Mr. Speaker, I appreciate the opportunity to speak today to the budget once again. It is worth speaking to more than once. It is significant for the country and it is significant for my riding in St. Catharines. It strengthens our economic federation. It invests in a stronger, safer and healthier Canada. It builds on the foundations of policy, which were developed and announced in November, to talk about Canada's strengths.
We announced what the policy framework and measures were going to be, in terms of moving forward, and we ensured that we acted upon those policies within the framework of our budget, those policies being fiscal advantage, tax advantage, infrastructure advantage, knowledge advantage; and entrepreneurial advantage.
The budget is fiscally responsible and it is a prudent balance between long term prosperity and short term needs.
In terms of long term prosperity, we have a significant debt payment. It requires, based on the way the budget is structured, that future governments do the same in ensuring that any surpluses go against our national debt. It ensures that not only are those tax savings on interest going back to Canadians through reductions in personal income tax, but it also tells future generations that we are acting responsibly and turning a country and an economy over to them that will not be straddled with a significant national debt.
It also recognizes and rewards the people who make our country great. We do not talk about this very often, but owners of small business, low income working Canadians, Canadian parents who pay household bills and try to save for their children's tuition are the people who make our country great. It is unique in terms of Canadian strengthens. Canada's government is committed to building on those solid foundations.
Budget 2007 is a first step of Advantage Canada's long term plan. Several major announcements, as I mentioned, fulfill the promises and commitments that we made in November.
For example, for small and large businesses, we are committed to reducing the paper burden on them by 20%. When we talk to small businesses across the country, business owners who employ perhaps themselves and their families or perhaps two or three employees, the paperwork they need to go through to keep that business running and to keep everything accountable is significant. From a federal perspective, we have said that they should have less paperwork, less red tape with which to deal.
We have also told those same people that it is time we increase the lifetime capital gains exemptions for small business owners, for farmers and for fishermen, from one side of the country to the other. Will we ensure they have the benefit of lifetime capital gains? Yes. We are moving from an amount of $500,000 to $750,000. The last time it was increased was back in 1988, almost 20 years ago. Its time has come.
We have also ensured that we have increased capital cost allowance rates on buildings used in manufacturing or processing, from 4% to 10%. We have ensured that other capital cost allowance rates have been raised, as well. It puts Canada's tax rate on new investment now third lowest among G-7 nations.
For manufacturing, there is a two year, 50% straight write-off for any capital investments in equipment and machinery acquired after the announcement of the budget on March 19. That is significant for manufacturing. General Motors announced a potential expansion in St. Catharines of some $400 million into a building, an investment it can make because it realizes that investment can be accelerated in terms of its write-off. It is already spurring economic activity across the country and the budget has not even been passed yet.
However, business cannot do it alone. Infrastructure is also desperately needed. Therefore, we have renewed our gas tax commitment. We have ensured that all municipalities, like the City of St. Catharines, will receive a portion of the gas tax credit.
By 2010, the city of St. Catharines will have received some $4.2 million. When we put that into context and look at the city of St. Catharines' operating budget, that $4.2 million will represent 5% of its yearly operating budget. That means property taxpayers should not have to see the types of increases they have over the last number of years.
We have also extended that gas tax credit until 2013-14. It means communities like mine can count on that money. They know it will be there. They can make their investments. They can talk about infrastructure and make the type of investments they need to ensure their communities are strong. Municipalities across the country know they have a partner in the federal government.
There will be priorities for these funds such as a cleaner transit system and better access to hospitals so people can get there sooner? We look forward to working with councils across the country to get this job done. In my riding the relationship, based on this, is a strong one. We look forward to working together.
The building Canada fund will mean $8.8 billion of investment over the next seven years for areas including border crossings and trade gateways from one side of the country to the other.
The budget is historic because it restores fiscal balance. It implements the recommendations of the expert committee on equalization. Glen Hodgson, chief economist for the Conference Board of Canada, said, “I think we can probably declare the fiscal imbalance between the federal and the province governments is over”.
This is what it means for Ontario and my community. It honours the Canada-Ontario agreement, which means close to $7 billion of new investment into the province and communities like mine. It means that social programs will be funded for the first time, especially those of health care, on a capital basis, which is huge for the province of Ontario.
In total Ontario will receive more than $12.7 billion in transfers in this fiscal year alone. The transfer means so much to the province. Regions like Niagara need to make it clear to the provincial government that they expect their fair share. Let me provide an example.
This government committed $250 million in new money for child care expenditures through 2007-08. That meant for the province of Ontario there would be $95 million to create new child care spaces in the province. Obviously that would trickle down and hopefully mean new spaces in Niagara and St. Catharines.
However, the provincial government in Ontario determined that, despite the fact it would receive $95 million in child care payments, it would only include an additional $25 million in its budget. That means $70 million in transfer payments, which hopefully were to be dedicated by the federal government to the province of Ontario, will not be invested in child care.
There was a lot of talk in the House from parties opposite that maybe we needed to invest more because there was a need for more spaces. The cheque was cut, the money was sent and the spaces were not provided and the money was not invested by the province of Ontario.
We have also had the opportunity to restore the fiscal balance with the Canadian taxpayer. There were $9.2 billion put toward debt. It has been said, but it should be said again, that $22.4 billion over the last two years went toward paying down the debt. Debt reduced today means taxes reduced tomorrow.
We have ensured that personal tax cuts are there as well. There is a $2,000 child tax credit worth $300 a year for every child under the age of 18. There is pension splitting for seniors, finally, after 40 years. We have also made key investments in the area of education, research and development and cultural heritage. All of this is to ensure that from 2005-06 to 2008-09 spending will increase by 4.1%, a full percentage point less than the economy is expected to grow.
Excluding the one time cost of restoring the fiscal balance since budget 2006, the value of these tax cuts announced is more than double the value of new spending announcements.
We believe in responsible fiscal management and we will live up to the promises of advantage Canada to reduce debt, reduce taxes and position our country to be a world economic leader.
