Mr. Thomas Siddon (Burnaby-Richmond-Delta):
Mr. Speaker, it gives me great pleasure to appear before this House to offer some observations on the budget which was introduced last Thursday by the Minister of Finance (Mr. Chretien), to speak both as a candidate in the recent by-elections and as a representative of the people in Burnaby-Rich-mond-Delta.
I am not usually known to express gratitude in a profuse fashion. However, I would like to begin by complimenting the Minister of Finance for some of the economic initiatives undertaken by this budget. Many of them look surprisingly familiar to me. Having been a candidate for some months and having studied the policy documents of my party, I found a remarkable similarity in some of the short-term initiatives which the Minister of Finance announced in his budget.
I would like to back away from the question of specific initiatives announced in the budget and talk for a few moments about the question of budgeting from a more general point of view. In my mind-and the minds of many constituents from western Canada-the trend of the current government is to lead this country into an unprecedented economic crisis. This has been ably described by my colleague, the hon. member for York-Simcoe (Mr. Stevens). We have a situation in 1978 where government spending, which is at a level of $50 billion, is arcing up in an ever increasing curve because of the complications of high interest rates, devaluation of the Canadian dollar relative to its American counterpart, indexing of expenditures in the forms of salaries and other costs to government, and, in general, inflation.
Similarly, we have a situation where revenues of government-$35 billion for the fiscal year-are not growing nearly as rapidly. They are in fact arcing on a downward curve. That results from the tremendous increase of disincentive in our society. The consequence has been higher and higher rates of
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unemployment. And now the tax rollbacks, which are necessary to get this economy working again, will further hamper the growth of revenues needed to offset spending. I do not advocate increases in taxation as a means of disposing of this problem. The big problem is the question of waste, the question of the ever growing margin of difference between the spending of government on the one hand and the revenues received on the other.
Canadians, and this includes members opposite are facing a devastating crisis. It is somewhat like approaching the edge of a cliff which is crumbling away and dumping load after load of rock and rubble over the edge to enable one to walk farther and farther out over the precipice. Mr. Speaker, the almighty collapse is soon to come if we do not take strong measures to implement means of restraint and to eliminate waste. This country is in for some devastating times in the decade ahead. In other words, a budget should offer more than a recitation of mere platitudes and half measures to stimulate. It should be more than a bump here and a bump there. A budget should deal positively with the question of restraint. It should deal with new initiatives to control the growth of government.
Indeed, given the present circumstances, it should stop the growth of government. A budget must provide all the information necessary, not only part of it, to restore the confidence of Canadians in the government which is managing their resources.
I suppose I entered political life at the federal level primarily because of the concerns I felt over some of the things our Prime Minister (Mr. Trudeau) was saying some ten years ago, of which Canadians did not take note. At one point, around 1969 I believe, he made the following statement which I quote:
I suppose one has to be in the wheelhouse to see what shifts are taking place. I know that we have spun the wheel, and I know that the rudder is beginning to press against the waves and the sea . . . but perhaps the observer who is on deck and smoking his pipe or drinking his tea ... doesn't realize it; perhaps he will find himself disembarking at a different island than the one he thought he was sailing for.
I submit today, hon. members, that indeed the Prime Minister has been leading this nation on a voyage-a long voyage to fantasy island-an island as fantastic as the one depicted in the television series of the same name. In those days the Prime Minister also suggested that the Liberal party may turn out to be somewhat different than what we had traditionally come to regard as the Liberal party, a party which developed with some degree of respectability over the past century.
I submit to hon. members opposite that if they looked back over the last ten years they would see that the Liberal party has changed tremendously in terms of its approach to economic matters, under the leadership of the present Prime Minister.
The first thing we must do in dealing with the budgetary question is to predict the anticipated spending for the next year. Then we estimate the revenue available. Finally, we find ways to balance the budget. I know that the concept of balancing budgets sounds strange in a modern industrial world so dependent on investment; investment in our future. By failing to distinguish between capital spending, that is five-
year long-term budgeting, and an annual operating budget, this government has allowed the country to run uncontrolled for far too long. The people of Canada do not know what portion of the accumulated debt is purchasing real equity investment in the future of this country and what portion is being wasted through the many extravagant forms of abuse of access to the taxpayers resource.
I am disappointed that the budget introduced by the Minister of Finance does not come to grips in any way, shape or form with the question of controlling the rate of growth of government spending and eliminating the tremendously wasteful habits of the present government. These are ably documented in the one hundredth annual report-a condemnation of this government-which was filed yesterday by the Auditor General. The government cannot run the Post Office without incurring millions of dollars of debt. The government cannot run an airline without refinancing it from time to time with millions of dollars. These are either deficit dollars or taxpayers' dollars. How can this government propose to run a large corporation, such as Petro-Canada in an economically or fiscally responsible way?
The system of tax credits, the half measures, the gimmick-ery we are all talking about these days to get our economy moving forward again; the rebates, the filing of documentation back and forth with Ottawa to get a little off that tax penalty we are paying to the federal government, these are mere symptoms of the real problem in this country.
The real problem faced by the people of Canada is that taxes are too high in the first instance. I submit to this House that this introduces the concept of the tax revolt which was demonstrated in California in recent months. I submit that next June there will be a tax revolt in this country. The tax revolt will lead to the putting in place of a new government with new ideas to set the economy of this country straight.
This government is not totally honest. Perhaps that is a poor choice of words. This government is not telling Canadians the whole story when it files a statement such as the glossy budget of the Minister of Finance the other evening.
I wish to refer to some figures which the hon. member for Fort William (Mr. McRae) introduced into this House. He is not in the chamber this afternoon, but one evening last week he talked about the percentage of gross national product which rests in the form of debt. He pointed out that in 1952 we had
51.7 per cent of GNP residing in the form of debt, but that the percentage of debt, most of it having been accumulated through the war years, dropped to 18.7 per cent in 1978.
The hon. member for Fort William neglected to include figures for the years 1974 to 1978 which show that we went through, a minimum in those years in terms of percentage of gross national product, in the form of debt. The debt is beginning to take off again, not through the tremendous devastation and the costly burden of war, but because it is finally beginning to catch up and intrude upon the gross national product of this country in an ever increasing proportion.
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I wish to produce some figures of my own. These are from Statistics Canada. In the fiscal year 1967-68, personal and corporate income taxes as a percentage of GNP were 6 per cent. In 1978, personal and corporate income taxes are 12 per cent of the GNP of this country, the GNP has grown, of course, but personal and corporate income taxes have doubled.
The tax bite this government is imposing upon the earners, profit seekers and risk takers of this country has doubled. Government spending has increased from 13.6 per cent of GNP in 1967-68 to 26.8 per cent of GNP ten years later. That is preposterous and unacceptable. Although the significance may seem lesser, it is significant that the percentage of gross government revenue, which is raised in the form of personal and corporate taxes, has increased from 50 per cent to 59 per cent in the past ten years. The burden of taxation on Canadians increased far in excess of reasonable proportion.
This takes us to a question of political philosophy. A government is elected to provide the basic essential services of government, and that is all, if we believe in the principles of free democracy. A government which does not put any burden on society-one which one might call a very extreme form of right wing government-is non-government; it is chaos. On the other hand, a government which wants to take all of the earned income of Canadians and put it into the funding of government, is an extreme left wing form of government. It is worse than democratic socialism.
There is an optimum level of taxation as a percentage of GNP. That optimum level was certainly less than 6 per cent for decades in this country. In the past decade, it has doubled to the point where it is 12 per cent. The people of Canada will not stand for it any longer.
I indicated that the government is not telling the whole story in submitting a budget and sending press releases to the media. When the government sends out information on the splitting up of the pie, it sends out circular disks to show what proportion goes to what. It should be straightforward and fair in reporting that information.
In the Canadian Press last week, I noted such a sketch which showed the expenditure dollar and the revenue dollar. Unfortunately they were both shown the same size. In fact, in the coming year this government will spend $1.35 for every one dollar it receives as revenue. I believe the people of Canada should be told of that fact. The Mint will have to begin stamping out rubber dollars.
On the expenditure dollar, as reported to the press last week, there is a 14 per cent pie shaped wedge called debt. That is not the debt. That is the debt charge of the interest on the debt. It leaves the impression that our debt is 14 per cent of the government budget for the coming year. It is not. It is 35 per cent, plus the interest on that debt, which in the coming year will be in excess of $8.5 billion.
The government must level with the people of Canada. It must tell the people of Canada what the elements of the gross public debt are, a public debt now in excess of $70 billion,
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more than half of it having been accumulated in the past ten years since this government has been in office.
How much is held outside Canada? How much is caused by waste, as reported by the Auditor General? How much is internal debt held in the form of Canadian notes, Canada Savings Bonds and term deposits in bank accounts? The people of Canada should know to what extent we are beholden to economic powers external to our nation. The government should tell the people of Canada what would happen if public confidence in Canada Saving Bonds was suddenly shattered.
What would happen to the economy of our country? Can we continue to rely on Canada Savings Bonds to bail out a government whose costs are offset by debt? There is no speculative capital in Canada; it is all in the form of bonds and term deposits. Therefore we must continue to encourage foreign investment in this country. As long a we have little old ladies in Connecticut and financiers in West Germany who are prepared to take a risk when Canadians are not, we must continue to welcome their investment in this country because investment produces jobs.
If the profit elects to go elsewhere, so be it until Canadians take hold of their own country. Why should we be debtors in a world where there are creditors? Why should we be debtors in a world when we have such tremendous natural resources to put at the disposal of our fellow Canadians, and indeed people in the rest of the world?
Let us get back to basic economics. Let us talk about balanced budgets. Let us not say it is a pipedream. If we do not believe in the ideal that we can balance the annual operating budget of this country, then let us forget about democracy because it just does not work when you start putting up borders and, borrowing money from other nations. You become beholden to them in order to keep your head above water.
My time is coming to an end, I believe, or do I have more time?
Subtopic: THE BUDGET