Debates of May 9th, 2006

Financial Statement of Minister of Finance

[Cheryl Gallant, Conservative, Renfrew—Nipissing—Pembroke, ON]

Mr. Speaker, I will be sharing my time with the member for Edmonton Centre.

It is an honour and a privilege to rise today on behalf of the people of Renfrew—Nipissing—Pembroke to participate in the first Conservative federal budget in 13 years to address the concerns of Canadians. The budget plan of the new Conservative government is called “Focusing on Priorities”. The priority this government is focusing on is people: Canadians and their families.

That represents a fundamental change in attitude on behalf of the Government of Canada. For the first time in over a decade, Canadians from all walks of life will start to see the change in attitude that has only become possible with a generational shift in leadership in this country. That comes from electing a Prime Minister who is a member of this generation, the one that the demographers call the baby boomers.

Who better understands the needs of a majority of Canadians who are raising a family day to day than someone who is experiencing the day to day responsibilities of raising a family? Who else but a parent whose children are involved in organized physical activity could see the great benefit of government encouraging that activity?

These are the types of policies that represent a generational shift in thinking, from the old to the new. There is no doubt that the membership of the official opposition has been reduced to a club of grumpy old men. The mindset of the old party establishment, with its cult of leadership, was symbolized by a ruling clique. This was pathetically demonstrated by the claims of entitlement that Canadians heard from members of the old boys club when they were caught with their fingers in the taxpayer-funded expense claims cookie jar.

The debate over the GST is a prime example of how the budget of the new Conservative government represents fresh, innovative thinking on the part of the Prime Minister. There is no question that the tough decisions that allowed for balanced budgets were made by the former Conservative government in the 1980s.

The fact that the past administration shamelessly tries to take credit for past Conservative leadership has to be the most comical position the Liberal Party has ever taken, in that it has claimed ownership of the GST. The GST has become Liberal tax policy. The member for Markham fiercely defends the Liberal GST against all attacks. The party that campaigned on eliminating the GST has become the party of the GST. How appropriate.

Let us talk about the GST. If there is one tax that affects all Canadians, it is the GST. If there is one tax reduction that will benefit all Canadians, it is a reduction in the GST. It is as simple as that. The money that is saved by Canadians through reducing the GST returns directly into the economy, where it does the greatest benefit.

When a farmer in my riding of Renfrew—Nipissing—Pembroke purchases a new piece of equipment, he will see the benefit immediately. The GST is being lowered effective July 1 of this year, not three, four or five years from now. The previous regime would announce and re-announce tax changes that never seemed to happen or were so complicated that ordinary Canadians could never tell if the changes were really made. That farmer, in addition to joining all Canadians with a cut in the GST, will also see $1 billion in new funding for farmers added to the GST tax cut, which is a measure that will benefit all Canadians.

When loggers in places like Madawaska, Palmer Rapids and Deux-Rivières replace a piece of equipment, they will have the benefit of a reduced GST. They will have the benefit of the new federal government that negotiated an agreement to end the softwood lumber dispute. This dispute created much hardship for the loggers and their families who work in the forest industry. It was time for leadership and our Prime Minister delivered.

On July 1, working Canadians, like the farmers and foresters in my riding of Renfrew—Nipissing—Pembroke, will pay less tax thanks to a brand new $1,000 Canada employment credit. The new $1,000 credit, in addition to the $500 deduction for the cost of tools tradespeople are required to purchase to work their trades, will benefit all working Canadians.

I know the mechanics I rely on at Butler Chev-Olds as well as those at Rick Voskamp's local Suzuki dealership will appreciate that tax credit, as will all tradespeople in my riding who are required to purchase tools as a condition of employment. The families of those same tradespeople will appreciate the recognition our new government places on the work they do. If their children decide to follow their parents' footsteps into the trades, our new Conservative government is there to assist with help for apprentices themselves as well as the people providing the apprenticeships.

Our help for families with children is not limited to the trades.

Not only is our Conservative government eliminating federal income tax on all income from scholarships, bursaries and fellowships, a new textbook tax credit will assist students in purchasing the textbooks they need to study. This is being done at the same time we are expanding eligibility for the Canada student loan program.

While these measures assist families with children as they prepare to leave the nest, our new Conservative government has focused on the priority of assisting Canadians with young children with a plan that respects parents and the fact that like every child, every household is unique.

On July 1 of this year, not three or four years from now or never as the case used to be under the old government, the new Conservative universal child care benefit will provide all families with $1,200 per year for each child under six. In addition to trusting parents to make their own choices, when it comes to child care, the new Conservative government will allocate $250 million to create real child care spaces and develop a plan that actually provides the spaces. This second point is very important when one looks at what has happened in the province of Ontario.

In my riding of Renfrew--Nipissing--Pembroke, in the case of child care, this program has been downloaded to the County of Renfrew by the Ontario government. In order to access the dollars that are offered by the province, the County of Renfrew is being asked to cost-share on an 80:20 split for child care funding. The federal government allocates 100% to the Province of Ontario, which in turn directs it to the municipalities that are expected to deliver the program.

As the Consolidated Municipal Service Manager, CMSM, for child care services, the County of Renfrew is expected to make up any funding shortfall through its already overburdened and overtaxed municipal property tax base. This is not feasible. With some of the highest property tax rates in the Province of Ontario, the County of Renfrew chose to opt out of those child care programs because it recognized that its taxpayers could not afford to subsidize through their property taxes. The 20% cut that the province was taking was going to have to be made up by the everyday taxpayers of Renfrew county.

By targeting child care spaces in businesses and community organizations that require assistance, spaces will actually be created by our new Conservative government. This directs the child care where it is needed, without creating financial hardship on individuals on fixed incomes who are struggling to pay high property taxes. The additional burden on the CMSMs in Ontario results in the conflict of social services versus cuts to basic services like fixing potholes in roads. Shuffling funds between levels of government does not create child care spaces.

I briefly wish to touch upon the plight of older workers and the need to respond to those situations where older workers, through no fault of their own, find themselves facing unemployment.

Recently it was announced by Smurfit-MBI that its Pembroke plant would be closing, throwing 139 employees out of work. I want to assure the employees at Smurfit-MBI that it is a priority of myself and the new Conservative government, as identified in the budget, to assist them so they are able to continue to contribute their talents and experience in gainful employment.

[Michael Savage, Liberal, Dartmouth—Cole Harbour, NS]

Mr. Speaker, I listened to my colleague's comments with great interest and I appreciate them.

She mentioned the investment in post-secondary education and the tax cuts for books, scholarships and things like that.

In the economic update, which was introduced in the House in November, there were the following commitments: $2.2 billion for student financial assistance for low income Canadians; $550 million to extend the Canada access grants for low income Canadians; $3.5 billion for workplace based training; $1 billion for infrastructure; $265 million to specifically bring people with disabilities into the workforce; $1.3 billion for settlement and integration; and $2 billion-plus dollars for university research, 10 times as much as was in the budget.

We have already reversed the brain drain in our country and we have brought researchers back here in the last number of years, and that is mentioned in the budget document. The most important part of that for me is the issue of student access. There are hundreds of thousands of students across Canada who cannot afford university. Nova Scotia's tuition is $6,000 to $8,000. Does the hon. member really think $80 will help those students?

[Cheryl Gallant, Conservative, Renfrew—Nipissing—Pembroke, ON]

Mr. Speaker, as I mentioned before, students will be receiving the scholarships and bursaries tax free. In addition, we are expanding the eligibility for the Canadian scholarship program and we have the textbook tax credit as well. Many university students have to take mass transit and we will be providing tax credits for the monthly bus or transit passes that will be required. In addition to younger students, we have older students. As I said in my speech, we have the older workers at Smurfit-MBI who, I hope, will be continuing their education as well.

In the brief time allotted to me to speak on behalf of these residents, I focused on the benefits that our first budget provided to all Canadians.

We recognize that it is the middle class in our country who pay the bulk of the taxes, so it should be the middle class who should first see the benefits of a government committed to the tax cuts to improve their quality of life.

[Blaine Calkins, Conservative, Wetaskiwin, AB]

Mr. Speaker, my hon. colleague spoke quite a bit about education in her speech. I am a former faculty member of a college in Alberta for the last five years and I have a post-secondary education, with three different post-secondaries. When I was young and going to university, I applied for student loans.

Coming from a farm background, we were a fairly poor family. I would apply for and get a fairly good student loan and a bit of a bursary. Then I found out, when I worked and had to claim that as income, a bunch of the bursary was clawed back from me at the end of the tax year. I could not claim for books or for any of those things.

Could the member elaborate on how much money a student will be able to earn in a given year, including bursaries, before they are even on the tax roll? I know it is quite a significant number, so I hope she can tell me that.

[Cheryl Gallant, Conservative, Renfrew—Nipissing—Pembroke, ON]

Mr. Speaker, I have an example. If a student receives a $15,000 scholarship and also earns an additional $10,000 in 2007 by working as a teaching assistant, he would have a significant exemption.

For hard-working students, who are working their way through school, like my hon. colleague, that $1,000 employment credit will apply as well. Just by virtue of working toward his education, he will be earning another $1,000.

[The Acting Speaker, Conservative, Andrew Scheer]

We have just enough time for a quick question and a quick response.

The hon. member for Gatineau.

[Richard Nadeau, Bloc, Gatineau, QC]

Mr. Speaker, my colleague for Renfrew—Nipissing—Pembroke has an Acadian surname that affirms all of Canada's francophonie, a name of great gallantry. I would therefore like to ask her the following question. How is it that the budget does not provide for help to the Fédération des communautés francophones et acadienne du Canada for the development of Canadian francophone minority communities? There is no doubt as to the alarming rates of assimilation in Canada in francophone minority communities. Why is there no investment to help the federation and expand its budget, as it had requested?

[Cheryl Gallant, Conservative, Renfrew—Nipissing—Pembroke, ON]

Mr. Speaker, the new Conservative government tried and succeeded in providing broad-based tax benefits to all Canadians.

[Laurie Hawn, Conservative, Edmonton Centre, AB]

Mr. Speaker, I am very happy to stand in my place and speak in support of our government's historic budget for the three minutes that I have.

It has been a very long time since there has been such an agenda of hope for Canadians. I congratulate the Prime Minister and the Minister of Finance for their vision and courage. They have presented a balanced budget that significantly cuts taxes, focuses federal spending and pays down debt.

When I get up in the morning and turn on the lights, I pay a tax on the electricity. When I run my shower, I pay a tax on the water. When I brew my coffee, I pay an import tax on the beans. When I get into my car and drive away, I pay a tax on the gas. I pay a tax on the road on which I drive. I pay a recycling tax on the tires. I pay a tax to the street cleaner or a tax to the snow clearer. If I take the bus, I pay a transportation tax. Before I get on my flight to Ottawa, I pay an airport improvement tax. En route to Ottawa, I pay a tax on the jet fuel that the plane is burning. I pay a tax so air traffic controllers keep my aircraft apart from others. When I land in Ottawa, I pay a landing tax. When I check into my hotel, I pay a commercial accommodation tax. When I eat at a hotel restaurant and have a glass of wine, I pay a hospitality tax. If I go to a movie, I pay an entertainment tax. Every single item I buy is taxed. Every April 30 the government takes several more pounds of flesh in the form of income tax. Finally, when I die, my last act after death will be to pay tax.

When we refer to death and taxes it is definitely and ultimately in that order.

Canadians are tired of being overtaxed. That is why our budget has introduced tax relief of over $20 billion in two years, more than the last four federal budgets combined.

On January 23, the Conservative government inherited a 13 year old elephant of overtaxation, procrastination, unaccountable spending and many other impediments to long term progress and prosperity. We cannot eat an elephant like that in one sitting, but this budget has taken one heck of a bite out of the pachyderm's posterior. We know it, Canadians know it and the opposition knows it. That is why Canadians have expressed strong support for the budget. That is why all hon. members in the House should rise in support of the budget.

[The Acting Speaker, Conservative, Andrew Scheer]

It being 6:15 p.m., it is my duty to interrupt the proceedings and put forthwith every question necessary to dispose of the amendment now before the House.

The question is on the amendment. Is it the pleasure of the House to adopt the amendment?

[Some hon. members]

Agreed.

No.

[The Acting Speaker, Conservative, Andrew Scheer]

All those in favour of the amendment will please say yea.

[Some hon. members]

Yea.

[The Acting Speaker, Conservative, Andrew Scheer]

All those opposed will please say nay.

[Some hon. members]

Nay.

[The Acting Speaker, Conservative, Andrew Scheer]

In my opinion the nays have it.

And more than five members having risen:

Call in the members.

(The House divided on the amendment, which was negatived on the following division:)

Vote #5

The Budget

[The Speaker, Liberal, Peter Milliken]

I declare the amendment lost.

A motion to adjourn the House under Standing Order 38 deemed to have been moved.

[Michael Savage, Liberal, Dartmouth—Cole Harbour, NS]

Mr. Speaker, I appreciate the opportunity to speak to the issue of education in Canada. My remarks will deal with a question I recently posed to the minister, a question to which she was unable to respond, leaving it to the finance minister and then the intergovernmental affairs minister.

Other than a recitation of Liberal accomplishments, of which I was already familiar, there was no answer provided on this hugely important issue. Why is education important? Well, it is. Early learning, child care, pre-k to grade 12, university, community college and upgrading of skills throughout life are critically important.

From an economic perspective, Canada's labour market faces a significant shortage of skilled workers. In an increasingly competitive global economy, these shortages will have a serious impact on our economy. Countries across the globe, certainly the emerging giants, China, India and Brazil, are investing heavily in research and in their universities and colleges. There is a growing recognition that maintaining our continued success in Canada will depend on our ability to compete in the global knowledge economy.

The previous Liberal government invested close to $13 billion in research and innovation over the last decade, information that the government boasts about in its budget documents. Canada now leads all G-7 countries in per capita investment in university research. These investments have had a huge benefit to our economy, to the development of new technologies and to retaining and attracting top researchers. We have reversed the brain drain.

As chair of the Liberal caucus on post-secondary education and research, I had the opportunity to travel the country and meet with students, professors, researchers and university and community college presidents. The entire sector acknowledges the hugely valuable contribution of the government. They also understand that we cannot let up. We need to continue to invest our financial capital in order to enhance our human capital.

Last week the Globe and Mail referred to the Canadian economy as a “world beater”. It then suggested that the two priorities to keep it that way were education and an investment in the environment. However, the recent Speech from the Throne did not even mention the word education and the recent budget paid little attention to real issues of education and the environment. it was a huge opportunity wasted, especially after the dramatic action introduced in our economic update and the record-breaking economy that the government inherited.

Last spring the government of the day, in consultation with the NDP, introduced Bill C-48. The bill would have provided $1.5 billion in new investments for post-secondary education but it was only enabling legislation outlining parameters in which moneys could be spent. It did not outline details. That came in the fall economic update which addressed students, particularly low income families, aboriginals and persons with disabilities. It contained billions of dollars for those most in need.

The economic statement went well beyond Bill C-48, putting much more investment in students, among other significant investments such as 10 times more in research than we saw in last week's budget.

However, much was lost when the NDP sacrificed principle at the altar of political opportunism. Sensing electoral gains, it helped defeat the government. The immediate impact was the cancellation of the provisions outlined in the economic update jeopardizing the spirit of Bill C-48 and the investments outlined.

In response last week to my question on post-secondary education, the current government did not offer a plan as to what it would do for education. Instead, the Minister of Intergovernmental Affairs said:

--the Government of Canada currently provides significant financial support for post-secondary education and training. The Canada social transfer provides $16 billion.... In addition, our government currently provides $5 billion in direct support for students....

Those are the words of the minister in the government. I knew what the previous government did and I share the minister's view that it is impressive.

What will the government do to build on that record, especially for students most in need?

[Tom Lukiwski, Conservative, Parliamentary Secretary to the Leader of the Government in the House of Commons and Minister for Democratic Reform]

Mr. Speaker, I thank my hon. colleague for his question and I will be responding on behalf of the Minister of Intergovernmental Affairs.

The Government of Canada is committed to working with the provinces, territories and business and labour partners to ensure that post-secondary education in Canada continues to be an important priority. We welcome the Council of the Federation's initiatives in this regard. We look forward to working with the Council of the Federation as we go forward to ensure that post-secondary education and training remains an integral part of the government's priorities.

Our government has several initiatives it will be bringing forward to encourage skills development for people of all ages, whether it is through our trades program with incentives for apprentices and for employers to hire more apprentices into those skill jobs or whether it is assistance for university students, not through tuition credits but through relief of their student bursaries and scholarships.

We will be developing programs that will help all students continue lifelong learning. Currently, the Government of Canada invests $9 billion in post-secondary education, including $5 billion annually in direct support through such activities as student financial assistance, scholarship tax measures, and $3.8 billion in cash transfers and tax measures to the provinces to support post-secondary education.

Since 1988 the Government of Canada has provided $2.5 billion as part of the Canada education savings grants program. With the 2006 budget, the government is committing up to $1 billion of additional funding to provinces and territories in support of post-secondary education. Through this investment the government is taking action to address some of the short term pressures facing provinces and territories.

The government will undertake consultations with provincial and territorial governments with a view to identifying appropriate roles and responsibilities for each order of government in meeting future challenges and to examine the most appropriate ways to deliver support. Currently, 45 red seal trades are eligible for the apprenticeship job creation tax credit and the apprenticeship incentive grant.

The government, in consultation with provinces and territories, will consider extending eligibility to other economically strategic and provincially recognized apprenticeship programs in the future. The provinces have responsibility for apprenticeship training and certification of skilled journeypersons. The red seal trades are those trades for which agreed interprovincial standards have been developed. The government believes that it is unfair to tax students on the recognition they receive for their academic excellence.

All students work hard and they benefit from a number of tax measures such as the Canada employment credit and the tuition education and text book tax credits which reduce the tax liability of working students.

The 2006 budget provides $200 million over two years for university based research and development through the indirect cost of research programs, the federal granting councils, and the Canada Foundation for Innovation. The government will also be undertaking granting councils activities

[Michael Savage, Liberal, Dartmouth—Cole Harbour, NS]

Mr. Speaker, I appreciate his pride in our accomplishments but just look at the formula. In the economic update in the fall there was $2.2 billion for student financial assistance, $550 million for the Canada access grants, $3.5 billion for workplace based training, $1 billion for infrastructure, $265 million to bring people with disabilities into the workforce, $1.3 billion for settlement and immigration, and we offered a fifty-fifty plan in the election campaign.

The current government offers a tiny tax benefit on scholarships and books. It is $80. In Nova Scotia, tuition is $6,000 to $8,000 a year and students will get $80. That does absolutely nothing for the Canadians who need help the most. Tinkering with the tax system is not how education is improved. We must invest directly in it. This is an abandonment of Canadian students.

[Tom Lukiwski, Conservative, Regina—Lumsden—Lake Centre, SK]

Mr. Speaker, I would point out again to my colleagues, both on this side and that side of the House, that once again the Liberals are fond of talking the talk, but very often they fail to walk the walk.

Press releases are not true action. We consider a strong healthy economy the best support programs, not only for students but for other Canadians. I would suggest to the member opposite that he recall exactly what happened in last year's budget with his former government.

Once again he takes pride in saying that they have a commitment to post-secondary education, but if we listen to the members of the New Democratic Party, it seems that they are saying that government abandoned all pretense of supporting post-secondary education, and it was only the secondary NDP budget that actually put money into post-secondary education programs.

We have a bit of a disconnect here between the member opposite and the other opposition party in the House. I think they should get their act together and finally realize that the government will finally be paying proper attention to all students.

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

Mr. Speaker, there was an ominous promise in last week's budget to identify $2 billion in cuts in order to balance the books. Ominous because it failed to offer even a suggestion where these cuts would come from. Vague promises to find future savings like these are misguided from the point of view of Canadians who may lose their jobs or key services. The victims deserve to know who they are. The promises are also irresponsible and misguided from the perspective of fiscal planning. This was the Harris method. We have tax cuts today, vague spending cuts maybe tomorrow. This is a recipe for deficits.

I will explain that in more detail in a moment.

First, I want to assure the House that I do not oppose measures that increase government efficiency. Times change, programs become superfluous and the government of the day must ensure that Canadian taxpayers' money is used optimally.

Last year, I carried out an exercise of identifying low priority government spending in order to reallocate the amounts involved to high priority sectors. I provided a line by line description with each cut before the savings were spent.

It involved difficult decisions, but I think they were good. Because they were good choices, we had no problem explaining to Canadians what each of the cuts meant to them. The process was open and transparent.

Canadians deserve better than to wake up one morning and find that a service they depend on has been axed by stealth. Just look at the recent EnerGuide cuts undertaken by this government. Low income Canadians put thousands of their dollars into making their homes more energy efficient, with the clear understanding that they could recover much of that money through EnerGuide. Unfortunately, they discovered yesterday that the program had been cut, leaving thousands out to dry.

Sure, a tax cut will be welcomed by the majority of Canadians. However, if we only show them the tax cut and refuse to show them the service cuts that the lost revenue represents, then we are really only showing them half of the story, as those individuals who were ripped off by this government on previous commitments for energy efficiency discovered only yesterday.

Beyond the moral imperative, there is another reason that these cuts need to be identified now, a reason that goes right to the heart of rudimentary fiscal competence, so lacking not only in this government but in Conservative governments from Diefenbaker through Mulroney through Harris, and I could go on. A reason that goes right to the heart of fiscal competence is to not spend the money before it is in the bank.

The budget contained billions of dollars in new spending as well as billions of dollars in tax cuts. This is money that has been booked and will be spent based on the notion that the $2 billion in program cuts will be found in the savings yielded. But what if they are not found? Again, this was the Harris methodology, so well known to Ontarians.

Multiple pressures can cause the minister to fail. I ran into that during the examination of spending last year. There will be pressures within caucus by colleagues not wanting to lose jobs and funds in their riding.

Is it time, Mr. Speaker?

[The Acting Speaker, Conservative, Andrew Scheer]

I am sorry to interrupt the hon. member, but his speaking time is up.

The hon. Parliamentary Secretary to the Minister of Finance.