Mr. Speaker, I am pleased to respond in this debate on the Speech to the Throne, specifically in my role as the transport critic for the official opposition. I want to focus specifically on the new deal for cities that is much hyped, with very little delivered, in the throne speech.
In order to understand how this so-called new deal for cities is not very new, it is important to know just precisely how out of step this Liberal government here in Ottawa is, both with our neighbours and with all Canada's provinces, with regard to the spending of gas tax dollars. At the provincial level in Canada, on average 91.6% of all provincially collected fuel taxes is invested into transport related infrastructure projects. In the United States, 84% of federal gas taxes is earmarked specifically for highway and infrastructure improvements.
Ottawa, by contrast, puts fuel excise taxes into the consolidated revenue fund, general revenue, from which it is doled out for various government schemes and projects. We are talking about a huge sum of money. Last year, the federal government collected $4.7 billion in federal gas taxes and, on top of the $4.7 billion in gas taxes, $2.2 billion in GST on the cost of fuel and a tax on the excise taxes themselves. That is a total of $7 billion every single year, or roughly $220 for every man, woman and child in Canada, that is collected at the pump in gas taxes.
If we were to ask the average citizen standing at the gas pump for $220, he or she might want to ask what that money would be going for. In any of the provinces and in the United States, the answer is that the money is used to improve infrastructure and roads in those jurisdictions. However, a Liberal politician would be forced to say that the money goes into the general revenue piggy bank and is spent on other projects, such as the billion dollar, useless gun registry, $161 million in corporate welfare to the current Prime Minister and his company, Canada Steamship Lines, and billions of dollars in corporate welfare, and a mere $4 to $22 is spent on roads and infrastructure respectively.
What the Liberal politician would not tell the motorist but what every Canadian knows is that the closer we get to an election call, the more money Liberals like to spend on roads. According to the throne speech and clarified by the Prime Minister's response to it, I understand that as of February 1, 2004, the GST paid by municipalities will be credited back to them. Rebate cheques are due to start flowing in time for the upcoming federal election. The amount of the rebate is expected to be about $580 million every single year or at the rate of about $48 million every month as an election is just about to be called.
That $48 million must be seen in perspective. In all of 2001-02 Ottawa sent only $118 million to provinces for roads and highway improvement. Now municipalities are promised 40% of their annual amount every single month in the coming three months as we head into an election campaign. It is quite simply a spending spree within 60 days of an election call and within 90 days of election day itself.
There is nothing whatsoever new here. This is simple, typical, Liberal vote buying politics of writing cheques to other levels of government with an IOU expected on election day, which could be as little as 90 days away from today.
Just as there is nothing fundamentally new in this arrangement, there is also nothing new in the deal itself. This is not a new deal. When Canadians think of a deal, they think of a negotiated agreement that leaves parties demonstrably better off. There is no evidence of a new deal. Rather, it is desperate acceptance by municipalities of the small crumbs that are being given to them by the federal government.
Had the cities been in a genuine bargaining position, they would have asked for funding that is reliable, stable, transparent and visible, with low administrative and compliance costs. They would have asked that it be new net money, not simply GST relief. The scheme the government has set up really is innocuous.
The number one problem with the GST in this country is not just that it is simply a tax on Canadians but also the administrative costs associated with the GST. Here is what the government has now said it is going to do, for example, for the city of Port Coquitlam; the mayor of Port Coquitlam is in town this week. Basically what the government has set up is that if a city or a municipality buys new snow removal equipment or salting trucks and so on, they pay GST on it. They do not pay the full 7% GST that everyday Canadians pay; they pay about 4% GST. The federal government is now saying that effective February 1 of this year municipalities will receive a rebate cheque for the GST they are paying on the buying of new equipment or for their expenditures.
What this does is further complicate the GST. It further complicates the tax code. It creates new loopholes that make the GST even less efficient. It puts the federal government again in the position of cutting cheques to other levels of government rather than giving them a new source of funding, a new, stable level of funding. The only way the municipalities get any kind of money at all is if they already spend money.
Specifically, as my colleague from Saskatoon—Rosetown—Biggar pointed out, rural municipalities, shrinking cities in British Columbia, cities like Port Coquitlam and places that are dealing with urban sprawl do not have new money to spend from which they would get a GST rebate.
There is an overall macroeconomic problem in the country, as per our Constitution and as per the services that Canadians expect. Two-thirds of the services that Canadians are provided with and enjoy from their levels of government are given to them by the provinces, subsequently by the municipalities but overwhelmingly by the provinces. The problem is that the federal government collects roughly two-thirds of the tax dollars that are expended by Canadians. There is a major disconnect.
We believe in honouring the Constitution of 1867 with delegated, enumerated and limited powers specifically to certain levels of government. The fact is that 99% of all roads in the country are engineered, built and maintained by the provinces and municipalities but half the cost of a litre of gasoline is taxes and half of those tax dollars go to Ottawa. This new deal for cities that was announced in the throne speech says nothing about starting the process to go down the road to giving those gas tax dollars to the level of government that is providing those services. This is where we get into the disconnect.
One level of government is responsible for providing services, another government taxes the money away while saying, “We will decide what roads get built, we will decide how it is done and by the way, we will cut the cheques just in time for an election campaign so everyone knows whom to thank and whom to elect in the ridings”. It is a cynical kind of politics that is precisely at the core of the democratic deficit which the Prime Minister preaches against.
Canadians want transparency, accountability and straight lines. If they are taxed for something, they expect it to go to that service. What we see in the throne speech is the further eroding of our tax code, creating huge loopholes that are open to abuse and making the GST even less efficient than it was before, which was already tremendously inefficient. What we are not giving to the municipalities is a new deal.
When a presumptive Prime Minister, when he was running for the leadership of the Liberal Party, stood up and said, “We are going to have a new deal”, that hearkens back to F.D.R. and his grand view of social programs for the United States and the fallout of the 1929 Great Depression with new programs and social programs, establishing the safety net, making sure people do not fall behind, a new deal, a macro big program and a plan to get people going, to get a country ahead. “We have nothing to fear but fear itself”, he said.
A new deal; all that the Prime Minister's new deal has boiled down to is if we buy something, the federal government will give a rebate on some of the taxes but we have to buy it first and we will get some money just in time for an election campaign. It will be nice cheque. There will be a Governor of Canada stamp and it will be accompanied by a signed autographed picture of the Prime Minister just so that everyone remembers who the money was from.
That is essentially what the program is. The municipalities need new and stable funding. Some 85% of Canadians are living in and around cities. The municipalities need the gas tax dollars to make the needed expansions, to do the things they need to do so that they can grow, build and move forward.
The federal government needs to vacate the tax room. Two-thirds of the services are provided by the provinces but two-thirds of all tax dollars are being consumed by the federal government. We need a better equilibrium in that formula. We believe in stepping back, getting the federal government out of that tax room and giving it to the provinces so that Canadians have greater accountability from the levels of government that are providing those services.
We have seen the horror show in health care where the federal government has stepped into an area that is constitutionally provided for the provinces. It gets in there, buttresses itself in there so that it can play politics, look good, provide services and be seen as the compassionate, bleeding heart Liberal government being all things to all people. The average everyday citizens do not care who gets credit for giving programs. They do not care about that sort of stuff. They want services.
In rural Saskatchewan the roads are crumbling. There are gravel shoulders, the roads are unsafe, there are howling winds and there are no runaway lanes for trucks that are out of control. We do not have the basic things that Canada needs. It is the second largest land mass in the world. It is very thinly populated, spread out across the southern border of our country.
We need infrastructure. As per our Constitution that infrastructure is built, engineered and maintained by the provinces and municipalities. They do not have the money they need to get that job done.
The Prime Minister ran for office saying he was going to give a new deal. He has failed to do that in the throne speech. He has failed to sit down. He has failed to honour the House. In October last year we voted, along with the Prime Minister, that the government immediately have negotiations with the provinces and municipalities to do precisely what I have described, to roll back that balance of the two-thirds of the services provided by the provinces and the two-thirds of the taxes going to Ottawa.
He has failed that test. He has failed to honour and respect the House. The Prime Minister's new deal for cities is a sham. It is becoming a new deal for suckers. The democratic deficit which he said he was going to end will be expanding in two ways: by not honouring the vote in the House to give permanent, steady, new funding to municipalities and provinces; and also by failing to give Canadians the overall economic solution of making sure that the levels of government that provide the services are taxing at the appropriate level so citizens can get the government that they want at the price tag they expect. They do not want to see the cynical Liberal shell games that we are seeing with this throne speech of cutting cheques just in time for an election campaign. Canadians deserve better.
