Mrs. Beryl Gaffney (Nepean, Lib.)
Mr. Speaker, on February 18, my hon. colleague, the Minister of Finance, presented the government's 1997 budget, its fourth budget. I am pleased to speak on this budget. I will be sharing my time with the member of Parliament from Erie, Ontario.
It is a budget for all Canadians. It is a budget that works. It is a budget that stays the course. It stays the course in a manner that is seeing the deficit fall, but remains true to the ideals that Canadians hold dear. Through this budget the government has not only ensured but strengthened the social safety net for this generation of Canadians and for generations of Canadians to come.
The 1997 budget proposes selective tax cuts for low income families, charities, the disabled, students and workers pursuing higher education, and for parents saving for their children's future educations. But it is not yet feasible to consider a broad based tax cut. When the government does so, it will ensure that a tax cut is affordable and sustainable. Broad based tax cuts would be too costly at this time. They would require additional spending cuts or an increase in the deficit. Neither of these options are acceptable to the government.
The budget continues on the course of putting Canada's finances in order in a manner that is measured, deliberate and responsible. This is an approach that is giving Canadians control of their own finances.
Financial requirements will be eliminated by 1998-99. This means that the government will not have to borrow any new money from financial markets that year for the first time in 19 years. We are restoring self-sufficiency.
Keeping inflation low and progress in deficit reduction have paved the way for dramatic declines in Canada's interest rates. In the past three years Canadian short term rates have fallen close to 5.5 percentage points, the lowest levels in close to 35 years.
By creating a favourable economic environment, the government has enabled Canadians to save thousands of dollars a year on their mortgage payments and the benefits to small business have been even more dramatic. Let me give an example. On a $1 million loan with a 10-year amortization and monthly payments, a small business would save approximately $33,395 over comparable payments in 1995.
It is true that lower interest rates take time to stimulate the economy. However, developments in late 1996 show that the lower interest rates are beginning to stimulate growth. Let me give two examples. Housing sales soared in late 1996, stimulating strong gains in new home construction. This is very evident in the riding of Nepean. Sales of consumer goods have risen strongly, led by motor vehicle sales.
As demand has grown, so too has job creation. In the last five months 61,000 jobs have been created by the private sector, the majority of which are full time jobs.
The government is not alone in its optimism. It is shared by consumer, by businesses and by private forecasters alike. Consumer confidence has risen for four quarters in succession. Business confidence is at a record level with more businesses than ever believing that, now is a good time to invest.
Canadian forecasters expect the economy to grow by 3.3 per cent in 1997 and by nearly 3 per cent in 1998. They expect the economy to create between 300,000 and 350,000 jobs during 1997 with similar results in 1998. That is good news. Even international
forecasters are impressed with Canada's achievements. The OECD expects Canada and the U.K. to lead the G7 nations in growth for 1997 and it expects Canada alone to lead the G7 in job creation this year. The IMF also paints a rosy picture of Canada's economic outlook.
While the budget is helping to create a climate for long term jobs and growth, the government is also investing in immediate job creation, bridging the gap to the stronger growth that will result from lower interest rates. Through the Canadian infrastructure works program, the government has provided $2 billion in partnership with municipalities and provinces for $6 billion worth of investment in 12,000 different projects right across the country.
In the 1997 budget the government proposes to increase this commitment by an additional $425 million. When leveraged with municipal and provincial contributions, this could translate into approximately $1.8 billion worth of new investment and hence new jobs.
To further stimulate job growth, EI premium rates will be reduced by another 10 cents on January 1, 1998 and the new hires program will completely eliminate EI premiums this year for additional employees hired by almost 900,000 eligible small businesses. This reduction of payroll taxes will save both employers and employees, including those in Nepean, $1.7 billion in 1997. That is a very significant amount.
The budget invests in both the construction sector and needy households through a $50 million extension of the residential rehabilitation assistance program.
Tourism will get a further economic shot in the arm with a $15 million injection to the Canadian Tourism Commission. And $50 million to the Business Development Bank will help finance the private sector tourism infrastructure.
Neither is rural business forgotten. The 1997 budget provides $50 million to the Farm Credit Corporation to expand its capacity to support rural economic growth and diversification. Through the community access program, rural small businesses are being helped to plug into the Internet to the tune of $30 million over three years.
Another important initiative in the budget is the reduction of the paper burden for small business. Eligible businesses will be able to file quarterly rather than monthly. Then there are the budget measures that invest in long term job creation and growth. An important component of this long term strategy is the government's support for Canadian youth and for education and skills training.
In addition to the youth employment strategy, the funds for which were provided in the 1996 budget, federal assistance for higher education and skills enhancement will be enriched by $137 million in 1998-99. This allotment will grow to $275 million annually when the full impact of these measures come into effect.
Through the proposed education credit, the tuition credit and the carry forward of the unused portion of credits, the government has demonstrated its commitment to education. Students who need help repaying their loans will have their deferral period extended from 18 to 30 months. The loan repayment schedule will be tied directly to income in co-operation with interested provinces, lenders and other groups. The registered education savings plan contribution limit will double, and parents will be able to transfer unused RESP income into their RRSPs if their children do not pursue higher education.
No long term growth strategy would be complete without investment in innovation. Again, the 1997 budget proposes the creation of the Canada Foundation for Innovation. One of the main budget initiatives, the foundation will help to modernize research infrastructure at Canadian post-secondary institutions and research hospitals in health, environment, science and engineering.
The foundation will help Canadians be at the leading edge of research and technology developments which keep our industries competitive and create the jobs of tomorrow. It will encourage the best and brightest Canadian researchers to stay in Canada. It will assist in generating the kind of technology oriented graduates the future workforce will require. With its vibrant high tech sector, benefits such as these will be invaluable to the Nepean high tech community. The foundation will develop partnerships among educational institutions, research hospitals, business and non-profit sectors, individual Canadians and the provinces which could trigger approximately $2 billion worth of spending in research infrastructure.
These initiatives are all important for the creation of jobs and growth. However, if we lost our compassion in the process it would not be worth the price. I want to stress that the government has not lost its compassion in its fight to bring down the deficit. That is evident in the budget proposals that sustain and strengthen the social safety net. Included among these measures is $300 million which will be spent over three years to improve the delivery of health services to Canadians.
These announcements address a number of recommendations made in the report by the National Forum on Health. That includes $150 million for a health transition fund to investigate new and better approaches to providing health care, $50 million allotted over three years for the Canada health information system and $100 million over three years in additional funding to the community action program for children and the Canada prenatal nutritional program.
The federal government is also providing support for medicare and other social programs through the Canada health and social transfer.
While health is of prime importance, so too is the need to ensure our children's successful passage into adulthood. That is why the budget proposal for a national child benefit system is a major step forward.
Under the national child benefit system, the federal government will introduce an enriched Canada child tax benefit, while the provinces and territories will redirect some of their spending into improved services and benefits for low income working families. The proposal includes a two-step enrichment of the current child tax benefit to create a new $6 billion Canada child tax benefit by July 1998.
Canadians with disabilities have also been addressed by the budget. As well, charities have not been ignored.
In conclusion, we are staying the course on deficit reduction. We are investing in short term and long term strategies to stimulate job creation and growth.
Topic: Government Orders
Subtopic: The Budget