Mr. Speaker, I am pleased to speak to the budget today. As a former parliamentary secretary to two ministers of finance, I know that the most daunting task of any government is balancing its books.
In 1993, when we came to power, we inherited a $42.5 billion deficit, of which 33¢ of every dollar spent was borrowed money. We had to make some tough decisions. We had Canadians supporting us in terms of dealing with the deficit to the point where we got out of deficit and started putting money down on the debt. We started ensuring we would deal with a massive debt, which at that time was over $600 billion.
Government is about priorities. When the Conservatives came to power in 2006, they inherited a $12.5 billion surplus. They quickly eliminated that through the gimmick of reducing the GST by one point which cost about $5 billion to $6 billion. It was not surprising that they got themselves into a financial hole very quickly. The government, not being very good with mathematics, did not even realize that a recession was coming and preempted an election in order forestall the inevitable. A recession came and hundreds of thousands of Canadians were thrown out of work.
We see the consequences of that situation. We know that its figures are not very good. Kevin Page, the Parliamentary Budget Officer, has clearly indicated that the government is out by about $10 billion. According to the government, we now have a $56 billion deficit, but it is probably closer to $66 billion or $70 billion.
What kind of exit strategy does the government have? It does not have much of an exit strategy. It claims that it does not really need to cut anything or make any really tough decisions because the economy will bounce back and, through growth, it will be able to fill its coffers and everything will be fine. I do not think there are too many economists around who share that view, particularly in its second and third year, where we see this massive jump of about $26 billion that will suddenly come into the coffers of the government.
The reality is that Canadians are facing some stark decisions at the present time. Hundreds of thousands of people have been thrown out of work in the manufacturing sector, the forestry sector, the mining sector, et cetera across the country.
At the end of October, in my own riding of Richmond Hill, I held a pre-budget forum where we discussed some of the real issues facing people in the riding of Richmond Hill. What the government produced in its budget does not reflect those priorities very much, if at all. The one key area deals with job creation, particularly for small business. Nine out of 10 small businesses in this country create employment. They are the engine of the Canadian economy. The government again failed to address this issue in terms of job creation and jobs for the future. It is not just the stand-pat jobs of today. How do we ensure we are part of that green economy for tomorrow? How do we ensure we are on the innovation agenda, something that was the hallmark of the previous Liberal administration?
Unfortunately, we do not hear the word innovation over there. We do not hear about the jobs for tomorrow that will be for Canadians coming out of universities and colleges, the jobs that will have value, not only for themselves but for Canadians as a whole and for the community at large around the world.
The problem is that there is an imbalance at the moment between people who are looking for jobs and the jobs that are out there. I heard that loud and clear from businesses in my own community. The concern out there is that the government is not providing the kind of regulatory, economic or other tools to stimulate job creation, particularly for small businesses. As we have seen unemployment rise in this country, we have seen people who have become very concerned that there is no hope.
There may be some growth in part-time jobs, but for people who really need a job, retraining is important. Someone between 40 or 45 years of age may have had a job for 20 or 25 years and suddenly he or she is now out of work. The talents and tools people were trained on 20 or 25 years ago are not necessarily germane for today's job market, which is causing them great angst.
We need to see strategic investments particularly in new sectors like green technology. Green technology is obviously something, whether it is wind energy or solar power, where Canada can be a leader. Up to one million jobs could be created in this sector, but again, we need to have the kind of economic tools available, particularly a tax structure and particularly in terms of regulatory mechanisms. For example, when dealing with windmills, rather than import them from Germany, the Netherlands or Denmark, we should build them here. Obviously, that would be of importance.
The federal government's job creation programs in terms of investing in new technologies was something that I heard loud and clear. We need to do that if we really want to be on the cutting edge for the future. The government needs to invest capital into research and development. Again, research and development is absolutely important for those engineers in this country, as an example. We want them to be here, our designers et cetera so that they can stay in Canada and not have to go to the United States or elsewhere. That is important in terms of being able to compete at home on the global market. But again, the budget is very quiet in this area and is something that we need to be addressing for our new graduates.
The federal government should also have provided reforms in terms of policies and educating skilled immigrants. In many sectors, whether it is nursing or medicine in terms of provincial bodies, the fact is that we again need the leadership of the federal government working with the provinces and territories to encourage and to faster integrate new immigrants in Canada. What is the point of bringing new immigrants to Canada if they cannot get a decent job? We often hear about fields such as doctors who cannot practise medicine. The underskilled is a problem and yet those who are skilled are not being utilized. The underutilization of talent in this country is a major problem.
There is no question that with over 300,000 jobs already lost in this country that there is some despair out there. In terms of the budget, we should have addressed how to ensure that we giving a helping hand to people, how do we ensure that we are trying to invest in the right areas. But again, not only the Conference Board of Canada but some conservative institutes out there indicated clearly that the government was simply throwing good money against bad, that it was not doing the kind of investments that need to be done. The C.D. Howe Institute, the Fraser Institute, not exactly good friends on our side, took a very strong stand in terms of looking at where this money was going and obviously were disappointed.
There is the issue of infrastructure funding for not for profit organizations. We have 160,000 charities across Canada that employ over two million people. The government made a big fanfare about trying to invest in these charitable organizations, that it would announce that people in a short period of time, and it was a year ago in August, I think, had 10 days to fill in a form. Now 10 days for non-profits is a major task to begin with. But the government only earmarked about $4 million and had over 1,000 applicants-plus across the country.
Therefore, people applied and they assumed, because of the big fanfare that the government announced, that after applying they would receive assistance. Certainly, in my riding, although we did get money after repeated writing and phoning to the minister's office on things like roads, parks, development, et cetera, in the non-profit area it was a disaster. Of the six that applied, not one received any money. They received a curt email saying “too bad, so sad, 1,000 applied and we only had $4 million, you're out of luck”. That is not really very appropriate, particularly when we are talking about a sector where there are two million-plus jobs out there. Again, those are the most vulnerable organizations. When they needed assistance from the government, they clearly did not get it.
The Fraser Institute's recent analysis of Statistic Canada shows that the stimulus package was neither timely nor effective. Again, when talking about infrastructure money, the only people who really made money were those who put up all those signs across the country because obviously those who really needed it, the money was not in hand. The government is great at announcing things, that it is going to be rolled out, but it is not there, the money is not in hand.
If I had the time, I would speak about all of the defence procurements, which the government announced but is not delivering on.
Let me go back, particularly to the issue of small and medium sized businesses, which have been hit hard. Those in Richmond Hill and the southern York region have been hit hard in particular. There is a crisis there. We need to have a responsible government that is absolutely prepared to listen. One of the ways the government could help this situation would be to work much more collaboratively with both provincial and municipal authorities.
Many businesses in my community have asked for certain tax breaks. They have asked for tax breaks in order to help first, in terms of some capital writeoffs for machinery; and second, because they simply are so over-burdened at the present time with the drop in the economy. Times are much more difficult in terms of people spending money that these businesses need. They need to have this kind of assistance.
I would point out that we submitted a detailed report to the Minister of Finance indicating these areas which I am outlining to the House today.
Canada must be competitive, and the only way it can be competitive is in the areas of innovation and good tax policy, in making sure that retraining is available for older workers who need it, and by providing opportunities to our young people. Again, the government seems to have failed in all of these areas.
What did the government do for workers? It brought in a $13 billion payroll tax hike which will affect over 220,000 small businesses in Canada.
When I hear about EI from members on the other side, I would point out to them that it was the Auditor General who said we could no longer have a stand-alone EI account. I sometimes hear members on the other side refer to an EI fund that was rolled in by the previous Liberal government. In fact, it was the Auditor General who said we could not do that.
A tax increase of $13 billion is to me a tax. I do not know what else we could call it. The government does not like to refer to it as a tax but the businesses in my community see it as a tax. They see this as a regressive tax which hurts businesses. If a business has 9, 10 or 12 employees and decides to add an employee, or even maintain those that it has, then this tax obviously is not very helpful in terms of any kind of expansion.
There are over one million small businesses in Canada and 98% of these are looking for support. They are not looking for a handout necessarily but a hand up in terms of government policy. Yet, the government is applauding itself and saying we will get through all of this, that we should just grin and bear it. It says it is spending all of this money.
I will be interested to see the Auditor General's report in the fall. We will be able to really start looking at those infrastructure projects that were announced and see just where that money actually wound up. I have no doubt that it is going to be quite a report and quite interesting for Canadians.
This party is concerned about small business. Back in February we held a forum on Parliament Hill dealing with small business. We heard from small business owners who clearly indicated that the government had not been listening. That was obviously reaffirmed with the budget on March 4.
It is important for the manufacturing sector. We are seeing great attrition in this sector and this is of major concern. Capital cost allowance is sorely needed to help our manufacturers, particularly in dealing with new equipment. This needs to be properly addressed.
Canada has the worst youth unemployment record in a generation. Those of us who were here a couple of years ago may remember the debacle of the summer job creation program. Nobody knew who was going to get summer employment. It was so bad the government had the minister of veterans affairs announce more money. I do not know what that minister has to do with youth unemployment. The government finally changed it, and hopefully this year, at least for summer students, we will see some improvement.
I deal a lot with young people as I am sure many members do. Graduates who have come out of university are now going back for a master's program or a Ph.D. Why? They realize they cannot get a job, so they will stay in school because there are no opportunities out there for them. Again, no direction has come from the government in terms of dealing with the chronic youth unemployment situation, which, as I said, is the worst in a generation.
We also need to encourage start-up companies by introducing initial tax measures for Canadians, particularly for young entrepreneurs. The genius of Canadians, of course, is that we are a very inventive nation and we have been able to create, when in fact there is an opportunity, when the conditions are there. Again, the government seems to have ignored that.
One area which I cannot understand is that when the government has a success, it actually shoots itself in the foot, and that of course was on the ecoEnergy program. I am sure there are constituents of many members here, certainly my constituents, who since 2007 were applying and were certainly taking advantage of that program. The abrupt cancellation of this program, almost in the middle of the night, was because it was too popular.
What could be more important than dealing with energy efficiency, particularly in this day and age? It was cancelled and I understand that of the $745 million for the program, only $91 million has ever been actually directed toward customers as rebates.
What is interesting here is that people actually said, “I want to make my home more energy efficient and I am going take advantage of this program”. People lined up to be part of this, but again we do not know where the other $654 million is. It is not accounted for. Hopefully, we will see it when the Auditor General takes a look, but again it is a question of cancelling a successful program.
Many members on this side know that energy efficiency and climate change are not things that are very popular on the other side, but it is important that those kinds of programs address the needs of Canadians. Obviously, it helps in terms of reducing their expenditures, particularly for heating. Many small businesses that were involved in this kind of retrofitting program found it a great boon. I have companies in my riding that took advantage of it, saying, “We have all these customers now. This has been a great program”. Of course, once it was cancelled the phones lit up with people asking why the government did this, why it was cancelling the program. Again, there is no rhyme or reason, but it was cancelled.
Going back to one of the most important issues, when we have the kind of deficit that we have in this country, we cannot expect that governments are going to be able to spend their way out, but we would expect to have an exit strategy that very clearly lays out how it is going to tackle getting out of the economic mess that we are in. Unfortunately, nobody believes the projections it has and because nobody believes the government, there is a great sense that in fact it is going to get worse and worse. Kevin Page was very clear that the government was out by at least $10 billion. Who knows how much more?
The difficulty is that we have to be able to explain to Canadians what the nature of the problem is and how we are going to deal with it, as we did when we were in government. We did many things as a government to deal with an economic crisis in deficit. We made sure that we did not merge the banks. I remember my colleagues on the other side saying, “We have to be like Citibank”. Who is now taking the credit today for what Paul Martin did, in assuring that we did not have bank mergers? It is those guys on the other side, and I have to say that that is a bit hypocritical, given the fact that when I was parliamentary secretary, I had more Conservatives come over and say, “We are not going to be competitive globally unless we are like Citibank”.
It is good that we did not listen to the economic gurus on the other side. They like to say that they are the economic gurus. The economic gurus have a $56 billion deficit. The economic gurus say, “Let us have bank mergers”. The economic gurus say, “Just let the market run its course”.
Sometimes government can play a very positive role in society. In this case, we did play that positive role and because of that, we came out of a very difficult situation. Unfortunately, it did not take the Conservatives very long to get back into one. With a $42.5 billion deficit for 23 years, which they now think they are going to get out of in five, and good luck to them, there is not an economist worth his or her salt who believes that that is credible. Certainly, we on this side do not see that happening in the foreseeable future.