Mr. Speaker, I am very happy to be able to take part in the debate on my government's budget. I will start, perhaps, by giving an overview and talking about the budget's objectives and highlights.
This budget does what is necessary to bring the deficit under control. These are the strongest fiscal measures adopted by the federal government in 50 years. This budget guarantees that we will bring the deficit down to 3 per cent of the gross national product by 1996-1997. It enables us to meet our deficit reduction objective, without increasing personal income taxes. For the second year in a row, the government has refused to lower the deficit on the backs of taxpayers.
The program review introduced in this budget redefines the role of government, with the result that the departments will concentrate their efforts on the priorities of Canadians.
After the broadest prebudget consultation process in this country, both the financial markets and Canadians alike have told us that they want first and foremost for us to cut the deficit and to put our financial house in order.
As the finance minister said himself: "Come hell or high water, we will meet our 3 per cent of deficit reduction by 1996-97". However, there are ways to do that. We could have used the Gingrich-Manning approach, the slash and burn approach, and cut everything by 15 per cent to 20 per cent. However, this is the wrong way. We have to do it in a fair manner, taking care of the poor, the handicapped and the senior citizens in our society. I do not think it is appropriate to cut 20 per cent of something that is good and keep 100 per cent of something that is bad.
The new philosophy of this party is that if the government does not have to do it, we will not do it; we will give it to private enterprise.
Most Canadians approve of this budget. There are very few people who complain about this budget. Of course, there are those who want to destroy this country; they will not approve something as good as this budget.
Unfortunately, the premier of Ontario, Bob Rae, along with his strategists, had to go back to the drawing board. He was counting on us to bring in a bad budget. He was counting on this to start his provincial campaign. I have news for Mr. Rae. He can call an election and campaign against the federal budget. He will meet Brian Mulroney and his party, because in Ontario we can take a lesson. I think the Ontario NDP government can take a lesson from what we have done here at the federal level in terms of deficit control.
This budget is necessary medicine for difficult economic times. It is the strongest fiscal action by any federal government in 50 years. It will result in a total savings of $29 billion over three years; $25.3 billion will be saved by expenditure cuts. The Minister of Finance is sending a strong message to international markets that Canada is serious about deficit reduction. Cuts to government departments account for half of the fiscal saving in this budget. Departmental spending will be cut by $3.9 billion in 1995-96, $5.9 billion in 1996-97, and $7.2 billion in 1997-98. For every dollar in increased revenue there will be $7 in expenditure reductions. That is what Canadians told us they wanted and that is what we did.
I would also like to speak about the impact of the budget in my northern Ontario riding.
There can be no mistake that this budget was tough on northern Ontario, as there were no incentives for natural resources and about 80 per cent of the economy of northern Ontario depends on natural resources. We knew this was to be a
tough budget, but we in northern Ontario were prepared to accept that. We know that we have to share the burden of taxes and deficit reduction.
Let us look, for instance, at the natural resources department. It suffered one of the largest cuts of all departments, close to 50 per cent. The new role of the department will be to focus on the sustainable development of natural resources, the revitalization of the natural resources sector, national and international leadership, knowledge of the land mass and natural resources, and health, safety and resource related environmental concerns. It will maintain a presence in areas of federal responsibility such as international trade and science and technology.
Due to the current financial situation, the government did not renew both the mineral development agreements, the so-called MDAs, and the forestry development agreements, the FRDAs, which were cancelled by the last Tory budget in 1993. We said in the red book that we would review those programs and we did. We would have liked to have kept those programs for northern Ontario and other parts of rural Canada, but we had to cancel them because of the fiscal reality in the country.
However, the government responded in other ways. It responded by taking action in eliminating unnecessary regulatory barriers to mineral development. This was a key priority identified by the mining industry.
The finance minister also told northern Ontario Liberal MPs that after the budget was presented he would be willing to look at alternative measures and incentives for the mining industry.
There is a campaign called "Keep Mining in Canada". It is a broad based organization of industries from across the country. That organization gave the budget an A-plus on the deficit reduction side. However, it would have liked to have seen tax based incentives for the mining industry. I have been pushing for that for the last year. I am a little disappointed they were not in the budget; however, I understand that the main thrust of the budget was deficit reduction. I also understand that the finance minister could not on the one hand, cut one sector, like agriculture, and on the other hand, give more incentives to another sector.
On the agricultural side, there are quite a few dairy producers in my riding. Only a few years ago Canadian farmers were caught in an international trade war that drove down crop prices and farmers' incomes. With many disputes settled, agricultural producers now receive more than a third of their income from the market. Our government will introduce a national whole farm stabilization program, along with crop insurance, instead of basing programs on individual agricultural commodities.
In 1997-98 $600 million a year from the federal government, in addition to $400 million a year from the provinces, will go into this program. This is after a reduction of 30 per cent, with a total savings of $250 million.
The greatest impact on farmers in Timiskaming-French River is the reduction of the dairy subsidy, which is 30 per cent over a two-year period. It is believed that this reduction may be made up in part by the cost of producing a pricing formula that ensures a fair payment to producers.
The elimination of the western grain transportation subsidies will save the government about $5 million annually. This will open the western economy to diversification and innovation and meet GATT requirements.
Since I only have two minutes, Mr. Speaker, I will address the regional development programs. There was a reduction of over $560 million by Industry Canada to ACOA, FORD-Q and western diversification. That is a reduction of about 49 per cent across the board. Fortunately for northern Ontario we have a program called FEDNOR. We were getting approximately a 1 per cent share per capita compared to other programs in Canada. True, with strong lobbying by northern Ontario MPs this program was not reduced but increased by $18 million. For that I have to thank the finance minister, who finally recognized that northern Ontario was not getting its fair share of regional development moneys.
It demonstrates that the Minister of Industry has listened to the concerns of the northern Ontario caucus and has recognized that northern Ontario was not getting its fair share of regional development funding and has acted decisively to correct this inequity.
Increases to FEDNOR will total $63.7 million over the next three years. The breakdown in funding is as follows: in 1995-96, $6.2 million to $23.3 million; for 1996-97 it will be up to $20.4 million; and in 1997-98 it will be up to $20 million again.
In closing I approve of my government's initiative to make this regional development money available on a repayable loan basis. I can say that the business people who are going to profit from these programs in my riding are also in agreement.