Debates of Feb. 27th, 2008

Financial Statement of Minister of Finance

[Thomas Mulcair, NDP, Outremont, QC]

Mr. Speaker, the answer for my colleague is no, there was no problem. Quite the contrary, employment statistics showed that we continued to have a quite robust economy in Canada. The choices made in a budget are, in the final analysis, societal choices. What do we want to do in this country with all this wealth?

Canada is a wealthy country in every sense of the word. We have abundant natural and human resources, but we are also blessed by nature. Water is part of our wealth. Mines which can be found anywhere are part of our wealth. Forests are part of our wealth, but are often abused.

Nevertheless, we, in the New Democratic Party, have always advocated the use of this wealth for the people, and not for the structures.

[Peggy Nash, NDP, Parkdale—High Park, ON]

Mr. Speaker, I thank the hon. member for Outremont for sharing his time with me today.

I am very pleased to speak to the budget tabled yesterday by the government.

Budgets are about priorities. Budgets are about choices. Budgets define governments. Budgets are about how to use the resources that we all contribute to make our country and the world a better place.

For too many years, budget after budget, even with record surpluses, we have been left with a smallness, a stinginess in our budgets and therefore in our society. People now know that after years of tax cuts mainly favouring large corporations and the well-off, we face huge challenges in our society that governments have not addressed. We have huge unmet needs, yet we are offered a breathtaking lack of vision with the budget.

Once again, the opposition is sadly putting narrow, partisan self-interests over the good of our country. The Leader of the Opposition comes to Toronto and says some very nice sounding things about reducing poverty, but just like on his record with Kyoto, it is all meaningless. He and his party are supporting budget after budget and vote after vote that take the country in the wrong direction.

Today, Canadians are working longer and harder. More and more people are falling below the poverty level. Incomes are flat. Personal debt is at an all-time high. Seniors are struggling to stay in their homes. Students are starting out in life with a huge debt. Millions of Canadians have no family doctor.

What has the government done with its latest budget?

We know in broad strokes what it has done. We know that for every dollar it spends in programs and services and all the various things it includes in the budget, it spends $6 for corporate tax cuts, $6 to the big polluters, $6 to the big banks and $6 to its friends who are already make a lot of money.

What this means overall is average Canadians, people who work very hard, who pay their taxes and who want to see their money invested back into their communities, pay 12% more for the services that we all need and profitable corporations pay 14% less. There is something wrong with this picture, but the government's direction is clear.

It is not that people cannot find a sprinkling of money here or there in the budget, which they might like. It is that the government has shelved out most of the money to the big banks and the big polluters. It takes the country in the wrong direction. Canadians want environmental responsibility, not rewards for those who pollute without sanction.

What is left? What do we see in this budget? Let us take a look.

To deal with the crisis in homelessness, what do we find in the budget? Every day I see people on the streets of Toronto. They are desperate to find proper shelter. A growing number of people are absolutely falling off the bottom of the economic ladder. There is nothing in the budget for them.

To deal with affordable housing, what do we find in the budget? Parents are struggling with high rents and minimum wage jobs, although the government will not support a national minimum wage. People are struggling with poverty level jobs and high housing costs. There is absolutely nothing in the budget for them.

What is in the budget to retrofit buildings, a major initiative to increase energy efficiently? There is nothing.

What about child care for all the parents who are struggling to get adequate care and a good start for their kids in life, for parents in my riding who are paying sometimes $2,000 a month for a couple of kids in child care? There is absolutely nothing.

What about seniors who want to stay in their homes and are looking for home care? There is nothing.

What is there to clean up pollution in the great lakes? There is nothing.

What is there for the five million Canadians who cannot find a family doctor? There is nothing.

What about reducing wait times in the health care sector? There is nothing.

What about those who cannot afford the prescription drugs they desperately need? There is nothing in the budget for them.

What about culture, the stories that we tell each other, the images, the arts that define us as Canadians? There is nothing, not even a mention of art, in the entire budget.

What about climate change? There is nothing.

The biggest investment in the budget is $350 million for nuclear development. That says it all. I believe the members opposite, the opposition who are supporting the budget, ought to be absolutely ashamed of themselves. They should not go back to Ontario and pretend to be standing up for Ontarians, pretending to be standing up for Toronto, pretending to be standing up for those less fortunate because they have betrayed them with the budget.

Rather than using our resources to give the big polluters or the big banks a big cheque, what people in my community tell me is that they desperately want to see money spent on infrastructure. They pay a lot of money in taxes and they want that money invested back into their communities in infrastructure, especially in a national transit strategy.

The gas tax transfer, which is a positive step, falls far short of beginning to address the decades of neglect in expanding our transit and fixing our infrastructure. There is no significant dent in the $123 billion deficit in infrastructure. We know the government's plan, with its new crown corporation for public-private partnerships, is about privatizing as much profitable infrastructure as possible while leaving citizens on the hook for any cost overruns. That is some partnership.

Toronto was Canada's big major cultural centre. Top-up funds for the big six cultural initiatives such as the opera, art gallery, after the community has raised so much of its own money, are missing. There is nothing for the television fund, nothing for Telefilm Canada. That is the government's vision for the arts, absolutely nothing, a blank.

Ontario is especially hard hit. The government continues to ignore the manufacturing crisis, which is throwing hundreds of thousands out of their jobs. Our government risks permanent damage to this key engine of our economy. A bit of money for auto, for research and development is not a strategy to help our manufacturers and exporters deal with the spiralling petrodollar in Canada.

Where is the plan to deal with the high dollar? Where is the national “buy Canadian” procurement policy that most other developed countries use to boost their local products? Where is the plan to balance our trade so we do not export all our good jobs? Where is the green job strategy? Where are we positioning Canada and our economy for the 21st century? Simply, we are not.

While Ontario faces a tsunami of job loses, we continue to be hammered by the lack of employment insurance for those who have faithfully paid their premiums.

Why do Ontarians get on average $5,000 EI less than those in other parts of the country? Why do almost 80% of those who are unemployed in Toronto get no EI? What other insurance program takes one's premiums and fails to provide the benefits when disaster strikes? What a rip-off for Ontarians.

Creating a crown corporation for EI is the wrong approach. This will let government duck its responsibilities and public accountability. It continues the fine tradition of the previous government to take billions of premiums paid by workers and employers and use them to pay down the debt rather than provide benefits for those most in need.

Budgets are about priorities. They are not about what one says, they are about what one does. We know the priorities of the government are about downsizing, about getting out of services, about getting out of the things that Canada and Canadians care about most. It is about helping their friends, the big polluters and the big banks.

Again, those on the opposite side, in the opposition party, ought to be absolutely ashamed for allowing the Conservatives to take Canada in the wrong direction. They did it on Afghanistan by not only getting us into this combat mission, but then enabling the continuation of this war to 2009, and who knows for how long into the future, and they are doing it with this budget.

I regret the budget so badly fails Canadians. I will proudly join with other MPs of the NDP in standing by our principles, in standing up for Canadians and in opposing this budget.

[John Cannis, Liberal, Scarborough Centre, ON]

Mr. Speaker, I listened very carefully to the member for Parkdale—High Park. I remind the member that she went to the election in 2005 saying one thing, “Look what we got you. Lend us your vote and we will get you more”. People were unable to see through the smoke and mirrors at that time.

It struck a chord with me when she said that we had betrayed the seniors, the students, infrastructure money and so on. This might not be a good budget, and it is not, but there is some money in there for infrastructure for my city of Toronto. There is some money in there for education. It is not what it should be, but at least there is some money.

The Liberal Party will not betray Canadians, even if there is just a teeny bit in the budget, the way the NDP betrayed Canadians. Before the last election, there was $1.6 billion for housing. There was money for education, for seniors, for international obligations and for the environment. The money was in place through the recommendations of the NDP. Then that party did an about-face and brought down the government prematurely.

What will the member for Parkdale—High Park say to her constituents when she goes to the polls? Is she going to tell them to lend the NDP their votes because it will lose them some more? That is what the NDP did in the last election. If anybody should be ashamed, it is the members of the NDP.

[Peggy Nash, NDP, Parkdale—High Park, ON]

Mr. Speaker, I remind the hon. member that there was no federal election in 2005 and that I was not elected until 2006.

I will also challenge the opposition that—

[John Cannis, Liberal, Scarborough Centre, ON]

The budget was 2005. You betrayed Canadians.

[Some hon. members]

Oh, oh!

[The Acting Speaker, Conservative, Andrew Scheer]

Order, please. The hon. member for Parkdale—High Park can answer the question on her own, so if we can let her do that.

The hon. member for Parkdale—High Park.

[Peggy Nash, NDP, Parkdale—High Park, ON]

Mr. Speaker, they doth protest too much.

I remember that the previous government, like the current government, was going down the path of shovelling huge corporate tax cuts to their friends, mainly in the oil and gas sector. This is in spite of all its red book promises, which are certainly a testament to its legacy of broken promises.

The NDP ensured that $5.4 billion of those corporate tax cuts, rather than going into the pockets of the executives of those companies, would be invested in the community in housing, in transit, in students, so their tuition was reduced, and in foreign aid. That is the kind of negotiation around a budget that ought to be done.

The members opposite squandered that opportunity. They have basically sold their opposition to supporting a budget. What did they get for the budget? They got absolutely nothing.

The member opposite comes from Toronto. He ought to be ashamed of how the budget betrays the aspirations and the needs of the city of Toronto.

[Brian Fitzpatrick, Conservative, Prince Albert, SK]

Mr. Speaker, back in the early 1990s, we had a serious recession in North America, and there are concerns that we may have a replay of that type of recession.

People in the province of Ontario elected a New Democrat government led by a fellow by the name of Bob Rae. What did Ontario get during that period? High taxes, big government, a huge massive deficit and a debt that was over $100 billion. It tried to spend its way out of this thing with high taxes and massive spending and so on. Where did it get the NDP government?

If the NDP members had power or had some say in Parliament, is that the recipe they would use to try to deal with the situation we have to deal with today, and that is higher taxes, more spending, big deficits, try to spend their way into prosperity?

[Peggy Nash, NDP, Parkdale—High Park, ON]

Mr. Speaker, despite the aberration of the government in Ontario, which is now the responsibility of the official opposition, given their candidates are these days, I remind the member that the NDP has a record of more balanced budgets in the country than any other political party.

The government has been shovelling taxpayer dollars out the door, and I remind him once again at a rate of six to one in the budget. Building on that, hundreds of billions of dollars have been made in tax cuts by the government, and the previous government, toward the most profitable corporations. By doing that, Canadians have been denied the services, the goods, the infrastructure and all the aspirations that they seek.

[Ted Menzies, Conservative, Parliamentary Secretary to the Minister of Finance]

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.

[Garth Turner, Liberal, Halton, ON]

Mr. Speaker, I listened to the parliamentary secretary with care, certainly when he talked about the Government of Canada living within its means. He referenced a Canadian family when he made that statement.

I want to ask the parliamentary secretary, does he believe that a Canadian family could increase its spending over the course of two years by double the rate of inflation and still be within its budgetary envelope, especially when its revenues did not go up? How on earth could that be prudent when we have increased spending by that amount of money? Would you counsel a family in your riding that it would be fine in terms--

[The Deputy Speaker, NDP, Bill Blaikie]

The member for Halton should refrain from using the second person.

The Parliamentary Secretary to the Minister of Finance.

[Ted Menzies, Conservative, Macleod, AB]

Mr. Speaker, I guess there was a question in that, but I am just a little puzzled by the member's comments that he was actually listening to my speech when I could hear in the background the hon. member suggesting that I may not know exactly what I am talking about.

I do not think that it would be my place in my role as Parliamentary Secretary to the Minister of Finance to be speculating about doubling inflation. The suggestion by the hon. member perhaps came from the Liberal suggestion that they would spend over $90 billion this coming year if they were in government, which would drive us another $62.5 billion in debt. Perhaps that is the hon. member's method of financing, but that will not be the way that this government operates.

I do want to highlight some of the things that we have done, but which I did not have an opportunity to talk about in my speech. Something that is very important in my riding, for example, is a new police college that is being built in my riding and the funds--

[The Deputy Speaker, NDP, Bill Blaikie]

There is a great appetite for questions so I am going to try to get all kinds of people in. The hon. member for Western Arctic.

[Dennis Bevington, NDP, Western Arctic, NT]

Mr. Speaker, I will try to be prompt with my question. The hon. member in his speech talked about the money that is put into carbon capture and storage in the budget, some $240 million. At the same time, the only new money in the budget for clean energy is about $5 million over two years under the accelerated capital cost allowance.

There is a need for some analysis of the results of some of these projects. I sit on the natural resources committee, and we did not see any analysis of carbon capture and storage in comparison to other strategies for greenhouse gas reduction in this country.

Could the hon. member tell us how the government has come to the conclusion that this investment of Canadian funds is so much better than many of the other possibilities that we have in the country to more directly reduce greenhouse gas emissions right away? Why should we be pouring money into a very strong oil and gas industry that has the resources to invest its own money in dealing with its own pollution problems?

[Ted Menzies, Conservative, Macleod, AB]

Mr. Speaker, indeed, the NDP loves to condemn the oil and gas sector so badly, a sector that contributes over $5 billion a year in taxes, that pays Canadians wages, grows our economy and employs Canadians. I do not know why the NDP seems to be so unexplainably opposed to an industry that does pay its own way.

The hon. member asked about our environmental plan for expenditures that will help the environment this year. There is $500 million for public transit, and the hon. member suggests that we have done nothing. There is $250 million for carbon capture and storage. These are forward thinking ideas that the rest of the world would like to have the opportunity to parallel along with us.

We have increased the CCA rate on CO₂ pipelines. We have put in $10 million for biofuels research. We have put in $3 million for E85 fuel infrastructure--

[The Deputy Speaker, NDP, Bill Blaikie]

Order. I have a feeling that exchange has come to an end, too. Further questions and comments. The hon. member for Scarborough Centre.

[John Cannis, Liberal, Scarborough Centre, ON]

Mr. Speaker, the parliamentary secretary talked about balanced budgets, et cetera. I think he was a bit unfair because the current Minister of Finance was in the provincial government for nine years and that government did not balance one budget. For the record, I want to clarify that he left Ontario with a deficit of almost $6 billion.

Nevertheless, I want to ask the member why his government has been so unfair to the city of Toronto. Toronto is having to raise property taxes, and levies for hockey arenas, community centres and garbage because Toronto is being starved.

I was happy that he said that the Conservatives are extending the gas tax. In essence he is confirming that the Liberal government started the gas tax and the Conservatives now see the light to extend it.

Why are the Conservatives starving Toronto? What have they got against Toronto? I know the Minister of Finance says that they are not in the pothole repair business, but that is part of Canada, too. Why are they being so unfair to Toronto?

[Ted Menzies, Conservative, Macleod, AB]

Mr. Speaker, as we have heard in the House before, I reject the premise of that question. We are not forsaking any city in this country.

I would encourage my hon. colleague who asked the question to go back to Ontario and remind the premier that Ontario's share of the largest infrastructure contribution from the federal government is waiting for his signature, and the premier is blaming us for inaction. Premier McGuinty has not yet signed the agreement that would provide money to repair the streets in Toronto.

[An hon. member]

It is $162 million a year.

[Ted Menzies, Conservative, Macleod, AB]

Mr. Speaker, it is $162 million a year. I am reminded by one of my colleagues from Ontario that is the amount.

There is $2 billion in the gas tax fund. The Liberals suggest it was their idea. We have heard a number of things in the House that were their idea but did not get implemented. That is the unfortunate part of this.

However, we actually have to stop and thank the hon. members of the Liberal Party for recognizing the benefits that will come from this budget and for supporting it.

[Joe McGuire, Liberal, Egmont, PE]

Mr. Speaker, on page 71 of the budget papers, with respect to the employment insurance program, the government announced that it is going to form a crown corporation to set rates. There does not appear to be any other function but to set rates.

I wonder why the government needs a crown corporation to set rates when that expertise is in the department and it could set rates at the stroke of a pen, really. I do not think it would take a crown corporation to determine what a proper break-even rate is.

It says it will be a new, independent crown corporation and proceeds to say that the maximum annual charge set by the CEIFB will be 15¢. If it is free, an independent should be able to set those rates on its own.

My main question is why a crown corporation, why set up a whole new bureaucracy merely to set rates for EI?

[Ted Menzies, Conservative, Macleod, AB]

Mr. Speaker, I agree with an hon. member who said that is a good question. If the Liberals were honest with themselves, they would realize that question is leading them down a path that they probably do not want to go. There is a reason that we are creating a crown corporation. It is because of the abuse that happened under 13 years of Liberal government to the EI account.

We have guaranteed there will be $2 billion put into this and it will be run completely separate so that no party that is ever in power can get its hands on the workers' money.

[John McKay, Liberal, Scarborough—Guildwood, ON]

Mr. Speaker, while I thank the parliamentary secretary for the riveting speech, I hope he did not overpay for it.

I will be splitting my time with the member for Halton. I have only a few minutes left, so I take it that I will see everyone in the morning.

We have all noted that the finance minister has been running around the country for the last three or four months saying there is no money in the cupboard, the cupboard is bare, we are broke, and telling us to not have any great expectations of this budget, and for certain yesterday he delivered on that expectation. There were very low expectations and he certainly met those low expectations.

Interestingly, the Globe and Mail this morning in its editorial picked up on that very theme and talked about Minister of Finance's “empty cupboard”. The point of the editorial is that it was the Minister of Finance that emptied the cupboard in the first place, so naturally he does not have any money for anything. As a consequence, we see what we see in this rather pathetic budget.

What is really sad is that the Conservative government started out with a fiscal surplus. It started out with 13 years of sound fiscal management. It started out with one of the most prosperous economies in the G-7.

Also, interestingly, it started with almost $100 billion in a five year planning surplus, going from 2005 through to 2010. But where will we be in 2010? If we look at page 25 of the government's budget, we can see that the surplus will be down to $1.3 billion. I do not think that even Paris Hilton could spend it that quickly. These guys are in a league by themselves. I am sure that Paris Hilton is probably watching this debate and wondering how in heaven's name they did it.

Again, I direct members' attention to page 25, which is really the only page we need to read in the budget. The rest of the budget is a 415 page spin document. Let us look at their document. The Conservatives actually increase their revenues over a four year period by $16 billion. Over the same period, they increase their spending by $30 billion.

I do not know how other members do their budgeting, but in my house and I dare say pretty well all the members' houses, people cannot actually spend more than is brought in. Households cannot be run that way. Businesses cannot be run that way. Certainly a government cannot be run that way. It is an incredible testimony to the incompetence of the minister.

I do not want to disturb the Minister of the Environment in his reading of Frank magazine, which constitutes his briefing materials most days, but even he would understand that we cannot spend faster than we bring the money in. It is pretty simple.

For the particular year that the government actually presents for this year, the fiscal year 2008-09, the government has actually reduced the revenues by about $2.5 billion. Meanwhile, the government's expenditures in the same year go up by $7 billion, the consequence of which is that this country actually ends up perilously close to a deficit.

The government has canned the whole idea of prudence money. When a Liberal government was producing budgets, we had a minimum contingency of $3 billion and frequently built into the budget another $1 billion, $2 billion or $3 billion to actually create cushions for unanticipated events. For instance, SARS was an unanticipated event. As well, the peso crisis was an unanticipated event.

The incompetence in this budget is manifest. We are very close to a recession. Certainly there is a recession in the U.S. The government has actually taken its GDP numbers and reduced its GDP numbers in the last three months by 25%. That brings them right down to the edge.

Again, if the hon. Minister of the Environment could actually read his own budget, he would realize that he was one of the ministers who was left out. The word “environment” is virtually not mentioned in this budget.

Here we have $16 billion going down the drain. We simply cannot carry on this way. Traditionally in prudent budgets, we do build in some cushions, but that government and those particular members do not seem to understand prudence. They do not seem to understand that we cannot spend more than we get in. It is rather amusing to hear them traipse on about how they think this is a good thing--