Mr. Speaker, we are certainly hoping that we can bring back some reason to this debate. I appreciate the opportunity to rise in the House and make my remarks in support of budget 2008.
By the way, this is our third balanced budget. There were suggestions in the House earlier today that Conservatives do not know how to balance a budget. I would argue strongly that this finance minister has now tabled three balanced Conservative budgets in a row and we are looking forward to many more.
Of course, we would like to thank the Liberals in the House for recognizing the value of a balanced budget and realizing that this is good for Canadians and they are going to support us on this. We are looking forward to the day that we get this done and we can get on with other business that is so important to Canadians.
This budget builds on our government's solid record of fiscal management. Our responsible and prudent approach has served Canadians well. This approach has allowed us to be ahead of the curve while others are just now taking action.
We have made the broad-based long term tax reductions for Canadians, for both individuals and businesses alike, that are in place now, exactly when we need them. We have reduced record amounts of debt, we have controlled spending, and we have made the largest investment in public infrastructure in modern history.
In budget 2008 we have built on that solid foundation. We are introducing a tax-free savings account to help Canadians save throughout their lifetimes and never pay tax on the earnings in or the withdrawals from these accounts.
We are providing additional support for manufacturers and processors. We are making our communities safer by putting more police on the street. We are taking additional steps to preserve Canada's environment and we are helping even more students excel. We are further protecting our seniors.
We are doing all of this with a steady hand on the tiller to guide us into the future with confidence.
As we all know the coming year brings with it growing concerns about the uncertainty and the volatility in the world economy. That brings with it a larger than expected slowdown in the United States and questions about the duration and the impact of ongoing financial market turmoil.
Fortunately, our government acted decisively with historic tax reductions that benefit Canadians right now. We could do this because our economic fundamentals remain strong. Our budget is better than balanced. It is in surplus. Unemployment is at its lowest point in 33 years. Inflation remains low and stable.
This all means that we can be confident in the Canadian economy. On that basis our government is keeping its promises to Canadians with actions to further our long term economic plan, “Advantage Canada”. Our plan lays out five key advantages that will provide the groundwork for even greater prosperity for Canadian individuals, families and businesses. We are getting things done.
For example, we have made major progress in creating a tax advantage. In fact, we have provided relief in every way the government collects taxes: personal and business taxes, excise and consumption taxes, and the 2 percentage point reduction in the GST. Our government is giving Canadians the tax cuts they deserve, tax cuts that we promised and we have delivered.
With the $60 billion of tax reductions announced in our fall economic statement, the total action taken by this government to date is approaching $200 billion in tax cuts over this year and the next five years. What is more, we are bringing taxes to the lowest level in over 50 years and we will not stop there.
Taxes will continue to decline, thanks to our tax back guarantee, which guarantees that as we pay down the federal debt, interest savings are being returned to Canadians in personal income tax cuts.
We are reducing the federal debt by more than $37 billion, including $10.2 billion this fiscal year. As a result, by 2009-10, personal income tax reductions, provided under the tax back guarantee, will amount to $2 billion. We have also committed to ongoing measured debt reduction in the face of global economic uncertainty. This government will not pass on to our children or grandchildren a debt from the excessive spending of past governments.
I am proud to say that our fiscal approach is paying off. This government's tax reductions mean more money for individuals, families, workers and seniors to spend or invest as they see fit. This money can also be used to save for the future.
Budget 2008 takes action to build on the progress we have made in creating a Canadian tax advantage.
Saving money often can be difficult, especially for low and modest income Canadians. In budget 2008 we have made saving money easier with a new tax-free savings account. This account will generate tax-free income for life. The tax-free savings account will allow more money to grow and, as its name suggests, tax-free, and will remain tax-free when withdrawn. No catch, no small print.
Adult Canadians will be able to contribute up to $5,000 every year to a registered account plus carry over unused amounts to future years. The great thing about this account is that it allows Canadians to save for whatever purpose they want, be it for home renovations, starting a small business, or a special vacation.
Most important, to make it easier for lower and modest income families to save there will be no clawbacks. That means that neither the income earned in the tax-free savings account nor the withdrawals from it will affect eligibility for federal income tested benefits such as the Canada child tax benefit, the GST credit, old age security or GIS benefits.
In the first five years it is estimated that over three-quarters of the benefits of savings in a tax-free savings account will go to individuals in the two lowest tax brackets. That is tax-free savings for Canadians. According to the Globe and Mail, “Savers and investors, meet your new best friend”.
This government has not ignored Canada's thriving business community either. Our previous two budgets, the tax fairness plan and the 2007 fall economic statement took action to help our businesses compete in today's globally competitive marketplace.
Because we are committed to making Canada a great place to create and expand business, last fall we introduced a timely and decisive plan to reduce the federal corporate income tax rate to 15% by the year 2012. This bold initiative will give Canada the lowest overall tax rate on new business investment in the G-7 by 2010 and the lowest statutory tax rate among G-7 countries by 2012.
Recently, with the community development trust, we acted in support of Canadian workers and their families. Manufacturers and processors are now benefiting from our accelerated capital cost allowance measure that allows manufacturing and processing businesses to writeoff investments in machinery and equipment over a two year period. This temporary measure creates an incentive to accelerate investment and will provide $1.3 billion of assistance to this sector by 2009-10.
We have also increased capital cost allowance rates for manufacturing and other non-residential buildings and for computers to better reflect the useful life of those assets.
Now, in budget 2008 our government is going even further. We are providing an additional three years of accelerated capital cost allowance treatment for investment by manufacturers and processors in machinery and equipment. This initiative will provide manufacturers and processors with an additional $1 billion in tax relief over the next five fiscal years.
Moreover, it will provide businesses in the manufacturing and processing sector with more time to accelerate their investments to better enable them to adjust to the current economic challenges.
Budget 2008 also contains initiatives that respond to the infrastructure advantage in our plan “Advantage Canada”, further evidence that this government is following through on its long term commitments.
Now that they are in opposition, I am sure the hon. members across the floor would agree that in order to support our communities and ensure the competitiveness of the Canadian economy, Canada needs access to modern infrastructure, though as government they largely ignored that problem for 13 years.
Our government, through our building Canada plan, is making the largest single federal investment in public infrastructure since World War II, a total of $33 billion over seven years for roads, bridges, water systems, public transit and international gateways.
A key component of our building Canada plan is the federal gas tax fund that provides direct funding for essential infrastructure for Canadian cities, towns and communities.
In budget 2007, our government extended this funding to 2014. Budget 2008 goes an important step further by extending the federal gas tax funding permanently. This initiative provides $2 billion a year starting in 2009-10 and that is forever. This is money that municipalities can bank on and build into their long term capital planning. Municipalities asked us for it and we delivered.
Gordon Steeves, president of the Federation of Canadian Municipalities and a Winnipeg councillor said:
Budget 2008 delivers good news for cities and communities. The decision to make the gas tax transfer permanent represents a critical move toward addressing the municipal fiscal imbalance and building vibrant cities and communities. The permanent gas tax fund sets a new standard for the way the Government of Canada supports cities and communities
Budget 2008 is all about investing: investing in our people, investing in our future. It all starts with ensuring that future generations have the opportunity to be the best that they can be and that future includes aboriginal Canadians. Our government has made significant progress in supporting our aboriginal population.
Budget 2008 builds on this program in a number of areas with measures to foster new aboriginal economic development: improvements in first nations and Inuit health and education outcomes, funding for prevention-based models of child and family services on reserves, and improved access to safe drinking water in first nation communities.
In today's increasingly knowledge-based economy Canada needs a highly skilled workforce. To that end, budget 2008 is investing in a new post-secondary Canada student grant program that will integrate existing grants and provide more effective support to more students for more years of study.
Our government will provide $350 million for this Canada student grant program in 2009-10, growing to $400 million in 2010-11, with continued growth going forward. This funding will reach an estimated 245,000 students. That will benefit over 100,000 low and middle income families, more than the current system.
This is a significant investment in our future. Building on that investment, budget 2008 is creating 500 new doctoral scholarships under the Canada graduate scholarships program.
These scholarships, named in honour of the former Governor General Georges P. Vanier, will help develop and attract the new generation of world-class researchers, by providing $100 million over five years beginning in 2008-09 to attract the best doctoral students, from here and around the world, to study in Canada. The Canadian Federation of Students has come out strongly in support of the budget saying, “The government has taken a positive step towards improving access to post-secondary education”.
Of course, it is important to nurture our best and brightest here at home, but one of the greatest challenges facing Canada today is the shortage of skilled workers. This fact, coupled with an aging population, means that we also need to look beyond our borders to ensure we have the workforce required to build a stronger future.
In recognition of this need, budget 2008 takes action to improve the responsiveness of our immigration system. This new funding will complement existing programs by modernizing and speeding up the immigration system so that we can get the appropriate people to meet our labour market needs. Our people are certainly our most important resource.
Canadians are known as a compassionate society, and we must look after each other. For its part the government has taken action to help those who need it most. In budget 2007 we introduced the working income tax benefit to help people over the so-called welfare wall. We also introduced a registered disability savings plan to help parents save for the long term financial security of their disabled children.
Budget 2008 provides further support for vulnerable Canadians. Specifically, this year's budget provides $110 million to the Mental Health Commission of Canada. This funding will help support demonstration pilot projects on housing and complementary community support services. This initiative will also help us recognize the needs of those who are homeless and suffering from a mental illness so that we can take the appropriate action to meet those needs.
Preserving and protecting our environment is, no doubt, one of the most important issues to Canadians today. They expect their government to take action to reduce harmful emissions, ensure clean drinking water and crack down on polluters. And we have taken action. Since coming into office, our government has made significant investments to support cleaner energy, clean transportation alternatives and the development of green technology.
In budget 2008 we are taking further action to fulfill our commitments to a cleaner, healthier environment. For example, budget 2008 is committing $250 million for carbon capture and storage projects. Furthermore, our government is providing $66 million over two years to lay the foundation for market-based mechanisms that will help establish a price for carbon and support the development of carbon trading in Canada.
As well, this year's budget provides $13 million over two years to accelerate access to cleaner renewable fuels for cars and trucks.
The budget is also further extending tax incentives for clean energy generation.
What good are environmental laws if we cannot enforce them? That is why this budget also provides $21 million specifically for that enforcement. This action illustrates this government's commitment to actually do something about the environment, not just talk about it. That is what this government is about: taking action and getting the job done. Taking action requires strong leadership, and that means not being afraid to step up to the plate, make decisions and establish priorities.
This government is determined to safeguard Canada's strong economic and fiscal fundamentals to avoid falling back into deficit. Just like any family, we want to ensure that we live within our means. In budget 2008 we have done just that. It is a budget that is thoughtful and responsible. It is a budget that is good for Canada and good for Canadians.