Budget Implementation Act


Budget Implementation Act, 2005

Remarks by John McKay, MP Scarborough-Guildwood
Parliamentary Secretary to the Minister of Finance
House of Commons


May 30, 2005

Hon. John McKay (Parliamentary Secretary to the Minister of Finance, Lib.): Mr. Speaker, I appear not to be the most popular person in the House with the member opposite, but I appreciate that I have this opportunity to respond to his motion.

He has asked that the offshore agreements with Newfoundland and Labrador and Nova Scotia be severed from Bill C-43, the bill to implement the measures in budget 2005. Headlines over the weekend made it pretty clear just what is behind the motion. He wants to protect one element of the budget from his party's obstructionist tactics.

The hon. member is telling us that it is okay to derail moneys for cities and communities, that it is okay to derail money to create more day care spaces, both in his province and the province of Nova Scotia , and that it is okay to derail increases in the guaranteed income supplement for seniors in Newfoundland and Labrador . It is okay to derail things such as those which are in the budget implementation bill, but he only wants this aspect of the budget passed immediately.

It is referenced as the Atlantic accords, but I would note in passing that there are two provinces that do not benefit from the Atlantic accord, namely New Brunswick and Prince Edward Island . Therefore, it is pretty hard for the hon. member to say that this is a particular benefit for a generalized region when it is only a benefit to two particular provinces. Insofar as his proposal disadvantages half of the provinces in the region, that in and of itself is part of the reason why the budget should pass in its entirety, all 24 sections.

The motion is not possibly the strongest argument ever made by a member in the House. We on this side of the House disagree profoundly. We believe the people of Newfoundland and Labrador and Nova Scotia deserve fair treatment under the Atlantic accords. There is not a person in the House who disagrees with that point. We believe they deserve a new deal for cities and communities. I hope the hon. member agrees with that. We believe they deserve more and better child care and I hope the hon. member agrees with that. We believe they deserve an increase in the standard of living for their seniors. I think the hon. member would agree with that point as well.

All this can be done quickly if the members across the way would quit with their game-playing and put the interests of Canadians first. We have had a week off. I am not sure what it was like in other communities, but in my community there was great support for the budget and to get on with the business of Parliament. I am sure in your community, Mr. Speaker, there was a bit of a different view with respect to your dramatic role in that last vote.

Let us talk about timing because that was one of the significant points that the hon. member made, that somehow or another we could pretty well turn this whole thing around in two days. I would just make note that the budget implementation bill for budget 2004, which is the parallel budget and the exact same thing as what we are doing now, was introduced on March 31, 2004 and received royal assent on May 14, 2004 . It took six weeks to pass the entire budget implementation bill. We still do not have the parallel bill for 2005 to committee stage, which will start tomorrow. I wonder what in fact is the difference. Bill C-43, the bill to implement this year's budget, was introduced on March 24. We are now only getting it before the committee, starting tomorrow.

I want to make this important point. If the hon. member is concerned about timing, he really only needs to look in the mirror. If it were not for the tactics of his party, the budget could have received royal assent weeks ago and the money would be flowing already.

The last few weeks in national politics have been full of development and surprises of all kinds and here we go again. Canadians are getting tired of all this bickering and all the shenanigans from the official opposition, which knows that Canadians would like the government to get on with the business of governing. Mr. Speaker, I do not know what it was like for you but certainly for me over this past week that was a theme repeated by many constituents. Similarly, I would like nothing better than to get on with the business of this budget implementation bill.

Budget 2005 was shaped by the contributions of many people, including many members in the House on all sides who provided their advice and insights. I adopt the views of the hon. member for Halifax who said that everyone had a contribution to make with respect to not only the Atlantic accord but the budget itself. This included specific input from the opposition finance critic and the finance critics from the other parties, the hon. members for Medicine Hat, Saint-Hyacinthe—Bagot and Winnipeg North.

What resulted, I believe, was a budget that is highly credible, effective and promises real benefits to millions of Canadians. It is a very popular budget not only with the people in the Atlantic region but throughout Canada .

However what allowed us to have a budget like this did not come easily. The government, with the help of Canadians, worked hard to get to where we are today. As the song says, we have come a long way, baby. Let us reflect for a moment on how far we have come as a nation in recent years.

When my party first took office about 12 years ago, Canada was mired in very deep financial trouble and there was speculation in the Wall Street Journal about our impending third world status. We were, quite frankly, in a vicious cycle of growing deficits and rising debt with high interest rates, little or no economic growth and a very real danger that our social programs would be cut drastically.

Within a few short years, Canada 's situation underwent a remarkable turnaround. We eliminated the deficit and began our current string of seven consecutive budget surpluses. As we know, this budget projects an eighth budget surplus and the anticipation is that over the next five years we will run a further five budget surpluses.

We have reduced our federal debt by more than $68 billion and restored Canada's triple A credit rating which is not only of benefit to the government and the debt it has to pay, which is roughly twice the debt of all of the provinces combined, but it also assists the provinces themselves in terms of enhancing their credit ratings so that they pay less money for their indebtedness, let alone municipalities that have a modest debt burden, and then of course Canadians, both corporate and personal, are paying infinitely less interest for their money these days.

We implemented the largest tax cut in Canadian history and made significant investments in priorities such as health care, education, research innovation and the protection of our environment. This turnaround was not by accident. Quite the contrary. It was a direct result of the fiscal and economic plans implemented by the government and the commitment of Canadians to seeing them through. To this day these efforts continue to bear fruit.

Indeed, Canada enjoys the benefits of an economy that is both strong and resilient. This resilience has manifested itself time and time again as Canada 's economy has bounced back from several unexpected shocks, both foreign and domestic.

In 2003, for example, despite the shocks of SARS, the beef ban caused by a single case of BSE in Alberta and an increase in the value of the Canadian dollar, Canada recorded economic growth of 2% annually, exceeding half the members of the G-7.

In 2004, despite a sharp increase in oil prices and a further rise in the value of the Canadian dollar, our economic growth strengthened to 2.8%, a rate that once again surpassed that of other G-7 nations such as France , Germany and Japan .

That brings us to the year 2005. Today our recent economic indicators are looking quite positive. We have strong consumer spending, supporting a healthy growth in our GDP.

The most recent figures show that our unemployment rate has declined to 6.8%, the lowest level in five years. Inflation remains within a band of 1% to 3%, despite a sharp rise in global oil prices. Interest rates remain at historic lows, as they have the past several years.

There we have Canada 's economic performance in a snapshot. Clearly, when we look back and estimate how far we have come, we have much to be proud of as a nation.

There are plenty of reasons to be optimistic about the future as well. Private sector economic forecasters surveyed by the Department of Finance before the last federal budget estimated that Canada 's economy would grow by 2.9% this year and 3.1% next year, rates that would clearly put us at or near the top of the G-7.

It was against this backdrop that we introduced Budget 2005. Like all budgets, it was the product of consensus and an exercise in trade-offs among members of the governing party. Indeed, my hon. colleague, the Minister of Finance, has the unenviable task of saying no to many great and worthwhile proposals from members of the government, the opposition parties and Canadians whom he met as part of his prebudget consultation. We can imagine just how tough it is to weigh all these considerations against the government's finite fiscal resources.

When all was said and done, we delivered a budget that delivered squarely on the commitments that we made in the 2004 election campaign and the Speech from the Throne, issues such as increased funding for environmental protection and more money to assist immigrants and new Canadians become a part of our workforce.

Once passed, the budget will implement our commitment to give Canada 's communities a share of the federal gas tax revenue and establish the framework for a national early learning and child care initiative. All of these measures are aimed at protecting our national security, stimulating economic growth through research and innovation and promoting Canada 's voice in international affairs.

Where would we be without our commitment to sound budgetary planning and the commitment written right into the budget that we will not, under any circumstances, return to deficit. That, in part, is thanks to a wide range in reallocation of resources where we identified $11 billion in savings over the next five years.

Initially our parliamentary colleagues in the opposition seemed to be pleased with what we had set out. Only minutes after the budget was tabled, the hon. Leader of the Opposition stated that there was nothing in the budget that should cause a government to be defeated. That is a pretty extraordinary statement by any member of the House, but particularly a strong statement of endorsation from the Leader of Her Majesty's Official Opposition. So he, along with the hon. member for St. John's South— Mount Pearl and members of his caucus, voted to support the bill less than two weeks ago.

First we have a general endorsement on the delivery of the budget and then we have a vote from his caucus and his leader less than two weeks ago on this very budget that we are talking about.

I respectfully suggest to the hon. member that his position is somewhat disingenuous to speak in favour of the bill, to vote in favour of the bill and then say that no, we have to run this piece way ahead of any other pieces, many pieces of which would benefit his own constituency.

He has now presented this as a severance measure but it is hard for me to understand his motivation, other than a certain protectionist view of his own political livelihood. At one point one votes for the budget and at another point one speaks in favour of the budget. We have an example before us of six weeks before the previous budget implementation bill. We have, of course, already passed that six week period by virtue of some of the activities of members opposite. I take it that he does not have as much confidence as, say, I would have in the good faith of the members' opposite in their support of the budget implementation bill.

Let me just talk a bit about the commitments that are in the bill. We have a commitment to implement our national early learning and child care program. There is no question that the establishment of such an initiative would help thousands of working families across the country to find affordable and accessible child care services. This would encourage more people to join the labour force knowing that their children are being looked after in a stimulating environment.

At the same time, research around the world has shown that quality child care and early learning opportunities are critical to ensuring that children get the best possible start in life, putting them on the road to achieving their dreams and boosting Canada's well-educated and technically skilled workforce.

I put it to the House in a rhetorical fashion. What is it about that initiative that the hon. member does not like?

How about the commitment to infrastructure? This would not only improve the quality of life for people who live in our communities but it would also make communities more attractive places in which to live, work and invest for both domestic and foreign investors. Canada needs to continue to attract this investment to keep our economic engines running.

These initiatives represent investments in our future as a nation. They would help ensure our children and our children's children will grow up in a better country than we did.

I know the hon. member for Don Valley West has been a champion of this initiative in the budget and rightly can recognize himself as being in this budget and I know he is very enthusiastic about the support. I appreciate that the hon. member for Don Valley West understands the importance of passing this budget. What I fail to understand is how the member for St. John's South—Mount Pearl can possibly disagree with that initiative.

However I want to reiterate that these investments will not be made at the expense of everything that we have achieved thus far. We will not allow this government to go back into deficit, which is why we have pursued and will continue to pursue a balanced approach to fiscal planning, including continued debt reduction, investments in social and economic priorities and tax relief.

Speaking of tax relief, Canadians have told us that they want more money in their pockets. Our position has remained clear for the past several years. As fiscal resources permit, we will continue to reduce the tax burden faced by individual Canadians. The tax cut we implemented in 2000 reduced taxes for individual Canadians by an average of 21% over the past five years and we have built on these reductions in every subsequent federal budget.

In budget 2005, we increased the amount of income that Canadians may earn without paying federal income tax to a threshold of $10,000, which is roughly a move from $8,000 to $10,000. This move, which will be fully implemented by the year 2009, will remove more than 860,000 low income Canadians, which will include a quarter million seniors, from the tax rolls.

Let us make no mistake about it, tax relief will continue to remain a cornerstone of our balanced approach to the nation's finances.

In conclusion, it is time to stop the rhetoric and get on with the job that Canadians have elected us to do, and repeatedly told us to do, particularly in the last few weeks, that of managing the business of our nation for the benefit of all our citizens.

In the motion today from the hon. member, he is concerned about his constituents. Not to put too fine a point on it, he seems to be more concerned about his political neck. However this motion would only serve to delay the benefits of budget 2005. Let us put this wrangling aside and let Canadians reap the benefits of this bill.

My advice to the hon. member is simple: Hold tight, the money is on its way.

Hon. John McKay: Mr. Speaker, I think the hon. member was speaking to the same constituents I was speaking to. Canadians are quite disturbed by the obstructionist tactics and quite disgusted by the whole thing.

We are rather pleased that the budget vote passed by the narrowest of margins of course as the House knows. However, they were pleased and assumed that we were going to get on with the business of the nation.

Then, along with the hon. member, we read that not only will we have obstruction tactics on the floor of the House, but we will have further obstruction tactics in committee starting tomorrow. What was a euphoria will be apparently a short lived euphoria.

On the second point that the member raised with respect to the budget, this is probably the third historical budget of the government. The 1995 budget was an extremely important budget and set the nation on a particular fiscal path. Budget 2000 was also very important. However, this budget is possibly the budget that has the most uptake by most of Canadians. Any politician or any party that imperils the passage of this budget does so at its own risk.

I agree with the member. I cannot see the basis in logic or fairness as to why a particular provincial concern should be preferenced above seniors, cities and communities, infrastructure or any other important items that are in the budget.

Hon. John McKay: Mr. Speaker, I welcome the hon. member's anniversary in the House. It is great that he has been here for five years. This may not have been his best day, but still the previous four years were probably pretty good to him.

I would point out to him that over the last five budgets, this is exactly the way that we have done business. Every budget implementation bill has somewhere between 10, 15 or 25 sections in it, all of which call for spending initiatives of some kind or another, so there is nothing new or novel about this bill.

Equally, the last budget implementation bill was passed in six weeks which also called for substantial financial investments by the Government of Canada. There is nothing unusual about this. I put it back to the hon. member that I cannot quite see the basis of his argument as to why a particular concern of a particular region would take preference over national concerns which would benefit not only the other regions of Canada but would also benefit his community and the province that he represents. It seems to me that at its root, the hon. member's motion and his argument is deeply flawed.

   Hon. John McKay: Mr. Speaker, there are 24 sections in this bill, all of which in my view are quite important sections, not equally important but quite important. Some of which would arguably be as important to other members of the House as is the Atlantic accord to certain members of the House. I do not quite understand the basis for her question.

The hon. member needs to be careful about cherry-picking particular sections of either Bill C-43 or Bill C-48, both of which I know she considers to be important bills. When we cherry-pick on budget bills, other difficulties are created.

She used as an example the veteran's bill. The veteran's bill was a single issue bill that created a bill of rights for veterans. It was an important thing but simply a single issue bill. This is a bill which covers a great number of items and proposes spending in the order of $200 billion.