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Scott Brison's Speech in Reply to the 2003 Budget

Source :

House of Commons Debates

Wednesday February 18, 2022

Scott Brison, M.P.
Speech in Reply to the 2003 Budget

Mr. Scott Brison (Kings—Hants, PC):
Mr. Speaker, it is with pleasure that I rise today to speak on the budget. This budget is a return to the 1970s Liberal free-spending habits that have imperiled Canada's economic prosperity. Instead of a vision for the future, the government is reverting to a nostalgia for the past. Last time we witnessed program spending growth like this, the current Prime Minister was the Minister of Finance.

The fact is that since 1998 we have seen growth in program spending that did not always reflect the priorities of Canadians, but this is the first year in which we have seen such a dramatic increase in program spending. Nobody disagrees, and in fact, we want to see a greater level of investment in health care and the military.

Health care and the military clearly represent the priorities of Canadians, but if we take the budget's health care reinvestment portion and military reinvestment portion out of the increase in the spending, the fact is that there is a 7.3% increase in government program spending in the budget, net of health care and the military.

This is far in excess of the economic growth in Canada. We cannot sustain that level of spending growth. It is simply not sustainable and we are imperilling the future of the country. It is like the sixties and the seventies all over again. There are anti-war protesters in the streets, there is talk in the House and elsewhere about the idea of decriminalizing marijuana, and there is a free-spending Liberal government in Ottawa again. The Prime Minister must be having a flashback.

The Prime Minister should have warned his finance minister not to make the same mistakes that he made when he was the finance minister in the 1970s and to simply say no to this Liberal waste and largesse. There was probably not one single Liberal backbencher who did not get something in this budget. There was probably not a Liberal caucus hand in the air that did not get something out of the Minister of Finance in these days when the Liberals are more concerned about the Liberal leadership race than they are about the future of the country.

We do not want to see the deficit at 9% of GDP again. That is where it was when the Liberal government was defeated in 1984. The deficit was 9% of GDP, largely because of that type of profligate, wanton spending by a Liberal government and a finance minister who is currently the Prime Minister. We are back to that level of spending again and Canadians are very concerned, because it is a very ominous sign.

The government is proposing to help fund some of these new spending programs by reallocating a total of $1 billion a year from department and agency budgets. This represents an amount that is equal to the amount that has been wasted so far, a billion dollars, on the failed long gun registry. That is one single government program. If the government would learn how to cut the fat, it would be able to deliver more meat in the budget for real tax reform, for real tax relief for Canadians and for real and significant reinvestment in the Canadian military.

What is really ironic about the budget is that only $1.6 million over the next two years is going toward the Canadian military and $200 million of the reallocated funds that the minister sought from departments actually came from the Canadian military. Of all the departments to identify for waste, who would have thought the Liberals would target the military? It is a department already on the ropes, already fighting to try to maintain reasonable levels of equipment and quality of life issues for the Canadian military.

It is absolutely shocking what the government has done to its Canadian military and to Canadian families. Now, instead of providing Canadians with more money in their pockets and providing the military with the resources it needs to actually do what is necessary to carry out the very important tasks in a post-cold war environment, the government is again dropping the ball.

The finance minister likes to describe Canada as a northern tiger. In doing so, he invites a direct comparison with those economies that have truly earned their reputation as tigers, economies like those of Ireland, Hong Kong and Singapore.

In those countries there were governments that provided revolutionary, courageous and bold tax reform focused on productivity. Canada has all the ingredients, save one, to truly turn itself into an economic northern tiger. As a nation we have the resources, we have the people and we have the knowledge to turn Canada into a world leader. However, the one missing ingredient is federal leadership. Leadership is required to enhance and to implement a bold agenda to strengthen the standard of living of every Canadian.

The finance minister talks about a northern tiger, but with his Liberal incrementalism, with his Liberal pussyfooting, the best we can hope for is to be a northern kitten. The real tigers have focused on enhancing productivity by dramatically cutting and, in some cases getting rid of, corporate taxes, capital taxes and taxes on investment. The true tigers have built tax systems that encourage investment and savings. The tigers have kept their governments responsive but, as a per cent of the economy, as small as possible. Ireland's public revenue as a percentage of GDP is 34%. Hong Kong's is only 10%. Smart, forward thinking, fiscally responsible, focused and effective government has been key to the tigers' success.

In recent years these tiger economies have been growing twice as fast as that of the Canadian economy. In 10 years, Canada's economy grew by 6% per capita. Ireland's economy grew by 92%; think of it, 92% growth in Ireland's GDP per capita. Clearly, due to the government's lack of economic leadership, courage, wisdom and foresight, Canada remains a toothless tiger. Our standard of living is suffering. The 20% loss in the value of the Canadian dollar since this government was elected represents a pay cut for every Canadian. That low Canadian dollar both reflects and fosters low productivity.

By failing to introduce a bold, productivity focused tax reform package yesterday, the finance minister has failed his first test of leadership. Canada needs productivity focused tax reform. We need to eliminate the capital gains tax, eliminate the capital tax immediately, not over a five year period. We need to reform our corporate and personal tax system. This budget involves a little bit of tax tinkering but no tax reform.

If I may, I will speak for a moment on the issue of marginal tax rates. Our marginal tax rates attack investment and attack hard work. We should be encouraging people to work hard, to save their money, to get ahead. Instead, we have a tax system that pummels ambition and initiative. That is simply wrong. We should start celebrating success in Canada, not apologizing for it.

At $7,400, Canadians hit the basic personal exemption threshold where they have to start paying taxes. The government does not have a problem with taking money from people making $7,400 per year. It is immoral. It is counterproductive. It discourages people to go from being on welfare to actually taking a job. We should be rewarding people who make the right decision, who try to enter the workforce and better themselves and their families. Instead, we have a system that forces them to make that very difficult decision: that if they take a job they are going to make less money for their families. That is just shameful.

Then when we look at what happens to the child tax benefit, for instance, we see that it gets clawed back starting at $33,000 of income. This means, because of our marginal tax rate and our clawback of benefits, that somebody around the $33,000 tax bracket, a Canadian family with three children, gets its child tax benefit clawed away from it. The government thinks that a Canadian family with three children that is making $33,000 per year is rich. I can tell the House that any Canadian family raising three children on $33,000 per year is struggling.

The government talks about helping children. The government talks about helping Canadian families. It may talk the talk, but the finance minister and the government clearly do not walk the walk.
Canadian families and all Canadians need a government that reforms our tax system to help them succeed and prosper in an increasingly competitive and difficult global environment.

We have talked about what happens at the $7,400 tax bracket. We have talked about how the government claws away the child tax benefit from Canadian families at $33,000 per year. At $100,000, we hit our top marginal tax rate in Canada. In the U.S., Americans do not hit the top marginal tax rate until around $400,000 U.S.

There are a lot of young, educated, talented Canadians who we need to keep in Canada. Our future productivity as a country is contingent not just on keeping the best and brightest we can produce but also on attracting them. Instead, we are sending them south of the border because a lot of them are high income earners.

We are losing them not just for next year or the year after, but we are losing them for 30 or 35 years of future revenue. Just think what that means to our ability in the future to pay for our health care system, for the retirement plans that Canadians value and for the social and physical infrastructure that Canadians want. How are we going to be able to afford that if our best and brightest continue to leave Canada seeking opportunities elsewhere?

Clearly tax reform is absolutely essential and this is a government that is ignoring the dramatic need to reduce and reform Canada's antiquated, anti-success and anti-productivity tax system.

Earlier I mentioned the low value of the Canadian dollar and the fact that every Canadian has had a 20% pay cut as a result of the loss of 20% of the value of the Canadian dollar since this government was elected. The best way to address the loss in the value of the Canadian dollar is to improve our productivity as a nation. Tax reform is only part of that, but it is the part that is most absent in terms of the government's agenda. Actually, to call it an agenda is a bit of an overstatement because this government really has no agenda. It has no vision and no clear direction. It is more focused on next week's polls than it is on the challenges and opportunities that Canadians face in the 21st century.

Canada's effective corporate tax rates are among the highest in the OECD. This creates a competitive disadvantage between Canada and our international competitors. In today's global economy, competitive corporate tax rates are essential. In the old economy, in the old days before the forces of competitiveness and globalization were as pervasive as they are today, high taxes redistributed income.

In the new economy, the globally competitive economy, high taxes redistribute people and capital. Talent and capital have never been more mobile than they are right now and they flow to the areas of greatest opportunity for growth and prosperity. We are repelling capital and talent in Canada. The minister talks about making Canada a magnet for talent and capital. That is a joke. He is forcing capital and talent out of Canada by refusing to deal with some of these very significant flaws in our tax system.

A tremendous disappointment to our party, to Canadians and to the member for Saint John, who has fought so hard for the Canadian military, has been the fact that the government only made a half measure effort to try to address the significant underfunding issues in Canada's military. Canada's military is cash starved and Canada is jeopardizing its international reputation by refusing to address long term military spending needs. This budget started to address a need for spare parts, but it did not address the capital equipment needs that would define a modern, capable and internationally respected military force.

Any economic growth that Canada enjoyed in the 1990s came as a result of some of the structural changes made to the Canadian economy by the previous government, free trade being an important one. The deregulation of financial services, transportation and energy was very important, and of course there was the elimination of the manufacturers' sales tax and the replacement of that tax with the GST.

However, none was as important as the Canada-U.S. free trade agreements of the late 1980s and the early 1990s. Our economic growth in the nineties was contingent completely on the economic growth and prosperity that resulted from American growth and today our future prosperity is imperiled.

In a post-September 11 we faced a pretty stark reality, either being on the outside of fortress America or working in a leadership capacity with our friends and partners, the Americans, to be inside a fortress North America. Investment in perimeter security and in a new Canada-U.S. partnership on security issues, and economic cooperation, would help ensure that Canadians continue to have access to this vital market.

The best way to protect economic sovereignty is by creating economic growth and prosperity. There is no better way to protect Canadian economic growth and prosperity than to ensure continued access, in fact, improved access to the richest market in the world, the United States.

By only paying lip service to domestic security issues the Liberals are imperilling Canada-U.S. trade upon which Canadian prosperity depends.

The budget is an affront to the provinces that are still shouldering the burden of Liberal downloading. Program spending, including health care and defence spending, has increased by a staggering 7.3% in the budget, including new expensive programs that interfere directly in areas of provincial jurisdiction.

The issue of fiscal imbalance is an extremely important one. It is not a purely Quebec issue as it affects every province in Canada.

It is very important to deal with the issue of fiscal imbalance. It is not fair to have one level of government, namely the provincial level, assume all the responsibilities for health care, social services and education, and another level of government, namely the federal level, assume all the responsibilities for raising money.

The federal government has the means to raise money. In order to solve the problems affecting the health care system, it will be necessary to also deal with the issue of fiscal imbalance.

It will be so important that we as parliamentarians on all sides of the House recognize the importance of improving the conditions for our provinces. Our provinces have the lion's share of the responsibility to provide health, social and education spending, and yet the federal government has most of the taxing power.

The federal government has the capacity to slash transfers to the provinces, as the government did in the late 1990s, and without really facing any political repercussions, throwing health care and education into a crisis in every province in Canada. At the same time that provincial governments were struggling with deficits the federal government was awash in surpluses and not paying a political price for its irresponsible slashing of transfers to the provinces.

The best accountability that could exist for health care and education would be for a provincial electorate to have full knowledge that not only did the provincial governments have the responsibilities which they have now to provide health care and education funding, but also the power to raise the money. We have to take a serious look at how we can ensure that.

There are innumerable other failures in the government. In recent weeks we saw a proposal from President Bush to move significantly on reducing and streamlining taxes on dividend income. There was nothing in the budget to address that. We should have eliminated withholding taxes which would have helped significantly in terms of improving our climate for economic growth, prosperity and investment.

We currently have our greatest trading partner, the U.S., in a recession. We have a world teetering on war, we have Canadians concerned about their declining standard of living, and the government wants to go back to the seventies. Lacking a vision for the future the Prime Minister and the government always revert to nostalgia for the 1970s.

In closing, Canada has a triple AAA country with a single B government. We have an investment grade country but a junk bond government. The best country in the world deserves the best ideas in the world and Canadians thirst for ideas based leadership. I know that our party can provide that leadership and make Canada a winner in the world again.

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