Response to the Speech from the Throne

This new session of Parliament marks the mid point in the mandate of our government. We are halfway through our term. Setting new goals. Meeting new challenges. And building on the accomplishments of two years and four months in office.

It is often said that to know where you are going, you must remember where you have been. I would add that you should remember where you started. And, Mr. Speaker, I remember where this government started just over two years ago.

We inherited a country that was in deep economic trouble. Unemployment was more than eleven percent. The deficit was $42 billion -- and growing every year.

But the economic malaise that we inherited was only half the picture. As deep and destructive was the distrust and cynicism that Canadians felt towards their own government. Ministers served in the federal government who did not even believe in Canada. The taint of scandal forced the resignation of minister after minister. And the business of government was dominated by lobbyists and fixers.

This was the scene when we took office in 1993. And this government rolled up its sleeves and got to work, to turn things around. And turn things around -- we have.

We came to government with a plan -- the Red Book.

In the last Session of Parliament we passed almost 100 Government Bills and implemented almost three-quarters of our Red Book commitments.

But these statistics do not tell the whole story. That more than half a million new jobs have been created in the Canadian economy since we took office. That the unemployment rate has fallen by two points -- under ten percent for the first time in half a decade. That after years of empty promises and action deferred, the federal government is finally getting its fiscal house in order.

At the end of the new fiscal year, we will have reduced our deficit-GDP ratio from six per cent to three per cent as promised in the Red Book -- from $42 billion to $24.3 billion. And next year, it will be another percent lower -- at two per cent, the lowest level in twenty years. And it will keep going down. This has been accomplished not against the will of Canadians -- but with the active support of Canadians.

It has not been easy. But I want to salute the work of the Minister of Finance who has been able to garner support for tough but fair budgets. And I want to thank the Canadian people for their understanding and commitment.

Because we made clear to Canadians -- and Canadians understood -- that deficit cutting is not an end in itself. That we have not pursued it because we wanted to. Because we are driven by ideology. But because it is a necessary step in restoring the economic health of Canada -- in ensuring long term growth and jobs for Canadians.

Accepting high deficits year after year has meant accepting high interest rates. And that has meant higher mortgages for Canadians who own homes. And it has made it more difficult for young families to buy their first home. It has meant that thousands of small businesses and farms could not grow and expand -- and create jobs.

Accepting high deficits year after year has also forced us to borrow money from abroad just to finance our debt. And this has made us too vulnerable to the foreign money markets . It has limited our own economic sovereignty. And every single Canadian has paid a heavy price.

These are the reasons we have worked so hard -- and will continue to work hard -- to reduce the deficit. And our success so far is translating into real, lasting benefits -- for all Canadians. Much has now been accomplished. We are not yet at the end of the road, but for the first time in a long time, the end is in sight -- as the Minister of Finance will show next week in the Budget.

In the Red Book, we wrote that: "The Liberal two-track policy of economic growth and fiscal responsibility will make possible a monetary policy that produces lower real interest rates and keeps inflation low, so we can be competitive with our major trading partners."

That is exactly what is happening. Interest rates have come down dramatically. Inflation in Canada is lower than it has been in decades -- and lower than in virtually any other industrialized country.

Since March of last year, short term interest rates have dropped by three percentage points. This decline is 2.5 percentage points more than the decline in the United States. Today there is virtually no difference between Canadian and American short term interest rates.

The way we are putting our fiscal house in order says a lot about our values. As a government. And as a society. We could have gone after spending with a meat clever -- hacking everyone and everything with equal vigour. But that would have been unfair. As Canadians, we cherish the values of community. Of equal opportunity. Of tolerance and understanding. Of compassion and support for the most vulnerable. We believe in simple decency and respect. Canadians want deeply to win this important battle against the deficit. But they absolutely refuse to do it on the backs of those in need of help. So does this government. And we are proud of that.

That is why, for example, we have cut military spending, but we have actually increased spending on employment programs for young people. That is why we have cut subsidies to business by more than fifty per cent, but invested in a National Infrastructure Program that is resulting in capital projects in every province of Canada that have created tens of thousands of new jobs and will have important economic benefits for decades to come. That is why we have closed loopholes for family trusts and imposed a special tax on bank profits, but funded new programs such as the Pre-Natal Nutrition Program and the Aboriginal Head Start Program and restored the National Literacy Program.

That is why we eliminated the $100,000 capital gains exemption, and increased the Small Business Loans Act ceiling to $12 billion. That is why while we have worked to reduce the size of the federal public service, we have also created programs such as Youth Service Canada and the youth internship program to give thousands of young people the work experience they need to earn -- and keep -- that important first job.

Mr. Speaker, it is this sense of balance and priority that has been the hallmark of our government. Tough, no-nonsense deficit fighting. That has, frankly, broken the back of the deficit. Combined with compassion, understanding and a willingness to invest in people -- as we set out in the Red Book. We have proven that a government can be a tough, fair and effective financial and economic manager and that it can also be progressive and human. That, more than anything else, is the balanced approach that Canadians voted for when they chose us to lead Canada over two years ago. And that, more than anything else, I am proud to say, has been the accomplishment of the first half of our mandate.

I mentioned earlier that our government inherited not just a fiscal deficit from our predecessors -- but a credibility deficit too. Canadians had given up on their public institutions. They had stopped believing in their government. They had stopped trusting elected officials.

Mr. Speaker, you can agree or disagree with our policies. But no one -- after more than two years in office -- can question the honesty and integrity of this government and its ministers. No one. And, Mr. Speaker, that is an accomplishment that not only makes me very proud, it has given Canadians a reason to believe in their government again.

Canadians know that when this government gives its word it keeps it.

Restoring the Government of Canada as a competent fiscal and economic manager. And restoring people's faith in government as an honest institution. These, I believe, are our cumulative accomplishments halfway through the mandate. They are accomplishments of which we are deeply, deeply proud.

And they set the stage for the second half of our mandate. Yesterday, the Throne Speech announced the broad initiatives that the Government will take in this session. Initiatives that continue the work we began two years ago. Initiatives promised in the Red Book. That promote economic growth and job creation. That promote unity. That promote the security of individual Canadians and their families.

We were elected to restore the economic well-being of Canada. As I said, unemployment is down considerably from the time we took office in 1993. But it is not down low enough for our liking -- or the liking of Canadians. Too many Canadians are still out of work. Too many more are still worried about holding on to their jobs.

Above all, we want young Canadians to become active participants in our economy. They want jobs. They deserve jobs. Young people want to embrace the future -- not fear it. And it is up to all of us to create that hope and opportunity for them.

Youth unemployment is not unique to Canada. We see it everywhere in the industrialized world today. In every country -- many, in fact, most far worse than here. But that comparison should give us little comfort. Because we should not measure the success or self-fulfilment of our young people against those of other countries'. We should measure them by our own hopes and ambitions and by our sense of obligation as the custodians of the society that they will inherit. If we want Canada to continue to grow and prosper, if we truly want a country of hope and confidence, young people working hard in meaningful jobs, jobs with a future, is our only guarantee.

In our first two years, the government has done much to actively foster a climate of job creation. And it has met with success.

But government does not create jobs -- it creates the climate for the private sector to create jobs.

And that is what we have done -- and continue to do -- lay the foundations for long term sustained job growth. Now we need the partnership -- the active partnership -- of the other levels of government and the private sector to make that sustained job growth happen.

We have had a preview of how well that partnership can work. With the right amount of commitment and effort.

Nothing in many years has given Canadians a greater sense of pride and accomplishment than the two Team Canada trade missions to foreign markets such as China and India. These two trade missions, combined with the Latin America trade mission I led a year ago, brought home more than $20 billion in deals for Canadian businesses. That means tens of thousands of jobs in Canada, and an important foothold in some of the fastest growing foreign markets in the world.

But I believe even more important than the impressive statistics of the Team Canada missions was the impact on Canadians of seeing their prime minister, their provincial premiers and leaders of businesses large and small working together to bring home jobs for Canadians. There we were, politicians from just about every party, representatives of just about every kind of company large and small -- all pulling in the same direction. For once the politicians stopped pointing fingers at each other and the business people stopped blaming government, and everyone pulled together -- working on the same team, with the same goals.

Canadians were used to seeing governments compete and first ministers bicker -- but with Team Canada, they saw us working together. They liked what they saw. They want to see more of it.

I believe that we can and must prove to Canadians that we -- federal and provincial governments and the private sector -- do not need to leave Canada in order to be able to work together. That yes, Team Canada worked well in Beijing or Bombay or Buenos Aires. But it can work just as well in Burnaby or Brampton or Bromont.

We should put the same Team Canada spirit to work here at home creating jobs in a true national partnership. I commit here and now, before the eyes of the nation, every resource of the federal government to creating that partnership. And I urge the private sector and the provincial governments to join with us.

To the private sector I have a very specific challenge. For many, many years, you have urged the federal government to get its fiscal house in order. You have campaigned against deficits. You have warned us of the negative impact of too much government spending on the economy. You have urged us to get out of areas that are better dealt with by the private sector.

You said that when this is done, the private sector will create jobs.

I say to you that the federal government has delivered. Now Canadians want the private sector to deliver.

Now it is your turn to show your confidence in Canada and Canadians -- especially young Canadians. To recognize that just as we have taken the lead in eliminating the fiscal deficit -- you have a responsibility to eliminate the human deficit ... of unemployment. No true balance sheet can ignore the heavy and growing costs of chronic unemployment. It is wrong on a human level. It is wrong on an economic level. It is wrong on a commercial level. It is wrong on a moral level. And you have a responsibility -- just as surely as I and my colleagues in government do -- to invest the energy and commitment it takes to solving this problem.

That is why in the Throne Speech yesterday we announced that the federal government would be doubling its contribution to summer job creation in the private, public and not for profit sectors this year, and urged the private sector and provincial and municipal governments to do the same. We need to encourage and help young people who are putting themselves through universities -- and this is an important way we can do it.

Today I want to announce another initiative. In the weeks ahead I will be calling on businesses to join in launching a domestic Team Canada focussed on creating jobs for young Canadians -- primarily in the private sector. I will be appealing to businesses large and small to invest in jobs for young Canadians. This would create many tens of thousands of new jobs. It would further promote economic growth and consumer demand. And most of all, it would prove to millions of Canadians that Canada does work -- not just for the powerful and the privileged, but for ordinary Canadians.

And to the provinces I issue a challenge as well. I challenge you to join with us in rekindling the spirit of Team Canada -- and making it work on a permanent basis. As we work on redefining and clarifying our responsibilities, let's work together on this jobs agenda. It may not be as exciting as picking fights with each other. It certainly will not be as easy. But we have proven we can work together for jobs and economic results. We owe it to Canadians to give it the effort it takes.

We also owe Canadians the security that is provided them by our social programs. A healthy, growing economy means healthy, viable, sustainable social programs. That is why getting our fiscal house in order is such an important key to preserving the social programs we as Canadians hold so dear.

But that is far from the limit of this government's commitment to social programs. We also know that if we want healthy social programs not just today and tomorrow, but ten and twenty years from now, we must plan for them now. And that is a responsibility that this government takes very seriously.

In no area is this more important than in the public pensions system. Everybody recognizes that demographic changes in our society mean that we will have to make changes to ensure that our pension system remains sustainable for future generations of Canadians.

That is why we have begun discussions with the provinces to ensure that the Canada Pension Plan, which we run in partnership with the provinces, will be there for Canadians who work hard and contribute to the plan. The public has been asked to participate in these discussions.

The next step is to ensure that the support provided to seniors through the Old Age Security and Guaranteed Income Supplement program is sustainable and will be there for the future as well. You have our commitment. This we will do. We have an obligation to plan for the future. And we do not take that obligation lightly.

As we do that, we will honour another commitment -- a commitment I undertook in this House, on behalf of this government. I made a promise to current seniors that I repeat today: the OAS and GIS payments that you receive will not be reduced.

And we will continue to ensure the health and sustainability of Medicare -- the most cherished social program of all. This government will ensure that the health system will be there for all Canadians -- rich and poor alike. And we will maintain substantial cash transfers through the Canada Health and Social Transfer to ensure that the federal government will always have a strong say in Medicare and be able to preserve free, universal access to health care -- anywhere in Canada.

Because Medicare is as much a part of our country as the air we breathe or the water that runs through our rivers and lakes. It defines who we are and who we want to be. It sets us apart from other countries. It draws us together no matter where we live in Canada.

We will work to ensure it continues drawing Canadians together for a long time to come.

Because bringing Canadians together and keeping Canada united in common cause and purpose must be the number one priority of any government in this House.

The referendum on October 30 last year showed us that we can never take our magnificent country for granted. We need to remind ourselves every day why it is so good to live in Canada. We need to remind ourselves of all that we have in common, the values that we cherish: tolerance, respect, generosity and sharing. We need to remind ourselves of all that generations of Canadians have accomplished to make our country the envy of the world. We need to remind ourselves of the genius of federalism -- and how it has accommodated our diversity, while building on our strength. A united Canada is a far nobler enterprise than the narrowing of vision proclaimed by those who would break up this country.

Canada is a vast country occupied by a diverse population. Thirty million people of diverse origins who live peacefully together in a land that the United Nations ranks as the very best for its quality of life. It is a great success on the world stage. A success that we cannot simply take for granted. A success which we must continue to build.

In the community of nations, Canada is seen as a young country that is constantly evolving in an environment of rapid change. The global economy is transforming itself and becoming more and more interdependent as larger blocs of nations are formed, as in Europe. Canada itself has become a large collectivity as more and more provinces and territories have joined over the years to make us one of the seven leading industrial powers in the world. Canada has grown very quickly. It is only natural for us to review the way that our country functions. Economic globalization is forcing governments around the world to redefine themselves.

The one constant in Canadian history has been our ability to adapt to new circumstances and new realities without sacrificing our principles and values. The Fathers of Confederation provided a framework that is as valid today as it was 130 years ago.

They provided for strong, autonomous provinces capable of delivering services and of adapting them to local circumstances. They provided for provinces that could grow and flourish in their own individual ways. All of Canada is richer because Saskatchewan invented Medicare. All of Canada is richer because British Columbia makes us a Pacific nation. And at a time when people are told to think globally but act locally, strong provinces are more important than ever.

But the Fathers of Confederation also provided for a single national government, elected directly by all Canadians. That speaks and acts directly for all Canadians on the great issues of the day. In the 21st century that national government will be as important as it has ever been. And we will preserve the role of that national government:

• in strengthening our economy and economic union to ensure a prosperous country for ourselves and our children;

• in enhancing social solidarity in Canada -- in preserving and modernizing the social union so that the caring and sharing society is truly Canada-wide in scope;

• In pooling our national resources to achieve common goals efficiently and effectively;

• in protecting and promoting Canadian values and identity while celebrating our diversity; and

• in defending Canada's sovereignty and in speaking for Canadians collectively on the world stage.

Together, we will modernize our federation with respect for our diversity, and with confidence as we head into the 21st century.