Mr. Speaker, I rise to speak at third reading of Bill C-31, the budget implementation act. In my speech I will critique the latest Liberal budget on how it responds to the wants and needs of Canadians.
I will focus on the main concern of all Canadians, namely, the creation and preservation of long term sustainable jobs. I will critique the Liberal government's performance in creating jobs, which is what it promised during the last election and since, and compare the results with the Reform Party's plan for economic prosperity.
A government budget is more than a forecast of spending practices. It is a game plan, a master plan which tells the people what are the intentions, the priorities and the goals of their government. It is a promise of performance.
The previous budgets of this government have been small steps in the right direction. The intention: deficit reduction. The priority: job creation. The goal: a better economic future for Canadians.
Even though the route taken by the Liberals has been slow, arcane and convoluted, on this side of the House we felt that they were headed in the right direction with past budgets. The 1996-97 budget is a much different story. The intention: to pull the wool over the eyes of Canadians. The priority: to maintain the status quo. The goal: to lead Canadians to believe that it has delivered on its promises in order to get re-elected. Canadians are smarter than that.
The government has promoted its political interest by subordinating the interests of hard working, tax paying Canadians. The government and, in particular, the Prime Minister and the Minister of Finance should be ashamed of themselves. We in the Reform Party feel that it is our obligation as elected representatives to get to our electorate to find out what our constituents want and to represent them in the manner in which they want to be represented. As this is not the practice of many members opposite I will take a few moments to tell them what Canadians wanted from this budget.
Canadians wanted five things. They wanted long term sustainable jobs, tax relief, long term sustainability for social programs, an increased standard of living and to know when the government will balance the budget. Many Canadians have come to realize that the first four items on their list cannot be achieved until the government stops adding to the debt and the interest payments to service the debt. This list cannot be achieved if the debt is not stabilized and then reduced.
This list is not too much to ask from a government that campaigned on creating opportunities. Canadians were not expecting the government to create for them the opportunity to file bankruptcy or the opportunity to watch their jobs head south of the border or the opportunity to see their payroll and gas taxes skyrocket. It is probably not very comforting for Canadians to know that all of these opportunities are considered to be acts of God by our Prime Minister.
Rhetoric aside, let us take a closer look at this taxpayers' wish list to see how well this budget comes through for Canadians. First is the area of long term sustainable jobs. Canadians want work. They want to pursue employment opportunities created through a healthy and prosperous economy.
The government claims to have created hundreds of thousands of jobs. In the year ended December 31, 1995, employment had grown only a meagre 8,000 jobs. That is a fact. This number represents half a per cent of the labour force. Of course, these jobs were not created by government-nor should jobs be-but rather by companies and individuals.
The national unemployment figure is hovering just shy of the double digit range and does not take into account those who are no longer looking for work. The actual percentage of unemployed Canadians is approximately 13 per cent when including those who have given up looking for work. This figure is doubled when applied to unemployed youth.
The government has said that it is dealing with student unemployment. The budget contains a new initiative to spend $250 million on jobs for a few lucky students. These jobs will provide summer employment for a minute percentage of our youth. However, the initiative will not help to create real employment opportunities after graduation.
I would have thought that after the huge success-I say this with tongue in cheek-of the national infrastucture program, the government would have realized that throwing money into make work projects does not create meaningful jobs.
The second thing Canadians want from a budget and from a government is tax relief. The level of taxation in this country is one of the major job killers. This happens on many different fronts. Many corporations that are looking to expand operations do not consider Canada because of the outrageous level of taxation. It is a killer of potential jobs for Canadians.
Many companies in Canada cannot afford to maintain the size of their workforce due to the taxation cost per employee. This results in mass layoffs and downsizing and is the killer of present jobs.
In 1995, based on an average family income of $57,000, this family paid over $27,000 in taxes of one type or another. That is a taxation level of 46 per cent. Some estimates show the level at over 50 per cent when all types of taxation are considered. The average Canadian family's tax bill has increased by over 1,000 per cent since 1961 under successive Liberal and Conservative governments. That is not double, nor is it increased by a factor of 10. It is a shameful record. This budget does not provide tax relief.
Third, Canadians expect the budget and the government to preserve social programs. Canadians are concerned that the funding available for social programs such as health care, old age security and unemployment insurance will be swallowed up by debt servicing costs, that is, the interest payments on the debt. Currently Canada wastes close to $50 billion a year servicing the debt. That $50 billion is no longer available for social program spending on important programs such as health, education and pensions.
This has resulted in tax grabs and clawbacks, especially from our seniors. The changes to the mandatory withdrawal of RRSPs and the clawback on federal pensions at $40,000 are robbing our retired seniors of the savings they struggled for decades to accumulate.
The government promised to maintain universality of social programs. During the last election campaign the Reform Party proposed reducing and eliminating pensions for seniors who were above the average Canadian household income of $53,000. When we came out in the open and presented very honestly our zero in three plan the Liberals condemned us to Canadians for wanting to end universality of social programs. In the finance minister's last
budget he, the same person who condemned us for our zero in three plan, ended universality of seniors pensions.
The dishonesty is astounding. I think Canadians should know about it and consider it as we get into this next election period.
By not dealing with the deficit in the budget and with the debt continuing to grow and therefore the cost of servicing the debt, the government is jeopardizing the social programs which are most important to Canadians.
The fourth thing Canadians wanted and expected from the budget was an increase in the standard of living. For the last two decades Canadians' standard of living has been dropping. That is, take home pay after taxes and other payroll deductions has been decreasing steadily for the last couple of decades. Since 1989 Canadians have suffered an 8.6 per cent drop in real disposable income. That is just since 1989. This is attributable to an ever increasing tax bill. Due to ever growing levels of taxes and payroll deductions Canadians have less money to invest, to buy a car with, to buy a home with or to take that elusive dream vacation.
The Canadian standard of living has stagnated and regressed to the point where present and future generations will be worse off than their parents. This scenario is courtesy of the tax and spend policies of the present and previous Liberal and Conservative governments. Clearly the blame is to be laid on previous Liberal and Conservative governments and on this Liberal government.
The budget does not allow for an increase in the Canadian standard of living, the fourth thing Canadians wanted and expected from the government and the budget.
The fifth thing they wanted was a definite date for balancing the budget. In a recent poll 66 per cent of Canadians surveyed expressed the belief that the government has not gone far enough with its deficit reduction plan. The Liberals are content to delay the inevitable, bleeding red ink at a rate of over $80 million a day. This means the government spends $80 million a day, still more than it brings in; this is in spite of huge increases in tax revenues over the term of the government.
Every legislative body in the country has made a commitment to get its financial house in order except for the federal government. Because of this inaction the national debt is barrelling toward $600 billion. Currently the debt load is over $40,000 for every Canadian taxpayer.
The government blames the private sector for not doing its part to create jobs. Instead of lecturing the business community on how to create jobs, the government should work hard and make the difficult decisions necessary to balance its books by the end of this mandate. In doing so it would create an environment conducive to economic growth and job creation.
I quote the finance minister from his budget speech of February 1994: "For years governments have been promising more than they can deliver and delivering more than they can afford. This has to end and we are ending it".
The question that comes to mind now is when. When will the government end the ever increasing debt which requires the ever increasing interest payments to service?
The government's budgets have left Canadians with a deficit of over $30 billion. Since the Liberals took power in 1993 the national debt has grown by over $100 billion. The only thing the Liberals are putting an end to are jobs, economic growth, disposable income and certainly not the ever increasing debt.
It is not my intention to paint a dismal picture of Canada. Canadians are creative, industrious, hard working people who deserve a government which will legislate changes in their best interests.
Canada has the potential to be one of the economic powers of the global market. However, until the financial crisis is under control this potential of prosperity is in jeopardy. Do not take my work for it. This is what the experts are saying about this past budget of the finance minister, the budget which this legislation we are debating today would implement.
Diane Francis of the Financial Post stated:
The Liberals are not doing the cutting fast enough. By failing to cut deeper, faster, the Liberals ignore the real possibility that another recession will hit in a year or two and land us back in the deficit.
From Ernst & Young's budget analysis:
The government did not seize a most important opportunity to clearly reinforce its resolve to deal with our national finances. It is important that all Canadians not only understand when a balanced budget will be realized but also when surpluses will be created to facilitate tax reductions, systemic debt retirement and greater flexibility with our important social programs.
From Catherine Swift, president of the Canadian Federation of Independent Business:
If we are going to see some enduring job creation and not just some political quick fixes like some of our youth initiatives, then we have to see a reduction in taxation on jobs, and we did not see that in this budget.
From the business editor of the Ottawa Sun , Stuart McCarthy:
We are all left sitting on a ticking time bomb which grows by the second called the national debt.
Granted, it is easy to sit back and criticize another's work, but it is much more difficult and credible to offer an alternative. That is what we in the Reform Party did when we published the taxpayers budget. I find it strange that the Prime Minister and the finance minister continually avoid our questions in question period by
asking us where our new budget is. When you do it right the first time, you do not have to redo it.
We did it right the first time with our taxpayers budget. The taxpayers budget is a logical, comprehensive, efficient plan to balance the federal budget. We stood behind it when it was first released in early 1995 and so did many of the experts. We still stand behind it because it works.
When asked difficult questions regarding cuts to social programs, the finance minister often refers to the so-called cold hearted Reform Party. He would have Canadians believe that I and my colleagues would sell our dear mothers down the river in the name of deficit reduction. It is the finance minister who has not only sold mothers down the river but has sent the farm with them.
The Reform Party's taxpayers budget established an old age pension clawback for those seniors whose yearly household income is $54,000 or higher. We felt these seniors were able to live comfortably without the assistance of the federal government. This was a difficult decision to make but we were forthright and had the courage to state our objections in writing.
The Liberal plan for old age security, and I have referred to it already, establishes a clawback for seniors benefits at $40,000 a year and ends universality of seniors pensions. Surely the finance minister must be apologetic to our mothers and fathers who find themselves paddleless on that infamous creek.
The finance minister is suddenly and conspicuously quiet on the subject.
Why is he so quiet? My guess is he has finally taken time to read our taxpayers budget and is trying to steal our ideas without our noticing. I have news for the finance minister. He can have them. We presented the taxpayers budget for him to look at and to learn from. That was our intent.
He would do well to take them and put them in effect. We would see the positive results of that budget. To make it absolutely clear, the Liberal government has cut about $3.5 billion more in the areas of health care, education and welfare than the Reform Party proposed in our taxpayers budget.
The same government, Prime Minister and finance minister who call Reformers heartless have themselves reduced federal government payments for health care, welfare and education by $3.5 billion more than the Reform taxpayers budget.
What would Canadians gain through the implementation of the taxpayers budget? If I wanted to be curt, I could mention everything they have lost through the irresponsible practices of the present and past Liberal and Conservative administrations. Unfortunately it is not that simple.
The most important aspect of the taxpayers budget is that it takes place over a relatively short time period. Canadians would regain control of their financial lives quickly. Canadians would be freed from the strains of our overburdened tax system and would be able to plan for their futures in a stable economy with sustainable, universal social programs.
The taxpayers budget offers deficit elimination and tax relief which would stimulate long term private sector job creation. It offers a more secure society established through the re-examination and reform of social programs, the unemployment of individuals and families and the decentralization of social program delivery.
Reform's formula is one that will eliminate the deficit in a quick, calculated, humanitarian way. Debt reduction and increased consumer activity will lead to job creation. However, there are other essential components to creating employment opportunities.
These are spelled out in Reform's five R plan in the taxpayers budget: reduce the federal debt, relieve Canadians of their tax burden, restore labour market efficiency and reduce social program dependence, remove barriers to internal and external trade, and renew Canada's physical and intellectual infrastructure.
The combination of these components is a sure fire way to create an environment in which the private sector can thrive and in so doing create long term, sustainable employment.
I have already spoken of the importance of reducing the deficit and relieving Canadians of their tax burden. Notwithstanding the importance of the previously stated issues, I will focus the remainder of my speech on an area of job creation which I am particularly interested in.
As the Reform Party internal trade critic, I am quite concerned about the lack of action taken by the government in dismantling barriers to internal trade. We in the House recently debated Bill C-19, implementing an agreement on internal trade.
The government stated in the red book and in both throne speeches that it is committed to the dismantling of the barriers to internal trade. If this were truly the case, why did the government pass Bill C-19 two weeks ago, 10 months after the agreement on internal trade came into effect?
While the agreement on internal trade is weak and in some areas actually tends to enshrine barriers, exactly the opposite of its intention, at least it was a start. Yet the legislation to implement the agreement was not passed in the House until 10 months after the agreement came into effect, almost two years after the agreement was reached in the first place.
Interprovincial trade barriers cost Canadians jobs and money. These are the two criteria budgets traditionally address, jobs and money. A budget is supposed to outline what initiatives have been undertaken to stimulate the economy, resulting in jobs and money.
This budget is a sunshine budget. The message of don't worry, be happy does not wash with me or with Canadian taxpayers. We are supposed to believe the government is doing all it can for Canadians. To listen to the finance minister, he has not left a stone unturned in his search for job creation and debt reduction.
Unbelievably, the Prime Minister stated last week in Calgary that high unemployment is unbeatable. The Prime Minister has thrown up his hands and has said that we will have to live with unemployment because we cannot beat it. Canadians are stuck with high unemployment under this government. If the Prime Minister is throwing up his hands and surrendering to unemployment, then he should step aside. There is plenty which can be done right here at home to deal with the high unemployment rate.
To start with, quick action should be taken to remove barriers to internal trade. These barriers between the provinces are a serious hurdle on the road to economic prosperity. Business groups, think tanks and academics across Canada all agree that it is in the economic best interests of all Canadians for trade barriers to be eliminated.
According to the Fraser Institute, if Canadian firms were able to operate freely across the country, the average Canadian household income would rise by as much as $3,500 a year. This is another means of putting dollars back in the hands of Canadians. This is a matter that this government refuses to address in a serious way.
The Canadian Manufacturers' Association, the Fraser Institute, the C.D. Howe Institute and others estimate that internal trade barriers cost Canadian businesses between $6 billion and $10 billion a year. It amazes me that this situation has not been addressed in any substantive way by the government. Stephen Van Houten, president of the Canadian Manufacturers' Association, said that trade barriers result in lost sales, lost investment and lost jobs.
Many Canadian businesses have had to resort to going through the United States, through American companies, in order to do business with businesses in other Canadian provinces. It is sad that it is easier to do business with the United States and Mexico than it is with other provinces.
Members may ask how this will affect job creation. Many companies are forced to leave Canada because they simply cannot afford to stay. When they leave they take with them Canadian jobs. Businesses leave Canada, certainly for many reasons, all of which must be eliminated.
I have already talked about the high taxes and payroll deductions driving businesses and jobs out of Canada. Excessive government regulation and interference is another factor causing businesses to leave this country. The restrictions and barriers to internal trade are another. We are not talking about a few dozen jobs. We are talking about tens of thousands and probably hundreds of thousands of jobs all lost because government in this country will not eliminate the barriers to internal trade.
I will cite one example. I will not use the company's name because I have not asked permission to do so. There is a company in northern Ontario that specializes in the high tech industrial heat treating of materials. This company is state of the art. Its workers are highly skilled at their trade. The company entered into tendering competitions for government contracts in Manitoba and Quebec. In both cases, the Ontario company could provide the best product at the lowest price. There was no doubt about that.
In both cases it was awarded conditional contracts. In Manitoba, the job would be awarded if this company would post an enormous payroll bond to cover its workers, a bond which was completely out of reach for this small company. In Quebec, the contract would be awarded only if Quebec workers were used. This is a highly specialized company which has spent a lot of time and money training staff to do a highly specialized job very efficiently. In both cases, the cost of doing business in Canada was too high.
The company is now contemplating taking its business and its high paying jobs to the United States where it can use the NAFTA agreement to gain access to Ontario and Manitoba. Does this make any sense? This kind of nonsense has to end and it must end quickly.
I could literally go on for hours citing examples of unjust trade restrictions within Canada. They would all draw the same conclusion: we must do something to rectify the situation. Patriotism should not be the sole rationale for doing business inside Canada.
With regard to internal trade barriers many companies have stated that the only reason they are staying in this country is that they are patriotic Canadians. One after another have said that patriotism can only go so far and that if things do not change, these companies will move their businesses to the United States, Mexico or elsewhere.
I will now summarize the government's approach to budgets to date. In the 1994-95 budget the Liberals tried to grow out of debt through make work projects. In the 1995-96 budget the Liberals tried to tax their way out of debt through payroll and gasoline taxes. The 1996-97 budget is really a do nothing budget intended to
stupefy the masses into believing that all is fine and that the problem has been solved.
I will conclude by reading an excerpt from the C.D. Howe study, "Deficit Reductions-What Pain, What Gain". This study should be required reading for anyone who believes that we can first, grow our way out of debt; second, tax our way out of debt; third, do nothing about our fiscal crisis. The study concludes by stating that short term sacrifice for deficit elimination can yield a rich, long term return.
The long term benefits of balancing budgets in a quick and efficient manner will accomplish the following: First is income and job security. A balanced budget will put an end to the downward spiral that we have seen in take home pay over the past 20 years. Second, it will provide tax relief. By controlling spending and balancing the federal budget, taxation levels would be reduced in conjunction with deficit and debt reduction. Third is social program security. By ending the continual increase in interest payments on the debt, tax dollars could be directed to maintaining social programs such as health, education and pensions which are so important to Canadians.
The answer is quite clear. The environment for job creation can be achieved through the taxpayers budget or a similar approach. It also will require dealing with and eliminating internal trade barriers. This can and must be done.
Through my speech today I have shown that the 1996-97 Liberal budget and the Liberal government's entire approach to fiscal reform is ineffective and does not respond to the needs of Canadians which have been stated quite clearly across the country. In this budget Canadians wanted job creation, not vote creation. I believe that Canadians can see through the statements of the finance minister and others that the problem has been solved. The budget will not end up being a vote creator.
