders

3:50 p.m.

Gerald Keddy

It was never there. What are you talking about? That is a total falsehood.

Financial Statement of Minister of FinanceThe BudgetGovernment Orders

3:50 p.m.

Liberal

John McCallum Liberal Markham—Unionville, ON

Perhaps I should repeat the point since the member opposite seems to fail to comprehend.

Up means that direction and down means that direction. When we go from an income tax rate of 15% to 15.5% that is up, and that is what the budget did as confirmed in the document.

Financial Statement of Minister of FinanceThe BudgetGovernment Orders

3:50 p.m.

Gerald Keddy

It was never 15%. That is misleading the public.

Financial Statement of Minister of FinanceThe BudgetGovernment Orders

3:50 p.m.

An hon. member

It is 15%. Last year it was 15%.

Financial Statement of Minister of FinanceThe BudgetGovernment Orders

3:50 p.m.

Liberal

John McCallum Liberal Markham—Unionville, ON

Fifteen is a lower number than fifteen and a half.

Financial Statement of Minister of FinanceThe BudgetGovernment Orders

3:50 p.m.

An hon. member

Tell the member to check his tax form.

Financial Statement of Minister of FinanceThe BudgetGovernment Orders

3:50 p.m.

Liberal

John McCallum Liberal Markham—Unionville, ON

If the member checks his own tax form he will see this point verified.

Financial Statement of Minister of FinanceThe BudgetGovernment Orders

3:50 p.m.

An hon. member

Tell him what page it is on.

Financial Statement of Minister of FinanceThe BudgetGovernment Orders

3:50 p.m.

Liberal

John McCallum Liberal Markham—Unionville, ON

It is revised schedule 1. If the member has the real copy, as opposed to the Xerox one, the 15% is in nice Liberal red. It stands out so people can see it.

Let us not debate facts anymore. Let us just acknowledge the point which does imply that this reverse Robin Hood syndrome is still alive and well in this budget.

Let us talk about other disadvantaged or challenged groups in this country. Let us take Canada's farmers who are in a state of crisis and the government does not care. There is not a penny of emergency funding for spring planting. There is nothing for producers in dire need of immediate funding if they are to have any chance at all of surviving.

The member for Malpeque, in question period, questioned the Minister of Agriculture and got a non-answer. His asked why there was no emergency funding for spring planting and why there was nothing right now for producers threatened with going under if they did not get money right away, and he received a non-answer from the minister.

Until the government comes forward and explains clearly why my colleague is wrong, we have to conclude that it does not care. There is not a penny for Canada's farmers now at their moment of crisis.