Archives - Jean Chrétien

Jean Chrétien to the Saskatchewan Association of Rural Municipalities

I want to talk about the 1995 Budget -- both for what it means for the country as a whole and for the West in particular.

The Budget was not easy. The cuts were difficult. And they will be painful for many people. But it is essential for us to get our fiscal house in order -- and to achieve our interim goal of a 3% deficit-GDP ratio. And it is important that we do this in a way that is fair to individual Canadians and fair to all the regions in our country.

If we want to have a strong economy -- in Canada, in the West, in Saskatchewan -- we cannot afford to continue gigantic annual deficits.

The fact is that after a long recession, the economy is improving. Our economy grew by 4.5% last year, the biggest increase in six years. More than 430,000 jobs were created. Unemployment has fallen to 9.4% -- the first time it is in the single digits in four years.

Things are getting better. They are still not good enough for our liking. But they are going the right way.

But without serious fiscal action, we would be at a glass ceiling -- with no room to continue this improvement. Because of our deficits and our debt, Canadians are paying the highest real interest rates in the Western world.

They keep companies from expanding and creating jobs. They keep people from buying homes. And they keep farmers in a bind too!

Without serious fiscal action, our economy will not have the confidence of investors around the world. We need their capital to create growth and jobs in Canada. Every country needs that investment. That is a reality.

And without serious fiscal action we will continue to spend more and more just to service our debts. We already spend $50 billion a year just to service the debt we inherited. This is more than we spend on unemployment insurance and pensions for seniors combined.

And unless we took the action we did, it would have grown even larger. We cannot afford that. No country can afford that.

Let me try to put the situation into perspective. All the net income of every single farmer in this country over the next ten years would not be enough to pay even one year's interest on our national debt.

If interest rates, which are closely related to the level of debt, were to rise another two per cent, interest costs to Canadian farmers would increase within one year by as much as $200 million. As long-term loans were renegotiated, the additional interest charges could be more than $400 million.

I think Canadians recognize that we had no choice but to take strong and immediate action to turn the tide.

I wish this had not been the situation we inherited. But wishful thinking has no place in government.

We have to deal with reality. And do our best to improve the situation. That is what we are doing.

The key is to act responsibly. And fairly. That is what we did in our Budget. We have tried very hard to be fair to individual Canadians. And fair to all regions.

That is why we decided against increasing personal income taxes. We believe Canadians have already taken enough tax hits in recent years. They have not seen their real income grow. They could not honestly be expected to give more than they are giving.

And we have worked hard to ensure that the Budget was fair to every region in Canada.

I know that here in Saskatchewan our decision to end the Crow Rate is not easy on anyone. And the fact that this was necessary to comply with the new rules of GATT does not make it any easier. Neither does the fact that all of us knew this day would come sooner or later.

But I also know that given half a chance, farmers don't want subsidies. They want access to markets. They want fair prices.

That is our focus. To help farmers in the Prairies do what they do better than anyone, anywhere. To feed the world. To diversify. To get value-added growth. And to make a decent, honest living doing it.

I know that there is concern here in Saskatchewan that the $1.6 billion buyout package benefit farm operators -- whether they are owners or renters. And that financial institutions and foreign land owners, in particular, pass on the benefits.

You have our commitment that we will work hard to help make this happen.

I also know that as municipal officials you have legitimate concerns about the increased

use of roads that will result from ending the Crow. That is why we have put together a $300 million adjustment program that will help you in improving roads and building new ones -- and will help provide more transportation choices to farmers.

I know that Ralph Goodale will work hard to help you make these adjustments. As he always works hard -- very hard -- for the Canadian farmer. I have been in public life for a long time.

And I have never seen a stronger or more articulate advocate for Canadian farmers than Ralph Goodale.

The Budget has a big impact across the country. We are closing military bases -- not in Moose Jaw, and Ralph had something to do with that too -- but across Canada. We are laying off 45,000 public servants across Canada. We have ended other agricultural transportation subsidy programs that affect other parts of Canada, like Feed Freight Assistance and Atlantic Freight Rate Assistance.

And we have ended the Public Utilities subsidy that has benefited provinces like Alberta and Nova Scotia.

Every region will hurt. But every region is carrying its share of the load. No region has been singled out for special treatment. And no region has been targeted to receive a tougher hit. We are all in this together. And we will all get out of it together.

What we have tried to do is to choose the right priorities. Priorities that reflect the priorities of Canadians. It would have been easy to do a Tory-style budget slash of 15 or 20% across the board. It would have been easy. But it would have been wrong.

We did not cut as deeply in our transfer payments to provinces, for example -- with only an average 4.4% cut in transfers versus an average 7.3% cut for our own federal government programs.

But we could not ignore this area. Your provincial government knows how important it is to fight the deficit. That is what they are doing. I am sure that they did not expect us to subsidize their deficit-fighting by keeping our own deficit high.

But we have given them and other provinces the lead time to prepare for the lower transfer payment. And, as I said, we cut them less than we cut ourselves.

That is because the services that these transfers fund are important for Canadians. Services like Medicare and post-secondary education are priorities.

It has been said that "to govern is to choose". We have made our choices. They are the priorities of Canadians.

We believe in the strong social programs that we are so proud of. Like Medicare, which was born right here in this province. I was there when we expanded Medicare across Canada in the 1960s. As a member of the government of the day, I had the honour to vote for Medicare. It was one of the proudest moments of my life.

What we are doing today ensures that we can sustain and support programs like Medicare for generations to come.

We can only sustain Medicare if our economy is healthy and if we spend our money wisely. That is our responsibility. That is why we took the actions we did in the Budget -- not to wreck Medicare, but to save Medicare. Not just for us, but for our grandchildren and their grandchildren.

For us as Canadians that means two things are important. We have to keep the economy growing, because a strong economy is essential for strong social programs like Medicare.

And second of all, we have to hold the line on huge increases in spending on Medicare.

Ten years ago, we were spending 8.7% of our GDP on public and private health care costs. Today we are spending more than 10%.

But the situation has stabilized. The rate of increase has come to a halt. And the public sector costs have actually declined. As a nation, we are making progress. In fact, over the last three years, the cost per person of hospital and medical care covered by the public sector has actually declined a bit. The provinces are working hard to keep costs under control, while retaining a high level of service.

We have to continue that progress. That does not mean cuts to Medicare. Not at all.

If we can keep the costs of Medicare constant and keep our economy growing, ultimately the cost of health care will decline as a percentage of GDP -- without affecting the quality of health care Canadians receive.

That is how we can ensure the long-term health of Medicare. Not through cuts. Not through user-fees.

But through finding better efficiencies in the system.

And always respecting the five principles of Medicare: universality, portability, comprehensiveness, public funding and public administration. For Canadians, these principles are not negotiable.

Medicare is not the only social program Canadians value. And this budget lays the ground work for progress on other social fronts through the new Canada Social Transfer.

By grouping our transfers together and eliminating unnecessary restrictions, we are giving provinces the opportunity to create new programs to help people live decent, productive lives.

Let me give you an example.

Every expert says that investing in programs like pre-natal and school nutrition programs will pay off in helping young people develop -- particularly young people from poor families. It is an investment in their future.

But funds from the Canada Assistance Plan cannot be used to finance school nutrition programs.

The same thing with helping the working poor.

Right now, CAP funds cannot be used to top up incomes of the working poor. Or to provide them with health benefits such as drugs or medical devices. Moves that would help people become more self-sufficient.

By removing these unnecessary restrictions, we can make considerable progress in these areas.

And we do not need mega-projects or mega-spending to do it. The fact is that we do not have extra billions to spend on these programs. But the fact is also that we have been spending billions in a system that has not been working as well as it should. A system that has not been helping those it should help. A system that is letting Canadians down.

No, spending more is not the answer. The fact is we simply cannot afford to. What we must do is spend smarter.

This is what we must do as a nation -- working together, in cooperation. The Canada Social Transfer gives provincial governments the tools to do what they can do best -- design the programs that serve the needs of their people. And the provinces have my commitment that we will help in that work through working with them to arrive at a set of mutually-agreed principles that affirms what kind of society we want for Canadians -- and how we can work together to achieve it.

An economy that is growing and creating jobs for Canadians. Social programs that help people gain dignity and independence.

Governments that have the flexibility to act -- and are not beholden to creditors or international markets. This is the Canada we all want.

The Budget introduced by Paul Martin moves us decisively in that direction.

By getting our own fiscal house in order, we are ensuring that Canadian values and priorities get the attention they deserve. We are building a healthier stronger economy -- for every region. We are acting responsibly and fairly for all Canadians.