Mr. Speaker, I am pleased to participate in this prebudget debate. It is a fairly valuable exercise.
In previous parliaments, there was certainly a perceived need among members to participate in debate leading up to the budget to help the government focus. In this Parliament things may have changed a little. Some of the paradigms have shifted. I would not be surprised if there were informal consultations more directly between the Minister of Finance and others in the House, not with a view to knowing what is in the budget, but sensing where Canadians and the political parties may want the budget to focus.
In the debate today we are attempting to give the Department of Finance and the minister some focus, and I welcome the opportunity to speak on behalf of my constituents in Scarborough—Rouge River.
Most budget speeches and debates deal with pledges in the future. The view I want to share with the House today is based more on a focus of promises kept. When one looks at where our government has placed itself, the commitments it has made and what it has been able to deliver so far, I am confident we have a very solid foundation.
The budget we will have in just a short amount of time will focus on building from our Speech from the Throne commitments. They were generally grouped into four categories. One is that we wish to build a stronger economy. We want a more secure, prosperous and inclusive society. We want a healthier, safer environments. We want Canada to have the resources to meet global challenges.
It is an agenda that one could argue was both idealistic and practical, but we are confident as Canadians that we can achieve these goals, that we can get to where we want to be. We will draw on our economic strength, our fiscal strength and we are able to do that now in a way that was not possible previous to when we balanced the budget in 1997-98. That was a very important benchmark.
I want to emphasize that one of the real accomplishments of the current government, which is an evolution of the government that was there for Canadians in 1997-98, is that we have kept those financial promises. We have put an end to 27 consecutive years of deficits. I am confident, and I sit here on this side of the House, that we will honour our current commitments. Those will be reflected by positive action flowing from our budget.
It is not just rhetoric. Two envelopes of huge social investment have been embarked upon over the last many months. First is the historic $41 billion tenure agreement that the federal government entered into with the provinces and territories to bolster health care.
I and all of us around here accept that the proof will be in the pudding. It is one thing to put money aside and another thing to spend it properly. It is another thing to get the results for which we aim. However, our objective is to get the product that Canadians want in health care. This government has done its part by setting aside the resources now and into the near future so the provinces and territories, in collaboration with the federal government, can achieve those health care objectives.
All the governments have signed on. It includes key elements of systemic reform and the best terms ever for reporting and accountability. By meeting and surpassing every financial standard identified in the landmark report of Commissioner Roy Romanow, this initiative will turn the corner on the continuing intergovernmental feud that existed for many years, which Canadians will remember. It puts it behind, and we now can embark on an agenda where everyone is in general agreement as to where we go.
The health accord puts the focus where Canadians want it. Lord knows there have been millions of dollars on consultations and politicians talking, consulting and working to get us to this point. However, what they want is shorter waiting times in health care, more health care professionals and better equipment. They want improved primary care, home care and access to drug coverage. We have better services for our aboriginal Canadians and people in the north. We are investing more in health innovation and research. We will have improved public wellness and health.
The second major social investment was entered into to help alleviate the fiscal disparities between the provinces and territories.
The government has launched the most far-reaching improvements ever undertaken in the equalization area since it first was initiated in 1957. Through two years of transition arrangements, which have already been agreed upon by the first ministers, the available federal funding to assist Canada's less wealthy jurisdictions will rise initially to meet the highest level equalization has ever generated, and then will continue to grow at a rate of 3.5%.
The territorial funding formula will benefit the territories in a similar fashion. The best expert advice about future distribution issues will be sought with provincial and territorial collaboration. With a new approach and with incremental federal funding of approximately $33 billion over 10 years, we are directly addressing prime provincial and territorial concerns about their need for clarity, predictability and adequacy of funding to maintain their role in these envelopes.
Our action on these two fronts, health care and equalization, represents a $74 billion investment over the next 10 years. Just as important, it is an investment that is sustainable. It will not jeopardize our fiscal track. It will not put us back into deficit. That is an important element.
Beyond these upfront agenda items, our government will focus on delivery of other key commitments it has made to Canadians in the Speech from the Throne. They include productivity and economic growth and high quality, universal, affordable, developmental child care. We have a new deal for cities and communities based, in part, on a share in the federal excise tax. We will build on support for seniors. We will invest in producing more opportunities and reduction in disparities that are there currently for aboriginal Canadians. We will invest in protection of our rich natural environment. We have committed to improve our investments in national defence and national security, and generally will be pursuing an objective that secures for Canada respect and influence in global affairs.
There is no question that is a lot of agenda, but the government is committed to pursue it. Maybe the most important component of all that is our growing economy, without which we could not accomplish these national roles. Our growing economy will provide the resources for these increased investments in health care. It will encourage workers to want to work here and investors to want to invest here.
I am not in a position to predict exactly what will be in the throne speech. We all know that. We will hear from the Minister of Finance, on the appointed day, in the budget speech. However, there is one other thing that I am pretty sure will be in that speech, but it should not be a surprise to anyone.
The approach of the government in planning our future spending will be prudent and disciplined. This is something that the government will not forget as long as the government is the government. No matter what is said in the House, no matter what the opposition parties say, I am certain we will stick to that commitment of prudence and discipline in our spending.
For 27 years prior to 1997, we were caught in a vicious circle of chronic deficits. We on this side of the House know that because for many of those years we were the government. We know about chronic deficits and about the 27 years. It caused higher taxes, rising debt, higher interest rates, job loss and many negative things on the economic front. We ended up with a huge national debt, one which we did not believe was at an appropriate level. We were forced to take steps, and Canadians had to take the steps. Frankly, the government could never have accomplished this fiscal discipline without the support of Canadians.
Looking back, we spent approximately 38¢ on the dollar supporting the debt load; 38¢ of every dollar that was taken in taxes was allocated to finance the debt that Canadians had borrowed. However, that is behind us now. We have made steps. The debt has gone down and Interest rates have gone down. I stand to be corrected, but we spend less than 25¢ on the dollar now sustaining our debt load. That is substantial progress, but we want to go further and we will. I hope there is support in the House and among Canadians to continue to reduce our debt to GDP level.
In addition to making major social and economic investments and in addition to the recently concluded $100 billion tax cut, our relatively robust fiscal position has also enabled us to deal with some rather nasty external surprises like the arrival of SARS and the outbreak of BSE, which is not a huge outbreak. The existence of those things can throw a government's fiscal position out of kilter. In doing our budget, we have ensured that we have planned for contingencies that can throw our fiscal house out of order.
We have also managed to secure for Canadians a AAA credit rating. I cannot imagine anyone in the House would object to that. That is an asset for all Canadians when and where and if we have to borrow. We of course continue to borrow to cycle and reduce the current debt load, but with a AAA credit rating our standing and ability to pay is enhanced. That also produces lower interest rates. Lower interest rates for Canadians means that when they want to make purchases as consumers or when they want to borrow money, the interest costs are much less. That means when they are buying homes, cars, appliances and making major purchases, they are better off. Our farmers and small businesses are better off, and the economy then generates growth. Those are some of the benefits of having improved our fiscal position.
I also want to note we will be working to sustain an increase in our living standards. Now that Canada is in a surplus position, we rank first in the G-7 for growth in living standards. Living standards is where Canadians are. They are not that interested in looking at a financial balance sheet, but living standards is where it hits home. The average standard of living of Canadians has increased more in the past 7 years than in the previous 17 years. That is a tangible benefit to my home and to the homes of all Canadians no matter where they live.
We do not want to take this progress for granted. As the Minister of Finance so often hammers home, to continue these benefits we need to continue to respect the principles that we plan our spending by. We must live within our means. We must plan carefully. We must behave prudently and we must always work to stay in the black.
I should say that I am one of those who would not lose too much sleep at night if by some strange occurrence we ended up with a small unplanned deficit, but I have to say that I have worked with the Minister of Finance, the previous minister of finance and the one before that, who happens now to be our Prime Minister, who are so religiously committed in planning that I do not think I am going to have to worry about a technical deficit. Our planning, our contingency plans and our budgetary allocation for prudence mean that not only are we going to avoid the deficit but also that we are going to end up with a surplus.
I heard earlier today, as we are always hearing from the opposition, about this alleged problem of the government overshooting and obtaining more revenues than it had planned for. That is not a terribly bad thing when we end up avoiding a deficit and with more money than we planned for. If we build in prudence of $3 billion, or if we build in a contingency of $3 billion in the budget and then something is added for prudence, we are going to end up with extra money. We are going to end up with a surplus just because we put the contingency and prudence allocations there.
In planning our economy, in trying to calculate where we will end up 18 months down the road, our government does its own financial calculations, but we also go to the best private sector forecasters. There are several of them out there. They grapple and work with the same numbers. They do the number crunching; there are computers running all the time.
I have attended relatively faithfully the policy and economic analysis program at the University of Toronto. For years it has been doing micro and macro computer crunches on our economy and projecting what our government finances are going to be and what the whole economy is going to be.
Simply, we cannot predict with absolute accuracy in science. When we have an economy that is over a trillion dollars in GDP, it is very difficult to know with precision how much money a particular business is going to make, how much money it will pay in taxes, how much someone is not going to pay in taxes, or when there will be a bankruptcy and when there will not.
There are millions of these little economic decisions going on all the time in our country, so trying to predict 18 months in advance where we are actually going to be on the bottom line is very difficult. The one principle we follow in all of that, though, is that wherever we come out on the bottom line after the 18 months it is going to be above the bottom line. It will be in the black and not in the red.
I have never been one to criticize the government for not being able to predict because in fact rarely has any private sector economic forecaster been able to predict with any more accuracy than the government itself has.
I am very proud of what the government has been able to do on the economic and fiscal front. There is more to do. The proof will be in the pudding on health care and on equalization, but we are committed to delivering these things in a financially sustainable way.
The budget will build on the Speech from the Throne and address the concerns of Canadians and my constituents. I look forward to budget day.
