McKay Attacks Finance Minister's Squandering of Federal Surplus

February-28-08

    Hon. John McKay (Scarborough—Guildwood, Lib.): Mr. Speaker, I am sure if you sought it we would get unanimous consent to extend the four minutes.

    In Ontario we have seen this movie before. It was a horror flick then; it is a horror flick now. The Minister of Finance, along with Mike Harris, reduced revenues substantially in Ontario. When the people of Ontario gave them the exit sign in fact the cupboard was bare and Mr. McGuinty inherited an almost $6 billion deficit.

    There a few tricks in between times, though, because in one budget before the election, they wanted to make sure they would not show a deficit so they sold off some rather valuable assets in order to cover up their profligate ways, the main asset being Highway 407, which they sold off for about 25% of its value. The eventual purchaser flipped the highway two or three years later and made a handsome little profit, thank you very much, Mr. Speaker.

    The Minister of Finance has no money left so what will he do. He will create a diversion. He has this taxpayers savings plan thing.

    Any properly advised investor will first of all invest their money in an RRSP. That will use up a fairly substantial chunk of money. The investor will get a tax break and they will have their interest and earnings tax free until they take it out. If they have any money after that, they can invest it in an RESP and they will get government assistance with any moneys they invest. After that, and I am sure there might be one or two people in this chamber actually have money left over after that, they will put money into this taxpayers savings plan.

    It is a wonderful plan for those who are in the upper 1% of earners in this country, but for the balance of the people in this country, it is virtually a useless plan. It is a great show about absolutely nothing. It will cost the treasury $5 million in foregone revenue in the first year. What will the average person get on a 4% return? A savings of $92.

    If I go to my local bank and say that I want one of these things set up, the bank will be delighted to do so and they will charge me a fee of $200 to run a $5,000 plan for which I will save $92. If I invest in one of these things, assuming I have any money left over in the first place, I would be down $100 just by doing it in the way in which the Finance Minister plans to do it.

    The other huge contradiction on which the Conservatives have not quite picked up, they did this monster cut on GST, which encourages consumption and discourages productivity, then on the other hand they encourage savings with this pathetic little plan. Either they want consumption or they want savings. This budget is much to do about nothing as--

Mr. Speaker, to continue with my speech comparing the spending habits of this government to that of Paris Hilton, at least Paris Hilton has the virtue of spending her own money. She inherited it. She did not work for it, just like this government. However, she inherited and she is spending her own money. The Conservatives inherited a huge sum of money. It is not even their money and they are spending it like crazy drunks.

    When we look in the commentary by the Globe and Mail yesterday, it starts off by saying:

    In Ontario we have seen this movie before. It was a horror flick then; it is a horror flick now. The Minister of Finance, along with Mike Harris, reduced revenues substantially in Ontario. When the people of Ontario gave them the exit sign in fact the cupboard was bare and Mr. McGuinty inherited an almost $6 billion deficit.

    There a few tricks in between times, though, because in one budget before the election, they wanted to make sure they would not show a deficit so they sold off some rather valuable assets in order to cover up their profligate ways, the main asset being Highway 407, which they sold off for about 25% of its value. The eventual purchaser flipped the highway two or three years later and made a handsome little profit, thank you very much, Mr. Speaker.

    The Minister of Finance has no money left so what will he do. He will create a diversion. He has this taxpayers savings plan thing.

    Any properly advised investor will first of all invest their money in an RRSP. That will use up a fairly substantial chunk of money. The investor will get a tax break and they will have their interest and earnings tax free until they take it out. If they have any money after that, they can invest it in an RESP and they will get government assistance with any moneys they invest. After that, and I am sure there might be one or two people in this chamber actually have money left over after that, they will put money into this taxpayers savings plan.

    It is a wonderful plan for those who are in the upper 1% of earners in this country, but for the balance of the people in this country, it is virtually a useless plan. It is a great show about absolutely nothing. It will cost the treasury $5 million in foregone revenue in the first year. What will the average person get on a 4% return? A savings of $92.

    If I go to my local bank and say that I want one of these things set up, the bank will be delighted to do so and they will charge me a fee of $200 to run a $5,000 plan for which I will save $92. If I invest in one of these things, assuming I have any money left over in the first place, I would be down $100 just by doing it in the way in which the Finance Minister plans to do it.

    The other huge contradiction on which the Conservatives have not quite picked up, they did this monster cut on GST, which encourages consumption and discourages productivity, then on the other hand they encourage savings with this pathetic little plan. Either they want consumption or they want savings. This budget is much to do about nothing as--

Mr. Speaker, this is an amusing government. This government really does not want to govern, it just enjoys itself. It is like it keeps loading the pistol and handing it to us, spinning the chamber and saying, “Come on, shoot us. We want to be shot. Please, Mr. Speaker, will the Liberal Party put this government out of its misery”. It is begging to be put out of its misery.

    There is such good fun in watching these people squirm. Every day that they are here, they sit here and say, “Please shoot us and put us out of our misery. We are an incompetent government. We know that and we know that the Canadian people deserve better”.

    When the Canadian people decide that they are prepared to go to election, that will be the day that we in fact do what they are asking us to do.

Mr. Speaker, the estimate is that in a year a person would earn about $200 at 4% and would have $200 tax free, roughly speaking.

    If one is at the maximum rate, that is almost close to 50%, then one would be in the order of saving $100. Others have worked it out to be about $90. A person could save $90 over the course of the year which would be tax deferred. That is wonderful if, in fact, a person had the $17,000 or $18,000 to invest in an RRSP and I do not know how many thousands of dollars a person would have to invest in their kid's savings, et cetera.

     For those people who can put $25,000 or $30,000 away in savings, and I do not know too many people in this chamber who can actually do it let alone the people who are watching on television, but I say good for them. That is a wonderful thing for them, but it actually will affect very few people.

     One can see it in the government's estimates. It expects the treasury to have forgone revenue of $5 million. That is not even a rounding error in federal budget matters. Therefore we have this rampant contradiction here. The government weights up the consumption tax and then unloads on the savings tax. It would be nice if it could actually get it together.

   If the government truly cared about all Canadians, it would not be taking us to the knife's edge of deficit. I am not impressed.

    We do not believe this budget is enough to bring this government down but it is part of a collectivity of actions which will very soon, I am sure, result in its very well-deserved demise.

Mr. Speaker, it is very curious on the other side how they are very keen to know what the Liberal Party will do, when in fact they keep handing us this gun and telling us to shoot. It is kind of a curious question from the other side, is it not? For a party that actually offered a former member of Parliament a serious sum of money to vote a particular way, is that not a very curious question?

     I would interested in hearing the hon. member's comments in that regard.

Mr. Speaker, it is very curious on the other side how they are very keen to know what the Liberal Party will do, when in fact they keep handing us this gun and telling us to shoot. It is kind of a curious question from the other side, is it not? For a party that actually offered a former member of Parliament a serious sum of money to vote a particular way, is that not a very curious question?

     I would interested in hearing the hon. member's comments in that regard.