Mr. Robert D. Nault (Parliamentary Secretary to Minister of Human Resources Development, Lib.): Mr. Speaker, as I was saying, our efforts in the last almost four years clearly show that by 1998 and 1999 net borrowing requirements will be zero.
That is how most countries define a balanced budget. So what we can now say is that we have the deficit under control. As well, the debt is starting to fall as a portion of GDP. In only four years we have been able to clean up the mess left behind by nine years of Tory incompetence and mismanagement.
What are the results of all this hard work by this government and quite frankly by Canadians as it relates to some of the pain that Canadians have had to go through in order to deal with the Conservatives and their rule and of course some of the people on the right wing who have suggested that they have all the answers?
We have the lowest inflation in a very long time. We have interest rates at their lowest level in almost 40 years. We have massive savings for home owners and consumers and economic growth is strong. In fact, we have led the G-7.
Of particular interest, because of course this is an election year and everybody likes to make predictions, the private sector forecasters predict we will continue to have the strongest economy in the industrialized world.
Since our election more than 715,000 new jobs have been created. As has been said in this place by the Prime Minister on a number of occasions, that is more than Italy, France, Germany, Japan and Britain all put together. That may not seem like a lot to some members but in fact based on the mess that we inherited from the right wingers in this particular scenario that I mentioned, I think it is a job well done indeed. I suspect that some forecasters like John McCallum from the Royal Bank are predicting we will even better that this year with the creation of up to 350,000 more jobs.
That is on the fiscal side. Those of us who were here under the Mulroney rule have to remember that now we have the little brother of the Conservative Party called the Reform Party whose members were so embarrassed about their leader under the Conservative Party they decided to start their own.
None of us is fooled by that. It is the same right wing Tory ideology. That is why we see the lack of interest by the voting public in supporting the Reform Party, which is no different than when it supported the Mulroney years because of the tax policies, the vision and the values it holds for Canadians and which the majority of Canadians do not support.
I want to talk a bit about those particular values. Before I do that, I want to lay a few issues on the table for the public watching today. The opposition and certain parties in the provincial jurisdictions are suggesting that we in the federal government have been able to clean up our finances by downloading to the provinces.
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I want to talk a bit about Ontario because I am an MP from north western Ontario. What we are living through is almost identical to what I would envision under a Reform government if it were ever to occur in this land. We are seeing a slash and burn policy. We should look at the facts in Ontario to give us a sort of preview and a picture of the future if another right wing party like the ones in this House would form the government.
Because of Mike Harris' irresponsible tax cuts he has had to cut $1.3 billion out of hospitals, $.5 billion from roads, $400 million from post-secondary education, $2 billion from social assistance and I understand $1.3 billion from municipalities, and that is just the tip of the iceberg.
I want to give people some information this afternoon that may bring to light just why it is difficult for federal members of Parliament to accept where Mike Harris is going and that he is in fact trying to blame the federal government for the slash and burn and all the different headaches that he is causing people from northwestern Ontario and Ontario as a whole.
Payments to Ontario's government will drop from $10.3 billion in 1993-94 to $9.1 billion in 1998-99, a decline of $1.2 billion or 11.4 per cent. This represents at most 2.5 per cent of Ontario's revenues. We cannot, after the list I have just read, suggest that this cut made to transfer payments to the Ontario government and the Ontario people is the reason why Mike Harris and his Tories are cutting all the services in Ontario.
Let me give the real reason why. It relates to the opposition, especially the right wing opposition parties, both the Tories' and Reforms' interest in across the board personal income tax cut. In Ontario this particular government has suggested that it would cut 30 per cent out of our personal income tax. That works out to $4.9 billion per year by 1999. That is the reason we are closing hospitals, why we are reducing payments to school boards and why we are increasing the size of our classrooms and why we have to reduce transfer payments to the municipalities.
Anyone who has spent any time looking at what is going on in Ontario would know that it is not the transfer payments from the federal government to the provincial government, but it is the silliness of having a tax cut across the board when there is still a major deficit to deal with and in fact you cannot afford to do without those revenues. For the life of me I cannot understand why this blind right wing ideology is even being considered by Canadians and Ontarians when in fact those of us in this place know that we cannot do without that revenue until we balance our books.
I am proud to be a Liberal for a number of reasons. Even though we have had to make some tough decisions on the deficit we continue to maintain our values of looking after our social programs, putting them on a good footing. The agreement that we signed with the provincial governments on CPP is a perfect example of that. Putting money toward health care, putting money toward youth, putting money toward innovation and technology, that is what Liberalism is all about. That is why this government is popular in the polls. It is not because some of the members opposite say that we have played some number game.
People are more intelligent than that. They know we have made tough decisions but we have been fair and equitable. That is the reason why when we go to the people with this particular budget and our record they will agree with us that we have gone a long way down the road to improving our chances in the next millennium.
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Mr. Leon E. Benoit (Vegreville, Ref.): Mr. Speaker, the member just described what Liberalism is all about. He said virtually the same thing as the finance minister said this morning on CBC television, which was that they are going to focus their spending on the things that really count to Canadians. He said that their values are health care, education, children and job creation. Those are the same things which the hon. member said.
Those are the words, but I want to ask the hon. member about the actions and contrast them to the words.
When we look at the action on health care, in fact federal spending has been reduced by 40 per cent. That is a fact. That is reality.
Unemployment has remained above 9 per cent for many months. The unemployment rate is almost as high as it was when the government took office in 1993. Not only are there 1.5 million people unemployed, there are another two million to three million who are underemployed, and fully a quarter of the workforce is afraid of losing their jobs. More important than the actual unemployment rates, bad as they are, is the fact that Canadians are having to worker harder than ever just to make ends meet. That is
making their lives very difficult. It is creating child poverty and problems within families.
Education funding has also been cut by the federal government by 40 per cent. That was the action. That is a fact.
The government shows its concern for children by reducing the average family income by $3,000. I am talking about take home pay. That is the pay which families have available to look after their kids. That has been reduced by $3,000 since the government took power. That is how the government shows care for children.
I would ask the hon. member to respond to the clear difference between the words that he and the finance minister speak and their actions over the last three years.
Mr. Nault: Mr. Speaker, I find it so humorous that I could almost laugh.
All of a sudden that right wing party is talking about jobs, health care and the plight of the poor. It is talking about those issues because it cannot deal with the only issue that it ran on in the last election, which was cleaning up the finances of the nation by slashing and cutting everything that was not nailed down. Now that the Liberal government has done what no government has been able to do for the last 20 years, all of a sudden that party has recognized that there is something else.
Let me deal with the issue of 42 per cent. When the finance minister for Ontario presented the Ontario budget, on page 9 he said that Ontario will experience federal cuts of some 42.4 per cent.
That is the reason I brought up these numbers and that is the spin the member opposite is putting on this debate.
Mr. Benoit: Mr. Speaker, I rise on a point of order. I believe there is some rule in the House about just how far a member can stretch the truth before it is no longer acceptable?
The Acting Speaker (Mr. Milliken): There is certainly a rule in the House about referring to members who stretch the truth.
I think the hon. member is giving an answer to the question of the hon. member for Vegreville. With respect, what he is suggesting is that he does not agree with the answer, which is entirely parliamentary, but the rest is not.
Mr. Nault: Mr. Speaker, as you know, I was in opposition between 1988 and 1993. I understand the opposition mentality. When I sat across from Brian Mulroney, who is the big brother of the Reform Party, I used to get these numbers as well.
However, it is important to get the facts on the record. The opposition party is stating that we have cut 42 per cent of the transfers to the provinces. The Ontario finance minister has selectively chosen a 1995-96 starting point, the high water mark for transfers and he is looking at only the cash. That is what the opposition is doing today. It is very misleading to the public because part of the CHST is not just the cash but the tax transfers.
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This is very important. I have a list of every single province in front of me. Ontario, when the tax points and transfers are included, will end up with only $1.5 billion less which is 2.5 per cent of its total revenues.
For someone to stand up in this place and suggest otherwise is not being factual. It shows why those members are at less than10 per cent in the polls. They cannot even get their facts straight.
The Acting Speaker (Mr. Milliken): Order. The time for questions and comments has expired. A subamendment was moved earlier in the day. It has been reviewed and has been found to be in order.
[Translation]
Mr. Roger Pomerleau (Anjou-Rivière-des-Prairies, BQ): Mr. Speaker, I too am pleased to speak on the budget. Yesterday afternoon, the people of Canada and Quebec were sorely disappointed with this federal budget, who purpose is to win votes. It is not only a do-nothing and meek budget, but also one that falls short of their expectations, given the considerable flexibility the government and its Minister of Finance had in preparing this budget.
Like the vast majority of people and pressure groups, the Bloc Quebecois condemns this cheap election-minded budget designed to disguise this Liberal government's lack of action while purporting to provide assistance to children, families and the unemployed in Canada and Quebec.
Like in the cartoon published in Le Devoir this morning, the Minister of Finance of Canada is bragging, with cynicism to boot, in the face of all the people who were hit by the massive cuts of the past three years. This cartoon illustrates the attitude with which the finance minister tabled this budget. Such an attitude is an insult to the 1.5 million unemployed in Canada today. It is an insult also to the tens of thousands of children who have been forced to live in poverty by this government since it took office. In fact, the number of poor children has increased by 500,000 over the past three years.
This attitude is also an insult to provincial governments, which have had to pay the price for reduced transfer payments and to live with the consequences of this government's policies for the past three years. Finally, the most insulting aspect of this attitude is that, in addition to showing off, the Minister of Finance is displaying a terrible lack of initiative in his election minded budget.
Two general conclusions can be drawn from yesterday's budget. The first one is that, since it was tabled last night, this budget has generated a unanimous reaction in Canada and in Quebec, as we saw this morning in most newspapers. There is an obvious lack of faith in the proposed measures, in light of the previous policies of this government over the last three years, since it took office.
This lack of faith affects Canadians and Quebecers, because the finance minister paints a misleading picture on the reduction of the deficit, which he says is the result of the government's cost cutting measures, but which is in fact largely due to a reduction in transfer payments to the provinces.
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There is also a lack of faith when the finance minister proposes a timid reduction of employment insurance premiums, whose rate is well above the rate that the government and the minister could have set. Instead of granting a 10 cent reduction, the minister could easily have lowered the rate by 30 cents, as we will see later.
There is also a lack of faith when the finance minister announces that $800 million will be earmarked for the creation of the Canada Foundation for Innovation. That money will come from the savings made through reduced transfer payments to the provinces. In fact, it is the provinces that will pay for this investment.
Let us look at the reduction of the deficit, which the finance minister is so proud of. The minister is very cynical when he boasts about the early success of his fight against the deficit.
Yesterday, he said, and I quote: ``For 1998-99, the government's deficit target is $9 billion''. The minister is therefore talking about a partial deficit, without ever setting a deadline for a zero deficit in his budget, as several provinces did, including Quebec.
We all know that the finance minister refuses to give a date, at least for the time being. The minister, who is driven by fear, is probably waiting for the next election campaign, which is not too far away. He will then engage in grandstanding in setting a deadline for his zero deficit, because he will have given himself enough flexibility to set a date depending on the circumstances.
This timid attitude, to say the least, goes against the very idea of a long term budgetary plan, and illustrates the essentially demagogic nature of the budget tabled yesterday by the finance minister. However, this lack of rigour on the government's part is not the real issue. The real issue is the source of the funds used to fight the deficit, something which the minister is so proud of.
It was precisely this that the Minister of Finance touched on yesterday when he said, and I quote: ``The fact is that by 1998-99, government spending on everything but the debt will have been reduced from $120 billion in 1993-94 to $103.5 billion''.
Once again, we must put these statements by the minister in context. Yes, spending has been reduced, but how? Now we know that it has been almost entirely by offloading the deficit onto the backs of the provinces. This reduced federal spending is largely an illusion.
Let us return to a major sticking point in yesterday's budget: the reduced EI premiums. As we have said repeatedly, these premiums are well beyond the objectives that could have been reached in order to demonstrate leadership in this area, and that could have been an effective job creation measure.
Let us also return to the creation of the Canadian Foundation for Innovation. Once again, this is a measure that owes its existence to money taken from savings generated through decreases in provincial transfer payments.
A second thing we notice in examining this budget is the sly interference of the federal government in matters of provincial jurisdiction. An examination of measures over the last three years reveals three areas where the government has shown a lack of good faith.
First, the piecemeal approach when it comes to the promises regarding benefits for children living in poverty: $70 million seems completely ridiculous, if you consider the role of this government in contributing to child poverty, which has done nothing but get worse since this government came to power.
I would like to quote a brief passage from the Liberals' red book, which reads as follows, on page 15:
Today, after nine years of Conservative government, Canadians are facing hardship: 1.6 million unemployed, millions more on welfare, a million children living below the poverty line, record numbers of bankruptcies and bank closings.(1745)
Here is another quote taken from real life, straight from Statistics Canada: ``After three years under the Liberals, the country is still in a sorry state: 1.5 million Canadians are unemployed, nearly 3 million are on welfare, 1.5 million children live in poverty, 500,000 more than three years ago, and the number of bankruptcies, 86,253 between January and November 1996, has also reached record levels''. We understand perfectly why before he resigned from the Liberal Party, our colleague from York South-Weston said: ``We accused Conservatives of every possible evil, and I am resigning because we are doing exactly the same thing they did''. People had certain expectations with respect to child poverty.
How can we believe this government if we consider it failed to inject $720 million in child care, a promise that was not kept, like the GST?
Second, more band-aid solutions, when we consider promises in other areas that are strictly matters of provincial jurisdiction. This is an amazing attitude on the part of the Minister of Finance. He savagely cuts transfer payments to the provinces, which undermines provincial objectives to fight poverty and unemployment, and meanwhile he is interfering in provincial jurisdictions with his pre-electoral gestures. We know perfectly well the government cut $4.5 billion in transfer payments to the provinces which are used for social programs. It also took $5 billion out of the unemployment insurance fund, which in the end comes out of the pockets of Canadians.
What is going on? The problem is that the unemployed are receiving fewer benefits that are becoming increasingly difficult to obtain and are getting them for a shorter period of time. Thousands of people will never have unemployment insurance, even if they did work. So today, they tend to end up on welfare much faster. Transfers to the provinces for social assistance have been cut.
When the government says it is doing something about poverty, it is just putting a band-aid on a problem the government itself created and which has not changed from what it was three years ago, when the Conservatives were loudly condemned by this government.
Finally, as you saw earlier during question period, no commitment was made or will be made in this budget to compensate Quebec for the cost of harmonizing the GST, a demand that has been voiced repeatedly for a number of weeks, especially by the Quebec Minister of Finance.
We know the government has just transferred $1 billion to the maritimes, and as my colleague from Longueuil explained earlier, when you transfer $1 billion from the federal government to the governments of the maritimes, this is $250 million which comes out of the pockets of Quebecers, since Quebecers provide Ottawa with one quarter of its revenue. So they took $250 million out of the pockets of Quebecers to send it to the maritimes, because they were harmonizing their provincial sales taxes with the GST. Quebec has claimed compensation for nearly $2 billion and will not get a penny. That is the story of the GST.
[English]
This budget is an electoral budget but it is also a lousy budget. The minister of finance did a lousy job on this budget. The minister had every opportunity to do something. He had a margin in which to manoeuvre; in fact $8 billion under the targeted deficit if we include in the $5 billion the $3 billion that was set aside for bad eventualities.
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The Bloc Quebecois produced three reports recently, trying to show the government through an analysis of the fiscality that it would be perfectly possible through the fiscality, through the underground economy and by implementing some measures suggested by the auditor general to get $6 billion more.
It is possible to get a $14 billion margin. It is a real possibility. With this margin we should have expected the minister to do something. It would have been quite possible to still target zero deficit for the year 2000 but at the same time to give back to the provinces the $4.5 billion taken for social programs and to put back into the unemployment insurance fund the $5 billions taken from there to give more protection to the unemployed and maybe to use a 30 cent reduction on fees instead of 10 cents. But that is not what the minister has done.
Of course, this budget is an electoral budget, we all know it. We are going into an election, as everybody seems to understand. The election will be a very strange one in comparison with the one of 1993. In 1993, 54 members of the Bloc were elected from Quebec and, to the surprise of all Canadians and to our own surprise, we became the official opposition here.
This time there will not be any surprise. We will very easily elect 55 members of the Bloc back into the House of Commons. It is now possible for Canadians to replace the Bloc as the opposition, if they so wish, if they think we did not do a good job as opposition, by electing an opposition from another party. If they do not, we have to admit that we will be elected as the official opposition not only by Quebecers but by all Canadians.
[Translation]
In conclusion, this budget needs to be seen as what it is: a vote-seeking budget, a do-nothing budget which does not come up to expectations, and for what it is absolutely not: a tax-reforming budget.
We know, Canadians and Quebecers know, that the rich in this country do not pay as much tax as they should. The minister has been urged repeatedly to really reform the Canadian tax system, but there is nothing in this regard in the budget.
To give a precise example, the family trusts, we know that they all beat it for the U.S. not so long ago, and got out of paying an amount estimated at between $500 and $600 million in taxes. Six hundred million dollars is exactly what will be given to poor children over the next two, three or four years. Two companies belonging to the same group left without paying taxes, and the government did not react.
Nor are there any job creation measures. Jobs, jobs, jobs, if anyone can find any, let them tell us where. There will be no hope for Canadians or Quebecers with this budget as far as job creation is concerned. All that the minister and the Prime Minister say is that it is up to the market to create jobs, and we must set up the necessary conditions for jobs to be created.
We need look no further than the banks, which have made record profits in the past two years, but are now responsible for record layoffs as well. Before telling us that private companies create jobs, maybe a thorough analysis ought to be done.
There is nothing about the GST and Quebec. Where is the fairness here? There is a double standard; the maritimes get money, Quebec does not. And they will go on cutting benefits to the unemployed and cutting social programs, while the minister is madly patting himself on the back, claiming he has managed to fight the deficit with his budget.
We are heading toward an election, and the Liberals will be judged accordingly.
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[English]
Mr. Paul Forseth (New Westminster-Burnaby, Ref.): Mr. Speaker, it is budget time and with all the rhetoric around the tax and spending plans of the Liberals of our money, in other words the people's money, the money and the wealth created by Canadians, not the government, with all this talk people sometimes become fed up and rather cynical.
What flows from that is the notion of average Canadians that the government always paints a rather rosy picture. When was the last time we heard a federal Conservative or Liberal government admit that things were not very rosy? Canadians then just tune out. They tune out of the budget debate. They tune out of all the commentary about finances. They say ``The government brags and so we really cannot listen to them. We have the Bloc and it seems to always resort to rather self-centred whining about how hard done by Quebec is. It is always the message from the separatists of wanting''. Quite frequently they use the word demanding.
Opposition parties have an obligation to compliment the government when the government goes in the right direction. When it comes to being critical the opposition must go beyond just cynicism and criticism but offer practical, credible alternatives that can stand the test of public examination.
I put it to the member of the Bloc, and he is being very negative in his tone, what are his solutions to contribute to Canada? What is the Bloc prepared to do to make Canada work rather than opt out? What is the member prepared to offer as a fiscal alternative to help all of Canada, including Canadians in Quebec, rather than just complaining and offering to opt out?
Mr. Pomerleau: Mr. Speaker, my colleague said many citizens will tune out when we speak about the budget. They will not tune out when the time comes for the election.
What did we produce in a practical way to help the government to establish a good budget? Today we are giving our opinion on this budget and our opinion is that this budget is not very good at all. But we did a lot of work for the government. I am sure in certain fields the Reform Party also did some work in presenting some analysis to the government.
We produced three reports on fiscality, a study well done. We received congratulations from the Minister of Finance for having done so. These were reports on three studies that showed clearly point by point through an analysis that if we would review the fiscality in this country we would probably be able to save right now $6 billion that could be used to put back into programs for employment.
We are not trying to opt out of the government. We are trying to help. If we want to help the government, the government has to help itself. With this budget, when we see that it has a full margin to act and it does not do anything, it is saying that it will help poor people, but it put $600 million for the poor children. That is the same amount of money that it let go with the fiducies familiales to the United States. That is only one or two companies that did that.
We are trying to help. We offered some analysis but nobody listened.
[Translation]
Mr. Nic Leblanc (Longueuil, BQ): Mr. Speaker, I would like to quote remarks by Alain Dubuc, a journalist and economist, in La Presse. He said he was a federalist in the last referendum.
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Just to give his remarks a little credibility, because there are people in the government and in my party who say that we behave this way because we are separatists, he himself said that the federal government has cut $6.8 billion, including $2.5 billion this year, in funding to the provinces over the past three years.
That means that the provinces have to face this cut and continue to pay the same percentage of taxes. If the government is cutting money to the provinces, it should also cut the taxes and revenues it takes out of the provinces. The provinces are getting it both coming and going. And, in return, they get what Alain Dubuc of La Presse describes as the big box of Smarties. In other words, they sprinkle little treats here and there just so they can say they are doing something for health, for poor children, and so forth.
I would ask my colleague to comment on this example. According to Alain Dubuc, and it is easy to calculate: In the case of poor children, the federal government and the Minister of Finance say they are helping poor children, but the figure works out to be $28 a year per child. That is, 53 cents a week per child. It hardly pays for a litre of milk per child.
So you can see how ridiculous it is to gloat that, as $2 billion is being taken away from Quebec, poor children are being given 53 cents a week. My colleague made an excellent speech. I would like his comments, because I find this way of going about things totally ridiculous.
Mr. Pomerleau: Mr. Speaker, I thank my hon. colleague for his excellent question. As we can see from my hon. colleague's breakdown of figures, what this budget, tabled by a minister who claims he wants to seriously look after poor children, provides for is 53 cents per week per child in Canada. We can also see that, over the past three years, instead of improving, the situation of poor children in Canada has in fact deteriorated.
When the Liberals were criticizing the Conservatives in their red book, they indicated that there were 1 million children living in poverty in Canada. There are now 1.5 million poor children in Canada, which means that their number has increased by 500,000 in the last three years. Poor children do not appear out of thin air. If their numbers are growing, it is because the overall economic situation is deteriorating, because more and more people are unemployed and on welfare.
While it is content with giving 53 cents per week to poor children and brag about it, as my hon. colleague said, the government is letting family trusts move to the U.S. depriving the government of $600 million in tax revenue. That is what this budget is all about and the kind of work that has been accomplished these past three years.
Mr. Paul DeVillers (Parliamentary Secretary to President of the Queen's Privy Council for Canada and Minister of Intergovernmental Affairs, Lib.): Mr. Speaker, I will be sharing my time with the hon. member for Fundy-Royal.
The budget tabled by the Minister of Finance is good news as regards job creation. This budget is in line with the federal government's long term strategy to improve the state of public finances, so as to create conditions that will promote employment, as well as short and long term growth.
The government will also continue to invest in immediate and longer term initiatives to create jobs, which is a top priority for me and the federal government. Let us not forget that 715,000 new jobs were created since the Liberals took office, in 1993.
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Extending the federal infrastructure works program is an excellent example. The government will spend $425 million on that program, for a total of $600 million this year.
I am also very pleased about job creation initiatives in rural areas, since my riding includes some large rural areas. In this regard, regional tourism will get increased support, through an amount of $50 million allocated to the Business Development Bank of Canada, as well as an additional $45 million, over a three year period, to the Canadian Tourism Commission, and additional funding to the Farm Credit Corporation.
Over the next three years, the federal government will allocate $1 billion for job creation initiatives for young people. The Minister of Human Resources Development recently announced that $225 million would be earmarked for the creation of jobs for young Canadians. These initiatives will provide a more promising future to many young Canadians who wish to join the labour force.
I also want to mention the creation of the Canada Foundation for Innovation, an investment of $800 million by the government, which will ensure that Canadians remain on the cutting edge of research and technology, areas which will help our industries to remain competitive and to create jobs in the future.
Given the Liberal government's sound economic management during the last three years, it is not surprising that private sector forecasters are expecting more than 300,000 jobs to be created this year and also next year. Having said that, I can assure the House that the Liberals will keep up their efforts to create jobs for all those Canadians who are still looking for work.
[English]
In the time remaining I would like to deal with some of the criticisms that the government has received with respect to job creation. I have already indicated that in the first three years of the Liberal government's mandate Statistics Canada confirms that approximately 715,000 net new jobs have been created by the Canadian economy. This compares to a net loss of 71,000 jobs during the last three years of the previous government's mandate. Under the previous Tory government the unemployment rate was at 11.4 per cent at the time that the Liberal government was elected in 1993.
The current rate of unemployment is 9.7 per cent. This is obviously much too high. One person in Canada unemployed, seeking work and unable to find it is a human tragedy. There will never be an acceptable unemployment rate until unemployment is eradicated.
I do not think it is a fair comment to indicate that because the official unemployment rate issued by Stats Canada is still at 9.7 per cent that the Liberal government's record on employment and setting the conditions that lead to employment creation is bad. Look at the 715,000 jobs that have been created by the Canadian economy in that time period.
We still have 1.5 million unemployed people which is certainly not acceptable and is certainly a cause for concern to everyone, particularly to those people who are unemployed, but 715,000 people have found jobs. The reason that the rate still remains as high as it does is because more people have come into the work force. This is something that the government cannot control. It can encourage people to obtain more training so that they will be in a
position to seek employment, but it does not preclude people from coming into the workforce.
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I do not believe the official unemployment rate is the proper indicator one should be looking at to measure the government's performance in job creation. It should be the total number of net jobs created.
The opposition parties are saying that the government should provide tax relief. By giving Canadians tax relief, more disposable funds would be available for them to make purchases and this would stimulate the economy.
I would like to draw the House's attention to the low interest rates which have the same effect. The government has managed the economy and has been able to reduce the deficit. It has shown responsible fiscal management and interest rates have dropped dramatically. They are at their lowest of the last several years.
I have two examples of the savings and benefits that people can obtain. I quote a Royal Bank report from October 1996 on home ownership indicating that a five-year $100,000 mortgage has a payment of $765 per month. The same mortgage for the same term except for the higher interest rate in 1990 required monthly payments of $1,200. The Royal Bank indicates that this is the equivalent to receiving an $8,000 raise in salary. This is as a consequence of the lower interest rates.
Similarly, on a new car loan of $15,000 over a four-year period, the lower interest rates today are resulting in savings of almost $500 per year. Again, that is an example of where money is being made available and is being freed up as a consequence of the fiscal management of the government and the lower interest rates.
It has been necessary to have certain cuts in spending in certain programs that have led to the reduction of the deficit. That leads to the more favourable interest rates. Now that the deficit is being reduced and is below the finance minister's targets, he is able to start paying the dividend for the suffering that all Canadians had to endure over the last few years to reach this point.
This budget shows Liberal vision. It shows Liberal values. The investments being made are in areas of child poverty, education, benefits for the disabled, research and development and also for the community action program for children.
CAPC is a program that is receiving increased funding when it was scheduled to receive a reduction in funding. The community groups and agencies in my riding with which I have met were very concerned about the scheduled reduction in funding. I am sure they will be very happy to see that the CAPC program is not going to be reduced but will be increased.
The Speaker: So you will know, there are only five minutes of questions and comments.
Mr. Leon E. Benoit (Vegreville, Ref.): Mr. Speaker, in the hon. member's presentation, he talked about how the government is quite proud of its record on health care, education and jobs.
The finance minister, of course, expressed that this morning. On a CBC television program, he said: ``We are going to focus our spending on things that really count to Canadians. That is what our values are: health care, education, children and job creation''. I guess the two are giving the same message.
Those words are quite nice but when we look at reality and the record of this government on those issues, it is quite another story. When it comes to health care, we have seen a 40 per cent reduction in spending. There was a 40 per cent reduction in transfers to the provinces. Mr. Klein said 42 and that might be closer. I am not sure. That is the reality.
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It is the same thing for education. There has been a 40 per cent reduction in transfers to the provinces.
With respect to job creation, unemployment rates are still at almost 10 per cent, compared to Japan at 3.4 per cent and the United States at 5.4 per cent. The record of this government on jobs is totally unacceptable.
Beyond that, the hon. member talked about how the unemployment rate has actually dropped somewhat since the government took office. That is true, but we are looking at a larger than ever portion that is underemployed. There are far more people underemployed than under the Conservative government and there are far more people who are afraid of losing their jobs. The record on jobs is nothing to be proud of.
I would like to ask the member to respond to the clear difference in the words, the actions and the record of this government.
Mr. DeVillers: Mr. Speaker, I would like to correct the statement made that this member is proud of the government's record on health care and education. My submission did not deal with those issues. My submission dealt with the jobs record. That is something which I dealt with at length. It is something which I stand by. It is not good enough. It is never good enough. Any rate of unemployment is too high. However, what critics such as the Reformers neglect to look at is the actual number of jobs which have been created.
The figure is there. The Statistics Canada figure indicates that 715,000 jobs have been created by the Canadian economy in the last three years, compared to 71,000 jobs that were lost in the last three years of the Tory reign.
The number is there. It is not an insignificant number. It is not good enough, but it is certainly something which I am prepared to stand by and be held accountable for during the next election campaign.
The member asked my colleague from Kenora-Rainy River the same question with respect to the 40 per cent cut to health care. All I will do is repeat the answer. That 40 per cent deals with the cash part only. It does not take into account tax points. We have to look at the entire picture; we cannot only look at the cash points in the transfers.
In the case of Ontario, the province with which I am most familiar, it amounts to 2.5 per cent of the total provincial budget. The provincial government is making draconian cuts to health care, education and to a lot of other areas. We know why. It is to fund the across the board tax cut of 30 per cent which that government, which is a friend of the Reform Party, promised the people of Ontario.
Mr. Dick Harris (Prince George-Bulkley Valley, Ref.): Mr. Speaker, I would like to ask the hon. member where he gets his math from.
If in fact this government has created these 700,000 or 800,000 jobs, why has that not affected the unemployment rate in Canada? If these are new jobs which have been created by this government, then in order for the unemployment rate to remain as stable as it has in the upper limits of 9 per cent, there must be jobs being lost on the other side because there are still 1.5 million people unemployed.
Mr. DeVillers: Mr. Speaker, I dealt with that point in my speech. The number of people who are unemployed is still roughly the same because more people have come into the workforce. Some people have graduated from school. Other people have obtained training and are now in the workforce. Other people have realized that there is a possibility of getting a job now and that is why they have returned to the workforce.
The government cannot control the number of people who enter the workforce. It can encourage people to enter the workforce, but it certainly cannot control who wants to be in the StatsCan figure and who does not.
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Mr. Paul Zed (Parliamentary Secretary to Leader of the Government in the House of Commons, Lib.): Mr. Speaker, I am particularly pleased and honoured to rise today in the House of Commons to address the issue of the budget.
Our fourth budget continues the plan that is important for Atlantic Canadians. It is of particular importance to the people of New Brunswick in my riding of Fundy-Royal.
It is a plan that dwells on the competent fiscal and economic management that is reducing the deficit. It is a plan that is aimed at creating and continuing to create a climate for jobs and economic growth in both the short term and the long term. It is a plan that ensures the long term future for effective sustainable social programs and that invests in a stronger society through education, health and our children.
I will point out a few facts that have become very important especially to the people in my riding. Our fourth budget announces that this year's deficit is the lowest in 15 years. It represents the largest year over year decline in the federal deficit ever. By 1999 we will no longer need to borrow any new money from financial markets and we will have the lowest deficit in the G-7.
Our fourth budget is also the latest instalment in our efforts to clean up the unprecedented fiscal and economic mess that was left behind by previous governments. In January 1994 the deficit was at $42 billion and our unemployment rate stood at 11.4 per cent. Our indebtedness was threatening our very future and the very future of the social programs that are of such vital importance to Canadians, especially Atlantic Canadians. No wonder so many Canadians had given up hope until 1993. What a difference four Liberal budgets have made.
One thing our budget does not do is to sacrifice sound economic management and wise economic investments for short term political expediency. Other parties are only too keen to play politics with questionable across the board tax schemes, but this is not what Canadians want. With this our fourth budget we are trying not to let Canadians down.
When we took office Canadians knew that we needed to take tough decisions and that fundamental reforms were required. When we took office in 1993 Canada's fiscal mess was jeopardizing the very future of our cherished social programs. With more money going to bankers each year than to social programs, their prospects were increasingly bleak.
Throughout our mandate our government has taken steps to save Canada's social safety net. In just three and a half years, we have reformed all aspects of our social safety net. All aspects of our social safety net have been reformed: a new employment insurance system; a new Canada health and social transfer which provides the flexibility and certainty that provinces need to deliver services in health, post-secondary education and social assistance; an $11 billion cash floor in the CHST, not a cash ceiling; and a new seniors benefit which was created to better target those seniors in our society in the most need without affecting current seniors.
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When we took office in 1993, Canadians had lost confidence but we knew that Canadians elected a Liberal government because they
trusted us to make decisions with compassion. We are building the social safety net of the future.
The 1997 budget announces the Canada child tax benefit, targeting more assistance to over a million Canadian families and their children to help those families escape the welfare trap.
Our youth employment strategy was announced to provide job opportunities for 110,000 young Canadians and to give young Canadians improved access to the federal youth programs which are presently worth more than $2 billion. We also believe it is important to ensure that all of our young people have access to good education. We have improved the system of student loans and education credits.
We have allocated $800 million for a new Canada innovation foundation which will be particularly helpful to our hospitals and universities in the province of New Brunswick.
We know that governments working together can do a better job in labour market training. Recognizing this, the federal government has turned over administration of labour market training to the provinces. As everyone knows, Alberta and New Brunswick have already signed ground breaking agreements.
The National Forum on Health recently made a number of recommendations to improve health care. The 1997 budget provides for $300 million over the next three years to implement key recommendations of the national forum. Social union discussions between the federal and provincial governments are setting out our principles of the safety net for the future and the management of our future.
Our commitment to the principles of the Canada Health Act is unequivocal. These principles will be enforced as they have been throughout our mandate. We will not only protect medicare, we will work in partnership with the provinces to improve it and to strengthen it.
We will take action to ensure that our health care dollars are spent more effectively and efficiently. We will bring the system up to date to respond to the changing health needs of Canadians and to respond to the advances which are being made to medical practices.
The National Forum on Health stated that the transition to a better system in the future requires some targeted investments today. That is why our fourth budget provides $300 million over the next three years to implement key recommendations of the national forum. Every single dollar will go to the delivery of better health care for Canadians.
We are also providing $150 million over the next three years for the health transition fund to help provinces launch pilot projects to investigate new and better approaches to health care. I believe the province of New Brunswick is already on the leading edge of developing important new projects for this important transition fund.
As I conclude, it is important to remember that today while unemployment is at 9.7 per cent, we will not be satisfied until every Canadian and every New Brunswicker who wants to work can get a job. We need to build on what works. Despite the cutbacks in the public sector, we have created 700,000 jobs since 1994. This year alone we will create 300,000 new jobs. Our jobs strategy is working.
The Acting Speaker (Mr. Milliken): When the debate is resumed there will be five minutes of questions and comments on the hon. member's speech.