Monte Solberg

[The Budget, February 26th, 1998]

Mr. Speaker, let us just see how good the finance minister's math is.

The government budgeted $103 billion. It had enough revenue to cover $103 billion. The problem is that the government spent $106 billion. The entire so-called debt retirement fund has been vaporized by new spending.

Again, how can we trust the Minister of Finance not to continue using the entire debt retirement fund as a political slush fund?

[The Budget, February 26th, 1998]

Mr. Speaker, the finance minister does not get it. We want to bring in the auditor general now.

Three billion dollars have gone missing from what is supposed to be a debt retirement fund, and the finance minister's fingerprints are all over it. The government's whole debt reduction strategy rests on using this fund to pay down our staggering national debt.

Last fall the finance minister said the fund “would be used to pay down the debt of the federal government”. He broke his word. Why should we believe he will not do it again?

[The Budget, February 26th, 1998]

Mr. Speaker, I think I can do it.

First of all, I point out that the government blew the contingency fund last year. In three successive budgets it said it would ensure the contingency fund is only used for emergencies, for no policy initiatives. In this year's budget it blew the entire $3 billion.

Even if the Liberals did devote the entire contingency fund in debt repayment, it would take them 200 years to pay down the debt. It is a ridiculous plan and they are being beat up by all the analysts who know their plan is not going to help pay down that debt.

[The Budget, February 26th, 1998]

Mr. Speaker, Canadians are very concerned about the plight of natives in this country. That is why we want to reform the department of Indian affairs. Right now in Canada we spend over $6 billion a year to help natives. But in fact a great chunk of that, as much as 50%, is chewed up in bureaucracy.

The auditor general routinely rips the department of Indian affairs because of the complete lack of accountability. A lot of that money does get to the band level only to not get to the grassroots natives simply because there is no accountability at the band level.

My friend just alluded to this. I along with colleagues on both sides of the House probably recently saw an expose of what happens on some reserves where money gets to the band level but does not get to the people at the grassroots level. We saw an expose of one band in particular where in fact the chief was driving a Cadillac, going to Las Vegas, had a huge house, and that is not unusual. Unfortunately it was in Manitoba. Unfortunately my friends across the way are blind to this or they do not want to hear about it. They do not want to wade in and fix this problems. Reformers do.

[The Budget, February 26th, 1998]

Mr. Speaker, it is a pleasure to respond. Obviously the Reform Party believes a balanced budget is good. We have been arguing for that since we came to Ottawa in 1993.

When we came to Ottawa in 1993 we were fighting a tremendous election battle in the months leading up to that point. One of the quotes I remember best was a quote from the Prime Minister on the campaign trail. He said “zero deficit, zero jobs, zero hope”. What a difference the Reform Party has made. We have convinced the Liberals across the way that a zero deficit is a good thing. We moved the government and we channelled a lot of the opinion of the public toward moving toward a balanced budget. I am glad that my friend across the way and his colleagues have had a change of heart and have realized that a zero deficit no longer means zero jobs and zero hope. It actually is a very good thing.

I would also point out that it was the taxpayers who really did balance the budget. Sixty-six per cent of the improvement in the government's balance sheet came from increased revenues which came directly out of the pockets of Canadian taxpayers. The other big chunk of that, two-thirds of the remainder, came from cuts in transfers to the provinces for hospital beds and higher education.

That brings me to my friend's point about the millennium fund. He suggested I said it was a waste of money. That funding would have been better used by the provinces to restore transfers for things like higher education. We pointed out that the millennium funds benefits 6% of students. What about the other 94%? Why not allow the provinces to lower tuitions so that all students can benefit?

Finally, my friend has pointed out that the Reform Party believes that we should reduce the overall size of government to 10.5% of GDP. I absolutely believe that. We think the government is too fat. I notice the government increased spending in this budget for the Department of Canadian Heritage; more money for TV production funds while it is closing hospital beds around the country. That is ridiculous.

We say trim spending in Canadian heritage. Cut the waste in Indian affairs. There is a tremendous amount of it. Cut funding for regional development which is simply corporate welfare. We know that the Chamber of Commerce comes before the finance committee every year and says please do not fund business anymore, it does not want subsidies for business anymore.

We also point out that we can make more savings in employment insurance. There are tremendous savings to be made there. We believe that we need to reform equalization. We are not afraid to say that. We think equalization formulas need to be changed. In a country as wealthy as Canada it is ridiculous that three provinces would support seven. That is where we would make some of those changes.

[The Budget, February 25th, 1998]

Madam Speaker, it is a pleasure today to rise to debate the government's budget. It is an important day. I think we would be negligent if we did not point out that this is an important day for taxpayers who have done a tremendous amount to bring the budget into balance for the first time in 28 years.

I am glad to note, as we began the budget debate on this day, that the finance minister acknowledged the tremendous role that taxpayers have played in bringing the budget into balance.

I have been listening to my colleagues opposite and I have noticed that they have used a few words over and over again. They argue that they have taken the balanced approach to this balanced budget.

I want to scrutinize whether or not that is exactly the case by running through the three major aspects contained in the budget. The government talks about how it will deal with the issue of spending. It talks about how it will deal with the issue of taxes and the issue of debt.

Let us start with the spending side. That is where the government started. It is where its proclivities lie and it is probably one of the most interesting parts of the budget. The government is arguing that it is the balanced approach to increase spending overall in the budget by $11 billion. We have not seen an increase in spending like that in years and years and years.

I simply want to make the point right now that we think at a time when the government has balanced the budget for the first time it is missing a glorious opportunity to deal with the fundamental economic problems of the country in a way that will fix them once and forever. By increasing spending it has essentially blown that chance, an $11 billion spending increase.

I want to say a couple of words about how the government has spent that money. For weeks on end the government has been talking about the need to invest in education. It has been no secret that there would be increases in spending for education. Who can be against education?

We all agree that education is extraordinarily important, but I think a little history is in order here. I think we need to talk about just how much the federal government values education. We need to point out to taxpayers of Canada and to students that it was the federal government which took the broad axe to education funding in the first place.

I remember very well in the 1995 budget that the finance minister said they were to cut the size of government percentage-wise far more than they were to cut transfers to the provinces. He made a speech to the Kansas City Reserve Board saying that they were to make far deeper cuts to the size of government, trim fat, eliminate waste, before they would ever cut important things like health care and higher education.

It just wasn't so. Those were their words but their actions were completely different. The result was that health care and higher education suffered massive cuts, 35% cuts to the provinces to provide health care and higher education. This was completely unnecessary when there were all kinds of wasteful areas in government spending that they could have cut, things that are completely unnecessary.

It was bad enough that they did that two or three years ago. Now they want to be rewarded for riding to the rescue with a new education program. They want to be rewarded after the provinces have taken the hits. It has been the provinces that have had protesters on the lawns of their legislatures saying that they want to see more funding for health care, more funding for higher education. There were never any protests here. The federal government got away with it basically scot-free.

Today those members want to come waltzing in to provincial jurisdiction and say that they will restore a fraction of the funding and they expect to be rewarded for it.

I want to point out in talking about the particulars of the millennium scholarship fund, just where we think this fund goes absolutely wrong. The first point is that the millennium scholarship fund will focus spending on about 6% of the students, leaving 94% of the students out there still looking for a way to get to university. We argue that if the government had taken that money and given it to the provinces, they could have used it to reduce the tuition costs and that would have helped all the students.

We think the millennium scholarship fund misses the point also in a very fundamental way. The issue is not so much that students in Canada are not well trained. We know they are. In fact we have got one of the highest participation rates in university in the industrialized world. The problem is not on the supply side. The problem is on the demand side.

I was talking a few minutes ago on a cable TV show with the hon. member for Red Deer. He pointed out that his children all attended university in Canada but they are all working in other countries in the world right now. Three children, one in Norway, one in Holland and one at Princeton.

Let me talk about his son who is at Princeton. Here is a young man who is a Rhodes scholar but could not find work as a professor in Canada. Why? Of course because we saw the federal government cut transfers to the provinces for things like higher education, making it almost impossible.

The government did talk about other areas as well, or other ways to aid higher education. Let us talk a little bit more about access to higher education, an important subject.

Government members have talked about ways that they would use the registered retirement savings plans to benefit people who want to go back to school. That is entirely laudable. We agree with expanding the use of RRSPs. RRSPs are a good idea. But the problem is people do not have the disposable income.

The problem again is not that the programs are not adequate. The fact is people do not have the income to participate in them. Which is why we are making the argument that we need to have lower taxes in this country, far lower taxes than we have today and far more than the government was offering in its recent budget. The registered education savings plan is another savings plan for education. But again Canadians just do not have the income to participate. We make the argument that if this government really wants to help education in this country, it has to address both sides of the issue.

On the one side we need to ensure that Canadians have adequate incomes so that they can put money aside to get their children into university. We need to ensure that transfers to the provinces continue. But on the other side we also need to know that there are jobs for those people. We need to know that when they graduate from university they can find a job so they can start to pay back those student loans. Unfortunately in Canada today where we have a youth unemployment rate of 16.2%, it is very difficult for many students to find jobs.

A study by Nesbitt Burns points out the huge difference in the tax rates between Canada and the United States. As a result so many of our students whom we have just trained at great expense are disappearing from this country and are going to the United States. And it does not end with the United States. It points out that people who are involved in computer sciences and it talks about all kinds of professionals, doctors, nurses, teachers and engineers, are disappearing across the border. It would be bad enough if it was only an economic problem, but I argue it is also a social problem. We are seeing families split up and that is extraordinarily unfortunate.

It was not very long ago that Liberals in this place would stand up and rip the Conservative government because our sovereignty was being taken over by the Americans. Today the Liberals are allowing our brightest and our best to go to the United States because they will not deal with the taxation problem in this country.

I want to talk for a moment about the debt side of the budget. First let me explain the situation for people. In Canada today we have a debt of $583 billion. When my friends across the way came to power a few years ago they began the process of adding debt upon debt upon debt. They built the debt up by about $90 billion while they were in government.

We now have this debt of $583 billion. We pay $45 billion a year in interest on it, one-third of every tax dollar. The average family pays $6,000 a year in federal taxes just to pay the interest on the debt.

We have been coast to coast over the past several months talking to Canadians about how to deal with the problem of the country's finances. Without exception no matter what part of the country we go to people say with one voice “Please begin the process of paying down the debt”.

Sadly in Canada today the government is taking the approach that the debt is not an issue. The government said in its budget that in fact it will only deal with the problem of the debt in terms of paying it down if it has some money left over in its contingency fund. There are no targets set for debt reduction, absolutely no targets. The finance committee suggested that the government at least have a very lukewarm target of between 60% and 50% of GDP. It completely ignored that.

All the government has is this sort of halfhearted promise that if it can get to it, it will start to pay down money from the contingency fund toward the debt. That is simply not acceptable. Canadians today know that when we live in a global economy we cannot count on just being secure in our country when we know that an Asian crisis as there just was or a Mexican peso crisis can have a profound impact on us especially when our economy is teetering atop a $583 billion debt, one-quarter of which is owed to foreigners.

We must begin to deal with the problem of the debt. Do not take my word for it. Listen to what some of the commentators have been saying about the issue of the debt in the wake of yesterday's budget.

Here is what the Canadian Taxpayers Federation is saying. Everyone well knows that is a very credible institution. My friend from Calgary Southeast used to head the Canadian Taxpayers Federation. It is saying “The federal government has also chosen to ignore the national debt and instead grow its way out of our debt woes. Debt servicing charges are actually going to increase over the next three years from $41.5 billion to $45 billion”.

Andrew Pyle, chief strategist of ABN Amro Bank, is calling the government's debt reduction strategy lazy.

Finally listen to this quote “I think the market could be less than enthusiastic about a plan that puts less emphasis on paying down debt, particularly during a period of robust growth and low interest rates”, said Aron Gampel, deputy chief economist with Scotia Capital Markets.

There are real problems with the government's approach to dealing with the debt. That is one of the chief reasons why we saw the dollar fall like a stone by half a cent right after the budget came out. That is a tremendous shock for people who were expecting something a bit better from the government.

We also point out that the debt has a real impact on Canadians' lives, when the debt is as high as it is and Canadian families are paying $6,000 a year in taxes just to pay the interest on the debt. It hurts many innocent people. I point out again that it is Canadians who have balanced this budget and they are the ones who deserve to see some tax relief.

I want to address the final big aspect of the budget. That is of course taxes. I want to spend a bit more time on this issue than on some of the other issues.

Since the government has come to power we have seen the government introduce new tax increases 37 times. We now have a government that is going to be taking in approximately $48 billion more in revenues by the end of its mandate than when it came to power.

We have a situation where we are seeing Canadians' disposable income fall like a stone, $3,000 for the average family since the government came to power. This is added on top of 10 years of misery under the Conservative government where we saw 71 tax increases. There have been 108 tax increases in the last generation under Liberal and Tory governments. It even goes higher than that if we go back into the Trudeau era. It is an extraordinarily poor record on behalf of both Conservative and Liberal governments over the last many years.

Government members again are arguing that they are taking the balanced approach. They are saying “We are taking a balanced approach to spending” by driving spending up $11 billion. That is the biggest spending increase in a generation. They are taking a balanced approach in not dealing at all with the problem of the debt. That is their argument. They are saying “We do not have to deal with the debt”. That is the balanced approach.

Now they are saying that they are going to introduce $7 billion in tax relief over three years, but that will not come anywhere near offsetting the huge increase in CPP premiums which took effect January 1. It was a huge increase. We saw the largest tax hike in Canadian history come in on January 1 and they have the gall to suggest that they are somehow reducing taxes.

That is not the end of it. We also know—and my friends will not deny this—that built in to the tax system is the phenomenon of bracket creep, which allows the government every year to take another $900 million out of taxpayers' pockets. The taxation system is no longer indexed to inflation. Cost of living increases will push people into new tax brackets and the result is that they will pay new taxes. A lot of people do not even realize it is happening. The fact is, that alone will claw back about 50 cents of every dollar the government has offered in tax relief.

My point is simply that the government cannot argue that there is real tax relief in this budget. In fact the revenue which the government is collecting is going up and up on an ever climbing track. I would point out to my friends opposite that since the government took power in 1993, the year it promised to eliminate the GST, we are now seeing projections for GST revenue growth to be 46% higher than in 1993. That is extraordinary.

Due to bracket creep and increases in income tax, by redefining income in various ways, Canada now has some of the highest personal income taxes in the world. I pointed out earlier that we have personal income taxes that are 56% higher than the G-7 average, higher than those of our trading partners, higher than in Japan, the United States, the U.K., France, Italy and all the other countries. We are 25% higher than the OECD average.

We have seen incomes in Canada drop so dramatically that more and more families are having to have both parents in the workforce, one just to pay the taxes.

Our argument is that it is time for a change to the approach the government has brought to us. We do not think its approach is balanced at all. We think it punishes the very people who balanced the budget. We think it is time to give Canadians, if I dare say it, a fresh start. We think it is time to secure their future.

I am not going to ask my friends opposite to take my word for it. I want to quote from some letters which the Reform Party has received. This is a letter from someone who lives in Nova Scotia:

Dear Mr. Manning,

Recently I read about the help you gave Kim Hicks in Sackville, N.B. It is nice to see that you are listening and willing to help people in her situation. There are many people that need your help to influence the government to lower the tax burden on ordinary Canadians. Please find enclosed my documentation which says a great deal about how government taxation policy is hurting me and many others. If this information is useful to you, please use it.

He goes on to list his payroll stubs. The letter continues:

—note that my taxable earnings for 1996 and 1997 are nearly the same; a difference of $33.60 between the two years. The big difference is that in 1997 I paid $647.07 more taxes than in 1996 on gross income that is nearly the same.

Our point is simply this. Ordinary Canadians are paying an extraordinarily high price for the policies of the government. We think it is time to devote an equal balance between debt reduction and tax relief to help Canadians secure their futures and to give them the real hope that only the Reform Party can truly give them.

[The Budget, February 25th, 1998]

Absolutely, Mr. Speaker. I withdraw.

The 1997 budget states “the contingency reserve is not a source of funding for new policy initiatives”. This just does not square with the actions of the government.

In fact, in this year's budget the government spent the entire contingency fund on new spending and the whole debt repayment program is premised on the contingency fund going to debt.

How does he square his actions of yesterday with his words of today?

[The Budget, February 25th, 1998]

Mr. Speaker, now we are just waiting for a Paul that tells the truth.

[The Budget, February 25th, 1998]

Mr. Speaker, I am duty bound to point out that the Conservatives supported the huge hike in CPP premiums in Bill C-2.

In the 1995, 1996 and 1997 budgets the finance minister claimed that the $3 billion contingency fund would not be used for new spending. That is what he said. He said “The contingency reserve is not a source of funding for new policy initiatives”.

In yesterday's budget the minister reneged on that promise and blew the entire contingency fund on new spending. Why should we believe the minister's word today when he already—

[The Debt, February 23rd, 1998]

Mr. Speaker, the government's record is very clear. It has added $100 billion to the debt and the only debt it has paid down was paid down with borrowed money from the Canada pension plan. This is not a very good bargain for Canadians.

The fact is the $6,000 in taxes that Canadians pay every year in interest could be used for things like paying household bills, preparing for their own retirement or paying for their children's education and sending them to university, something the government claims it is very concerned about.

Given the shameful fact that Canadians pay $6,000 a year in taxes just for interest on the debt, why again is the debt not the number one issue in tomorrow's budget?