Mr. Speaker, what a time to be addressing Canada's economic action plan. As we look around the world, the cradles of civilization in Europe are now overwhelmed with devastating public debt crises. South of the border, millions of people are chronically unemployed and the U.S. government has more debt than the entire U.S. economy has output.
Here in Canada we are strong. We are strong because our Prime Minister and his Minister of Finance have enacted responsible, low-tax, low-debt, low-spending economic policies that respect taxpayers and preserve the long-term sustainability of the government.
I started with Europe because the crisis is probably most acute there. Countries across that continent are faced with the prospect of debt defaults. Greece has a debt to GDP ratio of 165%. That means that for every dollar in output in the Greek economy, there is $1.65 in government debt. In Italy it is $1.20. In Portugal and Ireland, it is about $1.08.
Any government that has more debt than its economy has output is truly in a debt crisis situation. We know that the solution for a debt crisis is not more debt.
Right now the European Union and the IMF are working to try to deal with this crisis. The IMF has accumulated about $400 billion U.S. in its account to deal with crises like this one. It is seeking another $420 billion U.S. next week at the G20 meeting in Mexico. The European Union for its part has already committed $200 billion to Portugal, Ireland and Greece. It has set up another firewall fund worth half a trillion dollars.
At least nine euro currency countries have been downgraded. Greek and Portuguese debt is now considered by all rating agencies to be junk status. The NDP and the Liberals have both suggested that Canada should use tax dollars from this country to bail out governments in that continent. Before we start shovelling Canadian tax dollars into a foreign debt crisis, let us consider the situation in its entirety.
For these countries to require a Canadian assisted bailout, they would have had to have taxed every available dollar out of their own economy, borrowed every single dollar that anyone in the world would lend to them, and used every single dollar in the existing IMF and EU bailout contingency funds.
I would suggest that any country that exhausts all of those sources of funds in order to pay for its spending and its debt obligations is probably not the safest entity to which one would want to lend money.
This government is interested in protecting Canadian tax dollars. As such, we will not lend them to a foreign debt crisis before the countries whose policies created said crisis have a plan to deal with it.
Across the way they feel very differently. We talked about Canada Europe free trade. When we say that, they think it is something very different. They mean exporting Canadian tax dollars to euro debtor nations and importing failed European welfare state ideas to Canada. That is the kind of trade they propose.
The NDP and the Liberals both propose policies that are nearly identical to the ones that put Greece, Portugal and the other nations into trouble. For one, they propose allowing anyone who has been in the country for as little as three years to collect old age security. They have proposed a 45-day work year. That would allow people to pay into EI for 45 days and then collect employment insurance for the rest of the year. This would be an enormous cost to working families and small businesses. Now they are proposing to take Canadian tax dollars and spend them on euro debt bailouts before those countries have even written a plan to deal with their own crisis.
On this side of the House we understand that the best thing we can do to protect Canada from the debt crisis is to ensure that we do not repeat the mistakes that led to it in the first place.
That is why we have a firm plan to balance the budget by 2015-16, just three years from now. That will make us the first country in the entire G8 to balance its budget without a tax increase. What better way to protect ourselves against a debt crisis than to pay off debt?
How would we do this? To start with, we have initiated a plan to reduce the cost of government by $5.2 billion over the next three years. We have announced savings in department after department and we have been able to secure these savings without affecting front line services for the Canadian people.
Second, we are making our social programs sustainable. If old age security is not affordable to taxpayers, then it is not sustainable to seniors. That is why we are making it affordable and sustainable all at once. The demographic and cost pressures are evident. Over the next 20 years the number of people collecting OAS will double. The cost of OAS will triple. The number of taxpayers for each retired OAS recipient will fall by half. This is partly due to the demographic baby boom bubble. It is also due to the fact that we are living longer.
The average life expectancy grows by 47 days every single year. When old age security was created over half a century ago, life expectancy was 69 years and eligibility was 70, meaning that most people did not get any OAS at all. Now the age eligibility is 65 and life expectancy is 82, meaning there is now 17 years of eligibility. Twenty years from now it will be roughly 84, meaning people would collect OAS for almost two decades. That is not what the program was intended to do. Over a gradual period we would raise the age of eligibility by two years in a way that would not affect existing or soon-to-be recipients of OAS.
At the same time, as we render these programs more sustainable, we are growing the private sector by allowing tax-free savings accounts. Already, 6.2 million Canadians have opened accounts. That means for decades to come they will grow their savings without the hand of government interfering with their returns.
We are allowing small businesses to pool their resources to create employer pension plans for their employees to help the majority of Canadians who do not have an employer pension plan now.
We are removing regulatory obstacles so that there is one approval for every one project so that we can unlock the half a trillion dollars in resource wealth that sits beneath our feet across this country.
We are signing free trade agreements with countries all around the world. Europe and India are the next two agreements on our to-do list.
The goal here is to contain the cost of government and grow the success of the wealth-generating private sector so that we can have jobs, growth and long-term prosperity.