Madam Speaker, as you know, the Liberals are opposed to this budget because it is a bad budget, and they will therefore vote against it. At the same time, we are well aware that Canadians do not want an election. We will therefore vote so as not to trigger an election.
We have worked hard over the past few months, especially during the time when Parliament would have been working if it had not been prorogued. We held about 30 round tables and meetings that produced some very good ideas and some new policies that are different from the Conservatives'. We will continue working in this way in order to win Canadians' trust as an alternative government.
Why do we say that this is a bad budget?
Let me count the ways. It is a bad budget because it does nothing for one of the main challenges facing Canada today, which is the state of retirement income and pensions. Liberals and others have proposed a supplementary Canada pension plan and amendments to the Bankruptcy and Insolvency Act. This budget does nothing except offer yet more consultations: consult, consult, consult. We believe the time is for action.
It does nothing on the environment. It guts Canada's renewable energy programs, which are critical not only for the environment but for green jobs. Our situation now is pathetic if we compare Canada with other countries, notably the United States.
I could go on endlessly about the bad things in the budget, but I want to be a little more focused. I want to focus on only three areas: jobs, innovation and the way in which the government is proposing expenditure restraint.
We have said time and again that the top priority for the Liberal Party in the year 2010 is jobs. We have an official unemployment rate of over 8%. We have real unemployment of some 12%. We have the prospect for only a very gradual recovery in jobs. We have the government itself in the budget saying the unemployment rate this year will be higher than the unemployment rate last year.
We came up with three very concrete proposals for the creation of jobs in three of the most important areas: manufacturing and forestry, which are suffering; youth, who are suffering with an unemployment rate twice the national average; and the high tech jobs of tomorrow, which are critical for building new jobs in the new economy of the future.
The Conservatives might ask how we will pay for this plan and what about the deficit? Let me provide the answer to that. The Liberal plan is carefully costed at some $200 million to $300 million a year. At the same time, we identified extravagant, wasteful, partisan Conservative spending amounting to $1.2 billion a year, which could be cut immediately. This includes rolling back partisan advertising spending to the levels of 2005-06, substantially less wasteful management consulting, limiting ten percenters to members' own ridings which would save some $20 million, and a rollback of the unwarranted expansion of the Prime Minister's own department. If we add up those savings, they amount to $1.2 billion a year.
I think even Conservatives know that $1.2 billion is a bigger number than $200 million. Therefore, they could have funded our jobs proposals worth $200 million to $300 million, cut the wasteful $1.2 billion, and would have had close to $1 billion left over. What could they have done with that? Why not beef up renewable energy? Why not give money to hard-pressed students who got nothing in the budget? Why not do something for seniors and pensioners? Why not pay down the debt or some combination of all of the above?
The Liberal proposal addressed the most critical issue of the day, jobs, and it did so in a fiscally responsible manner, proposing a financing mechanism that would more than pay for these proposals and leave almost $1 billion left over for other worthy initiatives.
However, the Conservative policy in this budget is worse than doing nothing for jobs. In fact, it destroys some 230,000 jobs. This is in two ways. First, the estimates indicate that the Conservatives failed to spend at least $1.4 billion of infrastructure money which was allowed to lapse. According to their own methodology, when that number is combined with contributions from other levels of government, it is worth 30,000 jobs. They failed to get the money out, as Liberals have been saying for months. Now the facts have become clear in the estimates and that has led to a loss of 30,000 jobs.
Worse than that, the Conservatives are proposing punishing hikes in employment insurance. They are proposing, beginning next year, to raise EI premiums at the maximum rate allowable under the law for several years. This is a tax on jobs. According to the Canadian Federation of Independent Business, this act alone will destroy 200,000 jobs. I have verified with some of my economist friends that this is indeed a reasonable number. The government will raise an additional $6.3 billion from EI premiums in the fourth year, which is about the same amount it would get if it raised the GST by one point. The government is coming in through the back door, without having to go to Parliament, imposing a punishing tax hike on the companies and workers of Canada to the tune of $6.3 billion a year, the effect of which will destroy 200,000 jobs.
I criticize the government on two counts. First, it does not even have the honesty to admit that it is raising a tax. Yet every first year undergraduate in economics knows that a payroll tax is a tax. It could at least come clean and acknowledge it is indeed raising taxes.
The government members like to talk about a third party agency at a distance from the government, which miraculously sets these premiums as if that agency were located in outer space and as if the Government of Canada had no impact or influence over the agency. That is clearly untrue. The Government of Canada has already overruled the agency two years in a row.
Everybody knows there is only one person in the country who effectively sets the EI premiums, as he decides everything else in Ottawa, and that person is the Prime Minister of Canada. The Prime Minister of Canada is not obliged to have these punishing job-destroying EI premium hikes; he could just say no or raise them at a more gradual rate. It is entirely the fault of the government that these job-destroying tax hikes are taking place.
The nub of my point on jobs is this. First, the government could have implemented the Liberal Party's job proposals, financed by cuts in the government's own wasteful spending, with much money left over. It did not do that. It did not do anything. Worse, the government has measures that, through the lapse of infrastructure money, because it failed to cut it out, 30,000 jobs will be lost and because of punishing job-killing payroll hikes another 200,000 jobs will go down the drain.
The government has done a terrible job on jobs.
The next point is innovation. Sadly, all members know that not all the manufacturing and other jobs that have been lost during the recession will come back, some will, but not all. If Canada is to emerge from this global recession in a leadership position, we have to do research, innovate and commercialize. We have to come up with more BlackBerry-type leading-edge products to serve the global market. We will not compete with China, Vietnam and India on low wages. We have to compete with our brainpower, through innovation and getting these ideas to market and by being a successful player in the new economy.
Part of that is the green economy. As I have already said, the government has completely opted out of support for renewable energy and all the progressive green jobs that come along with it. As the Leader of the Opposition pointed out in his speech, the government has opted out of support for research and innovation. It cut funds to research granting councils and then it boasts about increasing grants this year, but the grants are still below where they were before the Conservative Party came to power.
The government let the space agency funds lapse and got rid of the government's leading scientists. In all these ways it has utterly failed to support the innovation agenda, which is critical for the future success of Canada's economy.
Let me back this up and illustrate the sheer hypocrisy of the government by giving quotes from leading commentators following budgets from the time the Conservative Party came to office. After budget 2006, here is what well-known economist Jack Mintz had to say:
The one policy that could have some impact on productivity--a rollover to avoid capital gains taxes when replacing one taxable asset with another--failed to even get mentioned in the budget.
Following budget 2007, Nancy Hughes Anthony, then president of the Canadian Chamber of Commerce, said:
The government promised in November that they were going to make Canada more competitive and control spending and I think they broke that promise today.
What about budget 2008? Marc Lee, senior economist at the Canadian Centre for Policy Alternatives, said:
The funding announced today may fulfill its role as a PR strategy but it doesn't come close to the kind of investment that our cities need to stay vibrant and competitive.
Finally, we have budget 2009. Here are two quick quotes.
Chantal Hébert said, “Tory budget lacking in innovative thinking”.
Elizabeth Church and Daniel Leblanc said in the Globe and Mail, “Money for bricks, but not talent”.
This explains the mentality of the Conservatives throughout their period in office. It has been clear, as these commentators have said, that they have no time for innovation, no time for research, no time for science. They grudgingly will support bricks and mortar to help renovate or build new buildings in universities, but then they shut down the funding for the people who would occupy these buildings. Therefore, their record illustrates a total neglect and a lack of priority attached to this area, which is so important for the future of the Canadian economy.
In ending this part of my speech, the Conservatives talk as if there is only one deficit in the country that matters, the fiscal deficit, that this has to be paid down and nothing else matters. We have the track record for paying down and getting rid of big, juicy Conservative deficits, so they do not have anything to tell us on this topic.
However, there is more than one deficit in the country. The Conservatives have to walk and chew gum at the same time. They cannot focus uniquely and solely on the fiscal deficit. We also have an innovation deficit and a productivity deficit. If we are to succeed in this world in competition with countries around the planet, we have to be more innovative, more productive and we have to address that deficit.
There is also a pension deficit, which the Conservatives do not understand because they propose no action on either the supplementary CPP or the Bankruptcy and Insolvency Act to help people stranded in failing companies. There is a retirement income security deficit.
There is a care deficit. Anxious middle-class families are at their wits' end to care for their children and to care for older people.
Finally, there is an education deficit.
We need to be able to do more than one thing at one time. Yes, we have to deal with the fiscal deficit, but the Conservatives ignore all the other deficits that the country faces, whether it is the education deficit, the innovation deficit or the productivity deficit. It is equally important that the Government of Canada address all these things, and the government has lamentably failed in that regard.
My third and final point concerns the way this government is trying to reduce government spending.
All economists agree that the worst way is to make the same cuts or apply the same freezes across the board.
Across the board cuts or freezes are a mindless, dumb, stupid way to go. It implies that every program is equally good or equally bad, so we have the same medicine to every department, except defence, across the government. This is not the way to go. What the Conservatives need is to apply their brains, if they have any, to assess which programs are really good, which programs are okay and which programs leave something to be desired.
That is precisely what we did in 2005. We had an expenditure review committee with ministers getting submissions from departments and picking and choosing where it would be least painful or most expeditious to find savings so we could shift from lower priority to higher priority areas. By mindlessly applying exactly the same freeze to every department, the Conservatives have abdicated their responsibility to play any thinking role in this business of restraint on government spending.
My last point is the Conservatives are deluding Canadians. They are pretending that this will be a painless exercise. If they freeze a department's budget for one year, they might get away with it. However, if a department's budget is frozen for one, two, three or four years, it will undoubtedly eat into the fabric of social programs and other services provided to Canadians. All the experts agree on this, but the government is not telling us what will be hit. Will it be the funding for training? Will it be that it will take forever to get a passport? Will it be that student funding will somehow no longer be available? Will it be that the arts will suffer because there is no money? The Conservatives are setting up a system where, without doubt, Canadians will be hurt, but they do not have the courage or the honesty to tell us which Canadians and which programs will be hurt. It is all veiled at the macro level as if this will be a painless exercise when that is the last thing that it will be.