Mr. Speaker, it is a pleasure to rise today on third reading of Bill C-28. We have had a lot of debate with regard to the budget implementation bill.
I want to again emphasize to members of the House that this budget is built on strong fiscal fundamentals. First, we have no deficit. We are paying down the national debt. We are the only G-7 state that continues to pay down the national debt. We have gone from 72.5% in 1996, down to 44.5%, and declining. We have had our sixth consecutive balanced budget or better. At the same time we are investing strategically in areas like health care.
The Minister of Finance made it very clear that he wanted to hear from Canadians. He wanted to know what kind of Canada they wanted, in terms of the budget. I would like to quote the minister. He said:
Canadians told us that the budget choices we make have to be about more than the tallying of accounts. Our choices must reflect the sum of our values. They must reflect Canadians’ pride in their country and, above all, their hope and determination that their children will inherit an even better Canada and a better world.
The minister's comments certainly are reflected in the work of the 2003 budget.
The budget responds to many challenges. It responds to the issues of health care. It responds to issues of poverty and affordable housing. It responds to issues dealing with our cities, ensuring that they become more competitive and that our communities become better places to live. Again, strong economic fundamentals is very important; no deficit. We will not go back into a deficit. The government has made that very clear, and that is what the Minister of Finance has delivered.
As far as our cities are concerned, as the former president of the Federation of Canadian Municipalities, I take great pride in the fact that it was the Liberal government in 1994 that embraced the FCM's 1983 plan for national infrastructure. It lay dormant under the Conservatives. The Liberal government came in 1993 and the next year implemented the national infrastructure program. We have built on that over the years.
For example, the current budget builds on the 2000 and 2001 budgets by providing an additional $3 billion in infrastructure support as a down payment over the next 10 years. The Federation of Canadian Municipalities has asked for years to have a 10 year program. Those of us in municipal politics know full well that to deal with capital issues and look at projects, it needs to be done over the long term, for 5 and 10 years. Fortunately the government and the budget has responded.
Two-thirds of this will be used to double the funding available under the Canadian strategic Infrastructure fund for large scale projects such as those located in Canada's major urban centres. As a member of the greater Toronto area caucus, I was pleased that the government announced $435 million, matched by local municipalities, by the GO, by VIA, to improve local transportation, rail, bus and otherwise, in the greater Toronto area, and this is leverage money.
Unfortunately the province of Ontario still has not responded to the announcement made by the government at the end of March. I hope, as it gets closer to an election, it will make an announcement because we are waiting, the commuters of the greater Toronto are waiting, so we can have a fund of about $1.2 or $1.3 billion to improve transit in the greater Toronto area. That is because the government has worked effectively with municipal governments over the years.
I quote from the president of the FCM. In a letter he says, “FCM wants to continue its positive working relationship with the Government of Canada”. This has been the cornerstone of the government working directly with our communities across this country.
The remaining one-third of the money of course goes to new municipal infrastructure funding and again we are looking at those details. As members know, we have agreements with each province.
The budget further provides an additional $320 million to the affordable housing initiative over the next five years. It provides $384 million over the next three years to extend the residential rehabilitation assistance program, something again for which municipalities have asked.
The budget invests $405 million in the next three years in supporting communities partnership initiatives to continue the fight for homelessness. We have to congratulate the Minister of Labour for her leadership in that regard. The Minister of Labour listened to this Liberal caucus when it came to the homeless issue. She has responded and she has worked very effectively with community organizations across this country. Again this has been well received across Canada.
The budget also invests in new technologies and alternative energy and begins to deal with competitiveness in the North American and global markets.
In addition, budget 2003 delivers security to Canadians in the quality of our society and the strength of our economy. Beyond these investments in our future, Canadians are expecting accountability from the governments. Again the budget delivers. In short, the minister said, with regard to this budget, that it was about the society that Canadians value, the economy that Canadians needed and the accountability that Canadians deserved. Many of these measures are addressed in the bill we are debating today.
The principal investment in this budget was health care. That was the number one issue we heard across this country, reinvesting in health care. To begin, the budget makes significant investments to address the concerns of Canadians about their health care system about waiting lists, about the availability of diagnostic equipment and accountability for their tax dollars. These investments, as agreed to by the Prime Minister and by provincial first ministers in the February 2003 accord on health care renewal, will help to improve access to the health care system for Canadians, enhance accountability for how dollars are spent in health care and ensure the future sustainability of the system.
The budget confirms $34.8 billion in increased funding over five years to meet the goals outlined in the health accord. Bill C-28 implements these measures in the important agreement between the Prime Minister and the first ministers. Investments agreed to in the health care accord and implemented in this bill include a five year, $16 billion health reform transfer. It is targeted to primary health care, home care and catastrophic drug coverage. I know, having held my own consultations in my own riding last year, these were the three key issues that were brought to our attention of by professionals and by members of the public.
Further investments agreed to in the health accord and implemented in this budget include: an immediate $2.5 billion supplement to the Canada health and social transfer, the CHST, to help relieve existing pressures on the health care system; an additional $1.5 billion over the next three years for the acquisition of diagnostic equipment and related specialized staff training; $600 million to the Canada Health Infoway for health information technology; $500 million to the Canada Foundation for Innovation for research hospitals; $75 million to Genome Canada for applied health genomics; and $70 million to the Canadian Institute for Health Information to enhance its capabilities to report on the health system and the health of Canadians. All of this is without going into a deficit. All of this is responding to what Canadians said was their number one priority, health care.
Following on the five year funding framework that was put in place after the September 2000 agreement with the Prime Minister and the first ministers, which agreed to health and early childhood development, federal support for the provinces and territories, the ones responsible for the delivery of health care in this country, the health care and social program transfers are further increased by $1.8 billion and funding is extended for an additional two years. This will ensure a stable, predictable and growing new five year funding framework. As a result, the total annual cash transfers for health and social programs will now rise to $26.1 billion in 2006-07 and then $27.7 billion in 2007-08.
In addition to further financing, the first ministers also agreed in the accord that the sustained renewal of a Canadian health care system needed structural changes. We heard that even last night in the discussions in the House. This is why they agreed to restructure the CHST into two separate transfers, and this is a very important initiative: a Canada health transfer and a Canada social transfer effective April 1, 2004.
This would ensure that the federal transfer support for health care is transparent to Canadians because there was an issue of transferring money to the provinces and no one knew where it went. At the same time the first ministers strengthened the equalization program by agreeing to permanently remove the ceiling on payments beginning 2002-03.
One of the most important foundations in our society are families and children. This budget would strengthen the government's longstanding commitment to Canadian children and families in several key areas. One of the most important measures, for example, would provide a six week paid compassionate care benefit, for the first time under the employment insurance program, to help families provide care and support to a gravely ill or dying parent, to a spouse or a child. We will continue to monitor this and look at the success of this particular important initiative that the government has undertaken.
Another important point would increase the assistance through the Canada child tax benefit for children in low income families. By 2007 annual benefits would increase to a maximum of $3,243 or up to $3,495 for a child under age seven. A third measure would allocate an additional $900 million over five years for investments in early learning and child care as agreed to by the ministers responsible for social services. The most important formative years are zero to five and we have responded to that.
For those facing the challenge of disability, a new indexed $1,600 child disability benefit effective this July would provide additional annual assistance to low and modest income families with a disabled child. In addition, the budget would provide $80 million per year to enhance tax assistance for persons with disabilities drawing on the evaluation of the existing disability tax credit and input of the technical advisory committee. We are continuing to improve with regard to the issues of people and children with disabilities.
Further, infirm children or grandchildren would be able to receive a tax deferred rollover of a deceased parent's or grandparent's registered retirement savings plan or registered retirement income fund proceeds. The list of expenses eligible for the medical expense tax credit would now include certain expenses for real-time captioning, note-taking services, voice recognition software, and the incremental cost to individuals with celiac disease of acquiring gluten-free food products. This new addition is as a result of listening to Canadians and responding in that area.
We know that better economic performance tomorrow requires a more productive, innovative and sustainable economy today. Improved skills and learning are vital to improved productivity and competitiveness, and a better life for all Canadians. That is why this budget takes action to help give Canadians opportunities to gain new skills by committing $60 million over two years to the Canada student loans program to put more money in the hands of students and better enable post-secondary students to manage their debt.
In addition, access to interest relief would be available to individuals who are in default of their Canada student loan or who have declared bankruptcy. This is another issue that we heard lots about during the prebudget consultation discussions. Protected persons under the Immigration and Refugee Protection Act, including convention refugees, would now be eligible to apply for student loans.
We looked at the tax system. We are in the third year of the largest tax cut in Canadian history, a $100 million tax cut. To further improve the tax system and enhance incentives to work, save and invest, the 2003 budget would build further on that five year tax reduction.
It would encourage savings by Canadians by increasing RRSP and registered pension plan limits to $18,000 over four years and indexing these new limits. So we are indexing them as well. It would extend the 12% federal small business tax to business income between $200,000 and $300,000 over four years. It would eliminate the $2 million limit on the amount of small business investment eligible for capital gains rollover. This is something we heard from small businesses and the minister has responded. Another measure would reduce business costs and complexity by improving the tax treatment of automobile benefits for employees and auto expenses for employers.
We know that a competitive tax system is necessary to attract investment to Canada and to encourage entrepreneurs to create and develop their businesses. It is the small business community that is the engine behind making the necessary jobs in the country. With this in mind, the budget would totally eliminate the federal capital tax over five years. This tax is currently levied on all corporations with more than $10 million of capital used in Canada. The first step in the phase out would raise it to $50 million which is the level of capital at which a firm begins to pay tax.
Additional tax measures would include: implementing the increase in federal taxes on tobacco, effective June 18, 2002, as part of our anti-smoking campaign; removing the 4% per litre excise tax on diesel fuel from biodiesel fuel; and providing authority for interested first nations, those first nations that want to, to levy a broadly based sales tax consistent with the same provisions as the goods and services tax.
The budget would also take action in such vital areas of public concern and support as climate change and the environment. The Minister of the Environment led a strong battle dealing with the Kyoto accord and the budget would assist the Minister of the Environment to ensure that the necessary dollars would be there to respond to public issues dealing with diversified fuels, for example. It would also respond to issues in the agricultural field. Again, the government is responding in this budget.
It seems clear that the scope of the budget plan is very broad. It is responding to strategic investments because this is what we heard when the Standing Committee on Finance visited constituencies across the country.
What is also important is the government's need to be accountable for the money it spends. I want to make it clear that the Minister of Finance has made it very clear that the priority is accountability. Canadians made that clear during the prebudget consultations. As a result, this budget introduces several new steps to make government spending more accountable and indeed transparent.
First, following up on the government's commitment to review the air travellers security charge, to ensure that the revenue remains in line with the cost of the new system, the budget would reduce the charge by just over 40% to $7 from $12 on each domestic flight.
Next, the budget announced the launch of consultations on a permanent employment insurance rate system regime for 2005 and beyond. As we know, for the last 10 years EI rates have come down consistently under the government. The minister wants to go further. He wants to have these consultations to ensure that, in setting the permanent EI rates, it is done in a transparent and open way with all stakeholders and that it provides employers and employees with certainty about contribution rates.
Until that time, this legislation would set the employment insurance premium rate for 2004 at $1.98. This is the 10th premium rate cut since 1994 and it would bring yearly savings for workers and employees to over $9 billion compared to the 1994 rate. As we know, before that they went up and since the government has come to power they have gone down every year. Based on private sector economic forecasts in the budget, it is estimated that this rate would generate premium revenues equal to projected program costs for 2004.
An improved accountability framework in the health care accord includes a commitment by all governments to report regularly to Canadians. This is another example of accountability and transparency. This framework would give Canadians more information about their tax dollars and how they are being used to bring in reform in the health care system. I know all members of the House would agree.
The government is also making foundations more accountable. Most of these changes would be made directly with the foundations involved. As we know, all foundation reports are public documents. The heads of those foundations would be called before various standing committees.
The Canadian Foundation for Innovation, the Canadian Millennium Scholarship Foundation, and the Canadian Foundation for Sustainable Development Technology were established by federal statute. As a result, amendments in Bill C-28 would ensure that any unspent funds would be returned to the government if those foundations were ever wound up.
The budget would terminate the debt servicing and reduction account which was established to pay interest on the public debt and ultimately to reduce the debt. There is no longer any need for this account since the debt servicing reduction account revenues must ultimately be deposited in the consolidated revenue fund.
Clearly we have a budget with no deficit. We have a new culture of accountability and transparency. I could go on and on about the investments we made in the military and elsewhere. We have been criticized by some members in the opposition about how the spending has gone up. The major spending component, of course, was health care. Members may want to debate the fact that we agreed to the first ministers accord and put the necessary dollars into health care. That is up to them. We wanted to address the number one issue of Canadians as well as issues of child poverty, cities, tax cuts and homelessness.
It is important that governing is about priorities. It is important to ensure that we listen carefully. The Standing Committee on Finance had 49 recommendations to which the minister responded to 34, in whole or in part. He responded effectively in ensuring that he listened to those concerns and invested in the needs of Canadian families.
We want to ensure that we not only have accountability, but that we have an atmosphere where the economy can continue to grow. It is important to note that expenditures are still significantly down from what they were in the 1990s, which was around 18% or 19%.
It is important to note that we are working on many fronts, but we are ensuring that we do so in a responsible manner. We would not have the kind of debt that we have seen for many years. We are getting the national debt down having eliminated the deficit. Whereas Japan is now about 130% of GDP in terms of its debt. It is going up. We are sliding the other way, the right way. We are going down and soon to be below 40%.
It is extremely important that we are doing it in the context of going from the bottom of the G-7 to the top. The economy is performing well. We are seeing that reflected in a number of industries. It is therefore important to pass Bill C-28 to ensure that those initiatives about which Canadians have talked about are addressed.
We cannot do everything in one budget so we have to build on it. As I said with regard to taxes, we addressed the issue of capital taxes this year. We dealt with personal income taxes and we will have more room in the future. We are working with members of Parliament, stakeholders, and Canadians generally on many issues.
It is important to work in a fiscally sound and responsible manner. There were too many years when we spent money we did not have. One of the things the government said when it was elected in 1993 was that it would deal with that issue. It dealt with the $42.5 billion deficit.
Government is about making choices. As a government we must make sure that we address these issues, but that we address them in a way which is fiscally responsible. In terms of many recommendations, we would have liked to have done more, but there is only so much fiscal capacity to do so.
Other issues which may not have made it into the budget may be addressed in the future. The fact is we have a budget today, a budget on which we have debated for many hours in the House.
The budget deals with issues on the environment which are very important to Canadians. We are taking very important strides in that area. I congratulate the Minister of the Environment because this is a very tough file. Again, $2 billion has been added to that file, making sure that we can address these issues in cooperation.
Government is about listening. It is about collaborating with the public. It is about making sure we do it in a way that we do not make the mistakes that have been seen in the past, that we do it in a manner in which we can say very proudly that we are not in a deficit, we are dealing with the debt and we are investing. If we continue to do that, future generations will certainly be thankful.
Unfortunately I am part of a generation that inherited lots of debt. Debt is a major concern to me and I know it is a concern to my colleagues across the way. I do not like personal debt and I certainly do not like to see government debt.
We have a contingency fund. The minister has set aside $3 billion. Fortunately the economy has been moving along, but we always have to be prepared. The minister has made sure that $3 billion is there.
More Canadians are working. There were 560,000 new jobs in Canada last year alone. It was the reverse in the United States, so we are fortunate. Many of those jobs are full time jobs in high tech, manufacturing and other sectors that are very important to the Canadian economy. It is important that we continue to see that and that we continue to assist and to listen both in terms of issues that affect the business community where we want to see jobs grow and in terms of the social aspect. As I have said, a budget is not simply a balance sheet. It is to make sure that the life of each and every Canadian is better than it was before and that we continue to build on that.
I am hopeful that after all the discussions we have had in the House we will move on Bill C-28, that we will continue to work together as parliamentarians. As we embark on the next round of prebudget consultations which is not very far off, we will continue to deal with the fundamental issues Canadians are telling us they want addressed but at the same time we will do it in a fiscally sound manner.
