Mr. Speaker, it gives me pleasure for the first time in many years to have the opportunity on behalf of the Northwest Territories to raise a critical voice about a federal budget. My comments will focus on three areas: how the revenue is being generated, impacts on the north, and protection of the environment, or rather the lack thereof.
A long time in municipal politics has taught me to first look at the revenue sections of a budget. It is pretty clear where the Conservatives plan to get their money and that is out of the wallets of ordinary Canadians. A 2% reduction to the general corporate income tax rate, doing away with the federal capital tax and the elimination of the corporate surtax will do nothing to help more working families.
Corporations, unlike ordinary citizens, can pick and choose where they will file their taxes. For the past few years the provinces and territories have been competing with each other in a race to the bottom for the lowest corporate tax rates. The federal government should take the opportunity to raise revenues from corporations while the provinces are giving them all these breaks.
Thanks to the Liberals, Canada already has a corporate tax rate well below the United States. Also, the corporations here have the benefit of public health care for their employees, so it seems unlikely that further reductions will do much more to attract corporations to this country.
The Conservative corporate tax breaks are nothing more than a crass political move to win favour with large corporations while those neo-cons turn their backs on ordinary Canadians. If the Prime Minister and his finance minister really wanted to help their constituents, they would have used the surplus found in the budget to deal with issues that matter to Canadians, such as health care, environmental improvement and post-secondary education.
Instead, the Prime Minister and his Minister of Finance decided to use the surplus contained in the budget to buy support from the largest corporations in Canada, in other words, to act like Liberals.
A further revenue concern I have with the budget is the cut to the GST. This ill thought out measure will also create turmoil in the way provincial sales taxes are dealt with. Once again, pressure will be on the less fortunate provinces with sales taxes to take up the tax room vacated by the GST cut.
As a northern MP, however, I must admit that the GST is a very unfair tax to people in remote communities across the country where the cost of living can run as high as 250% of that in southern Canada. The northern residents tax deduction was supposed to compensate for this, but the impact of this fixed amount of relief has been severely degraded by inflation over the 17 years since its inception.
With all the Prime Minister's talk about the importance of the north during the election, I had half expected to see a budget loaded with good things for the north. Apart from some urgently needed housing money, the Conservative budget does not provide anything that was not already promised by the Liberals.
First, there is reconfirmation of the $500 million fund to deal with the impacts to the Northwest Territories communities by the construction of the Mackenzie Valley gas pipeline. However, it is unfortunate that the fund has been tied to the project going ahead. If we wait until the project is going ahead, it will be too late to begin preparing for the impacts of the project. Funding is needed now to do the planning and preparation for mitigating the impacts of the pipeline's construction. Trying to put together the structures needed to deal with these impacts while they are occurring will cause them to never be efficient and effective.
It was also interesting to read this passage in the budget:
In order to mitigate the negative socio-economic costs of the project, and in light of the significant federal royalty revenues to be generated by the project, the Government of Canada will establish a $500-million fund.
It is rare that a passage causes me to do a double take, but this one really caught me. Do the Conservatives mean that royalties that should be going to the Northwest Territories in the first place will be used to provide for this fund? If that is the case, then once again we are being manipulated with our own money. Or does this passage mean the Northwest Territories will not be seeing resource revenue sharing and devolution for a long time?
I ask that because at the extremely low royalty rates set in place by the Liberals, it will take some time to make up half a billion dollars. As well, this royalty scheme in place on federal lands, established decades ago when oil and gas were relatively low priced, front loads all the tax and royalty breaks. It will be many years after project start-up before there are any revenues to speak of.
Is this any way for the government to manage for northerners their resource base, which is so vital to the development of the region?
A lot more money will be required to prepare the pristine Mackenzie Valley with its numerous small communities for the impact of a $500 billion gas industry, of which the pipeline is only the first step. A massive public works infrastructure fund, which should be funded from potential royalties, is absolutely required. Investment in infrastructure up front may see the significant reductions in project development costs, thus returning money to the public coffers.
On other northern funds in the budget, it was nice to see the finance minister understands the need for better housing in the north, but the approach the Conservatives have taken is, at best, a band-aid. A one time contribution of $50 million seems generous, but what has not been publicized is that the NWT will have to match this amount.
The budgets of the territories are already stretched thin due to federal cuts and arbitrary borrowing limits. Now these governments have to come up with additional funds to access the housing money. Just where exactly does the Minister of Finance expect the territorial governments to find the money? Mr. Speaker, I will tell you where they will find it; they will have to steal funding from other programs and services.
Finally, let me turn to how the budget deals with what is the most important issue facing all human beings, that of our changing climate. Dealing with Canada's commitment under Kyoto requires all of us to put conservation and energy efficiency first. The Conservatives, by name only, are firmly welded to the consumption bandwagon. The word “Kyoto” is not mentioned once in the budget. The words “greenhouse gas emissions” are only mentioned once and then only to give more funding to pulp and paper corporations to burn off their pollution to generate electricity. The words “climate change” appear only twice, both times to explain how funding to effective programs is being cut and shifted to a public transit tax benefit of dubious value.
This shows quite clearly that the government has no plan to deal with climate change. Without dollars, climate change plans announced by the government are nothing but window dressing. Without a major commitment to energy conservation, Canadians will suffer.
Canadians overwhelmingly want leadership from the federal government on the environment. Instead, we have a government that has become so focused on its few priorities it cannot see past its own nose, and a budget that buys votes today while selling out our future.
The Conservative plan for climate change is not made in Canada; it is made in the oil patch. It is a plan for increasing consumption of energy, which will do nothing but increase greenhouse gas emissions.
While a consumption based plan may be good for the Conservatives' buddies in the multinational oil companies, it is not good for the millions of Canadians who have to bear the full effect of climate change and the high cost of energy.
What was needed from the budget was a commitment to enhance and encourage the development of green energy sources. Instead of leaving huge tax breaks for the oil sands, the finance minister should have shifted the subsidies over to the green energy sector to encourage development there.
Once again, working Canadians are faced with a budget that places all the costs upon them, while those who could do more actually have an easier time.
The budget is nothing but a carny sideshow. It looks nice, it takes a poor family's money, but once we get past the elaborate facade, there is no substance.