Monte Solberg

[Supply, February 5th, 1998]

Mr. Speaker, I want to say to my hon. friend from St. Albert that I think the Sergeant-at-Arms does carry a sword and I think that is the way we could probably keep some order in this place if we really had to.

It is a pleasure to rise and address this motion. I will read the motion again just for people who are watching this debate:

That this House condemns the government for imperilling the economic and social security of Canadians with their reckless commitment to dramatically increase spending, at a time when the average family's share of the federal debt is approaching $80,000 and Canada has the highest personal income taxes in the G-7.

I think we are talking about an extraordinarily important issue here today. Unfortunately I do not have time to explore that issue as deeply as I would like, but I do want to focus on one aspect of that, what we in the Reform Party refer to as social benefits of tax relief. In order to do that I must talk a little about how government overspending has really come to hurt Canadians.

I want to talk first about the effect of overspending on social programs. Earlier the leader of the New Democratic Party spoke and I know the NDP is extraordinarily concerned about social programs. I can tell the leader of the NDP that the Reform Party is as well. We point out to our friends in the NDP and to the Liberals that since we have run up a debt of $600 billion and now have interest payments in this country of around $47 billion a year, we have had to find cuts elsewhere. The government in its wisdom cut social programs. Who does that hurt the most? It hurts low income Canadians. It hurts the most vulnerable.

I remember sitting on the finance committee and having Dr. Judith Kazimirski appear before the committee. Dr. Kazimirski was the head of the Canadian Medical Association. She spoke with a tremendous amount of passion about how long people with breast cancer or prostate cancer had to wait, on waiting lists, in this country because we cannot properly fund health care today. That is a disgrace. That is what has happened because we have interest payments of $47 billion a year, because successive Liberal, Tory, Liberal, Tory governments kept spending more than they brought in. The result was a debt of $600 billion. It has been the most vulnerable people in society who have paid the biggest price for this. We see that in the erosion of our social programs, but it does not end there.

When we look at the taxation system in this country, we see another perfect example of how overspending and mounting debt have hurt the most vulnerable people in society. If we look at working class Canadians and middle class Canadians, they have paid a tremendous price for overspending. I point to the tax load people have to carry in this country. We have the highest personal income taxes in the G-7, 56% higher than the G-7 average, than all the other people we trade with, the U.K., the United States, Japan. That is staggering.

My friend from the Conservatives was talking a minute ago about people going to the United States. According to the government's industry department study, people in the United States are 25% wealthier than Canadians. Just a decade ago we had Canadians who were on par with the Americans in per capita income. We tied second and third in the world. Now we are twelfth. The economic powerhouse Iceland is ahead of us because the Liberal and Tory governments did not keep their eye on the ball. When the Liberals were reducing the deficit they did it on the backs of taxpayers, so their per capita income went down and down. That meant a tremendous strain on families.

Not surprisingly, in 1991 Decima poll came out and said that 74% of working Canadians said that if they had their druthers, if they could afford it, they would have one parent at home. But they cannot afford it. Since 1990 personal incomes, real disposal incomes, dropped by $3,000 for the average family. That is unbelievable. Now Canadians are under tremendous strain because governments have overspent and the debt has mounted and mounted. Now we have interest payments of $47 billion a year. That would be bad enough, but we have Liberals and now the Conservatives talking about spending even more money.

I guess a debt of $600 billion is not enough. I guess taxes which are among the highest in the world are not enough for these people. Liberals want to spend 50% of the surpluses on new programs. Some people say the surpluses might hit $30 billion. That is $15 billion a year in new spending? We have a debt of $600 billion which leaves us extraordinarily vulnerable to shocks from around the world. But these people are so reckless that they want to spend more.

The Conservatives say they will spend a third of the surplus, $10 billion a year, in new spending advocated by a Conservative government. That is scary to me. This is the time to be prudent on the one hand and secure our present situation by starting to pay down debt. We heard that from Canadians when we went around the country this fall. They said pay down debt, it is our first priority, please pay it down, we have had enough of this profligacy of $600 billion debts, we need to pay it down.

On the other hand and close behind Canadians were saying “Let us start to give people some hope for the future. Let us give them some tax relief. Let us leave them with more money in their pockets so they can drive their own futures, so they can live their lives”.

We have all received letters from people who say “I have had it”. I received a letter from a lady who lives in Quesnel, B.C. Her name is Margaret Snell. It is one of the most heart-wrenching letters I have ever read. Her son came to her and said “Mom, I cannot be in baseball, soccer or hockey this year because we cannot afford it, right?” She was ready to complain about the CPP increases. They simply do not have the money. For them it was not an option of taking it out of disposable income. Like many Canadians, they do not have any disposable income. It was either going to come out of the mortgage or out of the groceries.

My point is simply that Canadians cannot afford a government which continues to spend. We have to have debt reduction. We have to have tax relief.

My party has laid down some solutions. We have set some targets for reducing the debt. Right now the debt is $600 billion. We would reduce it over 20 years to about $343 billion. It would go from 70% of the economy down to about 20%. It would save $20 billion a year in interest charges on the debt. That $20 billion could be returned to social programs. It could be used for tax relief. It is an extraordinarily prudent measure. It is something which would secure the future of young people who are having to bear an inordinate burden because of the profligacy of previous governments.

The other half of that surplus would be devoted to tax relief. We list nine measures in our document. The one which comes to mind right away is that which concerns the 3% and 5% Tory surtaxes. The Conservatives introduced them specifically as a measure to reduce the deficit. The deficit is now gone. The Liberals have a moral obligation to get rid of the 3% and 5% surtaxes. They were implemented specifically to pay down the deficit. It is gone. Let us remove those surtaxes and help all Canadians.

My friends across the way talk so often about the need to be more compassionate. I agree with that. Let us be more compassionate. If we implemented the tax relief measures which the Reform Party is talking about, we would lift 1.3 million low income Canadians off the tax rolls. The single mother who makes $15,000 and pays $1,300 in income tax today would pay nothing. The family of four making $32,000 which is paying $3,000 in income taxes would pay nothing. It is time to help Canadians.

We have laid down the challenge to my friends across the way. This is an hour of decision for them. There is a budget coming up. It will be the first balanced budget in 27 years. It is time for them to set a new course for the country. We do not want to see them go back into that spending mode which got us into this problem in the first place. Canadians do not want it. They have made that extraordinarily clear.

I lay down the challenge to my friends. Please consider seriously what we are suggesting to you today. If you do, I can guarantee that you will have the support of not only the Reform Party but of Canadians from coast to coast.

[Supply, February 5th, 1998]

Mr. Speaker, I thank the hon. member, the new finance critic, for participating in the debate today. I congratulate him on his post.

I want to set the record straight with respect to what my friend said vis-à-vis Reform Party policy on debt. As my friend knows, last fall the party engaged in a round of consultations with Canadians across the country. We specifically went out to hear what Canadians had to say. Canadians said very clearly that they saw the debt as the number one issue across the country. My friend may mock this but the polls in fact confirm that.

No one will ever accuse the Conservative Party of listening too closely to Canadians. We know that. I think people who remember Brian Mulroney will attest to that.

I want to ask my friend a question. We heard a salute to Brian Mulroney from my hon. friend. He lauded the Conservative record, the record where they increased taxes 71 times, the record where they added $300 billion to the debt, the record where they led Canada into the worst recession outside the great depression that the country has ever seen, and the record where we saw the trust in politicians eroded to new lows because of that prime minister.

Because he seems to think that the previous record was so good, is hon. friend suggesting that a new Conservative government would continue with the self same policies that gave us those record debts, record taxes and record deficits that we had under Mulroney?

[Supply, February 5th, 1998]

Mr. Speaker, I want to thank the hon. leader of the New Democratic Party for participating in the debate today. However, I want to challenge her thesis that if we spend more somehow the debt will decrease.

I would like to point out to the hon. member that in Saskatchewan the New Democratic Party took quite a different view. In fact, it dramatically cut spending for such things as hospitals and it actually ended up balancing the budget.

In practice the NDP actually does something quite different from what it says. I wanted to point that out.

I also want to point out that for 30 years we have been spending more than we have been bringing in. The result has not been that we have eliminated the deficit. In fact, it is quite the contrary. We have built up a debt of $600 billion. The only way the government could finally wrestle it down was to cut spending. Granted it did it in the wrong areas, but that is how it eventually did it.

If we could create jobs by spending more we would all have three jobs. I do not think that a $600 billion debt and 8.6% unemployment point to a formula for creating jobs.

I point out that when the debt rises to $600 billion it is low income Canadians who pay the most. We have a situation now where the average family in this country pays $6,000 a year in taxes as its share of the interest on the debt. The interest on the debt has eaten the heart out of social programs. There have been dramatic cuts made to health care and higher education to the tune of 35%.

I do not see how the hon. member can say that somehow if we spend more it will be good for Canadians.

Finally, I want to point out that because we have spent so much we cannot afford the tax relief which low income Canadians need. A single mother making $15,000 a year still pays $1,300 in taxes. I do not think the hon. member thinks that is socially just. I ask the hon. member, if that is not socially just, why does she not support a plan which would reduce taxes for people like that single mother and leave that money in her pocket so she can look after her child and guide her life the way she chooses?

[Surtax, February 4th, 1998]

Mr. Speaker, I am sure the finance minister will want to explain to Canadians their position on the GST, whatever it is this week. Income tax was a temporary measure 80 years ago.

Now the finance minister is trying to weasel out of the fact that their government is prepared to continue to keep the 3% and 5% temporary taxes introduced by the Tories.

We want to know why the government is not prepared to loosen the burden for Canadians who are suffering under this huge $3 billion a year rip-off.

[Surtax, February 4th, 1998]

Mr. Speaker, in the 1986 federal budget the then finance minister Michael Wilson slapped a 3% and 5% surtax on every Canadian taxpayer, calling it a temporary deficit reduction measure.

Does today's finance minister agree with this 3% and 5% deficit reduction surtax? Should it be eliminated immediately now that the books are in balance or is he prepared to continue with what amounts to a $3 billion rip-off of Canadian taxpayers?

[The Economy, February 3rd, 1998]

Mr. Speaker, the fact is that Canada's per capita income has fallen from third in the world to twelfth in the world in the last decade. It has fallen behind such economic powerhouses as Iceland, which is built on the side of a volcano.

It is not good. It is time for the government over there to wake up. Canadians are feeling tremendous pain and the government is somehow consoling itself with the fact that we have a balanced budget on the backs of Canadians.

My question is again for the finance minister. When will they start to reduce debt and reduce taxes in real terms? When will they start to help Canadians?

[The Economy, February 3rd, 1998]

Mr. Speaker, the industry department has confirmed what Canadians have long suspected. They are worse off than when the Liberals came to power. We know that incomes are down, taxes are up. We know that productivity is down. Debt is up. We are falling behind in our standard of living relative to other countries around the world.

My question is for the finance minister. When will the government admit that its policy of spending more, of high debt and of high taxes is causing Canadians tremendous difficulty? When will it set some real targets for debt and tax relief?

[Banking, February 2nd, 1998]

Mr. Speaker, we are certainly glad to hear that. We were just a little concerned that we would have one of the bank presidents up here introducing the budget in three weeks.

The fact is other banks are not going to sit around and wait while the Royal Bank and the Bank of Montreal eat their lunch for them. This is just the beginning and consumers do not seem to have a voice in this whole process.

What plans does the minister have to deal with any more bank mergers, or should we be directing that question to the presidents of the other banks?

[Banking, February 2nd, 1998]

Mr. Speaker, Canadians are very concerned about high service fees at the banks, about the lack of credit for small business and about the virtual monopoly hold the big six banks have on our banking system. This is why it is particularly alarming to see the Royal Bank and the Bank of Montreal on television making banking policy while the finance minister is at home brushing his teeth.

Who is really setting policy here? Is it the Royal Bank and the Bank of Montreal or is it the government? Who is setting policy on banking?

[Income Tax Amendments Act, 1997, February 2nd, 1998]

Yes, after tax. If they want to put the kids in ballet or in hockey they have to do it with 52 cent dollars. This makes it extraordinarily difficult. Sometimes people have to sacrifice these things and often they do. Since 1990 disposable incomes in Canada have fallen by $3,000 for the average family of four. This makes it extraordinarily hard for people to live their lives as they want to do.

I point to another example of where I feel the government has taken over too much control of the lives of Canadians. The most timely one is the Canada pension plan. For the last 30 years the government decided it would look after pensions for Canadians. Over the last 30 years governments knew the Canada pension plan was going off the rails. In fact when it was set up it was doomed to fail. For 30 years the Conservative and Liberal governments did nothing. In the meantime a liability of almost $600 billion was run up.

All this is coming to light and the government's only solution is to keep control of a plan which it has absolutely botched. It is now asking all working Canadians to pay another $700 a year as a reward for the job they have done for the government to provide them with the same pensions they were getting before, $8,800 a year. Actually it is a little less than they were getting before.

It is time for the government to begin giving up some control. Let us let workers control the money they now have to give to government. Some young entrepreneur who is just entering the workforce today will have to pay $3,200 a year for the next 45 or 47 years, until they are 65 years old, to get a pension of $8,800. That is so ridiculous it hardly deserves comment. Unfortunately that is what is happening. The government refuses to consider any of the options.

Around the world countries such as Australia, the U.K. and the United States are moving toward the idea of a personalized RRSP type system. They are giving workers control over their own lives. People are building up huge retirement accounts for themselves and for their families. However our power hungry government steadfastly refuses to do so. I do not know what else to attribute it to. The government refuses to allow Canadians to retain control over their own income. I do not understand why. I do not understand why the government never considered looking at some of the other options when it was investigating all this a couple of years ago.

Government members went across the country to talk with Canadians about what government should do about the $600 billion liability. They only met with 270 Canadians who were told “Your only option is to fix the plan as it now is”. That was the only option offered. That is ridiculous.

If there is to be a consultative process in a modern democracy, government should be willing to consider all options. Sadly that was not done and Canadians are now saddled with an unbelievably unfair tax hike that will hurt young Canadians more than anybody. It will drive a wedge between generations in years to come.

What is the solution to the problem of government grabbing more and more control and getting bigger and bigger? The solution is obvious. We should simply return to the tradition of limited government which we had for close to the first 100 years of Confederation. Until 1965 the level of Canada's taxes compared to the economy was only 27.7%. The G-7 average was 27.6%. We were almost exactly on par. The 1996 statistics indicate that Canada's taxes as a percentage of the size of the economy represent 43%. The G-7 average is 36%.

Not only have we grown tremendously relative to how much we taxed people in 1965. We have also grown tremendously compared to our trading partners in the G-7. We are about 25% higher than them in terms of the total economy. Our income taxes are 56% higher than those of our G-7 trading partners.

We should return to the tradition we had of limited government, a government that lives within its means, does a few things well that only the federal government can do and should do, and a government that allows the provinces, municipalities, individuals, families and charities to do all the rest. Does it not make sense for the federal government to focus on the things only it can do?

It would have benefits well beyond saving a few dollars. Maybe we would have a government that was actually effective at delivering some of the essential services which only the federal government can deliver.

Imagine if the federal government took all the bureaucrats who occupy the buildings in downtown Ottawa and focused them on fixing the criminal justice system. We might even have a criminal justice system in which Canadians have confidence.

Imagine if we focused some of the savings on equipping our Canadian military? The Reform Party raised the issue, before the House rose for the Christmas recess, of a soldier in Bosnia who suffered head injuries when a vehicle rolled over because we could not supply him with a helmet. I cannot believe it.

The federal government should focus on fixing the Canadian military and providing the equipment that is needed. Our soldiers did an outstanding job in helping Quebeckers and Ontarians during the recent ice storm. Let us give them the equipment to do the job when they go overseas to Bosnia or Haiti or wherever they are sent. That is the sort of thing the federal government should focus on. If it did those things instead of getting into all these other things it would have the money to do so.

My friend across the way is saying we need the money. Of course we need money. However, instead of spending $24 million on a flag program at the same time that hospital beds were being cut, maybe the government should have taken a look at the priorities of Canadians.

One solution in giving Canadians more control over their lives is simply to return to our tradition of limited government, a government which lives within its means, a government which does not spent more than it takes in.

Our party would invoke balanced budget legislation to ensure that legislators keep their promises and live within their means so that we do not saddle future generations with huge amounts of debt either through CPP or through the debt the federal government has already built up.

My second point is that it is time to support the family budget by controlling the appetite of the federal budget. There are three steps in doing so. The first step is that we have to freeze spending at its current levels and reallocate spending within those levels, within the hundred billion dollar budget.

If we did that, what would happen very quickly is that money that goes toward flag programs would get put into health care. Money that goes to building golf courses, which is something the government actually does, believe it or not, would go into things like research and development. If spending were reallocated into things Canadians really care about, people would be forever thankful to the federal government for finally doing the things they care about.

If the government focused on fixing the criminal justice system and doing those sorts of things instead of getting into fuzzy, ill defined projects, Canadians would be quite grateful.

The second step is to secure our future by paying down debt. My friends across the way proposed in the election campaign last year, in the throne speech and recently in the prebudget report of the finance committee that they would like to see 50% of any surpluses spent on new spending. That shocked me. I could not believe it when I heard it.

We are just emerging from a deficit we have had for 27 years. We have a debt of $600 billion. The average family pays $6,000 a year in tax just to pay their share of interest on the debt. It is unbelievable. My friends across the way want to start spending again. I cannot believe how imprudent, how foolhardy that approach is. It is absolutely ridiculous.

We need a plan to pay down the debt. The government does not have a plan. The Reform Party has come up with a plan. If we took half the surpluses we will soon be running and devoted them toward paying down debt, we would very quickly be in a situation where we would have reduced our debt to GDP ratio from over 70% down now to about 20% by 2016.

In the process of doing so, when we get down to about 45% of GDP mark we would probably start to recapture our triple

a

credit rating and interest costs would start going down. When we get down to about 20% of GDP, or a real cut of around $240 billion in overall debt, there would be a savings every year of about $20 billion in interest payments Canadians are currently making. That $20 billion could go back into hospitals, research and development, or possibly be used to deal with the huge unfunded liability in the Canada pension plan. A lot could be done with that $20 billion.

I must point out to my friends across the way how imprudent they are. We have a debt of $600 billion. We have a global marketplace and a global environment. We have things like an Asian crisis that help spike interest rates or cause all kinds of volatility. Unfortunately the government in its wisdom does not think it is a problem. It would rather take any surpluses and devote them to new spending.

My final point is that we must create an environment for prosperity and opportunity. We should not be driving up taxes evermore. Our income tax is 56% higher than the G-7 average, according to a report from the government's industry department. We are 25% less wealthy than our American colleagues across the boarder.

The Reform Party would take the other half of the surplus and devote it to lowering taxes. That would do more for the average Canadian then all the fuzzy headed social programs the government is embarking on, the 31 new programs it announced in the throne speech.

My other point is that my friends across the way have made a history in this country with the claim that they are more compassionate. I will address that head on. I wonder how compassionate it is to allow a family of four with an income of $32,000 to pay $3,000 in federal income tax. How compassionate is it to allow a single mother with one child, a waitress who makes $15,000, to pay over $1,300 in income tax?

Canada is the stingiest of all G-7 trading partners in how we treat low income Canadians with respect to basic exemptions. We are the stingiest. That is unbelievable to me. We always hear about Canada's tolerance and compassion. Where is the tolerance and compassion in that? Let us elevate all those people. Let us lift them off the tax rolls by bringing in tax relief that will allow those people to not pay any federal income tax.

I have raised the following issue in the House before and it deserves mention again. We have talked about people like Alice Strelaf, an older lady who lives in Abbotsford. She wrote to us because she was concerned about her personal situation. She had an income of about $18,000. She had to mortgage her home in order to pay income tax. She had to turn down the heat in her house so she could somehow get by. She is paying thousands of dollars in taxes every year. That is ridiculous.

There is a lot the government can do to help people. It can break that ridiculous promise it made in the election campaign and devote more of that money to paying down the debt on one hand and to lowering taxes on the other.

Bill C-28 is insubstantial stuff. It does not address the real issues that Canadians are concerned about. From an unemployment rate of 8.6% to staggering taxes to record high debt, those things need to be addressed. We need to address what would happen to the strength of the dollar if we suddenly started to pay down debt. It would go up dramatically. We need to deal with those issues and not the insubstantial housekeeping stuff the government seems to think is so important.