Stephen Harper

[The Budget, February 24th, 2005]

I might mention what occurred during the Prime Minister's visit to China. President Bush managed to persuade the Chinese to put voluntary restrictions on their textiles in the U.S. but our Prime Minister refused to follow suit. Without a shared commitment with the U.S., we do not have the power to do the same.

We continue to dole out massive foreign aid to China. While we face these challenges of China as a new competitor, we continue to dole out foreign aid to it, to a global military and economic superpower. Now we see that China wants to buy some of our companies which leads me to this question. Will some day China buy some of our biggest natural resource companies with CIDA money?

What about the United States, the country the Prime Minister does not see? While he travels all around the world, changing his tune daily on missile defence, trying to assemble some kind of G-20 organization, he ignores the G-2, the largest economic relationship in the history of the world, the relationship between the United States of America and Canada. We will not always be able to piggyback on the United States. In fact, our free trade efforts have stalled. We see across the country disputes and obstacles to free trade rising, whether it is lobsters in Yarmouth, or flowers in the Niagara Peninsula or disputes with agriculture and softwood lumber that have only become worse.

The United States has its own challenges on fiscal and trade deficits, and without new emphasis on strengthening our relationship, we can be sure that the resolution of these problems is more likely to harm Canada than to help us.

There is no country in the world that would not be delighted to have the United States as a neighbour and economic partner. This government, however, appears to be unwilling, or unable, to take advantage of this economic relationship, the most productive of any in the world.

A few statistics do back up our contention that it is time for a major change. It is in fact time for a bold budget, not just time for the minority compromise we have seen in this Parliament.

During the past 40 years Canada's GDP per worker has remained little changed compared with that of the United States. We remain stuck at about 85% of the American level. Unprecedented in our history over the past decade or so, our standard of living relative to the Americans' has declined. For a nation that has endured numerous innovation, competitiveness and productivity programs from the federal Liberals, we have precious little to show for it. We are where we were 40 years ago.

As the Conference Board of Canada put it last week, “Lest any Canadian think that the productivity gap is irrelevant, it more than accounts for the income gap of $6,078 per Canadian”. Having a family of four with some $24,000 a year less income to spend than it would have in the United States is nothing to celebrate.

Unemployment rates in this country are stuck well above those of our American neighbours. This has persisted for a quarter of a century. It was not always this way. Back in the early 1970s Canadian and American unemployment rates were the same. Ours were often even lower and now they are locked into a gap that should be unacceptable to the government and unacceptable to Canadians. It is unacceptable to this party.

The TD Bank pointed out recently that Canadians' purchasing power has risen only 0.24% a year over the period of the Liberal government. In other words, Canadian living standards and disposable income have not risen at all.

This is my problem with the federal government and with the Prime Minister. I got into partisan federal politics originally because I wanted to see something done about the federal deficit. So many Canadians wanted to see something done about it.

The reason we wanted to see something done with the federal deficit was not so the federal government could hoard Canadians' money and waste it on its pet projects. We wanted to see it for the benefit of Canadians. That has not happened. That is only going to happen when Canadians get rid of the present government and its irresponsibility.

There are other challenges that are not addressed in the budget. There is still no national securities regulator, no plan for a discussion, no plan on how to proceed with something which virtually the entire business community in this country has been demanding. There is no plan on how we are going to deal with the issue of bank mergers which is not going to go away.

Equally ominous with regard to our future productivity is the fact we are no longer getting our fair share of foreign direct investment. In fact we have been experiencing a net outflow. Sadly, too many Canadians and Canadian businesses see better opportunities elsewhere. There is little prospect of reversing this trend unless and until there are major changes in tax policy affecting the Canadian business investment environment.

The tax cutting measures brought forward in the budget, all of which we have supported and will support strongly, should nevertheless be bolder and they should be implemented sooner. They are affordable. In fact we cannot afford not to do them. We must get on with them.

High marginal tax rates should have been addressed in the budget. They have not been, especially for people like researchers and medical professionals whom this country is trying to attract and trying to keep. Effective marginal tax rates have hit an astounding 80% for lower income Canadians faced with clawback provisions on key social benefits.

Do we need any more evidence that we need strong tax reduction and a tax overhaul? We wanted to see the capital tax eliminated in the budget. It is a job killer. It has no place in the Canadian tax system and it should be gone before the planned phase-out in 2007.

The evidence is clear that the effective business tax rate in this country remains well above that of the United States. The C.D. Howe Institute has stated that Canada's effective tax rate on capital is 31.5%, substantially higher than in the United States where it is 20.1%. Our business tax rates are not competitive with those in the United States, period, and will not be even after the reductions in this budget.

Countries such as Ireland and Australia have moved aggressively on tax reduction for business and individuals. They have shown the benefits. They are bringing in investment. They are bringing in new revenues. They are moving forward both in terms of their economy and their social services. This country should be able to do the same. We should have the richest country in the world, not one just struggling to maintain its place.

Let me conclude by saying that a budget is one of the most serious and solemn acts a democratic and responsible government can make. Even in a minority government context, a budget should not be just about ensuring the survival of the government or the triumph of the party. It must be about ensuring our future prosperity as a country, our success as an economy, and our security as a society. It must be the expression of a vision.

Sadly, there is no such vision in this budget. Avoiding an immediate hanging is one thing. Expressing a vision for the future is another.

The government may avoid being defeated in the House, but it cannot avoid being criticized. Our duty as an official opposition is not to keep the government in power, or to defeat it, but to ensure that it is serving the interests of Canadians.

There are many things in this budget that we do not like. There are many others we would like to have seen that are not there. Many problems that could have been addressed in this budget were not, such as income support for our farmers and rural economy, the long gun registry, the unaccountable funds in foundations. Passage of this budget does not mean the days to debate and challenge the government on those measures will not come very soon.

Many of the positive steps taken by the Liberals in this budget do not go far enough or occur fast enough to have a substantial impact on the well-being of Canadians. Most of the money for child care, for gas tax transfers to the cities, and for climate change is delayed until the end of the decade, and there is absolutely no plan in place on how to actually spend it anyway.

As I have said, we will not defeat the government at this time. In this budget the government is following the Conservative Party's lead on some areas that are important to Canadians. It is moving forward on tax relief, on defence and support for caregivers. We will continue to hold the Liberals to account where spending is unfocused and wasteful.

At a time in world affairs when decisive and determined action is needed especially on the economic front, I believe that the Canadian government is in fact dithering. It is dithering on living standards. It is dithering on productivity in the Canadian dollar. It is dithering on taxes, dithering on the environment, dithering on infrastructure, dithering on child care, dithering on foreign policy, dithering on bank mergers, dithering on management and accountability, dithering on out of control programs like the gun registry, dithering on aboriginal issues. I could go on and on. The Liberals are playing for time. They are simply dithering with our future.

When the times comes, and it will, this party will be ready to give Canadians new pride in their past and new confidence in their future.

Mr. Speaker, I move:

That the motion be amended by adding after the word “government” the following:

but however regrets that the budget does not reflect Conservative principles since it fails to immediately implement the proposed tax reductions for Canadians; proposes spending to implement the fatally flawed Kyoto accord instead of addressing real environmental issues; contemplates massive spending on a bureaucratic child care program instead of delivering child care dollars directly to parents; makes no commitment to the agriculture sector and rural Canada to provide aid at a time when Canada's regions need it most; does not eliminate the wasteful spending on the long gun registry; does not immediately provide adequate resources for Canada's military, so that our armed forces can become fully combat capable as well as equipped for peacekeeping duties; continues to place billions of dollars in foundations and trusts contrary to the express recommendations of the Auditor General; and indulges in a massive increase in bureaucratic spending.

[The Budget, February 24th, 2005]

Mr. Speaker, this is the 11th consecutive Liberal budget since 1993 after four elections, and it is that finance minister's second budget but the first budget since the last general election. I have to say what a difference a minority makes. It is true, after all, that the prospect of a hanging in the morning does focus the mind.

It was, I have to say, quite touching yesterday to see members of the government gleefully applauding measures that only during the election campaign they denounced as half-baked and downright dangerous. One thing has not changed: there are still two federal Liberal parties, the one that campaigns on certain promises and the one that governs on something else.

During the election we told Canadians that the Liberals were hiding massive surpluses. They said we were just being fiscally reckless. Yesterday all those surpluses miraculously appeared.

We all know, of course, the famous projected numbers that last year's surplus would be $1.9 billion and it turned out to be $9.1 billion. In the debate during the election campaign I will not forget the moment when the Prime Minister turned to me and said that he knew the numbers. It turns out he knew the numbers, he just did not know their order.

The message should not be lost. Put simply, the government, as managers and custodians of our money, lied to the Canadian population during a national election campaign and we in the Conservative Party were telling Canadians the truth.

Our platform, which the Liberals criticized as being fiscally irresponsible, committed to over $50 billion in new spending and tax reductions over five years, the number the Prime Minister called dangerous. The Liberals have now committed exactly the same amount. Last June that $50 billion was a scary, black hole but now it is all sweetness and light. The black hole has become a veritable fountain of bright ideas.

What was clearly unaffordable and liberalized during the election is now presented as being unavoidable.

We should not believe for a moment that this kind of deception of falsification of the state of public finances comes without a cost. These kinds of numbers and this kind of fudging represents missed opportunities, as does much of this budget, opportunities that will not necessarily present themselves again.

For instance, these hidden hordes of money have allowed the government to indulge over the last decade in countless off-budget initiatives, initiatives poorly conceived, poorly planned and poorly executed, resulting in the worst incidence of waste mismanagement and scandal in our country's history.

I remind the House of the HRDC boondoggle, the gun registry, the GST rebate mismanagement, unaccountable foundations and, of course, the sponsorship scandal. For Canadians this means lost opportunities for themselves and their families. For government it means a smaller revenue stream, which threatens our ability to provide well into the future the quality of social services Canadians deserve and have come to rely on.

The astronomical surpluses amassed and hidden by the federal government are also the source of a dangerous fiscal imbalance. This imbalance is creating great tension within the Canadian federation.

While the provinces are struggling to fund the health care, infrastructure and educational programs the public is demanding, the federal government is hiding billions of dollars, which it does not even know what to do with.

This problem is still here and is even getting worse. We will continue to dog the government tirelessly on this issue and we impatiently await the report of the parliamentary committee we struck, against the wishes of the Liberal government, to study this problem. We will continue to defend open federalism and fight the dominating and paternalistic federalism of the federal Liberals.

I want to begin my analysis of the budget by focusing on the things that we like. Some of the tax reduction measures in the budget are measures that this party has been fighting for continuously over the past several years. While they are tardy and timid measures, they are the direct result of pressure that has been put on the government by Conservative members.

I know the government would like to take the credit and be complimented on some of these measures, and it does deserve some commendation, but, in fairness, commendation should also be given directly to members of the House who have long argued for these measures. For instance, the budget does contain tax reductions to business. However it should not be forgotten that for years there has been no stronger advocate of corporate tax cuts and tax reduction for business than our finance critic, the member for Medicine Hat.

There are some personal tax reduction measures, especially the raising of the personal exemption which most benefits low income Canadians, a measure which by necessity reduces the taxes of all Canadians. I have to point out that this has been advocated for some years by members of this party, including my predecessor, but advocated by someone who actually did this when he was the provincial treasurer in the province of Alberta, and that is the member for Okanagan—Coquihalla.

Finally there is the removal of the completely unnecessary and counterproductive jewellery tax, a special excise tax on jewellery, a position that has been strongly advocated by our member for Vancouver Island North.

This budget talks about benefits for agricultural cooperatives. A member of our caucus, who has not yet been elected, lobbied hard for the dividend exemption for agricultural cooperatives, which the government has finally implemented. I am talking about future member of Parliament Josée Verner.

When it comes to adoption expenses, which finally have been dealt with in the budget, nobody was more persistent over the years than the member for Prince George—Peace River.

When I look at the new announcements in the budget, they almost all come from the Conservative platform: tax reductions and spending increases for the Canadian military.

We have to tell Canadians that the spending increases are half of what the government claims they are and are far from what will be needed in the long term. However, for at least taking this step forward, credit has to go to a long line of Conservative defence advocates from both of our predecessor parties, to whom today's defence critic takes no back seat, and that is the hon. member for Carleton—Mississippi Mills.

All of these Conservative members in the House have done what Conservatives have consistently done. They have endured countless slurs and taunts for defending principles and ideals which government members now want to embrace at the last minute as their own. They have done this, not just with these measures, but historically in the not so recent past with issues like low inflation, the reform in the GST and with free trade. The Conservative Party will always stand up for principles ahead of their time and will always push government members to do what is right, even if we have to fight them to take the credit.

Even the proposals we like in the budget are inadequate or uncertain, for example, the increases in National Defence. None of the new money can paper over the fact that the government still has no actual plan for National Defence. It has no record of competent management. It has no history of emphasizing its importance. It has started in the budget with exaggerating and double counting the size of the actual increase. This is an unfortunate approach to the most serious of public policy matters.

September 11, 2001 should have reminded the government that we live in a dangerous world, a world in which armed forces are not only the strongest instrument of national defence and internal security, but also the clearest expression of sovereignty and international influence.

We have seen the indisputable deterioration of our military readiness and capability under the Liberal government, a deterioration so tragically symbolized by the sad events on board the HMCS Chicoutimi , a deterioration which, until the circumstances of this minority government, the Liberal government was absolutely determined to perpetuate into the future.

Our equipment is continuing to decline and properly equipped personnel continuing to shrink. Today, Canada's defence spending, as a percentage of our economy, ranks among the lowest in NATO. Our reach, our credibility and our prestige as peacekeepers have been as severely tarnished by government neglect as our combat capability. Currently, Canada is part of no less than 17 peacekeeping missions, the government likes to tell us, but the vast majority of these missions exist only on paper, some of them deploying less than 10 soldiers.

Today, Canada ranks 34th among the countries taking part in UN peacekeeping activities, the same ranking as Togo.

Our DART have to rent aircraft to deploy to parts of the world in urgent need of assistance. We do not yet know if the moneys in the budget will address the need for heavy lift capacity or the need to modernize the equipment our forces use.

We are pleased to see a commitment to recruit 5,000 frontline troops, but how will they be equipped? What will they do? We learned last week that our present shrinking forces have not even been able to get the government to put adequate boots on their feet.

Only time will tell whether Canada can actually recruit, train and equip those men and women we have often put in harm's way in the interests of international peace and security.

For more than 10 years, the federal Liberals have neglected and ignored our armed forces and now they are showing some repentance, albeit delayed. Rebuilding our armed forces is, however, a lengthy process. On this, as in all areas that come under federal jurisdiction, our party will be more vigilant than every. We are all too familiar with the impermanence of Liberal promises.

I have expressed some satisfaction with the new moneys for our armed forces, as we have obviously in this party, but Canadians can count on us to watch carefully, to press the government to develop a plan and to ensure it actually delivers on the promises it has made.

If we are somewhat in the dark on the government's defence plans, our view is crystal clear compared to many other initiatives in the budget, beginning with the Kyoto accord.

Last Wednesday the Kyoto accord finally came into effect, and the government is now committed to meeting its targets. In the budget we see the government setting aside another $5 billion for nebulous environmental purposes, but we know there is no plan for meeting our commitments.

The government is still contemplating buying hot air from other countries, many with worse environmental records than Canada, instead of actually reducing air pollution in this country. This is perhaps the worst environmental and economic proposal that has ever been placed before us. We in this party will never support the purchase of hot air credits from other countries.

I believe that on the Kyoto accord more and more Canadians are coming to realize there is no chance whatsoever that we will make the commitments the government has signed on to without inflicting grievous harm on our economy. Frankly, they increasingly wonder why we would do that when it would not improve Canadian or global air quality.

Eight years have passed since the government started specifically identifying spending budgets dealing with Kyoto commitments. What do we have? We have set aside $3.7 billion since 1997 for environmental initiatives. What has happened with the money? All we know is that some $658 million has not even been allocated to anything, while $1.2 billion remains unspent, sitting in some bank account. After eight years, the government still cannot bring forward a plan. It cannot even spend the money it has already allocated.

Everyone acknowledges the importance, the urgency even, of protecting the environment, but this will never be accomplished by allocating billions to unachievable and unclear objectives.

I point out that this pattern is repeated in much of the budget. Blocks of money have been set aside for grand purposes, but there are no actual proposals or plans in most cases to achieve them. The House should not think for a second, while we may let this budget pass, that we will support the government's implementation plans for these initiatives if indeed they ever materialize.

The government's non-existent child care program is one such initiative. The minister lectures Canadian women on families on what they should want. He had it all figured out in the 1960s and now he will finally do it. Canadians have moved on, parents have moved on and they want choice. We will oppose any scheme that funnels money into buildings and bureaucracies when it should go directly into tax assistance for Canadian parents and their children.

The same remark applies to the municipalities and infrastructure: no plan is in place as yet. We in the Conservative Party are going to insist that the federal government respect provincial jurisdictions. Without a commitment to that, we will oppose any and all federal intervention.

I have been and will be frank with Canadians on my assessment of this budget, and the backdrop of this should be clear. We are only eight months from the last election. We, and I believe all opposition parties, have tried to make this Parliament work and I can point to a number of advancements and achievements in this regard.

However, it is ultimately up to the official opposition to make the judgment on whether it is time and whether it is appropriate to force an election. In my judgment, Canadians do not want two elections in one year, and it is not in the national interest to do so unless it were overwhelmingly obvious that we must do so. That does not exist at this time, but I point out to the government that the standard it has had to exceed here is not very high. The budget, while it will get the government through the spring, does not give any confidence to us in its ability to lead the country into the future.

Perhaps most troublesome about the government is its unwillingness once again in this budget to come clean on its surpluses and to allow proper debate about the size and uses of this money. I said already, in last year's budget 2004 the government projected a budgetary surplus of $1.9 billion for fiscal year 2003-04, which was off a magnitude of four, a year that was scheduled to end only eight days after the budget was presented. We know the actual result, but we did not learn the truth until the fall of 2004. As a result, not only was Parliament misled and unable to debate the use of public funds, but more serious, the Canadian people were systematically misled and lied to in a national election campaign.

In budget 2004 the plan was for a surplus of $4 billion for 2004-05. Now the government tells us the surplus is close, that it will actually be $3 billion. This is only after front-loading nearly $3 billion allocated to Newfoundland and Labrador and Nova Scotia for the offshore promises the Prime Minister tried to wiggle out of, and after $5 billion was set aside without any plan or any proposal or any debate in more special funds. In other words, the real surplus for 2004-05 is closer to $11 billion, not $3 billion.

Since 1997, the government has understated its surpluses by a whopping $63 billion, and there is absolutely no end in sight to this practice. Now in this budget the government tells us the surplus for this coming year of 2005-06 will be only $4 billion, but how can anybody trust these people anymore?

The Auditor General as recently as last week told Parliament that:

Since 1997, the government has transferred more than $9 billion to various foundations in advance of need, and $7.7 billion is still sitting in their bank accounts.

And the Liberals did it again yesterday. Why can this money not be returned to Canadians in the form of lower taxes?

We are also concerned about the rate at which the government plans to increase spending, that is 7% for the next few years. We have past experience with the results of unplanned spending, when this government spend without any specific plan, without the knowledge of Parliament, and without the slightest respect for the most basic accounting practices.

While the government fudges and fiddles with the numbers, Canada still faces the challenges of the real world, and as a nation the government is not responding on our behalf. We have seen the Canadian dollar soar to new highs, causing difficulties for our exporters, not because our productivity has increased but because the prices of our raw materials has risen, and this creates great challenges that the budget simply papers over.

While the government continues to dither, our competitors are not standing still. China is a growing force, not only as a consumer of our raw materials but also as a competitor in manufacturing, in textiles for example. China is also becoming a magnet for international investment. Canada is not prepared to deal with the situation and the urgency is building.

[The Budget, February 23rd, 2005]

Mr. Speaker, I have listened to the Minister of Finance. I listened with great interest in a Parliament where the government is in a minority position.

During the last election campaign. I heard Conservatives talking about the expected surplus and the Liberals denying the possibility of a surplus. Obviously the fiscal imbalance does exist.

I should also mention that I did hear something about big surpluses. Big surpluses apparently have miraculously reoccurred, allowing the government to continue in some of its wasteful ways. As with all miracles, there are some good things that can happen as well and I note in a minority Parliament the sudden occurrence of a range of interesting Conservative priorities. I will want to speak more about this tomorrow.

Therefore I move:

That the debate be now adjourned.

[National Defence, February 23rd, 2005]

Mr. Speaker, the Prime Minister and Canadians will remember and I certainly remember our conversation at that time. He said that it did not make us part of missile defence. Now they are saying that it does make us part of missile defence.

On December 2, I asked the Prime Minister here in the House on the status of missile defence negotiations. The Prime Minister said, “The fact is that the United States government has not provided us with a specific proposal”.

If the Prime Minister says that there has not been a proposal, how can he now reject it?

[National Defence, February 23rd, 2005]

Mr. Speaker, it is not only Frank McKenna I am quoting. A spokesman for the American Missile Defense Agency said the following in December:

Canada ...worked out a deal so that information that came to NORAD would be shared for missile defence purposes....

The Prime Minister himself, during the Christmas break when Parliament was not sitting, said:

--we made the amendment to the NORAD agreement. ...that was part of this overall missile defence concept.

Is it not a bit late for the Prime Minister to decide he is not part of it?

[National Defence, February 23rd, 2005]

Mr. Speaker, today we have the unprecedented spectacle of senior Liberals disagreeing, not on whether the government should join the missile defence plan, but on whether it actually has joined the missile defence plan.

Will the Prime Minister admit that he is now claiming that he will not join missile defence because Frank McKenna has blown his cover?

[National Defence, February 22nd, 2005]

Mr. Speaker, unlike the Liberal Party, this party will never agree to a proposal we have never even seen.

Yesterday, in the House, the Liberal government, through this minister, reaffirmed that it would not participate in the missile defence shield. However, today, Ambassador Frank McKenna is saying the exact opposite.

Why did the government break its promise to make the details of this project public and hold a vote here in Parliament, before taking part in it?

[National Defence, February 22nd, 2005]

Mr. Speaker, that just does not accord with the government's statements.

All parties in the House agreed that there would be a vote before we became part of missile defence. Now Frank McKenna is saying the decision has been made. He is saying we are part of it.

Is the minister saying that the government's new star ambassador to the United States is a liar?

[National Defence, February 22nd, 2005]

Mr. Speaker, in a frank revelation today the new Canadian ambassador to the United States said that the government is already part of the missile defence program. He said this in spite of the fact that the Prime Minister has been telling the House and Canadians for months that there has been no agreement and no decision taken.

How could the Prime Minister secretly make this decision, so clearly breaking every commitment he has made to the House and to Canadians?

[Foreign Affairs, February 17th, 2005]

Mr. Speaker, the Prime Minister said this, and I will repeat it in English, “It is clear that if the Syrians are in Lebanon, it is because it is necessary to keep the peace”. That is what the Prime Minister has said at the very time when our allies and the international community are focused on a possible Syrian role in the assassination of former Prime Minister Hariri.

Will the Prime Minister absolutely, unequivocally withdraw that statement and apologize for making it in the first place?