moved:
That this House condemn the government for making their 50/50 election promise on any future surpluses without adequate public debate as to the optimal size of government, taxes, and debt, thus threatening to repeat Canada's 27 year old history of irresponsible spending, creating high debt, financed by high taxes, causing high unemployment.
Mr. Speaker, just so people get the point, let me re-read the motion. The motion is:
That this House condemn the government for making their 50/50 election promise on any future surpluses without adequate public debate as to the optimal size of government, taxes, and debt, thus threatening to repeat Canada's 27 year old history of irresponsible spending, creating high debt, financed by high taxes, causing high unemployment.
As somebody very wise once said—who is very well known to you, Mr. Speaker—this is the public's money. That is the point we are trying to make. I want to underline it by pointing out that the government has not consulted with Canadians on this whole issue, probably the most important economic decision that it will make during its mandate.
What do we know so far? This flows from the government's election promise and from its throne speech of last week.
We know that the government reaffirmed its commitment to spend 50 percent of any surpluses, when they occur, on new spending. We know that. It was in part of the election package and it was also in the throne speech.
Again, I raise the question of whose money is this?
Second, we know that there was absolutely no acknowledgement in the throne speech that Canada has a debt of $600 billion. That is a staggering amount of money.
There was absolutely no acknowledgement in the throne speech that we have the highest taxes of all of our trading partners, the highest personal income taxes in the G-7 by a tremendous amount.
There was no acknowledgement in the throne speech that in the past the government has been routinely chided, not only by watchdogs like the Reform Party and the Canadian Taxpayers Federation, but even by the auditor general on many occasions for irresponsible spending. There was no acknowledgement of that in the throne speech. I will say more about that in a moment.
No criteria has been laid down by the government for determining how any of this surplus should be spent, whether on new programs or on the side of taxes and debt reduction. Of course there was one measly lone reference in the throne speech to reducing taxes and paying down debt. Absolutely no criteria have been established on how those decisions are going to be made. The government has not talked about what the optimal size of debt, taxes and the level of government would be. There has been no definition anywhere about what constitutes, for instance, a tax break. What is tax relief as opposed to a social benefit that is delivered through the taxation system? That is a very important point. It would not be nearly as important if people knew that the government could be counted on to be up front and give them what most people believe would be a tax break. However, it appears the government may be intent on playing some games with what constitutes a tax break.
Also, there is no indication whether the spending announced in the throne speech will be applied toward the government's 50 percent spending promise. It is not mentioned anywhere. Therefore, we really cannot hold the government accountable to its promise unless we know that for a fact. I think there are many reasons to be concerned about what we know so far.
We also know, based on a recent poll published in the weekend Financial Post , that Canadians want tax relief. For instance, the poll states that 28 percent of Canadians would like to see a personal income tax cut, 3 percent want to see a business tax cut, and another 20 percent want to see both personal income taxes and corporate taxes reduced. That is a plurality of people who want to see tax relief, at least 51 percent. The people who want to see personal income tax cuts compared to the people who want to see taxes rise are outnumbered by a margin of 28:1. Those are the things that we know based on what has gone on before.
Anyone who is just a little bit logical has to conclude that what the government is proposing, in the face of the poll that I have just mentioned and after 27 years of fiscal irresponsibility, is the return to chequebook politics. We are returning to the 1970s and the sorts of supposed solutions that the government at that time brought forward. Rather obviously, those solutions failed miserably at that time.
The question raised in many people's minds is why are we repeating the same mistakes that we made in the past? As somebody once pointed out, if one does not pay careful attention to history one is bound to repeat all of the mistakes. I seems that is what the government is doing.
I have talked a little bit about some of the things that the government did not acknowledge. I talked about the debt, taxes and irresponsible spending. I want to say a little bit more about that in a bit more detail.
As members know, the Reform Party has done a tremendous amount of work on raising these issues not only with the government but also with the public. We think it is important that the public be invited to consult on these sorts of issues. As a responsible party we do our part to ensure, to the degree that we can, that we provide some background information so that when people give us feedback on these issues it is informed and that people really understand all the things that have happened in the past.
I want to make that point by talking about some of the things that are in our document, Beyond a Balanced Budget. We are going to be consulting with Canadians over the next three months to gather their input. By the way, if people want a copy of this—and I say to my hon. friends that they can certainly come and get one from me—it is on the Internet at www.reform.ca/babb so that if people want to pull that down they can.
I want to address specifically the issue of debt. In the throne speech the government made one reference to the whole problem of debt. It seems blind to the fact that the debt in this country is $600 billion. It consumes about 74 percent of the gross domestic product in the country which is almost without parallel among any of our trading partners. It is an absolutely astronomical figure.
I often point out to high school students when I talk to them that if they stacked up one hundred dollar bills about this high that would be a million dollars and if they stacked up our debt in one hundred dollar bills it would be about 1,200 kilometres high. It is a tremendous amount of money.
But that in itself really is not the problem. The problem with a debt that big is it has to be serviced. Interest payments on the debt have grown exponentially. They now consume about $47 billion a year. A third of every tax dollar that Canadians send to the treasury each year goes toward paying the interest on the debt.
We point out in our paper, Beyond a Balanced Budget, that since 1993 debt service charges have increased by $7.5 billion a year. That is only since the government came to power. At the same time health transfers have fallen by about $7 billion a year.
It has had a profound impact on the ability of the government to fund the programs that are the most important to Canadians. That is why the issue of the debt deserves more than one lonely mention in the government's throne speech. We condemn the government for not paying more attention to this important issue.
Perhaps this will help bring the issue home for people who have trouble dealing with an astronomical number like $600 billion or even $47 billion in interest. The annual interest bill is enough to run the governments of Newfoundland, Prince Edward Island, Nova Scotia, New Brunswick, Manitoba, Saskatchewan and Alberta, with enough left over to repay the entire public debts of Newfoundland, New Brunswick and Prince Edward Island. It is a tremendous amount of money.
The annual interest bill is enough to pay the annual federal transfers to the provinces for health, education, welfare, equalization and old age security. It is by far the single biggest payment the government makes each and every year. It is money that could be used for good things but because of the profligacy of previous governments, the government is paying out this tremendous amount of money, in many cases to foreign lenders, and this imperils the future of the country. The country is that much more vulnerable when the debt is $600 billion.
We argue in our paper that the government must pay attention to the debt. If government members talked to their constituents they would discover that people are very concerned about this massive debt. They are probably disappointed that the government has not paid more attention to it in the throne speech, which allegedly is the vision that the government lays out for the next few years.
It is not just the issue of the debt that we are concerned about. We are concerned about the government's poor commitment to the issue of reducing taxes. There is one single mention in the throne speech. A moment ago I spoke about our personal income tax burden. I do not know if members realize that compared to our G-7 trading partners, the personal income tax burden is 52 percent higher as a per cent of the total economy than in the U.S., Japan, U.K, France and Italy.
Obviously when you have a tax on production, which is what income tax is, that is that much higher than our trading partners, it will have a profound impact on our ability to compete. In the Financial Post poll on the weekend business leaders such as Peggy Whip from the Royal Oak Mines stated that the reason the company moved its operation to the United States was it could not attract people to Canada because the personal income tax burden is so high they refused to come.
This is not an academic exercise. It has a profound impact on jobs. People in the business community have said so. We also have the situation, and many members across the way are familiar with this, were we lose some of our brightest and best doctors to the United States. We produce computer programmers at the University of Western Ontario and they are lured away to other countries, primarily the U.S., because of its lower income tax burden. This is after we have paid for their education.
This is not an academic debate. The tax measures that the government has put in place over the period of many years has driven many Canadians out of the country. It has driven many Canadians out of business. The government has presided over record bankruptcies. 1995 had record bankruptcies. That was not good enough. Bankruptcies went up by another 20 percent in 1996 under this government.
I would argue that in some part it is due to the fact that we have tremendously high taxes in this country. It makes it very difficult for businesses to compete. It is not only personal income tax. We have all kinds of direct taxes, payroll taxes for instance.
At a time when we have a surplus in the EI account of about $13 billion, we have this government refusing to give Canadians tax relief. These payroll taxes have a very serious effect on the ability of businesses to compete because they are not sensitive to whether or not a business is making a profit.
If businesses are in a loss situation, they have to continue to make those payments on EI premiums, and at the same time the government is talking about raising CPP premiums by 73 percent. We already have legislation introduced into the House that will make that a reality starting on January 1. They will start to go up more and more and more. Payroll taxes will claim more and more and more victims.
It is a horribly serious situation, but what did it merit in the throne speech? But one mention, one mention, as though all of these problems do not exist in the country. It is as though the government has stuck its head in the sand.
Hon. members across the way know this and in a private moment I think would admit that Canadians out there really do want tax relief. I do not hear a hue and cry across the country for more spending. When I go to my riding, people do not say “Come on, let's spend more”.
I come from Alberta. In that province when people had a chance to have input into what they wanted to do with any surpluses, they said they wanted to pay down the debt. We have made tremendous progress in Alberta toward paying down the debt, but I think the key point is that the Government of Alberta recognizes that that money belongs to the Alberta taxpayer. Instead of arrogantly deciding that the government knew best how to spend that money, it consulted with the people to whom the money belonged. I think that is a message that this government should learn.
I want to touch on the issue of irresponsible spending. Over the years, I do not know in how many auditor general's reports, how many reports from interested academics, how many reports from people who were watch dogs of the government on issues, how many times the whole issue of irresponsible spending has been brought up to the government. Why is it that things never seem to improve?
The auditor general pointed out that the lack of inventory control at national defence cost the government $1.7 billion. Why do they repeatedly point out the terrible waste and even corruption that goes on in Indian affairs and nothing ever seems to change?
We point out some of the ridiculous grants that are given not only to special interest groups, arts funding and things that are beyond the pale, but also to business groups. How many times do we have to have the chamber of commerce come before the finance committee and say “We do not want grants for business any more”. Here is the voice of business saying “We do not want grants for business”, but what does the government do? It ignores them and says “We are going to continue to take money from profitable businesses in the form of taxes and give it to unprofitable businesses so they can then turn around and compete against those self-same profitable businesses”. That is ridiculous. It makes no sense.
We see this government, for reasons that I will never comprehend, continuing to do this. All the while it is undermining businesses that are trying to create jobs in this country. If there is one thing on which I think all parties agree, it is that we want to have more jobs in this country. So let us recognize what the government is doing here. It is putting short term political considerations ahead of what is right for the country and that should not be tolerated.
I would argue that the government has done a very poor job in terms of getting its spending priorities in place. Let me touch on that a little bit more.
When we talk to people around the country, and I am talking of all members in the House, I think that there is probably a consensus that the federal government should direct its spending toward issues that are important to Canadians, issues like health care.
We know that the government's record is on health care. The government has cut spending by $6.8 billion, reduced the transfers by 35 percent. But at the same time—and this speaks to its priorities—the government has cut departmental spending marginally. That is despite what the finance minister himself said on a number of occasions.
In fact we have a quote in our document “Beyond a Balanced Budget” from a speech the finance minister gave to a Federal Reserve board meeting in Kansas City, United States in 1995. He said “We will cut our own departmental spending a lot more than we will cut the transfers to the provinces”. Sadly that has not been borne out in what the government has done. We argue it is time for the government to match its own words with its deeds. We argue very vigorously that that simply has not happened, and government members are not paying attention to the priorities of Canadians.
The Reform Party wants to change that. We want to gather input from Canadians and that is what we intend on doing. We have sent out our “Beyond a Balanced Budget” document to hundreds of people around the country. We have posted it on the Internet. We are going to be talking to thousands and thousands of people over the next several months to gather their input. We are going to do the government's job for the government members because for reasons that I do not understand they think they have all the answers.
We believe this money belongs to the Canadian taxpayers and we are going to acknowledge that by going and talking to them. We argue that the real answer to creating jobs is not in subsidies and is not even necessarily training. We argue that it is demand. We believe that we need to start to lower taxes, we need to start to pay down debt so that we can get the economy going, so that we can start to create jobs that Canadians in all parts of the country need.
In conclusion, I will simply say that we cannot solve the problems of the 1990s with the solutions of the 1970s. I just want to urge the government to pay attention to that simple message and to start to hear what Canadians are saying and acknowledge that perhaps the government does not have all the answers and that it is time to hear some of the answers that come forth from the Canadian public.
