Debates of March 26th, 2013

Financial Statement of Minister of Finance

[Linda Duncan, NDP, Edmonton Strathcona, AB]

Mr. Speaker, thank you, and I will be sure to direct my response to the hon. member through you.

The member for Nickel Belt represents northern Ontario very well. I am sure his constituents are proud.

It is of course a reprehensible measure. I am one of those typical Canadians who has had to visit many family members in the hospital. Both of my sisters were hospitalized, and my father was in long-term palliative care. It is stressful enough for families to drive to the hospital each morning and try to cheer up a family member without having to worry about paying for parking. It is also the case at the cancer clinic in Edmonton. I have been through this stressful situation.

Surely to heavens when we are contributing to infrastructure, the government could think of some way to subsidize or help out those individuals who simply cannot afford to pay. The government should be working with the provinces and municipalities to come up with some mechanism to make it more affordable for those who are simply trying to visit seniors or sick family members. The government should not be just bragging about the tariffs it is going to take off but should also be revealing the fees and tariffs that it is now going to impose.

[Ted Hsu, Liberal, Kingston and the Islands, ON]

Mr. Speaker, I want to thank my hon. colleague from Alberta. She is perhaps the best MP from Alberta that we currently have. I will not dispute that. Why should I?

It is disappointing that the government did not choose the opportunity presented by the budget to restore funding for the Experimental Lakes Area. I want to commend my colleague for mentioning that.

I would like to read an email that I received from a Conservative, no less, which says “The ELA facility is world-renowned and scientifically irreplaceable. It is worth saving. When did we as Conservatives stop trying to do the right thing?”

I find it amazing. I know there is support from all across the country for what is an extremely good use of money, something that provides a good return on investment, which I am sure the Conservatives will understand.

I am wondering if my colleague could comment on the poor decision to not restore funding for the ELA.

[Linda Duncan, NDP, Edmonton Strathcona, AB]

Mr. Speaker, one of the things that I wanted to mention in my speech was a category of Canadian infrastructure that is missing and unrecognized, and that is our natural heritage.

The best way to bring down the costs of providing safe drinking water or even clean water for industrial processes is to protect our natural waterways. The Experimental Lakes project, which was run fantastically for 40 years and received international acclaim, was exactly that mechanism. Field work could be done in a contained area to test the impacts of coal-fired mercury emissions, acid rain and phosphates in detergents. Determinations and recommendations were made to government, which in turn would regulate and trigger investment in cleaner technologies to make life more affordable for us.

[Robert Aubin, NDP, Trois-Rivières, QC]

Mr. Speaker, I would like to begin by rereading the amendment proposed by the hon. member for Parkdale—High Park, because my comments relate directly to it.

The amendment is very simple:

That the motion be amended by deleting all the words after the word “That” and substituting the following:

“this House not approve the budgetary policy of this government as it:

During this Christian Holy Week, I have a litany of reasons why we should oppose this bill.

In some ways, politics is like many major religions. There are important, imperative moments throughout the year that should be a source of hope and renewal.

The tabling of the budget should have been such a source of motivation. Thus, Canadians could have regained hope in a government that listens to them and acts on behalf of all Canadians, leaving no one behind.

However, the reality is quite different. It is clear that what we have before us is a pre-election budget, albeit two years early, that is about satisfying a Conservative base and certain ridings that the governing party believes it can win over in 2015.

Where is the Prime Minister who promised to be the Prime Minister of all Canadians?

How can anyone believe in the purported economic competence of the Conservatives, when the Minister of Finance missed his economic growth targets by 35% for 2012? He is responsible for a $67 billion trade deficit.

While private sector economists are telling us that this year could be even worse, the minister is still saying that the deficit will be eliminated by 2015. It does not take a rocket scientist to understand that someone, somewhere will have to pay the price and that this budget therefore has to be an austerity budget. It would be nice if the burden of that objective rested on everyone's shoulders equitably. That is not what the Conservatives have in mind.

In the next few minutes, knowing that my colleagues from across Canada will be defending their part of the country, I will try to illustrate how Quebec is more of a victim here, rather than a respected partner in Canada's economic development. Why was Quebec bludgeoned so brutally in the most recent federal budget?

Let us begin with infrastructure. Last week, a reporter asked me what my first impression of the budget was. I summed up my thoughts by saying that this budget was from Mr.—I cannot name the minister here, but I gave his name—the magician. Everyone knows that this magician is able to dazzle his audience at first, but upon closer inspection, it quickly becomes obvious that his tricks are all smoke and mirrors.

For example, I would like to talk about the Conservatives' proposals with regard to infrastructure. Given that the main stakeholders, such as the UMQ and the FQM, have said that it will take $123 billion to update Canada's infrastructure, we expected the budget to contain stable, recurrent, predictable, long-term funding. The Minister of Finance's response was a 10-year plan. That is not really long term. Everyone would have preferred a 20-year plan, but that is not the biggest concern we have about this.

Our Merlin the magician is trying to distract us with smoke and mirrors while he transforms a seven-year plan that was already announced into a 10-year plan. As a result, a program worth approximately $30 billion over seven years has become one worth $47 billion over 10 years. The allocation of funding is not at all balanced over the 10 years since the government is allocating very little funding in the first few years and large amounts later on without bothering to index those amounts, thereby ensuring that the subsidies lose their value year after year.

In short, we will have to deal not only with increased infrastructure costs, but also with a foreseeable reduction of approximately $4.7 billion in federal investments over the next four years. The budget is full of this type of doublespeak and counterproductive measures.

The fight against tax evasion is another good example. Everyone agrees that the fight against tax evasion is worthwhile. Right away, this issue garnered the support of all members of all parties in the House.

Can someone then explain to me how the Conservatives can step up the fight against tax evasion and decrease the resources available to those responsible for leading that fight in the same breath? It must be magic.

Savings and job creation are yet another great part of the budget tabled by the minister. It seems that talking out of both sides of its mouth has also become a hallmark of the governing party. After raising the retirement age from 65 to 67 and asking workers to properly prepare themselves, the government is eliminating one of the biggest savings incentives for Quebeckers, namely the supplementary tax credit for labour-sponsored funds. Not only is this reducing workers' ability to generate part of their own pensions, it is also a direct attack on one of the most significant job-creation tools in Quebec. After such an attack, I hope that the Conservatives will have the decency to stop shoving their jobs, growth and prosperity propaganda down our throats, because their measures are having the exact opposite effect.

I would like to move on to job training. I hesitate to say that it is the icing on the cake. Every single page of the budget is harmful to Quebec, so every chapter seems like the icing on the cake.

The government is clearly interfering with a provincial jurisdiction. Every time the Minister of Transport, Infrastructure and Communities responds to a question, he tries to say that we are always confused about areas of jurisdiction, but that the Conservatives respect the division of powers. I have long wondered how it is possible that he has not reminded the cabinet that job training falls under provincial jurisdiction.

The government is taking back $300 million of the $500 million managed by the provinces so that it can put the maple leaf on a cheque. In return, it is asking the provinces to find new funding. In the same breath, it is saying that it is not cutting transfer payments to the provinces. What is wrong with this picture? On top of all that, the government is asking private business to contribute as much as 33% so that the program will work.

The job training system in Quebec has proven its worth and already involves all the stakeholders. My question is: why reinvent the wheel when it already works just fine? Unless our Merlin the magician's real, hidden objective is in fact to recover money for the public purse. The partners will be unable to cover the cost of this new program. The idea of using private enterprise in this way could also have some major surprises in store for us.

Let me give an example. What would happen to a welder trained in a company, using some of the company's funds, if the company had to shut down for some reason? What recognized skills will the worker have? Where will he get his competency cards? What diploma will enable him to do similar work for another employer? These are all questions that remain unanswered.

With respect to the co-operative system, Quebec certainly fosters the co-operative movement. Thus, it is no surprise that Quebec is once again being attacked with the elimination of the tax credit for co-operatives.

The government has also performed magic in the VIA Rail file. The budget allocates $54 million in 2013-14 to support VIA Rail operations. We could think that we might be joining the 21st century at last and that this acknowledges the importance of developing rail transportation in a country where the train quite often drives our regions' economic development, for example in the tourism industry. We would have to have a very short memory, though, if we cannot recall that this investment comes after VIA Rail's budget was cut by $287 million in the main estimates. Once again, this is another trick in an effort to hide the lack of vision of the Conservatives, who had promised to give power to the regions.

The budget renews the P3 Canada fund that forces provinces and municipalities to use public-private partnerships for projects of $100 million or more. No one from the government side has yet explained to me why the P3 solution is better suited to the taxpayers' ability to pay when Canada has the best borrowing capacity on the markets.

We could also talk about the securities regulator and everything this budget does not do. For example, there is nothing about the infamous employment insurance reform. There is not one line about changes to old age security. There is nothing for households with a debt ratio in excess of 167%. There are no incentives for Canadian corporations to reinvest the $600 billion in dead money. There is nothing to close the 30% gap in funding for first nations' education.

I will close by saying that there are a few elements of this budget that we approve of, but it is simply not worth supporting. Our vote applies to the entire budget and, therefore, I will let the House guess how I will be voting.

[Steven Fletcher, Conservative, Minister of State (Transport)]

Mr. Speaker, the member talked about infrastructure. The budget presents the largest and longest investment in the history of the federal government on infrastructure: $32 billion over 10 years for a community improvement fund; $14 billion for a new building Canada fund; $1.2 billion for a new private-public partnership fund; $6 billion under the current infrastructure programs; $7 billion for first nations; hundreds of millions of dollars for specific projects in Quebec such as the bridges in Montreal.

The member is going to vote against all of it. How can he go back to his constituents and say he is voting against Quebec?

[Robert Aubin, NDP, Trois-Rivières, QC]

Mr. Speaker, I thank my eminent colleague for listing off those figures. The important thing to take out of that never-ending list is how much of that money is essentially a reannouncement. I know that is not really a word, but it was the best I could come up with. The government is reannouncing the same investments and is keeping mum—almost completely silent—on new money that would help meet the needs of municipalities and provincial and territorial governments across the country. This is all being done without any consultation with the provinces or the stakeholders.

I will certainly return to my riding with my head held high to explain to my constituents that Merlin the magician has given us a smoke-and-mirrors budget.

[Kevin Lamoureux, Liberal, Winnipeg North, MB]

Mr. Speaker, I want to take this opportunity to highlight what I believe is a huge mistake the government is making: the government should have allocated the necessary resources to be able to save the Experimental Lakes Area. This is a project that is currently going to be decommissioned. It has first class scientific studies taking place, and they have been taking place since 1968 to protect our fresh waters. It has contributed to all sorts of benefits worldwide. It is a relatively small amount of dollars that would have been necessary. In fact, if the same dollars used to decommission it were used to allow it to continue, it would be able to continue for many years in the future.

Would the member agree that decommissioning of the Experimental Lakes Area is not only socially but economically the wrong thing to do and that within the budget money should have been allocated to ensure that the ELA would have been able to continue on as it has since 1968?

[Robert Aubin, NDP, Trois-Rivières, QC]

Mr. Speaker, I agree with my colleague and I would even say that this is one of the best examples of all of the scientific expertise we will be losing, expertise that we could be sharing with the world. Something else Canada has been losing over the years is its reputation as a major partner in international institutions. We have become just a shadow of our former selves since the Conservative government was elected, as a minority or majority government. The choices this government is making are based on an ideology that may have brought the party to power this time, but as Canadians find out more about that ideology, the majority of them are rejecting it.

I assure my colleagues that in two years, we will give all Canadians an NDP government and make things right by showing this government the door and giving it a taste of its EI reform.

[Bernard Trottier, Conservative, Etobicoke—Lakeshore, ON]

Mr. Speaker, it is a real pleasure for me to rise in the House today to speak about budget 2013. I will be sharing my time with the member for Mississauga—Brampton South.

A lot has been said by members on both sides of the House about this budget. Let me weigh in with what I think is important for my constituents in Etobicoke—Lakeshore, across the great city of Toronto and the GTA, and across Canada, in fact. It is a good budget in the sense that it brings balance to what we have to spend money on, tax measures and thinking to the future in terms of our long-term prosperity.

This budget touches on issues of connecting Canadians with available jobs and looking at the skills gaps. Representatives of businesses and manufacturing industries in Etobicoke—Lakeshore talk over and over again about the challenges they have of finding skilled people in Canada and sometimes having to go overseas to find people to fill the jobs. It really would be of benefit to our Canadian economy if we could match people, help them develop the skills and get them working right away in some of the important sectors of the economy like manufacturing in Etobicoke—Lakeshore.

Another important feature and one of the reasons I support this budget is the new long-term infrastructure plan. It is really important. If we look at the infrastructure deficit that was created in this country and what was spent on infrastructure between 1993 and 2006, we see it was less than $1 billion a year in transfers to municipalities and provinces. We are looking at a long-term plan so provinces and municipalities can lock in on developing the infrastructure they need to keep people and goods and services moving and keep our economy going.

A third important element is the new investments in world-class research and innovation. It is one thing to do pure research, but an important aspect in the budget is commercialization, looking at the D in the R and D and how to take great ideas and scientific research and make it into something commercially viable and, therefore, sustainable for the long term.

A fourth cornerstone of this budget is around the new measures to support communities and families. We have been doing a lot of things since 2006, which I attribute to our finance minister. This is his eighth budget and he has figured out the mix of things over the last seven years to make sure we are supporting families in a sensible, sustainable and affordable kind of way.

Fifth, there are measures to specifically help the private sector grow and succeed in this global marketplace. As we know, the world is very competitive. Even small and medium-sized businesses now have to compete worldwide, and Canadian enterprises are rising to that challenge. They are doing what they need to do to be successful. We are seeing that in the numbers.

I would say the most important part of the budget is the plan to return to a balanced budget. It is absolutely critical. I will say one thing. There is only one party in the House that is proposing a balanced budget. On the one hand, the official opposition is talking about spending increases in the order of $56 billion a year, with no plan to raise the funds, whether it is through taxes or otherwise. In its proposal, it is looking at putting Canada in a deep fiscal hole for generations. The other part of it is that not only would it create a deep fiscal hole, but my children, their children and everybody's children would be paying for it, and that kind of intergenerational debt transfer is just not right.

On the other hand, members of the third party do not have a plan at all. I will forgive them as they do not have a leader in place now, but everything they say suggests that they are speaking out of both sides of their mouths. We are the only party in the House that really has any plan whatsoever to restore Canada to fiscal balance.

I will provide a bit of context in the time I have. It has been said many times before that we are on a strong economic track. We have created 950,000 net new jobs since the depth of the recession in July 2009 and that is something to be very proud of. It is not the government that created those jobs but the Canadian economy.

I should mention also that, for the fifth straight year, the World Economic Forum ranked Canada's banking sector the soundest in the world. That is partly because of strong measures we put in place as part of our culture as Canadians. We are proud of our banks. In the city of Toronto a lot of people work in banks, are very proud to work for the banks, and that provides the financial underpinning for our strong economy. Reflected in that is the AAA credit rating that our government has. That was awarded by Moody's, Fitch and Standard and Poor's.

I also want to highlight the debt that the federal government has as well as that of provincial and municipal governments. If we look at the total net government debt across all levels of government, we see Canada leads the G7. However, it is important to make the distinction between net government debt and total debt. Our federal government pension plans, like the CPP and the Quebec pension plan, have significant financial assets that underpin them. Many countries in the world do not have that solid underpinning. For that reason, we lead the G7 when it comes to net debt to GDP ratio by far.

I want to talk about job creation, and 950,000 net new jobs is a lot of jobs. That means a lot of Canadians are back at work. In some parts of the country, they cannot fill all the jobs that are out there for lack of people with the right skills. However, some of the criticism from the opposition is that these are part-time jobs, which is simply not true. The information we have is that 91% of those jobs are full-time jobs and 79% are in the private sector. Over and above that, 68% of those jobs are in high-wage industries.

To get back to the plan for a balanced budget, when the recession hit we made a deliberate decision to run a temporary deficit. By the way, that was a decision that was supported by all parties in this House. However, as I mentioned, our net debt to GDP ratio is currently 35.8%, but in comparison, Germany is next at 58.4% and the G7 average is around 80%. Therefore, we are in strong fiscal shape compared to the rest of the G7, but we are not going to rest on our laurels. We are going to keep moving forward because that is the right thing to do, which is why we have made a commitment to return to a balanced budget.

Between 2006 and 2009, before the recession hit, the Conservative government paid down $37 billion in debt, which positioned us well. Obviously, we could not predict every aspect of the global economic downturn that happened with the fall of financial institutions around the world, but we are in a strong fiscal position and we want to become even stronger.

I should mention that we reduced the deficits and debt without increasing taxes. Opposition members talk about grandiose spending plans that they cannot afford, but hidden behind that message is the intention to increase taxes, whether with carbon taxes, a hike in the GST or personal income taxes. That is the only way the opposition could afford to pay for its program, short of passing the bill to the next generation.

However, since 2006, we have cut taxes more than 150 times. We have reduced the overall tax burden to its lowest level in 50 years by cutting personal income tax, adjusting the brackets as appropriate, and reducing consumption taxes. The GST was reduced from 7% to 5%. We reduced business taxes and we have also reduced excise taxes. We have accomplished a lot of tax reduction, which means significant savings for families. For a typical family of four, that is a tax saving of about $3,200.

Small businesses are important stakeholders in this economy and they have also seen significant tax decreases. A typical small business with $500,000 in revenue is seeing about $28,600 in reduced taxes.

One of the things we plan to do with our budget, which is one reason I support it, is take action to close some tax loopholes and make our tax system more consistent with economies in the rest of the developed world. Other countries have taken tax measures to make sure there is no tax loss trading that is done unethically and illegally. We will be making sure those loopholes are closed.

I want to highlight a couple of things that are critical for Toronto and Ontario, one of which is the long-term infrastructure plan. No country has committed this much money, as some members on the government side have mentioned, with $53 billion over 10 years in the new building Canada plan, which is significant. Municipalities like the City of Toronto really appreciate that help from the federal government. As well, there is the commitment to Massey Hall, which is a project I really support. There is an investment of $8 million in 2013-14 that has to do with some adjacent building that is going on. It is important that we get that Canadian landmark built, and the federal government is proud to participate in that.

To wrap up, there are some things in this budget for important industries like manufacturing and the automotive sector. It is a good budget for Canada, and the opposition has recognized the wisdom and the good sense in this budget. I wish it would support it. It puts economic opportunities for Canadians in place now and in the future.

[Hélène LeBlanc, NDP, LaSalle—Émard, QC]

Mr. Speaker, there is a growing recognition that austerity budgets such as this one do not lead to economic growth, but rather to negative growth or stagnation, especially in a fragile economic situation like this.

I would like to ask the Conservative member what there is in this budget that is new. I am having a lot of difficulty finding anything new.

How does he think this budget will encourage economic growth in Canada in the short term and prosperity in the long term?

[Bernard Trottier, Conservative, Etobicoke—Lakeshore, ON]

Mr. Speaker, I appreciate the hon. member's question.

She is talking about austerity, but approximately $2 billion in cuts is not the austerity we are seeing in European countries, for example. It is sensible, quite simply. We will reduce needless spending on travel and support functions in departments, for example. It must be done and it is general practice.

With respect to job creation, the measures put in place for the automotive sector are very important, as are the investments in research to improve productivity in those sectors. It is these measures that will really create jobs in those companies.

[Scott Brison, Liberal, Kings—Hants, NS]

Mr. Speaker, given that there has been significant worsening in employment numbers since 2007 with the global financial crisis and given that youth employment numbers are in fact five points worse in Canada today than they were in 2007, why would this budget freeze federal training dollars at 2007 levels, pre-recession and, in fact, in real terms 10% less if we take into account inflation?

Also, given that we have already heard now from the Ontario and Alberta governments that because of the cost-sharing nature of this proposal for the new jobs training program, they may not be able to participate in a robust way in co-funding this program, does the hon. member, as a member of Parliament from Ontario, believe it would have made more sense for the federal government to sit down with the premiers and the finance ministers prior to the budget to hammer out a policy structure that the provinces could buy into and participate in, as opposed to developing it on the federal side and then imposing it on the provinces unilaterally?

[Bernard Trottier, Conservative, Etobicoke—Lakeshore, ON]

Mr. Speaker, I love to talk about job training, because I spend a lot of time in my riding talking to business people about some of the challenges they are having.

One of the things they mention is that the skills are not there. They have jobs posted for months at a time. There is a machine shop in Etobicoke—Lakeshore that has been trying to get machinists for months. It cannot fill the positions and is looking to bring people in from places like Germany and the former Yugoslavia. Those are the kinds of jobs. When people look at the training programs now for the province of Ontario, they say that they do not work.

In the budget consultations we held for months before the budget was announced, the business people said that we needed a change, that the bilateral agreements negotiated in 2007 between the federal government and the province of Ontario did not work. They said that they wanted a program that was responsive to the business needs. That is what has been holding back the economy and it is what will be creating opportunities for young people.

[Eve Adams, Conservative, Parliamentary Secretary to the Minister of Veterans Affairs]

Mr. Speaker, I am proud to rise in the House today to speak to Canada's economic action plan 2013, our Conservative government's plan for jobs, growth and long-term prosperity.

Our economic action plan is centred on the priorities of hard-working Canadians and their families. Our economic action plan is focused on building an enduring prosperity for all Canadians. We are taking clear and decisive action to further strengthen our economy, create quality jobs and a better quality of life for generations to come, for our children and our grandchildren.

Today, I am proud to highlight some of the many benefits that our economic action plan 2013 would provide for Canadians and their families. For example, our economic action plan would provide the right kind of support to Canadian job creators. As promised, we are keeping taxes low to continue to help hard-working families and the employers who create prosperity and jobs for Canadians.

Since 2006, our government has consistently reduced taxes for hard-working Canadians, for the moms, dads, seniors and students. Simply put, we have reduced taxes for all Canadians.

Unlike the high-tax NDP and Liberals, our Conservative government believes in low taxes and leaving more money where it belongs, in the pockets of hard-working Canadians so they can spend their money on their own priorities and money can circulate in the economy.

As Conservatives, we believe keeping taxes low is critically important to the well-being of our economy. We will continue to encourage job creators to invest in and create jobs in Canada.

Our plan is working. In fact, Canada is leading the G7. This is no small feat. Since the depth of the recession in 2009, we have created over 950,000 net new jobs, the strongest job creation record in the entire G7. Canada's unemployment rate is at its lowest level in four years and significantly lower than the unemployment rate in the United States. This is quite a phenomenon.

Our banks are considered the most stable in the world, but the global economy continues to be fragile. That is why we are focused on job creation and not spending beyond what we can afford.

We are focused on eliminating tax loopholes that benefit only a select few. We are on track to balance the budget by 2015-16, as promised.

I mentioned Canadian businesses earlier. These businesses are our job creators. One of the measures I am very proud of is our continued support for small businesses and bright, industrious young people. Since 2006, our Conservative government has supported the Canadian Youth Business Foundation. Economic action plan 2013 continues that support by providing $18 million to the foundation, which provide mentorship, advice and start-up financing for young entrepreneurs between the ages of 18 and 34.

Our Conservative government has also lowered the small business tax rate from 12% to 11%, which allows small businesses to invest in growth, to hire our neighbours and to expand in new markets.

Our government is also providing a temporary credit of up to $1,000 against the small business increase in 2013 employment insurance premiums over those paid in 2012. This temporary credit will help approximately 560,000 employers if they hire more people. We have also increased the lifetime capital gains exemption to $800,000 in 2014 for small business owners.

Manufacturing jobs in southern Ontario are critical. That is why our Conservative government is helping businesses succeed and grow in the global economy. This economic action plan includes $1.4 billion in tax relief through a two-year extension of the temporary accelerated capital cost allowance for new machinery and equipment for manufacturers. Our message to manufacturers is clear: please invest.

These are just a few examples of how our government stands strongly behind our job creators. In order for Canada to grow, we need more businesses to create jobs for Canadians, for our neighbours and more investment in our economy.

Canadian job seekers also need adequate skills and training to fill available jobs. Nothing is more disheartening than to hear my neighbours in Mississauga and Brampton say that they are searching for work and have been for months, only to then hear businesses say that they cannot find enough skilled employees to fill available jobs. There is a serious disconnect here. People are struggling to find jobs, while some businesses cannot grow as quickly as they should in order to compete.

Our government is taking decisive action to fix this growing problem, to ensure that Canada is on the right track for long-term economic prosperity. The new Canada job grant will provide $15,000 or more per person in combined federal, provincial and employer funding to help Canadians get the skills they need for in-demand jobs. By asking employers to equally share in the cost of training their new employees, we know job creator will ensure that the training is targeted and results focused. The new employee is also reassured that he or she is training for a job that exists and needs to be filled.

We also believe in supporting our families and our communities. Economic action plan 2013 introduces several key measures to help Canadian families. We offer new tax relief for families adopting a child. We propose to enhance the adoption expense tax credit to better recognize the unique costs associated with adopting a child, and we wish these young families every happiness.

Let me also remind the opposition that since 2006, we have made the well-being of our children, our future, a priority. We introduced the children's fitness tax credit, promoting physical fitness among children through a credit of up to $500 for programs from hockey to ballet. In addition, we also offer the children's art tax credit, which encourages moms and dads to sign their children up for piano or guitar lessons, also with a credit of up to $500 for arts programs. As a mom, I know how very popular these programs are in the GTA among parents.

Our economic action plan also provides continued enhanced support for our veterans, for our nation's heroes. Canada's veterans deserve the very best. Under the leadership of our Prime Minister, economic action plan 2013 is a budget that invests in our veterans. In fact, the economic action plan proposes to more than double the financial support for funerals for families, while also cutting cumbersome red tape.

Our government understands the needs of Canadians. We have removed over one million low income families, individuals and seniors from tax rolls altogether. We are cutting taxes in every possible way we can. We have targeted personal income taxes by cutting them to the lowest tax rate, to 15%. We are increasing the amount that Canadians can earn tax free. The government has provided seniors with the very much needed ability to split their pension income. We have reduced the GST from 7% to 6% to 5%, which has put nearly $1,000 back in the pockets of the average Canadian family. With this plan, the typical Canadian family has seen savings totalling more than $3,200.

Like all Canadians, we cherish our health care. My aging mother relies on hospitals, just as most Canadians sometimes need our health care. Even during these challenging economic times, our government will continue to provide a 6% increase to provinces for health care funding over last year's payments.

Our government's plan to return to a balanced budget is working. We have reduced the deficit by more than half over the last two years. Economic action plan 2013 builds on past efforts to reduce government spending by announcing an additional $1.7 billion in ongoing savings. While the NDP and Liberals want to engage in reckless spending, we have a plan for Canada and our plan is working.

[Hélène LeBlanc, NDP, LaSalle—Émard, QC]

Mr. Speaker, last year was the International Year of Co-operatives. The Conservative government used the occasion to eliminate the co-operative development initiative and wipe out the Co-operatives Secretariat. This year, it is removing the tax credit for credit unions and caisses populaires.

Can the Parliamentary Secretary to the Minister of Veterans Affairs tell us why is the Conservative government is attacking the co-operative movement?

[Eve Adams, Conservative, Mississauga—Brampton South, ON]

Mr. Speaker, nothing could be further from the truth.

I think Canadians all understand that we are very fortunate to live here, with banks that are considered the most stable in the world. We only need to look at what happened in Cyprus earlier this week to understand how very fortunate we are to have the stewardship of this Prime Minister during this fragile global economy. Our government has a very strong record of supporting consumers and ensuring that their money is invested in a secure banking system.

[Ted Hsu, Liberal, Kingston and the Islands, ON]

Mr. Speaker, I cannot help but respond to the accusations made by my hon. colleague that my party is a party of reckless spending. It is unbelievable that she would say that.

My hon. colleague talked about cutting taxes so that money can circulate in the economy. I know that the finance minister is concerned about the large amount of cash that Canadian corporations and, indeed, corporations around the world are holding. They are holding that cash because they are afraid of the global economic risks that would bear upon any investment of that cash.

However, there is a tax credit that actually encourages companies to put that cash to use and take risks and invest, and that is the scientific research and experimental development tax, which was cut last year. I think the budget is a missed opportunity to restore these tax credits. I admit that it is a form of spending, but it is a way of encouraging corporations with a lot of cash on their books to take some risks, invest in research and development and invest in job creation.

[Eve Adams, Conservative, Mississauga—Brampton South, ON]

Mr. Speaker, in fact through the capital cost allowance, we are accelerating the ability for manufacturers, for instance, to invest in new machinery. This is critically important, certainly, in Ontario and in the GTA. We have so many jobs in the manufacturing sector that were lost during the recession. We really need to ensure that these corporations begin investing again.

Our plan is paying dividends. As I mentioned earlier, since the depth of the recession in 2009, over 950,000 net new jobs have been created in Canada. Clearly, our plan is working.

[Mike Wallace, Conservative, Burlington, ON]

Mr. Speaker, in the parliamentary secretary's area and in my area, there are a lot of young people just graduating from university and college who do not have a sense of what they would like to do. We are putting in this budget $70 million to support an additional 5,000 paid internships for post-secondary graduates in Ontario and across Canada.

What does the member believe that would do for her riding?

[Eve Adams, Conservative, Mississauga—Brampton South, ON]

Mr. Speaker, in the greater Toronto area, in Burlington, in Oakville, in Milton and certainly across all of Canada, we are offering hope to these young people through this added money in the budget. We are offering them a chance to go on with their studies in order to gain additional skills as they begin their careers.

In Canada and around the world, people will now have a number of careers in one lifetime. It is imperative that we invest in that type of work.

[Matthew Kellway, NDP, Beaches—East York, ON]

Mr. Speaker, I will be sharing my time with the member for Pierrefonds—Dollard.

It is a reasonable expectation that a budget should not just explain to us but to all Canadians how the government plans to spend its revenues. It should tell Canadians what it plans on doing with their tax money. Further, it is a reasonable expectation that a government putting forward a budget would want, and therefore make efforts, to explain to Canadians how it would do that.

However, these are disappointed expectations. Instead, we have a government that lacks the courage to live up to these expectations and even lacks the courage of its own convictions. Instead, we have a fundamentally dishonest document in this year's budget. It ducks, dodges and dives. It makes stuff up and pretends.

Let me illustrate this point with the subject of military procurement. In 2008, the government introduced the Canada first defence strategy, or CFDS. It is not so much a policy or strategy, as it is a mighty expensive shopping list, calling for $490 billion of spending over 20 years. We now know that is vastly understated.

Only two years after its introduction the Department of National Defence deemed the CFDS unaffordable. The briefing book prepared for the Associate Minister of Defence by the department in the wake of the May 2011 election stated, “The funding reductions from Budget 2010 and the reduced funding line going forward will make the Canada First Defence Strategy (CFDS) unaffordable”. The recommendation is to “conduct a CFDS Reset to confirm level of ambition”.

It needs to be noted that the CFDS was considered unaffordable even when the department was still budgeting just $5.7 billion for the sustainment of the F-35, which the CFDS states the government will buy. Therefore, the department's assessment of the unaffordability of the CFDS was and remains accurate.

Of course it is not just the associate minister's briefing book that we have to look to for an assessment of the affordability of the CFDS. The Minister of National Defence put together a transformation team in 2010 to “develop ideas to increase efficiency and effectiveness, and to act as the driving force behind organizational changes needed to reposition the DND/CF for the future”.

I am quoting from the forward to the “Report on Transformation 2011”, otherwise known as the Leslie report after its main author, now retired Lieutenant-General Andrew Leslie. This was not just about finding savings to the tune of a billion dollars per year from the budget. Rather, in Lieutenant-General Andrew Leslie's terms it was also about making “the Canada First Defence Strategy more achievable within the resources available”.

As early as 2010, that shortfall was anticipated to be at least a billion dollars per year.

It should be noted that none of Lieutenant-General Leslie's recommendations were implemented. Also, the reset or rewrite of the Canada first defence strategy recommended by the department and the associate minister remains an outstanding promise of the current Minister of National Defence. In other words, since 2010, the government has carried on pretending that it has a real, viable, affordable plan for military procurement. That pretense carries right on through into this budget with the incorporation of a document entitled, “Canada First: Leveraging Defence Procurement Through Key Industrial Capabilities”, otherwise known as the Jenkins report.

The Jenkins report's principal objective is to “outline an approach to maximize the overall benefit of the government's CFDS investment”. It assumes that the CFDS is affordable, that it is a viable military procurement plan and that it is what it had proclaimed itself to be in 2008. It assumes that military procurement under the CFDS will generate $49 billion of industrial and regional benefits. It continues the pretense that the CFDS is not long dead, and by way of the incorporation of that report into the budget, so does the budget.

One might ask what the harm is in pretending that we can afford that shopping list, when we cannot.

Let us examine the recent case of the joint support ships. In 2004 the Liberal government set out to purchase three of these with a budget of $2.1 billion. By the time the bids from industry rolled in under the Conservatives in 2008, it was clear that there was not going to be enough money to get just two ships. The Department of National Defence advised the minister in August 2008, the very same month that the bids were deemed non-compliant, that it was going to cost at least $3 billion to buy those ships.

The Conservatives responded by budgeting $2.8 billion two years later in 2010. Now the PBO has advised in a recent report on the matter that the government should be budgeting over $4 billion for what it intends to buy. More important, it also advised that the $2.8 billion that the government has budgeted has actually less purchasing power than the $2.1 billion the Liberals had budgeted in 2004.

The Conservatives started from behind and then stepped backward. The threat is that if the government continues to behave this way, if it continues to pretend that it can be things that it cannot, that it can buy things that it cannot, then we will continue to walk backward. It is called program failure and it has devastating consequences to the recapitalization of our Canadian Forces.

From the sea to the air, we can see that when one pretends to be able to buy it all, a priority is put on nothing. We have fixed-wing search and rescue being performed in this country by aircraft that is nearly 50 years old, belongs in a museum and is in need of replacement. However, the effort to procure replacement fixed-wing search and rescue capability has been grounded, squeezed out by other procurements higher up on that shopping list. Asked just last week about this procurement, the minister responded by saying that it was a good question and pointed his finger at his colleagues and their departments.

On the ground there is a different story still. Procurement projects for the family of land combat vehicles are all at different stages. This includes the LAV III upgrades, close combat vehicles, tactical armoured patrol vehicles, tanks and howitzers totalling, as best as one can make out from beating the bushes, about $6 billion in acquisition costs.

Obviously it is the army for whom these vehicles are intended that seems to be taking the brunt of the budget cuts. Now there is no reference per se to DND budget cuts in the budget. Those facts, that information, in the words of one budget commentator, is only being whispered “in Swahili at the bottom of a well”. However, the chief of the Canadian army, Lieutenant-General Devlin, appeared before a Senate committee recently, acknowledging that his force is facing at least a 22% cut. Reports suggest that a further 8% cut is coming effective next week.

With the government keeping up pretences that the CFDS is affordable, that budget axe is going to fall on operations and maintenance and readiness. It means no more Arctic training. It means a fire sale on government property. It means recapitalized fleets with empty gas tanks as the fuel budget going forward comes nowhere near covering cost increases from the past.

The Conservative government introduced the Canada first defence strategy with the promise of “stable and predictable defence funding”. That promise did not even last two years. It is just that the government has spent the last three years pretending that it did not break that promise.

This budget continues that pretence to the detriment of the Canadian Forces. This budget perpetuates the pretense that this is a competent government. It is most certainly not. The military procurement file brings that truth into sharp relief.

[Dean Del Mastro, Conservative, Parliamentary Secretary to the Prime Minister and to the Minister of Intergovernmental Affairs]

Mr. Speaker, I am disappointed with the member's speech. When it comes to military procurement I know what the NDP is against but I do not know what its members are for. It is funny.

When it comes to supporting our troops, we have to indicate what we are for because our troops have needs. When we were first elected to government we inherited an army that had been rotted out, an air force that had been virtually grounded and a navy that was sinking. We inherited the Liberal decade of darkness. I am proud of the unprecedented investments we have made into the Canadian armed forces.

That member rises virtually every day and indicates what he is against. Would he please say what he is for? If we are not investing enough into the military, perhaps he would like to indicate some areas where he would invest more. Specifically what assets would he procure or would his party support? How much more money than our government would his party invest into the Canadian Forces and the veterans in this country?

That is the kind of clarity that Canadians want. They want choices. I am tired of hearing what that party is against. Let us hear what it is for.

[Matthew Kellway, NDP, Beaches—East York, ON]

Mr. Speaker, I am happy to talk about what I am for. I am for honesty with Canadians in the budgeting process. I am for competent management.

The government has pretended that its military procurement strategy is a live document. For three years it has carried on this pretence. It is dead. The government has acknowledged it cannot afford it. The department has advised the government it cannot afford it, and the Conservatives continue to play games with budgeting.

The challenge is the challenge of program failure. Because of that incompetence, because of that mismanagement, the government now has less purchasing power for the joint support ships a decade after that process started. That is how incompetent the government is.

The government started procurement for fixed-wing search and rescue aircraft a long time ago. Because of incompetence and mismanagement, we are at a place now where the specifications for fixed-wing search and rescue aircraft have not even been written, and those planes are 50 years old.

[Kevin Lamoureux, Liberal, Winnipeg North, MB]

Mr. Speaker, I want to pick up on this line of questioning.

The member made accusations about the performance of the Liberal Party. I must advise the member that it was the Liberal Party that brought the CF-18, replacing the CF-104s, the CF-5s and the Voodoos, which the previous Conservative government failed to recognize in terms of its replacement.

The CF-18 has been a fantastic aircraft for the Canadian Forces for a number of years. The Conservatives had nothing to do with the CF-18. It was the Liberal administration of Pierre Elliott Trudeau that ultimately brought on that particular aircraft.

The member for Charlottetown from the Liberal Party has tried to get the government to recognize the importance of increasing the amount of money being allocated to our war vets for burial services. The government was shamed into materializing the money for those war vets.

The F-35, as the member has pointed out, is quickly becoming a somewhat dormant issue because of the government's failure to act on the replacement of the CF-18.

I wonder if the hon. member could provide to the House some indication of where the NDP believe we need to go. Where the NDP would take the country in regard to a replacement of the F-35?

[Matthew Kellway, NDP, Beaches—East York, ON]

Mr. Speaker, that is a simple and short answer: an open and transparent competition.

Let me applaud the courage of the member for standing up to try to defend the Liberals for their history and their record on military procurement, because it is indeed dismal.

I did not really talk about it here, but they are often accused of being responsible for the decade of darkness. I think the important point for today is that the government, with the CFDS, promised stable and predictable funding, and what we find out is that we are back on the yo-yo.

The Liberals took us down. The Conservatives decided they would take us up, but we are headed down again, and that is the problem. The NDP government, post 2015, will bring stable and predictable funding for the Canadian Forces and ensure that they have the right equipment to do the job that we ask of them.