Preston Manning

[Pre-Budget Consultations, February 1st, 1994]

Mr. Speaker, I would not maintain all preferences.

The details of our program call for reductions and tax concessions to business of about $1.5 billion over a three-year period. These are unspecified, although we have had discussions on what they might be. The number one candidate on our list would be to stop using tax concessions as a regional development tool under regional development programs. That is the only specific which is contained in that material.

[Pre-Budget Consultations, February 1st, 1994]

Mr. Speaker, I thank the member for his question.

I did not mean to imply that I was seeking special tax preference for exporting companies. I was just cautioning that if we put the total tax burden on Canadian companies, particularly exporters, at higher levels than that of the companies in countries we are competing with, we end up driving them out of business.

Our major recommendation in the materials we wish to table with respect to reducing special treatment for companies is mainly in reducing the use of tax concessions as a regional development tool. That is the argument we have used all along.

Before I sit down, may I formally table these documents? I ask permission to do so.

[Pre-Budget Consultations, February 1st, 1994]

Mr. Speaker, I thank the member for his question.

My response is this. Like the hon. member I support the RRSP program in principle, partly because of the reasons the member gives and also because it has enabled many Canadians who have no other way of providing adequate retirement safety nets for themselves to do so.

Second, I believe that using RRSP funds to support the home buyer's program is useful and helpful and should be sustained, not be cut back. I would urge members to put that view before the Minister of Finance.

[Pre-Budget Consultations, February 1st, 1994]

I thank the member for her question. The short answer to her general question is yes we believe in greater equity in the tax system and if the member would examine the middle part of the presentation which I discussed she will see that we are calling for a reduction of $4 billion to $5 billion in federal transfers to the private sector through subsidies and through tax concessions.

The only cautionary words that I would add to my answer to the member is that we do have to be conscious, because we are an exporting country, that if our total tax burden on our businesses exceeds that of their competitors then we simply drive them out of business, create higher unemployment and kill jobs.

The greatest illustration of this at the current time is in the province of Ontario if you stand at the border and interview these companies that are leaving southern Ontario for the United States, even for up state New York which used to be one of the highest cost areas of doing business in the world, and ask them why they are leaving they give you a very short answer. They show you their tax position in southern Ontario, they show you their tax position in up state New York and then they ask how they can continue to do business under those conditions.

My answer to the general question of the member is yes but with a cautionary note about driving business out by excessive taxation levels.

[Pre-Budget Consultations, February 1st, 1994]

Mr. Speaker, I first of all wish to thank the Prime Minister and the finance minister for providing this opportunity for the pre-budget debate in the House.

Second, I want to underscore the importance of this first budget of the new administration to the overall economic, social and political well-being of the country. As all hon. members know, the federal debt is in excess of $500 billion. The projected deficit for 1994-95 is in the vicinity of $44 billion to $46 billion.

The single most important thing that this government can do in its first term of office is to bring federal spending under control. Of course the primary instrument for doing that is going to be the budget which the minister brings to this House in a couple of weeks.

Reformers have a number of specific suggestions to make with respect to controlling federal spending, suggestions which have been market tested in the public arena, including in the federal election. However there are three additional contributions that I would like to bring to this pre-budget discussion.

The first is an overview of our consultations with the public on the issue of public spending, consultations which have been going on since March of last year and which have involved thousands more people than have been involved in the minister's pre-budget consultations.

The second is a summary of conclusions drawn from these consultations, conclusions which we believe will be useful to the minister in preparing his budget and in endeavouring to determine what the spending priorities should be of the 35th Parliament.

The third contribution I want to make is a brief commentary on the prospects of a full-blown tax revolt in this country if the government seeks to solve its fiscal problems by tax increases rather than spending cuts.

In making these remarks I will endeavour to be brief, it having been my experience that politicians who cannot practise economy in speech are rarely able to practise economy in anything else.

Early in 1993 Reformers engaged in an extensive consultation with our members, with knowledgeable resource persons and with the public on the subject of federal spending.

We asked over 100,000 Canadians by way of a mail survey whether they believed the federal government should deal with the deficit and debt problem through spending cuts or tax increases. We asked them to give us their views on what the spending priorities of the next Parliament should be. In particular, we asked in what areas the federal government should maintain or increase its current level of spending and we asked in what areas the federal government should reduce or eliminate spending in order to preserve financial support for higher priority items.

With this background data we developed a list of about $20 billion worth of spending reductions which we felt could be implemented in a three-year period if the federal government sought and obtained a mandate from the public to do so.

This deficit reduction program was unveiled to the media and the public in three stages in the spring of 1993. On March 29 in Toronto we unveiled proposals for saving between $9 billion and $10 billion through the reform of federal transfers to individuals and provinces with the emphasis on reform of transfers to individuals. On April 13, 1993 in Vancouver we unveiled further proposals for achieving savings of $4 billion to $5 billion through reductions in transfers and subsidies to the private sector. On April 22 here in Ottawa we unveiled proposals for achieving savings of between $5 billion to $6 billion through the reform of the operations programs and structures of the federal government itself.

I would be pleased to table these papers describing these proposals for the consideration of the finance minister and hon. members, even though some of the figures are slightly dated. All of these papers, I might add, were made available to the previous government, although I am not sure that they survived the great shredding which occurred after October 25.

We organized all these proposals into a 45-minute slide show suitable for presentation to public audiences and town hall meetings. The first public showing of this presentation was made on budget day, April 26, 1993 to an audience of over 1,000 people in Calgary. We subsequently made this presentation, the whole theme on how you come to grips with federal spending, available to almost 200 Reform spokespersons across the country. As a result, it was shown to thousands more people across the country at dozens and dozens of town hall meetings, followed in most cases by a question and answer period.

In addition, we prepared a broad sheet containing the same information on proposals to cut federal spending and distributed over 2.5 million copies door to door prior to the federal election.

This is a description of what a populist party calls intensive and sustained public consultation on an important issue.

Now for the conclusions relevant to the minister. What conclusions did we arrive at through this public consultation that would be of relevance to the minister in preparing his current budget? Let me list four:

First, there is an enormous interest in the subject of federal spending and taxation at the grassroots level in this country. There is a great thirst for relevant information and a genuine desire on the part of ordinary people to contribute to a solution to this problem.

Second, it is false in our judgment to say that the public is only interested in spending cuts if they are made at someone else's expense. Time and time again we have heard Canadians say, and many of these are Canadians in dire circumstances, that they are still personally prepared to make some sacrifices. All they ask is that the sacrifices be distributed fairly, in particular that those with political or economic clout do not manage to get themselves exempted.

Third, it is possible to generate in our judgment substantial informed sustainable public support for spending reductions, if one goes after it and if one can hold out genuine tax relief as the light at the end of the tunnel.

Fourth and finally, these in our judgment are the spending priorities the Canadian people want this Parliament and the minister to pursue in 1994-95.

First, maintain federal transfers in support of health care at present levels or better. Second, maintain or even increase federal support for higher education and labour force training. Third, preserve federal support at current levels for the heart of the pension system, the veteran's pension, the guaranteed income supplement and old age security for households below the national average household income. Leave RRSP contribution levels alone.

Fourth, maintain or increase federal support for environmental conservation, although many people feel that the effectiveness of federal spending in this area could be vastly improved. Fifth, maintain or increase federal support for the administration of justice.

If these really are the spending priorities of the Canadian people, and we remain open to suggestions from other members concerning this whole subject of priorities, spending on virtually everything else the federal government does should be decreased in order to reduce the deficit and to maintain the ability of the federal government to finance its activities in these high priority areas.

Just to comment on my third contribution on the prospects of a tax revolt, what prospects does the federal government face if it does not respond to the public desire to cut spending but instead chooses to raise even higher the total tax load carried by Canadians? The fiscal and economic consequences of such an action are many and well known. Increasing the tax burden will contribute to the growth of the underground economy, the exodus of job creating private capital in entrepreneurs, the further erosion of social services as more and more dollars go to servicing the debt and the reduction of international competitiveness.

What this House must also consider are the political consequences of increased taxation. In particular, the prospects of unleashing a full blown, bottom up tax revolt, the like of which this country has never seen. Let me speak particularly of the potential for a tax revolt in British Columbia and Alberta, where the majority of our Reform MPs come from and where we have a vast network of grassroots context. Let other MPs from other provinces give the finance minister their frank and honest assessment of the prospects of a tax revolt among their own constituents if his budget imposes a higher tax load upon those constituents.

On Vancouver Island, for example, there are probably more retired Canadians and more RRSP participants per capita than anywhere else in Canada. All the MPs on that island with the exception of the Minister of National Revenue from Victoria are Reform MPs who campaigned hard on the spending reduction program that I have outlined.

Many of their constituents are people who have provided their own retirement safety nets through RRSPs, in many cases because they did not have access to public sector or company plans and in many cases because of their declining faith in the Canada Pension Plan and the government's capacity to finance OAS in the future.

If the finance minister's budget contains even a hint of reducing the capacity of these people and their children to care for their own retirement needs, the minister will unleash a torrent of protest from these RRSP contributors and recipients focused on the Minister of National Revenue's office in Victoria which will reverberate across the country and make the GST protest of the 1980s look like a Sunday school picnic.

In the province of Alberta, as the minister well knows, there remains a deep mistrust of Liberal taxation policy, particularly among people in the energy sector. The four government MPs from Edmonton won their seats by a combined plurality of less than 3,500 votes, three of them by less than 300 votes, the Minister of Natural Resources by a plurality of less than a dozen votes.

Their capacities to represent their constituent's interests are very much still in the balance and on trial.

Rumours have persisted for weeks, to the point at which they are now considered more than rumours, that the finance minister is considering imposing a carbon tax on the producers and consumers of fossil fuels. This tax would no doubt be presented as an environmental measure, but since it will not apply to the nuclear waste outputs of Ontario Hydro nuclear plants or to hectares flooded by hydro electric companies like Quebec Hydro, it will have a particularly onerous and discriminatory effect on Alberta's petroleum, coal and utility sectors. It will be seen in Alberta, rightly or wrongly, as the present government's equivalent of the hated petroleum and gas revenue tax that was the cornerstone of the national energy program.

If the minister's budget were to contain such a measure it would completely undermine the position of the minister of natural resources in his home province. It will provoke an ugly confrontation with the Government of Alberta at a time when the Prime Minister says he wants a new era of federal-provincial co-operation and it will damage the economy of one of only two remaining provinces that are still making net positive contributions to equalization.

It has been said that this administration has rarely met an interest group it did not like, but there is emerging in this country an interest group which none of us can afford to disregard. It is the forgotten interest of the last 30 years, the interest that pays the bills. It is the interest of the long suffering Canadian taxpayer whose motto has become enough is enough. It is an interest that is finding its voice and its capacity for action through dozens of organizations, conferences and publications dedicated to protecting that interest from merciless, continuous, never ending exploitation by high spending governments.

In conclusion, to the taxpayers of this country, to whom all of us are ultimately accountable, we say that your voice has been heard by many of us in this House. If it takes a full blown tax revolt employing every legal means conceivable to convince the government that taxpayers have had enough, that tax revolt will find an ally and a command post within this House among Reform MPs and other MPs who came here to cut spending.

Our advice to the finance minister and the government as they finalize their 1994-95 budget is eight words: cut spending, do it fairly, do it now.

As our substantive contribution to restoring the financial health of the federal government and the financial health of the Canadian economy, we will lay on the table the $20 billion in proposed spending cuts which we have discussed extensively with the public. Take them, modify them and improve them but do not ignore them.

[Government Expenditures, January 27th, 1994]

Mr. Speaker, one further supplementary question for the finance minister so that we are clear on his position.

The airline industry in Canada pays about 20 per cent of its gross revenues in direct charges and taxes to governments compared to about 10 per cent paid by the American carriers to their government. Will the finance minister acknowledge that the high levels of these charges and taxes are already killing jobs in the airline industry and again explain how expanding the tax base can possibly improve the job situation in that industry or any other industry?

[Government Expenditures, January 27th, 1994]

Mr. Speaker, a supplementary question for the Minister of Finance that relates to the helping of workers.

A recent publication by the minister's department entitled Canada's Economic Challenges shows that Canada's total public debt as a percentage of GDP is higher than that of our major trading partners.

This weekend the minister will be told that the higher taxes paid by Canadian exporters to service that debt are already a competitive disadvantage, killing jobs in the export sector. Does the finance minister agree that this is so, and if so will he explain how further expanding the tax base can possibly stimulate job creation in the export sector?

[Government Expenditures, January 27th, 1994]

Mr. Speaker, my question is for the Minister of Finance. Last week the Reform Party proposed a spending cap that would have reduced federal spending next year by a modest 6 per cent. Yesterday the minister described this proposal as savagery.

This weekend the minister is attending a pre-budget conference in Calgary where resource companies have had to downsize 10, 15 and 20 per cent in order to remain competitive.

Will the minister tell the House how he intends to explain to workers and investors in those companies why the federal government cannot cut its spending by even a modest 6 per cent and prefers instead to expand the tax base?

[Infrastructure Program, January 26th, 1994]

Mr. Speaker, my question is just to get clarification from the Prime Minister.

Do the ministers in each province have a veto, yes or no, on these infrastructure projects recommended by municipal-the answer is no.

[Infrastructure Program, January 26th, 1994]

Mr. Speaker, that is an interesting reply from the Prime Minister, but my question is a very simple and direct one. Perhaps you could try again. I just asked, does the minister-