Mr. Jim Silye (Calgary Centre, Ref.)
Mr. Speaker, what the hon. member for Red Deer referred to earlier, he is absolutely right. This government has missed the problem. It has identified the wrong problem.
The government has taken the low bar on the high jump and said deficit is the problem. "We will solve that. What we will do is we will promise Canadians to spend less than the Conservatives did. We promise Canadians that we will bring in a lower deficit than the Conservatives did and that will solve our problem". I submit that did not solve the problem. It only adds to the problem.
I know this bill will be voted on at the end of the day. This is probably my last chance to speak on a monetary bill. I do not know if there is anything else on the agenda this week. The one thing I would like to leave with the Liberal Party and with Canadians across the country is I would like to remind them that it is a noble effort and it is worthwhile and it is a necessity to lower our deficit and we have to get to a surplus.
To the degree that this government has lowered the deficit, I compliment it. It is the right direction to go.
The degree to which it brags and overexaggerates the benefits that we have achieved to date is a disservice to the Canadian public.
What I am really concerned about as a Canadian is that the finance minister, because the global economy and global markets have improved over the last four years, has missed the opportunity to make the cuts sooner in the other areas he has avoided. They dilly-dallied for a whole year before actually making cuts. The first budget was all talk. He then lobbied with his cabinet and colleagues and did a good job in getting them to agree to some cuts. They took some of our ideas from the zero in three, the ones they thought they could sell. That is smart. If you see a good idea just steal it, take it and take credit for it. That is fine as long as it is good for all of Canada.
They went too far on the cuts in social transfer. They put it all together. In health, education and welfare they cut $7.5 billion, which is way too much. Provinces are having trouble. Hospitals are having trouble. Everybody is concerned about this issue. It has been an issue in Alberta where a lot of angry people have had to be addressed concerning the closures of certain hospitals, especially in downtown Calgary. I am very familiar with the issue there and which hospitals were closed. That is from a regime that did not promise any tax cuts or give any tax cuts. It just promised to balance the budget over x period of time. This issue is important.
In our zero in three budget we would have only cut $3.5 billion from health care, education and welfare. This is clearly $4.5 billion less than the Liberal government did.
The reason I accuse the Liberals of downloading on the provinces is they made their cuts in social transfers to provinces rather than cuts to to their own departments, notwithstanding the promise of the finance minister that we will sacrifice as well in order to justify this. If Canadians would accept the government's $7.5 billion cut to the Canadian health and social transfer, it would cut 18.8 per cent from departmental spending amounting to $9.4 billion. To date, it is only at 4.2 or 4.5 per cent. It assures us that it will get there but it has now changed the rules on how it will get there. It is not quoting $9 billion any more. It is not quoting a final number any more.
What the government is saying is that it will reach its 18.8 per cent cuts in program spending but it will redefine what program spending is and then move a whole bunch of spending off balance sheet accounting. It is now going to say it has met its 18.8 per cent. Pretty soon we might find in a year that it is $5.6 billion or another billion dollars, because I know it is projected and I know what will happen, but $5.5 billion will now represent 18.8 per cent and once again it will brag about how it has met its targets and objectives.
My biggest problem with what the Liberals have done is that they will go to the public after they call an election and ask and seek for a vote of confidence to stay the course and support a pan-Canadian view of this country where we have to give inducements to three provinces to buy into a harmonized sales tax at a cost of a billion dollars to the rest of the country. That is not even revenue neutral. It means that the finance minister had to dip into the current account to pay for that. The Liberals are going to ask for a vote of confidence without telling the Canadian public what they will do if they ever balance the budget.
What will they do? We say we should balance the budget and the sooner the better. Our party makes a firm commitment date as to when we would do that. We say that we would cut. Where we would cut more than the Liberals of course is in direct subsidies to businesses because we feel that distorts the marketplace. There is another $2 billion to $3 billion there.
In my opinion, if the minister had done that he could have really been looking at a balanced budget a lot sooner.
We say a tax cut after we balance the budget and after we have created a surplus. We take that money, apply some of it to the debt and some to lower taxes for all Canadians, not just the rich Canadians they accuse us of. Everybody's personal and spousal exemptions would rise to $7,900. That helps everybody. That is what we would do with a surplus. We would then lower the cost of government and lower the overhead. We do not need 300 MPs in this House. I think the majority of MPs would agree with me on that on a non-partisan basis. Why are we increasing it by six?
The Prime Minister has said in his broken English and broken French, the same way in both languages, that maybe we spend, maybe we do not spend and maybe we will have more money. As
soon as we hit a balanced budget are they going to go back to increasing spending on different programs? Are they going to continue to create that dependency on a big federal government so big government will look after everybody? Then we will just add to that debt.
Somebody has to address the fact and the reality that sooner or later, I do not care how small it is, whether it is a $1 billion payment, this government or any government will have to make a repayment on that debt. In our personal lives we cannot go on forever and ever increasing our debt without making a payment on it. It is fine to reduce your interest cost, your deficit, but we cannot continually go on adding to our debt. Sooner or later the bank calls us on our loan. Sooner or later it takes away our car if we do not make a payment.
Somehow or other government politicians and the bureaucracy-I do not think it helps sometimes-seem to think that the public purse is somehow different. The debt is $600 billion but they think the only problem to solve to get to a balanced budget is the deficit. They think that will solve the problems of everybody. That debt has to be addressed.
A prudent government and a prudent finance minister would have pushed harder and talked about the debt as a percentage of the gross domestic product. They would have talked about how we are going to repay it over 30 years, or at least some of it. We do not have repay the whole $600 billion but we should be making a $1 billion or $2 billion principal repayment at least every term of government. I agree that the repayment should be over the long term, that we should bind government to no more deficit spending except under extreme circumstances or emergencies.
The difference between the United States and Canada is gross taxation levels. High taxes kill jobs. Lower taxes will create jobs. The proof is that in the United States total state and federal taxation amounts to 27 per cent of the gross domestic product. The total value of the goods and services the Americans generate is taxed at a level of 27 per cent for individuals and corporations. In Canada taxation at all levels represents 35 per cent of our gross domestic product. The U.S. unemployment rate is 5 per cent and our unemployment rate is close to double that. The United States has lower taxes, more people employed and a larger population than we have. It must be doing something right. I maintain it is in the field of taxation. Therein lies the problem.
If we could ever give tax cuts we would go a long way to solve our economic problems and to improve our economic situation. We have to create less dependency on a big federal government. If we want to do that we have to give more disposable income back to the people so they can look after themselves. There will be less need for people to look to welfare programs and unemployment programs. I do not want to talk about unemployment because I will get off topic with that slush fund he has cooking, taxing us to the tune of $7 billion which is in that EI fund already. That is a generous surplus. I agree the fund should theoretically contain that surplus, but it is not really a surplus. If he is so far ahead of his deficit target, that is one small selective tax cut he could make. He may do it.
I know a lot of economists make representations to the finance minister, and he does listen, of course only if it is politically convenient to do so. He may do it at some point during the election campaign after the Liberals receive enough heat and they get enough criticism from the general public about their arrogance and how they brag about how well things are. The Liberals may receive heat about keeping half the truth from the Canadian public, the truth about the debt, the truth about the rising interest costs. Even though interest rates are low, the sum total of what this government is now paying in interest has gone from $30 billion to $50 billion. Is nobody worried about that? Is nobody worried about a $650 billion debt, notwithstanding the interest rate? Is nobody worried about how much money we are going to have to pay? That will be the single biggest cost to any future federal government. That is scary and that is after spending is reduced.
I submit there is room for another $10 billion worth of cuts the Liberals have not touched. Some government will or through attrition we will get down to that lower level of spending. After we get there the federal government will be able to provide the services Canadians want. It will take us two or three years to get there but it will be done.
Interest costs will rise if the Liberals continue to add to the debt. They will brag. They will say: "Vote for us. Give us a vote of confidence because we will have a balanced budget in two years".
I am worried about what they will do with the surplus. Will they ignore the debt and increase spending? Will they say they have taken enough flack from the Reform Party on health care and increase spending on health care by $1 billion? If they feel they have taken enough flack from the Reform Party in an area will they increase spending there? Will they say the foundation for innovation is so great that they will double its budget? Will they say regional development is doing good they will triple its budget? Will they ignore the debt?
We cannot ignore the debt. It is the single biggest problem facing the country along with the interest cost that services it. It has to be addressed.
I must be a voice in the wilderness. I am the only person who talks about the debt and high interest costs. No government member talks about them. The finance minister mentioned debt once in his 60-minute speech. We do not talk about it. He brags about everything else in his economic statement. An economic
statement should fairly and accurately represent the economic status of the country at any given time.
The minister dwells on the positives. That is misleading. He gets an f from me for not talking about the other side of the story, the debt. While the deficit has decreased how much have interest costs gone up? That is an important component.
Yes, we are a rich country. Yes, we can sustain a high level of debt. Yes, people will continue to lend us money. However, we are 40 per cent indebted to foreign countries.
The finance minister and the Prime Minister can brag about not borrowing any more and about the decrease in borrowing requirements. The foreign borrowing or borrowing requirements of the government have decreased from $32 billion to $14 billion. That is tremendous. That is a plus. That is good. We all want that.
It could have been twice as good as that. We could have got there twice as fast if the cuts I am talking about were made at the time I am talking about. They should not have wasted time. They should have lived up to their commitment to cut $9 billion from departmental spending.
The Liberals wasted two years. They failed to act for two years. They did not make the cuts, even the cuts they said they would make. The President of the Treasury Board got all the other ministers to agree to doing it to justify the $7.5 billion. That has now been done. I would defend the $7.5 billion, but I would do so by ensuring that departments lived up to their commitment, which was to cut $9 billion. That has not happened.
They will come in with a $14 billion to $15 billion deficit. We must consider the two years of inactivity. If they had made those cuts during those two years they could brag about a balanced budget. The election would be about what they do next. Do they address the debt or do they talk about spending on new programs or increase spending on programs?
If the Prime Minister and the finance minister come up with a sequel to their red book they had better address those things. What will they do when there is a surplus? A surplus is coming. Spending has been frozen. Certain departments have been told to cut back. There will be a surplus. It will take them a year or a year and a half longer than it would take us.
Nevertheless historians and economists will be able to go back and refit the numbers to see what would have happened if they acted here or there.
Topic: Government Orders
Subtopic: Budget Implementation Act, 1997