Preston Manning

[The Budget, February 29th, 2000]

Mr. Speaker, to no one's surprise increased spending was the number one priority in yesterday's budget with $86 billion in new spending over five years. Government members were so excited they gave the queen of the boondoggle a standing ovation and more money.

[The Budget, February 29th, 2000]

An hon. backbencher across the way mentioned the word taxes. Let us enlighten him on the subject of taxes. It is a great, difficult task to enlighten the hon. member.

I will turn to the other side of the loonie, to the taxation aspects of the budget, because for every dollar the finance minister and the Liberals propose to spend, there is a tax which must first be imposed upon and collected from Canadians.

First, the tax proposals contained in the budget must be considered in the context of the government's overall taxation record. That record is one of constantly increasing taxes and tax revenue. The official opposition finance critic, the member for Medicine Hat, has prepared some instructive charts on the government's taxation record which I commend to all members.

The one on personal income taxes shows Canada with the dubious distinction of leading the industrialized world in terms of high personal income taxes. The personal income taxes extracted from Canadians by their governments amount to 13.9% of GDP compared to the next highest nation which happens to be the United States at 10.7%. This is the biggest single reason why Canadians' standard of living measured in terms of real personal after tax income was $833 lower per person in 1999 than in 1989, while the real personal after tax income in the U.S. increased by $2,200 U.S. over the same period.

When it comes to payroll taxes, these charts show that job-killing payroll taxes for Canadians continue to climb, with skyrocketing increases in CPP premiums more than offsetting the token decreases in employment insurance premiums. When it comes to consumption taxes, by 2005 the federal government will be collecting almost $30 billion per year from GST, almost double what it was collecting in 1993 when the present Prime Minister promised to abolish it. It is the combination of all these high taxes which is driving capital, employees, employers and jobs out of the country and which has earned the finance minister the dubious title of Captain Brain Drain.

I wish to establish the fact that contrary to the assertions of the Minister of Finance, after this budget Canadian taxpayers will be worse off not better off than they were when the government took office. They will continue to be worse off into the future unless the government is removed from office and replaced with one dedicated to genuine tax relief.

The simplest way to demonstrate this is to look at the minister's spending and taxation projections for the next five years. The minister proposes to reduce federal taxes by $51 billion—and we think it is much less than that—over the next five years, $11.2 billion over the next two. But over the same period he proposes to increase the spending of tax dollars by $86.3 billion. Figure it out.

This budget continues the old Liberal shell game that has been going on for years and which has characterized every budget presented by the minister in which tax relief has been mentioned. With the right hand and with great flourish to attract our attention, he gives $51 billion in tax relief over five years. But with the left hand and surreptitiously through previously authorized tax increases, he extracts $86.3 billion from our other pocket. In the end the taxpayer is paying more, not less, than the Liberals were taking in 1993.

The charts prepared by the finance critic for the official opposition show that when the minister's hidden tax increases are added to his announced tax breaks over the last six years, Canadian families will still pay $703 per family more in taxes next year than they did in 1993 when the Liberals took office. When the finance minister's hidden taxes are added to his announced tax breaks over the next five years, Canadian families will still be paying more per family than they did when the Liberals took office in 1993.

That is why we describe the tax measures in this budget as half-baked tax breaks. We call upon Canadians who want real tax relief to examine and support our solution 17 tax relief proposal which my colleague, the member for Medicine Hat, will describe in more detail later on.

It is not just the weakness and inadequacy of the finance minister's so-called tax relief proposals that would disturb Canadians. Once again it is the absence of integrity on the tax side of the budget that casts a shadow over every tax proposal and promise the minister makes. Unlike the concept of deficit reduction or balancing a budget, which is an academic concept to most people where the taxpayer has to take it on faith that the goal has been achieved, when it comes to tax relief, the taxpayer on his or her own is able to determine whether or not the promised tax relief has actually been delivered.

The taxpayer can look at his or her paystub at the end of the pay period. He or she can compare the deductions of this pay period with those of last year or last month and determine for themselves whether the take home pay has increased or decreased. The family can look at its chequebook and bank account. It can tell whether or not it is receiving real tax relief by whether its after tax income is increasing or shrinking. When real Canadian families do that, they find that real after tax income in Canada over the last decade decreased by almost $3,000 per family.

It does not matter whether the words tax relief appeared in every second sentence in the federal government's throne speech. It does not matter whether the words occur in every sentence in the speeches by the Prime Minister or in the budget speeches by the finance minister or in media headlines and reports on the budget. If promised tax relief does not show up on the paystubs and in the bank accounts of ordinary Canadians, then it is not real tax relief no matter how much PR accompanies it.

If the government keeps promising tax relief year after year but it does not show up on the paystub or in the bank account of the taxpayer, after a while the taxpayer catches on to the shell game. Yes there can be a highly visible tax cut like the changes in rates, deductions and credits announced in the budget, including the elimination of bracket creep, which we commend. But there are also much less visible tax increases, like the pre-scheduled increases in CPP premiums which take effect without further announcements or fanfare. The list goes on and on.

Invariably under a Liberal government the increases are greater than the decreases so that the total tax load gets heavier and heavier. This has been precisely the Canadian experience and why Canadians find themselves paying more in taxes despite all the announced decreases than when this government took office.

The promise of tax relief is often a half-truth. The other half of the truth is that there is also a tax increase.

When government budgets like this government's budget are riddled with those kinds of half-truths, and when promises of tax relief are made year after year but no real tax relief shows up in the taxpayer's paystub or bank account, we do not have an accounting problem. We do not have a budgeting problem. We do not even have a tax problem. Once again we have an integrity problem, just as real and just as dangerous as the integrity problem on the spending side.

Let me get more specific on this subject. I will read to the House some of the promises that the finance minister has made in the past to taxpayers concerning tax relief. Then I will share with the House what the taxpayers to whom those promises supposedly applied actually experienced. Then let us see what this comparison says about the credibility of the finance minister and the integrity of his tax relief promises in this budget.

Promise No. 1 comes from a statement made by the finance minister in the House on October 13, 1999:

On January 1, as indeed on January 1 of every year since we have taken office, there will be a reduction in payroll taxes.

It is true that on January 1, 2000, employment insurance premiums were adjusted downward, but what also happened as a result of previously authorized changes to the Canada pension plan was that the combined employer-employee premiums for CPP went up on January 1 from 7% to 7.8% of contributory earnings.

The payroll tax hike from CPP premium increases is greater than the payroll tax reduction through the reduction of EI premiums. Thus many workers experienced not a reduction in payroll taxes as promised by the finance minister on October 13 but precisely the opposite, a payroll tax increase. Does one wonder why workers and employers get cynical when they hear promises of payroll tax reductions?

Promise No. 2 comes from a statement of the finance minister to parliament on December 7, 1999:

At $30,000 of income, Canadians no longer pay federal income taxes as a result of the actions taken in the last two budgets by this government.

I ask hon. members opposite to listen to that statement. The finance minister stood in the House and made that bold promise and declaration. Let me read into the record a letter from Paul and Fran Darr of Calgary, Alberta, taxpayers. The Darrs write:

We are a retired couple with a total income of $28,000.

If my math is right, that is less than $30,000.

Of that the government sees fit to take almost $4,000 in taxes, documents attached. Paul Martin has repeatedly declared anyone under $30,000 does not pay any taxes. Excuse me! This is written proof. If this is truly the case, we would greatly appreciate a return cheque for this amount that we had to pay for 1998, ASAP.

Let us look at promise No. 3. Mr. Speaker, do you see the credibility gap that is developing here? The finance minister makes these statements and promises. If one goes out to the taxpayers to whom they apply and asks if they ever saw that tax relief promised by the taxman, they shake their heads.

Promise No. 3 is from a budget speech. We are getting right down to promises in the budget. It is from the budget speech of February 16, 1999, at page 4. The finance minister said:

It is a budget that for the first time in many years offers tax relief to every taxpayer and it does so without using borrowed money.

Tax relief for every taxpayer, promised the finance minister. Let us go out to the offices, the factories, the stores, the union halls, the seniors' homes, the kitchen tables and coffee shops where we meet real taxpayers and let us find out about the finance minister's promise of tax relief for every taxpayer. We ought to be able to grab any taxpayer off the the street and ask if they got the tax relief the minister promised on page 4 of the budget, that he said they would get. Has it got there yet? We could ask them that. Let us find out how it is working out in the real world.

Shortly after last year's budget I was in Windsor, Ontario, where I met a worker at one of the auto plants. He was a union member. These are highly paid people. He had a paystub for overtime work in which the total deductions were greater than his net pay. He not only wanted to know where his tax relief was that was promised by the finance minister. He wanted to know whom he was working for. He thought he was working for Chrysler but according to his paystub he was working at least half time for Revenue Canada.

On another one of my trips last year I received a paystub from a millwright in Saskatchewan. His gross earnings for an overtime pay period were $2,022, but after paying income taxes, payroll taxes and other charges all he got to take home was $1,009. Gross pay, $2,022; take home pay, $1,009. It was less than half his paycheque. On his way home when he stopped to buy gas and a winter jacket, the taxman gouged him again.

This unsolicited paystub, along with many others I received, is an example of the very real tax horror stories of Canadians. They are stories which clearly show that the finance minister's so-called tax cuts, tax relief for every Canadian, clearly fail the paystub test. They are living proof that the finance minister is completely out of touch with Canadian taxpayers. His claims of so-called tax relief are in direct contradiction to the actual experiences of many hard working, tax burdened Canadians.

To help illustrate this point further last November we decided to hold the great paystub rip-off contest. Hundreds of Canadians responded to the contest by e-mailing, faxing and mailing in their paystubs and stories to my office. I want to take this opportunity to give the House a sample of some of the paystub stories we received and to announce the winner of this most unfortunate prize.

After I am through, surely even the most obtuse government backbencher will understand what I mean when I say that this government has an integrity problem on taxation, a problem of credibility that comes from promising tax relief to every Canadian and then failing to deliver it, and an integrity problem that is every bit as serious as the government's integrity problem on the spending side.

Here are some of the best entries to the paystub rip-off contest. Here is one called “pay raise rip-off”. Last year, Annalora Horch, a teacher who works for a private school board in Medicine Hat, Alberta, got a $1,000 raise. She was hoping to put the raise away for her retirement. After taxes, however, Ms. Horch's $1,000 pay raise left her with exactly $2.67 each month to put away for her golden years. She was promised tax relief from the finance minister.

You are shaking your head. I agree, Mr. Speaker, that we should shake our heads. Let me read the letter:

Please find enclosed copies of two months of my paystubs—September 1998 and 1999 and October 1998 and 1999. I work for a private school board in Medicine Hat. My board gave all the teaching staff a $1,000 raise for this year. I have never been on welfare or received unemployment. I have worked since I was twelve years old and am presently helping to finance my son at university to keep his student loans at a minimum. Any increase in pay is appreciated so I can save for my retirement. It was with great anticipation that I waited for my increase. However, the figures on the stubs tell the true story.

Listen to how taxes kill dreams. They do not just kill bottom lines. She has the calculation here: $1,000 divided by 12 months, she should be getting $83.33 a month. However, the paystubs for September 1999 show an increase of $81 in taxes. October 1999 shows an increase of $81 in taxes as well. She writes:

I already pay hefty taxes to the government and now it is increased even more. My much needed raise is not going to me or benefiting the school. It is going directly to the government for taxes. This is a great injustice to an honest, hard-working citizen. It is discouraging. Please, is there some way this continuing burden of increasing taxes can be alleviated for the ordinary, middle class worker? We need help and I am appealing to you to help me and all other taxpayers in this area of overburdened taxation.

Here is a short letter, signed by “Completely and utterly ripped off”. A Toronto police constable writes:

In 1999, I grossed $61,000 and after taxes and other deductions took home $34,000.

This is not some high income person. This is a person we consider to be in the middle income bracket. He continues:

Every other purchase I make has a further 15% in sales taxes. When are we ever going to get a break?

Completely and utterly ripped off.

Here is one called “back pay tax grab”. Adam Grabowski, a full time teacher in Manitoba with 12 years experience, writes:

I thought you would like to see a copy of a back pay statement I received in July. We waited a little over 14 months to get this pay due to negotiations.

As you can see, income tax accounted for a total of $508.33 or 48.6% of the pay. When you add in the employment insurance, which I can never claim due to my job, and the CPP, which I believe will not be there in 30 years, the federal government takes $571.1 or 54.7% of my gross pay.

I am a single income earner with 3 boys all under seven. Tell me how I can do anything wonderful with my family on the remaining amount.

These are real taxpayers, the object of tax relief in the last two budgets of the finance minister. This is their story. Listen to this one. A single mom sent the following letter to the member for Dewdney—Alouette. This is a fairly lengthy one but it is worth reading because it illustrates that taxes are not just some accounting device. They intrude on the lives of people when they are too high in ways that destroy people's dreams and even destroy their lives. The letter reads:

In July of 1993 I found myself the single parent of five children who worked as a Special Education Assistant. I could not support my kids off that wage so I got a student loan, the first of many, and started university where I hoped to become a teacher. Five hard years later I made it. I didn't think about the debt because I thought I would be able to make enough to support my kids and pay the loan back. I loved teaching. I was good at it, and I got a continuing contract, a permanent position in my first year of teaching. Now, I thought, I'll be OK. The hard work would be worth it.

I was wrong! The hard work was worth it because I love what I do and I value the education I received and the process of getting it, but I can't survive monetarily. I am a single parent although I have only three children still at home. With the level of taxation in this country...I can't make it. Yes, I make a good wage, but after deductions I still can't buy my ten year old son winter boots, or my sixteen year old daughter a monthly bus pass. I am being asked by the student loan people to pay over $350 per month. If I did that I couldn't buy any food for my kids. I am not in a better place. I am only deeper in debt!

The taxation level in this country is killing me.

This is not a rich person. This is not the filthy rich the finance minister and the Prime Minister talk about as being the beneficiaries of tax relief. These are ordinary Canadians at the lower and middle end of the spectrum. The letter goes on:

The taxation level in this country is killing me. I have to have a part time job in order to survive, but I can't leave my kids alone from 7 a.m. when I go to school until 10 p.m. when I would get home from my second job!

I love living in this country because there is so much good in it, but how can I see the good when the burden of taxation is blinding me? Something needs to be done for people like me who live on one income, be they single parents or families with one parent working. I don't need a national day care scheme. I need tax relief! I would love to be able to go into a store and buy my son a pair of needed shoes without worrying that I will have enough money left over so we can eat at the end of the month. Some people say I should quit and just sit on welfare, but I can't.

It is my hope that in this new session of Parliament the government will see just how the average, low-middle income earner in this country is suffering. I don't want pomp and ceremony. I don't want Senators to get a fabulous tunnel so they don't muss their hair in the Ottawa winter. I need relief from the exorbitant amount I pay each and every month for taxes. I need a break.

Please feel free to send a copy of this letter to Finance Minister Paul Martin and the Prime Minister. They obviously don't live in the real world. I do and I don't like it.

How do we pick a winner from all these? There are no real winners, only hard working Canadians who lose out to a finance minister who promises tax relief and then delivers tax increases.

It seems that no amount of income is too small to attract the attention of the finance minister. The letter we have selected as the winner strikingly illustrates this point. It comes from Mr. Paul Meyer, a structural engineer from Montrose, B.C., who worked half an hour of overtime, and listen to what the finance minister did to him:

I have enclosed a copy of my two most recent paystubs. I think they stand as a good example of how high taxation rates in Canada can be a disincentive to productive workers.

The government says it is interested in productivity. Here is a letter from a productive worker:

During the two-week period ending November 05, 1999, I was paid for 80 hours work, while the following period, I was paid for 80.5 hours of work, having put in a half hour overtime.

The half hour overtime increased my gross pay by $19.33. Amazingly, this resulted in my federal income tax increasing by $20.13. In effect, I paid the government 80 cents for the privilege of working a half hour overtime.

I recognize that this is an anomaly caused by “steps” in the tax tables, but the very fact that a “step” could result in an apparent marginal tax rate of 104% tells me that our tax rates are too high. As a resident of British Columbia with a good salary, my actual marginal tax rate is well over 50%.

I also note that, because it is late in the year, no CPP or EIC deductions were made from my salary, as I had already “maxed out” on both amounts for the year. If it were not for that “anomaly” my apparent marginal rate would have been over 110%.

Paul Meyer is with us here today. We congratulate you, Paul, on this most unfortunate honour and thank you for sharing your tax rip-off story for the benefit of the House and taxpayers across the country.

It is people like Paul who are paying for the $1 billion boondoggle at human resources and who are paying for all the past, present and future tax increases not mentioned in this budget. It is people like Paul who want real tax relief not token tax relief, not sleight of hand tax relief, not fake tax breaks, but real tax relief.

I remind hon. members that all these taxpayers whose letters I have read were promised tax relief in last year's budget, that all of them feel abused, not helped by the government and that this is just a tiny sample of 15 million Canadian taxpayers.

The government and the finance minister have a credibility and an integrity problem on taxation, just as they have the same problem on spending. It stems from the finance minister's being totally out of touch with ordinary Canadians, underestimating their pain, underestimating their intelligence, underestimating their patience and underestimating their desire for real tax relief.

It is the role of the official opposition to hold the government accountable for the management of taxpayers' dollars. We will use this budget debate to do precisely that. Official opposition members speaking on the budget are speaking first and foremost from the standpoint of the long suffering, long abused taxpayer. We are the voice of those taxpayers and we insist that they be heard.

I believe that by the time my colleagues and I have finished with this budget we will have demonstrated to the House and to any Canadians who are watching that the government is irresponsible when it comes to spending taxpayer money and irresponsible when it comes to the taxation of Canadians, and that lack of integrity characterizes its approach to bothe spending and taxation.

The official opposition has a second role which is becoming even more important in the light of the government's mismanagement of public affairs. And that role is to make sure that a constructive alternative is available to replace the government when the day comes that Canadians decide to do so.

It is in the discharge of this responsibility that we have been working together with others like-minded to bring into being the Canadian reform conservative alliance, or Canadian alliance for short.

This is not the time or the place to elaborate on this concept, but I mention it in the budget debate because one of the great founding principles of that alliance is genuine fiscal responsibility; the principle that is missing from the spending and taxation policies of the government and from this budget.

Under the heading of fiscal responsibility, the alliance policy package includes proposals for restoring integrity and accountability to federal government spending. It also includes a tax reform that will deliver approximately double the tax relief provided in this budget over the next five years. It is characterized by a 17% single rate of federal income tax with generous personal, spousal and child deductions that will remove more than two million lower and middle income Canadians from the federal tax rolls all together and deliver the largest reduction in the federal tax burden ever provided to the Canadian people by any federal political party.

One of the key MPs who has helped bring this alliance into being is the member for Calgary Southeast. He also happens to be the former president of the Canadian Taxpayers Federation and the official opposition critic for revenue. He has attended and addressed literally dozens and dozens of meetings across the country where people have met together to discuss uniting in new ways to control spending and get the debt and tax levels down. We should listen to his report on these activities.

The member of the official opposition who has led the development of the alliance's position on federal spending and taxation, including the solution 17 proposal, is the member for Medicine Hat, the official opposition critic for finance. On these subjects, he has consulted not only his colleagues in caucus but also think tanks across the country and supporters of the provincial administrations of Premier Klein in Alberta and Premier Harris in Ontario, provincial administrations that have actually succeeded in delivering real broad based tax relief to their people.

I would urge hon. members and the public to listen to these members and other opposition members who are not only devoting themselves to holding the government accountable for mismanagement of taxpayers money, but who are endeavouring to create a constructive alternative to the government. It is members who advocate genuine fiscal responsibility in practice as well as in words on both the spending and the taxation side who represent the wave of the future, and they deserve our full attention.

I want to conclude by reflecting for a brief moment on the truth of an old saying which applies to governments as well as to individuals, the saying that pride or arrogance precedes a fall.

It has been observed that there are two types of arrogance that bring down governments.

The first is an arrogance that is rooted, sadly, in ability and accomplishment. It is ultimately offensive to the public and will ultimately turn voters against an administration. But it is at least an understandable if not forgivable arrogance.

To illustrate, the Liberal administration of Louis St-Laurent became infected with this type of arrogance in the early 1950s and it contributed directly to the fall of that administration in 1957.

The wartime cabinet of Mackenzie King contained probably some of the ablest individuals ever to serve in a federal cabinet in terms of sheer ability and accomplishment, the ability to get things done under difficult circumstances with limited resources. There is no comparison between King's wartime cabinet and the front benches of the present government.

Louis St-Laurent, though past his prime by the mid-1950s, was an able and accomplished leader. Ministers like C.D. Howe, who had demonstrated enormous capability when he was in the private sector and even greater capabilities when he was in charge of all of Canada's wartime production effort, had achieved almost legendary status.

Unfortunately there is an arrogance that sometimes comes with great ability, accomplishments and legendary status. Howe was able and accomplished and he knew it. As the czar of Canada's wartime production effort, he was used to getting his way. He was impatient with anybody and anything that got in his way and particularly got in the way of any of his pet projects.

The project which preoccupied him in the mid-1950s was a massive pipeline project, the great Trans-Canada pipeline that would carry natural gas in huge volumes from western Canada, particularly from my home province of Alberta, into the energy thirsty markets of Ontario and the American mid-west. My father was very much involved, as premier of Alberta, in this project and I know this story from the inside out, not just from reading books.

A $1 million boondoggle in connection with that project was brought to the attention of the great man, C.D. Howe, in the House by the official opposition. Rather than acknowledge the million dollar boondoggle and deal with it, in his arrogance, an arrogance rooted admittedly in ability and accomplishment, an arrogance which by then infected the entire government, C.D. Howe dismissed the charge with his infamous line “What's a million?”.

It was that display of arrogance that marked the beginning of the end of that Liberal administration. The public had just about had enough and “What's a million taxpayers dollars?” from C.D. Howe was the straw that broke the camel's back.

There is another type of arrogance, an arrogance that is also offensive and repugnant to the public. But because it has no roots in ability and accomplishment, the public find it even more incomprehensible and insufferable. This is the arrogance of people and governments who are neither particularly able nor accomplished but find themselves in positions of great power and influence anyway. Their power and influence is largely inherited. It is built on the abilities and accomplishments of others, of their predecessors. They enjoy safe seats, not so much for what they have done but because of what others before them have done. They fall into power, not because of their abilities or powers of persuasion but because they were at the right spot at the right time when somebody else stumbled.

Such administrations do not appreciate the limits of their own abilities and accomplishments. They have nothing to be arrogant about, as Churchill observed, but they are arrogant anyway. It is the arrogance of inherited position and the power that goes along with it. It is like the arrogance that afflicted the old monarchies and aristocracies of Europe who believed in the divine right of kings, who believed they had a divine right to govern regardless of ability, accomplishment or the impact of what they were doing on their own people.

It is the arrogance of a Louis XVI and Marie Antoinette, lounging around the water fountain at Versailles, completely out of touch with the needs of their people but lording it over them anyway. In that arrogance of inherited power, responding to the news that the people of Paris have no bread by saying “let them eat cake”.

To draw a more contemporary analogy, it is the arrogance of King Jean I and the member from Grantford lounging around the fountain at Shawinigan, completely out of touch with Canadians but lording it over them nonetheless. And in that arrogance, responding to the news that the people want real jobs and real accountability for taxpayer dollars by saying “let them eat pork”.

In its arrogance and the mistaken belief that it is governments that create jobs, this Liberal administration has conceived a pipeline project. Not a magnificent nation-building project like the CPR and the Trans-Canada pipeline, but a tawdry politically inspired project to pipe federal government slush funds into every Liberal riding, with subsidiary lines into every other riding where there is a possibility of buying votes.

This time, not a million dollar boondoggle but a billion dollar boondoggle, has been brought to the attention of the House by the official opposition with the help of the media and the auditors.

In the House, the minister, who is supposedly responsible, and the Prime Minister arrogantly deny that a problem exists, and when the denial fails to calm the storm, the same Prime Minister arrogantly seeks to dismiss the problem by reducing it from a billion dollar boondoggle to $250. When that does not work, the same Prime Minister arrogantly seeks to justify the billion dollar boondoggle by maintaining that a Liberal inspired pipeline to distribute patronage tainted pork is acceptable as long as it winds its way through every federal constituency in the country.

To top it all off, as the supreme act of arrogance—and this is the feeling that came to me in the lockup when I went through those budget papers yesterday—the finance minister, who is supposed to be responsible to parliament and the people of Canada for the prudent use of taxpayer money, has the unmitigated gall to present a budget statement to the House which seeks authorization to collect and spend billions more of taxpayer dollars while totally ignoring the gross mismanagement of taxpayer dollars already entrusted to the government.

In other words, in a supreme act of arrogance, the finance minister presents a budget which, by its glaring omission of the issue of the day, says to the House and to the taxpayers not “What's a million?” but “What's a billion?”.

It is that arrogance, not the boondoggle itself, which is bad enough, but that arrogance of inherited position and power reflected in the misguided belief that the Liberal Party has some divine right to govern without any obligation to account for its failures or abuses of the public trust. It is that arrogance which when apprehended by the public will mark the beginning of the end for this administration.

It is that arrogance which demands that the House respond to this budget, not with fawning approval but by adopting the amendment which I now place before the House. I move:

That the motion be amended by replacing all the words after the word “That” with the following: “the House of Commons rejects the government's budget statement because it totally ignores the gross mismanagement of grants and contributions by the Human Resources Development Department, and continues the tradition of hidden tax hikes and boondoggle-prone spending that denies Canadians real tax relief”.

[The Budget, February 29th, 2000]

Mr. Speaker, I rise to begin debate on the first federal budget of the new century.

I would like to dedicate this reply to the budget address to a new Canadian, Joshua Jacob Kroon, born early yesterday evening to our oldest daughter Andrea and her husband Howard. The baby was born on budget day. When I meet young Joshua I am afraid it will be my duty to inform him that according to the budget tabled yesterday he already owes $18,600, that being his portion of the national debt. That is bad news for young Joshua. However, the good news is that by the time he becomes of age, Canada will no doubt have a new government and the Liberal legacy of high spending, high taxes and high debt will be a distant memory.

In addressing budget 2000, I am conscious, and I am sure all members are conscious, that millions of Canadians have hopes and dreams for themselves and their children that can be affected by the spending policies, the taxation policies and the budgetary promises of the federal government. For example, if the federal government wastes taxpayer dollars through irresponsible spending it is Canadians who suffer because there are then insufficient dollars available to fund those services, such as health care, which Canadians value highly.

If the federal government taxes Canadians too heavily it is the take home pay and the bank accounts of individuals, families and employers that are savaged and it is Canadian jobs and economic opportunities that are killed and exported.

If the finance minister makes promises and commitments in his budgets which are then broken, if the truths asserted in the budget turn out to be half truths, which are more dangerous than falsehoods because they are more difficult to detect, then it is the faith of Canadians in the integrity of the government itself which is shaken and eroded.

With this preamble, allow me to review the federal budget under three simple headings: spending, taxes and integrity.

It is clear again from this budget that the highest priority of the Liberal government is not tax relief but the increased spending of taxpayer dollars. The budget reveals that the government will be spending $4.3 billion more this year than provided for in last year's estimates. In other words, the promises in last year's budget to limit spending to $111.2 billion will once again be broken as the government spends $115.5 billion.

This chronic tendency of Liberal governments to break promises to limit spending has been criticized by the auditor general in these words:

At issue is more than the mere fact that the government spent more than it planned to spend. How this was done also matters. A scramble around budget time to find ways to spend money before the year ends is not a process calculated to ensure efficiency, effectiveness and economy in the use of public funds. In fact, it differs little from the end of the year spending by the departments with surplus funds, except that it involves not millions but billions of taxpayers' dollars.

In other words, the end of the year spending binges that have often characterized the government's departments has now spread to the Treasury Board, the finance department and the government as a whole, and this of course is a backward step.

Turning to the future, the finance minister projects surpluses for the next five years of more than $150 billion. If the government truly believed that these surpluses belong to the people, it would give the bulk of them back to the people. What is the finance minister's highest priority with respect to the use of those future surpluses? Is it tax relief? No. Is it debt reduction? No. Once again, the highest priority is to spend.

Of the $152 billion in projected surpluses over the next five years, the government implies that it will spend $66 billion, provide $58 billion in tax relief, apply $15 billion to the debt and leave $13 billion unallocated. Even if one took these figures at face value, which we do not, spending is still the highest priority.

The taxpayers and the official opposition also know that the government spends unallocated revenue, so that the $13 billion in unallocated revenue should be put into spending. The child care tax benefit is a social program not a tax relief program, so that should be put into spending.

Taxpayers and the official opposition also know that the cancellation of bracket creep, with which we concur, is a cancellation of future tax increases not a cut for today's taxpayer and it should not really be included in the tax relief figure. Even if we just take into account these first two adjustments, what the government will do with the projected $152 billion in surpluses is apply $15 billion to debt reduction, provide less than $51 billion in tax relief and spend $86.3 billion. Surprise, surprise. Once again the highest priority of the government is spending taxpayers' dollars.

I note with interest that the government says on page 12 of the budget that it will be supporting more genetic research. When the human genome project is completed, perhaps a complete genetic map of the Liberal species will become available. I am sure that our scientists will discover that the Liberals possess a recessive financial gene. That gene renders them congenitally incapable of saving taxpayers' dollars and compulsively inclined to spend them.

Whether a permanent cure for this disorder will be developed, only time will tell. At present, however, there is only one known remedy and that is to remove the temptation and the capacity for Liberals to spend taxpayer dollars by removing them from office.

The most shocking and disappointing aspect of the federal government's spending program is not the government's overspending of last year's budget. It is not that increased spending of taxpayer dollars continues to be the government's highest priority. We expected all that. The most shocking and disappointing aspect of the treatment of federal spending in this budget is what can only be described as an incredible omission.

I refer to the finance minister's failure to even mention in his budget, let alone address, the spending scandal at human resources development, a scandal which shakes to the core any faith the public might still have in the government's capacity to spend taxpayer money responsibly.

All the government's spending promises and spending plans remain compromised as long as the spending scandal at HRD remains unaddressed and unresolved.

As everyone in parliament knows, the spending of HRD on programs like the Canada jobs fund has been suspect for years. The odour finally became so bad that this summer the department itself was compelled to do an internal audit of 459 files, representative of $1 billion in spending on grants and contributions.

What did that internal audit reveal? It revealed that 15% of the files reviewed did not have an application on file from the sponsor; 72% had no cashflow forecast; 11% had no budget proposal; 11% had no description of expected results; 97% of the files showed no evidence that anyone had even checked to see if the recipient already owed money to HRD or the government; 80% of the files showed no evidence of financial monitoring; and 87% of the files showed no evidence of supervision.

We understand that this audit has inspired the CBC to propose a new game show called “Who Wants to be a Grant Recipient”, with the Minister of Human Resources Development as the host. It would be just like Who Wants to be a Millionaire , except the host does not ask any questions.

Of particular concern to parliament, the ultimate watchdog over the public purse, is that the gross mismanagement of taxpayer dollars at human resources is just the tip of the iceberg.

The federal government spends more than $13 billion per year under the heading of grants and contributions; the spending category under which the HRD funds have been so grossly mismanaged.

If a random audit found that 8% of the files the auditors looked at were so bad that they required a forensic investigation and perhaps referral to the police, what is the situation in the thousands and thousands of unexamined files in that department and across the government?

The Auditor General of Canada has repeatedly warned the government concerning the presence and the size of this iceberg. This is not something new.

In chapter 27 of his 1998 report he said:

We have reported to parliament on numerous audits of grants and contribution programs over the past 21 years. Many of those audits identified similar concerns: inconsistent application or interpretation of government policy on grants and contributions; inefficient use of funds and inadequate measures to ensure accountability by program recipients; lack of control, monitoring and evaluation; and reporting in the estimates and the public accounts that was inadequate to facilitate examination and year-to-year comparisons by parliament.

These conditions all still exist at human resources, hence the spending boondoggle there.

The auditor general went on to say in his 1998 report that these same conditions also exist with respect to the management of grants and contributions by the Department of Indian Affairs and Northern Development, by the Department of Citizenship and Immigration, by the Department of Fisheries and Oceans and by the Department of Industry with particular reference to federal regional development agencies, such as the Atlantic Canada Opportunities Agency, the Federal Office of Regional Development for Quebec and the Western Economic Diversification Agency.

At a meeting recently in the Peace River country, I described the whole HRD scandal. A farmer came up to me afterward and asked if there was any way that we could persuade the Prime Minister to make the human resources development minister the minister of taxes. When I asked him why he would want such a change, he said that if she mismanages the collection of tax money like she mismanages the distribution of it, that might be as good as a tax break. He said that she might lose his file or forget to check whether he owed the government any money.

It is not just the Minister of Human Resources Development who is implicated in the gross mismanagement of taxpayer dollars under the heading of grants and contributions. The government says in the budget that it wants to foster a culture of innovation. However, it is a culture of fiscal irresponsibility that permeates this government. The blame lies with all the ministers who have tolerated it or cultivated it for so long, including the Minister of Finance and, worst of all, the Prime Minister himself.

That the Prime Minister is part of the problem, if not at the heart of the problem, can be demonstrated in half a dozen ways. Let us look, for example, at the mismanagement of grants and contributions to the Prime Minister's own riding, particularly through the transitional jobs fund or later the Canada jobs fund.

What are we to conclude from the following: The Prime Minister's statement to the electors of Saint-Maurice in 1993, as reported in the Montreal Gazette of October 15, “When a dossier for Saint-Maurice lands on a cabinet minister's desk—need I say more—”, he said to gales of laughter during a campaign meeting yesterday”. The taxpayers are not laughing.

Over $2 million in federal government grants and loans given to the Shawinigan hotel project owned by a self-confessed embezzler, $600,000 of it granted and announced without any departmental paperwork two months before the 1997 federal election.

The $164,000 transitional jobs fund grant given to Yvon Duhaime whose hotel was adjacent to the Grand-Mère golf course in which the Prime Minister held a 25% interest. This grant was announced four days before the election and almost two months before any ministerial approval.

There was the $2.04 million transitional jobs fund grant given to companies owned by René Giguère which contributed $4,000 to the Prime Minister's personal campaign in 1997 and almost $15,000 to the Liberal Party of Canada in 1997 and 1998.

There was the $2.5 million grant from HRD given to build a training centre for new economy jobs in the Prime Minister's riding. This is currently being investigated by the RCMP because of allegations that more than $100,000 of that money found its way into the pockets of local directors.

There was the $200,000 grant announced by the federal regional development agency for Quebec for building a lighted fountain in the Saint-Maurice River in the Prime Minister's riding. Access to information documents reveal that this project was being lobbied for by the Prime Minister's office even before a formal application had been made by the sponsor.

Just last week HRD was forced to order a forensic audit into how funds earmarked for a project in the Montreal riding of Rosemont ended up bankrolling a virtually identical project in Shawinigan, once again in the Prime Minister's riding.

If I were describing to the House events occurring in some underdeveloped country with a corrupt and dictatorial government with no traditions or mechanisms for enforcing political or fiscal accountability, hon. members might shake their heads and say that it was regrettable but perhaps understandable. But the events I have been describing have been happening in Canada and involve the Prime Minister of Canada. What a shame. What a disgrace. What a scandal.

We are talking about the misuse and mismanagement of taxpayers' dollars, taxpayers' dollars which the House holds the Minister of Finance accountable for budgeting and managing responsibly. We have the right, indeed we have the responsibility to ask where has the Minister of Finance been in all of this and why is there not a single reference in the budget to these matters?

The finance minister, the would be prime minister, is implicated in all of this. It is now clear from the public accounts particularly between 1995 and 1998 that at the very time the finance minister was slashing health care funding, he was actually increasing the flow of funds to HRD and these programs where taxpayers' dollars were being wasted by the millions.

While the finance minister was withholding funds for hospital beds across Canada, he was authorizing funds for hotel beds in the Prime Minister's riding. Not only were the government's spending controls dysfunctional, but its spending priorities were upside down and the finance minister did nothing to correct either.

Despite all of the evidence of gross mismanagement of federal spending on grants and contributions—and I have only touched on the tip of the iceberg as the auditor general reports make clear—I draw to the attention of the House that in the minister's hour long budget speech yesterday, in the 350 pages of the year 2000 budget plan tabled in the House yesterday, there is not a single reference or even an acknowledgement of this problem. Nor is there any comprehensive proposal for remedying it and restoring the public's faith in the integrity of the government's management of taxpayers' dollars.

This is an incredible omission. This is an inexcusable omission. This omission is an insult to the finance committee of the House. It is an insult to the public accounts committee. It is an insult to the auditor general. It is an insult to the intelligence of the whole House. Most certainly and most deplorably of all, it is an insult to the long suffering Canadian taxpayer.

I venture to say that if any large public company in this country had a billion dollar spending boondoggle in one of its divisions and failed to report it or address it in its annual report to the shareholders, not only would its shares be hammered on the stock market but its vice-president of finance would be dismissed and would face disciplinary action from both the shareholders and the securities commission.

The House passed a law called the Canada Corporations Act that requires companies to adhere to a standard of financial reporting higher than that practised by this government. How can we demand a higher standard from the private sector than we actually demand in the handling of public money?

To add insult to injury, the finance minister has the nerve to come to the House asking for authority to increase federal spending by over $80 billion over the next five years. To that we respond in the name of and on behalf of the taxpayers by asking, why should the House give the government one dollar more of taxpayers' money to spend when it is grossly mismanaging the billions of dollars that it has already been given? Why should the House authorize the government to spend more taxpayers' dollars when the government's budget does not even acknowledge the gross mismanagement or propose any concrete spending controls to prevent it from ever happening again?

Some taxpayers may actually read the budget. They may come to the heading on page 8, “Sound Financial Management”. Then the taxpayers will come to the sentence on page 9, “Let there be no doubt, we will control spending”. When the taxpayers see that, they will say, “Really. You will control spending like you controlled it at HRD, like you control it at Indian affairs, like you control it in the heritage department. No thanks”.

The spending proposals of the minister and the government contained in the budget are unacceptable to Canadians and to the House. They are unacceptable not simply because they propose to increase spending and the burden on taxpayers yet again, but because the integrity of the government spending is compromised and the budget does not even recognize the fact let alone address it.

[The Budget, February 28th, 2000]

Mr. Speaker, in about three minutes I will formally move adjournment of the budget debate until tomorrow. Before doing so I want to thank the finance minister for his presentation, a presentation which is more remarkable not for what it contains but for what it fails to disclose.

I find it absolutely astounding that this budget statement contains no reference whatsoever to the $1 billion boondoggle at human resources development. It does not answer the question of taxpayers as to why we should give the government more money to spend when it wastes what we already give it.

If the vice-president of a large public company had a $1 billion boondoggle in one of its divisions and even failed to mention it in the annual statement to the shareholders, the stock of that company would be driven through the floor, heads would roll and the vice-president of finance would end up in a federal institution, and I do not mean the Senate.

Five years after the official opposition called for eliminating bracket creep the government has finally agreed to do so, and we commend it for doing so. While the budget loudly proclaims a number of other so-called tax breaks, it buries and obscures every provision in the government's financial plan for tax increases like the prescheduled increases in CPP premiums that take about $38 billion out of the $58 billion profit.

Far be it from me to cast a shadow over this day. Let our Liberal friends retire to the captain's table as the Liberal Titanic sails into the night. Let them eat, drink and be merry and celebrate while they may the illusions of this budget while the band plays Amazing Grace , and then let us reassemble tomorrow to commence the budget debate where the omissions, the half-truths and the illusions of this budget will be exposed in the clear light of day.

Therefore I move:

That the debate be now adjourned.

[Human Resources Development, February 28th, 2000]

Mr. Speaker, every budget the government has produced has increased spending. No doubt today it will be the same.

The human resources minister is responsible for wasting millions of the increased spending given to that department. If that minister is going to remain in charge of even a dollar from this budget, it would be one dollar too many.

Why should Canadians give the government more money when it wastes the money they give it in the first place?

[Human Resources Development, February 28th, 2000]

Mr. Speaker, let us see how these programs help people.

The public accounts from 1995 to 1998 now show the following: while the finance minister was busy slashing funds for hospital beds, he was increasing funding for hotel beds in the Prime Minister's riding; while health care spending was going down, spending on grants and contributions was going up. However, the budget speeches of the finance minister never revealed that. The real spending priorities were very different than what he talked about in the budget.

Why did the Prime Minister allow the finance minister to say one thing and do another? Will that—

[Human Resources Development, February 28th, 2000]

Mr. Speaker, if the Prime Minister was talking to taxpayers he would know how angry they are about the bungling at human resources development.

Their concerns can be addressed in three ways: by removing the questionable files from the hands of those who can tamper with them; by suspending all questionable programs pending an official investigation; and by suspending the human resources minister and other responsible officials while that investigation is pending.

Why does the Prime Minister refuse to take any of those actions?

[Human Resources Development, February 24th, 2000]

Mr. Speaker, we have the ingredients of a bad movie. We have the tip of an iceberg that could sink the government over mismanagement. We have a captain of the Titanic blindly sailing to the iceberg. We have a minister of human resources over the bow of the ship saying “I can fly”. But it will not fly with Canadian taxpayers.

The only question left is: Would such a bad movie qualify for a federal government grant?

[Human Resources Development, February 24th, 2000]

Mr. Speaker, these programs help none of these people and these answers are an insult to the House of Commons and the Canadian people.

Canadians want action on this affair, not excuses. They want the mess at HRD to be cleaned up. They want these questionable files to be put out of the control of people in the department. They want ministers and those responsible removed from their positions and they want the suspension of these programs before more damage can be done.

When is the government going to stop protecting incompetent ministers and start protecting Canadian taxpayers?

[Human Resources Development, February 24th, 2000]

Mr. Speaker, the government would love to distance itself from the billion dollar bungle at the Department of Human Resources Development, but unfortunately it is the government which gave it the money.

Since the government was elected the auditor general has repeatedly expressed concern about mismanagement of grants and contributions by this department.

After all of these revelations of mismanagement, waste and political interference, does the government still support spending millions of taxpayer dollars on the discredited Canada jobs fund?