Mr. Speaker, first let me express my appreciation to the government and the Minister of Finance for this historic debate.
Let this moment not pass without my saying that this debate is hopefully the first step on a road leading to real contributions with parliamentarians in the financial and budget planning for this nation. Therefore, while I doubt that we will solve all the problems today I do hope that the Minister of Finance will repeat and expand this exercise in the years to come.
This country has been blessed with a great abundance of natural resources. We have forests that provide lumber and wood products around the world, we have vast prairies that feed millions beyond our shores and we have renewable and non renewable energy resources that are the envy of the world.
We have natural resources far in excess of any other country in the world but unfortunately we also have something else far in excess of what we deserve and that can be described in three words: debilitating deficits and debt. Not only have we squandered the resources that have been ours but we have squandered the resources that rightfully belong to the generations that will come after us. To say it bluntly we are up to our neck in debt. As of today there is no plan or consensus on how we are going to overcome this national disgrace.
The federal debt is now 70 per cent of the gross domestic product and the annual deficit of the federal government as the minister said today is 6.2 per cent of the gross domestic product, not to mention the provincial deficits on top of that. The interest on the federal debt now consumes 31 per cent of total federal government revenues and I quoted the Auditor General's report in my reply to the speech from the throne when he said that hard choices lie ahead.
Recognizing these hard choices I issued a challenge to the Minister of Finance to balance the budget by the end of this Parliament. We have a crisis on our hands and the Minister of Finance has a choice in this budget. He can dare to be great or he can play it safe down the middle with more taxes and a little less spending which is a timid, anaemic approach to the problem.
The Minister of Finance has a hard choice to make. I think it is a simple choice. He can choose mediocrity or he can choose to rise above mediocrity to reach beyond himself and lead this nation out of a dark tunnel of deficits and debt into the sunshine of renewed prosperity.
History has always given the accolades to the leaders who rise to the challenge and buries the rest in footnotes beside the ignominy of their failure.
There is a parallel that some may refute but which is worth considering today. At the end of World War II the federal government had an accumulated debt equal to 108 per cent of its GDP. Soldiers were returning from the war without jobs. Unemployment was high. Industry was going through a rapid transformation as defence industries scaled back dramatically and in may cases closed down completely.
While it turned out to be the dawn of an era of unprecedented growth and prosperity, who would have known that in 1945?
The government basically had one thing going for it and that was the savings of the cost of the war effort which today we would call the peace dividend.
At that time also Europe had to be rebuilt and was rebuilt under the genius of the Marshall Plan.
The financial future must have looked bleak to the federal government of 1945 but it used the peace dividend to generate lasting jobs and wealth throughout the country. That prosperity seemed to be assured and never ending. When we look at the statistics we find it came to an end in the early 1970s when Mr. Trudeau and his Liberal government were running this country.
Mr. Trudeau had a vision of what he called the just society that would eliminate poverty and inequality in this land. The cost of eliminating poverty is equal to the price of success in the long run.
Mr. Trudeau and his Liberal government introduced generous welfare programs, social programs, and benefit entitlement programs that discouraged many from working. He paid for them all with borrowed money.
The point is that he paid for them all with borrowed money. In so doing he created a debt society and not a just society. I do not think the taxpayers would have been nearly as accommodating had they been given the bill at that time. The seeds of our present dilemma were sown when program spending blossomed to 125 per cent of all government revenues and when you add interest costs on top of that total expenditures rose to 155 per cent of all government revenues.
I referred to my parallel of today's problems with those facing the government at the end of World War II. Federal debt was intolerably high, unemployment was a major problem, industry had to restructure but at the end of the war there was a peace dividend.
Today we need the money that can be saved from the restructuring of our social programs to set this country on a course leading to renewed prosperity. In other words, we need a deficit elimination dividend.
Using information from the Auditor General's report in the 29 years from 1946 to 1975 the GDP of this country increased 12.5 times from $12 billion to $152 billion and during that same period the federal government debt only doubled from $13 billion to $27 billion.
I believe that if the Minister of Finance makes serious cuts in government spending and makes a serious commitment to balancing the budget by the end of this Parliament then the private sector will pick up where the public sector leaves off and will create thousands of long term wealth producing, tax paying jobs in a similar vein to the 1950s and 1960s.
This time around at the end of the cold war it is the economies of eastern Europe that have to be rebuilt. China and the Pacific Rim countries can absorb all our exports that are competitively priced. Mexico, which is now part of NAFTA, should be considered a consumer of our products as its standard of living rises rather than our competitor.
Our technological advantage can be the driving force of that economic growth and renewed prosperity.
If we put our trust in the entrepreneurial spirit of Canadians there is more opportunity for job creation in this country than there are Canadians to fill the resulting jobs.
Remember that the Auditor General said that hard choices lie ahead. I also think of Shakespeare and his advice to the minister of finance. He said there is a tide in the affairs of men which, taken at the flood, leads on to fortune.
Will the Minister of Finance rise to the challenge and commit this Liberal government to amending the errors of the previous governments and commit to balancing the budget by the end of this Parliament or will the minister dwell in the land of mediocrity and give us a few more taxes and a little less spending while we watch his vision cause this country to slide down into the realm of third world economies?
In the last election the Reform party laid out a clear and simple plan to balance the budget in three years. Now that we have been told that the deficit is significantly worse than we had imagined last fall I have given the Minister of Finance room to manoeuvre. While the choice is his, the bad news is that he will only have one chance to make that hard decision, which is that when he introduces his budget later this month I hope he can rise to the occasion and earn his place in history as the Minister of Finance who brought this country through the dark tunnel to the sunshine of renewed prosperity.
I can be done. It has been done before. Therefore, I do look forward to his budget later this month.