13 June 2006
Hon. Grant Mitchell: Honourable senators, I rise to explain why I have grave difficulty with this budget, why I feel it makes fundamental errors and misses unique opportunities that Canada could grasp in its effort to take its leadership place in the world.
I would like to concur with Senator Murray and express my appreciation for his comments about daycare and early childhood learning, about our program. It could be a program of great national consequence and of great consequence for many less fortunate people, in particular, and for many women who do not have the choice not to work but who must work, namely, single parents, and need the kind of support that program would have provided.
I should like to establish my belief that this budget reflects a triumph of votes over policy virtue. The government has tried to depict itself as a government of expertise and of administrative capability, of competence, the word so often used to describe itself. Yet it is clear that on key policy initiatives embraced by this budget, its policy initiative is not based upon prevailing wisdom, facts or a proper study. It is based, quite the contrary, upon pure politics.
My colleague Senator Eggleton made a strong point about the inappropriateness of cutting the GST, if you consider it from any number of objectives. First, it is not real tax cutting that helps people who need their taxes cut. Poor or low-income people would not benefit from it as they would from the tax cuts that we have brought in.
Second, it denies the economic imperatives of productivity and of promoting productivity for this country. Every economist, as Senator Eggleton said, except Prime Minister Harper, is very clear. There is a consensus that reducing the GST will not enhance productivity. Reducing income tax does enhance productivity at a time when Canada's economy needs to be encouraged in its productivity and competitiveness.
Here we have a GST-cutting policy that runs contrary to prevailing, conventional wisdom, facts, analysis and the kind of understanding that should drive this policy differently.
With respect to mandatory minimums, that is a classic "votes over virtue" kind of policy. Many areas of correctional policy and theory are difficult to establish, but it is generally seen by experts in this field that mandatory minimums do not work to reduce crime. When the minister in the other place was pressed to come up with studies that defended the government's position on increasing mandatory minimums, of the three or four studies he produced, one of them did not defend the case either way, and two of them argued against the case he was making.
There is little, if any, support for the idea that mandatory minimums will reduce crimes. The evidence, experience and policy evolution in the United States underline clearly their understanding that mandatory minimums are not a preferred policy initiative by any stretch of the imagination.
On the other side, it will cost a huge amount of money.
This government is resorting to vote buying in perhaps one of the more crass versions that I have ever seen. They have created a problem, this idea that there is rampant runaway crime that is increasing in ways that would suggest it is out of control, when clearly, that is not the case. They then compound that problem by saying that mandatory minimums will solve the problem, when clearly, they will not solve that problem and will cost the taxpayer hundreds of millions of dollars for no apparent good and no achievement whatsoever.
The issue of fiscal imbalance is a third area where the government is denying the facts, as it were. They are trying to create the impression of a problem so they can milk the solution to that problem for political gain. Clearly, they think that they have an issue that resonates well in Quebec. The fact is that if you analyze the issue of fiscal imbalance, it does not exist.
Provinces have more sources of income than the federal government. Amongst them, their additional sources of income are gambling revenues. Not only that, but the federal government turns around and gives $42 billion to the provinces. The provinces have plenty of money. There is not a fiscal imbalance. The equalization program has served this country well and will continue to serve it well, but there is not the fiscal imbalance that Mr. Harper is trying to portray exists. Why would he want to perpetuate that problem? He sees it as a political advantage.
Again, it raises the question: Why would they want to do that at tremendous cost to Canadian taxpayers? If they spend more money to redress a fiscal imbalance that does not actually exist, they will have to find that money somewhere. Where would we find that money? We either have to cut programs, and that is a question I will address later, because clearly, this government has it in mind to cut programs. They will have to cut about $22 billion worth of programs to ever begin to meet their promises. The other alternative is that they will have to raise taxes. One hopes that the government will not pursue that course of action any more aggressively than they already have by increasing the personal income taxes of Canadians that we had cut previously.
There is no issue or problem that lowering the GST will fix; that will create more problems. There is no problem that exist that mandatory minimums will fix; they will likely create more problems and more expense. There is no fiscal imbalance problem that this government's fiscal imbalance bias will ever fix; in actuality, it will cost more money.
That brings me to a fourth issue, and that is the issue of fiscal responsibility and managing an economy. I am reminded of a statement which I believe was made by Sir Winston Churchill. Historians may be able to correct me on this. Churchill once said that if you can convince the public that you are an early riser, you can sleep until noon every day. That is exactly what conservative governments try to do and they have done with some success. From time to time, they have convinced people that they can actually manage an economy and that they are fiscally responsible.
If one were to look at the history of debt in this country, the greatest portion of debt, provincially and federally, that this country has experienced has been created by Conservative governments. I expect that one could make a strong argument that Canadian economies — certainly U.S. economies and stock markets — under perform historically with Republican governments. If we were to study the subject, I believe that we would find that Canadian economies and stock markets would under perform with Conservative governments.
I come from a province where great effort was made to balance budgets and to begin to pay off debt. I come from a federal party with 13 years of profoundly successful, perhaps unprecedented, fiscal management of this country. We have balanced a budget that had a runaway deficit. I believe that 35 or 40 per cent of the government's entire expenditure was debt and deficit spending. That was turned around, and tremendous strides were being made to pay off the debt up to January.
We now see a budget, as Senator Eggleton pointed out strongly, where there is little regard for fiscal responsibility. I am gravely concerned that this government, in its focus on votes and buying votes, has lost that fundamentally important focus on properly managing the fiscal imperatives of this government. There is no cushion.
An amount of $3 billion a year has been committed to paying off a $488 billion debt. At that rate, it would take 160 years to pay off the debt. How is it that this government can say it is concerned about families and people now when it is prepared to mortgage the future of those families and the children of this country? We must be focused on paying off that debt, and we cannot take that responsibility and those pressures, in any way, shape or form, lightly. I believe that this budget takes fiscal responsibility very lightly.
I wish to focus on the area of the environment in particular. We talk about Canada taking its place in the world. That has great resonance with Canadians; it certainly has great resonance with me. Canada is a privileged part of the world. We are blessed in many ways, and we have a huge responsibility to play a leadership role in the world in many different ways. One of those areas of leadership has been our history in peacekeeping and the work we are doing in Afghanistan, which I applaud.
The Montreal conference chaired by Stéphane Dion showed that we were capable of leadership and respect in the world for our Kyoto initiatives and our environmental policy. That has been lost. The fact is that Canada can and must be a leader in environmental policy, but that has been gutted and reversed by this government's initiatives.
I have listened intently to the Leader of the Government in the Senate and to her counterparts in the other place as to the reasons why the government would choose to cut our 15 climate change programs. I mentioned these reasons today in Question Period. Initially, inefficiency was thrown out.
Clearly, our programs are far more efficient than the one program with which they have bothered to replace those programs. Our programs would cut greenhouse gases to as little as $20 a ton. Their program would cut greenhouse gases to $2,000 a ton, if it cuts greenhouse gases at all. Inefficiency is not the real reason they threw that out.
A second reason that government representatives have said that Kyoto will not work is that the program has been a failure and has not been able to achieve objectives. The government should design a program that will achieve those objectives. Instead, they are contemplating a program to reduce the objectives. That would be a way, I suppose, to solve the problem, but it does not solve the environmental problem.
The third issue — and this is the one that makes me scratch my head — is that we need a made-in-Canada policy. I know that stems from this idea that we might be buying tradeable permits allowing corporations and others to buy permits and to invest that way elsewhere in the world. We encourage our corporations to invest elsewhere in the world all the time it is good business. The easy political response to that has been that we will make it in Canada.
The fact is that the 15 programs the government has cut were all made in Canada. They all apply in Canada. They do not apply internationally. They have great promise and were on their way to being immensely successful.
What deeply frustrates me about this government's inability to grasp the importance of the environment — not just to Canadians, but to Canada's place in the world and people around the world — is that they underestimate the ability of Canadians to do great things. This government has said for the last number of months that Canada could never achieve Kyoto objectives. That is like them saying in 1939 that Canada and Canadians could never do what had to be done to assist in winning World War II.
The environment is a huge problem, and it may be a problem on the magnitude of winning World War II, but no one would ever doubt today that Canadians could do what they did from 1939 to 1945, which required massive commitment, energy and capability.
I believe that if we gave the Kyoto program a chance and took our rightful place of leadership on it, we would demonstrate to the world and to the Conservatives that Canadians can rise to that important challenge, can meet and surpass those guidelines, and provide profound leadership in the world in the issue of the 21st century. Instead, we have a government that views this 21st century problem with 19th century solutions. It is a lost opportunity for people and business in the country and for the place Canada could take in the world.
Finally, I am distressed and disturbed by how little this budget does to assist and manage the economy.