Mr. Speaker, I will be sharing my time with the hon. member for Vaudreuil.
It is with great pleasure that I rise to speak on the debate on the budget. The Minister of Finance last night presented to Canadians a budget that is fair, compassionate and visionary.
Last night, as part of my budget night activities, I held a teleconference with representatives from industry, municipal governments, business, social services, education and health in my riding of St. John's West, all of whom wanted to convey their reaction to the budget.
While these individuals had some concerns, the reaction to the budget was largely positive. While my colleagues on the other side of the House earlier mentioned that the Chambers of Commerce were not in favour of the budget, last night I had representatives from the Chamber of Commerce who were very positive about the budget and had nothing but good things to say about it.
I will now touch on some of the key points raised during the teleconference and discuss the impact on my riding of St. John's West. As a government not only are we meeting our deficit reduction targets, we are surpassing them. The budget ensures that we will meet our red book commitment of reducing the deficit to 3 per cent of GDP within our first three years in office.
In addition, by 1997-98 we will be meeting our new interim target of 2 per cent. By 1997-98, due to the consistent efforts of the Liberal government, the economy will finally be growing faster than the debt, the first time since 1974-75.
Program spending will be reduced by 12 per cent of GDP by 1998-99, which translates in the lowest level in 50 years. Also, Canada's fiscal requirements will be cut by $6 billion in 1997-98, the lowest of all the G-7 countries.
Earlier my colleague from the third party spoke about fishery violations and offences occurring and he went through a great litany of these violations taking place on the west coast.
For his information, the department of fisheries raised its enforcement budget to provide greater enforcement. The government cannot possibly have enforcement offices at every location to control all the people who want to violate our fishery agreement.
The residents of St. John's West are particularly pleased that there are no tax increases in the budget, no increases in personal income tax, no increases in corporate tax and no increases in excise tax. The government has not increased personal income tax since we took office three years ago.
Canadians have told us they want the deficit and the debt reduced, but they also want to protect the most vulnerable, and the people of St. John's West are no exception.
Again the finance minister has listened to Canadians and has safeguarded our social programs for the next century. Over the next five years the CHST, federal transfers to the provinces for health, post secondary education and social assistance, will be maintained. Funding will remain constant at $25.1 billion for the first two years and will actually increase over the three remaining years.
Although the initial cash component in Newfoundland's CHST will decline initially, transfers will resume growth some time over the five-year arrangement. The federal government is guaranteeing that the cash component of the transfer will never be lower than $11 billion during this five-year period. Newfoundland will benefit from the tax component as well as from the cash guarantee.
Also, by putting a floor of $11 billion under the cash part of the CHST, the federal government is ensuring the principles of the Canada Health Act can and will be enforced throughout Canada.
A new seniors benefit will replace the existing old age security and guaranteed income supplement. This new system is designed to help those who need it most. In my riding of St. John's West there are many single seniors and many senior couples who live on incomes well below $40,000 a year. To these seniors I want to say they will be as well off, indeed better off, than they are under the current system.
The new benefit will be tax free and fully indexed to inflation. The new system targets those who need it most and ensures the system is sustainable in the future.
In keeping with our red book commitment, the federal government is introducing a new child support system. These changes were a long time coming and are long overdue. The child support paid under the orders or agreements made on or after May 1, 1997 will no longer be taxed as income to the recipient, nor will it be tax deductible for the payer.
The federal government will introduced guidelines to assist parents, lawyers and judges to see that fair and consistent child support is awarded in divorce cases. The federal government will introduce comprehensive measures to help provincial enforcement agencies ensure that support is paid in full and on time.
The maximum level of working income supplement of the child tax benefit will double; it will increase from $500 to $750 in July 1997 and will increase again to $1,000 in July 1998.
Jobs and economic growth continue to be the government's top priority.
Since we took office in 1993 the Liberal government has and will continue to provide the private sector with an environment for growth. The economic climate in Canada is improving. Interest rates have declined three percentage points in the last year. Inflation is at its lowest level in 30 years and Canada's economy is more competitive now than ever.
More than 500,000 private sector jobs have been created. With this in mind the Liberal government is investing in the future. No longer do we have the resources to do everything. We must make some strategic choices. We must invest in areas where we can get the biggest bang for our buck.
The federal government therefore is reallocating existing funds into three areas, youth, technology and trade. We are providing an additional $165 million over three years to help students and their families deal with the increased costs of education. The government has increased education tax credits, raised the limits on the transfer of tuition fees and education credits, and increased the limits to contributions to RESPs. Also, the eligibility for the child care expense allowance will be broadened.
The government will also provide $315 million over three years to create new youth employment opportunities. We will double funding for summer student jobs. We remain committed to Team Canada style partnerships between business and government in order to create entry level jobs for youth.
I understand the Minister of Industry will soon announce technology partnership Canada, which will encourage develop-
ment of the environmental technologies, advanced manufacturing of material as well as biotechnology. In addition, funding to the Federal Business Development Bank will increase so that the bank will be able to provide more loans to knowledge based exporting and growth businesses.
The government is assisting small business by bringing it all of the advantages of access to the information highway. We are introducing a program in which 2,000 computer students will connect to some 50,000 small businesses on the Internet.
Canada's trade performance in the last few years has been nothing less than remarkable. Team Canada's approach has proven a major success with $20 billion in new business deals resulting from three major trade missions led by the Prime Minister.
Exports are vital to the creation of jobs. Every billion dollars in exports translates into 11,000 to 12,000 new jobs. Because export financing is so critical, the government will provide $50 million to the Export Development Corporation for further innovative types of export financing.
I will briefly mention the measures taken in relation to RRSP and RPP limits to increase flexibility for individuals saving for their retirement. A seven-year carry forward for RRSPs is being removed to permit individuals to continue to save for their retirement. The age limit for maturing RPPs and RRSPs will be reduced from 71 to 69. RRSP limits will be frozen at $13,500 through to the year 2003 and then increased to $14,500 in 2004, and $15,500 in 2005. These measures will limit the cost of the tax deferrals associated with retirement savings, while ensuring tax assistance is targeted at modest and middle income Canadians.
This is a fair budget, a realistic budget and a compassionate budget. While the economy is finally improving, the government must continue to stay the course on debt and deficit reduction. We have made some tough choices to ensure the programs we cherish as Canadians will continue into the next century. This budget will ensure that.