Mr. Monte Solberg (Medicine Hat)
Mr. Speaker, I give my sincere thanks to the government for permitting this precedent setting debate.
During this pre-budget debate I rise to offer an analysis of the government's infrastructure program that will add $2 billion to federal government spending. During the election campaign and in the throne speech the Liberal rationale for the infrastructure program was twofold. First, this jointly funded program would create jobs. Second, it would encourage public investment in our roads, sewers and public buildings, all of which would increase the nation's productivity and therefore our competitiveness.
Together these measures are supposed to jump start our economy. I would argue however that this rationale is deeply flawed. I would argue that this program is not only premised on faulty assumptions. I would also argue that its design is coercive, inefficient and unfair in nature.
Let us look at the assumption that this program will create 50,000 to 60,000 new jobs. As the government has already admitted it has not taken into account how many jobs will be lost by raising taxes to pay for this $6 billion program.
This program betrays the government's belief that it will use that $6 billion more efficiently than taxpayers, than investors would use it, despite the mountains of evidence indicating that it just is not so.
I can guarantee the House that the owner of a small business would not charter a jet to fly to Boston and New Orleans for $172,000 if he could get a commercial flight for $5,000. The Minister of Consumer and Corporate Affairs has demonstrated in an exaggerated fashion what happens on a smaller scale a thousand times a day in government.
Instead of taking that $6 billion out of the hides of taxpayers, I urge the government to leave that money where it is. The small business owners, taxpayers and investors will spend that money a lot more efficiently and effectively than government ever would.
Another assumption the government makes is that we are somehow lax in funding infrastructure in the country. This is despite the fact that public infrastructure spending increased 40 per cent between 1986 and 1993 to $17.5 billion.
Meanwhile private infrastructure investment last year was in the tens of billions of dollars. This was an investment that businesses were counting on to pay some immediate dividends, or else they would not have spent the money at that time.
However the same cannot be said of the infrastructure works program. It will only fund new projects that until now municipal governments were not planning, presumably because they were not the best use of taxpayers' money, or in the case of repairs and upgrading because the roads or sewers still had a few more years in them. Perhaps it was because new taxes would have to be raised to fund them which would enrage taxpayers who are already overtaxed.
We should have deferred to the good judgment of the municipalities. Instead the government's infrastructure works program coerces the provinces and municipalities into joining the program and requesting funds for projects that may or may not need doing. After all, if a municipality does not participate then the federal tax dollars that come out of that jurisdiction would just fund the next municipality over. Thus local municipalities are pressured into participating.
When the federal government tells the other levels of government that the only way for them to get a dollar is to spend a dollar, we have a taxpayer's worst nightmare. Sadly this is not the only design flaw with this program. Although this program is supposed to create 50,000 to 60,000 jobs the government does not, to my knowledge, have any way of monitoring how many jobs will be created or whether these jobs will teach new skills or will lead to permanent employment.
As the government knows, the Auditor General has been very critical of past government programs that spend millions and millions of dollars but never check to see if those programs are actually accomplishing their objectives. I hope some day the government can enunciate its plan for monitoring the progress and income of its infrastructure works program.
I am also concerned that this project will perpetuate the problem of dependency on government, a problem that has become the hallmark of Canada's social programs. On one hand, the government is saying that it wants unemployed Canadians to get their skills upgraded so that their long term job prospects will be improved. On the other hand, it is enticing them to go to work for two years on a dead end job creation project, a project that in all likelihood will leave them unemployed in two years with no new skills to show for it.
I am also concerned that the control over this program is so loose that we see projects like the Quebec City Convention Centre getting the go-ahead before any criteria are even established. Again it causes me to question the government's implicit contention that the minister for infrastructure knows better than taxpayers how their money should be spent.
The government's infrastructure works program will kill more jobs than it creates. It coerces other levels of government into participating and encourages unnecessary infrastructure investment. It lacks clear measurable objectives. It is susceptible to political pork barrelling. It provides a disincentive for unemployed Canadians to seek training and long term employment. It drives up taxes and impedes our ability to tackle the root cause of unemployment and slow economic growth. I refer of course to the deficit and the debt.
I quote now from the Investment Dealers' Association 1994 pre-budget submission:
The Keynesian agenda is no longer a viable option. Indeed, even if one abstracts from the deficit and debt problem, it is difficult to reconcile increased government spending with a rebound in economic growth. Government expenditures have already reached unprecedented levels, with spending accounting for about 40 percent GDP, and yet economic activity remains in the doldrums. In this regard the proposed $6 billion infrastructure program, while boosting overall productivity, would have a minimal effect on stimulating growth.
Government expenditures must be viewed within the context of government finances which have run amok. The stimulative Keynesian impact of higher spending is overwhelmed by commensurately higher taxes to blunt a deterioration in finances, or higher interest rates in response to larger budget deficits. Never before has fiscal policy turned completely on its head to the extent that policy initiatives must be considered in terms of their impact on government finances to the exclusion of everything else.
The other day the finance minister offered to give the leader of the Reform Party a lesson in economics. On behalf of our leader I will gratefully decline. Instead we will take our guidance from a small business owner who attended the finance minister's pre-budget consultation conference in Calgary on Saturday. Vicki Dutton told the minister and the conference you cannot tax a country back to health.
I would argue that simple truth is worth all of the finance minister's elaborate theories ten times over.
We should abandon the infrastucture works program immediately and begin the overdue process of cutting government spending.
Topic: Government Orders
Subtopic: Pre-Budget Consultations