Mr. Speaker, I am pleased to have an opportunity to rise in this debate on the budget implementation bill. I noticed that my colleague from across the way was talking about which way the wind was blowing. I was pleased to see last night which way the wind was blowing in British Columbia. It seems to be a very Liberal wind after that byelection.
I wanted to talk a bit about one component of the budget. It has to do with tax reduction. I do not know and I do not believe there is a great deal of argument in the country about the desirability of tax reductions. Regardless of whether one is in the centre or in the left or right of the political spectrum, most Canadians would see tax reduction as a desirable goal.
However, I think what is important is the way tax reduction is to be achieved. One of the important aspects of the budget was that there are some very important principles underlying the types of tax reductions in that budget. I would like to take a moment to enunciate some of those, give a couple of examples of how that works. Then if I have a moment toward the end, I am going to compare that to some of the suggestions which have come from some of the opposition members.
The first principle upon which the tax reductions are based is that tax reduction should begin at the bottom. As we have the fiscal manoeuvring room to provide tax reduction, it should be provided first to those Canadians at the lower and middle income levels. We start at the bottom with those who can least afford to pay tax and then expand the reductions upward as our fiscal dividends expand.
It is a very important principle. We saw that clearly enunciated in the budget with the raising of the basic personal exemption. This will take some 400,000 Canadians off the tax rolls. In addition we saw it with the 3% surtax being eliminated for those people earning under $50,000.
The second principle in respect of tax reduction is that it is important to target tax reductions to achieve important social objectives. Again we saw that in the budget. In the budget we saw such things as the $850 million tax credit being provided to low and middle income Canadian families with children. That is in addition to the $850 million that was provided in the previous year.
We saw that in a series of tax reductions in respect of obtaining post-secondary education. We saw a targeted tax reduction to achieve the very important social goal of providing access to post-secondary education. We saw tax reductions to help Canadians with disabilities in addition to the actions that were taken in the previous budget. We saw other specifically targeted measures such as a caregiver tax credit. On a smaller basis a tax reduction is being provided to volunteer emergency workers which is particularly important in a rural area like mine.
Another principle which the finance minister enunciated, developed and crafted his budget around is the importance of providing tax reduction in line with one's fiscal needs. We saw that very clearly. We saw a government with the help and support of all Canadians bring a balanced budget to this country for the first time in a generation and a half. Then once the fiscal dividend was at hand, the government started to provide the tax reductions. That is the appropriate way to do it, to make the reductions once the government is in the fiscal position to do so.
The fourth principle is a principle which some of my colleagues who sit across the way should listen to very carefully. The government has the responsibility not just to taxpayers but to all Canadians. If it simply takes all of the government action on the tax reduction side, then substantial numbers of Canadians will not be impacted and will not benefit by that action. In putting whatever type of fiscal plan together within a budget, one needs to remember the principle that not all Canadians are taxpayers, but all Canadians deserve to be considered for support by the federal government as they may require. We clearly saw that in the budget.
We saw $2.5 billion for the millennium fund, direct spending to help people access post-secondary education. When you come from a rural riding like mine, Parry Sound—Muskoka, the cost of post-secondary education tends to be higher because students need to live away from home. That is a particularly important thing.
We saw the increased funding to the granting councils. We saw the $1.5 billion restoration of the previously scheduled reduction to the CHST.
Those were non-tax measures, but they were measures that were important to Canadians. They were able to benefit Canadians who may not necessarily be taxpayers.
It is interesting to look at those principles. They are important principles. They are Liberal principles. They are principles the finance minister crafted within the budgetary measures.
It is important to look at what some of our colleagues across the way were suggesting in terms of budgetary action. Many were enunciated during the previous campaign.
First of all it was interesting to note that both the Reform Party by 1999 and the Tory party which had a date of 2000, were projecting balanced budgets far after we were able to achieve it. When talking about one of the principles, the interesting part is they wanted to provide tax action before they were willing to balance the budget. In essence they wanted to borrow money in order to provide tax cuts rather than bring the fiscal dividend forward and provide tax cuts in a sustainable manner. This is clear in both parties' platforms.
Looking at some of their tax measures, they certainly would not result in a bottom up process.
The Tories' 10% across the board tax reduction means the more you earn, the bigger the tax break you get. That is the exact opposite of the principle the finance minister is using, which is from the bottom up. The Tory approach is to provide the largest tax decrease to those who earn the most. We who come from Ontario know full well the results of that type of approach.
The Reform Party had a similar approach. It suggested a flattened tax regime and an average $2,000 savings for a Canadian family. When there is a flattened tax regime with an average of $2,000 it means the more you earn, the higher your income, the larger the tax reduction you will receive.
One of the most interesting and telltale signs of not adhering to those principles that I enunciated should be in the budget, was the Tory suggestion that the corporate tax rate, not the small business tax rate, but the corporate tax rate be reduced from 28% to 24%. This would mean that companies such as Canada's chartered banks, those cash starved corporations, would receive more than a 10% tax reduction.
The Tories, rather than suggesting that tax reduction come from the bottom up, suggest a corporate tax reduction from 28% to 24%. The impact of that is to put oodles of money into those cash starved institutions, Canadian chartered banks. That is the type of principle they want to bring to tax reduction.
Let me summarize. As we deal with the budget and the component of tax reductions, what makes it a successful budget, what has brought the support of Canadians to this budget, what has brought that Liberal byelection victory in British Columbia yesterday is the principle of providing tax relief from the bottom up. It is targeting tax relief to achieve important social goals. It is achieving our fiscal dividend first and then providing tax relief. Most important, it is remembering we have a responsibility to all Canadians and not just taxpayers but also including them.
Those are the reasons this budget has the support of the Canadian people. This was very clearly demonstrated yesterday in British Columbia.