Lost his last election, in 2006, with 35% of the vote.
Income Tax Amendments Act, 1998 March 18th, 1999
Mr. Speaker, the hon. member talked about costing things out. In the prebudget submission by the Conservative Party it did everything except cost out what the measures cost.
Let me help the hon. member. He referred to a whole bunch of tax initiatives. What did they cost? They cost the treasury $17 billion. If the government were to adopt what that party would like, we would be back in deficit. I am sure it would be way above the $42 billion where it left us.
Income Tax Amendments Act, 1998 March 18th, 1999
And sometimes a challenge, I would agree, to listen to the hon. member across the way.
I do have a lot of respect for the member. He is a member of the finance committee and does contribute substantially, I might add, to the debate in the finance committee.
With respect to his suggestion about looking at the tax system, the hon. member knows that the finance committee is the master of its own destiny. If the finance committee would like to look at the tax system, who am I to stand in the way?
We are all here to help ensure that Canadians receive the best possible government services. I would engage in any sort of debate that would provide more value for tax dollars for Canadians. That is certainly why I am here.
It is sometimes ironic to hear a member from the New Democratic Party, although I sometimes feel that the member does not quite fit that mould but nonetheless he is a member of the New Democratic Party, talk about taxes and the need for tax reform and the need to ensure that Canadians' tax paying burden is alleviated. We certainly have begun to do that on this side of the House beginning with the 1998 budget and continuing in the 1999 budget.
Albeit it is a beginning and I do not think anyone here on this side of the House thinks that this is the end of the work on the tax file, but the hon. member should stand up and at least say that he can support the measures in this bill. There is the increase in the basic exemption, the elimination of the surtax, the tax credit interest on student loans, the registered education savings plan, the ability to withdraw money from registered retired savings plans to finance part time education, the child care expense deduction, the caregiver tax credit, and the increase in the emergency volunteer tax credit.
There are a number of issues. The hon. member is correct when he says there needs to be additional work with respect to the tax system. I grant him that. The member should acknowledge that the work this government has started to do on that file is work he should be able to support and continue to support as before.
Income Tax Amendments Act, 1998 March 18th, 1999
Mr. Speaker, it is always a pleasure—
Income Tax Amendments Act, 1998 March 18th, 1999
Madam Speaker, members opposite should be keen to support Bill C-72, an act to amend the Income Tax Act, the 1998 budget and technical measures. In doing so they will support broad based and fair tax relief for low and middle income Canadians and their families as well as targeted relief for those Canadians who need it most.
I suspect that, as in the past, they will deny Canadians once again and go on to criticize and make wild projections to achieve objectives that would put Canadians' recent success in eliminating the deficit in jeopardy. A vote for Bill C-72 amounts to support for reducing taxes for 14 million Canadians, support for removal of 400,000 Canadians from the tax rolls, support for providing tax credits for interest payments on Canada and provincial student loans, support for allowing Canadians to make tax free withdrawals from their RRSPs to fund full time education and training, support for extending the education credit to part time students, and support for providing a tax credit to individuals providing in home care for an adult relative, and certainly much more.
However, as I have said, I have grave doubts about my colleagues' tax cutting credentials. My memory may be faulty but I cannot recall their supporting a single tax cutting measure we have brought forward during the last two parliaments.
Clearly with Bill C-72 my friends opposite can tangibly demonstrate they truly want to reduce taxes in a sustainable fashion.
I ask the hon. members opposite that when the division is recorded for Bill C-72 they can vote yea for tax relief for Canadian taxpayers and their families or they can vote nay. It is really that simple.
As the finance minister noted when presenting the 1998 budget, the measures in Bill C-72 represent the first steps toward general income tax relief, the first steps on which this government has already built with the 1999 budget. Together, the two budgets provide $16.5 billion of tax relief over the next three years. Moreover, as the minister recently noted, this is only the beginning.
With the federal deficit behind us Canadians can now look forward to tax relief in budget after budget in the foreseeable future. Of course at the outset, given that the financial dividend that allows broad based tax relief is modest, so too must be the initial relief itself.
We must not provide unaffordable relief that would jeopardize our regained financial health and impinge on Canadian priorities such as health care and education. Accordingly and in keeping with the nation's priorities, the measures in Bill C-72 act first to reduce taxes for those who can least afford to pay them, low and middle income Canadians.
The legislation before us contains two measures providing general tax relief. The first is a proposal to increase the amount of income that low income Canadians can earn on a tax free basis. As my colleagues know, personal tax credits ensure no tax is paid on the basic amount of income. This helps to make Canada's tax system fair.
Prior to the 1998 budget the basic personal amount that Canadians could earn tax free was set at $6,456 while the spousal and equivalent to spouse amounts were a maximum of $5,380. Effective July 1, 1998, Bill C-72 proposed to increase these amounts by $500 for low income Canadians. This will effectively increase the amount of tax free income by a maximum of $500 for single taxpayers with income under $20,000 and by $1,000 for a family with income under $40,000. As a result of this measure some 400,000 low income individuals will be removed from the tax rolls and another 4.6 million taxpayers will pay less income tax.
The House will also know that the 1999 budget proposes to build on this measure by extending the $500 increase in the basic amount to all Canadian taxpayers and increasing it by a further $175 for a total increase in the basic amount of $675. This would mean that effective July 1, 1999 the basic amount of income that all Canadians can earn annually on a tax free basis would rise to $7,131. Effective the same date, the maximum spousal and equivalent to spouse amounts will increase to $6,055. This will more than offset the effects of inflation on these amounts since 1992.
In the interest of fairness the largest proportionate benefit of these measures will accrue to low income Canadians. On top of the 400,000 lower income Canadians who will no longer pay any federal income taxes due to the measures in Bill C-72, the 1999 budget would remove 200,000 more Canadians from the tax rolls for a total of 600,000.
To continue with the measures to provide broad based relief, Bill C-72 proposes to eliminate the 3% general surtax for those with incomes up to about $50,000 and to reduce it for those with incomes between $50,000 and $65,000. As my colleagues will recall, the previous government introduced the general surtax as a measure to help fight the deficit. Accordingly, having eliminated the deficit, it is time for us to eliminate the surtax. This measure eliminates the 3% surtax for almost 13 million tax filers and another 1 million taxpayers will pay significantly less surtax.
Having begun the process of eliminating the 3% surtax in the 1998 budget, the 1999 budget proposes to complete the process and eliminate the general surtax for each and every Canadian taxpayer. This action will bring an end to this surtax for the 2.7 million Canadian taxpayers who continued to pay it in whole or in part following the 1998 budget. As a result, effective July 1, 1999 the 3% surtax will have been eliminated for all 15.1 million Canadian taxpayers.
Before I turn to some of the targeted measures included in the legislation I underline that these two measures in Bill C-72 provide very progressive tax relief. That is because as a percentage of current tax, the tax reductions are highest at lower incomes.
In each budget since we have taken office, including the 1998 budget, our government has provided targeted tax relief where the need was greatest and the benefits were substantial. Reflecting this fact, Bill C-72 contains several targeted measures, particularly those related to the Canadian opportunities strategy. Canada operates in a fast changing, competitive and interdependent world economy, an economy that is increasingly knowledge based.
The facts speak for themselves. Since 1981 the number of available jobs for Canadians with a high school education or less dropped by some two million while more than five million jobs were created for those with higher qualifications.
Unfortunately, as all members in this House realize, not all Canadians are in a position to access the knowledge and skills they will need throughout their lifetime to find and keep good jobs in a changing labour market.
Barriers, most often financial barriers, reduce access to post-secondary education for many. Accordingly, the 1998 budget and Bill C-72 propose several tax measures to provide financial assistance for students.
Student debt has become a heavy burden for many Canadians. In 1990 a graduate completing four years of post-secondary education paid an average student debt load of about $13,000. This year the same graduate's average debt will almost double to about $25,000. Moreover at the beginning of the decade, fewer than 8% of student borrowers had debts larger than $15,000. Now almost 40% are in that boat.
The financial burden on students must and will be reduced. To that end, Bill C-72 contains measures to provide all students with tax relief for interest paid on their Canada and provincial student loans. This will take the form of a 17% federal tax credit that will apply to both federal and provincial student loan programs.
In terms of dollars and cents, for a student with a loan of $25,000, it will mean a reduction in federal and provincial taxes of $530 in the first year alone. Over a 10 year paydown of a student loan, the new tax credit could mean as much as $3,200 in tax relief. This measure will benefit about one million Canadians.
The 1998 budget contains several other measures to help manage student debt. While they are not included in this piece of legislation, I will take a brief moment to remind my colleagues of these important measures.
For example, besides the tax credit, we increased the income threshold used to qualify for interest relief on Canada student loans by 9%. We introduced graduated interest relief which will extend assistance to more graduates farther up the income scale.
We have asked that lending institutions extend the loan repayment period to 15 years for individuals who have used the 30 months of interest relief. Moreover if after extending that repayment period to 15 years a borrower remains in financial difficulty, there will be an extended interest relief period. For the minority of graduates who still remain in financial difficulties after taking advantage of these relief measures, we will reduce their student loan principal by as much as half.
Together, these new interest relief measures will help up to 100,000 more borrowers.
To keep a job or to get a new one, many Canadians who are already in the workforce want to take time from work to upgrade their skills through full time study. There are many of them and we hear from them in our constituencies.
Individuals are looking to upgrade their skills and need the time away from work to do so. They often lack the resources to pay for these types of programs and courses. The legislation before the House includes several new measures to improve Canadians' access to learning throughout their lives.
The first of these measures is the proposed tax free registered retirement savings plan withdrawals for lifelong learning. An individual who has an RRSP and is enrolled in full time training or higher education for at least three months during the year will be eligible to withdraw up to $10,000 from their RRSPs, up to a maximum of $20,000 in furtherance of their education.
Of course to preserve the role of RRSPs in providing retirement income, the amounts withdrawn will have to be repaid over a 10 year period. In many respects, what we are proposing in Bill C-72 resembles the very successful home buyer's plan where Canadians can access their RRSPs when they are purchasing a home.
There is no doubt that every member in this House and all Canadians would agree that there is a need to continually upgrade knowledge and skills. That can be particularly hard for the growing number of Canadians studying part time while trying to manage the difficult balance of work and family. Therefore, we are proposing to extend the education credit to part time students.
Under the proposal, part time students will be able to claim an amount of $60 for each month they are enrolled in a qualified course lasting at least three weeks and including a minimum of 12 hours of course work per month. This measure will lessen the expense of education and facilitate lifelong learning for over 250,000 part time students.
As well, members will recall that to help parents save for their children's future, the 1998 budget introduced the Canada education savings grant to make registered education savings plans even more attractive. The government will provide a 20% grant on the first $2,000 deposited in annual RESP contributions for children up to age 18, up to a maximum annual grant of $400 per child. This truly makes RESPs among the most attractive savings vehicles available to Canadians for their children's education.
Over the past year we have already seen the impact of this particular initiative with the success that RESPs are having by increasing the pool from what was $2.5 billion before this initiative to approximately $4 billion just over this past short while.
Educational assistance payments are for students enrolled in full time education. However, taking into consideration the special needs of disabled individuals, Bill C-72 proposes to allow disabled part time students to qualify to receive educational assistance payments.
As well, the bill proposes to assist income constrained families by increasing the amounts they can transfer out of their RESPs into their RRSPs in the event their children do not pursue higher education. Specifically, the amount will be increased to $50,000 from $40,000.
Bill C-72 also contains several other targeted measures that are worthy of support by the House. Among them is the proposed new caregiver credit. The credit would reduce the combined federal-provincial tax by up to $600 for those Canadians caring for an elderly parent or disabled family member. It would provide assistance to about 450,000 caregivers that normally would not qualify for the infirm dependant credit.
To improve equity in the treatment of self-employed and incorporated businesses—and I know hon. members across the way would want to support this measure—Bill C-72 proposes that self-employed Canadians be able to deduct health and dental insurance premiums from their business income.
I am sure hon. members would also want to support this initiative. To support communities and the thousands of Canadian volunteers who provide essential emergency services, the legislation before us proposes that the tax free amount for volunteer firefighters be doubled from $500 to $1,000. This measure will also be extended to other emergency service volunteers.
Time constraints preclude me from addressing at length the many other contents of the bill. I trust that my colleagues will address these matters either in debate or at committee.
While the view from this side and the view from the other side do not always mesh, I trust on this occasion we will see eye to eye, given that Bill C-72 contains tax relief measures for Canadians, tax relief upon which the government built in the 1999 budget.
I trust members opposite can put aside the usual rhetoric and support the beginnings of what we on this side of the House see as a plan to continue to provide broad based tax relief in each and every budget, year after year. I call upon the members in the opposition parties to support Bill C-72.
Budget Implementation Act, 1999 March 17th, 1999
Mr. Speaker, not only would I hope the hon. member would take into consideration what you have just said, but also on the way he characterized the Minister of Finance I hope when he gets the opportunity to stand up he will correct what he said and retract that comment.
Toward the latter part of his comments I am assuming the hon. member talked about how he would build budgets. There has been some success on this side of the House in building budgets, with two year rolling targets, a contingency reserve, and prudence in the budgets ensuring that we stay with balanced budgets. We took that $42 billion down to a $3.5 billion surplus.
The hon. member obviously does not agree with the way balanced budgets are being built in this country, so I would offer him up the opportunity. How would he build the mechanics of the budget? He sits on the finance committee, he has heard from Canadians. He talks about rolling out the five year plans. The last time this country got itself involved in rolling out five year plans was when the Conservative Party was in government and we ended up with a $42 billion deficit.
How does the NDP build budgets? It obviously does not agree with the success we have had. Let us give it a chance to express how it would build budgets.
Budget Implementation Act, 1999 March 17th, 1999
Madam Speaker, it is my pleasure on behalf of the government to launch the debate on second reading of Bill C-71, the 1999 budget omnibus bill.
In the minister's budget speech last month he reminded us and all Canadians about what budget making is really about: “It is to make the lives of Canadians better. It is to improve their standard of living. It is to build today for a better tomorrow, for budgets are about more than entries in the books of a government; they are chapters in the progress of a people”.
This vision is reflected clearly and concretely in the legislation before us. It will add some important, impressive pages to the record of national investment by the government. In particular, it provides historic new funding for Canada's public health care system, a very real aspect of the standard of living cherished by Canadians from coast to coast to coast.
Based on agreement with the provinces, it sets out the design of significant additional funding under the Canada child tax benefit, the primary federal instrument for providing financial assistance to families with children.
Of course not every measure in this bill touches so directly and so dramatically on so many Canadians. It also includes measures dealing with the operations of government itself. It includes debt management, income tax administration and first nations taxations among other initiatives.
These actions should not be seen as mere footnotes to the 1999 budget vision of building today for a better tomorrow. These reflect our continuing commitment to an effective, efficient and fiscally responsible government. This is one of the key foundations that has allowed us to make new investments for a stronger economy and society and at the same time provide broad based tax relief while remaining deficit free.
There is certainly a lot to cover in this legislation so I will move on to the measures themselves, starting with the vital issue of health care.
Medicare is certainly, as everyone would agree, one of our most cherished social programs. It represents the fundamental values of fairness and equality that define our country by ensuring that all Canadians, regardless of their financial means, have equal access to high quality health care services that are based on need and not on the ability to pay. That is why action to sustain and strengthen health care is a key priority of this government and a central initiative in today's legislation.
Part one amends the Federal-Provincial Fiscal Arrangements Act to implement an $11.5 billion increase in cash through the Canada health and social transfer of health care. This funding marks the largest investment this government has ever made. The increases will be distributed on an equal per capita basis. That means each and every Canadian in every province will receive the same amount.
This is an investment that will help provinces deal with the immediate concerns of Canadians about health care. Those concerns, I believe, are articulated quite clearly, waiting lists, crowded emergency rooms and diagnostic services. At the same time this funding provides Canadians with longer term stability and predictability.
Premier Romanow recognized the importance of this budget when he said: “The important message of this budget is that it is a much needed shot in the arm of the health care system not only in Saskatchewan but right across the country”.
Under this legislation the Minister of Finance is authorized to pay $3.5 billion of these funds into a trust from which they will be distributed to the provinces at a pace they set over the three year period beginning April 1, 1999. The further $8 billion will be distributed through the CHST over the four year period beginning April 1, 2000. These numbers are significant by themselves but let me put them in a wider context for the House and for Canadians.
When the increase in funding reaches $2.5 billion in 2001 and 2002, direct cash support from the federal government under the CHST will total $15 billion a year. That means what is regarded as the health care component of the CHST will be as high as it was before the period of spending restraint. That period of spending restraint was to help eliminate the deficit in the mid-1990s. The story does not end there.
When we also include the growing value of the CHST tax transfers to the cash funding, total assistance to the provinces will be worth $30 billion in 2001 and 2002. This is a new high.
This legislation also provides for the complete elimination of the per capita disparities in the distribution of the existing CHST among provinces. By 2001-02 all provinces will receive identical per capita entitlements providing equal support for health and other social services to all Canadians.
In addition to the $11.5 billion increase in provincial transfers for health care, the budget announced that our government will further invest about $1.4 billion over the remainder of this year and over the next three years in health information systems, research, first nations and Inuit health services and health problem prevention.
Significant increases in the equalization program will also make more resources available to those less prosperous provinces for public services, including health care. Payments this year alone are expected to reach $10.7 billion. Bill C-65, which is now in the other place, renews the equalization program for the next five years. That means the projected payments will be a further $5 billion higher than over the previous five years.
There is one final point I would like to make. The government is not only increasing transfers for health care, we are also providing provinces and territories with greatly improved stability and predictability in funding. All major transfers, CHST, equalization and territorial formula financing, will be placed on a common five year track for the very first time.
The next measure I would like to highlight is the Canada child tax benefit. Through the creation of the national child benefit system the federal and provincial governments have embarked on a major co-operative effort to support families and reduce child poverty. Our purpose is to ensure that children are always better off when their parents join the workforce. In 1997 we announced the first federal contribution to this national endeavour, $850 million which began flowing last July, increasing financial support to over two million children and their families. In the 1998 budget we announced that a further $850 million would be allocated following the consultations with the provincial and territorial governments.
Today's legislation acts on those consultations. It also provides a further $300 million to increase benefits for modest and middle income families.
I should explain that the Canada child tax benefit has two key components, the base benefit and the national child benefit supplement. The base benefit provides a basic amount of $1,020 per child to families with incomes up to $25,921. Beyond this threshold it is progressively phased out and becomes nil when the family income exceeds $67,000. The national child benefit supplement provides maximum benefits of $605 for the first child, $405 for the second and $330 for each subsequent child to families with incomes up to $20,921. It becomes nil when the family income exceeds $25,921.
This bill proposes changes to both the supplement and the base benefit. It sets out the design of the 1998 budget commitment to provide an $850 million increase in the national child benefit supplement payments to low income families. The implementation of the proposed changes requires amendments to various sections of the Income Tax Act, section 122.6 to be specific.
The amendments will increase the level of the maximum benefits provided under the national child benefit supplement by $350 per child in two stages, $180 in July 1999 and $170 in July 2000. They would avoid a significant increase in the effective marginal tax rates for modest income families by increasing the net income level at which the supplement is fully phased out, from $25,921 to $27,750 in July 1999, and from $27,750 to $29,590 in July 2000. Finally, they would increase benefits by $184 per family for modest and middle income families.
Overall these changes mean, for example, that a family with two children which earns $20,000 will receive an increase benefit of $700 for a total of $3,750 per year.
Let us look at the aggregate results. The child tax benefit actions in our two previous budgets will ultimately provide $1.7 billion for the children of low income families. This legislation builds on that effort, not just by establishing the design for the $850 million allocated in 1998 but by delivering a further $300 million to enhance the child tax benefit for modest and middle income families. As a result 100,000 more Canadian families will become eligible for all or part of the base benefit.
This issue, support for Canadian children in need, takes me directly to the next aspect of this bill that I would like to cover. It takes actions to ensure that the full amount of the single supplement of the goods and services tax credit also goes to single parents whose income does not exceed $25,921.
The government will increase GST credit benefits for low income single parents to complement the national child benefit by providing them with the full value of the supplement. It will be effective on July 1, 1999 and will provide additional benefits to 300,000 single parent families.
The measures relating to the GST take me directly to the next set of measures contained in the legislation. In case hon. members have not noticed, the bill comprises a number of various measures so I am moving from one to the next as quickly as I can.
This section deals with the taxation powers of first nations. In our budget plan the government once again expressed its willingness to continue discussions and to put into effect taxation arrangements with first nations that indicate an interest in exercising taxation powers. This builds on the last two years of budget commitment to put into effect taxation arrangements with interested first nations which resulted in taxation authorities for three British Columbia first nations: the Cowichan Tribe, the West Bank First Nation and Kamloops Indian Band.
Today's legislation will further facilitate first nation taxation in a number of ways. The West Bank First Nation would be authorized to levy a 7% GST style tax on the sale of fuel sold on its reserve. This would take place in addition to its existing tobacco and alcoholic beverages tax authority.
I would also like to address another area where today's legislation involves the administration of taxation, specifically citing the example of the Nova Scotia workers compensation board. The amendment contained in the legislation will permit co-operation in audits and the exchange of program information between Revenue Canada and the WCB to help ensure that amounts owed are paid.
These actions are a direct result of the service agreement signed last October between Revenue Canada and Nova Scotia. These two levels of government are pursuing opportunities for partnership in tax administration, including joint employer remittance for payroll deduction and WCB payments.
The administration agreement will result in improved fairness and make compliance easier for business. We have often heard about this in the House and from other associations interested in ensuring the compliance burden is reduced. This is an example where various levels of government are joining together to reduce the compliance burden. It also reduces government overlap and duplication.
Some of the most important measures in today's legislation deal with investments our government is making in national health care and certainly in the welfare of children. We have not and we will not lose sight of a very fundamental concern: the critical importance of continuing good financial management. The investments we have made will not jeopardize our commitments to balanced budgets.
We often hear in the House and from Canadians in our constituencies that we still carry the painful legacy of decades of deficit financing in the form of a massive debt burden that costs us over $40 billion a year in interest payments. It is money that cannot go to further tax reduction. It is money that cannot go to additional investments in strengthening our economy and social safety net. That is why we have implemented our debt reduction plan. That is why we are also committed to managing the debt we carry as cost effectively as possible.
Today's legislation includes further measures to help achieve this goal. The amendments cover two principal areas. The first is clarifying the authority governing government borrowing and distribution of its debt. The second is modernizing government financial and risk management powers. Many of these are quite technical and often just confirm or clarify existing practices of powers, but let me just highlight a few.
Section 46 of the existing FAA provides the government with standing authority to refinance maturing debt. The government proposes to amend this section to clarify that maturing debt could only be refinanced within a given fiscal year. Accordingly, any debt that is not refinanced by the end of a fiscal year lapses and cannot be refinanced in the next fiscal year. It is a practice the government has followed for many years. The legislation is in response to interpretation questions raised with respect to the existing wording.
I should be very clear that the changes do not give the government more authority to borrow. New borrowing authority to finance a deficit must be obtained and would be obtained, as it has been in the past, through a borrowing authority bill.
Another amendment clarifies and enhances the legislative basis pertaining to auctions of Government of Canada securities. Last fall the government reached an agreement with the distributors of its debt on new rules in terms of participation at auctions of government securities. The amendments set out in more detail the minister's authority in respect of these auctions. The new rules are designed to enhance market integrity and to maintain a well functioning market in Government of Canada securities which benefits all taxpayers through lower debt costs.
There is another measure I would like to highlight because it deals with the issue of parliamentary accountability. I know members opposite are very interested in parliamentary accountability, as are all Canadians. The legislation will amend the FAA to enhance reporting to parliament on debt management activities and future debt management plans.
The proposed amendments ensure that parliament formally receives information annually on the government debt management program and plans, thus strengthening the reporting structure on an important government activity.
The government is also proposing to repeal the Borrowing Authority Act, 1996-97. Currently there is $4 billion of non-lapsing borrowing authority contained in this act to provide for contingencies such as foreign exchange requirements. The government proposes to transfer this unused borrowing authority to the budget implementation bill. No change in authority is being provided by this transfer.
As members can see, today's legislation is truly wide ranging. I have been more brief than I would have liked in dealing with some of the measures addressed so far, but as we continue this debate I expect that some of my colleagues will go into further detail on aspects of the legislation that interest or concern them most.
Some of the other issues the bill deals with very briefly now will be acts like the Superannuation Act which applies to the public service, the Canadian forces and the Royal Canadian Mounted Police. This change would improve future pension benefits for these individuals. There is an amendment to the basic pension formula to provide for benefits to be calculated on a five year average salary and one for integrating benefits for retirees when they become eligible for CPP or QPP benefits.
The legislation will also amend the Patent Act to clarify the authority of the Minister of Health to pay provinces moneys collected by the Patented Medicine Price Review Board from excessive pricing of products by patented manufacturers.
We are also amending the Agricultural Marketing Programs Act. A number of members in the House often speak out for the farming community and for rural parts of Canada. We are amending this act so that we can clarify the scope of federal government guarantees to financial institutions that fund advanced payments to agricultural producers under the act.
I should add a note of explanation. Although the intent was to provide direct unconditional guarantees to the lending institutions, the Agricultural Marketing Programs Act needs to be clarified for the federal government to provide such guarantees. Under the current legislation direct guarantees are conditional upon having producer organizations meet the terms and conditions stated in the act, which results in higher risk for lenders and interest rates on the advances that adversely affects our farming community.
Therefore the government is taking measures in the 1999 budget to correct the wording of the AMPA and to ensure that advance payments can be provided to agricultural producers at the lowest possible cost. This measure is another example of federal government commitment to agricultural producers and rural Canadians.
Finally, we are amending the European Bank for Reconstruction and Development Act to provide the Minister of Finance with the authority to undertake the financial operations necessary to meet our commitments to the EBRD.
These are but a few highlights of Bill C-71, the 1999 budget omnibus bill. It does not cover every measure that the February budget proposed. For example, the broad based income tax cuts which were announced will be confirmed in separate legislation. Even the actions in the legislation by themselves reflect the commitment to a balanced approach in budget planning and budget making which has been the hallmark of the government since coming to office.
The Minister of Finance said in the budget speech:
The social and economic needs of a nation are not separate. They are not in conflict. The balanced pursuit of both is key to the health and wealth of our country.
That is why, with the federal books in balance, we have brought before the House a bill that delivers historic investment in an area which Canadians have made very clear is their key priority. We all know that key priority is health care and that it continues our work to assist children in need or at risk.
We should be very clear that nothing we have proposed will undercut another vital aspect of balance: our commitment to providing Canadians with balanced budgets this year and in the years ahead.
This type of fiscal responsibility will allow us to sustain the social and economic investments we must make to maintain an economic environment which keeps interest rates low. We need to continue, as we have stated over and over in the House, and the Minister of Finance outside the House, the process of tax relief we all desire.
We know as a government and as parliamentarians that Canadians never want to return to the time of deficit financing when we were burdening our children and future generations with debt and adding to that debt each and every year. We have finally turned the corner. We now have an opportunity to build as we go forward in a very balanced and very responsible way.
As we move forward in the consultations for the next budget Canadians will come forward and clearly articulate their priorities. I am sure and quite confident that Canadians, as they have done in the past, will continue to provide a very balanced and thoughtful approach to making budgets for this great country. It will be one that will involve reinvestment both in the social arena and in the economic arena. It will ensure that we continue to pay down debt, that we stay balanced, and that we provide the kind of tax relief Canadians are looking for in a responsible way, which Canadians will clearly support. We have done so in the past. I submit that we will continue to do so in the future.
Many other members will be speaking to the 1999 budget omnibus bill. It contains a number of various elements contained in the budget speech, certainly in areas which reflect what Canadians told us in the prebudget consultations. The success of this budget and the success of the bill are embedded in the success Canadians have experienced and will continue to experience.
It is an opportunity for Canadians to contribute to the process and have their priorities heard. Many Canadians from my constituency and from other constituencies across the country will provide the input and necessary insight which clearly reflect where they want to go. They can rest assured their insight and priorities will continue to be reflected in what the government does in budgets to come.
Supply March 15th, 1999
Like on health care and education.
Supply March 15th, 1999
Madam Speaker, I am sure the hon. member knows that when we spend our time in the finance committee we do have some constructive debate. There are members on all sides of this House who certainly enjoy debate.
The hon. member talked about the economic health of the country of Canada. I believe he ranked it at about 6.5 out of 10 in his opening remarks. He made reference only to the exchange rate. What about inflation rates in Canada, the growth of the GDP and the unemployment rate declining?
He talks about fixing the currency to the U.S. dollar. He has a constituent who has put forward that proposal. I ask the hon. member whether he thinks that the B.C. forest industry could survive a fixed exchange rate with the U.S. dollar. Does he have constituents in business who would feel when they are exporting that in fact taking away Canada's ability to buffer what goes on around the world with flexible exchange rates would not help companies to export? By fixing it what we have is just one unitary exchange rate and our cycles are different than those of the United States.
Supply March 15th, 1999
Madam Speaker, one just has look at what most economists are saying. It is very clear that the argument against any sort of monetary union with the United States far outweighs any of the benefits.
The two examples brought to my attention by the hon. member for Peterborough have to be looked at, but when we look at what Canada has done in the past and what Canada intends to do in the future, our economy is not completely and directly synchronized with the economy of the United States. Canada needs to have the flexibility to respond to what goes on around the world. Just extending the U.S. dollar does not in any way solve the challenges that any country faces.
The two examples the hon. member has drawn upon speak for themselves. The arguments are there. The support of Canadians is in tact. We will continue with our own monetary policy to ensure the domestic economy continues to prosper.
Supply March 15th, 1999
Madam Speaker, I thought I indicated quite clearly that I would be voting against the motion by the Bloc. In the remarks I made I thought it was very clear the government has as its objective to ensure that we put Canada and Canadians first.
The motion is essentially saying to the House and to Canadians that they would like to go back to a fixed exchange rate system. When they draw comparison between the North American hemisphere and the European Union, members of the Bloc fail to recognize that within the European Union are countries of similar size and economic power. There are countries that want to integrate their economies. There is a free flow of labour mobility in the European Union which forms part of its agreement.
Does the hon. member who asked the question think that it would not be in the best interest of Canada and Canadians to ensure that we direct our own monetary policy? We have seen the impact of that. As we experience what goes on around the world, we must have as a country the flexibility to ensure that we can respond and continue to grow our domestic economy in spite of what goes on globally.