Mr. Speaker, it is a pleasure to participate in this debate today. I would like to mention that I will be splitting my time with the hon. member for Churchill.
As many of my friends opposite will know, when the last election campaign took place, I was not a proud member of the federal Liberal Party. I actually campaigned as a member of the Conservative Party and I spent a considerable amount of time knocking on doors. In fact, I actually knocked on around 25,000 doors over the course of eight or nine months during my campaign.
As I was knocking on doors, I had a great opportunity, of course, as other members do, to actually talk to individuals and families in their homes and find out what they cared about. I found that many people in my particular riding had not elected a Conservative since 1993. In fact, I was the last Conservative to represent that riding and there I was in 2005 campaigning again.
I found there was hesitation among people in the riding about the current Prime Minister. They did not mind the Conservative brand from what they knew from the past, but they had a few reservations about how this new Conservative Party would actually pan out. When people raised these questions with me I said, “Don't worry. I can assure you, my friends, that this new Conservative Party will be moderate, mainstream, middle of the road, and at its very core it has concerns about the economy, good economic management”.
I told people, “Don't worry, this party gets it. It understands the pressures that families are under today, it understands the concerns that people have about rising taxes. It is the party of prudent spending and economic management”. I said that and I did not give people any hint whatsoever as to what they could end up expecting.
What did they find? They found higher income taxes. No one told me about that when I was a Conservative candidate. Nobody told me to go to people's doorsteps and say, “If you vote for me, I will raise your income taxes”.
When I knocked on doors I had something called “Stand up for Canada”, which had a section in it called “Security for Seniors”. In that section it said, “We will not make life harder for senior citizens, senior investors”. I knocked on their doors and when they asked me, “Are you guys going to look after our savings”, I said, “Absolutely. The prime minister to be gets it. This new Conservative Party understands”. I did not tell them that we would go back as Conservatives and rob their savings.
When people said to me, “I have all my money in my house. Do you understand that? Do you guys understand that the repository of net family worth in this country is now residential real estate? Do you get it”, I said, “Absolutely. We will pursue prudent economic management policies that will not be inflationary, that will not trigger the Bank of Canada having to raise its key lending rate, which will translate into you having a higher mortgage rate”.
They asked me about inflation and I said, “Don't worry about that. There is no way that I think this government is going to overspend. This is a Conservative government, not like those Liberals over there who know how to mind the dollars. They will not overspend”. At the end of the day, I would have trouble going back to those people if I were a Conservative. I would have had serious trouble going back. I would have to say to those people, “I basically lied to you. I basically told you that the economic situation would be handled when it was not”.
I want to run through a couple of points before I get to some solutions because that is what Liberals are all about. We are about solutions. We are about solving problems. We are about giving people a sound, bright economic future. That is what everybody in the House ought to be concentrating on, not hurling mud.
I have to say a few things about what has happened regarding government spending. To me, there is nothing that represents failure on the part of government more than governments who overspend. It is a crime. I never thought I would see a Conservative government spend the way it is spending.
The government is spending more money in the current budget and projected in next year's budget than any other government in Canadian history, of any flavour, of any stripe.
In fact, government spending right now is increasing by double the inflation rate. That is a pretty serious issue. The consequences of that are extremely clear. When government spending is increasing by double the rate of inflation, it ends up itself being inflationary.
The government accounts for a significant part of GDP. As that happens it triggers an increase in the core inflation rate. As all hon. members know, the Bank of Canada tries to maintain an inflation rate of between 1% and 3% and right now we are at the top of that and bumping over. Economists agree that a very significant part of that is government spending.
As the Bank of Canada increases its inflationary range and exceeds it, then it has to have interest rate increases. Those interest rate increases are now impacting on families because they have also inflated our currency. Our Canadian dollar's rise to parity is certainly influenced by the inflationary tendencies we have seen from government spending and the Bank of Canada.
Now there is more pressure on families because mortgage rates are rising. In fact, key mortgage rates went up by half a point just a few days ago. With the record level of mortgage debt in this country with Canadians never having been as indebted as they are today, a half point increase in mortgage rates actually matters. It matters to people in my riding. In the 905 area, where houses are expensive, a half point is a big deal, and it need not have happened. It was fueled by the Conservative government. That is one pressure on families in my riding.
A secondary pressure on families is taxes. When I was knocking on doors in my constituency, I never told my people that their income taxes were going to rise because I did not believe it. The basic income tax rate in this country dropped to 15% in November 2005 in the last Liberal budget. I never imagined that a Conservative Prime Minister and a Conservative government would actually raise that, but they did.
People ask me why I am upset because it is only half a point. A half point increase in the bottom income tax rate translates into $2.8 billion. That is $2.8 billion that we are taking right out of the hides of Canadian taxpayers and sending to Ottawa. I do not think that is what any of them actually bargained for or voted for.
Then of course there are the 2.2 million seniors who owned income trusts. We know that story so I will not go over it in detail.
I went to a rally in Burlington, Ontario, as a Conservative candidate during the 2005-06 election campaign. I stood right behind the Prime Minister as he stood at the podium. He looked into the teleprompter and promised once again that he would never tax income trusts, and he did. Some $20 billion in the value of retirement savings, the capitalization of income trusts, basically vaporized because the income trust had been decimated by that commitment to tax it. Shame.
Also, and perhaps more significantly, $26 billion worth of Canadian companies have been sold, many of them to foreign interests, because they were worth pennies on the dollar because of the income trust decision.
Worse still, the Government of Canada said it was going to raid seniors' investments and take their income trusts because it was afraid of tax leakage. It did that because we have a robust income trust sector in Canada and the Government of Canada would see fewer dollars in terms of revenue. What has happened a year later? We know the facts. The Government of Canada suffered a $900 million tax loss because of the disappearance of these companies.
This is not all about problems; it is about solutions. We are also about solutions. Obviously, with an electoral campaign being forced upon us by the Conservatives, which will be here shortly, our platform will be revealed.
We do not believe that the GST cut is necessarily the best way to deliver the next tax cut. We think it is best through broad-based income tax cuts, which will put more dollars in the pockets of families.
Second, we want less government spending. With less government spending, we will have a drop in interest rates and that is definitely going to help families.
Third, we want an industrial strategy that addresses seriously foreign takeovers and also helps the automobile sector. Included in that is a corporate tax cut.
Fourth, we want broad based family tax reform and reductions. There is a number of things that we will be proposing there. Also, we have a demographic time bomb in this country with many people who today are truly going to need the kind of help the Liberal Party is offering.