Mr. Speaker, I am pleased to address for the first time Bill C-14, an act to provide borrowing authority for the fiscal year beginning April 1, 1994. I speak against the bill because it is time we stopped living on borrowed money. The government has to start living within its means and resist the temptation to continue the mistakes of the past 25 years.
In 1968 the Liberal government under Pierre Elliot Trudeau came into power. It generated the first deficit. Since 1968 and including that year every government has continued to spend more money each and every year than it generated in tax dollars. If we check the records, after the Liberal government was kicked out by the Conservative government it left a debt for the Conservatives of $175 billion in 1984.
The Conservatives continued the same spending habits the Liberals had taught them while they were in government. Each and every year while the Conservatives were in power they continued to add to the debt to the point at which the people finally had enough. Under that government the debt grew to $460 billion. When the Conservatives were in power they kept blaming the Liberal government for the debt that grew every year because they had to pay interest out of the revenues to service the debt brought in by the Liberal government under Mr. Trudeau.
Now the Liberals are back in power and they are blaming the Conservatives for the $460 billion debt. They say it is their fault and that the $40 billion interest payment is a result of their lack of fiscal responsibility. The Liberals are now expecting the Canadian public to buy the same argument again.
Enough is enough. The finance minister's budget ignored the real problem. The finance minister presented a budget that accomplished nothing. The results would have been the same after 12 months if he had done nothing. It is a shame for him as a person with such good business background and business acumen not to heed the advice of his own experience.
The real problem is the debt and the interest we must pay every year to service the debt which is in the $40 billion range. There is the deficit, the debt and the interest payment on the debt. The finance minister brought in a budget that increased overall spending by $3 billion. Yet his rhetoric sounds as if he read the Reform Party blue book and the zero in three plan.
He talks tough. He talks about where we must take tough measures and make tough decisions. We must work toward a balanced budget. We must do this. We must do that. However, what does he do? He makes one sector of the economy, the military, suffer the most. It is suffering pain for no net gain because he increased spending by $3 billion overall.
This is why we are concerned as members of the Reform Party. The finance minister says he understands the problem but he fails to address it in the budget. As a businessman I am doubly infuriated because every time the government interferes in the private sector through grants, subsidies and regional development funds it proves in the long run not to work. When the money runs out so do the businesses. It is unfair. It distorts the marketplace and it creates confusion.
For instance, under the infrastructure program the federal government will contribute $2 billion if a province contributes $2 billion and the municipalities collectively contribute $2 billion. Then we will have a $6 billion job creation program. It is creating confusion. In the heart of downtown Calgary in my riding is a building that contributes to infrastructure that already draws businesses and people. It is a round-up centre, a building called the Saddle Dome which houses the Calgary Flames, a professional hockey team. The municipal council has now found a way to make application to the provincial government and through it to the federal government. The President of the Treasury Board will have to make a decision. I advise him to
decide against it because it is not a true use of infrastructure moneys. He will be asked to make a decision on whether it falls under the criterion and the definition. There is confusion.
Therefore the federal government should make it a point that if it has an infrastructure program it should go toward infrastructure. Two other levels of government have decided that spending money on a facility that is already in place is infrastructure. Since the private sector is involved with the Calgary Flames and since it is the major tenant, I recommend the President of the Treasury Board take a good hard look at the application.
My original point was that the infrastructure program was causing confusion. It is an intrusion into the marketplace. Another intrusion involves the province of Quebec and the manufacturer of the Hyundai car. Hyundai was originally subsidized, attracted to come to the province. It was to create 1,000 jobs. We were to lend it $100 million and to sell 100,000 cars at the end of this wonderful deal.
Hyundai closed its doors when the money ran out. Some 856 jobs were created, not 1,000. There were only 26,000 cars produced, not 100,000. However the Minister of Finance is considering lending more money for it to reopen the doors and gainfully employ another 800 people, the same 800 people.
Has the government or the finance minister not even asked why it shut its doors. Is it because Hyundai is not competitive enough? Is it because it cannot sell cars?
This is the private sector in which the federal government continues to intrude and continues to distort. The private sector wants the government off its back and out of its pockets. It wants to be left alone; it can create the infrastructure. It wants the government to do only what governments can do, and that is peace, order and good government, not investing in the private sector. I do not know how much more emphatically Reformers can say that and repeat that until it finally gets the message across.
The government wants to pass Bill C-14 so that it can borrow money to meet its commitments in the red ink book. It wants to borrow money so that it can create jobs to fund our already too generous social programs rather than review them for ways and means in which it can create a social safety net that protects the truly needy, not those it protects now who do not really need the money.
We have limited dollars. We are living on borrowed money. Why do we not stop wasting borrowed money and reduce the debt and thus reduce the amount we have to borrow? The proper signal should be sent to investors, lenders and consumers that the government will change the mistakes of the past 23 governments and finally make a commitment to the proper principles of economic growth. Lord knows, with all the advice we have available through bureaucracy we could do it.
As a member of the Standing Committee on Finance I have heard some interesting presentations on a replacement tax for the GST. I have also had the very good privilege of questioning the deputy minister of finance, Mr. Dodge. It is worthwhile for the entire Liberal cabinet to listen to him, especially the finance minister to whom this man has to answer. Let me read a comment that he made to the committee referring to our huge debt. He said that the problem was not only a federal one but also a provincial and local one.
In 1992-93 our deficit stood at approximately $40 billion federally and approximately $25 million provincially. The debt at the federal level is getting very close to three-quarters of the GNP. We are paying interest rates that are about 2 per cent above the rate of growth of the economy. That means we have to divert increasing amounts of taxpayers revenues just to service the past debt.
Canada's total budget deficit was the second highest among G-7 countries in 1992. We are just about leading the G-7 with respect to all levels of spending which is approximately 50 per cent of our GNP. The proportion of our debt that is internationally held has increased a great deal over the past 10 years. It is to the point now where the combined federal provincial total is about $750 billion and $300 billion plus is foreign held.
We must pay foreigners more and more to service Canada's foreign debt, approximately $1 of every $20 produced. All we can say is there may come a time when financial markets will feel they can no longer trust Canada to handle its problems. People will want to sell their Canadian bonds and we will no longer be able to borrow. We will face serious problems like New Zealand, Sweden, et cetera.
The important part is that the moment of truth can arrive just like that. That means when the Liberal government's program and budget after this year and next year do not work, its final recourse may be the International Monetary Fund. The government may have to invite them here and I do not think we need that. Do we want to invite the International Monetary Fund to solve our problems? I do not think so.
Is the finance minister listening to his own deputy Minister of Finance? Is the Liberal cabinet discussing the seriousness of the debt and the deficit and the interest costs on servicing that debt? What is going to happen if interest rates continue to rise? I will leave that for another speaker to possibly address.
I recommend we handle our own problems before resorting to groups like the International Monetary Fund. I recommend a complete overhaul and entire review of the taxation system. Never mind just a GST study, make a commitment to an entire
tax review. Get rid of the income tax in its present form. Get rid of the 14,000 books of rules and regulations.
Why does this government not take some advice from one of its own members who worked hard and true on this in opposition, the hon. member for Broadview-Greenwood? I know what his name is but I am not allowed to mention it. He wrote the book The Single Tax .
That has a lot of merit. A flat tax for Canada would help spread the tax load. It would allow us to introduce a lower tax rate. It would help solve the problems with the social safety net with an exemption level for each person that generates money. That would solve the problem. They would not have to pay tax on the first $15,000 for instance. They could then look after themselves without government subsidies and aid. Then the money we did generate as a government could go to the truly needy, the people who really need welfare and those seniors who really need help under the guaranteed income supplement.
Why will the Liberal government not focus on issues like this? There is a member within that party and he is not even in cabinet. He has been shunted right out and I do not understand why.
A flat tax has some other advantages. A flat tax would allow all Canadians on a proportional basis, depending upon the size of their family and the size of their income, to pay the same rate of tax. That would be equal. It would be more equitable and it would be fair. The finance minister always likes to use the word "fair". He has said in his budget speech that his intent and one of the objectives of the federal budget is to restore and sustain fiscal responsibility but I beg to differ.
The other advantages of a flat tax, if the Liberal government were so inclined to review it, would be that being simple it eliminates the need and the work with all these exemptions and loopholes that the finance minister talks about in his budget.
Today when we want to develop a certain sector of our natural resources, we create an incentive for people to invest and we give them a tax deduction. That starts to work or does not work and then later on we take the exemption away. We call it a loophole and we eliminate it. We give and take and give and take.
If we had a flat tax we would not have to worry about incentives, loopholes and deductions. We would only have to figure out mechanisms over and above the personal exemption in terms of charitable donations, perhaps 1 per cent, and in terms of the child credit and child care costs. Those could be incorporated.
After that we could draw a line. We would state what was made, make the deductions, multiply by 15 per cent and send that amount to the federal government. This system would be less complicated and understandable by everybody. It could be put on one sheet. Everybody would be doing it the same way. It is a proportional tax.
I would love to have a debate on this. Perhaps I could convince my own caucus to make a motion at some future point to discuss this flat tax and have a situation in which we solve our own problems. I believe a major overhaul of the entire taxation system would entice more investment in Canada.
We need capital. We need equity capital. Right now the government mentality, especially at the federal level is to continue to live on borrowed money which I call debt capital. There is a big difference. Money that is at risk motivates. Government money, especially borrowed money, is a waste.
I wish at some point in time we could address our entire economic and social problems in a comprehensive and analytical manner. As some Bloc Quebecois members like to say in the finance committee, there should be a complete review of our taxation system category by category, allocation by allocation.
We could then decide what programs we should be funding, what programs should remain in the public sector and what programs should be shunted off to the private sector. Yes, I am talking about privatization. There are a lot of Crown corporations that could be sold off if they are still necessary. If nobody in the private sector wishes to buy them, that is only proof nobody wants the service or needs it anyway.
We could really clean house in this 35th Parliament if we made a commitment. I understand the Bloc Quebecois claims to be fiscally responsible. So does the Reform Party. Why do the cabinet ministers not swallow their pride and listen to some of the comments we make? They could take credit for being the greatest government that ever lived because it finally listened to the people on matters that really counted, money. We pay far too much in taxes and they need to be reduced.
I speak against Bill C-14. I know the government ultimately can put this bill through, but I caution it to at least listen to some of the comments made in this House. Do more than give token interest to what we say. We are here to serve for another four and a half years. We want to be solving the problems for this country, not for some international association.
