Tony Valeri

[The Budget, February 26th, 1998]

Mr. Speaker, I listened with interest to the comments made by the hon. member. He went on and on about the hiding of deficits. I am not quite sure what he said. However, I remind the hon. member that whether you are in Quebec, in British Columbia, in Ontario or down east, the other day the Minister of Finance stood to announce a balanced budget. That is great for this country. It is great for Canadians.

All Canadians participated in ensuring that we were able to achieve that objective. I think the hon. member should congratulate Canadians and Quebeckers for their participation in ensuring that particular objective.

With respect to the millennium fund, the hon. member went on and on about jurisdiction.

I would argue that whether a student is in Quebec or British Columbia or any other part of Canada, students do not want to hear about jurisdiction. They want to hear about assistance.

Yesterday this budget provided assistance to students to allow them to continue their courses, to allow access to education and further training and skills so that we can continue to build this country, a very united country into the next millennium.

[The Budget, February 26th, 1998]

Mr. Speaker, I will make a few comments and ask my hon. colleague a question.

He mentioned yesterday that the millennium fund was a waste of taxpayer money and that it was overspending by this government. I would like the hon. member to comment on the fact that he does not believe that helping 100,000 young Canadians gain access to post-secondary education, skills training, vocational schools is a valuable investment for this country in order to pursue their education and their careers into the next millennium.

Also, on page 10 of the Reform Party's alternative budget it advocates federal spending to drop to 10.5% of GDP. In real terms that is another drop of $10 billion in spending cuts each year. I suspect that it has to find those cuts. It has yet to identify those cuts of $10 billion. I would like the hon. member to make reference to that.

Finally, I would like the hon. member to stand in his place and reiterate what was said to the Calgary Herald , that this budget, a balanced budget, is very hard to criticize: “It does make it hard to criticize. I am not going to argue a balanced budget is not good”.

Perhaps the hon. member for Medicine Hat can for once stand up and say a balanced budget is good, the government has made progress, and speak to Canadians in a very forthright way.

[The Budget, February 25th, 1998]

Mr. Speaker, the availability of credit to the small business sector remains a critical issue for this government.

We are very aware of the importance of the small business community and its impact on our domestic economy. That is why the government has worked hard over the past few years to improve the environment for small businesses in Canada.

The views of the task force on the future of the Canadian financial sector will be helpful to the government in deciding whether to approve or reject the particular merger transaction.

I would like to assure my hon. colleagues in the opposition that this government will not allow this merger to proceed without the understanding of its impacts on the small business community in Canada and without the full input of all Canadians, including the small business community.

We said from the beginning that this government will not allow any financial institution to jump the cue. We set a process in place. That process was to allow the MacKay report to report. Once the MacKay report comes back to this House, the standing committee on finance will tour the country.

I offer the invitation to the hon. member who brought this question to the House to join us to hear from Canadians and to have input into what this government is prepared to do with respect to the merger of any financial institutions in this country.

[The Budget, February 25th, 1998]

Mr. Speaker, with respect to the change in personal income taxes paid in 1995, I urge the member to be a little more careful in his analysis of the tax trends. In comparing the tax burdens between 1995 and 1994 the member does not consider the one time increase in capital gains income reported on 1994 tax returns made in anticipation of the elimination of the capital gains exemption.

As a result, an unusually high amount of capital gains exemptions were claimed in 1994 which lowered the overall tax rates in that year to below normal levels. Any comparison between 1994 and the more typical 1995 average tax rates which does not take into account this fact exaggerates the rise in tax between these two years.

Growth in federal revenues since 1994 is primarily due to an increase in economic activity as reflected in the annual nominal GDP growth in the range of 4%. As we witnessed yesterday, this government has taken the first step to reduce taxes for lower and middle income Canadians.

The Reform Party may think that tax relief for 13 million Canadians, for low and middle income families, for single mothers and working parents, for 90% of taxpayers is a waste of time, but we do not.

[The Budget, February 25th, 1998]

Madam Speaker, we do not have very much time to address the number of issues that were brought forward.

I would like to reiterate the fact that the government, despite what some members in the opposition continue to state, does and will continue to invest in Canadian priorities. Health care and education consistently rank among the priorities of Canadians. Certainly the debt and tax relief with respect to low income and middle income Canadians are issues. We have taken steps. The child tax credit is a commitment that we fulfilled in the past budget and one that we will continue to work on.

I assure the hon. member that back in 1993 the finance minister put in place a consultation process that was unprecedented in this place.

We travel across the country on the Standing Committee on Finance gaining information from Canadians on what in fact should be included in the budget. I would only offer an opportunity for the hon. member to perhaps travel with that committee to hear from Canadians themselves.

[The Budget, February 25th, 1998]

Madam Speaker, we have started to hear the rhetoric heat up a bit. To address a couple of the points that were made, the budget yesterday reflected the balanced approach, the approach that worked for the government and worked for Canadians since 1993 in achieving our successes.

When it comes to the issue of the millennium scholarship fund and the issue of jurisdiction, the federal government has always had a role in access to education. It is a role that the government has continually stated, in fact with the announcement of the millennium scholarship fund, is not about jurisdiction or turf.

If the hon. member were to go to Quebec and speak to young students who are looking to gain access to university, he would know they are not concerned about jurisdiction or turf. They want solutions. They want to have some hope. They want to have some access to skills training because they know these are types of skills they will need to compete in the next millennium.

The government has responded to the priorities of Canadians. I think we would find across the country that the whole learning strategy, the opportunity strategy, is one that is well received by students, by Canadians interested in lifelong learning, by parents and grandparents who want to put money aside for their children.

Everyone realizes, regardless of what level of government, that we have to do our very best to ensure that each and every Canadian has equal opportunity to learning and skills training.

[The Budget, February 25th, 1998]

The hon. member opposite says he heard it before. He is quite correct. He has heard it before because it is a program that was put in place to eliminate the deficit. That is in fact what has occurred.

Every day over the last number of years the opposition party would stand up and say that we would never accomplish the elimination of the deficit. Yesterday those members sat in their seats and listened to the Minister of Finance state unequivocally that the budget will be balanced this year, next year and the year after precisely because we put in place a strategy to eliminate the deficit in a very balanced fashion, not by the extreme programs that the opposition party is putting forward, tax cuts at any cost.

Although we do have to listen to the rhetoric, and I am attempting to lay down some facts, I hope the hon. members will stand in their places and say that the deficit strategy the government put in place was a successful one which has accomplished that objective one year ahead of schedule of what the Reform Party had actually indicated in its election platform.

In a very important way, the reduction of the debt has actually begun. In 1996-97 the combination of economic growth and fiscal restraint meant that the debt to GDP ratio, what we owe in relation to what we produce, fell significantly for the first time in more than 20 years.

We all agree in this House that level is still too high but everyone must admit in this House that the trend is going in the right direction. We will continue to bring down the debt to GDP ratio. This year it will drop even further. Over the next two years the improvement will continue, falling to about 63%.

I will return to the topic of debt but for the moment I want to step back to our current deficit success.

I think it is worth comparing our federal financial performance with how other major industrial countries are handling their fiscal challenges. In Canada we use the public accounts method of measuring public finances. It is one of the most rigorous in the world. It is rigorous because it includes all the liabilities which government incurs over the course of a year. Many other countries such as the U.S. and Japan use the financial requirements measure. This includes only the borrowings that the government makes in financial markets. According to this measure Canada is in the best fiscal health of the G-7.

It is worth repeating that when we use the financial requirements measure Canada is in the best fiscal health of the G-7. This means that by the time the federal government of the United States sees its first balanced budget we will be on our third. Meanwhile, all the other major industrial economies will still be running deficits.

This is a reflection of the sacrifices Canadians have made to support and ensure that we were able to get the deficit under control.

There is an even more important way in which our fiscal progress has real meaning and real benefit for Canadians. The improved position of governments, combined with the federal government's commitment to low inflation, has played a key role in allowing interest rates to drop to a near 30 year low. While international pressures have squeezed rates up somewhat, today they are still more than 3 percentage points below the level of early 1995.

This is a bottom line win for Canadians. It means that someone who is renewing a five year $100,000 mortgage today will save $3,000 a year compared to just three years ago.

There is one final area of strong performance I want to touch on. As I said earlier, an important element of our fiscal renewal has been our government's action to control program spending. Over the last three years it has dropped in absolute dollar terms, a discipline unprecedented in at least 30 years.

But the growth of Canada's economy, combined with the fiscal turnaround we have put in place, means that we can now afford to begin to make strategic investments such as the Canada millennium scholarship and to increase provincial transfers to the Canada health and social transfer.

Our commitment to restraint is strong and secure. The fact is program spending will continue to fall in relation to the size of the economy. It will continue to reflect the priorities of Canadians, continuing the process we started some five years ago.

At that time total program spending stood at almost 17% of Canada's GDP. This year we estimate that it will be down to 12.4% of economic activity. By the year 1999-2000 it should drop to 11.5% of the economic activity, the lowest level in 50 years.

We must remember that is the year when, based on our fiscal targets and prudent planning, Canadians will see their third balanced budget in a row. That has not happened in almost 50 years.

Four years ago we established a plan which is working. For the first time in 30 years the budget is balanced. For the first time in 50 years we will balance the budget for three consecutive years. This budget is simply the next stage in that plan and it continues the same balanced approach for the future which has worked over the past four budgets.

We will pay down the debt as we have paid down the deficit. We will invest in critical priority areas like education and health care. We will cut taxes, beginning with middle and low income Canadians.

There is no doubt about it, with this budget we have made choices. They are choices that reflect Canadian priorities and that reflect the same balanced approach that we have taken all along. This is a budget for the Canadian people. The days of overspending and overreaching are gone. We have brought the deficit down from $42 billion to zero and we will continue to live within our means.

The only reason we can realistically talk about tax cuts is we have managed to get the books balanced. The measures announced in the budget will affect 90% of Canadian taxpayers. Four hundred thousand low income Canadians will be removed from the tax rolls altogether and an additional thirteen million Canadians will see their federal taxes drop. All along, this government has not once raised personal income tax rates. Where we have raised taxes, we have been sure to do so in the interests of fairness as with the special surtax on the banks.

The Canadian opportunity strategy is a comprehensive strategy that focuses on expanding access to opportunities, to knowledge and skills that Canadians require to meet the challenges of the 21st century. For a student today hoping to enter post-secondary education, it is about the 100,000 millennium scholarships that will be awarded each year.

For more than one million Canadians paying off a student debt, it is about tax relief for the first time ever on the interest portion of their student loans. For adults who are hoping to return to school or acquire new skills, it is about tax free access to their RRSPs. For parents or grandparents, it is about the Canada education savings grant to help them save for the education of their children and their grandchildren.

The millennium scholarship fund will provide 100,000 scholarships a year to students in every province and every community, with up to $3,000 per year for full time and part time students, young Canadians and adults at universities, at community colleges, at technical schools and vocational institutes. It is all about increasing access to knowledge and skills. It is about preparing for the next millennium. It is about reflecting Canadian priorities.

The way we set up the millennium scholarship fund is a reflection of what we believe. It is something we felt was so important that it should be taken out of the hands of politics and put into the hands of experts. That is why we are setting up a private foundation to administer the scholarships. Over time we may attract private sector endowments so it can grow and help even more young people.

All governments have an obligation to provide better access to skills and knowledge. We are not about to stand aside and ignore that obligation. It is not about jurisdiction or turf. It is about our future.

What we have been able to achieve over the last four budgets is a result of the hard work of Canadians. Members in this House often make reference to the fact that this government boasts about its success. Government members on this side of House state unequivocally that our success in our war with the deficit is a result of the sacrifices Canadians have made, of the partnership Canadians have struck with this government, of the support Canadians have given this government over the last two elections to deal with the fiscal questions and challenges we have had to deal with.

This budget marks an historic moment. It makes possible what many thought was not possible. Most important, it is a budget that shows Canadians that their support for our deficit fight and their willingness to endorse and accept the tough decisions we had to make was not misplaced. This is their success and the rewards it produces will be theirs and their children's.

[The Budget, February 25th, 1998]

Madam Speaker, I am certainly very proud to rise on behalf of the government in this debate to highlight our dramatic, in fact historic, balanced budget and our budget of balance.

Up until yesterday one in every three Canadians, everyone under 27, had never seen their federal government deficit free. As this House will see, the era of credit card governance is over. One would have to be almost 50 to remember when Canada was deficit free for three consecutive years. We are changing that too.

Starting now and with the 1998 budget, we announced our commitment to balance the books this year and continue to balance the books for each of the next two years. In other words, Canada will enter a new millennium with the type of positive financial performance we have not seen in a half century. That is a milestone, a new beginning and it is worth celebrating.

It is no surprise that the official opposition and other opposition parties are standing in their place today ranting and raving that we have not gone far enough or fast enough, whether it is cutting debt or cutting taxes. Let me refer to a word that the leader of the official opposition has never heard of, let alone understands its meaning, balance. That is a word they do not like, it appears.

I remember how members opposite consistently attacked our approach in each of our past budgets, an approach that combined real fiscal discipline with reasonable, responsible investments in areas of strategic economic benefit and for Canadians in jeopardy and in need.

It is no wonder that today's budget leaves a very bitter taste in their mouths, because the results of our approach are clear, concrete and convincing.

This government not only balanced the budget but took a balanced approach. Unlike the Reform Party which continues to put forward programs of extremes, this government has chosen to take a balanced plan for the future.

Today we heard the leader of the official opposition say that his party has a national job strategy. That is what he said. But we know what the name of this job strategy is, Reaganomics. It is called voodoo economics of the 1980s. It did not work then and it is not going to work now.

I think what we need to do is look at the facts of our balanced approach. These are the facts. Canada's pace of economic growth and job growth is positioning us as a world leader among the major industrial nations. Our deficit performance is absolutely the best of any G-7 nation. That is the benefit we get from a balanced approach.

It is an approach that the 1998 budget sustains. It combines continued fiscal progress through our debt repayment plan with a program of general tax relief and investments in learning and skills, in helping to manage student debt, in aiding children in need, in boosting research and in funding to provinces for health care and education.

What I want to focus on is our fiscal track record, because it is our success as financial managers that has made possible these tax cuts and strategic investments.

Achieving a balanced budget this year means that the deficit has in fact declined by $42 billion in just five years. This dramatic turnaround is the combined result of two factors. The first is the sharp drop in federal program spending due to our review of all federal programs. Program spending this year is estimated at $106 billion, down from $120 billion in 1993-94. That is real cuts in real dollars. Second, the deficit has been cut thanks to higher budgetary revenues, primarily from a growing economy.

Taken together, these factors highlight a dramatic transformation in Canada's economic and fiscal policy. In 1993-94, high deficits were pushing interest rates up and depressing economic activity.

This meant higher interest charges on the debt, fewer jobs for Canadians and, in turn, lower revenues for government, creating further deficit pressure. It was a vicious circle.

Today Canada enjoys the benefits of a virtuous circle with fiscal progress contributing to lower interest rates which in fact fuel economic growth and job creation, leading again to an ever improving fiscal situation.

As the minister told this House, while we have won a major battle, we understand full well that we have not yet won the war. Interest charges on our debt, the result of decades of deficits, will cost us $41.5 billion this year. That is money that cannot go to health care or further tax reduction or addition debt reduction.

For a strong economy and a secure society, this debt must be brought down. Our commitment is to make that happen, steadily and permanently. That is why we are instituting a two track strategy.

First, we will continue to follow policies that will pay off in better economic growth. Second, we will bring down the absolute level of debt itself through the debt repayment plan.

Under this plan we will continue to present two year fiscal plans based on prudent economic assumptions. Next, we will continue to build a buffer into our budgets. The $3 billion contingency reserve is there to make sure we meet our balanced budget targets despite any unforeseen pressures.

Finally, if the contingency reserve is not needed, just as it has not been needed in each of the last four budgets, thanks again to our prudent economic assumptions, it will go directly to pay down the debt.

Again, as the minister said, this is how since coming into office we have brought the deficit down year after year after year. This is how in the future we will bring the debt down year after year after year.

[The Economy, February 24th, 1998]

Mr. Speaker, again I would have to remind the member that he should be in this House at 4.30 p.m. to listen to what the budget has to say.

I find it absolutely incredible. Listening to the Tories talk about taxes is like watching someone return to the scene of the crime.

[The Economy, February 24th, 1998]

Mr. Speaker, the last Conservative budget, and God willing the last ever, projected government spending would rise this year to $128 billion. That is more than $20 billion higher than will actually happen. How much money does the Conservative Party think would be left for tax cuts if we stuck to its plan?