Absolutely, Madam Speaker. What I said was that it was rhetoric of rubbish. I do not know if that is vulgar or not. It is not, as far as I was concerned.
Lost his last election, in 2006, with 35% of the vote.
The Budget February 17th, 1999
Absolutely, Madam Speaker. What I said was that it was rhetoric of rubbish. I do not know if that is vulgar or not. It is not, as far as I was concerned.
The Budget February 17th, 1999
Madam Speaker, the rhetoric of rubbish is the only way I can speak to that.
What I want to—
The Budget February 17th, 1999
Mr. Speaker, after hearing a couple of hours of rhetoric I hope to be able to communicate to Canadians what was in the budget rather than what most members opposite believe in their own minds and use to their own political advantage.
Yesterday in the House the Minister of Finance delivered his sixth budget. It describes a vision of higher standard of living and a better quality of life for all Canadians. The budget articulated a well thought out vision for tomorrow. It also reinforced a plan for today, a plan that will make that vision a reality.
Maintaining sound, economic and financial management is certainly an essential component of the plan, but restoring order to the nation's finances is not, as the Minister of Finance said yesterday, an end in itself. He indicated in his speech yesterday that a better standard of living also requires us to invest in key priorities such as health care. It calls for continued tax relief. That is exactly what the 1999 budget proposes to do.
In my remarks today I should like to examine the fiscal and economic foundation on which we are building this vision.
As a nation our capacity to strengthen the health care system, to provide tax relief and to make other strategic investments depends upon the strength of this foundation. For the second consecutive year the government has brought down a budget that is balanced or better. Canada has moved from a deficit of $42 billion before the government came to office to a $3.5 billion surplus last year.
In the current fiscal year the government will again balance its books or better. It will be the first time since 1951-52 that Canada has been deficit free for two consecutive years. In fact by the accounting standards used in most other industrialized countries the government will post a financial surplus for the third year in 1998-99. It is this fiscal hat trick that is remarkable, not only in Canadian terms but in global terms. In the global arena Canada is the first G-7 country to post three consecutive surpluses in this decade.
As the Minister of Finance confirmed in his speech yesterday, the government is committed to keeping federal budgets balanced or better in both 1999-2000 and the year after that.
When we came to office Canada had a history of deficit financing. Today deficit financing is history. As recently as the early 1990s Canada's budgetary position was worse than that of any other G-7 country. Now, when making comparisons across countries, adjustments must be made for differences in accounting practices and in the distribution of responsibilities among the various levels of government.
In light of these considerations the most appropriate measure is the total government budget balance. On a comparable statistical basis our total national accounts based government sector deficit reached a high of 8% of GDP in 1992. It was more than double the 3.8% G-7 average at the time. Today our position is better than that of any other country in the G-7. It has improved each and every year since 1992.
It is our success in balancing the books that makes it possible for the government to consider significant investments in priority areas. First, our success in the fight against the deficit has made it possible to begin providing broad based tax relief for Canadians, both in last year's budget and again in this year's budget.
Next, the fiscal balance in previous budgets has made it possible for us to make a significant investment in health care in this year's budget. This investment, which amounts to $11.5 billion over the next five years, is the largest single new investment the government has every made since coming to office over five years ago.
The 1999 budget also includes a $1.4 billion investment aimed at strengthening Canada's health care system through additional resources for information systems, health research, as well as prevention and other health initiatives. This budget and this investment in health care are more than just transfers to provinces. It is all about ensuring that there is accountability, ensuring that there is investment in prevention, and ensuring that there is research in service delivery. It is all about ensuring that Canadians in every province now have a better opportunity of receiving better quality health care.
Fourth, we have proposed investments that will build on the Canadian opportunities strategy by advancing Canada's knowledge and innovation agenda. We said from the beginning that the plan we laid out in 1994 would be followed. Again, in this last budget we are building on previous budgets and building on the Canadian opportunities strategy, a strategy that ensures opportunity for individuals to acquire skills that they need in order to compete in the upcoming millennium. This budget invests and builds on that strategy and advances Canada's knowledge and innovation agenda. That will provide direct support for employment, particularly for youth.
Even with the important investments announced in this year's budget, Canada's program spending as a percentage of GDP is on a clear and downward trend. In 1993-94 program spending amounted to 16.6% of GDP. For 1998-99 program spending is expected to drop to 12.6% of GDP. By 2000-01 it should fall to 12% of GDP.
This will be the lowest level of program spending relative to the size of the economy in 50 years, and that is while we are continuing to invest in Canadian priorities: health, education, providing tax relief and continuing to pay down debt.
Focusing our spending on key priorities and putting an end to decades of deficit financing have allowed the government to make significant inroads in its fight against the debt. Last year Canada's debt to GDP ratio saw its largest single yearly decline since 1956-57. It fell from 70.3% to 66.9%. For the current fiscal year it is expected to fall still further to about 65.3%. By 2000-01 the debt ratio should come in at just under 62%.
Economic growth is not the only cause of this remarkable decline in debt relative to the size of the economy. The government is in fact doing what Canadians have asked. Canadians have asked that the government pay down the debt. The Minister of Finance pointed out in his speech yesterday that we are only one of a few countries in the world which is actually paying down its debt.
Nonetheless, Canada's debt to GDP ratio is still too high. Among our G-7 counterparts only Italy has a higher level of debt in relation to the size of the economy. We are therefore committed to keeping this debt to GDP ratio on a permanent downward track. To this end the government is following the debt repayment plan set out in last year's budget.
As part of this strategy we will continue to present two year fiscal plans. These plans will be based on prudent planning assumptions and will continue to include a contingency reserve, a buffer against unexpected financial pressures.
The current plan contains a contingency reserve of $3 billion each and every year. When it is not needed, as was the case last year, it will go directly to paying down the public debt. This is very important. Only three years ago when the debt to GDP ratio was at its peak, 36 cents of every dollar of federal revenue went to pay interest on the debt. Last year with the debt ratio dropping, the portion of each revenue dollar needed to service the debt fell to 27 cents, which allows the government more flexibility and more opportunity to reinvest in Canadian priorities.
These numbers tell a powerful story. They tell a story of a nation that is in control of its destiny, a Canada that is securing for itself greater economic freedom.
A diminishing debt burden is freeing up resources to strengthen health care and access to knowledge, to provide needed tax relief, to fight child poverty, to improve the environment and to invest more in a productive economy.
However, spending initiatives and tax cuts will be introduced only when they are sustainable, when the government is reasonably certain that it has the resources to pay for its actions. We will not commit to tax cuts, to spending that we cannot afford. We have turned the corner. The government is committed. Members on this side of the House are committed never ever to go back to the reckless spending years of the Tories across the way who continued to bury the country with $42 billion of deficit and continued to ensure that Canadians did not have the opportunity they were looking for.
Prudence is at the heart of this government's approach to managing the nation's finances. And so it should be, for there is absolutely nothing to be gained by introducing tax relief if it means running the risk of driving the country back into deficit. There is nothing to be gained by bringing in new spending initiatives one year if the government has to hike taxes the following year to pay for something it thought it could afford.
I know that our opposition critics love the government's prudent approach. We heard about it this afternoon. Why do they love it? Because the opposition will always be able to complain that we are not moving quickly enough to bring down taxes. We heard it from the leader of the Reform Party. We heard it from the Tories. Or that we are not acting decisively enough to beef up spending. We heard it from the NDP earlier today. We heard it from the Bloc.
What does this strategy mean for Canadians? That is whom this government is speaking for. It is speaking for Canadians and it is speaking to Canadians. For Canadians it means they can always have confidence in this government's ability to deliver sustainable measures. It means they can count on us to continue to provide tax relief and to continue to invest in key social and economic priorities year after year after year and budget after budget.
The continuing improvement in this government's fiscal situation is helping to keep interest rates low. In fact, short term interest rates, currently around 4.7%, have returned to the levels of early last year before the financial turmoil in Asia sent them rising. Long term interest rates are near historical low levels. The level of interest rates is further proof that Canada's economic fundamentals are strong.
The member for Kings—Hants made reference to how this government continues to talk about economic fundamentals. The essential difference in the management of the economy between this government and the past administration is that we focus on economic fundamentals. We ensure that the economic fundamentals are in place before we embark on any investment and before we embark on any tax cuts.
Reckless spending and promises that do not mean anything to Canadians and that cannot be fulfilled do not cut it with Canadians any more. They are looking for sustainability. They are looking for priorities that will be invested in and they are looking for leadership. This government has provided leadership. With the help of Canadians it will continue to provide leadership as we move into the next millennium.
A person does not need to be an economist to understand the benefit of low interest rates. When rates are low, the benefit is felt directly by consumers. It is felt by Canadians. It is a bottom line benefit for anyone who has a mortgage to pay or car payments to make. It is a bottom line benefit for businesses of all sizes that borrow money to invest in capital equipment or to expand their operations and create jobs.
While the Tories ridicule the idea of fundamentals, fundamentals provide a climate of low interest rates and low inflation. They provide an environment where businesses can continue to prosper and create those jobs Canadians are looking for.
Speaking of jobs, one of the most encouraging developments in the last couple of years has been a surge in employment. Employment jumped by 453,000 jobs in 1998, building on the already impressive gain of 368,000 jobs in 1997. Canada's employment performance in 1998 was the best for the decade.
The hon. member for Kings—Hants also made reference to the G-7. The G-7 said that Canada will outpace the rate of job creation in any other G-7 country. The trend continued in January of this year with 87,000 new jobs created.
It is not the government that creates these jobs. It is the private sector. This government has been successful in providing an environment conducive to job growth. The private sector continues to be profitable. When it is profitable and meeting the needs of the global economy, the private sector will be hiring Canadians. We will continue to provide that environment.
The unemployment rate today stands at 7.8%. It is the lowest jobless rate this country has seen since 1990.
Perhaps the most encouraging aspect of Canada's job performance is the fact that almost 40% of the new jobs created in the last 12 months went to Canada's youth. This represents 202,000 jobs, a 10% gain. The yearly employment gain recorded for youth was the strongest in over 25 years.
As far as the overall prospects for economic growth are concerned, yesterday the Minister of Finance emphasized once again that Canada has been affected over the past year by the financial instability in the global market. We all know what happened in Asia. We all know what is happening in Russia. We know the impact of what may happen in Brazil.
Lower world commodity prices were the most significant channel through which the Asian crisis dampened economic growth in Canada last year. In a survey conducted at the beginning of this year, private sector forecasters indicated that they expected growth in Canada to slow to about 2% this year before picking up to 2.5% in the year 2000.
Even with the lower growth prospects, both the International Monetary Fund and the OECD expect Canada to be among the top performers in the G-7. These organizations also expect Canada to continue to lead the pack in job creation. When the hon. member makes reference to the IMF and the OECD, he should make sure that he tells the House and Canadians the complete story. The IMF and the OECD are continuing to provide Canada with high marks in job creation.
The 1999 budget invests in health care. It invests in research and innovation and other key areas. The government is continuing to provide general tax relief to all Canadians without borrowing money to do so. The government's ability to move on these three fronts is a result of its firm commitment to good financial management.
The figures in this year's budget plan make it clear that Canada is breaking new ground and putting in place a strong economic foundation. It is the foundation on which we will build a better tomorrow, an enduring period of prosperity and an improving quality of life.
The actions of this budget are mutually reinforcing. Unlike what the parties opposite say, the initiatives we are proposing will work together to ensure that this ambitious but realistic vision of 21st century Canada will manifest itself not only in our finance minister's eloquent words, but also in the day to day lives of all Canadians.
The Budget February 17th, 1999
Mr. Speaker, the hon. member talked about the government laying out its priorities on health care. The member is absolutely right. It was health care.
One province has already indicated it will use the money to hire more nurses, to reduce waiting lists for cancer and neonatal services and to expand home care services. We have decided on our priority.
The hon. member hired the former Saskatchewan NDP cabinet minister who said “One cannot live on borrowed money forever. Sometimes it catches up to you. You cannot mortgage your children's future to the point where you can live high. It only leaves them with a debt”. Take his advice. Stop saying spend, spend, spend. We laid out our priorities. It is a health budget. The member should stand up and applaud.
Federal-Provincial Fiscal Arrangements Act February 15th, 1999
That is on the value of the resources.
Federal-Provincial Fiscal Arrangements Act February 15th, 1999
Madam Speaker, the member made reference to have not provinces and the fact that we are in some sense subsidizing have not provinces and that we treat have not provinces like liabilities.
I would like to clarify for the hon. member that we do not treat any province like a liability. The intention of equalization is to ensure that all provinces are able to provide a comparable level of service to Canadians so that Canadians, regardless of where they live, have an opportunity to receive health care and social services benefits.
Alberta and British Columbia, which are have provinces today, were provinces that did receive equalization payments in the past. So equalization payments are meant to try to support provinces as they are continuing to improve their economic circumstance and once they improve their economic circumstance equalization payments are no longer provided to those provinces.
I guess the true colour of the Reform Party comes through when the member says the objective of the government is to try to guarantee the same outcome or equal outcomes for Canadians and it just cannot be done. I disagree with the hon. member. Equalization is a cornerstone of what it is to be Canadian, and that is to try to provide have not provinces with the ability to provide equal services or services of comparable value to Canadians.
He went on to make an accusation about how low income Canadians from have provinces are subsidizing high income Canadians of have not provinces. For a given level of income, all Canadians pay the same federal taxes irrespective of which province they live in. So I ask the hon. member to take the time to speak with his provincial counterparts about equalization.
Saskatchewan is a recipient of equalization and I think individuals who live in Saskatchewan appreciate this program. It is a program provided in consultation and collaboration with the provinces. It is renewed every five years. It is reviewed every February and October of each year to assess what the payments are and it is a collaborative effort. It is meant to provide comparable services. I fail to understand how the hon. member could disagree with that premise.
Supply February 11th, 1999
Mr. Speaker, it is somewhat ironic that the motion in essence makes reference to the working poor and yet every time I hear Conservative colleagues speak they talk about the homeless.
I am trying to understand how the motion helps address the homeless issue. The Conservatives are talking about the working poor and about increasing the basic income tax credit to $10,000—it was amended by the Reform Party to something less than that—and the cost of indexing the tax bracket. Collectively they are talking about $28 billion or $30 billion of tax measures over three years.
They keep talking about the homeless in their speeches but their motion makes reference to the tax system. How does the motion assist those individuals who are not working? They are talking about homeless people. They are just making political hay.
Supply February 11th, 1999
Madam Speaker, for the benefit of the hon. member I will repeat what I said when I first stood up. I indicated that the raising of this issue was not only timely but of considerable importance and relevance to our underlying success in stature as a nation. If the hon. member would like, I would certainly take the time to provide him with a transcript of what I had said.
With respect to his comments on EI, one only has to remember not too long ago when the Conservative government was here in Ottawa when it did nothing but increase EI premiums, devastate the economy and increase poverty in this country. That government did nothing but have employment insurance premiums going up, unemployment going up and the economy going down. And this hon. member has the audacity to get up and talk about what this government has done in a negative way. January was the seventh consecutive month in which employment increased. There has been an average increase of about 57,000 jobs per month over those seven months.
We all know the issue of poverty is an issue we would like to deal with. Every parliamentarian in this House would like to deal with poverty but most parliamentarians in this House understand that whatever it is we do as a government, we must do it in a measured fashion. On one hand he talks about doing something on the benefit side while on the other hand he talks about ripping seven or eight billion dollars out of the bottom line to deal with his EI premiums because he thinks it is going to create jobs. When I speak to small business people they say “reduce my EI premiums and I will hire as many people as you like”.
Small business is concerned about the relevance of the economy. That means interest rates, a growing economy and growing opportunity which is what this government is providing.
Supply February 11th, 1999
Madam Speaker, since this government first came to office, the overall level of the tax burden and especially how it impacts the most vulnerable in our society has been a major consideration in our budget deliberations. This year is no exception.
I would like to thank the hon. member for raising an issue that is not only timely but also is of considerable importance and relevance to our underlying success and stature as a nation. It provides an appropriate opportunity to highlight actions that our government has taken in budget after budget.
Both the Prime Minister and the Minister of Finance are on record as saying that our government is committed to reducing the tax burden on Canadians. The 1998 budget gave concrete proof of this commitment and that this commitment is real, with over $7 billion over three years to the benefit of 14 million Canadians.
Both the Prime Minister and Minister of Finance have made it clear that our priority within tax reduction is to give first place to those who are in the greatest need, those in poverty or those with low incomes and especially families with children. Here again our budgets have given proof to this priority through real performance.
For example, in the 1998 budget we acted to increase the amount of yearly income that low income Canadians can receive on a tax free basis by $500. That took 400,000 Canadians off the federal tax rolls completely.
Even more important in my mind has been the work we have done with the provinces and territories in the development of the national child benefit system. Our goal is to ensure that children are always better off when their parents leave welfare. That is why the 1997 budget announced an $850 million increase in our support to low income families through the Canada child tax benefit. That was followed up in the 1998 budget with measures to provide an additional $850 million increase in the child tax benefit, $425 million in July 1999 and $425 million in July 2000. Taken together, these measures benefit about 1.4 million Canadian families with 2.5 million children.
Let me make one thing clear. Our government recognizes completely that such measures are but steps, though important steps, in a much longer journey. We make no claims that we have done enough in the battle against need and hardship, but what we have done is what we could afford to do. This is the reason that while I respect the intent of today's motion, I cannot endorse its sweeping menu of action.
We have to remember that just five years ago this nation was burdened with a deficit of $42 billion. Interest payments on our surging debt were consuming about 33 cents of every tax dollar. Our fiscal follies were exacting a painful price. It was measured in interest rates that were too high and job creation that was too low. That is why our government has constantly balanced our commitment to tax reduction and our priority to ease the burden on low income Canadians with another equally binding commitment, that is, before all else to get the government's books back in balance.
What is important to understand is that these two binding commitments are not in conflict. They actually reinforce each other. The proof of this is also very visible today. The surest form of sustained assistance for Canadians in need is the opportunity to earn a better living, and that means jobs. The surest way for the government to obtain the revenues to better assist Canadians in need is through real economic growth, the type of growth that is helped by low interest rates and marked by growing employment.
We were not going to achieve these things if we were to continue as a nation to borrow against the future. That is why we took tough consistent action to put an end to government that lived beyond its means. Our success here is also a matter of record.
In the fiscal year 1997-98 we eliminated the deficit for the first time in over 25 years and we committed ourselves to balanced budgets again this year and in 1999-2000. It was not an abstract achievement. It has helped to position us so that despite a difficult global economy, Canada is still recording moderate growth. More importantly, this January our unemployment rolls fell to 7.8%. Yes that is still too high, but it is also the best performance since June 1990. In other words more Canadians are working than we have seen in almost a decade. That is the best way, the most sustained way to hit poverty head on.
It was our fiscal success that made it possible for last year's budget to begin the process of broad based tax relief so many Canadians desire. We were able to undertake investments such as the millennium scholarship fund, an investment that will help thousands of young Canadians obtain a higher education.
I emphasize once again that there is much more to be done but we will not do it in a way that jeopardizes the sustained advances, fiscal and economic, that have been hard earned by Canadians. That is why we did not and still do not have the luxury of moving toward the menu of actions the hon. member opposite is suggesting.
The world economy is still volatile. Private sector forecasts of Canadian economic growth have been consistently ratcheted down over the last nine months. While there have been some positive indications currently, the time is much too soon to make the kind of tax reduction commitments that are being suggested in this motion which we would pay for year after year after year.
Yes we will continue our process of expanding tax relief as the Prime Minister and the Minister of Finance have stated, but we will also place continuing value on prudent planning and fiscal forecasts.
We dare not repeat the error of the hon. member's own party when it was in government of relying on rosy forecasts today that deliver economic turmoil and fiscal failure in the years that follow. No, we will continue our balanced approach because it is the approach that helps the most Canadians in the most need in the surest way. It is the approach that best ensures our government can continue to provide real assistance where it matters and in a way that can be sustained. Let me remind the House that this targeted approach to helping those in need has been a constant in budget after budget.
We know that charities are vital partners in the battle against poverty. That is why in our very first budget we lowered the threshold by which charitable donations begin to earn the 29% tax credit. We know that taking targeted action to boost assistance to students and to people trying to improve their economic condition by upgrading their education helps address poverty.
In conclusion, it is hardly strange that our government's record of tax relief may not be as dramatic or all encompassing as some opposition members say they would like it to be. It is always easy to spend money when one is not answerable to the future consequences.
A responsible government has to address more than just good intentions. It also has to face hard facts and deal with real risks. That means facing up to continuing fiscal constraints and dealing with the real risk of economic volatility.
The most important fact of all is that this government has proven year after year and budget after budget that a balanced and moderate approach delivers the results that Canadians want and that Canadians deserve. These results are positioning all Canadians for a more secure future whereby we can continue to deliver genuine gains for Canadians in need, rather than just pontificate politically as we just heard from the party opposite.
Petitions February 11th, 1999
Madam Speaker, I have two petitions signed by constituents of Stoney Creek who feel it is the duty of parliament to ensure that marriage, as it has always been known and understood in Canada, be preserved and protected.