Confederation Dinner
Five years ago yesterday, we took office. We have worked hard to live up to the hopes Canadians invested in us.
In government, you can't always please everyone. And you can't always do everything right. We are as human as anyone else. The thing is to do your best. Your honest best. To try and do the right things. The responsible things. Not just for today, but for tomorrow. For our children's tomorrows. And for their children's.
That is what we have tried to do. That is why it was so important for us to restore order to the public finances. And restore fundamental strength to the Canadian economy.
Last week, our Finance Minister, Paul Martin, delivered the 1998 Economic and Fiscal Update. In which our accomplishments as a nation were put in historic and international perspective. He forecast a budget surplus for 1997-98 of $3.5 billion - the first surplus in more than a generation.
Remember how different things were five years ago - or $45 billion ago. Remember how we all felt when we saw the real bill we had inherited: that $42 billion deficit. Or our eleven-and-a-half per cent unemployment rate.
Canadians wanted us to roll up our sleeves and get to work cleaning up that mess. And working side by side with them, we did it. I know it was not easy. But because of the hard work and sacrifice of Canadians - together - we turned things around.
And look at the results.
In 1992, Canada had the second highest deficit as a percentage of GDP in the G-7. In 1997, Canada was the only nation in the G-7 to report a surplus. In fact, the improvement in our fiscal performance over that period was the best in the G-7. Our debt-to GDP ratio - which had been rising for more than 20 years - fell for the first time in 1996-97. And this year, we saw the first back-to-back drops since the early 1970s.
Interest rates are at their lowest level in three decades. At 2 per cent, our average rate of inflation over the past five years has been one of the lowest in the entire world. Almost 1.3 million new jobs have been created since October 1993 and the unemployment rate has fallen to an eight-year low. Down nearly 3 points from the 11.4 per cent level recorded shortly after we took office.
And Statistics Canada recently reported that most of the more than half million new jobs that have been created since the beginning of 1997 have been in industries and occupations that tend to pay higher-than-average weekly wages.
It has been an incredible five years. But the real benefit of what we have done over the last five years is what it will enable our country to do over the next five years. Or the next ten, twenty or fifty years. Because balancing the books cannot be an end in itself - with all due respect to all the accountants in the room tonight. Balancing the books is an essential pre-condition for building a stronger country. A stronger society, for all Canadians.
And that is what I want to talk to you about tonight. What we are doing - what we must do - in the future to build a stronger society.
And how we can build a stronger society in a more uncertain world. Because, there is no use trying to whitewash the global economic situation of today. A storm is buffeting the global economy. A major storm. For countless millions of people in Asia, Russia and Latin America, it is a crisis. Like all nations, we have reason for concern. We rely on trade for jobs and growth more than any other industrialized country. So, any threat to the health of the world economy is a threat to our own.
Pressure on the Canadian dollar is just the most obvious symptom. Our exports to Asia have dropped by 30 per cent in the first seven months of 1998. And many parts of the country - especially in Western Canada - are experiencing slowdowns. But it is equally clear that the economic and fiscal progress we have made in recent years has left us in a very strong position to weather the storm.
In fact, even with the current global turmoil, the IMF recently forecast that Canada will be among the G-7 leaders for economic, employment and business investment growth in 1999. What can we do about it? Well, first of all, the worst thing to do would be to backslide on the discipline that has cleaned up the economic mess we inherited in Canada. Imagine how much more vulnerable we would be to this global situation today if we were still in the shape we were five years ago. In fact, that was the reason for all the hard work we did in our first mandate: to give us the resiliency we need to better cope with the ups and downs of the global economy.
Another thing we will not do is try to turn the clock back to an earlier, protectionist era. Protectionism only means impoverishment, for ourselves and, even worse for the struggling people of the developing world, who can tolerate no further impoverishment. We cannot close our borders and still prosper. We must open them wider and sell even more.
What we have to do is to continue building a country that will prosper in the global economy of the new century - with high employment, high wages and a higher standard of living for Canadians.
How do we get there?
Implementing a strategy to achieve a higher standard of living for all Canadians always comes back to dealing squarely with the same deeply-rooted challenge: enhancing Canada's long-term productivity.
Like other G-7 countries, Canada has experienced a slowdown in productivity growth in the last three decades. In fact, we ranked at the bottom of the G-7 in the 1980s and early 1990s. Too many Canadian families have seen their standard of living stagnate or decline in recent decades. Too many of our best and brightest are attracted to jobs and futures outside Canada. Too many innovations and breakthroughs are happening in places other than Canada.
But there are signs that times are changing. The structure of our economy is changing. In 1980, resource-based commodities accounted for 60 per cent of our total exports - today that share has fallen to 35 per cent. And the high tech sector in Canada has posted a level of growth in jobs and output throughout the 1990s that is twice the rate of the rest of the economy.
But while our productivity performance last year was the best in a decade - and above the G-7 average - it is not at all clear that we have firmly begun the period of long-term productivity growth that we need to generate a sustained improvement in our standard of living.
That is why improving productivity will be one of the key challenges in the years ahead. It is what I call a Productivity Agenda.
No, I have not become an efficiency expert. And I do not mean "productivity" in the way many of you in the room are used to it: working harder, and longer hours. No, improving productivity is about putting in place an economic and social environment that supports the best use of capital - to spur on entrepreneurs and innovators, and to attract investors. It is about investing in knowledge. And it is about investing in people.
What does this all mean in concrete terms?
Well, for starters, it means continuing the fiscal discipline we began five years ago. That's why now that we have eliminated the deficit, we will continue to reduce our debt burden. That is why Paul Martin announced last week that this year we will be able to pay down an additional $3.5 billion - our surplus for 1998-99 - on the debt, on top of the $3 billion payment we had already budgeted for this year.
Improving our productivity also means investing in knowledge - in research and development. Through organizations like the Canada Foundation for Innovation and the Centres of Excellence, we have levered support for cutting-edge research and development.
That brings me to the next, very important part of our Productivity Agenda: Investing in people.
It has always been true, but now more than ever before, that education and learning are key to success. Our goal is to ensure that every Canadian has access to the education they need to unlock their full potential in today's knowledge-based society.
Last year, our government created the Millennium Scholarship fund to do just that – to give over 100,000 young Canadians every year the opportunity to learn and succeed. Canadians who might not have had that opportunity without some extra help. A scholarship is not a handout – it is an investment. An investment in the skills of our citizens. More than that, it is an expression of our deep-rooted belief in the capacity of Canadians excel, to be the best in their fields - the best in the world.
In the 1920s, it was Canadian scientists who discovered insulin and saved millions around the globe from the worst ravages of diabetes. In the 1980s, it was the Canada Arm that allowed us, to help advance the frontiers of our knowledge of space. In 1998, a Canadian - Dr. Mark Wainberg - was asked by the International Aids Society to lead the worldwide battle against AIDS.
The Canadian tradition of excellence is a proud one. But the seeds of success are planted long before any one of us enters a college or university.
That is why investing in children is an investment in our productivity and standard of living. A child that is cared for, nourished and stimulated in his or her early years has a far greater chance of succeeding in life than one who is deprived of a healthy start in life due to poverty or neglect. Children that grow up in poverty are far more likely to do badly in school, to find only temporary or poorly paid jobs as adults. And to rely ultimately on society to provide for them, because have not been given the tools to provide for themselves.
Our government's goal is to ensure that every child gets the best possible start in life. That is why we have committed to investing over $1.7 billion additional dollars annually to support low-income families with children.
A productive people is by definition a healthy people. Access to quality health services, a clean environment, safe streets, these are what define the health of a nation.
That is why I am proud our government introduced tough gun control. This is not the United States. We want a different reality. A different quality of life. Where people do not have to hide behind locked doors in fear of violence. We are showing the world - and our neighbours south of the border - that a balanced, sane approach to crime prevention can work. That is one reason, for example that the murder rate here in Toronto has dropped to the lowest in years.
It is why just last week the government announced reductions in the sulphur amount permitted in gasoline. Because we know a healthier environment means a stronger country.
Our publicly funded system of universal health coverage is at the core of a maintaining a healthy population. The principles of Medicare have ensured that all Canadians have access to high quality medical treatment, regardless of their means. Medicare is a defining characteristic of our nation. It reflects our values of compassion and sharing. It also reflects the belief that good social policy can be good economic policy too. Ask a small business owner in the US if they wished they had universal health care in that country. The fact is that universal health care is cheaper than private care, it covers more people, and above all, it places access to quality care ahead of profit.
While the provinces and territories administer health services, the federal government – through the Canada Health Act and financial transfers – has played a key role in ensuring that all Canadians have access to similar levels of care.
We have said that we will invest more resources in health care to ensure that all Canadians continue to have access to quality care. And I repeat to you tonight that the next major investment we will make as a government will be in the area of health care. We will also work together with the provinces and territories to make our health care system more accountable to Canadians.
Ultimately, of course, it is not governments that make Canada a better place to live, that improve our quality of life and our standard of living - it is people. It is thirty million Canadians, and the thousands of individual decisions each of them makes. For their own careers. For their children. For their quality of life. That is why we have to give them the tools they need to help them in those decisions.
That is why we are helping parents invest in Registered Education Savings Plans for their kids. That is why we are helping families care for disabled loved ones through tax breaks.
That is why we have increased incentives for donations to charities.
And that is why we reduced personal taxes in our last two budgets - by $7 billion in the last budget alone. We will continue to reduce personal taxes in the next budget in February. And we will continue to reduce them in a sustainable way - not to jeopardize our fiscal health. After all, no one wants the country to go back into the red again.
But make no mistake, we will continue to do it.
Ladies and gentlemen, all this is what our Productivity Agenda is all about. It is the touchstone of all our policies. And it will continue to be.
In fact, I want to pledge to you tonight that in our next budget, the only expenditures that we will make will be those that contribute to a higher standard of living for Canadians.
If we follow this course. If we continue to invest in the health, education and well-being of our people. If we continue to drive toward greater knowledge, and to the solutions to the economic, scientific and social challenges before us.
A Canada that invests in innovation and growth, where prudent fiscal policies ensure economic stability and confidence. A Canada with the best health care in the world. With the safest streets and homes in the world.
A flexible Canada. A responsive Canada.
A Canada that is on the move, that has evolved much in recent years and will continue to evolve to meet the particular needs of our citizens from coast to coast, be they from Newfoundland, from Quebec, from Ontario, or from British Colombia.
A strong Canada that get its strength from the sense of common purpose of our people and their deep desire to live together.
A Canada that can continue being what the United Nations calls the best country in the world.