Barry Campbell

[Competition Act, March 20th, 1996]

Mr. Speaker, the hon. member has asked a question about the system for electronic document analysis and retrieval, or SEDAR.

It would perhaps be useful to tell the House what SEDAR does. SEDAR makes it possible to transmit documents electronically to securities commissions and to create an electronic data base accessible to the public.

Rather than being mailed to each of the provincial administrations, as is now the case, documents would go out once electronically. For us and for those involved in the securities market, this is clearly a welcome measure. In fact, if we were to set up a Canadian securities commission, SEDAR would be an essential part of it.

With the advent of SEDAR, the Canadian securities commission is not superseded. In itself, SEDAR does not eliminate the overlap in the present securities regulation system in Canada. It does not solve the problem of approving prospectuses and registering brokers. The approval of at least 12 regulating bodies is still required.

It does not eliminate the inconsistencies in the application of provincial rules, the discrepancies in execution, or the time and effort necessary to co-ordinate the policies of provincial administrations.

The commission would promote the effective application of regulation and improve access to Canadian financial markets. As financial markets are increasingly linked to foreign markets, we must increase the efficiency of our markets in order for our businesses to be competitive.

[Supply, March 20th, 1996]

Madam Speaker, I am really baffled. It used to be said about communists that the hardest thing about being a communist was predicting the past because of revisionist history. I see this going on in the Reform Party. It is incredible.

In 1990 the hon. leader of the Reform Party said that his party would repeal the GST. In 1991 he reversed and said that it could not be repealed immediately because that would increase the deficit. In 1992 his party changed its position again, that it would reduce the GST but in stages and after the budget was balanced.

In 1994 in a minority report appended to the finance committee's report on the GST, the hon. member for Capilano-Howe Sound said: "We commend the government on its attempt to harmonize the tax with the provinces. While we support the much needed harmonization, this would be a very difficult political objective to achieve". I recall he offered his help to achieve that.

Now there is a motion that states we should scrap it, end it, abolish it. We had a Reform Party alternate budget last year but

there is no Reform alternate budget this year. There is no provision for replacing the revenue from the GST that would not come after scrapping it.

I ask the hon. member for Capilano-Howe Sound, what is the position of the Reform Party today on the GST? What will it be tomorrow, the day after and the day after that? We have been through five different versions.

Further, would the member explain what was meant in last year's minority report when he and his party said: "We believe that a broadening of the tax base would address many concerns placed before the committee. That would also require an increase of the current GST rebate". He was clearly willing to talk about a broadening of the base to get a lower rate, including food, drugs, all manner of things.

[Supply, March 19th, 1996]

Mr. Speaker, the night before an opposition day we wait with bated breath for the opposition party's motion. However, it was with some disappointment and surprise that we received the motion last night.

The motion reveals that the hon. member from Saint-Hyacinthe understands appearances but is baffled by substance. He received a press release concerning a committee and was all incensed about the composition of the committee.

We now have a motion that deplores the composition of the committee but misses the substance which is that we are in a very real way responding to suggestions from members of the House that we look at the tax system with a view to determining impediments to job creation and growth. This has been undertaken in the most proper way.

The member for Saint-Hyacinthe-Bagot is an expert in the dairy industry. Let us look at the state of the dairy industry in Quebec. If Quebec were to separate would the dairy industry of Quebec be able to export milk to the rest of the country the way it has in the past?

I would consult the member for Saint-Hyacinthe-Bagot on an issue in which he had some expertise. The dairy industry in Quebec is an area where he clearly has some expertise. I would to consult him because he has experience. However, he also would obviously have some bias with regard to that industry because of his familiarity and he was paid by that industry. I would be pretty wary of his advice and I would want it subjected to scrutiny and public consultations that followed.

Coming back to the analogy from the letter the hon. member quoted, if I wanted to understand why the fox wanted into the hen house I would not just talk to the hens, I would interview the fox also.

It has been extremely disrespectful of the member to waste the time of the House. He has really out done himself in the way he has attacked the process. As I said, he understands appearances but he is clearly baffled by substance as he engages in what is really intellectual cross-dressing. This is a triumph of dogma over good sense. In the process he has belittled the reputation and professionalism of some of Canada's most eminent experts on taxation.

He has implicitly attacked the government's demonstrated commitment to tax fairness and ignored the raft of actions we have taken to ensure that businesses pay their share of the cost of providing government services to Canadians.

The member has abused the purpose of supply day itself, a time which we should spend on critical issues, with a motion that contains some regrettable misinformation.

What is really deplorable is not the composition of the technical committee and not the process of taxation review but to leave out of his remarks the recognition he has that this is but a first step in a process that will involve public consultation and consultation with members of the House.

These facts should surprise no one who listened to the minister's budget speech or read the news release announcing the committee. Unfortunately that does not include the hon. member. Let me explain things to him and to other members who are interested.

Why is the committee so small? What about public participation then? This is the first step in a business taxation review. This small group, whose members have expertise in various fields, will assess

the business taxation system as a whole and make useful recommendations and propose useful options to the government.

Public consultations will be held after the committee report has been released. At that time, special interest groups will have every opportunity to make themselves heard-in response to a package of clearly set out options and proposals-before the government makes any policy decision.

That is the way we go about things. We consult the experts and we get, as some might say, something to shoot at. We have a set of recommendations and people can weigh in on either side. We want to consult experts in the fields first.

As the minister said in his budget speech, Canadians want a tax system that is both as fair and as simple as possible. They also want a system that encourages economic growth and job creation. Given the complexity of these objectives, a comprehensive review of taxes related to investment and business activity is warranted.

The last general review of business taxation was internal work that preceded the 1987 tax reform undertaken by the previous government a full decade ago. The time is right and the objectives of the technical committee are clear and concrete, goals that every Canadian from every region can embrace.

The terms of reference were spelled out plainly in the news release that accompanied the budget.

"Improving the tax system to promote job creation and economic growth in an open economy; simplifying the taxation of business income to facilitate compliance by taxpayers and administration by Revenue Canada; and enhancing fairness in the tax system by ensuring that all businesses share the cost of providing government services. In addition, the assessment will consider the interaction between taxes paid by business-including corporate income, capital and payroll taxes-and taxes paid by individuals on income derived from investments".

Promoting job creation, simplification, better compliance, increased fairness, is there any Canadian anywhere who will not agree that these are vital attributes that our national tax system must display or that pursuing these goals must be a commanding concern of the government? That is what we believe and I suspect or at least hope the hon. member shares that vision. His motion is something else. It fails the tests of fairness and openness, the same values it claims are missing from the technical committee process itself. That is regrettable.

It describes the appointed members of the committee in the English version as both judge and judged with regard to business tax reform. Common courtesy and natural justice demand that these men and women deserve better and that such a meanspirited mistaken attack is inappropriate in the House.

They are not judges who will issue binding rulings because the government and the House cannot and will not be bound by their findings. They are there to analyse and advise because they are proven experts, distinguished academics, distinguished practitioners, the sort of people who know the field and who will help us to understand it while we remain members of the House with our ability to think critically about the issues they will raise.

They are proven experts like Jack Mintz. They are lawyers and accountants. I have their names and backgrounds with me here. They represent a wide cross section of expertise including Robert Brown, chairman and chief executive officer of Price Waterhouse; Professor Bev Dahlby of the University of Alberta; Gerry Godsoe, a partner with Stewart McKelvy Stirling Scales; Allan Lanthier, senior tax partner with Ernst and Young; Wilfrid Lefebvre, senior partner with Ogilvy Renault; Profession Nancy Olewiler, chairman of the economics department at Simon Fraser; Norman Promislow, a partner with Buschwald Asper Hentelef; Stephen Richardson, a partner with Tory Tory DesLauriers & Binnington.

They are all recognized experts in their field, the sort of people we would want to work on these issues and report to us. They are not judges. They will not make binding commitments for the government. They will analyse and advise.

How does the hon. member dare suggest these technical members are also the judge? Is he suggesting they are potential agents of the business community with vested interests that will make their advice suspect? He knows better. He knows they have highly regarded professional reputations. We are grateful to them for taking on this task.

I believe they have a higher opinion of their professional obligations and their duty to the nation and its taxpayers than the hon. member opposite appreciates. He would well understand that one leaves the baggage of a given client or past experience behind when it comes to an assignment like this for the Government of Canada, that one does bring to bear one's experience. That is why we call on such people.

The real bottom line measure of performance is the commitment we have as a government to the task at hand. I am confident the members of the technical committee will take their work seriously and provide us with important assistance.

Let us remember that the report will be a public document. Its observations and suggestions will be there for everyone to see. Any unwarranted biases or favouritism, which the hon. member automatically assumes would apply to everyone else but himself, will be there for all to judge. The technical committee accepts that discipline.

What about the suggestion in today's motion that the technical committee should include parliamentarians? The answer lies in the meaning of the term technical committee, which clearly escapes the understanding of some hon. members opposite.

Modern tax systems are complicated. That is part of the problem. We have struck a technical committee which has expertise and proven hands on familiarity with the system. Its members are well beyond taxation 101. In fairness to many of my colleagues like myself, the Income Tax Act strikes us as being extremely complicated. I want a little help when travelling through the act to zero in on those areas that are impediments to job growth and creation.

The committee will begin its work high up in the learning curve. I doubt there are many members of the House with the same expertise. We will gain time by involving a committee which is made up of people with these qualifications. The question is: What added value would parliamentary presence bring at this initial, purely analytical stage?

The technical committee should be allowed to undertake its deliberations without being afraid of stepping on political toes. It should be truly independent of direct party affiliations and public constituencies.

What is astounding is that implicit in the hon. member's attack on the committee is the suggestion that he and he alone-or perhaps his colleagues in the official opposition-knows exactly what has to be done. Why consult anybody that has a different point of view? That would lead to a result which might be different from the one they have decided, for ideological and other reasons, they want to propose.

There are dramatic inconsistencies in any event in the position of members of the official opposition. On the one hand they attack tax havens; on the other hand their separatist colleagues in Quebec talk about an independent Quebec being a tax haven. I am not sure where they stand. I want to hear from the experts first and then my colleagues can weigh in.

The committee's deliberations will not be public at first but there is nothing suspicious or sinister at work, despite the misleading and mistaken implication in today's motion.

As is customary in committees of experts, task forces and royal commissions of inquiry reporting to the government, the proceedings will not be open to the public. But the report itself will be published, of course, along with any documentation the committee deems appropriate to support its assessment and findings.

One of the things of which I am most proud is the progress the government has made in bringing policy making out into the open. As was said in the House last December regarding the prebudget report of the finance committee, in the past, budgets were made for the most part behind closed doors with the finance minister consulting in private with select groups of individuals and interest groups. The government for the third year in a row has taken the budget making process out from behind closed doors to Canadians across the country.

It is that openness which has contributed substantially to the favourable public reaction the government's budgets have received and it has no intention of jeopardizing that commitment in the future. The government's performance is a matter of record and it will stay that way.

I will emphasize again that any action based on suggestions of the technical committee will come only after extensive public consultation. The minister explicitly promised that in his budget speech.

I feel we should all regret the time we are spending debating a motion so lacking in merit. It is a wasted opportunity to deal with the real substance of matters before us.

The issue of taxation, both from the perspective of fairness and how it affects job creation, represents one of the most significant challenges our country faces. It deserves a debate based on substance, not political grandstanding and partisan game playing. We are committed to meeting that challenge. The action we have taken in three budgets proves that. It also proves that we are not beholden to any particular interest as the motion may imply. Again, let us look at the facts.

In our three budgets, personal income tax rates have not been increased at all. However we have taken real action affecting the corporate sector, putting the lie to the implicit suggestions in the hon. member's motion and his discussion. This action was carefully considered with respect to the corporate sector. We fully understand the consequences that higher corporate taxes have upon business investment and the ability of the private sector to create the jobs Canadians need. We have moved carefully, acting only where we could achieve real improvements, fairness and efficacy in the tax system.

We have acted without fear. This includes measures such as higher rates for the large corporation tax and the corporate surtax and reduced deductions for meals and entertainment, reducing business subsidies. Any suggestion that we are afraid to act with respect to the business and corporate sector where action is

warranted, fair, reasonable and helpful, is simply wrong. The record shows otherwise.

There are some, and perhaps the hon. member opposite is among them, who would prefer a truly punitive tax regime for business. It is interesting that he only suggests that in regard to Canada. In the province of Quebec other things are said about tax havens and lower corporate rates to attract investment, but it is here in the House that he says: "No, no, that is not on". He and his colleagues try to play with numbers to suggest that Canadian business gets an unfair preference in the tax system.

The fact is, and he knows it, that income taxes represent only a portion of the total tax bill. When all taxes are taken into account, income taxes, corporate income taxes, capital taxes, payroll taxes, property taxes, corporations pay about two-thirds of their before tax profits in taxes. Is that too much or is it still not enough? That is a question which must always be examined as we look at the mix of tax revenues along with the structure of the tax system. That is what this government will continue to do.

The technical committee on business taxation is a part of that process. Its findings should help spur informed intelligent debate, what every member of the House wants to take place, the sort of debate that today's motion does nothing but try to undermine.

I have no qualms in urging the House to dismiss the motion.

[Borrowing Authority Act, 1996-97, March 18th, 1996]

Mr. Speaker, thank you for providing that guidance. We regret the confusion at the front end of this. I happily yield the floor to the member opposite. We can continue the debate afterward if he needs to speak now rather than later this evening.

[Borrowing Authority Act, 1996-97, March 18th, 1996]

I am sure members opposite are very pleased that they will not have to endure me for 40 minutes. I will be splitting my time with the hon. member for Mississauga South.

I welcome this opportunity to speak on second reading of Bill C-10, the borrowing authority bill. As in previous years, the amount of borrowing authority requested in the bill is directly connected to the financial requirements set out in the federal budget. The information required to deal with the financial aspects of the bill is also contained in the budget plan.

I urge the House to approve this legislation as soon as possible. Our goal is to have new borrowing authority in place on April 1, the beginning of the government's new fiscal year. This will ensure continued regular financing operations for the government.

All borrowing authority granted by last year's Borrowing Authority Act, including the $3 billion non-lapsing amount, will be depleted by the middle of April. If this legislation is not in effect on time, it means that the government's funding requirements would have to be met by using section 47 of the Financial Administration Act.

Section 47 restricts the borrowing to short term funds. Having to resort to these could be costly to the government and Canadian taxpayers and would expose the government to the additional interest rate risk implied by increased short term funding. That is why it is critical that borrowing authority be secured.

I intend to highlight the specifics of the legislation before us. First, since this is legislation authorizing the government to borrow money, it is clearly appropriate to review our fiscal philosophy, what we do with the funds the taxpayers provide and borrowers lend to us.

The message has been driven home again and again in the finance minister's budget speech and in the debate that followed. These messages are worth repeating because no one should doubt our commitment.

The 1996 budget plan consolidates and extends the actions set out in the 1994 and 1995 budgets. Together, they implement a comprehensive strategy that is determined, measured and responsible.

It is determined because we are not letting up. As the Minister of Finance emphasized: "The attack on the deficit is irrevocable and irreversible. We will balance the books. Furthermore, we will put the debt to GDP ratio on a constant downward track year after year after year".

It is measured because our fiscal action plan is designed not as a quick fix, but structured to achieve long term, permanent progress.

It is responsible because it is a strategy that involves carefully weighing the needs of our economy and society and equally carefully designing the policy options to meet those needs.

The majority of Canadians do not want the slash and burn approach that ignores economic consequences and abandons the vulnerable. They do not want Gingrich style grandstanding. They want an approach that is fair and balanced. Just as important, it is the balanced approach that is the best way to keep Canadians onside for deficit reduction efforts.

I need not elaborate on the basis for our decision to take strong and disciplined action for Canada. High deficits and a high public debt have raised interest rates, undermined confidence, swallowed up domestic savings and made Canada's international debt soar.

With our first two budgets, we have put in place a rock-solid fiscal base. These two budgets instituted the most drastic spending cuts since the war, structural cuts spread over the entire medium term planning period. But this base entails much more yet. It means setting deficit reduction targets over two years, using conservative economic assumptions and building large contingency reserves against unforeseen economic fluctuations.

These measures ensure that our deficit reduction targets for 1995-96 and 1996-97, to bring the deficit down to 3 per cent of the GDP, will be met in spite of the fact that the GDP did not grow as much as originally forecast. One of the factors that made this possible is the sharper than anticipated drop in interests rates, which counteracted the effects of slower growth on the deficit.

The measures in the 1996 budget consolidate and extend those in the first two budgets and further contribute to our economic and financial objectives. We have maintained our focus on reducing program spending because the deficit is a problem created by government. The solution, therefore, should focus on cutting in our own backyard. In the 1994 and 1995 budgets there were no increases in personal income tax rates. In the 1996 budget there were no tax rate increases at all.

There is another way to underscore this point. Of the cumulative fiscal actions taken from 1994-95 to 1998-99, a full 87 per cent have been expenditure savings. Expenditure cuts in the 1996 budget amounted to $1.9 billion in 1998-99 and build on the reductions of the two previous budgets to keep program spending on a downward track.

Together, the three budgets and the employment insurance reform will contribute $26.1 billion in savings for 1997-98. This will ensure we hit our new deficit target to keep the federal shortfall to just 2 per cent of GDP in 1997-98. Our combined budget plans will deliver a further $28.9 billion in savings in 1998-99. This means the deficit will continue to drop and our debt to GDP ratio will fall.

There should be no doubt about the dramatic dimensions of this action. Program spending, that is everything but interest payments, was $120 billion in 1993-94. By 1998-99 we will have cut it to $105.5 billion. That is a decline of 14 per cent which means that program spending will have declined for six straight years.

These are real cuts in actual dollars, not reduction against some previously established plan. Relative to the size of the economy, program spending will fall to its lowest level since 1949-50. This drop in actual program spending is unprecedented in Canadian post-war history and virtually unprecedented internationally. Most other countries are merely trying to slow the growth of their spending.

There is another milestone I want to mention. Through such deficit action the federal debt to GDP ratio will fall 1.1 percentage points in 1997-98. That will be the first significant decline since 1974-75. It means the national income will finally be growing faster than financial obligations, putting us in a better position to manage.

There is one final fiscal measure I want to discuss which is financial requirements. In other words, how much new borrowing the government will be doing on financial markets. This is the basis by which most other countries, including the United States, the U.K., Germany, France and Italy, measure deficits.

In 1993-94 federal financial requirements stood at $30 billion or 4.2 per cent of GDP. By 1997-98 they will have dropped to $6 billion, just 0.7 per cent of the GDP. Relative to the size of the economy, that is the lowest level in almost 30 years. On that basis, we will likely have the lowest fiscal shortfall of any G-7 central government.

There is one thing we must all understand. Budget forecasts are just that, forecasts, estimates. That is because these things deal with the future and factors that can only be assumed such as economic growth and interest rates. That is why one of the budget plan foundations is to apply economic assumptions that are more cautious than those of the private sector. For example, projections for 1997 are based on interest rates 80 bases points higher than the average of private sector forecasts.

This is not a gimmick to deliver easy to reach targets. It is a discipline embraced because Canadians are tired of governments that emphasize wishful forecasts and then miss those targets again and again. We have been setting rolling targets that we have been achieving again and again, and will continue to meet.

Of course there were always excuses for the missed targets in the past, but governments are judged on their performance not their promises. That is why we built in a prudence factor to buffer us against the sort of events on which excuses are too often based.

Let me emphasize a corollary point. If economic developments are either as assumed or more favourable than assumed, the deficit will be even lower than our 2 per cent of GDP target in 1997-98. Any portion of the contingency reserve that is not needed will be applied directly to deficit reduction.

I want to turn to the legislation before us, but before I do let me just put Canada's fiscal progress again in an international context, specifically comparing it to the United States, our largest trading partner and the most meaningful comparison. The Canadian fiscal situation can be compared by contrasting our financial requirements with the U.S. deficit on a unified budget basis.

Canadian federal deficits relative to GDP have been larger than U.S. government deficits in recent years. However, with the fiscal measures in 1994 and 1995 in those budgets combined with our latest plans this performance will be reversed.

For 1996-97 the comparable Canadian deficit is projected to fall to 1.7 per cent of GDP while the U.S. deficit will remain stable at 2.1 per cent. The difference between the two ratios should widen in 1997-98, exceeding a full percentage point in Canada's favour.

The main factor behind this shift is program spending. Between 1994-95 and 1997-98 Canada's federal program spending is set to decline by 3.2 percentage points of GDP compared with only 0.8 percentage points in the U.S.

Federal program spending in 1997-98 should represent just 12.6 per cent of GDP compared with to 16.8 per cent in the United States. That is an incredible change. As I mentioned earlier, this spending will fall even further in 1998-99 to 12 per cent of the Canadian economy.

Let me now turn to Bill C-10. Like the borrowing authority bill for last year, this bill contains three basic elements: authority to cover financial requirements for 1996-97, exchange fund account revenues, and a non-lapsing amount. In total the government is requesting authority to borrow $18.7 billion for the 1996-97 fiscal year.

Let me touch briefly on the main provisions of the bill. First, there is the provision for $13.7 billion of authority to cover our anticipated borrowing to meet the net financial requirements set out in the new budget.

Second, there is the provision to cover $1 billion of exchange fund account earnings which give rise to additional Canadian dollar borrowing requirements. This is because these earnings, although reported as budgetary revenues, are retained in the exchange fund account. They are not available to finance ongoing operations of the government.

Third, there is a $4 billion non-lapsing amount. This is something I want to emphasize because it represents a change from previous years. The non-lapsing amount has been $3 billion since 1986. Our $1 billion increase is a prudent measure which will provide the government with the ability to manage foreign exchange requirements more effectively in light of increased exchange market flows and volatility in recent years.

The non-lapsing amount can either be used during the course of the year to manage contingencies or be carried forward temporarily into the next fiscal year until new borrowing authority is granted. In either event it underscores the sort of fiscal and economic prudence we believe must be the hallmark of good government in a world of accelerating change.

There are some minor technical provisions in the bill that more clearly link fiscal year borrowing authority with fiscal year borrowing requirements.

One provision provides that 1996-97 borrowing authority may be used only after the 1996-97 fiscal year begins. Another provision stipulates that for the purposes of calculating borrowing authority usage, the effective date is April 1.

If the borrowing authority bill is not passed before the start of the new fiscal year the government may continue to use in 1996-97 the $3 billion non-lapsing amount provided for in the Borrowing Authority Act, 1995-96. However, any use of the non-lapsing amount in 1996-97 will be deducted from the basic amount of new borrowing authority when the legislation before us is passed. This prevents the non-lapsing amount in any year from effectively adding to the borrowing authority in the following year.

We want the borrowing authority bill passed before the start of the new fiscal year to avoid using the non-lapsing amount, which in any event would last but a few short weeks. I appreciate the efforts of members opposite in expediting the passage of this borrowing authority.

This bill will cancel all borrowing authority remaining from fiscal 1995-96 once it is passed.

As further background information, I would like to review the government's debt operations in the current fiscal year up to mid-February.

I hope members are writing this down. I know they have been taking careful notes. So far in the fiscal 1995-96 domestic debt program the government has issued about $25.3 billion in marketable bonds, $1 billion in real return bonds and $224 million in

CSBs. There were also net redemptions of $5.8 billion in treasury bills. This provides a total of $26.5 billion in net new market debt.

I report to the House on last fall's CSB campaign. This year the government took a first step into the highly competitive RRSP market. Last fall for the first time, Canada savings bonds could be registered directly in the name of an RRSP. In January the new RRSP option was extended to all outstanding series of compound interest bonds.

The 1995 CSB campaign produced sales of $4.6 billion. After counting for redemptions during the year, the net increase in CSBs outstanding was $224 million, as I indicated earlier.

Regarding foreign currency debt outstanding, Canada bills decreased by U.S. $2.8 billion to U.S. $3.7 billion at the end of February. These are short term U.S. dollar denominated bills issued from time to time in the U.S. market to fund Canada's foreign exchange reserves.

The government launched two very successful global bond issues last year, a U.S. $1.5 billion five-year issue in May and a U.S. $1.5 billion 10-year issue in July. The five-year issue gained recognition from international financing review as the sovereign deal of the year. The proceeds of both issues were added to Canada's official exchange reserves.

In summary, this bill is straightforward and contains no unusual provisions. I urge the House to approve this legislation as quickly as possible so that new borrowing authority will be in place at the beginning of the new fiscal year and the government's regular borrowing program can proceed as the fiscal year begins.

As the debate continues we will learn a great deal more about this bill. Members will be fully informed about it. May I get a little guidance from you, Mr. Speaker, at this point?

[Borrowing Authority Act, 1996-97, March 18th, 1996]

Mr. Speaker, it has happened on numerous occasions and if it is not acceptable to members opposite that is fine. I will just speak very slowly for 40 minutes.

[Borrowing Authority Act, 1996-97, March 18th, 1996]

Mr. Speaker, if you were to seek it, I believe you would find unanimous consent for me to split my 40-minute speaking time with the hon. member for Mississauga South.

[Supply, March 18th, 1996]

Mr. Speaker, I am pleased to rise on behalf of the Minister of Finance to respond to the question of the member for Regina-Lumsden.

The government's number one priority has always been, is and will remain job creation. A key part of this commitment is ensuring that the corporate tax system contributes to job creation. Many steps have been taken.

The government has eliminated a whole range of what the member opposite would call tax breaks. They are too numerous to mention. Last year, as the member knows, it took significant steps to reduce business subsidies which were continued in this budget as well.

A number of incentives have been kept in place. They have been studied extensively and have been judged useful for job creation, for instance, the small business tax rate. I do not think the member opposite would argue that it was not useful in encouraging job creation in the small business sector. There are also vital measures to encourage research and development. I do not think any member

of the House would argue with the importance of research and development to the creation of long term and important jobs.

To ensure that corporations contribute to deficit reduction and do their fair share, steps have been taken with regard to the large corporation tax rate. Furthermore, the temporary surtax on banks which was instituted in last year's budget is continued further in this year's budget.

Finally, in this year's budget a technical committee was created to look at other ways in which the tax system can contribute to job creation. Their report will be made public after consultations some months hence. We all look forward to seeing the committee's recommendations.

[The Budget, March 18th, 1996]

Mr. Speaker, I thought I heard the hon. member say that he could not give this budget a letter grade because it was so bad.

Members opposite often cite the Fraser Institute, but on this occasion, not a word. Michael Walker said: "In regarding the government's latest budget as boring, commentators have missed some of the most aggressive fiscal action in the country's history. Far from being a bore, this budget was a turning point in Canadian fiscal history. We may well chart a dramatic turn in our fortunes to March 1996".

Would the hon. member like to comment? It is not that Mr. Walker has had a conversion on the road to Damascus; he has read the budget.

[The Budget, March 18th, 1996]

Mr. Speaker, I would like to pick up on the discussion of labour sponsored venture capital funds. The hon. member is correct in pointing out that they have been very successful, particularly in the province of Quebec. However, the government must at all times look at the total picture and weigh the effectiveness of incentives provided against other measures presented in the budget.

As the budget papers point out, those venture capital funds have approximately a two-year supply of capital based on the level and the rate of investment that has been engaged in by those funds. It seemed to be an appropriate and reasonable measure to scale back, to temper the incentive a little bit.

I wonder if the hon. member thinks that government should never re-examine and balance the incentives that it provides and just keep on benefiting one sector on and on.