Mr. Speaker, I will be splitting my time with the hon. member for Mississauga West.
I am pleased to rise today to speak in support of the budget tabled by the Minister of Finance on Tuesday, February 24. The Minister of Finance with the support of the Prime Minister and the sacrifice of all Canadians accomplished something that no minister of finance has been able to do for 30 years.
Not only would I like to congratulate the Minister of Finance for his historic accomplishment, but I would also like to thank him for giving me a birthday present I will remember for many years to come.
We remember during the 1993 campaign we promised to reduce the deficit of $42 billion to 3% of our GDP by the end of our first mandate. We did better than that. We got rid of it completely.
Many tough decisions had to be made to eliminate the enormous deficit we inherited from the Conservative government in 1993. This Liberal government did not take the slash and burn approach advocated by the Reform Party. We acted responsibly, and with the help of all Canadians, we were able to succeed. This is something all Canadians should be proud of.
As we enter this new balanced budget era, we will continue to act responsibly when it comes to this nation's finances. We will be as cautious with any surplus as we were with the deficit. That means targeted spending in areas of concern to all Canadians, such as health care and education, debt reduction, and tax relief to those who most need it. That also means we will not do everything that everyone wants us to do in this first budget of our second mandate.
However, this budget succeeds in striking a balance between social spending, tax cuts and debt reduction, just as we promised during the 1997 election campaign. That is why we are providing $7 billion in targeted tax relief over the next three years, including the elimination of the 3% general surtax on those earning up to $50,000 and an increase in the basic personal exemption for low and middle income Canadians. These two measures will completely remove 400,000 Canadians from the tax rolls and reduce the taxes for 14 million Canadians by 1999-2000.
This is a budget for Canada's families. This is the budget for all Canadians who made sacrifices during our four year battle against the deficit. Working Canadians with children will benefit from an increased child care deduction of $7,000 for children up to seven years of age, up from the previous $5,000, and $4,000 for children between seven and sixteen years of age, up from $3,000. These measures will benefit some 65,000 Canadian families with children.
Canadians faced with caring for elderly or disabled family members will benefit from a new caregiver credit that will reduce the federal tax by up to $400. This new measure will affect some 450,000 caregivers in Canada.
Lower income families with children will receive extra assistance.
The government recognizes that knowledge and skills are the key to jobs. That is why education is a key element of this budget. Lower income individuals with children or other dependants who would like to upgrade their education will be eligible for the Canada study grant of up to $3,000 per year.
As of January 1, 1998 this government is providing a grant of 20% on the first $2,000 of annual contributions made to a registered education savings plan for beneficiaries up to the age of 18.
This new program, the Canada education savings grant, will help families save for their children's education. A family contribution of $25 to the RESP every two weeks for 15 years would provide one child with $4,700 for each year of a four year post-secondary education. That means a case of beer per week.
Starting in the year 2000, the Canada millennium scholarship foundation will also give up to $3,000 per year to approximately 100,000 students wishing to pursue post-secondary education.
The measures announced under this program will reduce the debt load that many students can expect to incur by approximately half. Once out of school, Canadians with student loans will see tax relief for interest payments on those loans. All students will be given a 17% tax credit for interest payments on their student loans.
This budget also encourages employers to hire young Canadians. We are offering an EI premium holiday. Employers will pay no employment insurance premiums for new jobs created in 1999 and 2000 for persons 18 to 24 years of age.
This government is also making a significant investment in health. An additional $7 billion over six years will be given to the provinces under the Canada health and social transfer. This means that the CHST will grow an average of 2.5% over the six year period.
This government also increased its contribution to the establishment of a new blood agency by $60 million to renew Canada's blood system. An investment of $211 million over five years was also committed to the renewal of the national HIV/AIDS strategy.
In an effort to promote advanced medical research and graduate study, the Medical Research Council of Canada will receive a major increase in funding. The MRC will receive an additional $134 million for university based medical research. I believe some companies in my riding that are working closely with the universities will benefit.
This budget has not forgotten about the enormous debt burden facing this nation. So far this year, the government has paid down almost $13 billion in market debt. The debt repayment plan based on three key elements has been put in place. Those elements include: a two year fiscal plan based on prudent economic planning assumptions; a contingency reserve of $3 billion each year; and the use of the contingency reserve to pay down the public debt each year when it is not needed.
It is this type of fiscal planning which helped to eliminate the deficit. I am confident that the same strategy will be successful in eliminating the debt.
During the federal election campaign we committed to spending 50% of any fiscal dividend on social and economic priorities and the other 50% on a combination of tax relief and debt reduction. The impact of this budget over the next three years is a 40% investment in social and economic priorities and 60% on tax relief and debt reduction. Over the course of our mandate we will have to address this slight imbalance to ensure that we keep our commitment.
The budget before this House is a good budget. It is a good budget because it is the first balanced budget in 30 years. It is a good budget because it paves the way for balanced budgets into the next century. It is a good budget because it strikes a balance between tax relief, debt reduction and spending on valuable programs for children, families and those less fortunate.
This budget shows a commitment on the part of this Liberal government to invest in the future of all Canadians. I congratulate the Minister of Finance for his efforts.
