Mr. Speaker, it is my pleasure to participate in this debate.
I intended to review some of the background of the consultation process but in view of the drift of the debate in the House I want to speak about specifics.
I would at least like to highlight some of the principles that the finance minister has articulated to the members of the House and to the Canadian public. He said that in approaching our budget for this year deficit reduction indeed is part of our overall strategy for jobs and for economic growth. He also stressed that fairness is paramount so that the most vulnerable in our society will not be left behind.
I think it is an extremely important part of the budgetary process to ensure that whether it is the social security review, the review of our social safety net, or whether indeed it is part of the budgetary measures, we are constantly going to focus on the needs of those who are most needy in our society first.
He also said that the deficit reduction must be selective and strategic, clearly reflecting our priorities. He said that budgetary action should weigh on the side of cuts in expenditures and not, and I stress not, on increased taxes.
Finally he said that the economic assumptions must be prudent to stimulate confidence so that our deficit targets would in fact be achieved. As you know, Mr. Speaker, a problem of former governments was setting targets that never were achieved.
I commend to all members and all Canadians the book Canada's Economy: What Past, What Future? This workbook which has been prepared by the Canadian Foundation for Economic Education is available to all Canadians in all public places; post offices, grocery stores, et cetera, and even through
their members of Parliament. I find, having gone through this a couple of times, that this is an excellent layman's language discussion on the kinds of issues that the government is addressing today in dealing with the challenges of balancing our budget over the coming years.
In the last couple of hours there has been quite a bit of discussion about whether or not the deficit should be eliminated in three years, whether it should be five years or whether it should be ever. These, as members well know, are the same discussions that went on during the last election campaign. I think that the Canadian people made their choice, a very clear choice.
Members may recall that the Conservative government proposed that it was going to eliminate the deficit in five years. The Reform Party said it would do it in three years. It was almost like a bidding war. The Prime Minister said during the election campaign that we have to be realistic, picking targets which are achievable within the time frames that are available to the government.
The Prime Minister made a commitment in his election platform that his government would achieve a deficit reduction strategy which would achieve 3 per cent of GDP by the end of the third year of the mandate. We are on target now. The minister has assured the House and Canadians that we will continue to introduce whatever changes are necessary to make sure that we stay on track and that we meet that target.
That means that by the end of the third year our deficit will reduce to some $25 billion. That is only an interim target. By the time that third year is over and we have hit that $25 billion target Canadians will have before them a further strategic plan for the next period to balance the budget for Canada.
Yet today the leader of the third party comes again to the House and reiterates: "We could do it in three years: We could slash that deficit".
I was at the finance committee when the Reform Party presented its program. I was astounded that of the $40 billion deficit the Reformers just said: "Here is our plan". They started off saying that $18 billion of the $40 billion deficit was going to be eliminated by economic growth. That has absolutely nothing to do with the Reform Party. It has to do with the initiatives that have been taken within our country to ensure that we stimulate economic growth in Canada. The Reform Party is somehow taking credit for some $18 billion reduction in the deficit.
The Reformers then went through a mathematical exercise to identify areas where they would cut. Not one explanation, not one rationale of how that would impact on the delivery of the services of those areas that they were going to cut; not one analysis or statement as to the impact on jobs for Canadians; indeed, not one indication of what that might do to the economic confidence that Canada has been developing over this period since the election.
The Prime Minister yesterday said in the House, and I quote: "If tomorrow we were to eliminate the deficit, $42 billion to zero, there would be a huge recession in Canada. The wise thing is to do it in a progressive way". I think that is the fundamental difference between the approach of the Reform Party and of this government, that we do have to keep control, we have to keep things in perspective.
I want to move on because I know that my time is very short. I want to share with Canadians a few facts which I think they may find interesting as they go through their assessment of where we are and the kinds of things that we should do. One of the key areas in which Canada would like to make progress and our budget would intend, and indeed our social security review, is to help Canadians to acquire skills. We have to help Canadians acquire skills to get jobs, to keep jobs and to find better jobs.
As Canadians know there has been much debate and much discussion about potential cuts in funding for post-secondary education. I want to share some figures.
Last year there was a 19 per cent growth in jobs for those who had a post-secondary education. At the same time there was a 17 per cent decrease in jobs for those who did not have a post-secondary education.
All of the experts say that over the next decade 45 per cent of all new jobs will require a post-secondary education. The government has included these facts, figures and initiatives in its priorities because our young people who are now in school must be given every incentive and opportunity to continue their education. We do not want them to be sitting on the curb watching the rest of Canadians go by.
During the 1990 to 1993 period, 190,000 jobs were lost during the recession. However, if we look very carefully at how that is composed, we find that 640,000 jobs were lost for Canadians who had a high school education or less. Offsetting that, 450,000 jobs were gained during the recession by those who had a post-secondary education. I think that indicates to all Canadians how important that education component is in terms of our overall strategy for Canada in the coming years.
The next area I want to share with hon. members is an analysis I did of taxation from 1992 as to who paid how much taxes and when. I found it very interesting that the top 10 per cent of taxpayers made $50,000 or more. That means if someone made more than $50,000 in 1992 they were in the top 10 per cent of Canadians. Interestingly enough, that top 10 per cent of Cana-
dians, approximately two million, contributed 32 per cent of all taxes paid and 44 per cent of all charitable donations.
When people start discussing should we tax more, should we raise our tax rates or should we go after the rich, they should first understand that they are talking about people who make over $50,000 and there are only 10 per cent of them.
Second, they have to understand that they already paid 32 per cent of all taxes and of their disposable income they are the major contributors to charitable donations. I find that very, very important to understand when we start discussing whether or not we should for instance cut RRSPs. At the $50,000 level one cannot even contribute more than $9,000 to RRSPs. Therefore, if the level were reduced we are basically talking about reducing it only for those taxpayers who are making much more than $50,000. Those things will have to be taken into account as we discuss the measures with regard to RRSPs.
With regard to matters such as employer paid health benefits, that has come up. Eight million employees receive employer paid health benefits tax free. The fairness of that has to be assessed.
Today in the newspaper it was reported that the mayor of my city, Mississauga, said that if the government raises taxes it is going to force more people into the underground economy than it has now. It is also going to force people to withhold taxes. I agree with the first statement but not with the second one.
With regard to the underground economy, there is no question about that. If we make serious and tough but fair cuts as a result of this budget there is no question that there will be increased pressure on the underground economy. As a result, I believe the government should as part of this consultation, and I hope members will consider this, have a parallel defensive measure to ensure that there is no increased pressure on the underground economy.
I have many more things to say but I will-