Mr. Speaker, I am rising for the first time to debate the budget speech. I would like to identify with Canadians who are viewing the proceedings in terms of trying to understand the process that we go through in capturing the essence of responsible management stewardship and a sensitivity to the issues that are on the minds of Canadians.
It includes those insights that come from people in the low salary categories, those who are on very low fixed incomes; an aging society; and on the other part of the spectrum, a society that has young people looking for their particular position in the budget and how their needs have been accommodated. It includes the needs of small business people, entrepreneurs and those who make the contributions that not only instill a sense of confidence, but a sense of hope that we can generate revenues that will be contributing toward carrying the costs of a society that from time to time needs that government support.
I am pleased to try to capture the feeling that Canadians have as they watch these proceedings. All of the documents that I am referring to are available through the ministry of finance website.
I would like to make the point, in particular, as it was made very eloquently by the last speaker, in respect to things that are not in this budget speech. Canadians should be aware that while this is a budget that is on the threshold of 2004-05 in terms of the financial positioning or repositioning of the financial accounts of the country, that it also is part of a context, a larger budgetary context that has been set by previous budgets.
While there may not be something mentioned in this budget, that does not mean that those priorities are not high. What it could mean, and I am going to give housing as an illustration, is that there have been major commitments made in other budgets. So, while it is not mentioned in the 2004-05 budget, housing is a very high priority.
I would like to direct the last speaker to the 2003 budget, and in fact 2002, under the homeless and affordable housing files. The government's position and record of accomplishment, and record of future opportunity is great.
Recent budgets indicate that more than $2 billion has been committed over the six year period between 2002 and 2008. One billion dollars has been committed for the affordable housing initiative, a capital grant program aimed at increasing a number of affordable rental housing units.
Almost $500 million, committed for housing renovation programs under the RRAP, had been included in that particular budgetary cycle. The home adaptation for seniors and dependents program, the emergency repair program, and the shelter enhancement program were also committed. These are all programs that are within that budget context. While they are not mentioned in this budget, they in fact have been allocated, and discussions and negotiations continue with the provinces in terms of the delivery of the programs.
That does not even mention the SCPI program, the supporting communities partnership initiative. Some $665 million was allocated on the national homelessness initiative, a key element of which was the SCPI program. As we know, negotiations continue to go on. In fact, additional announcements are being made with respect to local community groups applying for those funds to offer support of its services and facilities.
These investments are in addition to the $1.9 billion provided annually to support 640,000 households living in existing social housing units. Far from the government being disinterested in the housing initiative, here is an illustration that while housing is not mentioned in this budget, housing is an extremely high priority of the government. The record illustrates how that is being accomplished within the total budgetary context.
When families are looking at their capacity to acquire new capital goods, be they washing machines, dryers, sewing machines, a new car or whatever, they look at what their projected income is going to be and make a calculation based on responsible stewardship of their financial needs. They look at the risks that are associated with making specific decisions. That is not a far cry from what the government has to do.
In my remarks I would like to outline not only some of the risks but some of the records of accomplishment. When we look at Ernst & Young's evaluation of the budget, it said that sound financial management was a cornerstone of the this government's first budget. Canadians want to see their government involved in sound financial management. That involves looking at some of the accomplishments.
We might remind ourselves that the rate of increase in terms of the GDP was around 1.7%. That was below the economic growth rate that had been projected for a number of reasons. That tells us that sound and prudent financial management means that one should not inflate the expectations of economic growth in the business cycle of the country.
It is interesting to note that the culmination of sound financial management has resulted in interest rates being at a modern all-time low. Of course, low interest rates are an opportunity for people to enter the housing market and to look at the acquisition of capital goods, and they take that into consideration in terms of their financial management.
There is the additional fact that the economy, through sound and prudent financial management, has since December 2002 created 271,900 new full time jobs. We should compare that to the growth rates of our American friends. It has been suggested that in addition to international policy, unemployment will be the key point on which the Bush administration will be judged, the creation of new multipliers that create job opportunities for Americans. In Canada, because of sound prudent financial management, minimizing or lowering the risks, we have created confidence in the capacity for the management and stewardship of our economy.
However, while the Canadian economy continues to grow by an average of 1.3%, projections are that we must be very careful with respect to our future rate of growth.
There are risks involved. We all know that from time to time, when the dollar is falling, the opposition has asked if this means there is no confidence in the Canadian dollar. Yet, on the other hand when the Canadian dollar strengthens, opposition members will remind us that if we have too strong of a dollar, it means that our exports are going to be less competitive and the American relationship with our economy is going to put us at risk. They are quite right on that. The corollary we draw from that is that we just have to tune and calibrate our business decisions very carefully.
I would suggest that as our dollar bobs and weaves around the 75¢ mark, we are attempting to tack very carefully, according to the winds of international monetary and business change. In a global economy, it is always hard to get that exactly right, but the fact that we are creating jobs, the fact that our economy is relatively buoyant, and the fact that we are, in relation to other G-7 countries, in a relatively competitive position means that prudent financial management, the tools that we are using, are being used in a sensitive and responsible manner.
In terms of the general situation, as has been said before, this is the seventh consecutive balanced budget and the first time since Confederation that we have balanced budgets at that rate. We have included a $3 billion contingency reserve. Families can understand what that means. We do not go back on our capital to keep our general day to day operating budget in check. We are very careful to ensure that we keep our reserves there in case we have a rainy day. The government is doing that and Canadians can understand and respect that.
We are adjusting and calibrating our budget toward the day when, in our health care, in our services to seniors in an aging society, we can see that if there was an actuarial requirement to project what the needs of the economy were to be in terms of sustaining that standard of living, that we have at this point got it right. We are actuarially sound. We are investing in those areas that will create new jobs.
At the same time that we are doing these things--and I know it has been mentioned with respect to the sponsorship programs and so--that whole set on which Canadians will judge the government are not only the financial approaches that are being used in terms of prudent and careful management, but also the checks and balances.
At this time the cabinet committee, on an expenditure review, will be examining all accounts in terms of attempting to claw back up to $3 billion in expenditures that can be redirected. There is an order through the President of the Treasury Board to re-establish the office of the comptroller general. The public expects that will be done, but that should be seen within the total context of how the government has managed prudently and responsibly the concerns of all Canadians.
I would now like to relate in terms of what this budget means to low income Canadians. That is the bottom line. To me, the bottom line is how people accurately see in the budget their position with respect to how important they are in the tax regime to which many members have made reference.
I would like to point out that the $100 billion five year tax reduction that was introduced in 2000 continues to provide that kind of tax relief. Three-quarters, and this is an important point, of this benefit is flowing to individuals, with most of the tax relief going to low and modest income Canadians. If Canadians want to see where they stand with respect to a 2002-05 perspective, they should go to the website and look at that chart.
For example, on personal income tax from 2001, of that $100 billion, 75% goes in terms of personal income tax. That question was asked of the member for Toronto--Danforth. In terms of corporate income tax the amount is 10% of the $100 billion in tax reductions. In terms of employment insurance, another point that was raised, it is 15.2%. So a huge part of that $100 billion in tax incentives in terms of reductions goes to individual Canadians through personal income tax.
I think it is also important to point out what that means with respect to business and entrepreneurs. The tax system and this budget support the growth of small businesses by encouraging them to retain more of their earnings and by enhancing opportunities and incentives for investors, such as venture capital funds, to invest in small enterprises.
These measures mean, for example, that in terms of a small business deduction limit, that limit will rise to $250,000 from $225,000 in 2003. That limit will rise to $300,000 in 2005. In terms of the federal capital tax threshold for small businesses, the cap on that will be lifted and raised from $10 million to $50 million so that more businesses will qualify for that kind of tax relief.
What does that mean in terms of a Canadian advantage? It means that as a result of the actions taken from 2000 to 2003, Canada's average federal and provincial corporate tax rate, including capital taxes, will be 2.3 percentage points lower than that of the United States. That is the impact it has in terms of low income Canadians and, if we will, low income businesses and entrepreneurs.
We should also look very quickly at what the budget means in the priority areas. I am not going to talk about health because it has been accommodated by other speakers, as has the importance of learning in terms of the Canada learning bond. That learning bond will provide upfront annual grants of up to $2,000 for low income families who have children with learning disabilities.
As the Prime Minister has said, this prudent and financially responsible budget shows some future opportunity for flexibility. Additional contributions will be made to health, not to mention that on the community based health side over $600 million will flow into various clinic-type approaches that are more preventative in nature and are major contributors to our health care program.
I have spent a great deal of my life in political activity at the municipal level. I think it goes without saying that the announcement the government made in terms of the rebate on the GST will mean several billions of dollars to municipalities right across this country over the next 10 years. It will provide local municipalities with an additional opportunity to invest in transportation systems that are environmentally friendly, in housing initiatives that they wish to make their portion of the program, and in social programs that they wish to activate at their level.
The commitment given by the government to discuss its budgetary cycle with municipalities before a budget is announced looks at them as an order of government, as responsible partners in shaping economic policy for the country.
Finally, let me say that I think we have all been concerned with respect to the international situation and what Canada's role is. Traditionally it has been in peacekeeping. This budget allocates funds for major involvement in the international activity in the world to make it a safer place to live.
In closing, let me say that I do believe the budget represents a careful and caring agenda for action on the part of the government. I think it is consistent with the commitment the government has made to Canadians from all regions: that the government is sensitive to its responsibility and its accountability. Within the broader context of its stewardship over the last 10 years, over the last decade and into this decade, I believe the government has earned the respect and the right to continue to administer the affairs of the Canadian people, and I believe it will be supported in that.