House of Commons Hansard #198 of the 41st Parliament, 2nd Session. (The original version is on Parliament's site.) The word of the day was conservatives.
Financial Statement of Minister of FinanceThe BudgetGovernment Orders
The Acting Speaker Barry Devolin
Order. I would ask that members keep their questions and answers brief.
The hon. member for Skeena—Bulkley Valley.
Nathan Cullen NDP Skeena—Bulkley Valley, BC
Mr. Speaker, a lot of budgets are about choices and proportion. How much are those guys going to focus on giving out to the wealthier Canadians? Well, $2.5 billion, plus a bunch in TFSAs and all the rest that the Conservatives have done. How much are they going to help average Canadians? If my friend is talking about home accessibility, which is a very important issue, one would connect that to a principle of health care. However, what is missing in the budget is the $36 billion health care cut that the Conservatives made to provincial health care budgets. All of those home visits and all the things that are needed to support seniors who want to stay in their homes longer, which New Democrats believe in, need to be supported by a vibrant, public health care system.
To cut $36 billion from the health care fund to the provinces that administer health care, then offer up a tax incentive for home retrofit for Canadians to have accessibility and say that everyone should be happy, is like the Minister of Transport saying that the government will offer a tax cut to people who lost have their jobs. The Conservatives are missing the point.
The point is to have a good, robust health care system for Canadians. Throwing down a few small programs and then expecting people to be satisfied when they do not have the health care attendant, the nurses, doctors and health care they need misses the entire point of what health care is.
Kevin Lamoureux Liberal Winnipeg North, MB
Mr. Speaker, at a time when Canadians are looking for strong leadership from the Prime Minister's Office, once again we have seen a huge letdown.
We want economic growth. We want to see a middle class that is given attention, as opposed to the neglect that we have seen over the last number of years. The best example of that is in regard to the income splitting. The government is giving hundreds of millions of dollars every year to some of Canada's wealthiest, and at a substantial cost. Who is going to be paying for it? It is going to be Canada's middle class. We wanted and expected a budget that would provide economic activity and have a sense of fairness to it.
Does the finance critic believe in any way that this budget delivers any sense of fairness to Canadians?
Nathan Cullen NDP Skeena—Bulkley Valley, BC
Mr. Speaker, no it does not.
What is remarkable about something like income splitting, as an example, is that only 15% receive the benefit, and that is skewed toward wealthy Canadians, but 100% of Canadians pay for it. Therefore, we have this strange reverse Robin Hood scene going on with the Conservatives where they take from the middle class and the poor to ensure that some wealthy folks, who, Lord knows, could always use a little more according to the Conservatives, get a little more.
The Conservatives not only have missed an opportunity around questions of fairness, but they have missed the reality of what Canadians want right now, which is affordable child care. I would encourage my friend from the Liberal Party to develop a program, as we have, because we have found this issue resonating with Canadians across the country. The extra $60 a month does not mean much to parents who pay $1,600 a month in child care costs. What they want is affordability.
Women are participating in our economy right now at the lowest rate since 2002. Every economist will tell us that on affordable child care, for every $1 that is put in, the economy gets back $2 to $3. This is a true investment. What does income splitting, at $2.5 billion a year, do for the Canadian economy? Nothing.
Yesterday was a good day for those who are wealthy, but not such a good day for everybody else.
Raymond Côté NDP Beauport—Limoilou, QC
Mr. Speaker, I thank my colleague from Skeena—Bulkley Valley for his amendment, which I am pleased to second on behalf of the people of Beauport—Limoilou.
If I may, I would like to say a quick word about tax avoidance, and the member for Papineau and his gang could accuse my barber of that. I am sure that when I go and have my hair cut, my barber will have some very interesting feedback regarding that accusation from the Liberals.
That said, to come back to our amendment, now the Conservatives are refusing to talk about income splitting. That is very interesting. I wanted to ask my colleague from Skeena—Bulkley Valley what he thinks of the fact that the term “income splitting” was nowhere to be found in the Minister of Finance's speech yesterday.
For the past several weeks, however, Conservative backbenchers have been practically bellowing, wanting to talk about the promises they made to their voters to bring in income splitting. Now it looks somewhat like a pill that is leaving a bad taste in the Conservatives' mouths.
What are my colleague's thoughts on that?
Nathan Cullen NDP Skeena—Bulkley Valley, BC
Mr. Speaker, it is not just what they have said; it is what they have not said. Yesterday, it was very interesting to see that the biggest program in this budget, income splitting, does not really exist for the Minister of Finance. That is unbelievable; this is a new reality.
After months and months of criticism from all over the country and from discussions across Canada, $2.5 billion just does not exist for the Minister of Finance or for the Prime Minister. Obviously that is because the program is not very popular, it will cost a lot, and it is not fair.
We, the New Democrats, believe that all of our discussions should be based on fairness. Fairness will be central to our budget when we become the Government of Canada.
David Sweet Conservative Ancaster—Dundas—Flamborough—Westdale, ON
Mr. Speaker, in the riding I represent, Ancaster—Dundas—Flamborough—Westdale, very few citizens have the opportunity to reach institutional daycare as the member says. It is a broad riding with rural, suburbs, as well as urban. We have a plan for every family to have an opportunity to get some benefits to pay for whatever child care they have.
What would the member say to the one constituent of mine who has already communicated with me. He has four young children with a stay-at-home mom. He goes to work and has a very modest salary. He said that this would make a serious difference in his household income because it would mean thousands of dollars in these tax breaks?
What does the member say about Canadians with low or modest incomes benefiting in that regard?
Nathan Cullen NDP Skeena—Bulkley Valley, BC
Mr. Speaker, it was quite revealing in the preamble to the member's question that a number of his constituents could not gain access to affordable child care. That is point. The member's leader, the Prime Minister, promised to create child care spaces in 2008, in 2011. He made the promise over and over again as did previous Liberal governments. Without a plan, it did not happen. The Conservatives did not plan to do it and they did not create the child care spaces.
I live in a rural community and there is a lack of child care spaces, especially affordable, quality ones. Canadians are looking for that. I am stunned that the Conservatives do not seem to get this basic reality for Canadians, that when they pay $1,000 or $1,600 a month per child, it is incredibly expensive. Many Canadians are paying more for child care than they are for their mortgage.
We presented a fully costed, affordable, quality child care program. The member calls it institutionalization. Does he refer to public schools this way, that our kids are being institutionalized? When someone goes to public medicine, does he refer to it that way? I hope not. The language is offensive. We need to help out moms, dads, moms and moms, and dads and dads, and also look for a little help for single parents who are trying to make ends meet.
Financial Statement of Minister of FinanceThe BudgetGovernment Orders
The Acting Speaker Barry Devolin
It is my duty pursuant to Standing Order 38 to inform the House that the questions to be raised tonight at the time of adjournment are as follows: the hon. member for Algoma—Manitoulin—Kapuskasing, Rail Transportation; the hon. member for Charlesbourg—Haute-Saint-Charles, Employment; the hon. member for Gaspésie—Îles-de-la-Madeleine, Rail Transportation.
Resuming debate, the hon. member for Papineau.
Justin Trudeau Liberal Papineau, QC
Mr. Speaker, I am glad to have this opportunity to speak the day after the Conservative government tabled its 10th budget. This is a budget that gives the most to Canadians who need it the least. I am not saying that this is not an important document—quite the contrary.
Soon we will have an election. When the time comes for us to campaign, the Prime Minister and his candidates will cite this latest budget when they try to convince voters to keep them in power. Therefore, it is important that Canadians know what this is, what is in it and what is not.
It is not, for instance, a plan for jobs and growth for the middle class and those looking to join it. The budget is a political document produced to that end. It is a vision for a Conservative election campaign; it is not a vision for Canada.
A long time ago, before Canada officially became a country, another campaign was under way, and when Louis-Hippolyte La Fontaine talked to his constituents in Terrebonne, he said:
Canada is the land of our ancestors; it is our country as it must be the adopted country of the various populations which come from diverse portions of the globe, to make their way into its vast forests as the future resting place of their families and their hopes. Like us, their paramount desire must be the happiness and prosperity of Canada, as the heritage which they should endeavour to transmit to their descendants in this young and hospitable country. Above all their children must be like ourselves, CANADIANS.
Former governor general of Canada Adrienne Clarkson said: “In that small paragraph are enunciated all the principles by which we as Canadians live in an immigrant society”. I agree, but that is not all.
This paragraph expresses a fundamental idea that Canadians are committed to and have respected for generations: the idea that their children and grandchildren will have an equal chance and a better life than they had.
That is how it was in Canada for a long time. Over the past century, our economy grew, and so did our middle class, becoming the foundation of a prosperous economic future. When the middle class grows and succeeds, so too does the entire country. Nonetheless, something changed in the past decade.
When the Prime Minister first took over in 2006, he inherited a $13 billion surplus. It was at the time of perhaps the strongest fiscal situation in the world. It took him only three years to put Canada back into deficit, and that was ahead of the recession. Since then, nearly 10 years of Conservative fiscal mismanagement have left 139 other countries ahead of Canada for expected growth in 2015, and that was before oil prices took a slide. That was before this delayed budget.
However, Canadians do not have to hear about international finances to know how poorly things are going. Over the past 30 years, median after-tax family incomes in Canada, those of the middle class, have only increased by 15%. Still, Canadians keep working hard, making contributions to our country and its future. Yet what happens when those hard-working Canadians are ready to settle into retirement? Many will not. They will have to keep working just to survive.
Studies now show that a full third of Canadians nearing retirement age have not been able to save for it at all. It used to be that the government would help. Now that is less the case. By pushing up the age to qualify for old age security and the guaranteed income supplement, the Prime Minister has made it even harder for Canadians to get the retirement they deserve. He did this so his government could double the tax-free savings limit. Again, that doubling only favours the richest Canadians. That is unfair. Canada deserves a better plan, focused on strengthening the middle class.
The Prime Minister could have implemented a plan for growth; he did not. When we study this budget, we see that he still does not want to. This government has done nothing to promote growth in the last decade and therefore our middle class, the backbone of the economy, has begun to weaken.
Less than half of Canadians consider themselves to be part of the middle class, compared to 67% in 2002. No less than 57% of Canadians believe that the next generation will be worse off.
How can a nation such as ours, which is rich in so many ways, have come to this, and why are so many Canadians having trouble making ends meet every day?
It is because the government has neglected that other key component of Canada's character that LaFontaine hinted at 170 years ago, fairness.
Here is the thing about fairness. It does not mean everyone is equal, but it does mean that everyone is given an equal chance. Canada is about that. No matter who people are or where they are from, they deserve a fair shot. That is how we succeed together. That is how our economy grows.
As we have seen with this new budget, the Conservatives still have no plan for growth. Here is what their plan is instead.
The Prime Minister and his Conservative government want to spend $2 billion on a tax break for the richest Canadians. In order to pay for it, they sold a bunch of assets and cut back on things like critical infrastructure investments, support for the RCMP and our security services, and health care funding for our veterans. All of this so they can give fewer than 15% of Canadians a tax break and have the other 85% pick up the tab. That will not help our economy grow and it will not help our middle class grow.
It is not fair. The Prime Minister and his government like to talk about the number of jobs created since the recession. However, the reality is that hundreds of thousands of Canadians are still unemployed or underemployed. There are some 200,000 more unemployed people than there were before the recession.
In fact, the rate of job growth was less than 1% for 15 consecutive months. This is the longest period with growth below this threshold in almost 40 years, excluding recessionary periods.
The statistics on youth are even more grim. There are now more than 165,000 fewer jobs for young Canadians than there were before the recession.
What does a plan for growth actually look like? It could start with infrastructure investments. The Conservatives will tell Canadians that they have poured money into infrastructure, but that is not the entire truth. Their plan for infrastructure is simply too little too late. Last year the government slashed the building Canada infrastructure program by 87% from its previous level. This year there has been no real improvement. What has been committed for infrastructure is back loaded until years from now.
A real plan for growth would put in place today a serious infrastructure plan to create jobs and prepare Canada for the changing global economy as well as a changing climate, although I suppose in the latter case one has to believe it is actually happening before one can do anything to address it.
To get back to infrastructure and investments, every dollar invested in roads, water or public transit generates $1.20 in growth. Every dollar invested in affordable housing generates $1.40 in growth. One billion dollars invested in infrastructure creates 16,000 person-years of good jobs—the kind of jobs Canadians need and are prepared to do. That is an excellent rate of return. That is economic growth.
Modernizing infrastructure facilitates and accelerates commerce. It enables Canadians to get to their destination more quickly and more safely. As I said, smart investments in infrastructure will prepare Canada for the effects of climate change. I should also point out that climate change is not mentioned once in over 500 pages in this budget—not as a reality we face or as an economic challenge. That exclusion speaks volumes. Honestly, a discussion on climate change is not just about science; it is also about the economy. This is a discussion that we need to have in 2015, and the government's complete disregard of this issue is a special kind of failure.
What is the Prime Minister's priority instead; that is, aside from that $2 billion tax break for the richest Canadians? Advertising. While Canadians have been struggling, the Prime Minister's government has justified spending some $750 million on advertising to promote things that sometimes do not even exist.
Think about it. That is three-quarters of a billion dollars on TV commercials and billboards, on paid persuasion. This is not fiscal prudence; this is waste, pure and simple. More than that, it is insulting. The Prime Minister must not think much of Canadians to suppose they believe that legitimacy to govern is earned by running a bunch of commercials on TV.
Do members know how Canadians know their government is working? I will give them a hint. It is not because they saw a TV ad. They know it when they drive to work on new roads and safer bridges. They know it when a new fleet of buses gets them across town in less time. They know it when we have a plan to address our changing climate. They know it when we have well paying, full-time jobs, and when their kids can go to a good school.
Canadians know that their government is working when they have a real, fair chance to succeed. However, the Prime Minister has no real plan for anything.
Instead, he will spend another $7.5 million to ensure that this budget looks good on TV. That is not a plan for Canada. That is an advertising plan for the Conservative Party. He is using hard-working Canadians' money to pay for that advertising. That is just plain wrong.
Generations of Canadians have shown that in our dealings with our friends and with strangers, we strive to be a fair people. Decades before we were even properly a nation, this was a principle to which we knew we must adhere so we would all prosper, whoever we are, wherever we may be from.
A government's budget should not be a marketing tool. It should be a document that, among other things, lays out a road map for how we want our country to look. It is not a callow piece of advertising. It ought to be a fair and compassionate plan, one that is both fiscally and socially responsible. This budget is none of those things. We cannot support it.
Therefore, I move:
That the amendment be amended by adding the following:
(h) unfairly benefits the rich instead of helping the middle class and those working hard to join it and;
(i) contains no plan for jobs and growth.
Financial Statement of Minister of FinanceThe BudgetGovernment Orders
The Acting Speaker Barry Devolin
The subamendment is in order.
Questions and comments, the hon. Minister of State for Small Business and Tourism, and Agriculture.
Financial Statement of Minister of FinanceThe BudgetGovernment Orders
Beauce Québec
Conservative
Maxime Bernier ConservativeMinister of State (Small Business and Tourism
Mr. Speaker, I have a question for the leader of the Liberal Party.
He gave a nice speech about Canada. I would like to tell him that those are fine words, but that in reality, Canada would not enjoy the same economic prosperity if we were to take his approach because it involves spending money that the government does not have. He wants to spend even more money on infrastructure programs than we are doing now, using borrowed money. Like me, the opposition leader knows that today's debts are tomorrow's taxes. What is certain is that Canadians will pay even more taxes under a Liberal government.
How can he justify raising taxes for Canadians and cancelling tax cuts as a way to create prosperity in Canada?
Justin Trudeau Liberal Papineau, QC
Mr. Speaker, I would like to thank my colleague for his question.
The reality is that I will not take any lessons on economic growth from the members of this government. Over the past 10 years, under this Prime Minister, Canada has seen the worst rate of economic growth of any Canadian government since the 1930s and the R.B. Bennett years that followed the Great Depression. The Conservatives did not create any economic growth.
Canadians are well aware that Liberal governments are the ones that balance the budget. This Conservative government created seven consecutive deficits. That is not economic growth. That is not what this country needs. Giving tax cuts to the wealthiest members of society is not the way to create prosperity, and I hope that the government will change its mind in that regard.
Nathan Cullen NDP Skeena—Bulkley Valley, BC
Mr. Speaker, we take no issue with the concern of the Liberals with respect to income splitting. As we have illuminated since it was first proposed by the government, it is a $2.5 billion giveaway to the top 15% of Canadian families, while everyone has to foot the bill for it.
I have two questions.
First, the member mentioned a number of places in which there had been research done with respect to the impact of investments in infrastructure and the like, and that there was a healthier return to government for investing in transit and whatnot. We agree as well with that assessment. However, one of the strongest impacts on investment is in affordable child care, that for $1 put toward affordable child care one receives even more, sometimes as much as $2.00 to $2.50.
We put forward an affordable child care proposal of up to $15 a day. The Conservatives have their strategy, which contrasts dramatically with ours. It offers two different things in different ways. We would say it is not as much. Therefore, I would like a clarification on where the Liberals stand on an affordable child care strategy.
Second, yesterday the Liberal leader stated that the small business tax cut, which we proposed in the House but the Conservatives and Liberals voted against but is now in the budget at a slower pace than what we wanted, needed to be redesigned and that he was opposed to the measure as it was presented yesterday. Could he tell us what it should be redesigned as, or does he want to eliminate that effort to help out small business?
Justin Trudeau Liberal Papineau, QC
Mr. Speaker, the member for Skeena—Bulkley Valley gave an excellent speech earlier in the House opposing the budget.
I will answer both aspects fairly quickly.
First, I am incredibly proud of the Liberal plan on child care that involved 10 deals, one with every province, to create child care spaces in 2005. It was a landmark decision that unfortunately both the Conservatives and the NDP voted against. Therefore, we will take no lessons from the NDP on creating national child care spaces.
Second, in terms of the small business tax credit, we are in favour of helping small business. There is no question about that. We are in favour of reducing taxes for small businesses and would not reverse the proposal that the Conservatives have. What I highlighted yesterday and brought forward concerns on was the fact that many studies had highlighted that most or many of the benefits from such a tax break would go to extremely wealthy individuals rather than to hard-working small business workers and employees. That is the concern for us. I hope care is taken when implementing this proposal.
Scott Brison Liberal Kings—Hants, NS
Mr. Speaker, I thank the Liberal leader, the member for Papineau, for offering some hope to Canadian parents who are looking for a real plan for jobs and growth for today's youth. Today's parents are the first generation of Canadian parents who believe their kids will be worse off than them.
The doubling of the tax-free savings account limit will make things worse by gutting the future capacity of governments. Is the leader of the Liberal Party concerned about the intergenerational equity component of the tax-free savings account in terms of giving a tax break to the rich but potentially making middle-class Canadians pay higher taxes in the future and receive fewer services from government?
Financial Statement of Minister of FinanceThe BudgetGovernment Orders
Liberal
Justin Trudeau Liberal Papineau, QC
Mr. Speaker, I thank the member for Kings—Hants for his question and for his excellent work as the Liberal finance critic.
First, we have been very clear. We are in favour of the tax-free savings account. We think that there is a meaningful use to encourage people to save, to set aside a little money at the end of the year in a tax-free way. We need to encourage middle-class Canadians to save for their retirement, and modestly done, this is a good measure. However, doubling the tax-free savings limit to $10,000 makes it beneficial only to wealthier Canadians.
I have travelled far and wide across this country and had an awful lot of conversations with middle-class Canadians who are struggling with debt at the end of the year every year and certainly do not have $10,000 to put aside every year to benefit from it, whereas wealthy Canadians absolutely will.
This issue will be very expensive in the short and medium term, but even more expensive in the long term. That is the term in which the Conservatives will be raising the retirement age from 65 to 67, hurting the average senior to the tune of about $13,000, the most vulnerable seniors to $28,000 out of their pockets, and those are the wrong priorities.
Larry Miller Conservative Bruce—Grey—Owen Sound, ON
Mr. Speaker, I have had a lot of feedback, as I am sure all of us have in regard to what was just a terrific budget yesterday, and I particularly heard from a lot of small business owners. I just had an email not very long ago from a small-businessman who started up about five years. The business has built up and it now has 18 employees. It is a family business. He and his wife were just thrilled to see the small business income tax rate lowered from 11% to 9%. He said that he was as happy as the devil and now he hears that the leader of the third party wants to reverse that if he wins the election.
I want to ask the member how he would respond to that constituent.
Justin Trudeau Liberal Papineau, QC
Mr. Speaker, I am happy to tell the member for Bruce—Grey—Owen Sound that he can tell his constituent that I have no intention of reversing that cut.
What I highlighted yesterday was that the help we give to small businesses, which we absolutely should be giving, should be going to his constituent. It should not instead be going to the likes of Mike Duffy Inc., for example.
There is a concern about the fact that this is a tax benefit that many wealthy individuals could incorporate and benefit from when in fact who we want to support is exactly his constituent, hard-working business owners who employ many employees in a small business capacity because those are the drivers of our economy.
The hon. member can reassure his constituent by actually telling the truth about what I said.
Elizabeth May Green Saanich—Gulf Islands, BC
Mr. Speaker, I would like to ask the leader of the Liberal Party if he agrees with the Prime Minister that since 2009, when the Prime Minister made the pledge at the meeting in Pittsburgh of the G20 that this country would stop subsidizing fossil fuels, yet despite his promise, the Prime Minister continues to subsidize fossil fuels in the oil sands, and in this budget, opens up new subsidies for liquified natural gas.
I would like to know if the Liberal leader would commit to ending fossil fuel subsidies in this country.
Justin Trudeau Liberal Papineau, QC
Mr. Speaker, I thank the hon. member for her great work as leader of the Green Party and for her efforts to highlight the fact that the government has not addressed responsibly either climate change or investments in renewables.
There is no question that a Liberal government would start off by recognizing that climate change is a reality and that a federal government needs to work with the provinces on the lack of leadership we have seen over the past ten years in making sure that we put a price on carbon and therefore reduce our emissions.
On the other side, making sure that we are investing in renewables, understanding the extraordinary advantages that come with a Canada that has a strong and vibrant renewable resource sector and making sure that the government incentives are directed toward things that would be good, not just for future generations, but for our economic positioning with our trading partners, is exactly in line with the priorities of the Liberal Party.
Financial Statement of Minister of FinanceThe BudgetGovernment Orders
Beauce Québec
Conservative
Maxime Bernier ConservativeMinister of State (Small Business and Tourism
Mr. Speaker, it is my pleasure to speak to the House and Canadians who are watching.
I want to let all Canadians know that I am very proud of what my government did in the last budget and for future generations. Our government's most spectacular achievement is the reduction of the tax burden on Canadians. The ratio of government revenue to GDP is at its lowest level in more than 50 years. I think that is a great achievement.
The leader of the Liberal Party promises to reverse this trend. He wants to take back the tax cuts that we gave to Canadians. We want to shrink the government, to give Canadians back their freedom, but the Liberals with their leader want to shrink Canadians' paycheques and take away their freedoms. The Liberals are very clear on what their priorities are. It is not cutting taxes for Canadians. They want to spend more money. They want to spend money to stimulate the economy when we are not in a recession. The leader of the Liberal Party and his finance critics have repeatedly refused to rule out running a deficit again for many more years if they are elected.
The leader of the Liberal Party is saying things about the economy that, for an economist, sound a bit bizarre. When he referred to the government budget last year, he said that there is no need to worry about the deficit, we should aim rather at stimulating the economy and the budget would balance itself.
For the leader of the Liberal Party, the more a government spends, the more it stimulates the economy, the more its revenues will grow and the less we need to worry about the deficit. For him, let us spend our way to prosperity. No, seriously, Canadians know that if we all spend more than we have, we will not get richer. It is called living beyond our means.
I think we have to wonder why the deficit and the debt exploded in the 1970s when his father was the leader of the Liberal Party. Perhaps they were not spending enough. They were spending a lot of money, but it did not create any growth. At the last Liberal convention, they had an economic adviser, Larry Summers. He said that it was alright for a government to spend because we need unconventional support policies for the economy. This is economic jargon for spending without restraint. According to him, accumulating more debt is okay when it serves to stimulate the economy, when we do not have a recession.
We all know that more spending and more borrowing will not act as an economic stimulus but rather as an economic sedative. Less money will be available for the private sector, and it is only private sector entrepreneurs who create wealth.
What the leader of the Liberal Party said yesterday was that he wants to reverse and abolish all tax cuts we are giving to Canadian entrepreneurs. He just said that a couple of minutes ago and he also said the same thing in a video released last year.
The leader of the Liberal Party explained that households and provincial governments in Canada are heavily indebted while the federal government has considerably lowered its debt levels since the 1990s. According to the leader of the Liberal Party, Ottawa is the only entity that has room to rack up more debt. It should therefore step up and spend more to stimulate the economy, when we do not need any stimulus.
For me, this is like a couple who has racked up a large amount of consumer debt on credit cards. They check the invoices for their three credit cards and the husband says to his wife, “We have reached our limit on these two cards, but we still have some credit left on this third one, so we can get richer if we max out this one, too. Let's go shopping.” Can anyone imagine a more absurd economic policy?
The leader of the Liberal Party seems to forget that it is the same taxpayers who will have to pay back the debt of all levels of government, municipal, provincial and federal, as well as their own. I am very proud that our government took control of the debt. The debt-to-GDP ratio is at 33% and our goal is to have that ratio at 25% a couple of years from now. At 33%, we have the best performance of all G7 countries.
For Conservatives, debt is not something abstract. Servicing the debt costs taxpayers about $30 billion a year. This is as much money as the GST brings to government coffers. For us, the more we cut down the size of the debt, the fewer resources we will need to pay the interest, and the more we will be able to afford to cut taxes for Canadians.
The leader of the Liberal Party and his American advisers still believe in the old Canadian theory that says that government can create wealth by spending more money. If the government injects money into the economy, where does it come from? It is not falling from the sky. In reality, every time the government takes an additional $1 in taxes out of someone's pockets, it is $1 that person would not be able to spend or invest. When government spending goes up, private spending goes down. There is no wealth creation.
Government borrowing has the same effect. It is like taking a bucket of water from the deep end of the swimming pool and emptying it in the shallow end. Nothing happens. It is this kind of policy that ruined our economy in the 1970s. Prosperity, we all know, does not come from government spending but from entrepreneurial investing. To stimulate the economy, we need to give entrepreneurs the means to create wealth. We need to put in place the best possible conditions to allow the private sector to become more productive by curtailing public spending, cutting taxes, reducing the burden of regulation and signing free trade agreements. Growth and progress depend on economic freedom through less government intervention in our day-to-day lives.
More government spending is not the answer to our social and economic challenges. The task is not to reinvent government; the task is to limit government. Conservatives believe in a smaller government, but the Liberals want a big government because they elevate the government and downgrade the citizens. We want a small government because, ultimately, we support individual freedom and personal responsibility. We have faith in people. We have faith that they have the ability, the dignity and the right to make their own decisions with their money and to determine their own destinies.
Soon it will be a time for choosing. People will have to decide if they want to go back to more spending, more borrowing and more debt, and maybe some constitutional crisis because the leader of the Liberal Party wants to interfere in provincial jurisdiction, in education. He said that education is important. We know that education is important, but education is a provincial jurisdiction. He wants to do like his father did and play in the provincial jurisdiction. Conservatives respect the Constitution and think that education is very important for Canadians. This is why we will not interfere in provincial jurisdiction. The provinces know better how to deal with that.
The time will come for Canadians to choose in a couple of months from now. They will have the choice between stability, a steady economic hand under the leadership of the Prime Minister, or instability and maybe some constitutional crisis with leader of the Liberal Party, instability because they want to spend the money we do not have to stimulate the economy when stimulus is not needed because we are not in a recession.
What are we going to do? In the last budget we tabled the balanced budget act. We want to ensure the next generation that nobody will spend money we do not have to create jobs when we know that it is the private sector that is going to do that. It is not the government, it is the private sector. We believe in entrepreneurs. That is why we want to cut their taxes and we also want to cut taxes for all Canadians.
I was very disappointed by the reaction of the leader of the Liberal Party. I know he is taking his advice from an American economist. If we look at what happened in the U.S. a couple of years ago, I think it had the wrong policy. Right now, we have the right policy for the future.
I am very proud of our budget. It was hard to achieve a balanced budget. It was not easy because budgets do not balance themselves, as the opposition leader likes to claim. It takes hard work. In 2006, as soon as this government took power, we began to manage Canada's budget responsibly, we created surpluses, we took control of expenses, and we allocated money—$33 billion—to the public debt.
We went through a global economic crisis that started in the United States and other countries. That affected Canada because businesses export their products to the United States and around the world. They do that because people like their products, which are made very efficiently, making them competitive in foreign markets.
However, when something happens in another country, these entrepreneurs are affected indirectly. We had to create a stimulus program, because we were in a recession, to stimulate the economy. At the time, we told Canadians that it would be temporary and that it was meant to stimulate the economy, but because future generations would have to pay for these current debts, we wanted to stimulate the economy through infrastructure programs that would benefit future generations. That is what we did. We created an infrastructure program that involved considerable spending to meet the country's needs and ensure that future generations could also benefit, but it was a short-term, very targeted stimulus program.
Now we are returning to a balanced budget. How did we do it? We controlled our spending. We froze operating expenditures across the Government of Canada. We imposed the freeze because we knew it was the right thing to do. For politicians, sometimes it is easier to raise taxes to have money and create programs, but that is not the right solution. The solution is to leave money in people's pockets. They are the ones who create wealth. That is why we froze the government's operating budget.
We also fought against tax evasion because the tax system has to be fair for all Canadians. We fought against tax evasion and created good policies. A number of my cabinet colleagues around the table had to make cuts in their respective portfolios because it was our responsibility. We had to get back to a balanced budget, as we promised Canadians we would.
We did the opposite of the previous Liberal government, which eliminated the deficits created by the Trudeau government in the 1970s and inherited by the Mulroney government. Nonetheless, the Mulroney government set the stage for creating wealth by signing free trade agreements. As hon. members will recall, the Liberals were against free trade with the U.S. That free trade agreement made Canada prosper.
We modernized Canada's tax system. When Jean Chrétien's Liberals came to power, everything was in place for revenues to come in to the federal government, provided that spending was under control. Instead of clearing the deficit by looking to their own backyard, they offloaded their deficit onto the provinces. Quebeckers remember the cuts to health care and social services. Mr. Chrétien's Liberal Party cleared its deficit on the backs of the provinces and Canadians. We dealt with our own deficit by making the courageous decisions that needed to be made. That is why I am proud of my government.
Now that our country is prosperous, we have to make sure that Canadians can keep their money in their pockets. What have we done? Since we believe in families and Canadians, we have lowered taxes for Canadians, Canadian families and seniors. This is a fair budget. We have implemented income splitting. Why allow families to split their income? It is a question of fairness, because couples in similar situations should pay the same amount of tax.
For example, a dual-income family earning $80,000 paid less tax than a single-income family earning the same amount. The single-income family paid more taxes. Couples in families with similar incomes were treated differently. We have solved this problem of discrimination.
We have instituted income splitting for seniors as well. Canadians like and use these measures. We have also made it possible for Canadians to shelter savings from taxes thanks to the tax-free savings account. Of those who have opened a TFSA, 60% earn less than $60,000. That is the middle class. The middle class benefits from these measures. Thanks to economic freedom, the middle class can continue to create wealth.
That is the difference between us, the Liberals and the NDP: we believe in people. If Canada is great and beautiful, it is thanks to Canadians. Canadians make this a great and beautiful country. Canadians work hard and make it possible to have the standard of living that we currently enjoy.
The government makes sure that we have a social network and social programs to meet the needs of Canadians, but prosperity comes from Canadians. That is the difference between us and the opposition parties, which want to tax Canadians. More taxes and more deficits lead to more debt. That debt will have to be repaid in the near future. What is irresponsible is creating debt and deficits in a time of economic prosperity.
That is why we have introduced a bill to mandate balanced budgets in Canada. A balanced budget holds politicians here in the House of Commons accountable. It is easy for a politician to spend money, and as Milton Friedman said, if you are spending somebody else's money you often give bigger gifts.
I want to add that Keynesian measures do not enrich our country. A country gets richer through tax measures that put money back into people's pockets.
Economic prosperity is good for all Canadians, and I would compare it to a rising tide. John F. Kennedy famously likened economic prosperity to a rising tide, saying that when a country becomes prosperous and there is economic growth, it is like a rising tide that lifts all boats.
We need to promote economic prosperity, and that is what this budget does. That is why we are proud of it.
This budget also keeps the government's promises. As the member for Beauce, I personally promised the people of my riding that our government would eliminate the deficit, make sure that we returned to a balanced budget and cut taxes.
Today, I am proud to be able to go back to the people of Beauce and tell them that that mission has been accomplished. We eliminated the deficit, we balanced the budget, we are lowering their taxes and we are going to continue to do so in the future. We say so in our plan.
Next year, we will have a surplus of $1.4 billion. That money will go into the pockets of taxpayers through other tax cuts, but some of it will go to helping future generations. We want to be responsible and so we will use our surpluses to pay part of the debt so that future generations do not have too heavy a burden to bear.
I am very proud to rise in the House today and show Canadians that they have a choice to make in the coming weeks. That choice will be very clear when the next election takes place: prosperity or debt, lower taxes or higher taxes, failure to comply with the Constitution and interference in other jurisdictions by the NDP and the Liberals or compliance with the Constitution, economic prosperity or economic uncertainty.
The choice is clear. The past is an indication of what the future holds. We have managed the government's budget very effectively, and we are going to continue to do so.
Guy Caron NDP Rimouski-Neigette—Témiscouata—Les Basques, QC
Mr. Speaker, I thank my colleague, the member for Beauce and Minister of State for Small Business and Tourism, and Agriculture, for his speech, but there were so many non sequiturs in it that I hardly know where to begin.
First, I am glad that he mentioned that he is an economist because given the things he has supported in the past, when it comes to credibility, there are a few things we could discuss.
Among other things, I know that my hon. colleague has supported zero inflation and a return to the gold standard. I would like him to comment on that. I have not had time to read his blog in a while.
As for the Conservative government's policies on balancing the budget, Jim Flaherty said in 2013 that using the employment insurance surplus to balance the budget, as the Liberals had done in the past, was out of the question for the Conservative government.
What are we seeing though? We have a $1.4 billion surplus, most of which comes from the projected employment insurance surplus of $1.8 billion. Without that surplus, which is presently in the general revenue fund, the Conservatives would not have balanced the budget.
Would my colleague mind commenting on what appears to be a contradiction of the promises made by the Conservative government's former finance minister?
Maxime Bernier Conservative Beauce, QC
Mr. Speaker, it is simple. We told Canadians that we would freeze employer and employee contributions to employment insurance and that is what we did.
The good news is that in the budget, we told entrepreneurs and Canadians that we would gradually lower their employment insurance contributions in 2016-17 and 2017-18. That is a responsible policy.
I disagree with my colleague when he says that we cleared the deficit with unfair budget measures. We cleared the deficit by making tough decisions, going after tax evasion and ensuring that Canadian public servants have benefits equivalent to those of Canadian workers who pay for their benefits.
I am talking about sick leave for people who are truly sick, not for people who are well enough to work. We are going to allow our public servants to have short-term sick leave and make sure they do not get any more benefits than the rest of Canadians get. The Government of Canada will save $900 billion by doing so.
Adam Vaughan Liberal Trinity—Spadina, ON
Mr. Speaker, I have a couple of quick comments. The member opposite said he was worried that the Liberal leader was taking advice from an American. I would like to inform him that Mr. Friedman is also an American. However, I am not sure it is the origin of the advice but rather the quality of the advice that is in question here.
As for the Constitution, the Conservatives Party has gone to the Supreme Court 10 times and lost 10 in a row. That is the constitutional record of a party that has no regard for the Constitution whatsoever.
I am curious about this mythical couple that has three credit cards and still has a little borrowing capacity. The response of the member and the government is that the only thing this couple should do is pay down their debt. Does the member opposite not also realize that they could take that remaining credit, perhaps build an extension on their house, invest in much better insulation and thereby create jobs for people who do renovations?
Perhaps they could take in a boarder and create some income, so they could cut their costs, save the environment, provide housing for someone, create income and savings, and pay down their debt all at the same time while growing their economic base and their economic capacity.
Is that not also a vision that could be embraced as one that is positive for more than just people holding the debt but in fact for the whole community?