Mr. Speaker, I am very happy to rise to take part in this budget debate, however sad that example of the Reform from Alberta cozying up to the separatists may have made me. It is surprising that the comparison the Bloc did not make was to the fair share that Alberta received in this budget as well which was so warmly received by Mr. Klein.
Under the leadership of our Prime Minister, the federal government has now created conditions where Canadians can be optimistic about the future. After years of difficult choices, the finances of the nation are now solid and the government can act on those things that matter to Canadians.
By far the greatest priority for Canadians is the strength of our public health care system. Over the next five years, an additional $11.5 billion will be transferred to the provinces to be used in meeting the health care standards that Canadians have a right to expect. In my own province of Ontario, an increase of almost $4.4 billion will go into health care.
Health care is an obvious element of our quality of life and our quality of life is clearly dependent on our standard of living. The question is how can we maintain or, better still, how can we improve our living standards in Canada?
Since 1987 we have done okay. Our standard of living has grown by 7%. However, when we look at our American neighbours we see that in the same time they have increased their standard of living by 17%.
To understand why this has happened we need to look at the productivity growth rates that we have realized in Canada over that period of time. Productivity, the measure of the efficiency with which people, capital, resources and ideas are combined, is the most important determinant of our standard of living.
Unfortunately over the last 25 years Canada has had the lowest rate of productivity growth in the G-7.
If productivity in Canada had grown by 1.2% per year faster, which is the gap between the average U.S. and Canadian growth rates, our per capita income would have been $7,000 per year higher than it is.
It is no wonder that last fall the finance committee of this House warned that the slower rate of productivity growth is a cause for real concern for Canadians.
According to an Ekos survey, 82% of Canadians believe that increasing Canada's economic productivity is essential to improving our standard of living. Canadians understand the challenge. With time and a concerted effort, the government and the private sector acting in partnership can make sure that all Canadians see an increase in their wealth.
We have a strong foundation from which we can work. The broad economic conditions of the country are coming together. Last year this government recorded the first budgetary surplus in 28 years. Our inflation rate has been the lowest in more than a generation and interest rates are low.
And on the employment front, Canada is creating jobs at a rate unequalled in the G-7.
Canadians have demonstrated that when they put their minds to a task, as they did to eliminating the deficit, they can achieve their goals. This aptitude will stand us in good stead for the productivity challenge to which we must now turn our minds.
In terms of the nation's accumulated debt, first of all, the government acknowledges that debt is simply too large. The Minister of Finance has confirmed that we will make greater and greater inroads on the debt and in this fiscal year alone the debt to GDP ratio should drop to 65.3%. In the last two years we have seen the retirement of $20 billion of market debt.
Second, Canada's overall tax burden ranks about the average among the G-7, but the reality is that it is higher than that in the United States which is our major competitor. In the budget the government set out its plan for tax relief, that it needs to be fair, it needs to be focused on the individual and it needs to be sustainable or permanent. Taken together, the 1998 and 1999 budgets provide tax relief totalling $16.5 billion over three years.
Third, stronger productivity growth will require stronger business investment in technology, machinery and equipment.
Four, we need more foreign investment in Canada because it can bring new technology and ideas.
Fifth, Canadians must take more chances, innovate more often and bring our ideas to market. The government's decision to invest an additional $50 million in technology partnerships Canada signals that we understand innovation is a strong determinant of productivity growth.
Still though, Canada's private sector spends less on research and development as a share of its GDP, despite our more generous R&D tax incentives. Fewer than 1% of Canadian firms perform any R&D. Moreover, not enough Canadian ideas are commercialized in Canada.
Sixth, while the World Economic Forum ranks Canada first in knowledge workers, we are not following through with on the job training.
Seventh, our exports are concentrated in too few firms.
Taken together, training, trade and R&D, the World Economic Forum ranks Canadian businesses as 15th in terms of company operations and strategy. And that ranking is dependent on too few firms.
The government started down the productivity path with a program called “Building a More Innovative Economy” in 1994 and has broadened its strategy with the last federal budget.
In 1997, the Canada Foundation for Innovation was created with an $800 million dollar investment from the federal government. The foundation's mandate is to fund new and modernized research infrastructure. This budget will increase that investment by an additional $200 million.
To ensure that our research infrastructure is fully utilized by the brightest minds in the country the government has further increased its total support to the research granting councils and to the National Research Council by more than $120 million. We are accelerating our efforts to disseminate knowledge. The budget will broaden access to the information highway with $60 million for the smart communities demonstration projects. Our networks of centres of excellence have brought together the best of our brains in a uniquely Canadians way that creates ideas like sparks off a flint. I want to see those sparks ignite and blaze in as many productive paths as possible.
That is why the government has invested an additional $90 million in the networks of centres of excellence. Moreover, by investing an additional $430 million over the next three years in the Canadian Space Agency and thereafter stabilizing its annual budget of $300 million, the government has determined that Canadians will participate in exploring the space frontier.
When Canadians compete with the best in the world we can win. We can come out ahead. It happened in the automotive sector, the pharmaceutical sector, the aerospace and biotechnology sectors. Our investments in education, training and technology pay important dividends in jobs and growth.
As we look to the 21st century we can pull that same resolve together as a nation to address the productivity challenges that are core to high quality accessible health care, a strong educational system, second to none, a society that provides real opportunities for youth and security for their parents and grandparents.
This budget is a further step in implementing the long term plan that we began to set out in 1994. Success is a journey, not a destination. With this budget, we continue our progress on the road of success.
