Scott Brison

[Budget Implementation Act, 1998, March 31st, 1998]

Mr. Speaker, I am pleased to speak on Bill C-36, the budget implementation act.

The budget of 1998 represented a major shift in the fiscal fortunes of the Government of Canada. It has taken 15 years of fiscal planning to achieve this balanced budget as the Leader of the Opposition mentioned previously in the House. Policies including free trade, the GST, deregulation of financial services, transportation and energy, all implemented by the previous government, were necessary and appropriate. They provided the framework and the basis upon which this government was able to balance the budget.

Let us make it clear. The real heroes today are not politicians, or certainly not the members on the government side. The real heroes are ordinary taxpaying Canadians who have had the budget balanced on their backs and who endure the highest taxes in the G-7 countries.

With this budget the Liberals have gone from being a tax and cut government to now being a tax and spend government. This should not be surprising because this was the government that led us down the path of debts and deficits beginning with former Prime Minister Trudeau in the early 1970s.

The biggest single spending initiative in this budget is the millennium scholarship fund. Canadian taxpayers are contributing $2.5 billion of their money to a bursary fund that will not be delivered to students for three years. Even then it will only benefit 7% of students.

What seems to be lost on the government is who in fact is making the program possible. It is ordinary taxpayers. It is not the Prime Minister. It is not the finance minister. It is ordinary Canadians who as I have said have paid the highest taxes of any of the G-7 countries. They have seen their income taxes as a percentage of GDP rise from 13% in 1993 to 14% now. Keep in mind that the previous government reduced income taxes as a percentage of GDP from 14% to 13% between 1989 and 1993.

Now the Minister of Finance is retroactively allocating $2.5 billion from last year's budget to this program, an act that the auditor general has spoken against. The Minister of Finance has taken responsibilities away from the auditor general, the watchdog of the Canadian taxpayers in this House and provided them to the board.

When I recently asked the Minister of Finance in question period to provide the auditor general with access to the fund's books, he responded that if the auditor general would like to have access to those books, it will be arranged. The auditor general does want access to those books, yet nowhere in this legislation is their a clause giving the auditor general the access he needs to oversee the taxpayers' money. The departmental officials I met with last week confirmed that despite the minister's reassurances to the contrary in this House, the auditor general in fact will not have access to the fund's books.

This represents the second time in two years that the Minister of Finance has set up an at arm's length foundation with a significant amount of taxpayers' money and appointed a separate auditor. The last time was the innovation fund, $800 million to be allocated to medical centres, universities and research laboratories. Now $2.5 billion will be administered without a clear and transparent auditing practice.

In the legislation the board for the millennium scholarship fund will appoint its own auditor. This is contrary to common business practices where the shareholders appoint an auditor, not simply the management. In this case the shareholders are ordinary Canadians who are represented by this government. That is why this departure and this lack of accountability in practice is very dangerous. It is also why the auditor general should be involved in overseeing such a huge allocation of Canadian taxpayers' funds.

Why does the government or the minister not appoint an auditor themselves? Instead it is going to be the board that appoints its own auditor. It may be an arm's length corporation but I would suggest that the arms are very short when the government is going to be appointing a significant number of the members of the board. The accountability is certainly not provided to ordinary Canadians who are footing the bill.

If we look at the millennium foundation in this legislation there is a significant lack of clarity surrounding the criteria of need and merit. It is stated very nebulously that the criteria is based on need and merit. No further direction has been given to the board on this criteria. Depending on the make-up of the board, the need or merit criteria could vacillate from one end of the spectrum to the other.

I remind the House that there are many young Canadians who need a higher education. The need component for the millennium scholarship fund may be more appropriate than simply the merit component. There needs to be some type of guarantee that young Canadians who do not have the financial means to achieve a higher education are provided with a higher education. Keep in mind that 7% of Canadians seeking higher education will benefit. Only 7%. To have it nebulously stated as it is, is inappropriate.

Frankly students who demonstrate the merit frequently earn scholarships to higher education institutions. They can participate in a higher education without the need for some gigantic memorial fund to the Prime Minister.

It should be remembered that the Canadians taxpayers who are footing the bill for this deserve and have now lost the ability to oversee the funds with this government's reticence to use the auditor general.

A second point of Bill C-36 which is worth noting today is the changes to the RESP program. Investor's Digest recently ran an article stating that the changes to the RESP policies will simply serve to complicate the current program. I quote “The problem with the RESPs is that they are already too complicated for most investors. The new grants will create more confusion”.

I do town hall meetings in my riding. Often we talk about tax policy. I have not had one constituent ask me to complicate the tax code. I have heard a lot of them say that the Canadian tax code is not user friendly and that it is inappropriate that citizens have to hire accountants to deal with their own governments.

What does the government do to address a crisis in higher education funding? It complicates the tax code. This proposal serves to complicate a tax code that is already far too complicated.

To give one example of the potential for abuse, there is a 20% top-up for individuals investing in an RESP, a matching where the government will effectively provide grants to those who invest in RESPs. It is a worthy intention to help provide and augment Canadians' savings for the higher education of their children. However we must always be wary of the first law of public policy, which is the law of unintended consequences.

I met with departmental officials last week. Nobody has explained to me why this 20% top-up will provide Canadians with a 20% grant if they invest in an RESP. If, 20, 18 or 15 years down the road, the beneficiary of the program chooses not to go to university or to pursue a higher education for whatever reason, the government will at that point be getting that grant back. The money earned on that grant over that period of time will be left with the individual, the contributor, the Canadian investor. This creates a direct incentive to invest in RESPs.

Recognizing that there is only a limited pool of funds out there for Canadians to invest with, it creates a direct disincentive to invest in RRSPs. The government is effectively providing a 20% top-up for Canadians to invest in one investment vehicle and a similar disincentive to invest in the other, the RRSPs.

By creating a policy like this, we will create a policy that will ultimately create financial insecurity for Canadians in terms of their retirement accounts. It will create a crisis down the road.

No attempt will be made to recover the earnings from the 20% top-up. The fact is it would be almost impossible logistically to do this. Again this is going to create a decrease in the incentive to invest in RRSPs.

Let us look at another example of this government's propensity to tinker with economics as opposed to providing broad based tax relief, which was the appropriate measure that should have been taken at this juncture. Let us look at the EI fund and the employment insurance holiday for employers hiring young Canadians.

Our party has repeatedly called for the government to reduce EI premiums to $2 from the current rate of $2.70. We outlined our position in our plan for growth, which was our prebudget submission.

The finance minister has stated categorically time and time again that EI premium reductions will not create jobs, will not lead to increased job creation in Canada. I heard the minister speak recently to the board of trade in Halifax. He stated that reducing EI premiums would not lead to greater job growth. Today the minister's agenda has obviously changed. Why would he eliminate EI premiums for young people if he did not feel that the reduction or the elimination of those EI premiums would lead to increased job creation for young people?

Everybody wants young people to have greater opportunities to seek employment in Canada. But we want all Canadians to benefit from reduced payroll taxes.

We have established that the minister cannot have it both ways. Effectively he is articulating that reducing payroll taxes will not have an impact on employment growth. Yet he is implementing policies where effectively that is what he is doing for that intent. Effectively he is playing one group against another. Certainly young Canadians between the ages of 18 to 33 need a break. But through this employment eugenics policy or this Pavlovian economics policy, he is creating a direct disincentive for Canadian businesses to hire other Canadians.

Again, it is an example of a government that prefers to make decisions for Canadians as opposed to ordinary Canadians, who deserved broad based tax relief in this budget, to make their own decisions as to what to do with their fiscal dividend.

While this government now brags about being in the black, many Canadians are still in the red because of its reticence to change fiscal policy for the better.

[Millennium Scholarship Fund, March 26th, 1998]

Mr. Speaker, yesterday the Minister of Finance said that if the auditor general would like to have access to the millennium fund books it would be arranged. Yet the Budget Implementation Act does not give the auditor general any right of access to the books of the foundation. In fact the legislation calls for the millennium fund to have its own auditor.

Based on the minister's commitment yesterday, will he amend the legislation to ensure access for the auditor general and eliminate the provision for a separate auditor?

[Income Tax Amendments Act, 1997, March 26th, 1998]

Madam Speaker, I thank the hon. member for a very good question. There is a tremendous amount of duplication of efforts between provincial and federal governments in Canada.

If we look at the education system and training in Canada, we see that part of the problem is that there are so many programs which are not tied together that we do need a more cohesive approach to training, education and more research into apprenticeship programs. I think there is a significant amount of potential, especially in the areas of tying education to the jobs of tomorrow.

I believe governments have to look ahead to see where the employment trends are going and then federal and provincial governments should be compelled to work together to ensure, either through apprenticeship programs or through a better secondary and post-secondary education system, that our young people are provided with the skills and tools they need to survive and prosper here in Canada.

[Income Tax Amendments Act, 1997, March 26th, 1998]

Madam Speaker, I seem to have struck a chord.

In any case, the economic policies and the mess the government of Brian Mulroney inherited dictated that we had to reduce by 15% per year program spending growth. We reduced it to zero by the time we left office. Beyond that we were able to not only reduce program spending, which was out of control at that time, but we were also able to reduce the deficit as a percentage of GDP.

We were also able to implement policies which have been absolutely essential in reducing the deficit, including the GST, which is a consumption tax that is a heck of a lot better than the manufacturers' sales tax which it replaced.

Then we implemented the free trade agreement.

We were the party that supported free trade before the members on the government side had ever supported it. Those are the types of difficult innovative policy decisions which have provided to Canadians today a fiscal dividend. The fact is those were the right policies then and are the right policies now.

[Income Tax Amendments Act, 1997, March 26th, 1998]

Madam Speaker, obviously the hon. member was not so disenchanted in 1988 with the Conservative government's policies that it prevented her from running as a candidate.

Obviously she felt quite comfortable in the Conservative Party's policies between—

[Income Tax Amendments Act, 1997, March 26th, 1998]

An hon. member opposite said it was two years too late. It was a heck of a lot faster than the previous government.

We deregulated financial services, energy and transportation. Those policies helped this government. They helped lay the groundwork for this government to continue to eliminate the deficit. In fact, we could say that this Liberal government is a government of sound and original ideas. Unfortunately its original ideas are not sound and its sound ideas are never original.

The hon. member talks about the CHST transfers and the fact that our party espoused a tax point solution to this issue. How can the member say that transferring greater authority to the provinces to determine the future of their health and social spending is a bad thing when he is part of a government that has reduced health and social spending by 35% over four years? How can he say that the federal government can be trusted with that responsibility when there are a lot of provincial governments out there which are fearful of further draconian cuts in the future from a federal government that is as heavy-handed as this one has been?

[Income Tax Amendments Act, 1997, March 26th, 1998]

Yes, I do agree with her when she says that what is going to happen when we head into the next recession with 9% unemployment, crippling taxes, a massive debt and a weak dollar is that we are going to have to spend and, after having spent the fiscal dividend, we will have little recourse but to run renewed deficits as income slows. That is a basic argument of mathematics.

The hon. member and his government are actually content with spending money without providing any meaningful tax relief to Canadians.

Let us hear what Sherry Cooper of Nesbitt Burns says. She says we are pouring all this money into education and scholarships and then the better and brighter will go straight to the U.S. where taxes are massively lower.

This member stands behind a millennium scholarship fund which does not kick in for two years. This fund will cost $2.5 billion and will help only 7% of students seeking higher education. It is appalling that he would be proud of it.

In 1984 when a Conservative government was elected the deficit as a percentage of GDP was 9%. We reduced that to 4% by 1993.

His government maintained our policies, including free trade and the GST. We deregulated the national energy program, which I hope my colleagues in the Reform Party have some appreciation for.

[Income Tax Amendments Act, 1997, March 26th, 1998]

Madam Speaker, I thank the hon. member for his question. When he quoted me, in fact, I was quoting Brenda Robertson who writes for Investor's Digest . I urge the member to pick up a copy. It comes out tomorrow.

[Income Tax Amendments Act, 1997, March 26th, 1998]

Madam Speaker, it is with pleasure that I rise in the House today to speak to Bill C-28 which offers a wide range of tax related measures, most of which have been discussed at great length in the House by myself and other members.

The bill demonstrates the Liberal philosophy to governing our country: government by knee jerk reaction, crisis management and economic tinkering. Liberal governments do not plan to fail but quite frequently they fail to plan.

Effective economic policy needs to be consistent and the vagaries of politics cannot interfere with the economic direction of the country. In the Liberal war of politics versus economics politics always wins. Unfortunately Canadians frequently lose. That goes back to 1974 with wage and price controls, the 18 cents per gallon tax, the budget of Joe Clark and the Liberals' flip flop on that, their flip flop on the Pearson airport deal, helicopters, GST and free trade.

However, I am pleased that at least they have maintained the policies of the previous government to the extent that those policies have been largely responsible for the government's ability to reduce the deficit. The types of policies I am speaking of are free trade, GST, deregulation of financial services, transportation and energy. Those were the policies of the previous Conservative government which provided the government with an opportunity to make some choices for the future of Canadians. I say with great confidence that not a member on the government side of the House today would disagree that their previous policies are clearly failing ordinary Canadians.

In Bill C-28 the finance minister tinkered with several areas to provide minimal targeted tax relief. He complicated a tax code which is already far too complex. Canadians should not need tax accountants or even tax lawyers to deal with their governments. Even the Americans are moving toward streamlining their tax measures when the Canadian tax code is far more complicated.

The targeted education tax measures in terms of basic direction and intent are very strong. We suggested as part of our prebudget position that the government move toward providing better incentives for investments in RESPs and providing more flexibility for Canadians to invest in their futures and the education of their children.

However, this type of stop gap, one off, cobbled approach to education will not be effective without a holistic approach to economic public policy. Public policy should be designed to provide opportunities for young Canadians in Canada not only to obtain an education but also after their education.

The recent government budget announcement relative to RESP changes follows on the heels of the proposed changes in the bill. If we look at tomorrow's edition of Investor's Digest we see an article by Brenda Robertson which reads:

My problem with the RESPs is that they're already too complicated for investors. The new grants—will probably create more confusion.

This case in point is from the mouth of a tax accountant who probably prefers a complex tax code at some level. She is saying that it is actually getting too complicated for the ordinary Canadian to benefit from.

In the PC plan for growth we call for government to allow Canadians to have more flexibility with their RESP contributions and transfers from their RRSPs, but only as part of a holistic policy toward economic growth, one that combines tax relief, lower income taxes, lower payroll taxes, greater opportunities for jobs and growth in Canada that would keep young people here where they belong.

Let us look at what the government's policies have done to higher education in Canada. We can start with Nova Scotia, the cradle of higher education in Canada, and the immediate situation of the faculty strike at Dalhousie University. Dalhousie is my alma mater. Its students felt that their concerns were being overlooked in the recent election by the two levels of government, both the provincial Liberals and the federal Liberals. The Dalhousie students union spent $40,000 to buy television advertising to make sure Nova Scotia voters were reminded of the education crisis which was looming because of federal cuts to health and social transfers to the provinces.

The student debt load has grown in recent years by 280%. The debt load at the completion of a four year degree now averages $25,000. In 1993 only eight students in the maritime provinces had debts exceeding $30,000 after their four year programs. In 1997 there were over 900. The number increased from 8 to 900 in that short period of time.

Why is student debt load ballooning out of control? It is partially because of the cuts to transfers but also because of the general unemployment situation. Tuition has only increased by 110% but student debt has increased by 280%. The disproportionate growth in student debt is due to the general unemployment situation. Students are competing with graduates for jobs that were previously within the exclusive domain of students.

It is ludicrous to address the issue of student debt load without addressing the issue of general unemployment. That is why we need to address the issues of reducing taxes, growing the economy and providing an economy that creates jobs and provides a better opportunity for young people to work, provide for themselves and supplement their incomes while going to university.

Acadia University is in my riding. Its students just went through a near crisis because of a strike that loomed for several months. Uncertainty was created. Many of those students who were having difficulties came to my office to seek advice. They were not finished their degrees. They were faced with a faculty strike and already had $30,000 in student debts. What a great way to start their careers.

The chain of events since 1993 on both the federal scene and the provincial scene in Nova Scotia has been unfortunate for the Liberal Party of Canada and its cousins in Nova Scotia. For the first time in Nova Scotia's history a governing party has failed to win its successive second term.

The legacy of Russell MacLellan, who called the federal budget an excellent budget for Canadians and for Nova Scotians, is that the Liberal Party lost 20 seats. The Liberals went from 39 to 19 seats in Nova Scotia. Russell MacLellan is kicking himself today for not speaking up when he was in Ottawa and for not speaking up in previous budget debates when the government was adamant that health care and education would be cut to the bone.

National leadership is required at all levels to ensure young Canadians receive the best education in the world to get the best jobs in the world. Leadership is not about federal or provincial jurisdiction. It is about federal and provincial co-operation. The struggle to raise the living standards of a nation is inextricably linked to the quality of its education system in a knowledge based society.

While we need a strong education policy we also need to address tax policy. We need tax relief to keep our best and brightest in Canada and to stop the brain drain that is sapping the lifeblood from Canada's future. Sherry Cooper from Nesbitt Burns stated that the government's changes or lack thereof to education and tax policy will turn Canada's brain drain into a brain train to the United States.

Once our students leave school the economic outlook for them in Canada is very bleak. Canada continues to have a youth unemployment rate of over 17%. Highly educated and motivated Canadians are being forced to leave the country in search of work. As an Atlantic Canadian, I have seen the brain drain issue for a number of years. For over 30 years families have watched their young people leaving Atlantic Canada and going to central Canada to seek opportunity. Unfortunately it is now an issue with which all of Canada is familiar. Across Canada young people are leaving and families are watching their children leave Canada to go to the U.S.

Every year 80% of Waterloo computer science graduates go to the U.S. The combination of higher income and lower taxes in the U.S. is too seductive to walk away from. Canadians need bold action from the Minister of Finance to reverse this exodus. Yet the Liberal policy is to maintain high payroll taxes and the highest income taxes in the G-7. These policies run counter to the most basic of free market logic.

Bill C-28 epitomizes this Liberal philosophy. Instead of making substantive changes to initiate growth in the economy the minister has nickelled and dimed the Canadian people by offering targeted tax cuts in politically palatable areas. If the PC Party plan for growth were implemented we would see the basic personal exemption increased to $10,000. That would take two million low income Canadians off the tax roles. Instead the Canadian government offered Canadians a stop gap solution, an increase of $500.

In fact the tax relief for a Canadian making $10,000 per year in this budget works out to $80 per year. That is an insult. There is no member on the government side of the House here with me today who would disagree that it is an insult.

The fact is that $80 per year amounts to one cup of coffee per week at Tim Horton's, one cup of coffee per month at Starbucks.

It is unacceptable, frankly, that this government has balanced the budget on the backs of ordinary Canadians and now refuses to provide any benefits back to the ordinary Canadian taxpayer.

My Liberal colleagues told this House about the marvellous tax relief and what they have provided for Canadians, and clearly that is not the case. In fact, again, I urge members to pick up a copy of tomorrow's Investor's Digest . In terms of tax relief it states, “What's going to happen when we head into the next recession with nine per cent unemployment, crippling taxes, massive debt and a weak dollar? Presumably, having spent the fiscal dividend on education the Finance Minister will have little recourse but to run renewed deficits as income slows”.

Again, this government is making the wrong choices. It fails to deliver the opportunity to average Canadians to make their own choices as to what to do with their fiscal dividend. This government may have moved into the black, but Canadians are still running in the red. Personal debt is at an all time high in this country.

Bill C-28 makes 15 small and favourable changes, arguably, to the tax code for selective groups, but again this is not sound economic policy. It further complicates the tax code. Certainly we would prefer to see some tax breaks for some Canadians as opposed to no tax breaks at all. But what about really addressing the issue of the egregiously complicated and not user friendly Canadian tax code and making it easier for average Canadians to deal with their own government?

Canadians have not experienced a real after tax pay increase since the early 1980s. Personal disposable income has dropped by 6% since 1991. In Canada the Liberals have maintained high payroll taxes and they continue to believe that we can create a growth economy with a high tax economy. It is not possible and we are going to continue seeing a gap in the standard of living between Canadians and Americans.

If we look at Bill C-28 and the revisions to the CHST, the Canada health and social transfer, the CHST helps the provinces pay for health, education and welfare. In the Atlantic provinces where the local tax base is not as strong as it may be in some parts of the country to pick up the slack when these cuts are particularly draconian, the effects of changes and cuts to the CHST are dramatic and the impact is devastating.

The government talks about having established a cash floor for the CHST funding. The fact is that the cash floor is established on a national level. The fact is that seven of the ten provinces will continue to receive less money every year for the next four years, including provinces like Nova Scotia.

When the government talks about cash floors it should realize that health and education spending in many provinces is not a matter of having a floor. It is subterranean. It is not up to the national standards and the Liberal answer is to cut further the cash transfers to the provinces in those areas.

Our platform would call for a provincially reached cash floor level that would truly establish the long term stability of social investment in each province of Canada. We need a plan that ensures equity and equality of opportunity for all Canadians.

This Minister of Finance would like Canadians to believe him when he says in a press release that “Governing is about choices, priorities and values. Our choice is clear. Health care is a priority for this government”.

Based on the Liberal convention of last weekend and the outcry of Liberal delegates from across Canada for this government to start investing more in health care and to start dealing more with the health care crisis of this country, obviously health care may be a priority for the Liberal Party at a grassroots level but it is not a priority of this government.

I said a few minutes ago that there was not one government member on this side of the House who would disagree with me when I say that the government's policies are clearly missing the mark. There may be one now.

We will continue to offer our positions and our beliefs which represent our unwaivering belief in the free enterprise system. The free enterprise system is the best system to provide all Canadians the opportunity to succeed and prosper in this country.

We also believe that the free enterprise system is only going to be successful and sustainable if all Canadians have access to the levers of the free enterprise system and to the levers of growth to bootstrap themselves and their families.

We need a government that is prepared to commit to sound strategic social investment in areas that will include the competitiveness of Canadians in a global environment as we enter the 21st century, as well as a government that will couple this investment with tax reduction and provide Canadians the types of opportunities they need and deserve right here in Canada.

Canadians need a plan for growth. That is what the PC party is offering Canadians. It is not offering a stopgap, one-off approach to economic policy but a holistic economic policy that will provide Canadians with a plan that will work and will put more Canadians back to work.

[Millennium Scholarship Fund, March 25th, 1998]

Mr. Speaker, the budget implementation legislation does not guarantee access for the auditor general and it is well known that there has been a public dispute between the Minister of Finance and the auditor general. Is the minister's fight with the auditor general the real reason the auditor general's access to the foundation's books has not been guaranteed?