Mr. Speaker, Canadians are profoundly disappointed with this government's budget. This was summed up best in today's
Globe and Mail
editorial: “Poor marks for the finance minister's budget”. It said that he has left the impression of a man more interested in short term political popularity and budget sleight of hand than laying the foundations for a stronger economy in the long run”.
This is a very important time for our country. We are entering the 21st century, a time of global opportunity. The decisions and choices we make today as a country can either limit or reduce the choices we have as Canadians in the next century. We fear that the minister is making the wrong choices.
The Liberal government did not address the fact that Canada currently has the highest personal income taxes of any of the G-7 countries, the highest tax burden of any of the industrialized countries.
The Liberal government did not address the fact that our productivity growth has been the worst in the G-7 over the last two decades. Our incomes, after taxes and inflation, have been declining while our neighbours to the south have enjoyed soaring incomes.
We live in a world with unprecedented change. Globalization and the forces of technology are driving that change.
Governments will be successful in bringing their countries into the new millennium to be full participants in the global economy only if they have the vision and leadership to do so.
Our party believes in the free market system but we also believe that all Canadians deserve an opportunity to participate in that economy. They need access to the levers of the free market economy. Without that we will not have the type of society that Canadians want, a prosperous society, a society where all Canadians have equality of opportunity regardless of where they are from in the country, regardless of the income level or the socioeconomic status of their parents. We want to see all Canadians participate in economic opportunity.
This government really has no meaningful agenda. The Prime Minister and the Minister of Finance have demonstrated no real vision. This is a government on cruise control. It is a caretakership government, a government without real leadership.
This was nowhere more evident than during last summer's dollar debacle when the debate surrounded the dollar and the dollar went to record lows of sub 65 cents. At that time the Prime Minister actually had the economic naivety, I should say audacity perhaps, to say it was good for tourism, implying that somehow the lower dollar could help the Canadian economy, implying that we can devalue our way to prosperity.
The logical corollary of his argument would be that if we reduce the dollar to zero by high taxes and productivity inhibiting policies ultimately we would become the greatest exporting nation in the world.
We all know a country cannot devalue its way to prosperity. To achieve success and prosperity in a global environment requires a country that values productivity, that values its people and their opportunities.
Instead of looking into the next century the Liberals are focused on the next election. The finance minister is focused on the next leadership campaign. Canadians deserve better than this. Economic policies are not short term in nature. They require consistency, a long term focus and they require vision.
Last year when the government even had a vague whiff of a surplus what did it do with that? It took $2.5 billion from Canadians for the millennium scholarship fund, $2.5 billion out of last year's budget, and stocked it away for the future. It took it from Canadians who needed the economic stimulus, who needed the investment in the economy last year and said they could not have it.
That is clearly unacceptable. Not only does it offend the auditor general but it offends Canadians and it offends good economic policy.
We have seen the results of five years of this government. Those results have been a beleaguered health care system, a health care system that is not there when Canadians need it. The tax burden has grown from $112 billion in 1993 to over $150 billion last year under this government.
What we have here is a budget surplus and a leadership deficit. Canadians deserve a full opportunity to succeed. That is the least they deserve. Our leader, the Right Hon. Joe Clark, said recently that sound economic and fiscal policies are the bedrock of any country that wants to function effectively in the modern world and economic growth is the means to achieve all the goals we set for our society.
There are some dire warnings out there about the Canadian economy from organizations like the IMF and the OECD, one of the world's greatest economic think tanks on these types of issues. The OECD, headed by a former Liberal cabinet minister, warned recently that current trends could “lead to a substantial decline in Canada's per capita income relative to the OECD average”.
In short, Canada is falling behind our trading partners, behind other countries, and Canadians will pay the price in the future for a government's lack of vision now and the Liberal government's lack of courage in tackling the real problems facing Canadians and the Canadian economy.
Canadians and our party understand the importance of fiscal responsibility. In 1979 Joe Clark introduced the first fiscally responsible budget of a generation, which was defeated for purely partisan purposes. The last P.C. government reduced the deficit to GDP ratio from 9% when it took office to around 5% when it left office.
The real price to reduce the deficit has been paid by Canadians, Canadians who have seen their health care system slashed, Canadians who have seen $19 billion taken from their health care system, Canadians who have seen taxes rise dramatically from $114 billion to $151 billion, EI premiums kept at a ridiculously high rate and benefits slashed. Only 30% of applicants or those who pay into the system of EI actually qualify when they need it. This is clearly unacceptable.
The Liberals have fought the deficit by charging Canadians more and giving the provinces and Canadians less. They also had some help. The
Economist
said that much of the credit for deficit reduction goes to the passage of time and to successful reforms implemented by the previous government, including free trade, deregulation of financial services, transportation and energy and of course the GST that the Liberals used to be opposed to but now embrace and which the Prime Minister claims on foreign trips to have invented.
Good government will require better choices than this government is making. The previous government gave it the opportunities to make the right choices, because that government had the vision to make the right choices.
In this budget there is no tax relief for Canadians. I think it is very important that point be made clear. What we have is a fiscal shell game and an illusion that there are tax benefits in this budget, but in fact there are not. Cutting taxes and giving more money back to Canadians who have borne the brunt of deficit reduction is not important to this government. Government members feel they have cut the deficit. We see them over there like trained seals during question period applauding their efforts. They feel they cut the deficit. Canadians paid the price for reducing and eliminating the deficit and Canadians deserve a break now.
The Liberals increased the basic personal exemption a little in this budget and they said it will take 200,000 Canadians off the tax rolls. What about the 1.4 million low income Canadians who have been dragged kicking and screaming on to the tax rolls by this government by refusing to reindex tax brackets?
There has been a huge tax grab in the EI fund, $19 billion this government has taken from workers and employers, workers who need that fund during difficult times, seasonal workers. During a transitional period, during a time of immense change, both economically driven and technologically driven, there are regions of our country where people need help to make that type of change. This government has turned its back on regions of this country, including Atlantic Canada. The message was very clear in the last federal election. I would add that the message will be clear in the next federal election as well.
This government is practising a give and take tax policy where it will give some tax breaks through the front door but then through the refusal to reindex tax brackets will take it through the back door.
Bracket creep is costing Canadians around $1 billion per year. This government has not addressed that issue. The budget does not address the brain drain issue, the fact that the tax disparity between Canada and the U.S. remains immense. In Canada one reaches top marginal tax rate at about $65,000. In the U.S. it is around $400,000 Canadian. In Canada the top marginal tax rate, federal and provincial, is about 50%. In the U.S. it is about 40%.
The members opposite will say yes, but things are better here. The fact is things used to be better when we had a decent health care system, when we had a health care system people could rely on. But for the difference in take home pay after taxes, Canadians are discovering they can buy health care in the U.S. when they need it.
The fact is no one in the House or at least in our party advocates a private health care system, because we believe in a single user pay system that works for Canadians and is provided by the government. We believe very strongly in that because all Canadians, regardless of income levels, deserve access to a quality health care system. This government has devastated the health care system and at the same time has continually raised taxes, driving some of our best and brightest south of the border.
The EI premiums are an extraordinarily regressive tax. Payroll taxes are particularly regressive. Someone making $39,000 per year will pay the same amount of EI premiums as someone making $300,000 per year. This is the government's idea of a fair tax policy.
In terms of corporate taxes, in June the Mintz report was tabled to the finance committee. It pointed out some of the disparities between business taxes in Canada and business taxes in the U.S. and our other trading partners. It pointed out that one of the biggest impediments we have to economic growth and productivity in Canada is our tax system and particularly our business tax or corporate tax system. There was not a mention of really addressing the fundamental issues of corporate taxation in the budget.
We will continue to lose foreign investment to other countries because the budget has not addressed the fundamental issues. In time we will continue to see substandard job growth in Canada. The government said unemployment has gone down in recent years. It has gone down in the U.S. as well. In the U.S. the unemployment rate is at the lowest point in 20 years. Canada maintains an unemployment rate double that of the U.S. That is clearly unacceptable.
When we talk about lower taxes it is very easy to not really explain how important it is to the lives of average Canadians. We advocate tax reduction for three reasons.
Canadians need a break. Canadians have seen their disposable incomes decline by 9% in recent years. During the same period U.S. disposable incomes increased by 11%. Canadians need jobs and opportunities. In every jurisdiction high taxes kill jobs. In a global environment it is not possible to maintain an artificially high tax rate. We need to ensure that our tax system is competitive and thus Canadians can be competitive in the global environment.
Job creation has been led by Ontario and Alberta. Why? The governments in Ontario and Alberta have recognized that lower taxes create economic opportunity and jobs. By lowering taxes in Ontario the Harris government has actually taken in more tax revenues. It is imperative that the government learn from some of its more rational provinces in terms of appropriate tax systems.
What was really cynical in this budget is it mentioned the homeless but there was not one single initiative for the homeless. How dare the Minister of Finance mention the homeless but not provide one single initiative to help the homeless.
The budget may talk about poverty, and it is a major issue. One in five Canadian children is living in poverty. We had a debate in the House sponsored by our party on the issue of poverty. Why are children living in poverty? Their parents are living in poverty. We have slashed access to EI benefits for seasonal workers in regions like Atlantic Canada without providing anything in the wake of those draconian slashes. We have maintained artificially high taxes which have inhibited job growth. More Canadians need jobs.
The parents of these children who are living in poverty want to work. They want opportunities to compete and to succeed. The best way to ensure this is to reduce the tax burden on all Canadians to create economic growth and opportunity such that these people can participate in the economy.
In my riding there are many constituents with families living on less than $10,000 per year.
Members opposite have dismissed poverty as something that really is not there or they have said that we should change the way we measure poverty because the way we currently measure living in poverty in Canada is statistically incorrect. I heard a member of the Reform Party compare poverty in Canada to third world poverty by saying there may be some Canadians who are starving but not many.
In my Canada and our party's Canada it is unacceptable that any Canadian is starving or that any child is living in poverty. The only way we are going to change that is to recognize that we need to attach the hands of Canadians to the levers of economic growth, get this government of high taxes and high regulation out of the way and provide Canadians with the opportunity to compete and succeed.
This was supposed to be the health care budget. The last budget was the education budget. I forgot that for a moment because the results of the last budget, being an education budget, were fairly nebulous. There was a $2.5 billion millennium scholarship fund taken out of last year's books. Of course it will not benefit any Canadian until after the year 2000, even then it will only benefit only 4% of students seeking higher education.
Interestingly enough, the year after the Liberals' education budget, 12,000 graduates have declared bankruptcy. I shudder to think what will happen after the health care budget but it cannot be any worse than what the Liberals have done before.
The minister expects to be commended for an $11.5 billion reinvestment in health care, which will only bring health care spending up by the year 2004 to the 1995 level. That ignores the $3 billion yearly growth in the cost of health care due to inflation and an aging population. That would be like thanking an arsonist for burning down your house and then rebuilding a smaller one on the same site eight years later. This is ludicrous.
The way the Liberals are spending on health care, they have cut indiscriminately since 1993 and now they are preparing to spend indiscriminately. Nowhere in the budget was there mention of engaging the volunteer sector to better maximize the health care spending of organizations like the VON which have served Canadians well in the past and will continue to do so in the future with very little help from this government. What is the strategy to address the fundamental issues of pharmacare and home care? What about palliative care with an aging population? Where is the strategy for developing a real program working with the provinces to provide not just a more expensive health care system but a better health care system?
We will be addressing issues in the budget debate over the next several days. This budget has clearly not dealt with some of the fundamental issues in the Canadian economy and health care system. On the economic front this government has not set firm debt reduction targets. Again the government is ducking the real issues.
I remind the Minister of Finance who recently said the economy is clicking on all cylinders that the economy continues to sputter for many Canadians and that we want to see the economy firing on all cylinders. The minister talks about the government's strong fundamentals. John Kenneth Galbraith, Canadian ex-patriot and economist, once said beware of governments that say their fundamentals are strong. That is very appropriate for this government.
Let us look at the fundamentals. We have an unemployment rate twice that of the U.S. We have record high rates of personal bankruptcy, a negative savings rate, the highest personal debt rates ever. The IMF and the OECD are saying cut taxes. Brain drain is taking our best and brightest. The economy is not clicking on all cylinders and we want to see it click on all cylinders for all Canadians.
