Mr. Speaker, I am pleased to speak in the debate on the budget implementation act.
This is undoubtedly one of the last principal debates we will have in this place prior to an election being called by the Prime Minister, incidentally, at his discretion, for his own partisan purposes rather than doing so on a fixed election basis. However this gives me an opportunity to comment on the fiscal record of the Prime Minister and the government over the past 10 years.
The way I see it, the Prime Minister has had three distinct periods in his fiscal track record.
The first period was when he first entered politics in 1988 as an opposition member. Between 1988 and 1993, the Prime Minister, when he was an opposition member, opposed virtually every effort to reduce the then enormous deficit because he believed, and people can read all the speeches he gave during the time he was a member sitting on this side of the House, that deficits were not really a serious problem, even though the national debt was increasing by $30 billion and $40 billion a year during his tenure in opposition. He opposed every spending restraint introduced at the time by the Progressive Conservative government, even though those spending restraints were not nearly as adequate, and, most shocking, he opposed the introduction of the free trade agreement when he ran as a Liberal candidate in 1988, the very same free trade agreement which has proven to be principally responsible for the economic growth that has filled federal coffers through increased taxes during his tenure as finance minister.
He benefited from the policy that he opposed and, most notorious of course, he also railed against the introduction of the goods and services tax to replace the outmoded and inefficient manufacturer's sales tax in 1991 and 1992. He promised, along with his boss, Mr. Chrétien, in the red book he authored, to scrap, eliminate, kill and abolish the GST.
The last time I checked, which was about a half hour ago when I made a retail purchase, I am still paying 7% to the Prime Minister who 12 years ago promised to scrap, abolish, eliminate and kill the GST. The record of the Prime Minister is one of hypocrisy when it comes to fiscal issues.
He then became finance minister in 1993. I ask members to guess what he said when he became finance minister? He arrived in the office with his red book commitment, which he wrote, and said that he would reduce the deficit to 3% of our gross domestic product, not to eliminate it. He was not committed to deficit elimination, heaven forbid, tax relief or debt reduction, all he wanted to do was tweak the deficit a little tiny bit.
Do members know what happened? After all that time in opposition, after all that time denying that the deficit was a problem and the debt was a crisis, he was mugged by reality in 1994-95, and it was not pretty. He was mugged by the markets when it was clear at the end of 1994 that Canada could no longer continue to go $30 billion and $40 billion into the red and that we had the worst balance sheet of any major industrialized country.
He did not come to fiscal prudence as a matter of choice or virtue. He tried to make a virtue of necessity in the 1995 budget. I have to give him some small credit for the 1995-96 budget but I mainly have to give credit to the markets for forcing the government to realize that some degree of spending restraint was in order. I also have to give credit to Canadian taxpayers because, fuelled by increasing exports to the United States which became possible because of the free trade agreement, fuelled by a devalued Canadian currency which made our exports bargain basement prices into the United States, and fuelled by increased Liberal taxes, huge revenues poured into the federal treasury.
Between 1993 and 1998, when the budget was finally balanced, two-thirds of the deficit reduction that had been achieved was accomplished, not because of spending restraint, but because of increased tax revenue. That is money that has now become a huge taxpayer overpayment that the government calls a surplus.
Another way that it happened was by ripping off Canadians in their employment insurance premiums. Canadians who work hard, self-employed people and the small businesses that struggle to hire new labourers are being penalized in order to contribute to what has now become a $42 billion notional surplus in the employment insurance fund.
I want to review the fiscal choices that the Prime Minister made in the 1995, 1996 and 1997 budgets when he was finance minister. Yes, he did engage in some spending restraint, but we know a lot about him by the choices that he makes. I believe, as do Canadians, we do not judge a politician by what he says but by what he does, and what the Prime Minister did was to slash health care and defence, to cut the heart out of our military and make it almost impossible for our brave men and women in uniform to do the job that we ask of them. Canada has been rendered the lowest investor in its military of any of our NATO partners. He has embarrassed our men and women in uniform by slashing defence by--