Mr. Speaker, there are many issues in relation to the budget to deal with and off the top I would say that as a member of the House of Commons finance committee it was my honour to talk with many Canadians who appeared before the committee and submitted written briefs. Their voices are being heard, if not by the government, certainly by the Liberal Party of Canada and the Liberal members on the committee.
I listened to some of my committee members earlier today speaking about how they interpreted what Canadians had said to the committee and their conclusions based on that as reflected in recommendations of the report tabled by the House of Commons finance committee. I would like to make it clear to the House and to Canadians watching this that we went through the prebudget consultative process. The hard-working, conscientious staff of the committee wrote a report. We went through it and tried to find those areas where all of us as committee members agreed. There were a number of recommendations that actually we came to consensus on.
However, there were many areas of the report and of budget performance so far by this government that we could not agree upon and that is why the Liberal members on the committee issued a minority report.
In the minority report, we made a couple of fundamental points that the government truly needs to be reminded of these.
First, we believe the government erred seriously by increasing government spending by double the rate of inflation, actually 8.6% over the past couple of years. That is almost without precedent in the history of the federal government, that federal spending would increase at double the rate of inflation. That compares with spending under Liberals governments over the past decade or so which was less than 3% per year.
It is ironic that the government, which preaches prudent restraint and the credo of smaller government, actually has created the largest government purse in Canadian history. There have been consequences of governments that spend a great deal of money.
Government spending accounts for roughly 13% of the Canadian economy. It is a very significant amount. When government spending increases by double the rate of inflation, it puts inflationary pressures on the entire country, on the budget and on the monetary supply. It affects a lot of things right down to the Bank of Canada's own fiscal and monetary policy. It also does something else. It sends a signal out to the world that the Government of Canada is profligate, that it is spending a lot of money, and that, in turn, tends to attract currency traders to put more value on the Canadian dollar, which is one reason that we have seen the value of the Canadian dollar rise over the past couple of years, particularly in the past 12 months when the dollar rose in value by 28% in a single year.
What are the consequences? We have manufacturers going out of business. We have people in the resource sector who cannot compete any longer. Our tourist operators are no longer able to see a steady and predictable flow of customers coming to this country. We are priced right out of the global marketplace by our own currency. What is worse is that the Minister of Finance, during this period of time of rapid appreciation of the Canadian dollar, did not say anything that would stem that or halt it. I do not even think he understood the guaranteed results of a higher Canadian dollar.
The Minister of Finance stood time and again in the House and talked about the strong Canadian dollar, which, in turn, sent a signal to the currency traders around the world that the government wanted a strong currency. Given that, more money came in and our dollar rose above par, actually up to a $1.10 U.S.
The Minister of Finance also made it clear that he would not even support our own Canadian retailing sector. It was not enough to destroy manufacturing, to hurt people in the resource sector and to destroy the tourist industry, he had to go after the service sector which today accounts for 70% of the jobs in our entire economy.
The Minister of Finance actually held a press conference in the foyer of that big white building down there on O'Connor Street, which houses the Department of Finance. He held the press conference after meeting with all of the retailers, the Retail Council of Canada and others who appeared before our finance committee and who afterward were appalled at what the minister had to say. The minister held up a Harry Potter book in one hand, which he bought in Washington, and in the other hand he held up another Harry Potter book that he had bought in Ottawa and asked Canadians why they were paying more for the book in Ottawa than the one he had bought in Washington.
What a ridiculous thing for a Canadian Minister of Finance to say. The American market is 10 times bigger than our market, the distances to ship goods are proportionately far less and the value of manufacturing any item, per unit, is less than it is in this market. Yet the Canadian Minister of Finance was telling Canadian retailers that they were ripping off Canadian citizens.
This shows, to me, an absolute lack of fundamental understanding on the part of the Minister of Finance of the consequences of his actions. Those consequences started with high spending by the Canadian government, equalling inflationary pressures, equalling a higher currency and, finally, equalling job loss on the part of Canadian workers, many of them in my riding. I represent an area in southern Ontario that has a high degree of industry that is related to the automotive sector and the automotive sector has been hit pretty hard by the American economy.
The second major factor that the minority report of the Liberal members came to the conclusion on is the fact that the Minister of Finance has absolutely no idea how severe the American economic downturn is at the moment, nor did he prepare our country adequately to deal with it.
Let us remember what he did in the last economic statement in November. He spent the cupboard bare. He accelerated the GST cut that the Conservatives had promised by three full years. That means a $60 billion hit to federal revenues. How does that help us withstand any kind of downturn in the American economy?
I have auto workers in my riding who are out of work because their pickup trucks are not being bought by American contractors because the American housing market has been destroyed by the bad economic policies of Washington, policies which, I might say, in large part, have been aped here in Canada.
The Minister of Finance failed in that regard.
We made a third point in our minority report and we hope the government listens but, sadly, I do not think it will. The third point has to do with the impact that the government's decision of October 31, 2006, had upon senior investors in this country.
On that fateful day, that Halloween massacre day, the Minister of Finance decided that he would tax income trusts. By doing so, he imposed, in essence, a $25 billion penalty on roughly two million seniors in this country. Not only did he destroy the hopes and dreams of many people who, because of their age--and this is tragic--do not have time to recover and make those funds back.
They are not like the Minister of Finance who, because of being a politician in two levels of government, has a couple of government pensions rolling in. They are just helpless Canadians who worked their whole lives trying to get a bit of money together and who invested in the economy.
I, who stood a few feet behind him as a Conservative candidate during the last election, and everyone else believed the Prime Minister of Canada, when he was a candidate for the job, when he stood during the campaign and promised people in my area that he would never ever tax the income trusts. Ten months later, he broke that promise and $25 billion were lost.
The Prime Minister, of course, not only destroyed the hopes and dreams of a lot of individual Canadians but he also destroyed an entire income trust sector, and that has had very severe consequences.
My friends across the way say that they have done some other things to help seniors, and that is true. I will give them credit. They have done some things. One of the best things is pension splitting. Pension splitting is a good idea and I am really glad I brought it to the Conservative caucus when I was a member over there. I am very pleased that I did that.
When I was part of the Conservative caucus, I clearly remember the Minister of Finance arguing with me that he was not sure pension splitting was a good idea at all. In fact, the Minister of Finance was quite irritated with me when I sat over there because I kept pestering him by saying that we needed pension splitting. The only time he actually admitted that we needed it was when he was looking for something to sugar-coat a tremendously bitter and destructive pill called income trust taxation. It was not brought in with the spirit they are trying to portray right now.
We have some very serious concerns about where the budget is heading right now. As we go into the next few months of a continued deterioration of the American economy, we need to be very mindful of the ability and the desire of the government to protect my constituents and other people across Canada from the dangers that lie ahead, which could be severe.
We have seen a housing meltdown in the United States of monumental consequences. If that comes here, we truly will have a disaster because Canadians today have 90% of their family net worth sitting in one asset, on one street and in one town, and that is their home. I am very concerned that we will see a potential deterioration of the environment in which Canadians today invest in homes.
Canadians do not have the family income to participate in an ever-spiralling real estate market. It is in my neck of the woods, outside Toronto where the cost of living is extremely high, where I think we will see a lot of problems down the road.
There is another thing the government has failed to do, which has had an impact on the family finances of people in my area. In fact, 10 days from now I have three town hall meetings in my riding dealing with the issue of child care. This is a big financial issue with people in my area.
For a family to look after one child through institutional child care, it costs, in general, $11,000 to $13,000 a year in after tax income. That is massive. What has the government done to help those families? It is doing something. It is sending $100 a month per child, per household. Of course, those $100 cheques are taxable. At the end of the year it amounts to $1,100 in an instance that costs $11,000 to $13,000.
Those are bread and butter issues that are bothering my constituents a great deal.
The issue is coming down to two things now, jobs and economic opportunity. Employment numbers go up and they go down and every 30 days we get new ones. The ones that came out today were not too bad, and I hope the trend will keep things going up, but the numbers last month were disastrous.
What really bothers me are the manufacturing jobs in the heartland of Canada, which is in the industrial heartland of Ontario. When plants close and when the equipment is unbolted, the jobs are gone forever.
I wandered around an aeronautical manufacturing facility in my riding three weeks ago where I saw a number of concrete pads that were empty. I asked why there were empty spaces in that facility. I was told that there had been equipment in the facility but that the plant had lost manufacturing contracts because it was no longer competitive due the high value of the Canadian dollar. This company used to manufacturer rotor assemblies for American military helicopters and it has now lost the advantage it had because of the Canadian dollar being at parity. The work is now going to factories in the United States.
When I asked the company what happened to those pads and why they were empty in the plant, I was told that the equipment had been unbolted, taken up and sold. I asked where it was sold and I was told that it was sold to China. China has bought all this manufacturing equipment, very sophisticated CAD/CAM equipment, that is being shipped across to China and set up.
Those same machines, worked by Chinese workers, then compete with our people and sadly put them out of work, unless we come up with a strategy. I have not heard one at all. I know we have one and I know it is going to work. We need to have an industrial strategy in this country to protect jobs and make sure those machines are not unbolted and not sent out of this country.
Until the government understands that a currency needs to be stable and predictable, that we need to have an interest-created environment homeowners can depend upon, we need to have some economic prospects, we need to have government spending under control, we need to stop our own government from causing inflationary pressures, until all of those fundamentals are in place, my constituents will continue to do what they do every day and ask me to stand at every opportunity, the earliest opportunity, and vote for the defeat of this government.