Mr. Speaker, to a certain extent I would like to congratulate the NDP for their 12 points. I have read them and I think to some extent all of us can subscribe to some of the principles embodied in those 12 points. I am not saying the NDP is perfect. To some extent they are in what might be described as a time warp, following interventionist tax and spend permanent deficit policies that were abandoned years or even decades ago by thinking lefties around the world. Whether we look at Tony Blair in the U.K. or at Scandinavia or at the social democrats in Europe or Australia, all of them have abandoned the kinds of policies the NDP is proposing today.
Nevertheless, there are some positive elements in their 12 points. Indeed, when I think about what the government has accomplished, not just in the last budget but since being elected in 1993, many of those points that the NDP has mentioned resonate with me as things that our government has achieved.
By the way, Mr. Speaker, I would like to share my time with the hon. member for Mississauga South. I neglected to mention that.
I ask members to take themselves back to 1993 and ask themselves what the state of the Canadian economy was then. In a word, I think one could say it was bad, because we had unemployment rates and interest rates at or near double digits and we had a deficit of $43 billion. In late 1994 we had the Mexico crisis and people in Canada and the U.S. were saying Canada would be the next Mexico and the IMF would be coming in. Members may recall that the Wall Street Journal was saying we were going to be a third world country.
Then the government took strong action against the $43 billion deficit. As a consequence, since that time the $43 billion deficit has become a $17 billion surplus, as of last year. We have reduced the government debt ratio substantially. We have reduced the external debt ratio by 20 percentage points over the last few years. We have restored sanity, health and dynamism to the Canadian economy.
I will just mention in passing that a few months ago in the House the leader of the fifth party actually boasted that he and the Tories inherited a $38 billion deficit from the Liberals in 1984 and left us later, in 1993, with a deficit of $43 billion. He was boasting of the $5 billion increase in the deficit. I guess the reason for his boast was that the deficit he left us was a little smaller as a per cent of GDP than the deficit that he inherited. However, it shows the absence of strong objectives by the Tories that they could boast they left us with a bigger deficit when we in fact not only wiped out their huge deficit but turned it into a $17 billion surplus.
Another issue that the Liberal government has addressed effectively is the productivity issue. It is true that there has been, over the last decades, slower productivity growth in Canada than in the United States, but the productivity issue is a new economy issue because Canada's productivity growth in old economy industries has been if anything a little higher than that of the U.S., whereas the U.S. has done better than we have and indeed better than every other country in the new economy industries in terms of productivity growth.
What has the government done to address the new economy and productivity issue? We have done a lot. Not only have we reduced the corporate tax rate to the point where in a couple of years it will be five points lower than that of the U.S., we have also eliminated the income tax surtax, we have slashed the rate of tax on capital gains, we have provided billions of additional dollars for support in research and we have not finished yet because we also have the innovation plan announced recently by the Minister of Industry.
The government's tax reduction package is also helping individual Canadians, particularly the middle class. A Canadian family of four with a combined income of $60,000 will see a decline of about $1,200 in federal taxes this year.
All in all, this program of tax cuts is the most ambitious in our entire history. In terms of dollars per capita, it is much more generous than the cuts proposed by President Bush last year.
Clearly we have made enormous progress in very little time. In less than a decade, Canada's economy, which was one of the weakest among industrialized countries, has become one of the most vigorous.
Earlier today we had news which gives further evidence that we have no technical recession and that indeed we hope that a recovery is underway. Canada's gross domestic product grew by 2% in a quarter, far exceeding analysts' expectations. If we leave out inventory GDP grew by 6% in a quarter. Real take home pay is up by 5.7% largely because of a 7.5% tax cut.
I am not being over confident about the future. There are still weaknesses in terms of profits and investment. The consumer and housing industry are strong reflecting the influence of lower interest rates from substantial tax cuts last year but also additional tax cuts this year.
People in New York and London agree with our story. They agree that we have indeed made enormous progress since 1993 in terms of taxes, productivity, employment, just about anything we care to think of. The foreigners agree with us and we agree about this progress.
It is only across the aisle, particularly Canadian Alliance members who keep giving us their totally distorted statistics and negative attitude on every issue. It is those members who are conveying the wrong impression and as I said earlier they are essentially a part of the problem and not a part of the solution.
I say without any hesitation, for the reasons that I have outlined, that the government has already demonstrated its commitment to fair tax and sound monetary policy as advocated by NDP members. Through the actions that I described it is clear that we have followed their advice.
Let us look at some of the elements in the NDP plan. It calls on the federal government to restore its full participation in health care and education funding. Here again, this government's constructive measures leave little doubt as to its position on this issue.
In health care services, last year's budget reiterated that the $23.4 billion set aside for the health care agreements and early childhood development, concluded by the first ministers in September 2000, were fully protected despite the impact of the most recent economic downturn.
I might say that there is a whole lot of confusion. If we listen to the provincial premiers we might think that the federal government pays for only about 15% of health care. That is because they ignore the tax point element of our contribution which makes the total contribution very much higher.
The worst, when it comes to this, is the Bloc Quebecois. The Bloc Quebecois' position is completely contradictory. On the one hand, it does not count the federal government's contribution in terms of tax points. It does not recognize at all the role of the tax points that have already been transferred. Yet, on the other hand, it wants more. It wants more tax points. Perhaps from the perspective of the Bloc Quebecois or the Parti Quebecois this makes some kind of sense, but for us, it is a completely contradictory position.
Let me say in response to the NDP that we have taken substantial actions as well in the areas of infrastructure programs which it wants us to do. We added another $2 billion program.
We have taken strong actions in terms of the aboriginal population including $185 million in support of the development and well-being of aboriginal children. The Prime Minister has signalled his personal commitment for improvements in this area.
We have taken strong actions in the area of agriculture and have committed ourselves to more.
Canada's economy is once again on the move. Our industrial base is being transformed and revitalized. Just as our athletes demonstrated at the recent winter Olympics Canada is ready to take on the world and win. Therefore, I will be voting against the motion.