Maurizio Bevilacqua

[The Budget, March 10th, 1998]

Madam Speaker, as a member of Parliament I have travelled extensively throughout the country, not only as a member of the finance committee but also during the years when we were dealing with social security review. Many of the measures that have been announced in this budget actually address the concern cited by Canadians may I say from coast to coast to coast in relationship to key areas.

I do want to go back to the issue raised in reference to the Canadian opportunities strategy. There is no question that it does include measures that will benefit those who are currently students, graduates who are coping with student loans and workers who are trying to upgrade their skills.

Also there is the registered education savings plan and the greater flexibility therein and the government's contribution to postgraduate students who are working in scientific and medical research. The hon. member ought to say that we are investing precisely in the areas she has stated.

I can say with a great deal of certainty that in many quarters this budget is being dubbed at times as the education budget, as a budget that speaks to the development of human resources in our country. When we look at the amount of funding that has been directed toward those areas, the member must admit that students are much better off today than they were prior to the budget. We have to have a sense of fairness in addressing this particular budget as it relates to the quality of life that students will have as a result of the measures.

I can honestly say it addresses some of the concerns I had many years ago when I was sitting in the opposition benches about the various cuts the then Conservative government was imposing on youth programs. I am really glad to see that the government has highlighted youth as a major issue that we need to make great investments in.

On the question of transfers to the provinces, the hon. member knows that we raised the floor to $12.5 billion, as much as the national forum on health said that we should. We followed up on that.

[The Budget, March 10th, 1998]

Madam Speaker, I am very pleased to have an opportunity to address the House on this historic occasion. When I first came to the House of Commons as a member of Parliament almost 10 years ago, I could not have predicted that one day we would be speaking of a balanced federal budget. No one could have. At that time deficits had become a permanent part of our political culture.

Since I moved to Canada in the early 1970s our country never witnessed a balanced budget. Deficits were the reality of my generation. Younger generations grew up with them. It is the reality we lived with. This is a discouraging fact. The deficit was always a dead weight around our nations leg, slowing us down, holding us back.

The deficit robbed the government of its freedom to act in the best interest of Canadians. It clouded our vision and limited our horizons.

In my first term as a member of Parliament the only thing that was more discouraging than the existence of the deficit was the former government's failure to control it. Every year at budget time Canadians were presented with an impressive sounding plan to reduce the deficit. Then year after year after year the deficit would rise and our faith in the government's fiscal policies would fall.

Finally Canadians ran out of patience and voted for change. When the government took office it inherited a deficit of approximately $42 billion. It was an overwhelming challenge but the government did not shrink from it. From the outset the Minister of Finance brought forward budgets based on credible plans to control and reduce government spending. By sticking to these plans the government was able to slowly wrestle the deficit to the ground.

The Minister of Finance deserves our congratulations for succeeding in a task that has defeated many of his predecessors. However, let me echo what he said in his budget speech on February 24. “Canadians can be very proud today. This is their victory”.

Since the government took office Canadians have been key players in the budget making process. The public prebudget consultation introduced by the government gave every citizen an opportunity to speak directly to the government on this issue. Individuals and groups responded with enthusiasm. They came forward with their proposals for what should be in the federal budget.

Last year I participated in the prebudget consultations. The finance committee held public hearings from Vancouver to St. John's. These were complemented by prebudget town hall meetings held by members of Parliament in communities throughout the nation.

As a result, last year's exercise was the most extensive prebudget consultation to date. On behalf of the finance committee I would like to express our warmest and sincerest gratitude to the thousands of Canadians who made insightful contributions. Many of their thoughts, ideas and recommendations were addressed very clearly and precisely in the 1998 budget.

The people of Canada spoke out in a loud and clear voice. They told us that they want balance; not just a balanced budget but a balance in government policies, in its goals and in its results.

The government has listened and it has acted. The budget is the response. The 1998 budget responds to the expectations of Canadians.

Let us consider the following points. The government has eliminated a deficit which has been a priority for Canadians for many years. It has put in place a mechanism to start paying down the debt, which many have identified as the next challenge that government must attack. The government has taken some major steps toward tax relief. It has invested funds in certain key areas guaranteed to secure the maximum advantage for the resources available.

The budget is a turning point. This is the year we stop borrowing from our children. This is the year we start giving them something back. Instead of mortgaging their future we are now helping them to build their future.

With the Canadian opportunities strategy we are introducing a comprehensive approach which will ensure that all Canadians have access to an education. This is the cornerstone of our government's commitment to ensuring the future prosperity of this great nation.

Let us make no mistake. Getting an education is crucial. It will decide whether young Canadians will work as active players in the knowledge economy or they will be pushed to the sidelines.

The Canadian opportunities strategy is the key to a bright and rewarding future. It includes measures to help those who are currently students, graduates coping with student loans, the worker seeking to renew his or her skills, parents and grandparents saving to pay for students' education, post-graduates and others working in scientific and medical research, young people facing challenges in joining the workforce, and children in communities trying to gain access to the Internet.

I am personally very pleased to see the emphasis that has been placed on helping Canada's youth. It is tangible evidence of our commitment to Canada's future.

The budget contains other strategic targeted investments. For example, to help families with child care expenses the budget proposes to increase the limit on the child care expense deduction. For Canadians providing care for the elderly or disabled family members the budget proposes a new caregiver credit which will reduce federal taxes by up to $400.

Self-employed Canadians, owners and operators of small businesses will now be able to deduct premiums for health and dental insurance against their business income.

At the same time the government is moving forward in key areas. During last year's prebudget consultation Canadians told us that they support a measured approach to tax relief. They understood that as we enter a new era of balanced budgets no steps should be taken which might jeopardize the hard won victory over the deficit.

Therefore the vast majority of people who participated in the consultations agreed that in the initial stages tax relief measures should focus on Canadians in greatest need. That is what we have done. The government has taken measures to increase the basic income tax exemption. They will mean that 400,000 low income Canadians will no longer have to pay taxes. Another 4.6 million people will see their taxes drop as a result of these changes.

The budget also eliminates the 3% general surtax in its entirety for individuals with incomes up to $50,000. The general surtax will also be reduced for those with incomes between $50,000 and about $65,000.

Taken together, these tax relief measures will amount to a saving of approximately $7 billion for Canadians over the next three years. In all, 14 million low and middle income Canadians, 90% of all taxpayers, will benefit. This is only the first step. In the years ahead as resources permit, the government is committed to extending tax relief to other Canadians.

Finally, the budget addresses a third concern shared by a large number of Canadians: reducing the national debt. In the years ahead the government will continue to include a $3 billion contingency reserve in its budgets to prepare for unforeseen developments. If as was the case in recent years that reserve is not needed, it will go directly to paying down the debt.

At the same time, our government will continue paying down its market debt, the funds it has to borrow on financial markets. Already this year the government has paid down almost $13 billion of this debt.

For these reasons and many more, it is fair to describe this budget as an historic budget. Not only does a balanced budget represent something no other government has accomplished in 30 years, more importantly, it was done without destroying Canada's social safety net.

That has been the genius of the government's budgets. They have always combined fiscal responsibility with social responsibility. By doing so the government has ensured that Canadians will leave future generations with the legacy of expanding opportunities rather than one of high taxes and escalating debt.

There is no question in my mind that Canadians believe that tomorrow will be better than today.

[The Budget, March 9th, 1998]

Mr. Speaker, last Thursday in the town of Aurora I hosted my post-budget town hall meeting to speak with residents of Vaughan-King-Aurora, hear their views on the 1998 budget and to solicit their recommendations for future fiscal and economic policy.

Participants favoured the budget's balanced approach to economic and fiscal management. They approved of the government's plan to put the national debt on a permanent downward track, to provide tax relief for 14 million Canadians and to make wise investments in key priority areas such as health care, education, youth employment, technology and research and development.

Residents agreed that a balanced budget is not an invitation for a spending spree and share the view that we should not allow deficits to threaten our economic sovereignty or our ability to chart our own future as a nation.

Last Thursday, residents of Vaughan—King—Aurora showed a great deal of confidence. They feel that as a nation we are into a new era, an era of optimism and expanding opportunities for all.

[Committees Of The House, February 23rd, 1998]

Mr. Speaker, I have the honour to present in both official languages the third report of the Standing Committee on Finance. Pursuant to its order of reference dated February 4, 1998, your committee has adopted Bill C-28, income tax amendments act, 1997, and has agreed to report it with amendments.

[Small Business Loans Act, February 16th, 1998]

Mr. Speaker, I wish to address the House with regard to Bill C-21, an act to amend the Small Business Loans Act. The support for small and medium size businesses provided by the SBLA is integral to the government's jobs and growth agenda which is reducing the deficit, creating the conditions for strong and sustainable economic growth, and helping Canadians get back to work.

I will engage in this debate by giving a larger scope and a broader framework to the issues we are debating. I will also illustrate that the SBLA is part of a larger strategy presented to Canadians by the government.

The strategy basically deals with four overarching themes: to make Canada the most connected country in the world; to enable Canada to realize its international potential; to invest in innovation and knowledge; and to increase the participation of Canadians in the new economy. All of these themes are highly relevant to Canada's small business community which indeed must adapt and innovate to thrive in the new information economy.

Over and above the benefits that our renewal of the Small Business Loans Act will confer on small and medium size enterprises, many Industry Canada programs are designed specifically to increase the participation of small businesses in the new economy. These programs complement the way in which the SBLA supports small businesses and innovative new companies in particular by making it easier for them to secure debt financing.

Recent developments with regard to connectedness are particularly exciting and relevant to the field under discussion. Let us take some examples.

As part of small business week recently, the Minister of Industry launched three new Internet web sites designed specifically for small business. The sites are located on Strategis, Industry Canada's interactive web site. The new Strategis sites continue Industry Canada's efforts to connect Canadians, increase support for small business and move Canada ahead in the knowledge based economy.

The first, Sources of Financing, is a new leading edge product based on a sophisticated and powerful search engine. Through the site small businesses can access information on a wide range of information about traditional and alternative sources of financing. These sources include the SBLA and run the gamut from the familiar debt financing arrangements available from the major financial institutions to services offered by micro lenders or venture capital companies.

The second site is designed to complement the Canada community investment plan, CCIP, an initiative which was started in 1996. It is an innovative program to help businesses with potential for growth gain access to existing private sector sources of risk capital. The program which has a special focus on small and medium size businesses is designed for communities which exist outside the orbit of Canada's major financial centres. Twenty-two communities across Canada are taking part.

Steps to Growth Capital is the Strategis web site which has been created as a companion information site to the CCIP. Steps to Growth Capital will help growth oriented firms prepare themselves to find outside investors and close a deal. There are eight steps covered in the program which address a whole range of investment capital issues, from identifying capital needs to managing a relationship with an investor.

It is becoming quite clear from the comments I have made that the SBLA should simply not be viewed in isolation but rather as part of a larger strategy presented by the Government of Canada under the leadership of the Minister of Industry, who has really taken upon himself to provide the type of programs and tools to the small business sector so that it can grow in a growing economy. We could look at this perhaps as the creation of a tool kit for small businesses so that they can generate the type of wealth and the type of jobs our economy needs.

These three sites have come on line in addition to the wealth of small business information already available via Strategis through Contact!, the Canadian management network. This site is one of the busiest on Strategis. It provides entrepreneurs with access to information on where to find out about management skills, locate outside advice and take part in extensive on line business to business discussion forums.

Contact! makes available many, many resources. For example it provides extensive data on more than 1,500 Canadian small business support organizations. It also includes an all in one business support centre with more than 450 on line how to publications and descriptions of more than 300 business management software tools.

It is clear from the type of material and programs the Government of Canada is providing small business that we are doing our part and our share to make sure that they can grow to their potential.

The government's goal in making Canada the most connected country in the world is to ensure that Canadians wherever they are can have access to the information highway by the year 2000. This is perhaps the single most important action the government can take to ensure that we succeed in the knowledge based economy.

I think members of Parliament on both sides have a full understanding that there has been quite a transformation occurring in this economy. The role of government as a facilitator is to provide these opportunities for small business so that we are well equipped for the challenges of the 21st century. May I say it is not so much the 21st century that we really have to get ready for. We have to be ready because the so-called 21st century telecommunications systems and networks are here already.

This is why Industry Canada is working with private and public sector partners to ensure that all of Canada's 16,500 schools and 3,400 libraries are connected to the Internet by 1998. That is the type of leading edge work we need to engage in. Just think about the fact that 16,500 schools and 3,400 libraries are going to be connected to the Internet in 1998.

What does that mean? It gives us a competitive edge as a nation. We will be ahead of most if not all industrialized countries in the world in this particular sector. Why is that important? Because it speaks to competitiveness in the ever growing competitive global marketplace. It provides our people with the human resources required, the potential to expand this country's human resources and to make sure that we get our fair share.

It is also why we are connecting rural and remote communities through public access sites across Canada. It will give them the tools to further their economic and social development. For rural communities, technology is their friend. It brings them closer to the centres and makes them connect not only with people within Canada but throughout the world.

My colleagues will continue on stressing some of these points. I am sure they will dedicate the majority of their speeches to the issue of how this bill we are examining is part of a larger strategy the government has in mind. I have touched upon some of the key issues in my 10 minutes. My hon. colleagues will touch on some of the other overarching themes in the Minister of Industry's strategy for a more connected society.

[Income Tax Amendments Act, 1997, February 2nd, 1998]

Mr. Speaker, I am often struck by the pessimism that exists on the other side when we as a country are enjoying an excellent standard of living. There are areas which need improvement. I mentioned, for example, the issue of youth unemployment. That is a concern for many Canadians from coast to coast. I am surprised the hon. member does not recognize the government has governed well.

We can look to the headway we made on the deficit. It was $42 billion when we took power. That was not long ago. It was back in 1993. When I was sitting where the hon. member is sitting now I remember how badly we felt as a nation. We were carrying a high deficit. Interest rates went through the roof. More important, we saw a truly demoralized nation, a nation which was running just to stand still. People's incomes were dropping. People had lost their hope to purchase a home. Bankruptcies were going through the roof. People's hopes were dim.

The government cannot take all the credit. Indeed Canadians rolled up their sleeves and said that we needed to tackle the deficit. Now they want to tackle the debt. We need to make strategic investments in areas that count like education and health.

During the election campaign the increase in cash flow of approximately $1.5 billion was welcomed by people from coast to coast to coast. They felt we were investing in the right things: health and education.

The hon. member mentioned something which struck me as being odd. He said that this is just money that goes to social spending and it has nothing to do with jobs. I submit to him that he is absolutely wrong. The investment we make in education is perhaps the number one way of ensuring that young people have the skills and the education required to get the new jobs that exist in the new economy.

It is the way in which we can respond to the changing dynamics of marketplace where, as members know, the old rules simply do not apply.

I think that is the big difference that exists from the member's attitude and my own. I truly believe that we can equip the people of Canada with the proper skills. I believe that this country has great potential for growth.

I believe there are signals given by the marketplace and given by people's attitude that tomorrow can be better than today provided we pool our common resources, provided we find the inner strength to look to the 21st century with the type of optimism that we have the right to.

If anybody is asked, any economist throughout the world, what would be the perfect conditions for economic growth in an industrialized society, what they will say is that human resources need to be invested in as we have done. The burden of deficits needs to be eliminated. Interest rates need to be low. Inflation needs to be low. These are the fundamentals that generate economic growth.

I simply do not understand why the hon. member cannot take pride in the fact that Canadians from coast to coast have sacrificed to reach these objectives, that Canadians from coast to coast have said to the Government of Canada defeat the deficit. We will sacrifice ourselves for whom? For our children, whether they come from Quebec, British Columbia, Ontario or anywhere else in this country.

The hon. member gets up in his seat and somehow tells the people who are watching this debate that things in Canada are terrible, that it does not matter that because of low interest rates we have seen immense growth in the small business sector, that it does not matter that over a million jobs have been created, that it does not matter that because of the almost elimination of our deficit that we are able now to invest in the social and economic needs of Canadians, particularly health care and education, that does not really matter, those are not achievements, the fact that the unemployment rate is below double digit. When former Conservative governments were saying that it would take until the year 2000, that is not worth celebrating.

To diminish the efforts of Canada, that is what the hon. member is saying. All the work that the Canadian people have participated diligently in, you are saying that is worth nothing. I say to you that you are wrong and we—

[Income Tax Amendments Act, 1997, February 2nd, 1998]

Mr. Speaker, I am pleased to take part in this debate concerning Bill C-28 and to support the government's decision to increase cash funding to the provinces under the Canada health and social transfer.

The measure of real leadership is where government places its priorities. The priorities of this government in this case are clear and concrete.

Health and education are issues that affect every Canadian in every region. They are truly national concerns. It is proper that as our federal financial situation improves, the government has given first place to investing in health and education through boosting provincial funding for these vital purposes. This is the type of investment all Canadians can appreciate. This is the sort of support for federal-provincial partnerships that all Canadians should endorse.

Under this legislation federal cash funding to the provinces under the CHST will be guaranteed at $12.5 billion annually for the next five years. That is a $1.5 billion increase over the previously legislated cash floor.

It is important to remember that the cash portion of the CHST is only part of the total value of our federal support for provinces in the areas of health, education and social assistance. When tax points are included, the total funding to provinces provided under the CHST will exceed $25 billion. That will grow to over $28 billion in the years ahead.

There are some critics unfortunately who try to dismiss or minimize the issue of tax points. They try to ignore the fact that these federal tax points once transferred to the provinces are not only a gift that keeps on giving, but a gift that keeps on growing year after year. Tax points. I know that sounds abstract, arcane and perhaps bureaucratic, but Canadians owe it to themselves and to our national policy debates to understand the issues involved, especially if they are to appreciate the legislation before us.

Over the years as federal-provincial social programs have been developed the federal contribution has taken two forms. One is a commitment of direct cash contributions. But as of 1977, we also agreed to provide the provinces with tax points.

What is a tax point transfer? It simply means that the provinces can collect a portion of the taxes that would otherwise go to the federal government. In other words it means that provincial tax revenues increase, federal revenues decrease and the national taxpayer still pays the same rate. There was good reason for the provinces to accept these tax points. As the economy grows so does the value of those points. While there have been economic ups and downs, each of those tax points is worth much more today than when the programs they fund were introduced.

Consider for a second the tax points transferred to the provinces in 1977 to support health and social programs. In 1977 those tax points amounted to some $3 billion worth of revenues. Today they are worth about $12 billion. In other words if the federal government had not transferred those tax points to the provinces, today we would have some $12 billion more a year in our coffers.

Some of that money could have gone to accelerate the deficit reduction but I firmly believe and I am sure hon. members in government believe it belongs where it is doing the work it does. That means providing a national health care system that is the envy of our American neighbours. It means support for post-secondary education that makes attending a Canadian university much more affordable and accessible than is generally the case in the United States of America.

To me the bottom line is clear. Federal support for health care and education, two of the most important concerns within our society, is real and reliable. As our economy grows and our financial situation improves it is support that is again growing.

I am not trying to hide the fact that to get Canada's deficit down transfers did have to be cut. The cash portion of federal funding for provinces represents about $1 in every $5 of federal program spending. We simply could not get the deficit down without including transfers in the fiscal restraint effort of our first mandate.

A number of points should be considered in judging our federal performance on trimming transfers. First, our original cuts to cash transfers represented about 3% of total provincial revenues. In other words 3 cents of every provincial spending dollar. I hardly think there are too many Canadians who would describe that as an excessive or exorbitant contribution to resolving a national debt problem that was hurting us all.

Second, we have always shared the concern Canadians were feeling about the future of social programs, especially health care. Because of our better than expected fiscal progress we are now able to reduce the size of our planned transfer cuts with Bill C-28 restoring up to $1.5 billion of federal revenues a year to provincial coffers. This means our transfer cuts will end up equalling only about 2.5% of provincial revenues.

Third and most important, let us recognize these transfers cuts brought real bottom line benefits to the provinces not just losses. That may sound contradictory but it is again the truth. We should not forget that our federal deficit reduction program has played a crucial role in allowing Canadian interest rates to fall to their lowest sustained level in some 40 years. While international pressures have seen rates move up somewhat, they are still well below the levels we can all remember from the 1980s.

It is not just individual Canadians and corporations that have benefited from these lower rates. The provinces have also been winners.

First, the lower interest rates made possible by our fiscal restraint have meant lower provincial debt servicing costs. In fact we have estimated that the drop in rates provided the provinces with a $1.8 billion dividend between January 1995 and December 1996. That saving has continued to grow.

Second, the provincial gains go beyond lower interest charges. Canada's low interest rates are the reasons why growth and job creation have accelerated significantly in recent months. Our growth rate is one of the best in the world and our unemployment rate in December was the lowest in seven years.

That makes the provinces winners as well, providing them with higher tax revenues through more working Canadians and healthier companies, not to mention reduced welfare costs. In other words, the success of our deficit battle has improved the ability of provinces to invest in health care and education.

Personally I have no patience for those who try to argue that the government has supposedly acted unfairly and offloaded our deficit on to the provinces. I see it differently. Yes, we imposed cuts but as carefully and as fairly as we could. Provinces, in fact all Canadians, are sharing in the very real rewards those federal cuts have bought and paid for.

I have raised these points because they serve as a useful context for the legislation we are now considering. Before concluding I must make a couple of further points about the government's commitment to health care and education. The enrichment of the CHST under Bill C-28 may be the most dramatic evidence of our commitment but is not the only proof of our continuing expanding support for these vital social and economic activities.

For example, also in Bill C-28 we are taking an important step to help Canadian parents save for their children's education. The legislation will expand the limit on the amount that may be invested in a registered education savings plan for a youngster from the current $2,000 to $4,000 a year. This brings the limit for such savings—where the income is tax sheltered until used to pay school costs—more in line with the growth in tuition and other school expenses.

Our action on health care also extends well beyond the funding under the CHST. For example, in last year's budget our government announced that we would provide $150 million over three years to help provinces put in place such pilot projects as new approaches to home care and drug coverage that will enable them to test new ways to improve our health care system.

In the 1997 budget we also committed $50 million over the next three years to allow both levels of government, federal and provincial, to put in place a co-ordinated national system of health data. This will ensure that health care providers, planners and individuals across our country have the right health information at the right time, including the most up to date knowledge possible concerning the treatments available.

I know my remarks have gone beyond the specific legislation before us, but no act of government stands in isolation from the overall directions it has established and commitments it has made. That is why I welcomed the opportunity to speak today in support of Bill C-28. It demonstrates the government's commitment to the critical issues of health care and education. It proves that the direction it has set is one of continuing partnerships and support for the provinces.

[Finance, December 10th, 1997]

Mr. Speaker, at the conclusion of my remarks I spoke about the issue of post-secondary education and also that the committee recognizes the initiatives of the federal government to date and recommends that additional resources be dedicated toward helping children living in poverty as the fiscal dividend grows.

Investments in these areas are means to making the new economy work for Canadians. By taking such steps we can ensure security and opportunity now and in the future.

On behalf of all committee members, I want to thank Canadians from coast to coast to coast for participating in our pre-budget consultation. It has instilled a profound respect for our country, its citizens and their ideas in all members of the committee.

“In Keeping the Balance”, which is the title of the report, we have tried to respond with the substance our fellow citizens demand, as well as a budget plan they deserve. I am proud of what we have accomplished together.

[Finance, December 10th, 1997]

Mr. Speaker, it is a pleasure to participate in this very important debate, a debate which speaks to the issues of Canadian values and priorities for today and for the future.

Canadians have spoken. Their message was quite clear. Canadians want balance, balance between the security offered through debt reduction and tax relief and the benefits of investing in people and indeed our future. They quite frankly told us that health care, education and pensions are not only line items on a budget sheet, but rather they represent our core values as a people. Indeed they are an expression of our values.

This fall as part of its annual prebudget consultation, the House of Commons Standing Committee on Finance travelled from coast to coast to coast engaging Canadians in a national dialogue about building a strong economy and a strong society. We asked our fellow citizens about their values, about their priorities and how the federal budget should reflect them.

I am pleased to announce that this year's consultation was the most extensive ever. In addition to regional consultations and round table discussions in which members of the committee participated, we called upon members of Parliament to hold town hall meetings to ensure that the people in their ridings were involved in the policy process. That is very important.

It is important because as the Standing Committee on Finance travelled to the major cities of this country, members of Parliament were reaching to the rural areas of this country, to the small towns. Many of the discussions took place not necessarily in hotel ballrooms but around the kitchen table, where many important decisions in this country take place.

People everywhere throughout this great nation accepted our challenge with a great deal of enthusiasm and a determination to make a difference. It was quite clear to me that they approached this consultation with an understanding that economic growth and fiscal success are not ends in themselves, but rather they are means to improving the quality of life of all Canadians.

In total, including round table discussions, witnesses, town hall participants, letters and e-mails, our committees received over 4,900 submissions. This national conversation was both rewarding and enlightening. Not only did we as members of Parliament come away with a sense of what individual Canadians want in the next budget, but we learned a great deal about the new outlook that is shared by many Canadians.

It is one that is filled with a great deal of optimism and hope. People told us that change is not something they feared. Change is something that we embrace.

Throughout our meetings it became quite clear that the challenges we faced as a nation in the 1980s and 1990s have made us a more confident people. This in large part is possible because of our Canadian character which allows us to adapt to change and triumph in the face of adversity.

Adversity is the right word to describe the situation our country faced in the early 1990s. We were confronted with a vicious circle of high deficits, high interest rates, slow economic growth and high unemployment. This vicious circle wreaked havoc on our standard of living, on our position on the world stage and on our future.

Thanks to the hard work, the foresight and much sacrifice, Canada is about to enter a new era, one in which the government's bottom line will be written in black ink rather than red and one in which the Government of Canada will be able to tackle the challenges facing our nation more effectively than it could in the past.

We are moving forward, replacing the excesses of the past with the successes of today. Interest rates are at their lowest levels in three decades. Inflation remains firmly under control. Consumer and business confidence are up and continue to rise. The virtuous circle of lower deficit, lower interest rates, stronger economic growth and job creation is perpetuating a culture of success.

On October 15, 1997 the finance minister unveiled the results of four long years of sacrifice by the Canadian public. Clearly that sacrifice has paid off. The deficit four years ago stood at $42 billion. We all remember that when the Liberal government took office after the Conservative government the deficit was at $42 billion. Now it is at $8.9 billion. Every target has been bettered. The $8.9 billion is almost $15.5 billion below the original target for this year and almost $20 billion below the deficit of the previous year.

The minister went further, promising a balanced budget no later than the year 1998-99. Today Canadians face a brighter future. Let us for a second take a minute or so to look at some of the headlines that appeared in newspapers. In the Globe and Mail , October 1, 1993, “Economic outlook dim”. In the Globe and Mail , July 1, 1997, “Economy Rockets Ahead”. In the Financial Post , September 18, 1993, “Falling jobs, sales, exports turn 1993 into a disappointment”. In the Financial Post , November 12, 1997, “Economy gets upbeat appraisal”.

The next headline speaks to another very important issue about Canada's position on the world stage. How sad it was back in the early 1990s when editorials, newspaper articles and opinions around the globe were stating that Canada was a basket case in economic and financial terms.

In the Wall Street Journal , March 24, “Canadian government disappointed with down grade”. In the Wall Street Journal , February 20, 1997, “Canada's budget wins applause because of its restraint”. In the Ottawa Citizen , July 23, 1993, “Recovery sputters through spring”. In the Toronto Star , December 2, 1997, “Economy grows at 4.2%”.

This must mean something. It means that through the hard work and sacrifice of Canadians, through the entrepreneurial spirit of the private sector in Canada and through the responsible management of the Canadian economy by the federal government, Canadians are now looking to the future with a great deal of optimism.

There is a great deal of pride in me and I am sure in Canadians from coast to coast to coast when we see that economic conditions have bettered to the point where now Canada is not being laughed at by other countries. Because of what we have been able to do in the House of Commons and throughout the country, Canada is referred to as the Canadian miracle.

Gone is the burden of the $42 billion deficit. Gone are the crippling interest rates and rising inflation. Gone is double digit unemployment. Over one million jobs have been created since the government took office. Unemployment has been below 10% for 12 consecutive months.

I understand the pain the member for Markham is going through. He remembers as clearly as I do when the former prime minister stated that the unemployment rate could never fall below 10% until the next millennium. I understand and I feel his pain.

This enhanced confidence in our prospects and abilities will prove to be truly a valuable asset as we face new challenges in the future. Not only do we as Canadians believe that tomorrow will be better than today. We also have the capacity to make it so.

Canadians feel empowered in today's society. They have seen the impact they have on government policy. They are determined now more than ever to continue to steer our country in the right direction.

Throughout our consultations Canadians spoke clearly and decisively on many issues. They expressed serious concern about the national debt. Canadians want us to finish the fight with the deficit and to turn our attention to the debt.

At 73.1% our debt to GDP ratio continues to curb our economic potential. This is why the committee called for the government to establish an interim debt to GDP ratio range between 50% to 60%, and we went further. We also said that it should be done within the life of this mandate.

There is no question about the fact that Canadians want to leave future generations a legacy of expanding opportunities rather than one of high taxes and escalating debt. Let me leave no doubt in the minds of my hon. friends across the way. Canadians recognize that across the board tax cuts are not affordable at this time. To implement them would be irresponsible and short sighted. I also want my friends in the House to know Canadians want targeted tax relief.

That is the reason the committee felt it was important to address a number of issues including raising the basic personal non-refundable tax credit amount, reviewing the impact deindexation has had on our tax system, addressing the issue when the fiscal situation permits, and reducing or eliminating surtax on personal income. These are all issues we heard about. As a responsible committee we brought them to the attention of the House of Commons and the Minister of Finance.

A message that was very clear from the people of Canada was that once tax cuts are feasible, the focus should be on the personal income tax. The committee continued to call for immediate measures that would help those in greatest need.

There has been a lot of talk about spending and investment, call it what we may. The reality is that Canadians are against old fashioned spending sprees. They want continued fiscal responsibility. They want continued prudent budgeting and prudent assumptions. They want the $3 billion contingency fund to be used toward the debt, a very important point to be made.

They do not want to see the economic stability of the country undermined by an oppressive deficit ever again. They want to ensure that those who need it most receive support from our social safety net. They want to build an economy that is prepared for the challenges that lay ahead in the next century. They want responsible government. They want wise investments. They want results.

The spending patterns of previous governments demonstrated a lack of respect for Canadian taxpayers. As elected representatives we owe it to the families we represent to invest their resources wisely. New resources, whether invested through new programs or significant changes to existing programs, should be allocated within a framework of accountability like that introduced in the government's program review.

That means determining whether the program addresses an evident problem, whether it could be resolved more efficiently by the federal government, other levels of government or the private sector, whether the proposed program is the most effective way to approach the problem, whether the program is being delivered efficiently and whether we can afford it.

It makes sense to put checks and balances in place to ensure Canadian taxpayers are getting the best value for their tax dollars. Let me quite blunt. Having the money to spend is no justification for spending the money. Respect is a theme that runs throughout our report: respect for Canadians, taxpayers, those in need, innovators, respect for their right to a responsible government and a better tomorrow.

RRSPs are one of the three pillars of our retirement income system. The committee in its wisdom recommends that the schedule for contribution limits set out in the 1996 budget should be revised so as to allow contributions to increase before 2002. The committee also recommends that the 20% foreign property rule be increased in 2% increments to 30% over a five-year period. This diversification will allow Canadians to achieve higher returns on their retirement and reduce their exposure to risk, which will benefit all Canadians when they retire.

Canadians also told us that small and medium size businesses create roughly 85% of all new jobs and account for 45% of Canada's GDP. Their importance in our economy cannot be overstated. It is in everyone's interest to ensure our economic environment is one in which they can thrive. It is for this reason that the committee supported the government's move to lower EI premium rates. This measure, the latest measure taken by the government, will result in a $1.4 billion saving for both employers and employees.

However, we went further than that. We also said when the fiscal situation permits, EI premiums should be further reduced. We call on the government to ensure that EI premiums not be increased during an economic downturn.

The committee also recommended that the government take steps to address imbalances in the way different sectors of our economy are treated by the tax system and to examine the appropriateness of the $200,000 threshold of the small business deduction.

As we build a strong economy, the government should do its part as a partner and facilitator to modernize the economy and to do its part. That is the reason we supported programs such as Technology Partnership Canada, the industrial research assistance program, because it goes a long way in helping Canadian businesses compete in a global economy.

Our report also respects Canadian priorities when it comes to the social safety net. Both on the road and throughout the public hearings in Ottawa, Canadians told us that they are ready to reinvest in the social and economic needs of our society. That means improvements to Canada's health care system, which includes an increase in the CHST cash floor to $12.4 billion, a recommendation that was acted upon earlier this week.

It also means continuing support for the youth employment strategy. If I can speak on this particular issue for a few minutes, Mr. Speaker. I had the privilege to chair the Ministerial Task Force on Youth. From that Ministerial Task Force on Youth the government responded with the Youth Employment Strategy. Today, as a result of those measures, hundreds of thousands of young Canadians have benefited.

Youth Internship Canada, Youth Service Canada, the Summer Job Action Plan, these speak to a very important issue providing opportunities for young people to give them that very important first chance at a job, to get that very important first line on their resumé.

As a member who has dedicated the greater part of his political life to addressing the issue of youth unemployment and concerns related to young people, I can say that the most important barrier they face is the experience paradox: no job, no experience; no experience, no job. That is why the government as a partner in the development of the Canadian economy should play its role in making sure that that very first important chance is given to young people.

We live in changing times, more challenging times for our young people. Many of the new economy's jobs require a higher level of education which means that one of the roles of the government should be to provide opportunity and accessibility to post-secondary education so that young people, students, can be given the opportunity to acquire the educational level required to get those new economy jobs.

Investment in these areas are means to making the new—

[Standing Committee On Finance, December 3rd, 1997]

Mr. Speaker, the House of Commons Standing Committee on Finance travelled across the country to engage Canadians in a national dialogue about building a strong economy and a strong society.

Canadians approached this consultation with an understanding that economic growth and fiscal success are not ends in themselves, but rather a means to improve the quality of life for all Canadians.

Canadians want balance, not just a balanced budget, but balance in government policy, in its goals and its results. Canadians want balance between the security offered by debt reduction and the benefits of investing in people, technology and research and development.

Canadians firmly believe that health, education and pensions are not just line items on a balance sheet but rather an expression of our core values. Canadians want to leave future generations a legacy of expanding opportunities and security rather than one of high taxes and escalating debt.

Canadians have demanded accountability from the government as well as responsibility from themselves.

In our report entitled Keeping the Balance, Security and Opportunity for Canadians , we have tried to respond with the substance our fellow citizens demand, as well as a budget plan.