Mr. Speaker, there are three problems with this budget. They are broadly defined problems and each of the three has its own components.
It is a budget that provides short term gain for some and long term pain for all Canadians. It is a budget that will provide long term pain because it follows the long Conservative tradition of fiscal imprudence and incompetence. It is also a budget that has no vision. At best, it is all over the map with no coherence. At worst, it reflects the incredible smallness and small-mindedness of the top five priorities.
What Canadians expect, especially from a new government in great fiscal shape, is not smallness and small-mindedness, but a bold vision and a blueprint for sustainable growth for the future.
Nothing is more important for Canadians, for our children and grandchildren, than to lay the foundations for our country's future success and prosperity, and to tell Canadians how we can continue to thrive and prosper in a world of emerging Goliaths like India and China. This budget is nowhere on this fundamental issue. It is small. It is petty. It is without vision.
The budget also follows a second long Conservative tradition: taking money out of the pockets of poor Canadians and giving it to the wealthy.
My third and final topic will be the connection between honesty and politics in Canada.
Fiscal competence and debt reduction are core national assets. Slowly but surely, these assets have been built up over the past 13 years to the point where Canada's fiscal record and reputation are second to none in the world.
When Conservatives ask what we Liberals did over the past 13 years, I am proud to answer that one thing we did was to clean up their $42 billion deficit mess. With much sacrifice by Canadians, we balanced the books in four years and then the nation began to reap the benefits of these sacrifices. Since balancing the budget, Canada has enjoyed the strongest job growth of all G-7 countries, the biggest debt pay down, and the strongest growth in living standards. That is what we did over the past 13 years and I for one am very proud to have been a part of it.
As a result, the Conservative government inherited the best fiscal situation since Confederation.
Are Canadians not entitled to expect a good deal more from the first budget of a government that had the amazing luck to inherit a $10 billion surplus? I think they are.
The least that Canadians can expect from this new government is that it will not waste or squander the public funds it has inherited. This money is a vital asset that the government spent years building up and that could be wasted over time or destroyed in a nanosecond. This certainly has not happened yet, because the government inherited the soundest fiscal situation since Confederation.
But there are disturbing signs that the Prime Minister takes the nation's finances lightly. There are signs that the Prime Minister does not care about debt reduction and is preparing to join the ranks of the many Conservative leaders known for their financial incompetence, from Mr. Diefenbaker to Mr. Mulroney to Mr. Harris in Ontario.
When John Diefenbaker came to power, after a string of Liberal surpluses, the government ran seven consecutive deficits. The Mulroney-Campbell government bequeathed to the Liberals a $42 billion deficit and it took several years and a great deal of pain to clean this up.
Maybe the most fiscally incompetent government in all of Canadian history was the government of the Mike Harris common sense revolution, or more appropriately, the Mike Harris stick it to the common man revolution.
An hon. member: Didn't Flaherty have something to do with that?
Hon. John McCallum: I am coming to that. That was a government in which the two most important economic ministers of the current federal government, the Minister of Finance and the President of the Treasury Board, were both key players.
The Harris government laid off 10,000 public servants, closed more than 30 hospitals and fired 8,000 nurses. But better than that, of even greater incompetence, the Conservatives found they had made a mistake and they had to hire back many of those nurses.
So zealous were they to cut taxes before the money was in the bank and so blatantly did they fix the books that what happened after they lost power? The auditors came in and instead of finding the promised balanced budget, what did they find? They found a deficit, and it was not a small deficit. It was a deficit of $5.6 billion.
Now two of the prime architects of that financially disastrous regime are sitting across the aisle holding the two economic portfolios of the federal government. That fact alone should make Canadians quite worried about Conservative fiscal incompetence, but there are other reasons.
In the election campaign, when the Conservatives released their economic platform, they got the numbers wrong, so they re-released it. Then they got the numbers wrong again, so they re-re-released their election platform. Now that is incompetent.
Just yesterday, the Minister of Finance said that he was cutting income tax, when in fact he raised it. The nicest interpretation is that the minister is demonstrating crass incompetence. The most likely explanation probably cannot be said in the House.
The Conservative plan consisting of increasing income tax to reduce the GST is a poor financial measure and, once again, it is incompetent.
As Herbert Grubel, a former Reform finance critic, told me, reducing the GST may be a good political move, but it is a disastrous economic one. In other words, it makes sense only for a Prime Minister who puts political opportunism before the good of Canada.
The Conservative Party's refusal to identify its cuts on budget day is also fiscally irresponsible, but it is not a surprise. The Harris duo across the aisle know this trick well: cut the taxes today with vague promises of spending cuts some time tomorrow. This is a recipe for deficits if ever there was one. They certainly delivered a big one, $5.6 billion.
Our government disclosed over 100 line items of detailed expenditure reductions on our budget day last year. If the Conservatives had any degree of fiscal competence and fiscal responsibility, they would have done the same thing yesterday, but they did not.
Yesterday the budget eliminated what is called economic prudence, a technical term which is essentially money set aside to provide further assurance against running into deficit if something negative hits the economy, and something that is negative always might hit the economy. We have seen SARS. We have seen hurricanes from time to time. We have seen recessions. One hopes it will not happen, but even a terrorist attack could happen. Many things could happen. If we are skating close to the edge, if we have gotten rid of the prudence, there is nothing there to protect us should some unforeseen negative occurrence happen. Then the Conservative government would be much closer to deficit than our government under the Liberal leadership would ever have been. This is fiscally irresponsible, fiscally incompetent. It is playing fast and loose with the nation's finances.
The Prime Minister speaks disparagingly of surpluses and the associated debt paydown as excess taxation. When the Prime Minister or finance minister travels internationally to G-8 meetings I know they get lavish praise for balancing the books. I have heard it: “How did you get rid of your deficits? What magic formula does Canada have to get rid of deficits when other countries have failed to do so?”
Does the Prime Minister answer that question? The Prime Minister I assume, since he does not like fixed surpluses, would say, “No, George, this is not a success; we have a terrible problem in Canada. Our surpluses are much too big”. Or he could say:
“No, Jacques, we have a crisis in Canada. Our surpluses are much too big”. This attitude of the Prime Minister’s is ridiculous.
If he actually did say that to George Bush or Jacques Chirac, he would certainly be a laughingstock.
The Prime Minister fails to understand that surpluses and debt paydown are not excess taxation for today's generation. They are lower taxes or better government services for future generations. It is dangerous when the Prime Minister of Canada disparages debt paydown and when he does not care about future generations, especially when we live in a world of an aging population.
Maybe it is not surprising. The Prime Minister seems to care about only one thing: votes in the next election. Future generations will not be voting in the next election. That is sufficient reason for him not to want to pay down debt for the benefit of future generations, because they will not be voting come the next election.
All this is very worrying for Canada’s economic future. The country’s finances are so healthy now that the risk of deficit is not imminent. However, the government’s financial mentality and incompetence are such that I am worried about what the Conservatives will do with our vital asset, that is, our financial competence.
We who have built up this asset have to be extremely vigilant so that it is not destroyed by the government. Canadians cannot afford to return to the long-term problems that are engendered by the Conservatives’ usual deficits and their financial incompetence.
The other long-term problem posed by the budget is the absence of a grand design for the country. The budget does not ask the sole question that any responsible minister of finance would ask in 2006.
The question is as follows: how can a small country with some 30 million inhabitants continue to prosper in a world in which superpowers such as China and India are beginning to elbow their way in and former superpowers such as Europe and the U.S. are taking dynamic measures to advance their own economic interests?
The government seems to think that the world owes Canada a living. It does not.
In terms of any sensible plan that would answer this question, the government is either going in precisely the wrong direction on tax policy, or it is totally missing in action on everything else.
If the object is to enhance Canada's saving and investment, promote productivity and prosperity, then a hike in income tax to pay for lower GST is the worst policy in the world. This is not a controversial statement among economists and policy experts. The government is proposing to fritter away some $10 billion per year, an enormous sum of money, in a tax cut that does nothing at all for Canada's future prosperity or competitiveness. This is another triumph of political expediency over what is best for Canada. It is a disgrace.
I truly believe that the Prime Minister, himself an economist, should know better than to fritter away all the taxpayers' money in a way that does absolutely nothing for the long term economic health of Canada.
An hon. member: Did he graduate?
Hon. John McCallum: I am not sure if he has a degree.
By lowering income tax instead of the GST, he could have put the same amount of money, or more, into the pockets of Canadians. He could have done it more fairly, and in so doing, he would have given a boost to Canada's medium term prosperity. Clearly again this is a case of long term pain for all Canadians in the name of short term political expediency for the Conservative Party.
One does not need to have a Ph.D. in economics to understand that Canada will not compete with India and China on the basis of low wages. We do not even want to try. The only way we can compete is through our people, brain power, ideas, research, commercialization, entrepreneurship, higher learning, training.
The Conservatives’ measures in this area are tokens at best and, at worst, a complete shame. We Liberals had reserved $2.5 billion for research and development, particularly university research, marketing, the Canada Foundation for Innovation and new research centres. One of these centres is located in my own riding. Unfortunately, all that was cancelled in the budget. In exchange, the Conservatives are offering only $200 million, instead of $2.5 billion. This is quite pathetic.
As far as higher education is concerned, the Liberals had set aside funds to be paid to every college and university student. They could receive up to $6,000 in tuition fees for a four-year program. Once again, the Conservatives thought they should cancel this measure. What do they offer in exchange? A tax deduction for textbooks worth about $80 a year.
This is not just a token. This is an insult to hard-working students and to their parents who are hit with rising tuition fees, whereas we on this side of the House recognized this problem and offered to pay half of the fees in year one and year four up to a total of $6,000. The Conservatives are giving students an $80 tax write-off on textbooks.
Not only that but perhaps even worse, in the fiscal update we also had plans that were booked to provide even more generous assistance to disadvantaged Canadians, aboriginal people, people with disabilities and low income Canadians, who wished to go to university. In those cases the amounts were more generous.
All of that was cancelled by the Conservatives. Their pathetic $80 tax deduction for buying books is an insult compared with the substantial measures that we put in place in order to promote a learning economy that would be competitive in the world and also provide access to Canadians to post-secondary education.
While other countries work to create a tax system that fosters innovation, what does the Prime Minister do? He hikes income tax to cut the GST. While other countries pour billions into research, innovation and higher learning, what does the Prime Minister do? He withdraws from the race, offering tokens so small as to be insulting.
This is dangerous stuff. It is absolutely and totally irresponsible. It is a recipe for long term pain. Canada simply cannot afford to sit on the sidelines or to take a time out as other countries pass us by.
I come now to that second great Conservative tradition, to take from the most vulnerable Canadians and reward the better off.
With respect to tax policy, let me begin by correcting the budget numbers for the rather obvious error that every Canadian understands except, it seems, the finance minister and the Prime Minister. What we heard yesterday was an income tax increase and not an income tax cut, and that is a fact. They have offset this tax increase with a GST cut and the employment credit. On the basis of correct numbers, we find the budget takes money out of the pockets of Canadians earning around $30,000 and puts that money into the pockets of wealthier Canadians. It is absolutely false when the Prime Minister and the finance minister say that every Canadian received a tax break in this budget. That is only true if we make the wrong assumption that income taxes went down when in fact income taxes went up. That is not a very difficult assumption to correct and once we do that it becomes abundantly clear that lower income Canadians suffered a tax hike.
Mr. Gerald Keddy: It was never there. What are you talking about? That is a total falsehood.
Hon. John McCallum: Perhaps I should repeat the point since the member opposite seems to fail to comprehend.
Up means that direction and down means that direction. When we go from an income tax rate of 15% to 15.5% that is up, and that is what the budget did as confirmed in the document.
Mr. Gerald Keddy: It was never 15%. That is misleading the public.
An hon. member: It is 15%. Last year it was 15%.
Hon. John McCallum: Fifteen is a lower number than fifteen and a half.
An hon. member: Tell the member to check his tax form.
Hon. John McCallum: If the member checks his own tax form he will see this point verified.
An hon. member: Tell him what page it is on.
Hon. John McCallum: It is revised schedule 1. If the member has the real copy, as opposed to the Xerox one, the 15% is in nice Liberal red. It stands out so people can see it.
Let us not debate facts anymore. Let us just acknowledge the point which does imply that this reverse Robin Hood syndrome is still alive and well in this budget.
Let us talk about other disadvantaged or challenged groups in this country. Let us take Canada's farmers who are in a state of crisis and the government does not care. There is not a penny of emergency funding for spring planting. There is nothing for producers in dire need of immediate funding if they are to have any chance at all of surviving.
The member for Malpeque, in question period, questioned the Minister of Agriculture and got a non-answer. His asked why there was no emergency funding for spring planting and why there was nothing right now for producers threatened with going under if they did not get money right away, and he received a non-answer from the minister.
Until the government comes forward and explains clearly why my colleague is wrong, we have to conclude that it does not care. There is not a penny for Canada's farmers now at their moment of crisis.
Mr. Ed Fast: Thirteen years.
Hon. John McCallum: Thirteen years is right. Thirteen years is the time it took to get rid of that Conservative deficit of $42 billion and to create the conditions for a booming Canadian economy. I am proud to have been a part of those 13 years.
Our only concern is that on the other side, they are going to mess it all up with this attitude of not wanting to pay down debt, going too close to the edge and going back to a deficit. That is the problem.
Let us go on again about Canadians or regions that are not necessarily the richest. What I would say, having travelled extensively in Atlantic Canada and northern Ontario, that I have a keen appreciation of the central role of regional development agencies in creating jobs and stemming the outflow of people to the more populated parts of the country.
Why was there no mention of regional development agencies in the budget? Do they no longer fit into Conservative Ottawa, which wants to solve everything with a tax break? Or, is it the case, as with aboriginal people and farmers, that the government just does not care?
Why is it cutting funding to forestry, which is so critical to those regions of the country? Why, in a typical case of indifference to the plight of the less privileged, is it totally ignoring the fishing industry in which older workers are in a state of transition?
The answer, as usual, is that it is a government and a political party that does not care. It has no compassion for Canadians in need.
Another relatively underprivileged part of the country is the north. We see another broken promise with no mention of the northern development plan. Why the decimation of aboriginal funding, which will be especially damaging to the north?
That gives a pretty clear idea of the general attitude of the government, which is callous toward the least privileged members of our society
Let me now spend a little more time on three particular areas of concern, beginning with the environment.
Mr. Myron Thompson: Please don't. Give us a break.
Hon. John McCallum: I would like to address a particularly major shortfall of this shortsighted budget. The member opposite should pay attention because this is a very important area.
An hon. member: All the while, roses are dying.
Hon. John McCallum: On this side of the House, we know that the fight to save our planet is one we cannot afford to lose. As my colleague suggests, we have to preserve those wild roses for future generations.
This is a war that claims as its casualties our air, our water and our wildlife. It is affecting our children and it will damage generations yet to come. It is a battle that needs all nations to unite and fight as one, but if what is in this budget is any indication, the Conservative government seems intent on denying this reality.
The Conservatives are not taking into account the very real risk of climate change, besides being determined to nullify the efforts made by the previous Liberal government to halt this destructive process. Thus they have discreetly axed environmental programs, and they have been silent, contradictory, indeed sometimes incoherent about their plans for our environment.
Through denial and inaction, the government is cutting short our country's future and jeopardizing worldwide efforts to reverse the damage that has already been done. The Conservative government plans to kill programs that would help Canada to meet its Kyoto commitments. It intends to use the savings to fund a $2 billion transit tax credit. This tax credit will cost over $2,000 per tonne of greenhouse gas reduced. This is incredibly inefficient. For a government that prides itself on efficiency, here is a number that is between 10 and 100 times more ineffective than the Liberal plan. Ninety-five per cent of the money going to the transit pass will go to people who use the system anyway. What is the point?
What the government refuses to acknowledge is that a tax credit is not an environmental program. It will not do anything to address the urgency of climate change.
Meanwhile, I used to be minister for NRCan and, in response to high energy prices, we established a super program through EnerGuide that provided funding to low income Canadians and to other Canadians to help them improve the energy efficiency of their heating, and it worked. EnerGuide has been a proven success over many years.
Energy efficiency improvements are good for the environment because there is less pollution, and they are good for the pocketbook because it costs us less to heat our houses. It was a great program but the government simply cut it. It does not make sense when it says that it was ineffective because having been there I know it was highly effective.
Since 1997, the Liberals funded programs that have helped us better understand the challenges and risks of climate change, promote green technologies and innovations, develop policy options that allow us to address the climate change crisis and take every action possible to reduce greenhouse gas emissions. We have worked to move Canada toward a clean energy future and increase the efficiency, sustainability and international competitiveness of the Canadian economy.
I am particularly proud, as a Canadian, of Canada's global leadership role played at the Kyoto conference in Montreal in December 2005 by our former minister of the environment. He really led the world to develop the next stage.
Also, as a Canadian I must say that I am particularly dismayed by the role of our new environment minister who, as president of this same conference, will check in and then check out pretty fast. What an abdication of responsibility and what a loss of a great opportunity to show leadership on this global project that is so important to Canada and to the world.
Canada must continue to play an influential role. We cannot relent in our determination or in the efforts we should make to reduce greenhouse gas emissions both in Canada and in the rest of the world.
I urge the Conservative government to rise above petty politics and adopt specific measures for the environment.
I turn now to Canada's aboriginal people, to what is in the budget for them, or more accurately, what is not. The Conservative government jettisoned the Liberal government's Kelowna accord, an agreement by both levels of government committing $5 billion to improve aboriginal housing, health and economic development.
While the commitments the Conservatives have made, including national water standards for first nation reserves and native-run school boards, will no doubt be beneficial to our country's first nations, Inuit and Métis people, they are little more than a distraction from the larger issue at hand.
The programs outlined in this budget were laid out in the Kelowna accord. What the budget lacks is any new funding at all for aboriginal Canadians.
Kelowna was the result of first nations, Métis and Inuit leaders joining with premiers, territorial leaders and the federal government, for the first time in history, to forge a comprehensive plan, with measurable targets to ensure accountability, that will address the urgent problems facing aboriginal communities.
On this side of the House, we believe the commitments made in Kelowna are essential in order to bridge the gap in living standards between aboriginal and non-aboriginal Canadians. However, with this new budget, it is clearer than ever that what we achieved in Kelowna is in danger. The Conservative government has abandoned the plans laid out in the accord for the sake of ideology.
The Conservatives' lack of commitment to what was achieved in Kelowna is no secret. During the last election, the former Conservative finance critic, now the immigration minister, publicly stated:
|| [The] Kelowna agreement is something that [they] crafted at the last moment on the back of a napkin on the eve of an election. We're not going to honour that. We will have our own plan that will help natives a lot more than the Liberals'.
It is disappointing but not surprising, I would say, to see this lack of commitment reflected in the Conservative budget. Where is the plan that was promised by the former finance critic? Is this budget a signal of what is to come? Is it the first step in the Conservatives' plan to abandon the Government of Canada's commitment to aboriginal people? Is this their strategy to gradually undermine the Kelowna accord?
Kelowna is the product of more than two years of hard work by native leaders and the federal and provincial governments. Together we managed to reach a historic agreement to overcome the economic divide that will still exist in 10 years between aboriginals and their fellow citizens in the areas of education, health, housing and economic opportunities.
I cannot see how a government of any kind could withdraw in all conscience from such an agreement. Aboriginal Canadians deserve at least that. They deserve all the funds they were promised at the first ministers’ meeting in Kelowna, and not just crumbs. Only a detailed plan will enable us to make real changes to the quality of life of aboriginals and help them move from poverty to prosperity.
It is simply unacceptable to cherry-pick from the Kelowna accord without even having the decency of consulting the aboriginal leaders. In the Liberal Party, we are committed to working together with first nations, Métis and Inuit leaders. Despite the poor showing in this budget, we will continue to strongly encourage the Prime Minister to do the same. It is not enough to just pay lip service. Canada's aboriginal peoples deserve a government that can achieve real progress.
Throughout the past few months, the Conservatives have been trying to create a phony war between their government and the opposition on the subject of child care. The Prime Minister and his ministers have tried to frame the child care debate as a matter of choice. In a way, they are right, but it is not a choice between the Liberal child care program and the Conservative child care program. It is a choice between an existing national public system of early learning and child care--
Mr. Gerald Keddy: There is no existing system. What are you talking about?
Mr. Merv Tweed: It's a figment of your imagination.
Hon. John McCallum: --and no federally funded national child care system at all.
An hon. member: There are agreements signed with every province in this country.
Hon. John McCallum: Mr. Speaker, $1,200 is not bad to put in people's pockets. It is like the baby bonus. But it is not child care and it is not early learning. I think that is one of the main confusions over there.
What the Conservatives do not seem to understand, including those members I hear from over there, is that the vast majority of Canadian parents need to work. The simple fact is that child care is not a matter of choice for most Canadians. It is a necessity.
Let me make one thing clear. Again, I have to go slowly for the benefit of the members opposite. The Liberal Party has always believed in income support for Canadian families. In fact, we pioneered the concept. Our party established both the national child benefit and the Canada child tax benefit, which just last month alone provided $800 million to 2.9 million Canadian families.
We are pleased to see more income support for families included in the budget. I said that at the beginning: we do not object to the $1,200. We are pleased to see more income support, but a cash payout to parents is not a child care plan. It does not address the child care space deficit across the country.
The provinces, parents' groups, women's groups and advocacy groups representing the poor have all opposed this government's plan to dismantle the national child care agreement signed by the provinces. Nevertheless, the government ignored that opposition and forged ahead with its plan to kill the national child care system in favour of its taxable $1,200 a year child care plan.
Parents need viable, affordable solutions to the child care dilemma, not a small payout that is subject to taxes and clawbacks. The problem with the Conservative child care allowance is that it will not make child care more affordable. It will not create any new spaces. It will not increase accessibility for children with special needs. In short, it will leave parents to fend for themselves.
Furthermore, in order to pay for this plan, which will provide lower income parents with a paltry $20 a week for child care, the government will cut the young child supplement under the Canada child tax benefit. This monthly tax-free income supplement is targeted to those who need it most. Under the Conservative plan it will be killed, yet another example of the reverse Robin Hood behaviour so typical on that side of the House.
This supplement currently pays $20.25 a month to parents who do not claim child care expenses for their preschool age children. Now we learn that it will be eliminated at the same time the child care payout takes effect. The benefit was due to increase in July to $249 annually.
Families with modest or average incomes will benefit the least, after taxes, from the child care allowance. By eliminating this supplement, the Conservatives are making things worse because they are going to widen the gulf between poor families and rich families. There is every reason to think that the Conservatives’ child care allowance will ultimately be nothing but a mirage. They cannot help parents in need by taking with one hand what they give with the other.
Our party enabled the Conservative government to inherit the best financial situation of any country in the G-7. There is nothing to prevent the Prime Minister from honouring the day care agreements we concluded with the provinces and, at the same time, financing his child care allowance.
With this budget, the Conservatives are showing once again that they are completely out of touch with, or simply do not care about, the needs of the majority of Canadian families. With this budget, the Conservatives are proving once again that their priorities lie with protecting the wealthy and neglecting the underprivileged.
I would like to remind the Prime Minister that standing up for Canada means standing up for all Canadians, not just those in the highest income bracket.
That is why the conduct of the Bloc Québécois is so shameful. By forming an unnatural alliance with the most right-wing government in the country’s history, the Bloc members are betraying the values and convictions of the vast majority of Quebeckers.
Quebeckers want a healthful environment. Quebeckers want to help the most disadvantaged in society and not just pass them by. Quebeckers want a good preschool education and day care system. Quebeckers also believe that the fiscal imbalance must be resolved.
For purely partisan reasons, though, the Bloc Québécois has allied itself with the Conservatives, this party of extreme neo-conservatism, even though the budget does not provide one cent to resolve the fiscal imbalance.
As for the NDP, that is a party that sacrificed child care. It is a party that sacrificed the Kelowna Accord and the environment for the sake of 10 additional seats in the House of Commons. That party is an accomplice in this budget. NDP members have reaped what they have sewn and their cynical opportunism has left the Liberal Party as the only legitimate voice for progressive voters.
We had 13 years of cleaning up their mess, 13 years of fantastic economic growth. The only fear we have is they will mess it up.
Several times I have stressed the triumph of the Prime Minister's political expediency over what is good for the nation in his disdain for debt paydown, his decision to cut GST rather than the income tax, his opting for a transit pass that does nothing for the environment and even his preference for small, targeted tax credit over broader tax relief.
Why are young hockey players more deserving of taxpayer support than young violinists? Is this a paternalistic government, a “government knows best” government that wants to socially engineer Canadians in the direction of its own recreational and educational preferences? Social engineers over there encourage the hockey players but not the violinists. I do not know why. Why does one deserve help and the other does not?
However, my basic point is that the Prime Minister's political expediency will not work. At the end of the day, his cynical riding-by-riding calculations of where to put the tax credits to get the most votes will fall flat. On this side of the House, we have greater faith in Canadians. We believe Canadians will see through these rather crude vote buying schemes. Canadians will vote against a government that desecrates the environment. They will vote against a government and its accomplice over there that cancels child care, a government that shafts aboriginal people and applies its reverse Robin Hood mentality to take from the vulnerable to accommodate the well-to-do.
Canadians care about a strong economy founded on balanced books and prudent fiscal management. They do not appreciate governments like that one, which is in the process of playing fast and loose with the nation's finances. Canadians understand that if our country is to thrive and prosper in a highly competitive world, we need to take big steps to go to the next level, not the small and cynical steps proposed by the Prime Minister and his followers. Ultimately and before too long, the Prime Minister's expediency will fail. Let us hope it is not so long that his short-sighted policies have time to bear their poisoned fruit and impose lasting pain on Canadians and the Canadian economy.
I end with a few words about politics and honesty, and then I have to present the amendment.
Yesterday I was amazed to discover that a blatant error contained in the budget provoked so little comment or reaction from the public. Yes, it is true. The media corrected this error and referred to an income tax increase, not a decrease. The fact is, such an obviously self-serving error appearing on page 1 of the budget speech in and of itself provoked little comment.
On reflection, maybe this is because Canadians have come to believe that it is normal for politicians to behave in a way that in most other occupations would be seen as flagrantly dishonest. If so, maybe that is why we, as a group of politicians, all of us in this room, fair so poorly in public esteem. To me this is most unfortunate not only at the personal level as a politician myself, but also because the distrust of politicians by the citizens of Canada can hardly auger well for a strong democratic process.
Therefore, I would end with a simple and serious request of the Minister of Finance. For the sake of the public esteem of politicians, for all of us in this chamber, for the sake of our reputation for honesty and for democracy in Canada will he simply come clean and tell the truth to Canadians so we can honestly debate the merits of his budget?
I move, seconded by the hon. member for West Vancouver—Sunshine Coast—Sea to Sky Country:
|| That the motion be amended by deleting all the words after the word “That” and substituting the following:
||“this House condemns the government for a budget which
||abandons any federal leadership role in the development of social policy;
||ignores the Kyoto Protocol and the battle against climate change;
||destroys federal-provincial agreements which were creating high quality, universal, affordable and developmental child care spaces;
||walks away from the Kelowna Accord with Canada’s aboriginal people and all provinces and territories;
|| fails to deal with student access to post secondary education, including the high cost of tuition, or to provide adequate support for science and technology;
||raises the income tax rate for all Canadian taxpayers; and
||eliminates the policies of fiscal responsibility which have fostered Canada’s robust economy for over a decade.”
Before getting to the heart of the matter, I would like to address a remark to my Liberal colleague who spoke before me.
I think that the Liberal Party members as a group should look to their reputation. They are not credible when they talk about the common good or when they talk about using public funds properly, particularly with the sponsorship scandal in the background. They are not credible when they talk about the welfare of the regions, because they devastated the regions, particularly with the employment insurance cuts, the theft of the surplus in the employment insurance fund. They left the fishers out in the cold, just as they did the farmers.
So it seems to me that they should be a little less arrogant, and a little less cynical too, and hold their peace for quite some time. I think that this would be a good thing for everyone.
An hon. member: Modesty.
Mr. Yvan Loubier: That being said, my message is now addressed to the Conservatives.
During question period, I heard the Prime Minister say: “I am pleased to have the Bloc Québécois' support in our efforts to improve the Canadian federation”. The thought came to me that I hoped that the Conservatives would not become as arrogant as the Liberals were after 13 years in power, particularly not after only a few months in government.
The Conservatives must know that we would have rejected this budget had it not been for their formal commitment to solving the fiscal imbalance, with a specific timetable for a meeting of first ministers to discuss it and find solutions, and a specific timetable for the solution, that is, the next budget, in the spring of 2007.
We would have voted against it, with all the consequences that might have involved, but we would have voted against it.
Were it not for there being a solution to the fiscal imbalance, this budget, with a few exceptions, to which I will come back at the end, is unbelievably flawed in terms of the decisions the Conservatives should have made regarding the problems we have been working on for years. Decisions should have been made that could have had an even more positive effect on the welfare of the citizens of Quebec and the rest of Canada. Those decisions were not made, and I will take the next few minutes of my time to talk about them.
I suggest that the Conservatives put that in their pipe and not start being arrogant with us, because they will find us on their heels on every issue I am going to name. We will be in their face whenever they present bills dealing with matters that are fundamental for the citizens of Quebec. We will work relentlessly to achieve progress on these issues, and to win.
If they think they have found allies, they should know that we are temporary allies and that we are giving them the benefit of the doubt on the fiscal imbalance, one of the most important issues of concern to Quebec and one of the top priorities. They have been warned.
For the rest, and until then, we will be watching them closely. We will be on their heels. We will oppose their decisions when they do not reflect Quebec’s difference and our deeply held convictions.
I assure you that they will find us everywhere they go, and in particular to make sure that they reform employment insurance, the big thing left out of this budget. Have we not been talking about this for long enough? The Liberals sabotaged the employment insurance scheme.
We have at times worked with the Conservatives, who seemed to agree with some of our proposals for reform. Now that they are in power, they have nothing to say and they are not talking about employment insurance any more. Today, 60% of unemployed men and women are still excluded from the employment insurance scheme.
If we look to the budget tabled yesterday, the theft of the employment insurance surplus is still being perpetuated. This has got to stop.
The Conservatives are no longer talking about an independent employment insurance fund. And yet they made a commitment to create such a fund. The Bloc Québécois will continue to fight for justice for unemployed workers, so that the 60% who are excluded are covered properly and with dignity by the employment insurance plan and the systematic looting of the EI fund surplus stops.
As for the POWA, the Program for Older Worker Adjustment, it is not difficult to understand. I have an invitation from the Prime Minister. I met with the Minister of Finance several times to explain the priorities of the Bloc Québécois: employment insurance, followed by the POWA. An assistance program for older workers is not difficult to understand: there are older workers who have been victims of mass layoffs, especially in single-industry regions.
We are talking about regions where there is one dominant industry.
As soon as things go wrong on the international scene, for example, because the Canadian dollar is too strong and we have to reduce our exports to the United States or elsewhere, there are mass layoffs and even plant and company closures.
For older workers, retraining and job re-entry programs do not work. Ninety-five percent of workers over 55 years of age are not eligible for retraining and job re-entry measures. Why? Because when you work in a single-industry region, if the company closes, workers cannot be hired by another employer because there are no other employers.
As well, some employers will not hire workers who are going to work for only another five or six years before they retire. They will invest in younger workers, who will stay with the company for 25, 30 or 35 years, as the older workers who were dismissed en masse did before them.
In the regions, often couples have worked for the same company for 30 or 35 years. They have little education and have accumulated some assets over the years, such as a house and an RRSP.
Ten years or less from retirement, having run out of employment insurance benefits, these people are required to liquidate everything—house, RRSPs, etc. They end up going on welfare before they are entitled to their pension. What a terrible and tragic end. It is not hard to understand. I explained all this three times to the Minister of Finance, the Minister of Transport and the Deputy Prime Minister. I think it is easy to understand.
The human resources development committee worked very hard on this in order to develop a new aid program for older workers. This program existed until 1997 when it was abolished by the unfeeling Liberal government.
Since then, there has been nothing and we have been fighting to reinstate an aid program for older workers. This program is highly important, especially in a context of globalization. There is no mention of it except in the minister's speech when he says a feasibility study will be done. The word “feasibility” suggests looking at what it will cost to implement such a program. This is encouraging. At least the government recognizes the need to implement such a program and is looking into the cost.
We have had enough of feasibility studies. This program costs roughly $100 million a year. When it was abolished in 1997 it cost $17 million a year for all of Canada. It cannot cost $2 billion today. There is nothing on this in the budget. We wanted to have this immediately.
In terms of the allowance of $1,200 per child under six—my colleague from Trois-Rivières will say more about this—why could this amount not have been a refundable tax credit? This would have the same effect except that it would target low and middle income families. They would not have to pay a dime in taxes on this $1,200.
Yesterday, the Minister of Finance proudly announced that they would protect the national child benefit, that it would not be touched, even with the $1,200 per child under six. Yes, but what about federal tax? Federal tax will still be charged on that amount.
Our advice to parents receiving this $1,200, or $2,400 if they have two children under six, is to put the money aside to pay their taxes at the end of the year to avoid any surprises. This government did not agree to convert this $1,200 annual cash payment into a refundable tax credit, which would have avoided all these problems.
With regard to the Kyoto protocol, it seems to me that for quite a long time, while the Conservatives were in opposition, they criticized the establishment by the Liberal minister of the program for achieving the Kyoto targets. They said there was another alternative. They could have immediately put that alternative on the table, instead of driving everyone wild by shelving the $2 billion provided for in the previous plan, with no indication as to how it will be used.
The Conservatives will find themselves obliged to deal with the issue of Kyoto. If there is one issue apart from employment insurance and the POWA that deserves all of our energy, it is surely Kyoto, because we are in favour of protecting the environment. The Bloc Québécois, including my colleague from Rosemont—La Petite-Patrie, would even like to go beyond Kyoto. If the Conservatives think it will be easy, if they think they have bought us because of a commitment on the fiscal imbalance in the budget, they are mistaken. They have not bought us. They will have to deal with us as they move ahead. What is more, we are not for sale.
As for the manufacturing sector, we know that the Conservative philosophy dates back to the end of the last century, even the 19th century.
At that time, it was said that the market could solve everything, the market could regulate everything, nothing was necessary. It was said that we had to achieve balance between supply and demand, and then the labour market would organize itself.
That is not how it works these days. Draconian measures are necessary in the sectors threatened by globalization and by the emerging nations, sectors such as textiles, furniture and apparel. Now there is agri-food as well, for Brazil and Chile are entering the traditional markets, especially with the Canadian dollar above 90 cents.
We have to help these sectors survive. We were successful at this in the mid-1980s thanks to the free trade agreement with the United States. There were restructuring measures. In so-called soft sectors, such as furniture for example, certain companies did very well. They modernized their equipment and boosted their productivity. They are able to pull through. But it is not the market that is going to do it.
We cannot compete with countries on an uneven playing field, such as China for example, which does not have a market economy. It has a controlled economy where you can play with prices as you wish, and so push down the competition. Once the competitors are down and out, you take their market. That is not fair competition. The government has to assume its responsibilities in this area.
There is also the whole arts and culture sector. The cultural community had high hopes. My colleague, the critic on heritage issues, will address this more specifically later. Those hopes have been dashed. Instead of the $150 million increase for the Canada Council, this budget is content to invest an additional $50 million over two years in the Canada Council.
To my mind, an effort could have been made. I cannot believe that there is not one Conservative who has not gone to the theatre, who has not seen shows, who does not visit art galleries and who does not encourage artists. I cannot imagine that Conservatives are all calculators. They must consider culture to be important. It is one aspect of peoples' vitality, the peoples of Quebec and Canada, naturally. I cannot understand that greater priority was not given to the arts and culture.
Let us talk now about the Canadian securities commission. What a crazy and detestable idea. Since I have been here, since 1993, they have been trying to pull the wool over our eyes. They say a supranational body is needed to ensure the requirements for securities commissions are standardized and to encourage investors. Really. For 10 years, the securities commissions, including Quebec's Autorité des marchés financiers, have harmonized their practices. And they continue to do so. There is no need for a big league player to oversee everyone.
The fact of the matter is that a Canadian securities commission would totally ignore the jurisdictions of the provinces and Quebec in this matter and support Bay Street. Its head office would be in Toronto. Toronto would be on the investors' circuit. Everything would go through Toronto. Instead of individual traits reflecting the particularities of each of the provinces and Quebec, there would be one standard. They want the rules to be the same everywhere, just so it can all be centralized in Toronto.
We will fight, as we have since 1993, to prevent the creation of this Canadian securities commission. They cannot say, as the Prime Minister and the Minister of Finance are saying, that they will respect the jurisdictions of the provinces, and dare at the same time to propose a securities commission like that in opposition to Quebec. It will not fly.
This is why we asked the Prime Minister the question. If Quebec were the only one to oppose it, would the government still establish a Canadian securities commission? The government has given us evasive responses. Nevertheless, we know that if this were this case, nothing would change. Everything would happen in Toronto. Eventually, the Autorité des marchés financiers would gradually lose its power in an area of provincial jurisdiction.
I have said it before and I will say it again: if it were not for the Conservatives' pledge to correct the fiscal imbalance, we would have voted against them. We will be keeping an eye on the government and every move it makes between now and the first ministers' conference this fall. We will be keeping an eye on it as it puts together its next budget. Given all the negative effects of this budget, we are not their allies.
That said, in terms of that commitment, this side of the House, the Bloc Québécois, cannot demand—and employment insurance will be our first target—that the government move forward, make commitments, find solutions to this problem, develop a process and a set a deadline, and then say that we will bring them down anyway.That would be ridiculous. We are not electioneering.
Some members of this House are electioneering: the Liberals and the NDP. What did they do when they found out there was something on the fiscal imbalance? From the start, the Liberals were against correcting the fiscal imbalance, so they opposed the budget. The NDP, which is closer to the centre than any other party in the House, also opposes our suggestions for correcting the fiscal imbalance, which is by transferring tax fields and reforming equalization. The New Democrats' attitude toward the Conservatives' budget is natural, opportunistic, and entirely to be expected.
The budget sets out other positive measures that the Bloc Québécois has supported for years. We are pleased that the Conservatives have paid attention. It does not make up for all of the gaps and problems I mentioned, but it is a band-aid solution until the next budget. We think of it as a transition budget.
The budget provides $1 billion for post-secondary education. We had asked the government to take immediate, concrete action in this area, given that this sector was suffering from the drastic cuts made by the previous government, the so-called government of the common good. The budget now provides $1 billion for post-secondary education. We can applaud this measure.
The budget also allocates $1.5 billion to help farmers. This is also good news. These investments must be continued, however, for years to come. Until subsidies are restored, as long as the Americans and Europeans offer their farmers higher subsidies, we will not be able to compete with them on equal terms. This cannot be a band-aid solution; we need to maintain assistance until the question of agricultural subsidies on an international scale is resolved. This is, however, a good starting point.
The budget also provides $800 million for social housing. We called for a first step, an initial investment, which we see here.
As for public transit, on three separate occasions, the Bloc Québécois tabled a bill aimed at creating a tax credit to promote the use of public transit. My colleague from Longueuil—Pierre-Boucher tabled another one last week. We are pleased that the government understood the message being sent concerning public transit. This represents another battle led by the Bloc.
Action has also been taken in the budget on longstanding demands such as exempting scholarships. It was not right, in fact it was completely ridiculous that a student who received a scholarship from the Government of Quebec or Ontario would pay federal tax on it. It was absolutely ridiculous. These scholarships are no longer taxed. We fought for this for seven years.
With regard to microbreweries and the excise tax, we have also won after battling for five and one half years. Our microbreweries create hundreds of jobs in the regions. They can now compete favourably with their American and European competitors.
I repeat, no measures are planned for the following: employment insurance, POWA, changing the $1,200 allowance to a tax credit, the Kyoto protocol, arts and culture, the weakened manufacturing sector and the Canadian securities commission. I can assure the House that the Bloc Québécois will fight with all the energy for which it is known.The Bloc will oppose the government if it goes against the interests of Quebec in these matters. We will propose solutions for each one of them. We will convince the other opposition parties and the government. The Bloc Québécois' action and zeal will not stop at this budget. We will be on the heels of the Conservatives until the next budget.
Mr. Speaker, I am very happy to participate in this debate on the very first budget of the Conservatives and to indicate why we are so adamantly opposed to it.
I want to begin by making a further comment on the difficulties I have with the position taken by the Bloc. The Bloc critic is wrong when he suggests that the NDP is opposing the budget because of either opposition to the fiscal imbalance or because of political opportunism. He will know he is wrong in both instances when it comes to the NDP.
He will know that throughout the time we have spent together on the finance committee, the NDP has been in the forefront of discussions around addressing the fiscal imbalance, calling on the Liberals to recognize it. Although it might be hard in the middle of debate, given their position to support the Conservatives, which comes as a surprise to all of us and for which we cannot determine solid reasons, he will at least understand that the very issues he raises as reasons for the Bloc supporting the Conservatives are all those items which are part of Bill C-48, the NDP's better balanced budget, for which the Bloc was in complete opposition.
When the Bloc stands up and congratulates the government on $1 billion for education money and for enhancing the infrastructure at our post-secondary educational institutional level, he and his colleagues obviously forget that the money is there only because the NDP negotiated it in the last minority Parliament, having convinced the Liberals that it was better to invest in those areas that mattered to Canadians than to completely squander their fiscal surplus and capacity.
When the member of the Bloc raises support for the Conservative budget because of the $300 million for foreign assistance, he ought to remember that is only there because of the NDP's better balanced budget in Bill C-48.
I want to applaud the Conservatives on this front because they have recognized the importance of respecting the will of the House. They have acknowledged that Parliament passed a budget last year, which called for the expenditure of $4.6 billion over two years for education, housing, aboriginal affairs, the environment and foreign affairs. Those are all areas that are important to Canadians.
We waited a long time for the Liberals to move on the implementation of that bill and that money. They failed to do so. They dilly-dallied and delayed as long as they could and finally went down to defeat and no longer had the opportunity to do so. Thank heavens, after considerable lobbying on the part of the NDP, the Conservatives did listen and agreed to flow the money, at least close to $4 billion of that $4.6 billion, knowing they had a huge cushion on which to draw, a tremendous surplus that made it quite easy for them to pay down that debt and to honour that commitment. We are grateful this money is flowing.
Canadians will see the benefit of having a strong New Democratic force in Parliament. They also will see the benefit of having a minority Parliament and how we can make it work for the betterment of all Canadians.
When it comes to the budget and our opposition to the Conservative plan, we are opposed because it is not a plan. It has no vision. It is government by tax credits, and government by tax credits does not a country make. It is the scattering of tax credits to the detriment of a coherent vision that is forward looking. That is the very purpose of a budget. It is to present a blueprint to Canadians to help us sort through where we go in the future, to know that some of those economic barriers that Canadians now face in terms of their ability to contribute to their fullest are addressed on a number of fronts. A budget is intended to address those obstacles, those barriers and to ensure that everyone in the country, regardless of sex, race and ability, is able to contribute to his or her fullest ability.
The budget fails to recognize that fundamental principle. It fails to accept people as individuals. It fails to ensure that it is gender neutral in its approach and does not present a bias or an ideological bent in its configurations. Nowhere is that more apparent than when it comes to the issue of child care.
I do not perhaps have to repeat the fact that we are only here because we have had 13 years of Liberal government that promised child care and never delivered, as my colleagues have pointed out, not one space in that entire period for child care. If they had at least delivered one space per year, we would have had 13 child care spaces, and that would have been at least better than what we have. Unfortunately, we have zero from the Liberals. They can stop the hot air in this chamber and their bragging. They had these agreements at the eleventh hour in a minority Parliament.
With pressure from the NDP, they finally decided to keep a promise and put in place a child care program by signing three deals with three provinces and beginning some discussions with some others, hardly making a dent in the formidable task of establishing a national child care program. Yet now they are ready to claim victory if only they had been given another month in the House.
They might want to remember that it was their former leader who told the House and Canadians that he would have an election by the end of February. What difference did a month make in how Canadians would decide on the future of the Liberals? Canadians defeated the Liberals, not the NDP. Canadians had it with their irresponsible lack of transparent operations, their borderline corruption practices and their broken promises.
Maybe I should not be so gentle and talk about borderline. Other people in the House are quite willing to talk openly about the corruption that appears to have been the case among Liberals, but I do not want to go there. All I need to do is focus on broken promises, which leads us to this point today of having still a serious problem and another government that refuses to recognize the problem of the day.
The government has not given us a child care program. It has given us an allowance that gives a few dollars to parents who have children under the age of six. As all the newspapers have reported and as all the documentaries have suggested, this will benefit women who stay at home. I wish I could say women or men, but I think the truth of the matter is the government is using a public policy to pursue a particular ideological perspective. I would not go so far as to suggest Conservatives would like to see all women barefoot, pregnant in the kitchen, however, let me point out--
Some hon. members: Oh, oh!
Ms. Judy Wasylycia-Leis: My goodness, I guess I have struck a raw nerve.
Perhaps I could go on and describe for the members the difficulties inherent in their policies from the point of view of working women. They might not recognize that 70% of women in the workforce today have preschool children. I would hope it might get through to the Conservatives so they could understand that when this is the reality and when they have a policy that does not address the needs of those families and working women by ensuring good quality care, instead giving a few pennies to help parents juggle working family responsibilities, clearly they have ignored the reality of women in our society today.
Perhaps I only need to point out to them the numerous headlines that suggest the birth rate is at 0%. The birth rate is not growing because it is very hard for families to juggle their responsibilities without any decent support by government. Decent support means quality child care. Decent support means places where people can take their children when they are working, places that are safe and regulated, where there is professional staff, places that are non-profit so no one can make money off the backs of kids.
What we have is a policy that is slanted against working women. The Conservatives today are where the Liberals were 20 years ago when members in this House stood and said, “Working women are a social phenomenon”, or, “We only have to worry about men who are employed between the ages of 18 and 40, because after all they are the primary workers”. Never mind the contribution that women make. Never mind the fact that because of the policies of consecutive Conservative and Liberal governments, families cannot possibly manage to make ends meet without two people in the family working. Those members should get that through their heads because that is what we are dealing with today. We are dealing with a situation where women want to work or have to work, and our policies should ensure that their children are able to go to the best quality child care spaces available.
Some hon. members: Oh, oh!
Ms. Judy Wasylycia-Leis: Mr. Speaker, I think that the Conservatives and the Liberals should stop and listen just for a moment. I did not heckle during their speeches. If I struck a raw nerve, maybe that will cause them to listen a bit more, because this is a serious problem. There are one million children today in unregulated child care spaces.
I ask, which member in this House is prepared to place his or her child in an unregulated child care space without knowing whether the child care professionals have been trained appropriately, without knowing that there are certain safety standards, without ensuring the best quality care? I did not do it. I would not do it. I do not think anyone else in this House would do it.
It is time the Conservatives recognized that we have to invest in child care spaces. They did not do that in this budget. What did they do? They gave some money for a child care allowance, for a baby allowance. That is fine. I am not quarrelling with that. They could have done both. They could have ensured families had an allowance and they could have put money into child care spaces. They had two choices.
The Conservatives could have taken it away from the $7 billion that went to corporate tax breaks, despite the fact that we have the highest profits ever in our corporate sector, and despite the fact that we have shifted the burden away from individuals in terms of paying taxes to corporations. That would be one choice. I think that is reasonable. Let us give to families for a change, ordinary Canadians, working women, children. Why do we have to squander our future by neglecting our children on the backs of corporate profits? Why does the government insist on sacrificing our children because it is so shortsighted and so close-minded about the fact that working women are here to stay?
There is a second option that the Conservatives had. If they had wanted to keep their corporate tax cuts, fine. Canadians disagree. We disagree. But if they are that focused on that, then so be it. But they had another choice. They decided to put $5 billion in additional money beyond the norm against the debt because of their incredible surplus they had going into this budget process.
If we look at the books, $8 billion went against the debt. That is $5 billion more than the normal $3 billion in prudence and contingency funds. Five billion dollars more to bring down the debt from $494 billion to $486 billion, which means we are not paying off the debt hardly one second sooner than if we did not do that.
That $5 billion would have created one million child care spaces, one million spaces to ensure that children are properly cared for in a nurturing environment, so that women can work and feel confident that their children are cared for and people can feel that they are doing their best as parents. They are not listening to this nonsense from the Conservatives that somehow women are bad mothers if they put their children in child care. That is the essence of what the Conservatives are saying. There is so much more we need to be saying. That was the first point I wanted to make.
The second point has to do with the failure by the Conservatives to keep their commitment to Canadians in terms of their election platform. We hear them boast and brag a lot about their five priorities, five issues that they want to accomplish. Interestingly enough, there is one that is hardly mentioned at all in the budget, yet it is the most important issue facing Canadians. It causes the most grief and agony. It is the most difficult matter in real, personal, human terms and that is the quality of our health care system and the length of the waiting lists.
The Conservatives clearly promised a reduction in wait times. It was a big to-do, a big fanfare in the last election. They said, “This budget will accomplish all five of those priorities, including the reduction in wait times”. What have we got in the budget on health care? There are some words about the government working on it with the provinces. The Conservatives will enforce the money that the Liberals put in, even though that was not working and the Conservatives were the first to criticize it. They were the first to jump all over the Liberals for suggesting the money was not going to where it should in terms of reduced wait times.
There is nothing else. There is not one penny toward the hiring of more nurses, even though there is a looming shortage of 78,000 in this country, or soon to be. There is not a penny in terms of developing primary health care to take the burden off the institutional expensive side of the system. There is not a mention of alternative remedies and natural herbal medicines. There is not a mention of anything in terms of building a health care system where people do not have to wait for agonizing weeks and months and years to get the help they need.
There is so much more to be said. I want to talk about the absolute betrayal of aboriginal people in this country. I want to talk about the impact on my own constituency of Winnipeg North where the average individual income is $21,000. People will not benefit from the GST cut. Really, just as the newspaper said, the rich benefit the most. People in my constituency will be hurt and will not benefit from the budget.
We believe there has to be investment in very serious areas that affect working families. Therefore, Mr. Speaker, I move:
|| That the amendment be amended by adding the following after “for over a decade”:
|| And that this House further condemns the government for the continuation of the last government's obsession with corporate tax reductions as opposed to spending to help working families, specifically condemning the higher priority given to physical infrastructure while ignoring direct financial assistance for students at our post-secondary institutions, the lack of spending to reform our inadequate employment insurance system, and the ongoing lack of commitment to create not for profit child care spaces with multi-year funding.
Mr. Speaker, it is a pleasure for me to rise to speak to budget 2006. As we have just seen in this House, this is a budget that is generating a lot of excitement and it is good to speak to it. This is the first budget from the Conservative government and one that we are very proud of.
The Government of Canada spends a great deal of Canadians' money. In fact, this budget will spend $188 billion, taxed from the pockets of working Canadians. This is not government by tax credit. The government is spending $188 billion. This is a government that is very much engaged in programs and in areas of responsibility that assist Canadians. We do not want to be over-involved, and that is a balancing act that we are determined to win.
Of the $188 billion of spending, less than half of that is actually discretionary. It is like a family when they have money coming in the door from income. There are some things they have to spend money on whether they want to or not. They spend money on their mortgage or their rent. They have to spend money on food. They have to spend money on the necessities of life like clothing, transportation, educational costs, all the things that families have to spend money on. There is of course some area of discretion.
We went to Canadians during the last election campaign and we told them that if they chose us to run their finances, to spend their money to do the things that would administer the country on their behalf, then these were the things we were going to make a priority, and we listed our five priorities. This budget delivers on those five priorities. It is focused on the things we told Canadians we were going to do.
Why is that important? It is important because the faith and trust in political leadership has eroded. It has gone down a lot over the last few years. It is important that leaders tell people what they are going to do, and then actually follow through and keep their word. That is what this budget does.
It restores some accountability and some discipline to federal spending, and I am going to talk about that in a minute.
This budget provides tax relief for working class Canadians which is important because their tax burden has now outstripped the money that they spend on the necessities of life. That is not fair. It is not right and it is not necessary. We also reduced the national debt and are committed to balanced budgets. These are very important principles.
I would like to start with a determination to be accountable. The previous government would routinely make five year, pie in the sky promises, most of them to be delivered half a decade down the road. We think that Canadians should only have to spend money on what can be delivered today, what they know is going to happen now, and not down the road after many years. Basically, in this budget, our plans are over a two year period. We will only put in measures that are affordable and ready to be implemented.
Over the last five years, government spending has grown by an average of 8.2% annually. That is close to 10%. I ask Canadians watching this debate: How many of their incomes have grown by close to 10% per year over the last five years? The answer is none.
Last year, the party opposite, that was governing our country, actually spent an increase of 14.4% over that one year, nearly a 15% increase in spending. How many Canadians had a 15% increase in their income in order to support that level of spending by government? The answer is none. We have been much more moderate. Spending growth in this budget is 5.4% and next year it will be down to 4.1%. That is important.
We also want to ensure that when we do spend, we are not just throwing money out there to have bragging rights. We want to ensure that the spending actually buys something for Canadians. It gives real results if there is some value for money. We are re-evaluating the programs where there is spending taking place. Some of those programs get a D on this evaluation. A lot of them get an F. We are not going to continue to spend hard-working Canadians' money on programs that are not getting results for them. We are going to re-evaluate and spend money that actually gets results.
We will also be reducing Canada's debt by $3 billion a year. We are considering putting any surplus after that $3 billion in debt reduction into the Canada pension plan and the Quebec pension plan. These plans have huge unfunded liabilities. The bulk of the benefits from these plans is going to be borne by younger Canadians who are not even taxpayers yet. We want to help them all we can to be fair to them in meeting their obligations down the road.
We also will improve the financial accountability on how money is spent. We believe the Auditor General should be able to tell Canadians how their money is spent when it goes into crown corporations and into federally funded foundations. This should not be hidden as the Liberals hid it. It is Canadians' money and they have a right to know how it is spent.
This budget also recognizes that Canadians pay too much tax. The average working Canadian's burden for the necessities of life has risen about 1,000%. Let us guess how much the tax burden has risen in the same time. It is 1,600%. That is the tax they are being overtaxed.
We want to make sure there are some tax reductions to even it out, to give Canadians the right to spend their own money as much as possible, so our budget plan delivers on our commitment to cut the GST by one percentage point. That will be effective July 1. We also will benefit all Canadians with this tax cut, not just those who earn income. Every single Canadian is going to benefit from this reduction in the GST. In fact, the benefit will be close to $9 billion back into the hands of Canadians over two years, even those who do not pay any personal income tax. Although the GST rate is being cut, we are going to keep the GST credit at current levels to protect low income and modest income Canadians.
That is not all. The budget also proposes a comprehensive plan to reduce personal income taxes for all taxpayers. That means there will be a new Canada employment credit for all working Canadians. Effective July 1, the first $500 of income that a working Canadian earns will not be taxed. That will then double in 2007 to $1,000. This will help all working Canadians to keep more of their own money and to meet the costs of employment.
We will also permanently reduce the lowest personal income tax rate. Starting on July 1, it will go from 16% to 15.5%. This is the rate that applies on the first $36,400 of income. It benefits the low income earners who need this decrease in taxes the most.
The Liberals claim that this is a tax reduction they wanted to put into place, but they did not put it into place. They announced it and did some technical things to make it happen, but they never passed it into law.
This is now going to become the law of the land. The personal income tax rate on the lowest tax bracket will actually permanently be reduced from 16% to 15.5%. If the Liberals had wanted to do that, why did they not do it? They had 13 years.
We will also legislate an increase in the basic personal amount of income Canadians can earn tax free. Again, the Liberals claim they wanted to do it. They started to do it, but they never passed it into law because it did not matter enough to them to actually do it in time to pass it into law. It was a deathbed promise to try to get more votes during the election. Thankfully it failed, because now we have a government that means business about tax reduction for Canadians.
Also, we want to help the job creators of this country, the economic engines, people who engage in business and economic activity, so we are going to eliminate the federal capital tax as of January 2008. If businesses have capital needs, they should not have to pay extra tax in order to bring money into their business.
We are going to eliminate the corporate surtax starting in 2008. This was a tax the Liberals brought in that was supposed to help reduce the deficit. It was not needed in the last few years and yet the Liberals kept it on. We also are going to reduce the general corporate tax rate from 21% to 19% by 2010.
This will make us competitive with our largest trading partner. We do 85% of our business with one country and that country has a better tax regime than we do. Our businesses cannot compete. They do not have enough cash in their hands. They cannot keep enough of their own earnings in order to compete. We want to make sure we change this so that we are on a level playing field, so that we can vigorously use our talent, our innovation and our entrepreneurship in this country to succeed and to create prosperity for all Canadians.
We did not stop there. In budget 2006 we also recognized small business as the backbone of our economy, so we are going to increase the amount of small business income that is eligible for the 12% tax rate from $300,000 a year to $400,000 a year by next year. And we are going to reduce that 12% tax rate to 11.5% in 2008 and to 11% in 2009.
We want to free the economic engines of country to create good jobs for Canadians and to create prosperity for all of us.
Canadians know that with a small population our education and skills are very important in making us competitive in the global market. We know that education and skills training are key to our economic future. That is why we are going to invest significantly in training and education.
Starting immediately, there will be a new tax credit of up $2,000 for employers who hire apprentices. In January 2007, a new apprentice incentive grant will provide $1,000 a year to apprentices in the first two years of an eligible program. That is in addition to all the other tax reductions for working Canadians.
Many tradespeople have to provide their own tools in their work. We are now going to allow a deduction of up to $500 for the cost of tools.
We are going to help post-secondary students with a tax credit for the cost of textbooks. We are going to fully exempt all scholarships, bursaries and fellowship income for students.
In addition to that, we have allocated $1 billion for urgently needed investments in post-secondary educational infrastructure. In fact, the federal government spends $8 billion a year on education. As of this budget, that has been increased by $800 million more in this year.
On aboriginals, we note that under the past government aboriginals lived in the most appalling third world conditions. We are determined to change that. In this budget, we will spend $450 million to upgrade water, housing and education facilities on reserves and also to help aboriginal children. We will provide $300 million for off reserve housing and $300 million for badly needed housing in the north. We also have allocated $2.2 billion to lay to rest this terrible situation of the residential schools problem. Thus, in this budget, there is $3.2 billion allocated to aboriginal spending.
Over the next few years, and beginning now, we will be holding discussions with aboriginal leaders as to further programs that will assist aboriginals, and we will be funding those in future budgets. We do not believe in the Liberal way of having a big meeting on the eve of an election, on an electoral deathbed, allocating big bunches of money with no plan at all. We will make plans. We will put them into place. We will fund them. We will make the lives of aboriginals better in this country.
We also want to support our primary economic sectors that are facing serious challenges, both at home and abroad. That is why this budget provides $2 billion in support for the agriculture sector over two years, including an additional special $1 billion immediate investment to assist farmers.
I compliment my colleague, the Minister of Agriculture, who has been meeting for months across the country with stakeholders in this important industry, hearing their concerns and bringing together a plan to address the immediate needs and the future needs of this critically important industry.
We also commit $400 million over the next two years to the forestry sector, in addition to delivering what the Liberals could not for years, which is an end to the war on softwood lumber that was robbing our communities of income and robbing many Canadian families of jobs. We have put that to rest.
We will also invest an additional $400 million for the sector, particularly to help support worker adjustment as this new softwood lumber agreement comes into effect, to strengthen our industry's long term competitiveness, and to combat the pine beetle infestation, which was ignored by the previous government and is destroying our forests at an alarming rate. We are going to get busy and do something about that.
We have already had some discussion about our measures to help families with children. This of course is a priority for all members of this House. We have, I think, reasonable disagreements on how to go about it, but as members know, our party believes that all parents need help. We want to have universal assistance and support for every single parent and family in this country, so we have introduced, as we campaigned on, our universal child care plan. It will give $3.7 billion in funding over two years for a universal child care benefit. It will give families $100 per month for each child under the age of six to assist them in raising their children, in caring for their children, in providing for whatever care families think is most appropriate for their own family situation. It will benefit 1.5 million families and over 2 million children.
As well, we are mindful that many parents, some parents, choose full time institutional day care. We will invest $250 million a year, starting next year, with real plans to increase the number of child care spaces by 25,000 spaces each year. We are now building plans to make sure those spaces actually are created, unlike the Liberal deathbed plan to throw out money with no requirement that actual spaces be created. We are going to create spaces so that the segment of families that need them will actually have them.
We are also going to increase the child disability benefit so that more families can have that assistance for children with disabilities. We are going to also keep our promise to introduce a tax credit of up to $500 on fees for fitness programs for children under 16.
Mr. Speaker, there is so much more in this budget and, although you say I have one minute, I have three more pages. How can that be?
We are going to protect Canadians.
We have plans to address the fiscal imbalance in a meaningful way and open up discussions with the provinces.
We are going to apply the fiscal discipline that we talked about, that Canadians are needing.
Budget 2006 keeps promises. It is a promise-keeping budget. Ours is a party that believes when we say we are going to do something, we actually keep our word. That is what Canadians are like. They are honest people who keep their word. They want their leaders to do the very same thing. We focus on the priorities that Canadians elected us to deliver. It sets the stage for future action, as future budgets and future financial resources become available, to continue to build an even better Canada for all Canadians.