Mr. Speaker, it is with great pleasure that I rise today to comment on the 1998 federal budget.
The Minister of Finance is to be congratulated on leading this nation from a state of economic stagnation and a deficit of $42 billion to a balanced budget, the first in almost 30 years.
Brian Neysmith, president of the Canadian Bond Rating Service, stated: “The Minister of Finance and the Liberals have accomplished what they actually set out to accomplish. They achieved a balanced budget. They achieved it ahead of schedule, and from that point of view, you have to give them full marks”.
I have been disappointed to see the members of the opposition take such partisan approaches to this accomplishment. Canadians clearly support this approach and the determination of the government to get our fiscal house in order.
Opposition members harangued the government about the deficit. Now that the books have been balanced and now that we have a balanced budget for the next two years, we hear cries of “shame” because it was not balanced the way they would have done it.
Harry Houdini is alive and well and living on the opposition benches. They would provide deep tax cuts, eliminate the debt and provide social programs, it seems, through various magic vanishing acts. The government, however, has to deal with reality.
The end results prove that the government made the tough decisions and with the support and understanding of Canadians it made Canada the first G-7 nation to balance its books.
Governing is about choices, it is about leadership and providing a clear vision for the future. This budget has mapped out a vision of economic and fiscal planning that will secure a bright road ahead for all Canadians.
I had the opportunity to host a post-budget breakfast in my riding last week. I had representatives from the chamber of commerce, community organizations, social agencies, young people and municipal councils. A common theme was heard during the discussions. We have our priorities straight. Debt reduction is front and centre, followed by new expenditures for skills development and health and selective tax reductions.
The three key elements were welcomed by the participants at my meeting, namely a two year fiscal plan based on prudent economic planning assumptions, as the current plan commits to balanced budgets over the next two years; the inclusion in the fiscal plan of a contingency reserve of $3 billion in each year; and the use of a contingency reserve when it is not needed to pay down the public debt.
This could mean that if the contingency reserve is not needed, up to $9 billion could be used to pay down the public debt. The minister has been cautious and prudent in his calculations. The debt to GDP ratio is the most relevant measure of a country's ability to manage its debt. It represents a true measure of debt burden. The government has already paid down almost $13 billion in market debt so far this year. More important, however, the debt to GDP ratio will be put on a permanent downward track through sustained economic growth and debt repayment plan.
The government is committed to bringing down the debt quickly and it has a strategy in place to do so. Given the effectiveness of the government in dealing with the deficit, I believe Canadians support this approach.
The St. John's Evening Telegram stated on February 25 that while the $13 billion payment will not cure everything overnight, it is a promise that the country will not be plunged into the debt more deeply in the future, that it will no longer mortgage our children's futures, and with the economic returns on the fiscal year yet to come in, even more may yet be applied to the debt.
The budget speaks to youth. As Lucie Konrad, executive director of the Canadian Youth Foundation stated, overall this is a good day for young Canadians. With this budget, young people can look forward to some relief from the crushing burden of almost a decade of a youth jobless recovery and increasing share of rising education costs.
The Canadian opportunities strategy provides a co-ordinated set of measures building on the 1996 and 1997 budgets to create opportunity by expanding access to knowledge and skills needed for better jobs and higher standards of living in the 21st century.
As a former educator I applaud the minister on placing a very high priority on providing greater opportunities for young people to prosper in the new knowledge based economy.
The budget demonstrates leadership by announcing the Canadian millennium scholarships and Canada study grants, tax relief on student loan interest and improvements to the Canada Student Loans Act, supporting youth employment through education, insurance premium holidays for employers for the young Canadians they hire in 1999 and 2000. These are investments in our future. Young people must be encouraged to dream and to seek opportunity in Canada.
The government has listened to the concerns of our youth. Heather Taylor of the University of Alberta student union stated that these educational measures in this budget are things for which we have been fighting for the past eight months. It shows the government is listening to students. It will have a huge impact on students.
The 1998 budget provides for the first time tax relief for interest on student loans. Beginning in 1998 all students will be eligible for a 17% federal tax credit on their student loan interest. Interest relief extensions will help about 100,000 graduates.
The editorial in the Toronto Sun on February 26 stated: “We applaud the finance minister. We think he has made the right choice in the first post deficit budget. The nation has a responsibility to help the 600,000 young Canadians who fear they will never have a good job or a decent career”.
The opposition has talked about a need for tax relief. The government will deliver $7 billion of tax relief over the next three years, tax relief for low and middle income Canadians through an increase in the basic personal exemption and the elimination of the 3% general surtax on Canadians with income up to $50,000. Those are two measures that will take 400,000 Canadians off the tax rolls and reduce taxes for 14 million Canadians by the year 1999-2000.
This government does not just talk tax reductions. It has taken clear and firm actions in this area. The government is continuing to provide targeted tax relief. I believe Canadians have examined the budget and have strongly indicated it is a balanced approach to the economic well-being of Canada.
I remind members of the opposition that we have a four to five year mandate. Obviously during that time we will be able to take other measures which I am sure Canadians will be supportive of. The next few years will continue to see tax relief and continued social spending in the area of health care. The impact of the 1998 budget over three years is clear. Forty per cent of new government spending focuses on investments in social and economic priorities and sixty per cent is targeted toward debt reduction and tax relief.
The government has demonstrated solid economic leadership that bodes well for the economic well-being of all Canadians.