Mr. Speaker, today is an important day. Today the House will consider the motion to concur in the main estimates for the current fiscal year.
Members of the House will approve all spending of the government and will debate the main estimates for 1998-99. We also have before us 50 motions in opposition to specific items contained within these estimates. Consequently the government has a similar number of motions on the table to reinstate opposed items. We will debate the first opposed motion presented by the hon. member for Pictou—Antigonish—Guysborough under the justice department for operating expenditures in the main estimates for the fiscal year ending March 31, 1999.
We have licked the deficit monster. We have looked it in the eye and we have met the challenge. We have put the programs in place to fight the monster and we have slain the monster. Four years ago few if any could have imagined the success we have achieved. Since the tabling of our fifth budget the fiscal achievements are still making news not only across this great country of ours but also beyond our borders. For the first time in 30 years the federal budget will be balanced this fiscal year. That is a reduction of $42 billion in just four years.
Along with the U.S. we are the only G-7 nation to balance its budget. Using the accounting standards of the United States we registered a surplus last year and a surplus of $12 billion is projected for this year, easily the best record in the G-7 nations. We will balance our budget next year and the year after. This will mark the first time in nearly half a century that Canada has three consecutive balanced budgets.
Put simply, we are at the start of a new fiscal era. As the Prime Minister and the Minister of Finance have said repeatedly, this success story is due to the will, the forbearance and the patience of all Canadians.
In our efforts to restore the health of our nation's finances we have pursued a balanced approach, reducing the deficit steadily step by step while undertaking within our limited resources strategic investments to build a strong economy and a secure society. We will continue to follow the balanced approach of sound economic and financial management. It is an approach that works.
Looking back only four short years ago the financial markets considered Canada to an economic disaster in the making. We were lumped with every troubled economy in the world. The Wall Street Journal called Canada an honorary member of the third world. Canadians did not need The Wall Street Journal to convince them. They knew we needed a fundamental change.
Canadians were prepared to take the harsh medicine necessary to restore Canada's fiscal health. With this firm commitment we reduced government spending and encouraged economic growth without increasing personal income tax rates. We cut $14 billion from federal program spending. In fact we were the only country in the G-7 to actually reduce spending in absolute terms. I emphasize that we have cut more in our own backyard than in transfers to the provinces.
Between 1993-94 and 1999 to the year 2000 transfers to the provinces will have dropped by 5.3% compared to a decline of 8.7% in direct federal spending. The result is a leaner and more cost effective federal government. In fact as a share of the economy Government of Canada spending is headed back to where it was in the post-war era of the 1940s. Program spending to GDP fell from 16.6% in 1993-94 to 12.4% in 1997-98, a decline of 4.2%. We will never go back to overspending.
In 1999-2000 we project federal program spending will be down to 11.5% of the GDP, a drop of nearly 8% from a peak of over 19% during the mid-1980s.
More Canadians are now working. More Canadians are now paying taxes. More Canadians are now buying goods and services which in turn means higher sales tax revenues and increased corporate tax revenues reflecting higher profits. That is what a healthy Canadian economic growth is all about: more jobs, more sales, more production and a larger economic pie. All of that is good news for Canadians.
Our economy has improved thanks to our sound fiscal policies and our will to put our fiscal house in order. Thus now is not the time to relax and rest on our laurels. We now have to reduce the debt burden. The truth is that while we have won the battle of deficit we have not yet won the war on the debt burden. That is why we will stay on course.
We will take the same systematic determined approach to the debt that we successfully took against the deficit. Step by step, year by year, we will steadily reduce the debt and we will continue to present fiscal plans based on prudent economic planning and assumptions.
In the mid-1980s the government spent $1.20 on programs for every dollar of revenues collected. This year, given our large debt and cost of servicing, 72 cents of every revenue dollar collected will be spent on programs.
Notwithstanding our high debt and the need to service it, the government recognizes that the tax burden on Canadians is too high. It must and will be reduced. In each of our previous budgets we have introduced targeted tax relief measures for those most in need and where the payoff is the greatest. Now that the government will be balancing its books we have also begun to provide general tax relief starting with low and middle income Canadians.
The 1998 budget eliminated in its entirety 3% of general surtax on those whose incomes were approximately $50,000 and reduced it for those with incomes of up to $65,000. We have also added $500 to the amount that low income Canadians can earn tax free.
While these measures are necessarily modest for now they are significant. In fact over the next three years the measures announced in the 1998 budget will provide some $7 billion worth of cumulative tax relief for Canadians. Ninety per cent of all taxpayers will get some degree of personal tax relief from the 1998 budget. Thirteen million filers will no longer pay any federal surtax and another one million will pay significantly less surtax. Four hundred thousand low income Canadians will be taken off the income tax roles entirely.
Furthermore, as the Minister of Finance clearly stated, when financial resources permit we will broaden and deepen tax relief. In addition, to build a stronger economy the government's approaches entail investing in areas critical to our long term economic performance and to the achievement of our social goals. To do otherwise would be short-sighted and bad economics.
While the government recognizes that the private sector is the engine of job creation, we also believe the government has an important role to play in the economy. That is why we chose to invest in access to education, in skills, in low income families with children and in health care in the 1998 budget.
The centrepiece of this effort is the Canadian opportunities strategy. The strategy is a co-ordinated set of measures to provide greater and more affordable access to the knowledge and skills needed to help Canadians succeed in the 21st century. We want to ensure that we have the best educated and most skilled labour force in the world.
To that end the strategy increases access to post-secondary education through scholarship, grants and loan relief. It makes it easier for adults to return to school and helps parents save for their children's education. Our balanced approach to investing the fiscal dividend for the long term benefit of Canadians will ensure that we will build a stronger economy and a more secure society at the same time.
The measures we introduced in the 1998 budget are carefully targeted and matched to our ability to pay. They are a measure of our fiscal success. Also fuelled by our fiscal success the Canadian economy is showing significant strength. In 1997 the economy grew by 3.8%, our best performance since 1994. It was also the best performance of the G-7.
When the government came into office in 1993 Canada was caught in a vicious circle. Today we have set in place a virtuous circle that has made Canada an attractive place to do business, to invest, to produce goods and services, and to conduct research and development.
Job creation is up sharply. Over one million jobs have been created since 1993, 372,000 jobs in 1997 alone. The unemployment rate is now 8.4%, the lowest level since September 1990, down from 11.2% in 1993. While the level is not satisfactory the improving trend is clear. Long term interest rates are at their lowest levels in about 30 years and our inflation rate is one of the lowest in the world.
Our determination to keep it that way is illustrated by the fact that the government and the Bank of Canada announced in the budget that we were extending the current inflation control targets of 1% to 3% until the year 2001.
Looking ahead, both the IMF and the OECD expect Canada to lead the G-7 in economic and employment growth this year. The good news is that we have reached a major milestone in our path of fiscal and economic health. The best news is that we have natural resources, the economic resources and, most important, the human resources to build an economy that has durable strength and a society that has security second to none in the world.
Canada will enter the new millennium with a healthy economy and Canadians can count on us to stay on track with sound fiscal policies.