Mr. Speaker, it is with some delight that I rise to talk to the budget of 1998, a budget of which Liberals are so proud. Quite frankly they do have not a lot of reason for such pride.
Yesterday in the House, in response to a question that I asked of the Prime Minister, I suggested that maybe health care was the top priority of Canadians generally across the country, whether they be premiers of provinces, finance ministers, health caregivers or other Canadians. The Prime Minister suggested to me at that time that I should probably go back to the Winnipeg budget and look at the budget of my colleagues, the Tories in Manitoba, who reduced taxes but did not add one cent to medicare.
I have had the opportunity to go back and look at the Manitoba budget that came down four days ago. I suggest that we can make some comparisons between the Manitoba budget and the Liberal budget tabled in the House. I honestly say that the Liberals can learn something from my colleagues in Manitoba.
Its budget was the fourth balanced budget Manitoba had put forward to its citizens. Over $100 million of new money was added to the Manitoba health care portion of the budget to bridge significant federal cuts to Manitoba's transfer payments.
In response to the Liberal government, Manitoba has shown that health care is a priority. Additional dollars are and have been going into health care in the Manitoba budget. Of that $100 million Manitoba spends $1.93 billion or 34% of its total budget on health care. I use that to stress the fact that the province of Manitoba recognizes health care is in a crisis and is a priority of its budget.
I also suggest that maybe the Liberal government would like to go a little further and take another lesson from Manitoba which has implemented balanced budget legislation. The Liberal government could learn from Manitoba. Its balanced budget legislation has been in place for a number of years. If the budget of Manitoba is not balanced, ministers and the premier have to pay the consequences.
In the budget which was just brought down in Manitoba there was a reduction in personal income tax. Is the government listening? There was a reduction in personal income tax. There was debt repayment and a plan for continued debt repayment in the Manitoba budget. It was increased from $75 million to $150 million in this budget year to retire the debt. The Liberal government unfortunately has not learned those lessons.
In the Manitoba budget small business was acknowledged. An economic opportunity will be available if the businesses are treated properly. In the small business reduction the payroll tax went from 2.25% to 2.15%, but it was a reduction in regressive payroll taxes. Unfortunately the Liberal government has not learned the lessons of other provincial governments.
There was a capital tax reduction. There was an increase in the exemption from $3 million to $5 million. That is very positive. The Manitoba government recognizes that small business is the backbone of our economy. The Liberal government should take lessons from it.
The Prime Minister suggested that I make some comparisons between the Liberal budget and the Manitoba budget. Let us talk about the Liberal budget. It is balanced for the first time. Congratulations. I am very pleased that finally the budget is balanced.
Let us understand why the budget is balanced. It is not because of the last three and a half or four years of this administration. It goes back to 1991 when a policy was put into place to target inflation. The 1991 policy caused interest rates to drop, which allowed the government to balance the budget.
Other policies were put into place from 1991 to 1993. One of them was the NAFTA. Make no mistake about it. The reason the economy is so strong today in Canada is international trade. We live in a global society. We live in a global economy.
When members of the government were in opposition they said “We will rip it up. We will have nothing to do with international trade. We will have nothing to do with globalization”. Now they have decided that it is such a good thing they will expand the NAFTA. We are going to expand into Europe. We are going to expand with the MAI. We are going to expand into South America. Make no mistake. That policy was put into place by a previous administration.
Then there was the GST. The same people who are now in power said “We will scrap it. We will not have it any longer”. In fact the GST, which was put into place by the previous administration, was used to bring the operating deficit down to zero in this year's budget. The Liberal government should thank the previous administration immensely for balancing the budget of 1998.
Let us have a look at the Liberal record. Canada today, after four years of Liberal administration, has the highest personal income levels of the G-7 countries. We did not hear that in the finance minister's budget speech but it is fact. The Liberals have raised taxes 40 times since 1994.
According to an Industry Canada study that was done with the United States, Americans today are 25% richer than Canadians. American manufacturing workers get paid $1 per hour more than their Canadian counterparts. America's jobless rate is 4.7% while Canada's is 8.6%. Canadian wage earners pay roughly one-third more in taxes than their American counterparts.
Canadians have been making up for stagnant incomes by eating into their savings and borrowing more. I know my colleagues on the government side will pooh pooh this, but there is another statistic that in this year there will be more bankruptcies than ever before. There will be record levels with 97,000 registered bankruptcies in Canada this year.
The government cannot blame anybody. It cannot blame previous administrations. It cannot blame the economy. It can blame only itself and the tax record it put forward to the country.
According to Statistics Canada, taxes took the largest bite out of the household budget in 1996. Taxes took 22% of every dollar, whereas 17 cents went for shelter, 12 cents went for food and 12 cents went for transportation.
I hope Canadians were not looking for a big break on taxes in the budget, because they got none. Quite frankly they will have to pay more taxes. Even though the spin doctors are putting the spin that there were tax reductions in the budget, the fact of the matter is that when it comes down to the dollars and cents off a paycheque, at the end of every month they will be paying more in taxation than they have in tax breaks in the budget.
Liberals continue to overtax Canadian workers and employers and kill jobs by keeping employment insurance premiums unnecessarily high. It was our position that the government should take the $7 billion overexpenditures and transfer those dollars to CPP and not increase the CPP payments the way it did. That is where it comes to the fact that Canadians this year will be paying more in tax dollars than they did last year. They have had huge increases in CPP but have not had an offset in employment insurance premiums.
I go back to the Manitoba budget. Manitoba recognizes that business is a very important part of the economy. It reduced regressive payroll taxes. It increased the exemption in capital assets. It reduced capital tax. It allowed Manitoba businesses to have an environment to expand, to hire people and to develop an economy that Manitoba would like to have.
The Prime Minister said “Go and compare with the Manitoba budget”. He and the finance minister should have made that comparison prior to tabling their own budget in the House.
The Liberals are planning no measure to ensure that a fiscal dividend will either be achieved or become a permanent part of the federal budget scene. Like the province of Manitoba, the PC Party believes that there must be tough balanced budget legislation to ensure the country is never again caught up in the spiral of deficits and debt. We propose a balanced budget law that would reduce the pay of the Prime Minister and cabinet if the deficit ban were broken.
Let us talk about that. We have a budget that was tabled in the House by the finance minister. It was the first and only budget I have ever seen that never used any assumptions. It never showed Canadians exactly what the surpluses would be. It never showed Canadians a fiscal plan to reduce the debt on an ongoing basis. Why was that?
The reason was that the finance minister did not want to show Canadians exactly what the surpluses were. The estimates are that there should be between $5 billion and $15 billion worth of surplus if the job were handled properly by the government. That $5 billion to $15 billion surplus should translate into debt reduction and tax reduction.
Unfortunately we never saw those numbers at the bottom of the finance sheet because the finance minister is afraid to show them in case his caucus, his colleagues and his cabinet may wish to spend those dollars on other issues. Quite frankly they spent those dollars because they have not been translated into tax cuts or have not been translated into deficit reduction or to debt reduction.
The Department of Finance projected several billion dollars in the government's surplus, but the money has been spent anyway before Canadians got a chance to see it.
Jeff Rubin, chief economist for CIBC Wood Gundy, said that the Minister of Finance “does not have a political mandate to run budgetary surpluses so he is hiding them from Canadian taxpayers in an effort to explain why he is not giving them tax relief. If he were to acknowledge where he really stands, this budget would be politically indefensible”.
The budget raises the basic personal amount of deduction by only $500. The basic exemption right now in this budget is $6,956, taking 400,000 people off the tax rolls. My party would raise the basic exemption level to $10,000 which would take two million Canadians off the tax roll.
There is nothing in this budget to encourage job creation for Canadians by alleviating the tax burden on small business. The Prime Minister said that the member for Brandon—Souris should look at the Manitoba budget to see what it has done with health care in terms of priorities. The member for Brandon—Souris looked at the Manitoba budget and found that there had been a personal reduction on income tax in that province. There has been a personal reduction of income tax in Alberta and Ontario but the Liberal government is obviously deaf to those who talk to the reasoning of tax reductions.
Taxation policy can influence the economic environment which in turn may affect the competitive position of a country in a global market. As such, a competitive and stable taxation policy has the potential to be an effective tool for the Canadian government to promote investment in economic activity in the country.
Taxation generates immense perceptions from investors who are looking for new opportunities worldwide. In recent years Canada has shown significant improvement in terms of lowering the tax burden. Nonetheless, even if the present trend continues it will take some time to shed the perception of Canada as a high taxed country.
Catherine Swift from the Canadian Federation of Independent Business comments on the budget: “Further tax cuts would help create jobs. We're still not seeing a major job creation agenda here and from a small business job creator standpoint that really should be a prime target”.
I hate to repeat myself but I will. Let us go back to the Manitoba budget. The Prime Minister suggested I do that. Do I not listen to what the Prime Minister says? Go to the Manitoba budget. I went to it and believe me, the Manitoba budget does speak to assistance to small business. We would speak to reducing small business taxes from 12% to 8%, to reducing corporate tax rates from 28% to 24% and to increasing the small business deductions from $200,000 to $300,000.
The PC party would also increase the capital gains tax exemption from $500,000 to $750,000. Entrepreneurs and people in the farming industry are more willing to take risks and bring their ideas to market when they know they will be able to keep more of what they earn. Increasing the capital gains tax exemption is just one suggestion for attracting investment capital for start up or expansion. The agricultural small and medium size business sector is the most dynamic sector of the economy and should be rewarded. None of those words were even considered by the Liberal budget, which is a travesty because small business was the loser.
The budget of the finance minister and the government failed to restore the $6 billion the Liberal government took out of transfers to the provinces for health care, education and social assistance. I was told to go back to look at my own province because it is not showing it as a priority. Wrong. We put $100 million into health care which did not come from the federal government in the form of any transfer payments. It came from the pockets of the taxpayers of Manitoba. Seven out of ten provinces continue to get less cash for health care and education than they did before the Liberals formed this government.
Here are some glowing reports from some provincial politicians concerning this Liberal budget: “It is a further kick in the teeth to all provinces and I think you will see more provinces retreating into saying we are on our own, we've got to solve our own problems”. That comes from Ontario Premier Mike Harris.
“Canadians, Manitobans, premiers, finance ministers, governments right across this country have called for the federal government to put back into place some of the support for health care”. That comes from the Manitoba finance minister, Mr. Eric Stefanson.
I repeat this budget has done virtually nothing for the provinces which in fact are doing the job and doing it very well. They are doing it without any federal assistance.
One area of my responsibility is agriculture. I have looked through the budget and I looked through the throne speech. In neither have I seen any indication that agriculture is even playing an important part in the Canadian economy.
“Canadian farmers gave their pint of blood over and over again to help Ottawa get its deficit under control. Now the federal government has to deal with the serious issue of farm income and security”. That comes from Jack Wilkinson, Canadian Federation of Agriculture.
Nowhere did this budget deal with any of the issues that are facing agriculture not only now but in the future.
“There is painfully little in this budget on agriculture. It looks like they basically said goodbye to that productive sector in terms of any new initiatives for family farms. It makes it pretty clear that we are way down on the list of those who are deemed to be worthy of attention”. That comes from Nettie Wiebe of the National Farmers Union. But she had a point. There was nothing with agriculture in this budget.
The federal government offers nothing to the agriculture industry in this budget, nor did the government even mention agriculture in the throne speech. Two strikes. A third strike and I believe agriculture will see this government out.
The only measure it confirmed was the $20 million over the next four years Canadian rural partnership program. I have received and looked at the criteria of the Canadian rural partnership program. It is a $20 million over four year program. That is $5 million a year.
What is it going to do? It is going to facilitate some pilot projects. It is going to allow departments to come together so that they will be allowed to see how effective the programs are they now have in place. We will put $5 million a year over four years and basically accomplish nothing.
Ministry of agriculture's Pest Management Regulatory Agency budget for 1997-98 is going to have a $4.5 million deficit. The deficit was a result of the PMRA's not properly analysing its product base to generate fees.
We are going to put $5 million in one hand to try to look at the programs are, the pilot projects and facilitate programs for farmers. Yet farmers are going to pay $5 million a year more for PMRA which they did not want in the first place.
I know it is time to wrap up. I appreciate your time and this House's time. I must say that the balanced budget is the only good positive thing that I can say about the budget that was tabled. Other than that, all the issues that were dealt with in this budget, unfortunately, could be dealt with much better.
