Madam Speaker, I rise today to not only address the government's borrowing bill, C-73, but to also make a few comments about the budget.
The single biggest problem facing Canada today is the national debt of over $550 billion and the interest costs to service that debt. It is all too easy to think of this debt as a government problem, but it is not. The debt does not cost governments, it costs Canadian taxpayers. We pay for the debt directly every day in interest payments paid from taxes.
Whatever the party or Prime Minister or finance minister, the Government of Canada has not had a single balanced budget in 25 years. As a result, every Parliament has to pass bills like C-73, borrowing bills, to give it the ability to borrow money to service this debt.
For these two decades our governments have been living beyond their means, creating a delusion that we can live indefinitely on borrowed money.
How do they get away with it? How do they get taxpayers to fall in line when the cornerstones of our society like health care are in jeopardy because we are forced to borrow $89 million every day and $625 million every week to finance the debt? The answer in a word is sophistry, using clever but misleading arguments to justify actions.
One thing I noticed in my first year as MP was that an experienced cabinet minister could spin even the most unsound logic into what seemed to be publicly accepted government policy. The finance minister is no exception. He is an extremely clever man politically, and I often wonder what he is really doing with the Canadian taxpayer.
As a businessman and a taxpayer, I finally realized that we are all being hoodwinked. By waxing eloquent about breaking the back of the deficit and floating frightening trial balloons of higher income taxes, the finance minister has finessed many Canadians into believing that it is okay to go into debt, but just not as much as we have been in the past.
I would like to walk through the budget to demonstrate the art of sophistry at work, necessitating this borrowing bill we are debating today. Sophistry is defined as false reasoning or clever but misleading arguments. So much of what is served up in the 1995-96 budget is both politically clever but economically misleading. Is this truly a sound budget as the finance minister claims, or an unsound budget based on false reasoning?
If these walls could talk about the history of deficit fighting in this House, what would they say? They would tell of a former finance minister, now a Prime Minister, who in 1978 said significant reductions in the deficit can be expected. The deficit then was $13 billion. He is back at work now and the deficit is $39 billion. Seventeen years later he is saying the same thing, singing the same tune. When will he learn that times have changed?
These walls would also tell us about Liberal finance minister Allan MacEachen, who in 1982 said the government cannot responsibly add to the deficit. The deficit then was $28.7 billion. Today the Liberals continue to add to that deficit.
These walls would also tell us of Michael Wilson, who in 1990 said: "We will reduce the deficit to $28.5 billion next year. We will cut it in half to $14 billion in three years. We will reduce it even further to $10 billion the year after that". Does that sound like the current finance minister? Is that not what he sounded like the other day when he presented his budget? That deficit grew to $32 billion.
Finally, if these walls could talk they would tell us of our current Minister of Finance, who one year ago promised to break the back of the deficit and attack it head on. He had a projected deficit of $42 billion and the actual deficit that he will announce will probably be around $38 billion.
Deficit has been the focus since 1975. Meanwhile the real problems, the debt and the interest cost to service that debt, keep growing. Adding to the debt and therefore increasing interests costs, regardless of interest rates, regardless of the growth in the economy, will eventually erode program spending, reducing the amount of money for social programs and job creation initiatives.
That is what is wrong with the current direction in which this government is going. Before a single dollar of income is redistributed, before a dime goes to social programs, before a penny is spent on any other government program $2,200 must be paid yearly in interest for each and every person in Canada. Each Canadian's share of direct federal and provincial debt has risen from $4,500 in 1981 to over $25,000 today.
Here we have our clever finance minister talking about the deficit and the fact that he will spend less. He is misleading the Canadian taxpayer with the argument that by lowering the deficit through instalments he is solving our economic problem of the debt. He is not solving the problem. We have to get to a zero deficit. We have to stop adding to the debt. We should have a balanced budget as our immediate target, not somewhere down the road, that floating two-year revolving door.
In their reaction to the clever minister's budget the chartered accountants of Canada have stated: "The government has failed to set firm targets for the reduction of the deficit after 1997. Achieving a $25 billion deficit in 1997, which may well be the high point in the current economic cycle, is not sufficient. We must seize the opportunity now to break the deficit cycle and not risk facing unsustainable levels of deficit in the next economic downturn. We need a longer term plan to bring government spending under control".
Reformers have done this. We set out a clear spending reduction plan in our taxpayers' budget which would reduce the deficit to zero in three years. As our leader has pointed out, the biggest spending decision that the finance minister has made by not cutting program spending more quickly is to increase spending on interest charges from $39 billion when they first were elected to $51 billion when they are defeated in 1997 or 1998.
When the Liberals came into power in 1994 their total government spending was projected to be $158 billion. By 1997 their total projected spending will be $158.6 billion, despite all these spending cuts. On the spending side they will be right back where they started. They have failed to take the necessary steps to deal with the severity of our fiscal crisis and are leading Canada on a track destined for bankruptcy. Where is the benefit for people who have been hit with public service cuts, program cuts and cuts to transfer payments? The only purpose of these cuts, it appears, is to service the ever increasing debt. It is all going to interest.
The debt is the problem. The deficit is simply a contributing factor. It is politically clever but misleading to tell people that by slowing the digging we will fill the whole.
Another clear example in the budget of the finance minister practising the art of sophistry or false reason or clever but misleading arguments is evident when he states that the Liberals are not raising personal income taxes. Of course not. That would have knocked him way down in the polls and the minister knows that. The challenge was therefore to squeeze more money out of the taxpayer without waking them up to that fact. The minister succeeded.
I will give the House four examples. The tax rates of large corporations were raised by 12.5 per cent and corporate surtaxes increased by 1 per cent, from 3 per cent to 4 per cent. These increases will be passed on to consumers and will ultimately fall on the middle class, the very heart and soul of the support of the Liberal party, in the form of higher prices.
The Liberals placed a temporary capital tax on large deposit taking institutions. A temporary tax, there is an oxymoron. It is like a prominent backbencher. In 1917 income tax was originally supposed to be temporary.
Taxing banks means higher costs to Canadians for banking transactions. Watch how quickly service charges change in the next year.
A third example is the Liberals have raised gasoline taxes by 1.5 cents which will cost the average Canadian and so too will higher taxes on cigarettes which the minister sneaked in through a ways and means motion a few weeks ago.
The Liberals have eliminated the public utilities income tax transfers to the provinces which means if your utilities are provided by a private company you will see your rates jump by as much as 25 per cent because they no longer get the same treatment as fat cat government owned utilities.
This is another clever technique used by the finance minister to punish Alberta MPs. Let us punish the city of Calgary for voting six Reformers. Let us reward Edmonton for electing four Liberals. This blatant partisan political endeavour will only come back to haunt the Liberal Party. This was a selective tax grab against Alberta. The Minister of National Resources yesterday did not even have the courage to answer one of my colleague's questions about her support for the PUITTA transfers to the provinces. Eventually those provinces that are considering privatizing their utilities will not do it now because of the extra costs.
Clearly this budget is nothing more than a tax on the consumer. It is a consumer budget. It raises about $1.5 billion that consumers are going to have to pay, not on their personal income tax which they are all happy with, but through hidden taxes, through consumer taxes. It is a form of a GST.
Automobiles do not pay taxes. The people who buy them do. Once again the Minister of Finance is practising the art of sophistry by using a clever but misleading argument to make taxpayers think that he is doing them a favour by not raising their individual tax burden when he is by $1.5 billion.
Another example of sophistry can be found in the finance minister's use of soft targets in his budget projections. The real test of spending cuts from one year to the next is if we spend less than the year before. This government for the second time in a row will be spending more that it did the year before. It is up to $163.9 billion from last year's projected $163.5.
If the Liberals were truly going to spend less they would be below that $163 billion figure. Once again the minister does not sell it that way. He talks about spending cuts, lowering the deficit and that reaching his target of 3 per cent of GDP will solve all our problems. Meeting the 3 per cent target depends on the continuation for another three years of recovery in the business cycle. That is very unlikely to occur. That is why it is called a cycle.
The Liberals continue to delude taxpayers that things will turn around. They believe strongly in overly optimistic economic growth projections. Their hopes for gradual improvement lead them to delay, to defer, to minimize the need for tough and immediate action.
They think gradually they will work this through. It appears as though gradualism has become a Liberal policy. Change should not be introduced too suddenly. To avoid any shocks to the system reforms of any kind should be introduced gradually.
In an article I was recently reading the writer suggested that we use a gradual approach to introduce new traffic laws from driving on the right side of the road to the left side. Do it gradually, buses and trucks this year, cars next year. Gradualism is not going to work.
All that Liberal rhetoric about rolling two year targets does is side track us from the real problem of the debt. Once again gradualism sounds appealing but it is misleading. Interest costs continue to rise. At the end of the Liberal term they will have added another $10 billion to the interest costs of this nation. This is what they are doing. This is where their spending cuts are going. Everybody is sacrificing in this country just to pay the darn interest costs on the debt instead of getting the deficit to zero so that interest costs will not rise.
Why is it on the question of fiscal common sense finance ministers continually react by saying they will balance the budget tomorrow, they will get at it first thing next year, they will aim for a balanced budget but in the meantime they have to tackle the deficit? How would members react to someone who had cancer and planned to wait to seek treatment until he felt better? This is yet another example of a clever but misleading argument by the Minister of Finance.
The Minister of Finance has said that small business is the engine of our economy. It creates 85 per cent of the jobs in Canada. Yet in his budget he tried to take credit for the 400,000 jobs that have been created in this past year in Canada when all the government can take credit for are the 60,000 jobs it created through its infrastructure program which has simply added to the debt.
It is absolutely amazing how many times we heard that the infrastructure program was a huge success, creating years of employment. It was not just short term. Now we see in the budget that funding for the program will be reduced.
If the infrastructure program was such a success, then why has it been cut? Was it not living up to its potential? Through pork barrel programs like infrastructure, the Liberals are being politically clever but, as their budget demonstrates, economically misleading.
Another example of sophistry at work can be found in the finance minister's criticisms of the Reform Party's policy on old age security. The finance minister said the Reform Party's taxpayer's budget would hammer seniors at the low end of the income scale, which simply is not the case.
During the election campaign the Conservatives accused us that this would effect seniors who made $17,000 a year. Now the finance minister has the gall and the nerve and audacity to stand in this House and tell Canadians that we will hurt and harm seniors who make $11,000 a year. That is pathetic.
