Mr. Speaker, I commend the previous speaker from London West for her fine maiden speech. I enjoyed it thoroughly.
Today I ask my fellow Canadians, one and all, to think calmly and clearly upon the budget that has been placed before this House. We are indeed fortunate to have such a well thought-out
and balanced financial plan presented to us as the basis of our operations the next fiscal year.
This balanced approach will lead to a fundamental reform of our system, create jobs, continue to care for those in need, and begin the process of reducing the debt to the target of 3 per cent of gross domestic product.
As the finance minister said in his speech, now is not the time to move away from our values but is the time to return to them. I see it. We have kept our commitment to the Canadian people as outlined in our campaign platform entitled Creating Opportunities , now simply known as the red book.
This budget is about jobs. It takes action to support the job creation now, while at the same time it builds the foundation for solid growth and quality, lasting jobs for the future.
This will be achieved through working toward three major goals.
First, building a framework for economic renewal to help Canadian business succeed and to turn innovation into a more effective engine for economic growth.
Second, ensuring a responsible social security system that is fair, compassionate and affordable, a reform that will create jobs and opportunities for all Canadians.
Third, restoring fiscal balance to government so that it can devote its full energy to helping Canadians adapt to a world of challenge and change.
This government is dedicated to restoring fiscal responsibility. This budget exemplifies that commitment by planning deficit reduction from $47.7 billion in 1993-94 to $39.7 billion in 1994-95 and down to $32.7 billion in the 1995-96 fiscal year.
Over the three-year period outlined in the budget the government will implement $5 of spending cuts for every $1 in revenue increase. This is the only path to successful deficit reduction. Canadians can no longer afford to shoulder an ever-increasing tax burden. This budget acknowledges that fact that while also recognizing the increase in spending today is simply increased taxes for tomorrow.
In terms of these spending cuts, this is the most significant budget in years. Measures in the budget result in gross savings of $3.7 billion in 1994-95, rising quickly to $13.6 billion in the 1996-97 fiscal year. During the entire three-year period gross savings total $28.6 billion.
These cuts are not illusions. For instance, defence spending will be 7 per cent lower in the 1995-96 year compared to this year. Business subsidies will be almost 9 per cent lower in the 1995-96 fiscal year. The cost to government will decline. The cost of the unemployment insurance program will be reduced by more than 10 per cent. In the end, total program spending will be virtually frozen over the next two years and will decline as a percentage of our economy.
As I mentioned earlier, by applying prudence in making economic assumptions the actions set in this budget set the deficit on target of achieving our stated goal of a 3 per cent GDP of deficit by the year 1996-97. The response I have received from constituents regarding this budget has been most positive. Business persons were pleased with the rollback of the unemployment insurance premium rates to the $3 level. This initiative will save business nearly $300 million a year. This money can be reinvested in business to stimulate employment and create much needed consumer demand.
They also like the support for small business that came from the formation of the Canada investment fund to provide venture capital for small business and the Canadian technology network which will provide access to new technologies.
I have talked to small business. These operators were pleased to hear that a task force would be established to work with the banks for which at this moment they have great mistrust. We hope that the banks by working with our task force will allow small business people to regain faith in the national banking system, because they seem to be shut out by the great banks of this country, and to develop a code of conduct for lending to small businesses.
Farmers and small business people alike were happy that the $500,000 capital gains exemption was retained, and for good reason. Over the past month I had the good fortune to meet with many farmers in my riding about this issue. I agreed with their thoughts on this matter and I am pleased that when they decide to retire, they will be provided with the security for which they have worked so hard.
Many patients and dentists were pleased that the speculated tax on the employer health paid insurance program was not on the budget. Constituents entering the housing market for the first time and the realtors who assist them were overjoyed with the news that the home owners plan would be made permanent.
As well, local charities in my constituency were delighted with the opportunity to raise more funds through the lowering of the threshold of the 29 per cent tax credit from $250 to $200.
What about the many constituents without vested interests in any particular area? Were they covered in this budget? Simply put, they were in full agreement with the manner in which the deficit was reduced and handled. Canadians concerned about the deficit told me, and these are the facts, that the finance minister and his pre-budget consultations were the most important thing that has happened as far as they were concerned. That the government was ready to act to swiftly cut the deficit was another big point that my constituents reported to me by phone.
However, they specified they were glad it was done through cuts and not taxes. Simply put, that is the kind of budget they got.
As I outlined earlier, the 1994 budget works to cut the federal deficit while holding the line on taxes. It also works to increase job opportunities and provides capital for business. At the same time it is a budget that is becoming widely accepted by Canadians as a fair and honest approach to dealing with the challenges facing this country.
How did the government manage to do this? Actually, it was quite easy. It listened to Canadians and for the first time in Canadian history the federal budget was developed through public consultations. From the feedback I have received the end result of these consultations was quite clear. The 1994 federal budget is good for the people of Perth-Wellington-Waterloo and I strongly believe it is good for Canada.