Source document: https://docs-lawep.s3.us-east-2.amazonaws.com/1697722872088.pdf (Canada)
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~ 4 100 COMMONS DEBATES February 28.

2000 Tliosc are provincial decisions.

Thosc were par[ ol' the ncgoti- a~ions of tlic kderal governlnenl with ~lic provinces to cnsurc that thc right ~liinps happen.

Hc said: Mr. Speaker, I am tabling the bud@ documents, including noticcs of ways and means ~notions.

The details of the Incusures are contained in [tic documents.

I am asking that an order of' the day be tlesignated Ihr considcralion of these ~nolions.
Thc member from ~Iic Bloc Quebecois raised a couplc of issucs which bear some comnicnt.

Firsl.

she cornmenled wilh regard to the CHST, the Canada health and social transfer.

She basically clai~ned that the cuts in the CHST have to be restored.

The member will well know that the Prime Minister outlined for the flouse several times last week that loday the combination of cash and tax point lransfers to the provinces is grcater than i t was in 1993.

That is an important point.


Canadians have to understand that the federal government has given the authority to the provinces to collect taxes.

As their economies grow, the amount of tax revenue which they collect on that growing economy also means that the provinces will get additional revenues.

The combination of cash transfers and tax points is the important element.

The member also talked about social housing and homelessness.

She will well know that this is not a simple problem.
One aspect of this has to do wilh children.

Of the homeless recognized in the Anne Golden report in Toronto, 28% of the homeless were youth.

Of those, 7 0 8 had experienced physical or sexual abuse while they were in the family home.

It is important to understand that social housing and homeless- ness are separate issues.

The Speaker: The hon.

member will have the floor when we take up this debate again, whenever that is, and he will have 14 minutes.
It being 4 p.m. the House will now proceed to the consideration of Ways and Means Proceedings No.

5 concerning the budget presenlation.

GOVERNMENT ORDERS I am also announcing thal [he govcmment will.

at he carliest opportunity.

be introducing bills LO implement the measures an- nounced in this budget.

~ I begin.

want to express ~ ~ f , ~ G ~ lo the slanding committee caucus for their invaluable contributions in [he lead-up to this on ~i~~~~~ and [he many con,mittees ~ appreciation ~ Most importantly.
on behalf of [his parliament.

I want to thank Canadians from all walks of life and all parts of the country who shared their ideas and insights wilh us.

The experience of the last few years has confirmed beyond a doubt that an open budget process is a better budget process.

Throughout our country's history each generation has undertak- en the great task of building Canada.

Today, at the dawn of a new century.


we are fortunate indeed to live in a land of promise, in a world of change and in a time of opportunity.

Are there problems?

Yes, there are and there is much to be done.

That being said, we are in a better position today to chart our own course than we have been in many a decade.

Canada's economic growth is among the strongest of the G-7 countries.

The size of our economy will surpass the trillion dollar mark this year.

The deficit is a matter of history.


Indeed today we project the third, fourth and fifth balanced budgets in a row, something that has not been done in over half a century.

Inflation remains in check.

The government debt burden is declining.

Canada's foreign debt burden is declining.

Consumer and business confidence are at near record levels.

Most important, after a number of difficult years these positive economic indicators are now beginning to be reflected in the lives of Canadians.
In 1999 there were more than 425,000 new jobs created in Canada.

a Dace unmatched bv anv other G-7 countrv.

As a result , , our unemployment rate now stands at 6.89'0, its lowest level in nearly a quarter of a century.

, a THE BUDGET (160.5) FINANCIAL STATEMENT O F T H E MINISTER OF FMANCE Hon.

Paul Martin (Minister of Finance, Lib.)

moved: That his House approve in general he budgetary policy of the eovernrnsnl.

In the early and mid-1990s Canadians saw their real after tax income shrink.
Three years ago that trend began to turn around.

Based on the information that is iust out todav.

dis~osahle incomes are now some 4% higher than"they were in 1996 and, of even greater moment.

private sector forecasters project that Incomes will rise much more significantly in the years ahead.

.

- d 1 Fehruary 28.

2000 COMMONS DEBATES 4101 This is clearly good news.

However.

while the progress of rccent years is a record on which Canadians can be proud to stand.
i t is not a record on which we are prepared to rest.

Canadians do not want to dwell on the past.

They want to f(~cus nn the future.

and indeed that is the message of this budget.

In 1993 we established a plan to el~minate the deficit.

turn our economy around and create new jobs.

That plan has worked.

Now.

two months into the year 2000, we must take Canada further.

We must create a greater prosperity and see to it that the benefits of that prosperity are shared widely.
Our challenge now is to build on our new-found strength.

Canadians know that this is the time to act.

They know that globalization and the rush of technology will not wait for us.

Nor will these forces pause for us to prepare.

The challenges are here and the opportunities are now.

In last fall's fiscal update, we asked ourselves three fundamental questions: First, what will it take to secure our position as a leader in the new economy'?
Second, how can we provide every Canadian with an equal opportunity to succeed?

And third, how can we ensure the best quality of life for all Canadians.

not simply a fortunate few'?

In this budget, we outline our response to those questions.

First.

we will continue to provide sound fiscal management.

There will be no slipping, no sliding: the days of deficit are gone and they are not coming back.
Second, we will lower taxes to promote economic growth and to leave more money where it belongs-in the pockets of Canadians.

As we said last November, Canadians are entitled to keep more of the money they earn.

After all, they worked for it.

It's theirs.

Third, in order to ensure equality of opportunity, we will invest in providing Canadians with the skills and knowledge they need to get the jobs they want.

And fourth, together we will build an economy based on innovation.
For that, ultimately, is the only means by which a modern nation can control its future.

[English] sion and insistence that therc be an cquitablc sharing of thc benefits of economic prowth.

These are thc bedrock 01' our nation and they must be the cornerstone of our plan.

For this reason the first announcement of the first budget of the 21st century is that we will increase funding for post-secondary education and health care.

These are the highcst priorities of Canadians and they are ours.
We have already acted three times to strengthen the cash transfers to the provinces through the Canadian health and social transfer.

Indeed last year for health care alone we made the single largest investment in this government's history.

At that time we also said we would do more as resources permit.

and we will.

Today we are making good on that commitment.

We are announc- ing the transfer of a further $2.5 billion to the provinces to use over four years for post-secondary education and health care.
Furthermore, to meet pressing needs in our universities.

our colleges and our hospitals, the provinces will have the flexibility to draw upon this new cash sooner should they choose to do so.

We have already acted three times to strengthen the cash transfers to the provinces through the Canada Health and Social Transfer (CHST).

Today, we are announcing the transfer of a further $2.5 billion to the provinces to use over four years for post-secondary education and health care.
Furthermore, to meet pressing needs in our universities, colleges and hospitals, the provinces will have the flexibility to draw upon this new cash sooner-should they choose to do so.

As a result of this and last year's budgets, the cash component of the CHST will rise from the 1998-1999 level of $12.5 billion to increase of almost 25% over just two $15.5 billion next year-an years.
Therefore, the total annual support provided the reach close to $31 billion next through CHST-tax ye"'-" points and cash-will high.

We had guaranteed the provinces stable and growing funding for health care and post-secondary education.

Today, that is what we are continuing to do.

Nor is that the end of the story.

Equalization payments to the provinces will be $500 million These four elements speak to our economic framework, but our higher this year than projected in last year'x budget.
As a result, plan must do more than that.

It must reflect not only the value of equalization ~ransfers as well are now at an all-time high.

This our economy but also thc values of our society.

The success that we have achieved as a nation has come not only l'rom strong growth means more money for less prosperous provinces for health care.

but from an abiding conimitn~ent to strong values: caring, compas- education and other programs.
4 102 _ - ~ COMMONS DEBATES .~ February 38, 2000 ~_ - - -_ ----_--_--p - _ ]Mr. Speakcr, let mc now turn to our plan for building a stronger economy.

Prior to the fall update.

wc consullcd with a number o f economists from Canada's major chartered banks and lour m q o r forecasting firma.

This invited a national dcbatc on our longcr-term objectives-a dcbatc hased on a series ofpro.jcctions about Ihe size ot'thc budget surplus for each of the next five years.

These projections were sound.


But we also know, especially for thc later years.

that they arc just hat-projc'ctions.

They arc bets on the future.

not money in the bank.

Therefore, while we must always set longer-tcrm ob.jectives.

we will continue to make decisions only on a rolling two-year basis.

We will also continue to build additional prudence into our planning and to set aside a $.

?-billion Contingency Reserve to protect against unforeseen events.
Let there be no doubt, this government will not repeat the mistakes of others and spend money we might not have, or raise expectations we cannot meet.

Nor will we abandon the balanced approach we have adopted approach which recognizes that dcbt from the beginning-an reduction, tax relief and spending on health, post-secondary educa- tion and other key priorities are not competing claims, but comple- mentary components of a fair and effective plan.

[English] Let me now turn to the debt.


Canada has not just eliminated its deficit.

We are one of the few countries that is now reducing the absolute amount of its debt and we will continue to d o so.

Indeed over the past two years we have paid down the debt by more than $6 billion resulting in interest savings of more than $300 million a year each and every year.

As well, market debt, the debt issued in financial markets has fallen even further.
By the end of this fiscal year w e will have reduced our market debt by close to $20 billion.

More importantly, Canada's debt to GDP ratio, which measures the amoun; of the debt against the size of the economy, has improved markedly; the lower the ratio the more manageable the debt.

In 1995 Canada's debt ratio was 7 1%.

Today it has dropped by 10 percentage points and it should fall below 50% by the year 2004.

Beyond this the downward track must continue.


We are still a long way from the 25% ratiu Canada enjoyed in the late 1960s.

the last time our books were in the black.

measures to be outlined in this budget.

program spending next year will bc $4 billion lower than it was when we took officc in 1993.

Lct there be 11o doubt.

we will control spending.

For instance.


bepinning wiih ilic time we balanccd the books and looking ahcad to thc year 3-00 1-02. growth in program spending ib projected to bc in line with intlation plus population growth.

the standard that is used by most economic cornmenlators.

tlaving said thar.

the standard of living that we enloy as a country docs not come free.

For instance, Eully two-thirds of all of the new spending measures since we eliminated the deficit have been in the areas of heal~h care.
post-secondary education and innovation.

Furthermore there are other fields where the government must take action, areas where we have fundamental responsibilities at home and essential obligations abroad.

The crisis faced by farm famrlies in conimunities across the country is real and better short and long trrrn solutions are required.

The RCMP fuces new challenges in the area of organized crime and international terror- ism.
The demands upon our military whose men and women contribute so much at home and abroad are increasing.

Within our borders we must strengthen our immigration system.

Beyond our borders we have an obligation to help the poorest of the world's poor.

In each of these areas w e are providine additional funding.

Let me now turn from the responsibilities of the present to the opportunities of the future.

Let us address the new economy.

At this the beginning of the 2 1st century.


we have a unique chance to take hold of our destiny.

The basic question we have to answer is what are thc choices that we must make today that in five, ten or twenty years time will be seen as having made a critical difference in making Canada the land of opportunity?

Powered by the information revolution and a cascade of new technolopies, distance is disappearing, borders are collapsing and the world once divided is now connected as ncvcr before.
Micro- processors and microchips, satellites.

fibre optics and the lnternet are changing the way we live.

They are changing the way we work.

They are changing the way we communicate.

The result is the most significant economic transformation of our time.

Today the strength of a nation is measured not by the weapons it wields, but by the patents it produces; not by the territory it controls, hut by the ideas it advances; not only by the wealth of its resources, but by the resourcefulness of its people.
In such a world, successful nations will only be those that foster a culture of innovation.

There will be those that create new knowledge and bring the product of that knowledge quickly to market.

Economic growth has played an important role in Canada's falling debt ratio.

So has controlling government spending.

We have previously pointed out that federal government spending as a percentage of our gross domestic product is at its lowest level in over 50 years.
The fact is that even after taking into account the world as our market, but Canada as the place to live.

Our goal as a nation must be to lead the way.

Our goal must be to inspire a spirit of entrepreneurship, one that asks our people to reach higher, to look farther, and one that encourages us to see the February 28.

2000 C O M M O N S DEBATES 4 1 03 As a country we are well placed.

far better than most.

to seize Ilic opportunities of the 21st century.


But there is nothing incv~table about our progress.

If we are to capitalize on the opportunities of the new economy, then both the private and the public sectors have their roles to play.

they see their own rellection.

that thcy hear their own slorica.

Tlicrel'ore.

in this budge[ wc are providinp the ncceasary I'~inJing to enhance the presence of Canadian cultural material c ~ r i tlic Internet in both ofl'icial languages.
The private sector must change its concept of risk.

I t must improve access to capital.

11 must give greater priority to start up companies.

It must exploit the full potential of new technologies, like the Internet, to capture markets in every corner of the globe.

Government in turn must reduce the regulatory burden.

I t must help fill the gaps in an economy that is increasingly moving from brick to click.

What musl government do?

It must equip Canadians to succeed.


That means an education sys~eni second to none: basic research, the raw material of the new economy: secure social programs that recognize that real progress is made by reaching for the top, not racing to the bottom; and a tax system that is both fair and competitive.

If we are to talk about a more innovative economy, we must hegin with people.

Skills and knowledge join the ambitions of the individual with the potential of the country.
They are the meeting place between social and economic policy.

the best means available to us to narrow the gap between the rich and the poor.

That is why in 1998 we introduced the Canadian opportunities strategy, a multi-part plan to expand access to knowledge and to skills.

Last year built upon that foundation and today we huild further.

First.

as we have already discussed.

this budget increases support to the provinces for post-secondary education by increasing the cash available through the CHST.
Second, we will follow through on the commitment made in the Speech from the Throne to create new 21st century chairs for research excellence.

These will be new research positions in Canadian universities designed to atlract the best researchers from around the world and to retain the best from across Canada.

Half of these positions will be directed to Canada's leading scientists and hall' to the very best of the next generation of young Canadian researchers.
In October the Prime Minister said: "This investment will make Canada a leader in the knowledge based economy and will truly brand Canada as a country tliat values excellence and is committed to success".

This initiative will help Canadian universities not only to meet the opportunities and the standards that have been set by others today, but to set new standards that others will have to meet tomorrow.
To this end, this budget provides $900 million ol' 'funding over five years For 2,000 new research chairs.

Finally, scholarships are an important part of' expanding access to higher learning.

Therefore, in order to ensure thal more students receive their full value.

we are increasing the tax exemption ol' scholarships and bursaries from its current level or $500 to $3.000.

Research and development is the foundation for new products and processes.

I t is what smart companies always do.


I t is what smart countries must do.

Quite simply, we must ensure that within our borders we have a research capacity that is constantly pushing forward the frontiers of human knowledge.

In the 1997 budget, this government created the Canada Founda- tion for Innovation (CFI).

To date.

it has awarded $450 million to help post-secondary institutions, rcsearch hospitals and nut-for- profit organizations to modernize their laboratories.
their equip- ment and their technologies.

Alrnost half of its funding has been directed at health research.

The CFI is one of the cornerstones of our plan to supporl the new economy but if we do not act now.

its funding will run out within two years.

Therefore, in order to enable it to extend its awards into the year 2005, this budget provides $900 million to the CFI, raising the Government's total investment to $1.9 billion.
Because health research holds such potential to contribute not only to the quantity of our knowledge, but also to tlie quality ol'our lives, last year's budget announced the creation of the Canadian institutes for health research, an initiative that will transform the way research is done in this country.

Today, we take another important step.

Llnderstanding how genes function opens tlie door to substantial progress in advancing the treatment of cancer and other lik-threat- ening diseases.
Gene research will save the lives oi' many.

I t will enhance the lives of still more.

11 will surely form the basis for many advances in biotechnology, which many believe will he as in~portar~t in the new century as computer technology war in the last.

Third, as Canadians, especially young Can;~di;~ns.

[urn more and more to the Internet as a source ol' inl'ormation.
it is important that For this reason, we arc announcing today that wc will commit I'ive $160 million lo create the Genome Canada pro.ject-with 4104 __ - COMMONS DEBATES __-_--.p-______---__ .

~ February 28, 2000 centres across the country, providing laboratory facilitich (01 researchers from universities.

government and the private sector.

Canada is one of h e world's leaders in the field of biotechnolo- gy.

However.

we recognize that biotechnology.

for all its potential.

also raises concerns.


Canadians want to know that we understand and can manage its risks, that health, environmental and ethical limits will be identi- fied and respected.

Therefore, this budget will provide funding over the next three years to ensure that as we receive the benefits of biotechnology, we also have the ability to ensure its safely.

[English] For Canadians of all ages, protecting the environment is not an option, it is something we simply must do.
It is a fundamental value beyond debate, beyond discussion.

For this reason.

this budget provides additional resources to further clean up the Great Lakes, to ensure environmental enforcement, to protect species at risk.

to reduce organic pollutants in the north and to provide development assistance to deal with greenhouse gas emissions in developing countries.
Furthermore, we are announcing today that in order to preserve national habitats and species we are cutting by half the capital gains tax arising from the donation of ecologically sensitive land.

In 1998 we, along with the other orders of government, NGOs and the private sector, launched the process required to develop the national climate change strategy.

These consultations are conclud- ing and the strategy should be unveiled by the end of the year.
However, within the context of a budget seeking to prepare our economy for the 21st century, there are a number of things that we can and must do now.

The unequivocal fact is that climate change, indeed the entire environmental spectrum, will provide challenges, but for an inno- vative economy it presents many more opportunities.

Those na- tions which demonstrate how to truly integrate environmental and economic concerns will forge new tools.
They will develop new technologies that others will have to adopt.

Tremendous rewards await those nations that get there first and for those that do it best.

Given the importance of natural resources to our country, because of the severity of our climate, leadership in this area of the new economy is not a matter of choice for Canada.
Quite simply, we must apply the same innovative thinking, the same spirit of enterprise, the same technological ingenuity to protecting and enhancing our environment as we have in becoming world leaders in the field of telecommunications.

transportation and so many others.

Technology is key, make no mistake.

If we arc to succes.sEully tackle climatc change.


to cut costs and boost productivity and to translhrm ourselves into the world leadcr in the fields of clean energy, then we have to employ cvcry bit of the skill and knowledpc that we possess.

Accordingly, thih hudgct takes a number of targeted actions.

First.

we are announcing today the creation of a sustainable development technology fund.
This fund will foster innovation by helping companies develop new technologies and bring them to market in areas such as clean burning coal and new fuel cell development.

Second, we are announcing that we will create the Canadian foundation for climate and atmospheric sciences, a network of institutes that will link researchers from across the country in order to further our understanding of the impact of climate change and air pollution on human health.
Third, the government is beginning to change its procurement policy to move as much as possible to more environmentally friendly energy stimulating market demand for green power.

Fourth, the Federation of Canadian Municipalities and la Coali- tion pour la renouvellement des infrastructures du Qutbec have worked on excellent proposals in the area of green infrastructure.

These allow us to extend the hand of friendship to those in the front lines of a fight for a cleaner environment.
One of these proposals is a green municipal enabling fund to help communities assess where their environmental needs are greatest.

The second is a revolving fund leveraging private sector investment in areas such as waste management and water conserva- tion at the municipal level.

This budget gives effect to both proposals.

Finally, as we move to more fully integrate economic and environmental policy, we must come to grips with the fact that the current means of measuring progress are inadequate.
Therefore we are announcing today that the national round table on the environ- ment and the economy and Environment Canada, in collaboration with Statistics Canada, will be provided funding over the next three years to develop a set of indicators to measure environmental performance in conjunction with economic performance.

In the years ahead these environmental indicators could well have a greater impact on public policy than any other single measure we might introduce.
When all these measures are taken together, this budget will invest $700 million in environmental technologies and practices.

We are making this investment because protection of the environ- ment is a fundamental value of our country, but let us understand as well it is also good economic policy.

It is a key element of our plan to build a more innovative economy.

Make no mistake, far from February 28.

2000 C O M M O N S DEBATES 4105 hcing a cost that we cannot afford.
environmental protccrion is an opportunity we cannot forgo.

There is another aspect of our plan that is of critical importance.

To succeed in the new economy we must ensure that it takcs root in every part of our country.

This perspective was at the heart of "Catching Tomorrow's Wave".

a report that was prepared by our Atlantic caucus.

Let me just say that we have heard them loud and clear.

A similar point has been made by other members of our caucus in a very different context.
They point out that while we must ensure that all provinces participate in the benefits of the new economy, even within provinces there are major differences be- tween urban and rural communities.

The concerns of rural Cana- dians are those shared by all Canadians: quality health care.

the best education for their children, a good job.

The difference is that in the case of rural Canada, a hospital closing, the school setback or the loss of a major employer threatens the very life of the community.
Therefore, we must expand economic development in smaller communities right across the country, north and south, east and west.

We also must recognize that in the years ahead all orders of government have to come together as never before to broaden opportunities right across the country.

As only one example of the kinds of things we must do, last week w e said that in addition to the moneys that were previously announced to meet farm needs across the country.
that we would commit a further $240 million for farm families on the prairies.

This, combined with an additional $160 million from the con- cerned provinces, provides an immediate relief package of $400 million.

We can also enhance opportunities across Canada by strenpthen- ing the basic physical infrastructure which underpins so much of the economic activity of both rural and urban Canada.

We hopc to have an agreement by the end of the ycar.

For its part.
For its part.

the Sedcral government is prepared to commit $4.50 million over the next two years and $550 miliion in each of the l'ollowi~lg tour years.

Having spoken about what it will take to succeed in the world of tomorrow, let me now turn to the authors of that futurc: our children.

Let there be no doubt that assisting families is not only the smart thing to do.

it is the right thing to do.

An important key to our children's success is the strength of the communities in which they live.
That is why the federal and provincial governments agreed to develop a national children's agenda, to expand the capacity of governments.

voluntary organizations and our commu- nities to provide the services and the support upon which s o many of our families and their children rely.

This agenda is critical and it simply must be advanced.

As the next step, the Prime Minister invited all governments to reach agreement by December of this year on an action plan for early childhood development.
Our objective is simple.

Whether it be further services or income support, all orders of government must be prepared to do more for our children.

In the same respect, in the Speech from the Throne the govern- ment committed itself to improving support for children by extending maternity and parental benefits under the employment insurance program from the current six months to one year.

This budget honours that commitment.


I would like to take this occasion to congratulate my colleague, the Minister of Human Resources Development, for her tremen- dous effort.

These initiatives focus on the needs of children.

They deal with the services and the programs their families require.

However, let there be no doubt that one of the best things we can d o is to leave parents with more money at the end of each month to invest in their children's well-being.
It was with this very much in mind that the government sought to that design its tax reduction plan.

The principles underlying package are as follows.

Whether it is urban transit, a grain road on the prairies or the highways of our country, the capacity to move people and goods safely and efficiently is key to an innovative and productive economy.
First, while tax reduction must benefit ali Canadians, it must primarily bencftt those who need it the most: middle and low income earners, especially families with children.

Affordable housing and green infrastructure are also essential elements of a modern society.

Thcy are critical to meeting the 2 Is1 century needs of our municipalities.

Second, broad based tax reduct~ons should focus ~nltially on personal income taxes.

To these ends.
To these ends.

the government has announced that we will work with other orders of government ar~d.

where applicahlc, the private sector to reach agreement on a plan to improve provincial and municipal inf'rastructure in cities and rural communities across Canada.

Third, our business tax system must he internationally competi- tive.

Ftnally.

broad based tax reductton\ should not bc ftnanccd with borrowed nloney.

4106 COM h4ONS DEBATES ~- ~ ~ February 28, 2000 In thc 1997.
I908 and 1999 hudzets wc lowered thc average personill tax hurdcri 01' Ci~nadians hy 1 0 % .

That is over 9 1 h billion.

Today, with surpluses prolectcd for thc coming ycars.

the time has come to do more.

For this reason we are settin2 c~ut ;I five-year tax plan so that individuals.

families.

small businesses and others will know for certain that thcir taxes will fall this year.

next year and in the ycars to come.

In practical tcrms, this has hit middle-incomc carncrs the 17% liardcrt.
hecause the federal tax rate-jumps by Y points-from soon as someclnc's income reachcs $30,000.

lo 26%'-as Thcret'ore.

over the next fivc ycars.

we will lower the rn~ddlc tax rate from 26% to 2 3 4 .

The plan we arc presentirig today provides real and significant tax relief.

I t is anchored in two fundamental structural changes.

First.

Canadians know that taxes cannot start lo come down in earnest until they stop going up with inflation.
Inflation should not force lower income Canadians on to the tax rolls and others into higher tax brackets.

Nor should inflation erode the real value of the Canada child lax henerit and the goods and services tax credit.

Nor should it erode the real value of the age credit for Canadian seniors, nor the income level at which old age security besins to be reduced.

Therefore.

we will make the most impcrrtant change to the Cana- dian tax system in more than a decade.
We will restore full indexation to the personal income tax system immediately.

Second, it has been over 12 years since the actual tax rates of Canadians have corne down.

In practical terms this has hit middle income Canadians the hardcst because the federal tax rate jumps by 9 points, from 17% to 26%, a$ soon ac someone's incomz reaches $30.000.

Therefore, over the next five years we will lower the middle tax rate from 26% to 23%.
Most importantly, we are announcing that two-thirds of that reduction, down to 24%- will go into effect on July 1st of this year.

Reindexing the tax system and lowering tax rates will provide a significant benefit for all Canadians, but as well we will go further.

Over the next five years we will increase the amounts Canadians can receive tax free to at least $8,000 and we will raise the income levels at which middle and upper tax rates begin to apply to at leaqt $35,000 and $70,000 respectively.
Furthermore.

while these amounts provide significant relief, they are only the start.

In future budgets when we can do more.

we will.

We will make the most important change to the Canadian tax system in more than a decade.

We will restore full indexation to the personal income tax system and we will d o s o immediately.

Mosl importantly.

we are announcing today that two-thirds of g o into cfl'ect on July I of this to 24%-will that reduction-down year.
Re-indexing the tax system and lowering tax rates will provide a significant benefit for all Canadians but as well.

we will go I'urther.

Over the next five years, we will increase the amounts Canadians can receive tax-free to at least $8.000 and we will rake the income levels at which middle and upper tax rates begin to apply to at least $35.000 and $70.000 respectively.

These amounts will provide significant relief but they are only the start.

In future budgets, when we can d o more, we will.


These structural changes mean substantial tax relief for all Canadians.

For families, we are doin, more.

I hardly need to remind this House that the cost of raising children is a significant expense.

Ask any parent about the price of new shoes, or snowsuits.

Ask any parent whose child plays sports or takes music lessons.

Ask any parent trying to save for their child's education.

The purpose of the Canada child tax benefit.


the CCTB, is to hclp with these costs.

In July 2000 the maximum payment for a family's first child will rise to $1.975, a level at which it was to remain in 2001 and subsequent years.

T h e cost of raising children is substantial.

Therefore, we are announcing today that the Canada child tax benefit, which is to be increased this July, will be further increased next July to $2,265 and to $2,400 over the next five years.
Amounts for each additional child will keep pace with these increases.

Most significantly.

nine out of ten Canadian children will benefit from these improvements.

At the present time, the Canada child tax benefit ic of greatest value to lower income Canadians.

The measures we are introducing today will add to that benefit while extending it more fully for middle-income families.

Second, it has been over 12 years since the actual tax rates of Canadians have come down.
For example, a single mother earning $25.000, with one child.

will see her benefits increase by 22% by 2004.

Fchruary 28.

2000 - COMMONS DEBATES ~ ~.~ - - 31 07 - -- A typical family with two children.

earning $60.000.

will receive $200 in additional benefits in 2001.

By the fil'tli year.

their benefit will more than double-from $733 to $1.541.

The challenpes of raising a family are compounded when a child has a disability.

In some of these cases full time home care by a parent is necessary.
Therefore.

we will assist these families by Increasing the disability tax credit by up to $500 per year.

In addition, for families with disabled children we will increase the maximum annual child care expense deduction from $7.000 to $10,000.

is occurring.

such as high tech services, which job creation rates that arc much higher.

ycl they arc up against shoulder tax companies operating around the world thal pay lowcr taxes in their home countries.
If we are to unleash the creative energies of our economy.

if we are to encourage innovation and expand job creation.

then tliesc tax rates must be brought down to allow our companies to compete vigorously.

Therefore, we are announcing that over the next five years we will lower the rate for thcse higher taxed industries from 2 8 4 to 21 5%.

putting all sectors of the Canadian economy on an interna- tionally competitive footing.

As a first step.

the rate will drop on January 1.

2001 to 27%.


We will also introduce a number of other tax measures to further assist persons with disabilities.

We will make permanent the opportunities fund, a pilot project to assist persons bith disabilities prepare for, obtain and keep employment.

We have talked ahout the importance of innovation in develop- ing a modern economy.

Just as we are making investments to that end, we must also introduce tax measures that encourage entrepre- neurship and risk taking.
Our government inherited three major legacies in the area ot income tax which had been introduced to help reduce the deficit.

This budget proposes action on three fronts.

First, we will reduce the taxation of capital gains by lowering their inclusion rate from three-quarters to two-thirds, effective immediately.

In 1999 we eliminated the 3% surtax.

This budget restores indexation of the personal income tax system.

Today we are also committing to eliminate the last of these legacies.
Effective this July we will eliminate the surtax for middle-in- come Canadians on earnlnps up to $85.000.

Over the next five years we will elimina~c i t altogether.

Since 1994 employment insurance rates have been reduced each and every year from $3.07 to $2.40.

In the future.

these rates will keep corning down to the point where they cover just the costs of the El program itself.

For planning purposes, we have assumed that they will tall to $2.00 In 2003.
Adequate inconies in retircnirnt are a critical requirement for any society.

Diversification of registered retirement savings plans and registered pension plans.

in turn, is an important part of ensuring that incomc.

Accordingly, we will increase the foreign content allowed in retirement plans to 30%.

beginning with a 5-percentage-poinl rise in the year 2000, followed by another 5-point rise in 2001.
To sustain the growth which underpins our econorrly we need a corporate tax system that is internationally competitive.

At thc niomcnt a nuniber of Canadian industries enjoy competitive tax rates ol' about 21%.

But therc are others, where much of the new Second.

we will allow up to $100,000 in stock options granted annually to be exercised with the tax being paid only when the shares are actually sold.
Third, a key factor contributing to the difficulty of raising capital by new start-ups is the fact that individuals who sell existing investments and reinvest in others must pay tax on any reali~ed capital gains.

Therefore we will allow a $500.000 tax free rollover for qualifying investments, thereby increasing the amount these investors can put into new ventures.
Finally, this budget proposes a measure which specifically benefits small but growing businesses, a major engine of both innovation and job growth in our economy.

Small business has told us that the most important steps we can take to assist them would be lo lower personal income taxes, provide for rollovers.

remove the 5%' surtax and reduce the tax on capital gains.

This budget does all of these.

I t also.

however, includes one further measure.


At the present time the corporate rate rises dramatically from 12% to 28% once non-manufacturing small businesses reach $200,000 in income.

We are announcing today that the reduction in the corporate rate to 21%, which is being phased in for large businesses will fully apply toall small business on income hctween $200,000 and $300,000 effective January 1, 2001.

The five year tax plan.


both personal and corporate, whlch we is I'ar reaching in terms of thc structural have outlined today 4 108 COMMONS DEBATES February 28.

2000 direction i t outlines.

I t is substantial in ternis of the s i x of rhc tax relief it permits.

This budget provides LI minimum of $58 billion in cumulative tax relief for Canadians over the next five years.

This budget cuts personal inco~ne [axes by an averape of 15% and for many much more than that.

For low and middle income Canadians.


for instance, taxes will Fall by some 18% on average and for lhmilies with children by an average of 21%.

The five-year tax plan.

hoth personal and corporate, which we have outlined today.

is far-reaching.

This budget provides a minimum of $58 billion in cumulative tax relief to Canadians over the next five years.

It cuts personal income taxes by an average of IS%, and for many.

much more than that.

For low and middle income Canadians.


for instance, taxes will fall by some 18% on average, and for families with children, by an average of 21%.

Let me give you some specific examples of how this budget will benefit Canadians.

First, indexation will help lower income Canadians most.

In- deed, they will receive almost 4070 of the tax reduction it affords.

They will receive more than $500 million by the fifth year in additional GST credits.
They will automatically receive increases in child tax benefits and the seniors credit.

Second.

two seniors with a family income of $30,000 will see their net federal taxes fall by 45% by 2004.

Third, a one earner family of four earning $40,000 will see its net federal taxes reduced by 17% next year and by 48% by 2004.

That is a savings of more than $1,600.

[English] A one earner family of four with income up to $32.000 will receive more in benefits than they will pay in federal taxes.
As a result they will pay no net federal tax next year and by 2004 this family will be able to earn up to $35,000 a year and still pay n o net federal tax.

A single parent earning $30.000 with one child will see his or her net federal benefits increase from $32 to over $1,000 by the year 2004.

A two earner family with two children and an income of $40,000 will see their net taxes cut almost in half next year, and they will pay no net federal tax by 2004.

This reprcscnts a savings of $1.244.


Finally, a two earner family with two children and $60,000 in income will see their taxes cut by almost 9% next year and hy 27%' by 2004.

That is a savings of more than $1,500.

One further point, a1 the beginning of this presentation I said that while we would set out five year objectives wc would makc our decisions based on a rolling two year tirnc horizon.
This is particularly importan1 when hearing these cxaruples because it means that as substantial as they are the tax cuts outlined in this budget rellect the least.

not the most thar we will do.

Indeed, what is not even reflcctcd in these examples is that the 15% average tax cut on which all of those examples were based does not take into account the 22% average tax relief when this budget is combined with its most recent predecessors.

Lct me just say that in subsequent budgets.


as resources permit, we will do more.

That is how we eliminated the deficit and that i\ how we will reduce taxes.

This is a budget with many elements but a single theme: creating better lives for Canadians in a rapidly changing world.

It is a budget that makes innovation the driving force of our economy.

It puts more money into post-secondary education and health care.

It acts to preserve our environment and to capture the opportunities it affords.
It speaks to our values by recognizing the importance of children.

[English] This hudget restores indexation to the Canadian tax systern.

It cuts federal tax rates for the first time in more than 12 years.

It supports job growth by making Canadian business more interna- tionally competitive.

It is a budgct that says you can cut taxes and invest in tomorrow at the same time.

It is a budget that sets its sights firmly on the future and charts the course to take us there.
I t is a budget that recognizes that while we cannot imagine the world our children will live to see, our responsibility t o their future is clear.

We must lay the foundation on which they will stand.

We must preserve the values on which they will build.

May it be said of us that we in our time laid that foundation and preserved those values.
May we embrace the future with confidence, the confidence of a people who knows that for all of our achievements as a nation, for all of the greatness of our history.

the best of Canada is yet to come.

Mr. Preston Manning (Leader of the Opposition, Ref.

): Mr. Speaker.

in about three minutes I will formally move adjournment of the budget debate until tomorrow.
Before doing s o 1 want to thank the finance minister for his presentation, a presentation which is more remarkable not for what it contains hut for what it fails to disclose.

February 3-8.

2000 pp---.---...p ~- --.-pp-...--L-.------.-..p-.----p-p---p-- COMMONS DEBATES ~- .. .~ pp-..-p--p- ~ --..--.-p... 4 109 ....

Call in the niernbera.

,,7-10 (The House divided on the amendment.

which was negatived on the following division:) (Di\.isio~z No.
753) YEAS hlcmhcrr Ahlone/) Asxlio Uachand 1Sa11il-lean1 Bcniicr l B o 1 1 a v ~ ~ 1 l ~ u r c 4 i a s ~ - Bcnllcr (T~~hiq~c~-lrlacIaquacl Bor~~t*il.
nricn Crnucl cas\1111 Uhrl'licn (I.ronvnar-Mi'ganlicl dc Sa\uyc I*qlc I)uma\ lilley 1 orscth Oasn1111 (illard-Dyinld (iuldrin$ (ircy l l ; d n ~ f ~ n l o ~ i honlil ( i o i n ~ u n d Harri* Hdr.vcy Hill 1MaclcodI Hilsuom Jolinhlun K~.ddy lS(luth Shore) I.alondc I.crehvrs ~ ' McNall) h l c a ~ c r d h411lh IKcd l>cr'rl Muiae Ohhrai I'icard t1)rummondl 1'rir.c Ilcrchclcnu 51-Hilairc Thompsol~ (New Brunswick Soulhwcs~) Turp waync NAYS ~ ~ ~ ~ M ~ I V ~ I ~ ~ Unn~sc~n h i ~ n / l ~ l d I'crlii~l l'latnondc,~i Ilcyaoida Sauvagc,lu Sl-Jacqueh T~cmhlay lHimooh~~-MillsJ Vunnc W~lliamr-86 I find i t absolutely astounding lhal this budget statemen1 con- lains no rekrence whatsoever to the $1 billion boondoggle at human resources developnient.
I t does not answer the queslion of' taxpayers as to why we should give [lie government more money lo spend when it wasles what we already give il.

If llie vice-president of a large public company had a $1 billion boondoggle in one 01' its divisions and even failed to mention it i n the annual statement to the shareholders, tlie stock of h a t company would be driven through the tloor, heads would roll and the vice-president of finance would end up in a federal institution.

and I do not mean tlie Senate.


Five years after the official opposition called for eliminating bracket creep the government hai finally agreed to do so, and we commend it for doing so.

While the budget loudly proclaims a number of other so-called tax breaks.

it buries and obscures every provision in the government's financial plan for tax increases like the prescheduled increases in CPP premiums that take about $38 billion out of the $58 billion profit.

Far be it from me to cast a shadow over this day.


Let our Liberal friends retire to the captain's table as the Liberal Titallic sails into the night.

Let them eat, drink and be merry and celebrate while they may the illusions of this budget while the band plays Aiilaci17g Grace, and then let us reassemble tomorrow to commence the budget debate where the omissions, the half-truths and the illusions of this budget will be exposed in the clear light of day.
Therefore 1 move: That the debate he now adjourned The Speaker: Pursuant to Standlng Order 83(2) the motlon 1s deemed adopted.

(Motion agreed to) CANADA ELECTIONS ACT The House resumed from February 25, consideration of Bill C-2, an acl respecting the election of members to the House of Com- mons, repealing other acts relating to elections and making conse- quential amendments to other acls, be read the third lime and passed.

and of lhe amendment.


The Speaker: The House will now proceed to lhe taking of the deltrred recorded division on thc amendment i n the name of lhe hon.

member for Vancouver Norlh to the motion at third reading slagc of Bill C-2.