Mr. Speaker, I will be sharing my time with the hon. member for Wetaskiwin.
I welcome the opportunity to speak today to this motion and, subsequently, to an issue that has been much misunderstood and often misrepresented.
Canada's government was the first government to recognize the existence of a fiscal imbalance with the provinces. We committed to respecting provincial jurisdiction and to clarifying roles and responsibilities. We also recognized the need for a comprehensive package of measures to restore the fiscal balance.
In budget 2006, and in other key pieces of legislation passed over the last year, we began to take concrete action. Finally, in budget 2007 we restored fiscal balance while living up to our commitments with respect to the equalization program and the Atlantic accord.
I will first speak about a better Canada. The first step to making Canada even better tomorrow is to restore fiscal balance in this country today. It is not in defending turf, not in engaging in parochial politics and not in confronting for the sake of confrontation, but acting in the best interests of Canadians in all parts of this country.
In the last few years there has been a lot of talk about fiscal balance but what is it really about? It is about better roads and renewed public transit, better health care, better equipped universities, cleaner oceans, rivers, lakes and air, and training to help Canadians get the skills they need. It is all about building a better future for our country. That means ensuring predictable long term funding to provincial and territorial governments.
Through budget 2007, we are delivering a historic plan worth over $39 billion in additional funding to restore fiscal balance in Canada. Restoring fiscal balance brings federal support for provinces and territories to an unprecedented level.
Unlike the previous Liberal government, which did not and still does not recognize the very existence of the fiscal imbalance, our plan is based on a clear set of principles: accountability through clarity of roles and responsibilities; fiscal responsibility and budgetary transparency; predictable long term fiscal arrangements; a competitive and efficient economic union; and effective collaborative management of the federation. Reflecting these principles, we have kept our commitments on equalization and on the Atlantic accord.
In coming to office, Canada's new government promised to protect the Atlantic accord. Budget 2007 does just that. It provides 100% protection for the Atlantic accord signed in 2005. In fact, we are returning to a principled, formula-based equalization program. As we promised, every province will be better off under the new system.
In moving to the new system, the budget took every action to fully protect the benefits of the Atlantic accord, consistent with our commitments and as requested by the Governments of Nova Scotia and Newfoundland and Labrador. I want to be clear that both Nova Scotia and Newfoundland and Labrador can continue to operate under the existing equalization system for the life of the Atlantic accord, exactly the same system today and in the future as before the 2007 budget.
As long as these provinces continue to operate under the existing equalization program, there is absolutely no change to either the accord or the equalization calculation on which it is based. What is more, both provinces have been given the right to opt permanently into a new improved Canada-wide equalization system.
In particular, while the new equalization system automatically applies to the other eight provinces, both Newfoundland and Labrador and Nova Scotia have a choice. They can keep their existing arrangements or opt permanently into the new principled and formula-based equalization system when and if it becomes more advantageous for them over the remaining life of their Atlantic accords.
Canada's new government went even further to facilitate that choice. The budget legislation also offers increased flexibility in making the transition to a new equalization system by giving both provinces a full year before deciding whether to opt permanently into the new system.
Simply put, we said that we would respect the Atlantic accord and we have taken every step to keep our word to the people of Nova Scotia and of Newfoundland and Labrador.
However, there is much more to restoring fiscal balance than just equalization. The actions taken in budget 2007 will restore fiscal balance, putting all major transfers back on a long term, fair and predictable basis. We are fulfilling our commitment to restoring equal per capita cash allocations in other major transfers to the provinces.
Starting in 2007-08, we will put the Canada social transfer payments on an equal per capita cash basis to ensure equal federal support to Canadians in all parts of the country for post-secondary education, social assistance and social services.
We are also committing to move the Canada health transfer to an equal per capita cash basis when the current arrangement expires in 2014.
We are keeping our commitment to building Canada's future by improving our infrastructure. In fact, the government's investment in infrastructure is by far the largest component of the fiscal balance package. We are making an unprecedented investment in Canada's infrastructure of $16.3 billion in new funding, for a total of $37 billion over the next seven years.
These investments will be of particular importance to the future economic vitality of Nova Scotia and Newfoundland and Labrador. Indeed, restoring fiscal balance brings federal support for Newfoundland and Labrador to more than $1.5 billion in 2007-08 and for Nova Scotia this totals more than $2.4 billion in those same years.
This includes equalization payments amounting to $477 million for Newfoundland and Labrador and over $1.3 billion for Nova Scotia, assuming these provinces choose to retain the previous equalization program on which their Atlantic accords are based.
Canada's new government is committed to abide by the principles it has set out and, in doing so, to demonstrate to Canadians and to their provincial and territorial governments that fiscal balance has not only been restored but that it will be maintained going forward.
It is important to be clear about what this means. It means a commitment by the Government of Canada to reducing the burden on taxpayers, not only in line with the tax back guarantee, but also if and when future government revenues again come to exceed its responsibility, and if future governments believe their responsibilities have come to exceed their revenues, it means they should be accountable to taxpayers for raising the additional revenues they may need to raise.
Maintaining fiscal balance over the long term also means maintaining the government's commitment to long term, predictable funding in all areas that continue to share priorities of governments in all parts of this country.
It also means upholding the equitable treatment of Canadians in all parts of the country by: maintaining a formula based equalization program that applies the same principle based approach in all parts of the country; ensuring equal access to funding support for shared priorities in areas where needs are Canada-wide in nature; and continuing to respond to the sometimes very different needs of Canadians in different parts of the country for programs in areas of clear federal responsibility, including infrastructure projects of national importance.
Having restored fiscal balance and put in place the principle based approach that will help maintain it, it is now time for Canadians in all parts of the country to do their part in moving the country forward by working together to secure and expand our advantages as set out by the Minister of Finance in the advantage Canada economic plan.
These advantages include a fiscal advantage grounded in the goal of eliminating Canada's total government net debt in less than a generation. It includes an infrastructure advantage based on modern, world-class infrastructure to ensure the seamless flow of people, goods and services within Canada and through our gateways and border crossings to the world beyond.
It is an entrepreneurial advantage freed up by the elimination of unnecessary regulation and a reduction in the burden of tax compliance and more competitive business. It is a knowledge advantage and a tax advantage.
In conclusion, I know that we can count on the provinces of Nova Scotia and Newfoundland and Labrador, and especially on the people of these great provinces to remain focused on building Canada's future prosperity and sustainable environment by expanding the many advantages we already possess as a nation.