Mr. Speaker, I will be sharing my time with the hon. member for New Brunswick Southwest.
It is with great pleasure that I rise today to speak on Bill C-32, an act to implement certain provisions of the budget tabled in parliament on February 28.
The bill deals with important measures, such as increasing the Canada health and social transfers, reinstating full indexation of the personal tax system, increasing the Canada child tax benefit amounts, increasing the foreign content amount for RRSPs and amending the Employment Insurance Act, among other things.
Today our high corporate and personal tax rates create a competitive disadvantage between Canada and our trading partners in today's global economy. It is clear that competitive tax rates are essential. Meaningful tax reductions combined with tax reform will increase both economic growth and opportunities for all Canadians.
The current Prime Minister has suggested that young Canadians should leave the country if they are unhappy with Canada's taxes. This kind of thinking reflects a sixties or seventies view of the world. This option, unfortunately, is becoming increasingly appealing to many young Canadians, particularly those in the high tech sector.
When Canada loses its best and its brightest young people, it loses both the capital and the talent essential to generate a higher level of productivity and innovation. The Conference Board of Canada states that the number of skilled Canadians moving to the U.S. has increased from 17,000 in 1986 to 98,000 in 1997. This is a staggering sixfold increase in just 10 years.
In the last five years there have been 50 different tax increases. Canadians now pay on average about 47% of their income in taxes. Government revenue has increased by $40 billion since 1993, including a hike of $24 billion in personal income tax revenue.
The 2000 budget was the tax cutting budget. Before this budget, Canada had the highest personal income tax in the G-7 and the second highest corporate tax in the OECD. Surprise, surprise, after these measures were implemented, due to more innovative and aggressive tax cutting strategies by other countries, we will still have one of the highest tax burdens in the industrialized world, yet the government claims that it has put Canada on the right track for the 21st century.
The government continues to look inward when it should be looking outward. Our trading partners have pursued policies of lower taxes, less regulation and lower debt and their levels of growth have been striking. For example, Ireland's real GDP per capita growth has been 92% from 1988 to 1999. GDP per capita increased 18% in the U.S. during the same period and in the U.K. and Germany by 14%. In Canada our GDP per capita growth was only 5% during this time.
Furthermore, since 1990 American net disposable income per capita has climbed over 10%, while Canadian real disposable income has fallen by 8%.
The fact is that the government has had at least $115 billion available to provide all Canadians with broad based, meaningful tax relief. The finance minister pretends to be listening to the call for tax relief and for meaningful action on the health care front but he is not listening hard enough. The 2000 budget falls short of its potential.
The case for deep and immediate tax cuts is real. Canadians now pay about 47% of what they earn in taxes to all three levels of government.
The PC Party of Canada firmly believes that Canadians have suffered long enough. They should not have to wait until after the next election for tax relief that falls far short of what could have been delivered. The government has a surplus because taxes are too high. That surplus ought to be returned to the Canadian taxpayers.
Increasing the basic personal income amount by only $100 this year, as the government has proposed, works out to be about 33 cents a week, or only $17 a year.
The finance minister's poor plan means that lower income Canadians will still pay taxes on earnings as little as $8,200. When we add on provincial taxes and payroll taxes, governments are taking away as much as 30 cents on the dollar from people with virtually no income.
What the government fails to mention is that since 1993, due to bracket creep, the government has actually dragged 1.4 million low income Canadians under the tax roll for the first time.
The PC Party would raise the basic personal amount from its current level of $7,131 to $12,000. Increasing the personal amount to $12,000 would remove 2.5 million Canadians from the tax rolls and could save an individual taxpayer up to $1,200 annually. This tax cutting measure would benefit all Canadians but particularly those in the low and middle income classes. I feel it is indefensible that right now in Canada someone making as little as $7,131 is paying income tax.
The greatest single disappointment in the bill is its failure to address the real needs of Canada health care. At one time the federal government shared the cost of health care 50:50 with the provinces. In recent years that share has been reduced so that now only 13 cents of every dollar spent on health care in Canada comes from the federal government. Meanwhile, inflation, population growth and the aging population are increasing health care costs.
Brian Tobin, premier of Newfoundland, has said that the government missed the boat by not reinvesting in health care. The Canadian Health Care Association has said that the budget does not recognize the severity of the current health care crisis in Canada. They are right. However, the government has again refused to restore cash payments under the Canada health and social transfers to 1993 levels. A one time payment out of lapsing year funds of $2.5 billion does not provide the kind of long term stability that our health care system needs. It is essential that the CHST funding be restored to the 1993-94 levels.
The government has no long term plan to save health care. Instead, it has chosen simply to put a band-aid over an arterial wound. Further, there is no serious intent on the part of the federal government to sit down with the provinces and at least attempt to fix the problem.
Bill C-32 amends the Employment Insurance Act and the Canadian Labour Code to double the duration of maternity and parental leave to one year. However, the government has continued to refuse to reduce the ridiculously high EI premiums. This year the government expects to collect over $18 billion in EI premiums but only pay out $12 billion in benefits. That is a surplus of $6 billion.
The Progressive Conservative Party of Canada proposes that EI premiums be reduced immediately to $2 per $100 of insurable earnings from the current level of $2.40.
EI premiums are a regressive tax on the poorest of Canadians. Somebody making $39,000 per year in Canada pays the same amount in EI premiums as somebody making $300,000 per year. It does not seem like a fair system.
The federal government is making it harder and harder to qualify for benefits. Currently only 30% of applicants who pay into the system actually qualify for assistance when they need it. Changes are needed to the EI system so that people can make proper use of what the system was designed for: help those who paid into it. It is not to be used as a fund to pad government books.
The tax grab from the EI fund of $19 billion that the government has taken from workers and employers is disgraceful and shows the true intentions of government.
The current arbitrary 20% limit for foreign content penalizes investors when returns from foreign investments are higher than returns on investments made in Canada. Bill C-32 increases the current limit of 20% to 25% for the year 2000 and to 30% in the following year. The PC party proposes that we increase this to 50% over the next two years.
The 1998 budget was called the education budget and the following year 12,000 graduates in Canada were forced to declare bankruptcy. The 1999 budget was called the health care budget, but over the last year hospital waiting lists have grown longer and the crisis in health care has become even bigger.
The 2000 budget has been dubbed the tax cutting budget, yet after these measures in Bill C-32 are implemented, we will still have the highest personal taxes in the G-7 and the second highest corporate taxes in the OECD.
There are certain measures within Bill C-32 that the Progressive Conservative Party support, such as the restoration of full indexation to the personal tax system. However, with the majority of the other initiatives, it is yet another case of the government lacking vision and taking baby steps forward.
We could have lower taxes and better spending on health care and social programs if the government had the courage to ensure that Canadian taxpayer money would be invested carefully instead of wasted rampantly.