Mr. Speaker, I appreciate having the opportunity to talk about the budget. I would like to start by congratulating the Minister of Finance.
The Minister of Finance has put forward a responsible, well developed and, something members opposite have a hard time with, fair budget.
It is a fair budget, a responsible budget and a good budget because the government recognizes that it has a dual responsibility when dealing with Canadian affairs. It recognizes that it has a fiscal responsibility. That is why the budget is prudent. It recognizes that we operate in a businesslike way but recognizes that we are not a business. It recognizes that we need to get full value for each of the dollars we spend.
In addition, the government recognizes that it has a social responsibility and that certain things are done in government not just to earn a profit but because they are the right things to do. We do them because we recognize as a government that we have responsibilities and obligations to individual Canadians. We intend as a government to adhere both to our fiscal responsibility and to our social responsibility.
I do not think there is any question in terms of fiscal matters that our responsibility has been carried out and carried out well. For the first time in almost a generation a Minister of Finance established a deficit target last year. Not only did he hit that target. He did far better than what he said he would be able to do.
Second, the minister set a medium term objective of 3 per cent of GDP in the next two years. He set out a strategy that will see us do that. It is a clear and concise strategy. It is an achievable plan that will see our deficit reduced to 3 per cent of GDP.
Despite what members opposite might say, this is not a smoke and mirrors budget. These are real cuts. This is not what happened in the past where the talk of reduction was simply that we would spend a little less than the increase we had planned. These are real cuts in actual spending and they are being done
with no personal income tax increases. They are real reductions, despite what the member opposite said.
In the first year we will cut expenditures by $3.9 billion. In the following year, 1996-97, it will be $5.9 billion. In the third year of the plan it will be $7.2 billion. That is a decline in a three-year period of almost 19 per cent. It is the largest decrease in government since we demobilized after the second world war.
The minister in establishing the budget did two very important and prudent things. First, his estimations in terms of growth and interest rates were very prudent. In terms of growth he projected a smaller amount than what the average private sector suggested. In terms of interest rates, both short and long term, he set his projections higher than what the private sector was suggesting. He built in a cushion to ensure that the budget is fiscally responsible.
Second, he set up contingencies in the next two years: a contingency of $2.5 billion in the first year and a contingency of $3 billion in the second year. He has made what I believe is an important commitment, that if he does not need the contingencies to achieve his deficit reduction targets the moneys will be used to further reduce the debt.
The minister has gone about setting a budget like we do when we set our household budgets or our small business budgets. He has taken what was in front of him, set out a reasonable plan over a reasonable period of time, built in contingencies and come up with a strong, workable plan.
In addition to the fiscal responsibility the minister has recognized the social responsibility. Although we are to cut some funding from social programs, it is important to remember than when the budget is fully implemented we will be spending as a government more than $50 billion on the social safety net of the country, more than $50 billion to protect the men, women and children of Canada. That is an important principle which the minister understands. It is an important Liberal principle and I am proud to sit with a government that recognizes it.
It is a budget that is fair and equitable because it asks all segments of Canadian society to participate in the exercise. It does not ask one part of Canadian society to carry an unfair burden. It is not suggesting that some segments should not have to participate at all. That is why the budget covers a wide range of areas.
Large corporations have been asked to participate by providing some increased revenue. They have been asked to participate by a decrease in subsidies going to businesses.
The federal government is putting its own house in order first. It is going to cut its expenditures by 19 per cent. That is the largest part of the cut.
Individuals have been asked to participate as well, as they should, not through increased income tax, not through taxing RRSPs, not through taxing dental and health benefits, but through a modest tax on gasoline.
He asked the provinces to participate as well. He asked them for a 4.4 per cent participation which is only half as much as what the federal government is doing itself. I think that is important. It is absolutely ludicrous when provincial premiers suggest that we as a government should totally exempt them from participating in the deficit reduction exercise.
Finally, as members of the finance committee which did a prebudget exercise unlike what the member opposite suggested, we adhered to the three principles that came out of the committee meetings. The first was that expenditures should be the largest portion of the action, not taxes. We did that with a 7:1 ratio. Second, we had to get our own house in order first. We did that with a $29 billion three-year cut in our own expenditures or a cut of 19 per cent. The third was that we would be fair and equitable. We did that by having all segments of Canadian society participate.
In conclusion, let me say unequivocally that I support the budget. I support the Minister of Finance. I support the government. We have achieved the dual objectives of fiscal responsibility and social responsibility. I am proud of what the minister has accomplished.
