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House of Commons Hansard #8 of the 39th Parliament, 2nd Session. (The original version is on Parliament's site.) The word of the day was taxes.

Topics

Presence in GalleryOral Questions

3:05 p.m.

Some hon. members

Hear, hear!

Canadian Islamic History MonthOral Questions

3:05 p.m.

Liberal

Mauril Bélanger Liberal Ottawa—Vanier, ON

Mr. Speaker, there have been consultations among the parties and if you were to seek it, I hope you would find unanimous consent for the following motion. I move:

That, in the opinion of the House, due to the important contributions of Canadian Muslims to Canadian Society; the cultural diversity of the Canadian Muslim community; the importance of Canadians learning about each other to foster greater social cohesion; and the important effort now underway in many Canadian communities in organizing public activities to achieve better understanding of Islamic history, the month of October should be designated Canadian Islamic History Month.

Canadian Islamic History MonthOral Questions

3:05 p.m.

Liberal

The Speaker Liberal Peter Milliken

Does the hon. member for Ottawa—Vanier have the unanimous consent of the House to propose this motion?

Canadian Islamic History MonthOral Questions

3:05 p.m.

Some hon. members

Agreed.

Canadian Islamic History MonthOral Questions

3:05 p.m.

Liberal

The Speaker Liberal Peter Milliken

The House has heard the terms of the motion. Is it the pleasure of the House to adopt the motion?

Canadian Islamic History MonthOral Questions

3:05 p.m.

Some hon. members

Agreed.

Canadian Islamic History MonthOral Questions

3:05 p.m.

Liberal

The Speaker Liberal Peter Milliken

(Motion agreed to)

The House resumed consideration of the motion.

Opposition Motion—The EconomyBusiness of SupplyGovernment Orders

3:05 p.m.

Bloc

Thierry St-Cyr Bloc Jeanne-Le Ber, QC

Mr. Speaker, I am pleased to speak to the Liberal Party's opposition motion, to which the Bloc Québécois objects for several reasons, as I will explain in this brief presentation.

I will begin with the reference to income trusts. This was a field day of irresponsibility. For years the Liberals refused to act on this issue and allowed income trusts to go tax free. They created an unfair advantage for this type of organization or enterprise. In addition, there was an increasing impetus for large corporations to adopt this economic model. It is a particularly pernicious model because it practically forces the company to spend all its money every year and to return surpluses to shareholders rather than investing them in research and development and spurring the growth of the company.

Thus, it is a very short-term vision that is destabilizing our economy. The Bloc Québécois had been asking for some time that these trusts be taxed as corporations, but the Liberal government did nothing. It acted irresponsibly.

The Conservatives were even more irresponsible during the 2005-2006 election campaign when they promised not to tax income trusts. That was an irresponsible promise, especially since many investors believed it and invested their money in this savings vehicle. When the Conservative government announced last year that income trusts would henceforth be taxed, trust stock prices plummeted, causing losses in the billions of dollars in market capitalization all because of this field day of irresponsibility: the irresponsibility of the Liberals, who never did anything about income trusts and are still today calling for this tax shelter to be maintained; and the irresponsibility of the Conservatives, who did in fact do something about it, but promised they would not, thereby giving investors false confidence.

Beyond this issue, this Liberal motion poses a major problem. I am talking about the same old centralist attitude of a domineering federalism that defines the Liberals, as well as the New Democrats and the Conservatives. We saw this today during question period on the issue of the securities commission.

There is quite the unanimity within the federalist parties in this House. They are unanimous on the fact that there should always be interference in Quebec's jurisdictions. They also share the attitude of Ottawa knows best. This is where it is decided what is best for the nation of Quebec, which was unanimously recognized in this House. However, that recognition was nothing more than lip service.

There is a lot of meddling in this motion. It talks about infrastructure, research and development, post-secondary education, assistance to immigrants, recognition of credentials, and labour force training, all in just two or three paragraphs; that is quite the feat.

This same old attitude harms Quebec because programs centralized in Ottawa are not adapted to Quebec realities. We see this quite often. Just look at the percentage of spending by the various departments in Quebec: we are almost systematically below our weight in terms of tax contributions and we are especially below our demographic weight. These programs are not adapted. Just look at Fisheries and Oceans. Quebeckers contribute 25%, but 25% of the budget certainly does not get spent in Quebec.

Taxation is another area where we see this. Ottawa puts in place centralized programs that do not reflect the reality in Quebec, and Quebeckers are punished and disadvantaged because they are part of the Canadian federation. I will give two examples. Taxation is not always exciting, but it represents hundreds of millions of dollars for Quebeckers.

The first example concerns tuition credits. We can claim tuition on our federal tax return and deduct up to $10,000 in tuition from our taxes.

In the rest of Canada, tuition averages $14,665 for a typical three-year university course worth 45 credits, but in Quebec it costs only $5,700. Students in Quebec therefore can claim only $5,700 of the $10,000 tax credit or 57%, while students in the rest of the country can claim the full amount.

If we take a typical tax rate of 22%, which applies to people earning $50,000 or more—this is often true in the case of university students—that comes to $946 per student. If we multiply that by 111,000 students, we get roughly $105 million in savings for Canada, because Quebeckers decided to adopt a different system.

Some might say—and I have heard this said in this House—that it does not matter, all the better for Quebeckers. Since the students pay less tuition, it is only right that they should have fewer tax credits than other Canadians. This is wrong. What Quebeckers do not pay in tuition, they pay in tax. Quebeckers decided to collectively pay students' tuition rather than expect students to pay a larger share themselves. Consequently, we are penalized because of the choices we have made. What is more, every year, Canada reaps huge savings. This is a gift from Quebeckers to Canada, and the federal government is still refusing to wake up to that reality and give us back our money.

Another similar example is the credit for child care. In Quebec, we decided to establish community tools such as very low-cost child care, at $7 a day, instead of the much higher average of $35 and up in the other provinces. This means that again the government saves hundreds of millions of dollars every year because Quebeckers decided to do things differently. When we ask the federal government to give the money back to provincial governments, it systematically refuses. We are not asking for a handout; we are asking that the savings be returned to Quebeckers, who chose to use a different model.

Unfortunately, I am running out of time, but I could go on about all these examples. Obviously, Quebeckers are realizing more and more that the federal framework does not allow them to build a nation, a society in their own image, and that in the medium term, the solution is for Quebec to become a sovereign country that fully controls all its taxes and can make its own budgetary decisions based on the type of society it wants to build.

Until then, the Bloc Québécois will at the every least continue to demand that the Constitution be respected, and to call for the decentralization of the federation and a solution to the fiscal imbalance.

The latest budget contained a monetary correction for the fiscal imbalance. The government gave several billion dollars that will help the Government of Quebec. However, in order to correct the fiscal imbalance, we are asking for a fiscal solution. Otherwise, the fiscal imbalance issue will not be resolved. The minister himself appeared before the committee and told us that there was no fiscal solution in the latest budget. Once tax or GST points have been transferred, Quebeckers will be able to decide how that money is to be managed, without having always to ask Ottawa for permission, and without having to beg for their own money.

It is important to establish another measure to avoid the centralization of the federation, which we are seeing at this time and which the three parties have been constantly supporting for several decades in Canada, specifically, to really limit use of the federal spending power in areas of Quebec jurisdiction. A rather inane sentence about this appears in the Speech from the Throne.

I would like to issue a challenge to the Conservative members, who could perhaps use the questions and comments period at the end of my speech to give me a list of the projects that, over the past 10 or 15 years, have met the criteria set out in the throne speech.

According to these criteria, they have to be new cost-shared programs that fall under Quebec's jurisdiction. Given all of these criteria, there are simply no programs left. There have been almost no new cost-shared programs that fall exclusively under Quebec's jurisdiction in decades. The last ones were about health insurance.

This is a real con. The federal government is giving us a totally meaningless gift.

Earlier, I asked the Conservative members of the House what programs they were talking about. I asked them to name one single program that the federal government has implemented in the past five to 10 years that meets the criteria mentioned in the Speech from the Throne, that is, a new shared-cost program that falls exclusively under provincial jurisdiction. I myself have not yet found a single one. I challenge the Conservative members to provide us with a list to prove that what they are giving us is worth something. If they cannot, then they are promising something we already have.

It looks as if the Conservative government is simply encroaching on provincial jurisdiction without even sharing the costs with the provinces. Even if the Conservatives came up with a bill to deliver on their throne speech promise, we would get nothing new. There is no substance to what the Conservative government is offering. I hope that the Conservative members will be able to give me a list.

Opposition Motion—The EconomyBusiness of SupplyGovernment Orders

3:15 p.m.

Liberal

Francis Scarpaleggia Liberal Lac-Saint-Louis, QC

Mr. Speaker, I listened carefully to the speech by my colleague from the island of Montreal. He spoke at length on the fiscal imbalance and so forth. It is difficult to grasp the true nature of the fiscal imbalance. My question is as follows.

At what point will we know with certainty that the fiscal imbalance has been resolved once and for all? Will it be when the Government of Quebec deems it to be resolved? If not, what will happen if there is a change in government and the new government claims that it has not been resolved? Or will it be when a majority of Quebeckers, according to some poll or other, claims that the imbalance has been resolved?

Opposition Motion—The EconomyBusiness of SupplyGovernment Orders

3:20 p.m.

Bloc

Thierry St-Cyr Bloc Jeanne-Le Ber, QC

Mr. Speaker, judging by his question, the hon. member clearly does not understand the concept of the fiscal imbalance.

The fiscal imbalance occurs when the federal government has too much revenue in relation to its constitutional responsibilities, while the provinces do not have enough revenue.

Nonetheless, I will answer his question. It is quite simple. When will the fiscal imbalance be corrected? It will be corrected when the federal government stops spending in the jurisdictions of Quebec and the provinces. That is clear.

If the federal government has the means to spend money in the jurisdictions of Quebec and the provinces, then it has too much revenue in relation to is constitutional jurisdictions. This is no laughing matter.

When enough money has been transferred from the federal government to the governments of Quebec and the provinces, and the government is no longer spending money in Quebec's jurisdictions, the fiscal imbalance will have been corrected. Clearly this is not the case.

In its motion, the Liberal Party is proposing again today that money, taxes, be spent in provincial jurisdictions. Conclusion: the federal government has too much money in relation to its responsibilities and has to spend it in provincial jurisdictions. That is the imbalance that needs to be corrected.

It is quite simple. There is no need to conduct polls, hold consultations or ask anyone whether the fiscal imbalance has been corrected. Once this House is dealing only with issues of a federal nature and it stops interfering in provincial jurisdictions, then we will know.

Opposition Motion—The EconomyBusiness of SupplyGovernment Orders

3:20 p.m.

NDP

Olivia Chow NDP Trinity—Spadina, ON

Mr. Speaker, in fact, there is a very serious fiscal imbalance, and that is one of investing in our communities and cities.

In my city, the city of Toronto, there is a desperate need for federal investment, whether it is infrastructure in highways like the QEW, or in public transit, or in the city itself so it can deal with some of its emerging needs.

In Montreal in the summertime, for example, a whole section was closed because of the crumbling infrastructure. It was really serious, and it is not only in Montreal. I have seen it in Ottawa as well. A stadium has had to be sectioned off, again because of aging infrastructure.

We have a very low corporate tax rate already in all the G-7 countries. We are lower than Japan, Italy, Germany and the United States. Instead of reducing the corporate tax rate any further, would it not make sense for the federal government to transfer more funding to different provinces as well as dramatically increase investment in infrastructure, especially municipal infrastructure?

Opposition Motion—The EconomyBusiness of SupplyGovernment Orders

3:20 p.m.

Liberal

The Speaker Liberal Peter Milliken

I would ask the hon. member for Jeanne-Le Ber to please answer briefly.

Opposition Motion—The EconomyBusiness of SupplyGovernment Orders

3:20 p.m.

Bloc

Thierry St-Cyr Bloc Jeanne-Le Ber, QC

Mr. Speaker, the provinces have needs in terms of infrastructure and, clearly, they do not have enough money, while the federal government has too much. The solution is to correct the fiscal imbalance and to transfer predictable revenues to the provincial governments.

I would also like to point out to the House that I issued a challenge to Conservative members to give me a list of programs, of the historical gains they claim to have given Quebec in their throne speech.

No one bothered to rise to try to show from which programs, over the past five or 10 years, the Government of Quebec could have opted out, if the promise to limit use of the federal spending power—which is in the throne speech—had been implemented. No one bothered to rise. I think their silence speaks volumes.

That promise is a sham. It is an empty promise. We are being promised something that we do not need, something that is already inapplicable. The three federalist parties continue to want to centralize the federation and tell Quebeckers what is good for them, while what Quebeckers really want is greater independence to build a society according to their own vision.

Opposition Motion—The EconomyBusiness of SupplyGovernment Orders

3:25 p.m.

Liberal

Bryon Wilfert Liberal Richmond Hill, ON

Mr. Speaker, I will be splitting my time with the member for Charlottetown.

I am delighted to speak to this motion. First of all, we have a good fiscal situation in Canada because of the record of the Liberal government for 13 years. I would point out that in 1993 when the Liberals came into power, we inherited a $42.5 billion deficit. During that time, we had to deal with fundamental issues to put our fiscal house in order.

There is no question that the current government inherited a significant amount of money because the Liberals were prudent. We dealt with the deficit and at the same time, we invested and we started to pay down the national debt as well. I think during our time in government over $60 billion was paid on the national debt.

I want to talk about municipal infrastructure. It should come as no surprise that the current government has failed miserably the cities of Canada. I point that out because in 1983 the Federation of Canadian Municipalities proposed a national infrastructure program to the government. At that time there was about a $17.5 billion municipal deficit. The government of the day said that if it were re-elected it would put that into operation, but that government was not re-elected. The Conservatives came in and for 10 years the national infrastructure program lay dormant.

In 1993 when the Liberals returned to power, they created the national infrastructure program, with participation from all three orders of government: a third, a third and a third. This was renewed in 1997. As a former president of the Federation of Canadian Municipalities I know all too well how important this was for cities in this country.

During the time of the Liberal government from 1993 to 2006, a number of major infrastructure programs were developed. In fact that money went toward improving highways, transit, sewers, basic infrastructure, recreation. It was extremely important. Our cities are the economic engines of Canada. We need to invest in them. We need to realize that although constitutionally the cities are under the jurisdiction of the provinces, the fact is that people who live in the cities, and now 80% of the population lives in our major cities in Canada, we need to invest in them. We need long term sustainability.

Regrettably the current government has failed. Now we have a $100 billion deficit. We are dealing with everything from rusting bridges, and we have seen what has happened in the city of Montreal as an example, to poor water treatment systems, to problems with transit. There has not been the investment. The government will probably talk about the building Canada fund of $30 billion of which $4 billion only is earmarked for cities. With a $100 billion deficit, $4 billion is not going to cut it.

We need real partnerships. We really need to invest. When the Liberals were in power we eliminated the GST on goods and services. I remember fighting that battle. We only got 57% of the rebate and eventually it was the Liberal government that came in and eliminated 100%. What did that mean for Richmond Hill alone? It meant a million dollars in savings in one year.

Understanding cities is important. We need to understand that they are the economic engines. People who live in these cities have to get to work. They have to be able to get from point a to point b and they cannot do that if the infrastructure is falling apart. We all have a responsibility.

When the leader of the Liberal Party went to Calgary in June, he reaffirmed the commitment of this party to long term infrastructure sustainability. This is a party that returned part of the gas tax to cities and communities across the country. This is the party that understood from the beginning the need to invest in infrastructure. When we invest in that, we have better productivity and that is extremely important for the country.

When we talk about lowering taxes I am clearly on record as supporting the lowering of taxes, both corporate and personal taxes, but we also have to have the investment in communities, whether they are large or small.

We have situations in Canada where we are not competitive because we do not have that investment in infrastructure. We need to have that. If the government is bringing in a fiscal update, it needs to look at that kind of investment in cities.

We hear the big city mayors across Canada continually say that the government is not listening. It is not paying attention to an issue which clearly is of the utmost importance for Canadians. Any fiscal update or budget that may come forward needs to address that fundamental issue.

We cannot have sewers that are falling apart. We cannot have a situation where roads are falling apart. People want to see three orders of government working collaboratively. That does not preclude the private sector. We certainly have seen private sector investment in past infrastructure programs. That is very useful, but again, the municipal governments have to be at the table. They have to be part of the solution. They have to be able to, as they did under the Liberal infrastructure programs, propose what their capital issues are. They have capital programs, five and ten year programs, where they can say they need to advance these things that are very important.

I know my friend from the Northwest Territories who is in the House, a former mayor of Fort Smith and a former president of the Northwest Territories Association of Communities, whom I had the pleasure to work with for a number of years, understands this problem from a northern perspective. There is no question whether one is in the north or whether one is in the southern part of this country, infrastructure needs to be addressed.

We of course had the new deal. These are the kind of innovative programs that I will want the government to consider, to start to really listen.

I realize that the big cities have not necessarily been electorally successful for that party, but that should not be the consideration. The consideration should be that these are the areas of Canada that produce such wealth. If we want to be truly competitive, if we want to match what is being done in Germany, in the United States, in Japan and elsewhere, we need to invest in cities.

I would urge the government to take a leaf out of the Liberals' book of what the Liberals have done in the past successfully. We have received accolades galore from city mayors across the country because they understand. We developed a 20 year strategy to address infrastructure and other needs in this country. For me that is a vision.

We need a national vision when dealing with infrastructure. We cannot do it piecemeal. We cannot simply say that it is somebody else's responsibility. We need to have it earmarked. We have to be able to say to the provinces and the cities that we are all part of this issue. It is not simply about writing cheques; it is about making sure that the money is delivered for the programs.

The same would be true for recreational facilities and things like bicycle paths, if we really believe in making sure that people are healthier. The federal government has a role to play as well in reducing carbon monoxide and improving the health of people in our cities and communities across the country and investing in transit. Again, it should be a dedicated transfer. Funding is important in those areas of the country where that is warranted.

This is part of the Liberal vision, what we have enunciated and have implemented for many years. We believe very strongly that this is something the Government of Canada needs to do because without doing so, from a competitive standpoint we will fall behind.

That is also true in investing in research facilities in our cities. We must make sure that we are investing in post-secondary education. With respect to post-secondary education, we need to convene a federal-provincial conference to talk about the plight of students who are faced with horrendous debt as they come out of colleges and universities. The Canadian Federation of Students and other stakeholders who understand the problem need to be at the table so that we can design a dedicated transfer to the provinces in that regard, as we did on health care funding when we were the government. It is extremely important that we do that.

My plea is very simple. If we do not invest today, we will suffer tomorrow in terms of being competitive in the international community.

I would trust that the Minister of Finance, when he brings down his mini-budget or his statement, will address that. We are all for debt reduction and all for tax cuts, no problem, except we need a balance, and if we are not going to bring that in, we will suffer in the long term.

Opposition Motion—The EconomyBusiness of SupplyGovernment Orders

3:35 p.m.

NDP

Dennis Bevington NDP Western Arctic, NT

Mr. Speaker, it is a pleasure for me to rise and ask questions of my hon. colleague from Richmond Hill.

I am certainly interested in what he has to say about infrastructure. We all know that infrastructure guides the progress of our industry and our lives. Certainly we need money to invest in infrastructure.

The motion today in talking about the reduction of corporate taxes follows a trend that was set over 13 years that brought Canada's corporate tax rate down to the other corporate tax rates in North America and around the world. In reality the corporate world in Canada has not been hurt. When the NDP forced the Liberals in 2004 not to reduce the corporate tax rate further, that did not upset industry. That did not upset business in this country. Things kept on going.

When we look at infrastructure and we look at the dollars we need to invest in our cities, towns and villages and we think of those that are going to gain from that investment, why would we want to cut back corporate taxes, cut back the available resources that the federal government can put into the important infrastructure work? Why is--

Opposition Motion—The EconomyBusiness of SupplyGovernment Orders

3:35 p.m.

Conservative

The Acting Speaker Conservative Andrew Scheer

The hon. member for Richmond Hill.

Opposition Motion—The EconomyBusiness of SupplyGovernment Orders

3:35 p.m.

Liberal

Bryon Wilfert Liberal Richmond Hill, ON

Mr. Speaker, I would point out to my hon. colleague that the Liberal government reduced corporate taxes dramatically, from 26% down to 19% and the Conservatives are proposing a dramatic cut from 19% to 18.5%. I would point out that reducing corporate taxes gives us a competitive advantage in the world, which is extremely important.

I understand where the member is coming from, but I would point out to him that we need to be on that cutting edge. That gives us an extra cutting edge.

At the same time, I suggest that a reduction of the GST by 1%, which would cost the national treasury between $5 billion and $6 billion, could be better used elsewhere. The government across the aisle eliminated the $3 billion contingency fund that we had set up to deal with unexpected situations, such as the ones we have had in the past, such as SARS, BSE, et cetera.

The fact is the GST cut could better be used in terms of infrastructure investment. That would be very important.

I do believe a reduction in corporate taxes would encourage investment. It would encourage reinvestment in cities and communities. Obviously, it would make us extremely competitive internationally.

Opposition Motion—The EconomyBusiness of SupplyGovernment Orders

3:35 p.m.

Liberal

Shawn Murphy Liberal Charlottetown, PE

Mr. Speaker, I am very pleased to rise on this issue and speak to this motion.

Let me say at the outset that I will be supporting the motion. The gist of the motion is that the government take measures to drive greater productivity in this country. It is, in my opinion, a term that is not used as much as it should be in this town. It is extremely important. The whole issue of productivity determines our future prosperity as a nation. Everything we do here in the Government of Canada should, in my opinion, be viewed through a productivity lens.

Canada has not done as well as it should. Our productivity level is approximately 85% of that of the United States. The gap is getting greater. We are basically a resource based economy. Prices are reasonably strong, but on the other side of the equation, the manufacturing sector is not doing that great. I believe the statistics are that approximately 80,000 jobs have been lost lately.

It is up to the Government of Canada to take action on productivity, and I do hope this motion is supported and acted upon.

Regarding the first two budgets of the government and the most recent Speech from the Throne, although there have been some positive comments, I believe direction is lacking. One of the positive comments that came out of the last speech was how the Minister of Finance was talking about a single securities regulator. I know there are jurisdictional issues on that, but again, this is something I urge him to continue to work on.

Interprovincial trade barriers have plagued this country's economy for many, many years now. Again, I realize there are jurisdictional issues, but I believe this is something that we and all Canadians should work on.

When we look at productivity, we look for certain programs, initiatives and policies. Some of the more commonly accepted ones are increased research and development, especially in the private sector, and increased technology transfer. On those issues, I am very pleased with the Liberal record.

Starting about eight or nine years ago, billions and billions of dollars have been put into the foundations for peer reviewed research. A lot of it is done in the academic institutions, but a lot of it is done in the private sector also. This is a program and a policy that has worked.

We look to policies and programs to improve our infrastructure, which the previous speaker spoke about. We look for improved highways, ports, airports and broadband so that our goods, our people and our knowledge can be transferred quickly.

We look for open, fair and equitable trade agreements. I am not sure I like the discussion regarding the South Korean trade agreement, but again that is something that will be debated further in this House.

We look for labour mobility, especially labour mobility within the provinces of Canada.

We look for progressive immigration policies, especially in regard to immigrants with the skills this country needs. We look for policies so that when those immigrants do come to our shores their skills are recognized.

We look for skills training and lifelong learning.

Two of the most fundamental issues that we look for are education, starting with our early childhood education system and going on to our secondary education system and our post-secondary education system, and, very importantly, an effective and efficient tax system.

It is somewhat ironic, and it has been said before in this House today in regard to this motion, that economists are unanimous regarding the GST. It is totally unbelievable that one of Canada's national newspapers surveyed 20 economists from different organizations and they were all unanimous that the reduction of the GST, from a productivity point of view, was not the way to go.

All 20 surveyed were of that view and I am not aware of any economist in this country who shares a contrary view. If there is one out there, I would ask that he identify himself.

Some of the economists are Sherry Cooper, chief economist at BMO Nesbitt Burns; David Park, chief economist, Vancouver Board of Trade; Jim Stanford, economist, Canadian Auto Workers; Ian Munro, economist, Atlantic Institute for Market Studies; and Don Drummond, chief economist with the Toronto-Dominion Bank, who says that not only should the GST not be reduced, but it actually should be increased. I do not think we will ever find another issue on which there is unanimity among so many economists.

What we are looking for are taxes that are efficient and effective. First we look for the reduction of capital taxes. They are a very inefficient, unproductive method of taxation. We also look for reductions in the rate of corporate taxation. The Liberal Party reduced it from 28% to 19% and the Conservative government has taken it down another half a point, from 19 points to 18.5.

We look for decreases in taxes on personal income, especially for Canadians in the lower income brackets, and it is my opinion that the reduction in consumption taxes is not the way to go at this time.

Why is it that we are going in this direction? It is my suggestion that it is just politics. It appeals to some people, but it is not the way to go. It is not a pan-Canadian approach. It is not a long term view of the economy of this country.

I cannot cover every topic, but there are a few I want to talk about. Another one I want to mention is the whole area of education. It is my view and opinion that this is an issue that is very critical to this country's productivity.

I would like at this time to read for members a brief quote from James Milway, executive director of the Institute for Competitiveness and Prosperity. He stated:

Lower educational achievement weakens our productivity. Most economists agree that the level of education attained across the workforce is an important determinant of the quality of an economy's human capital. Economic studies also show repeatedly that individuals' earnings increase with their level of education. In fact--

What he states next is important:

--the best single predictor of personal income is level of educational attainment.

I believe that view is held unanimously, but I am disappointed with some of the directions that this country is taking. In the last Speech from the Throne, it was promised that the Government of Canada would create 125,000 early childhood development spaces. It was not repeated in the latest Speech from the Throne.

Now, after 20 months, we ask the question: how many did the government create? Did it create 100? Did it create 75,000? Did it create 50,000? Did it create 25,000? Does anyone in the House know the answer to that question? The answer is none, zero, a big goose egg.

We see the same direction on the whole issue of post-secondary education. It is my belief and position that more resources have to be directed toward students, especially students from lower and middle income families, and there have to be more government grants based on need. I believe it is time for this country to take a couple of steps back and look at the total picture.

It is time that the government looked at the educational tax credit and also at the book tax credit, which I do not think helps anyone except perhaps the very rich. We should take a look at the whole picture and ask ourselves what the best program is for students right across Canada, because it is my belief that we are abandoning the democratic right to an education, and I believe we have to move very quickly on that issue.

I see that I am quickly running out of time and there are other issues I want to talk about. I support increased resources to students on needs based issues with certain principles of accountability built into them.

Another one is the whole issue of infrastructure. The previous speaker spoke to that eloquently. I believe we are lacking on this, but more importantly, the accountabilities are not there. They are not built into the system. I know I do not have time to review that now.

In closing, I will be supporting the motion. I think the government's productivity lens has to be adjusted. The question has to be asked in every program, in every piece of legislation and in every policy: does this initiative makes the country more productive? Also, we have to do it in a way that is accountable.

Opposition Motion—The EconomyBusiness of SupplyGovernment Orders

3:45 p.m.

Conservative

Merv Tweed Conservative Brandon—Souris, MB

Mr. Speaker, it is a little difficult on this side of the House to listen to those former government members, who governed for 13 years and who after their first year in government cut $25 billion out of health and post-secondary education, while today they stand in front of the public saying that is where all the investment should go to enhance our opportunities. It is so hypocritical of the party opposite. When those members were in government and had the opportunity to do that, they chose to cut the funding to those very services that today they say are so important.

It is also important to recognize the fact that economists are one group of people, but consumers are another group. The people whom I represent appreciate the fact that we have taken 1% off the GST and are committed to taking another per cent off. These are some of the people who do not pay income tax. This is the only form of tax break they get from any government.

My question for the member, and for anyone else who might want to answer it, is very simple. Is it Liberal Party policy to increase the GST should it ever become the Government of Canada again?

Opposition Motion—The EconomyBusiness of SupplyGovernment Orders

3:50 p.m.

Liberal

Shawn Murphy Liberal Charlottetown, PE

Mr. Speaker, the member across the way talks about the record of the Liberal government. I would suggest that the record of the Liberal government is very good with respect to post-secondary education.

However, I also want to point out to the House that when the Liberals came to power the Conservatives had been in power for nine years. The annual deficit was $43 billion, interest rates were at 12%, unemployment was at 11%, and the debt to GDP ratio was 73%. We are repeating ourselves here.

I also should point out that if the Conservative government had been in power another 20 minutes, this country would have been broke, but a lot of the same thinking and same people then migrated over to the Harris government and about three or four years after that the annual deficit in that government was $6 billion.

Opposition Motion—The EconomyBusiness of SupplyGovernment Orders

3:50 p.m.

An hon. member

Oh, oh!

Opposition Motion—The EconomyBusiness of SupplyGovernment Orders

3:50 p.m.

Liberal

Shawn Murphy Liberal Charlottetown, PE

If that government had been in power for another few months the country would have been bankrupt, but the same--

Opposition Motion—The EconomyBusiness of SupplyGovernment Orders

3:50 p.m.

Conservative

The Acting Speaker Conservative Andrew Scheer

Order, please. There seems to be some confusion in the House as to who is giving the response to this question. The hon. member for Charlottetown is the one responding to the question, so I would ask all other members to listen to the response. If they have follow-up questions, I will do my best to recognize them in due course.

The hon. member for Western Arctic.

Opposition Motion—The EconomyBusiness of SupplyGovernment Orders

3:50 p.m.

NDP

Dennis Bevington NDP Western Arctic, NT

Mr. Speaker, I have a question for the hon. member. Since 2001, corporate tax cuts have been introduced by the Liberals and the Conservatives followed with theirs. I cannot really tell the difference between the parties when it comes to tax policy. Yes, Liberals and Conservatives can argue over GST cuts. They can argue over the details, but they are dedicated to cutting corporate taxes. They have done it for many years. Right now we are running at close to $10.5 billion in corporate tax cuts that are going to accrue this year over 2001.

The return investment by those corporations into our economy has risen by only 1% of the gross national product. Where are we seeing the great return to the Canadian economy from this type of corporate tax cut?