Thank you, Marcella

I’m pleased to have this opportunity to welcome you all to Alberta, and the great city of Edmonton, my home. I am honoured to be able to address you this afternoon on the occasion of the 70^th Annual General Meeting of the Canadian Chamber of Commerce.

I bring greetings on behalf of the Government of Canada and the Prime Minister, who ¾ as many of you remember ¾ addressed your AGM last year in Saint John.

I want to talk to you this afternoon about the state of Canada’s economy and what we need to do to ensure its growth. Canada is going to be making important decisions over the next couple of years, as we determine our economic priorities and what we must do to achieve them. I look forward to seeing the Canadian Chamber of Commerce continue to play an important role in those decisions.

You understand the economy ¾ you help shape it every day. You understand the need to plan for the future ¾ that’s what you do to make your business grow. And I know that you can provide considerable insight into the needs of Canadians. After all, you can only build a successful business by understanding your customers, your employees, and your community.

Before we talk about how we are going to move forward, I’d like to spend a few minutes recalling how far we have come.

Six years ago, when Canada was running its highest deficit in history, could you have imagined debating how Canadians were going to use a budget surplus? When this government took office, we faced the immediate need to deal with a deficit that was hanging over Canadians, and threatening to choke off growth. Our energies were focused on that. And when I say our energies, I mean more than the government. It was a truly national effort ¾ one that involved organizations like the Chamber, one that involved business as a whole, and one that involved Canadians in all regions.

As the Prime Minister pointed out last year at your annual general meeting in Saint John, "we made these fundamental changes in order to give us the resiliency we need to better cope with the ups and downs of the global economy. To give us the flexibility to be able to position ourselves well and the ability to invest for the future."

We also recognized that while eliminating the deficit was crucial, it was also important to maintain the social infrastructure that continually regenerates opportunity.

Universal health care is not just a social right, it is a huge economic asset.

Head start programs for Aboriginal children are not only a matter of compassion, they are a matter of common sense.

Pre-natal programs for young expectant mothers help those who need it, by giving all children the chance to grow to their full potential ¾ physically, emotionally and intellectually ¾ from the day they enter the world. And that benefits us all ¾ when children can grow into healthy, productive members of the community.

In other words, economic growth spawns social progress, and social progress bolsters economic growth. What we see here is a balanced approach. Balance is a Canadian virtue. Canadians are committed to a strong social safety net ¾ one that is backed by sound fiscal policy and a growing economy.

Together, Canadians have achieved some things that just a few years ago many would not have thought possible.

• As a percentage of GDP, federal program spending has been reduced to its lowest since 1951/52.

• 1.6 million new, full-time jobs have been created since 1993. While the unemployment rate ¾ which sits below 8 per cent ¾ is still too high for anyone’s liking, it has gradually inched down to its lowest level of the 1990s.

• With a $2.9 billion surplus last fiscal year we have recorded back-to-back federal surpluses for the first time in 48 years.

• For the first time in a generation, taxes are being reduced without using borrowed money. And while no doubt many of you feel we must do more in this area, let me just repeat what we have already done in just the first two years since achieving a balanced budget. We have put in place $16.5 billion worth of personal income tax cuts. Since 1994 we have managed to cut EI premiums by a total of $3.0 billion. The 3 per cent deficit surtax has been repealed entirely. And fully 600,000 low-income Canadians have been removed from the tax rolls altogether. Let’s be clear: you’d like us to do more and we will. But it’s a solid start.

• And finally, it’s important to remind ourselves that all of this was accomplished while we managed at the same time to re-invest heavily in areas that make a direct difference to people and help to foster long-term growth: in health care, education, training, infrastructure, and R&D. Indeed, since balancing the budget, fully three-quarters of new spending has been focused in the areas of health and education.

One of the biggest areas of progress has been in the nature of the political discussion. The debate has shifted from how much can we borrow from the next generation, to what we are honour-bound to leave them. We didn’t just put the fiscal books in balance. We put the political debate back in balance.

While we can be justly proud of what we have accomplished as a government over the past six years, we cannot rest on our laurels. After an era of deficit cutting, Canadians, quite rightly, want to know what’s next.

We can all be proud of the fact that together we have closed a chapter in Canadian political history. Now we must ask ourselves: How do we write the next chapter? How do we shape a new era in which we raise the standard of living and quality of life of all Canadians?

There are many challenges to address. Many problems to solve. But we have one huge asset that Canadians have not had for a quarter of a century. For the first time in a long time, Canadians can now look forward to potential fiscal surpluses. In short, we have regained our freedom to make choices.

That means we also have decisions to make. We have to decide our priorities for the next decade and beyond. We have to decide what we want to leave future generations of Canadians. We have to decide how we go about bringing our vision for Canada to life.

Many Canadians are going to want to have a say in that. We certainly welcome the views of the Chamber of Commerce in that dialogue.

But before we can have a constructive discussion about where we want to end up, we all have to agree on where we are at the starting line. There are many estimates being suggested as to how big the surplus will be over the next few years. It’s important to give any estimate of future surpluses the credibility of consensus. That is why my colleague the Minister of Finance has gathered leading economists from across the private sector to sit down with him and his officials and come to a stronger consensus on future fiscal trends. They met a few days ago. One of the participants in that process is Josh Mendelsohn, an adviser to the Chamber, as well as the chief economist for the Canadian Imperial Bank of Commerce.

Let me just say that I believe this is a process that will pay off for Canada, because it will allow us to avoid an unnecessary and wasteful side debate over fiscal numbers. Rather than arguing about fiscal projections, we will be able to focus on the much more critical debate over policy options.

And let there be no doubt ¾ that debate ¾ which has been engaged already and which will continue through the Speech from the Throne and run-up to the next budget ¾ will be as fundamental a discussion of national priorities and values as we have had in many years.

It is a debate that will be waged over the precise balance between tax-cutting, debt-repayment, and spending. And while the last thing I want to do is to limit or preclude that debate, I do think it only sensible to reiterate some obligations that I believe government must meet. And I want to discuss some of the elements I believe critical to that discussion.

First of all, one of our clear obligations is to continue to reduce the debt as a percentage of GDP. As I say, it has come down a long way. Six years ago the deficit was over 72 per cent of GDP. Today it is under 65 per cent.

But progress is no justification for complacency. Our desire to reduce the debt is as strong as ever, because our obligation to future generations is as great as ever. Our commitment is to plant the seeds of continual economic growth ¾ not leave behind a bushel full of IOUs.

Secondly, I join with virtually everyone in this room I’m sure in saying that we must continue to cut taxes as much and as quickly as we can ¾ within the context of a balanced and responsible approach. And when I say "cut taxes", I’m talking first and foremost about personal income taxes. Why? Because throughout the battle to eliminate the deficit, it was working middle-class Canadians who were asked to bear the greatest burden. Consequently, it is to them that the benefits of lower taxes should first flow. They earned the fiscal dividend and they deserve their fair share of it.

But that being said, we know that using the fiscal dividend to benefit Canadians means more than reducing taxes. Canadians are looking for government to invest in areas that are critical to their personal security, their future prospects, or both. In short, they are looking for us to invest in those areas that will pay off in a stronger economy and increased opportunities.

This view ¾ that our approach must be a balanced one ¾ is shared by governments of all political stripes. Conservative premiers like Ralph Klein and Mike Harris agree with it. Here in Alberta, the provincial government has eliminated the deficit and cut taxes. But it also supports long-term investments, such as rebuilding the province’s infrastructure and renewing its commitment to science and technology.

Our sense of balance is a national characteristic. It is one of the reasons we Canadians are endowed with probably the best quality of life in the world. As the Prime Minister has said, one of our proudest achievements as a people is that for the last six years in a row, even as we have experienced profound change, we have been ranked by the United Nations as the best country in the world in which to live.

Just ask yourselves: Where would we be without the capacity to invest in areas that are crucial to our shared quality of life? I am proud of what we have done in the justice portfolio, for example, to use government resources to help prevent crime. We are investing $32 million a year to help people in communities across Canada build locally-based efforts to reduce crime, and make people feel safe in their homes and in their communities. That is an important social goal. It also has economic spin-offs. When people feel safe in their community, they play a more active role in their community. They revitalize neighbourhoods, transforming them from social and economic liabilities into prosperous and thriving assets.

Just as the debt must be reduced and taxes must be cut, there are clearly some areas in which government can and must invest. What we must make sure of is that when government does spend, it is on the right things, in the right way, with the right results.

You are business people. You know that it is necessary to invest. But you also know that real progress requires smart investment.

When you’re sitting down thinking of the investments you might like to make in your business, I’m sure it could turn into a long list. But you have to decide where you can invest most effectively. You can try to do a little bit everywhere, but does that yield measurable gains anywhere?

Government must ask itself the same questions about how it can best invest the resources that the fiscal dividend has made possible.

In my view, we must take the same approach that we took to eliminating the deficit in the first place. We didn’t cut spending across the board. We didn’t take an axe and start swinging away. We asked questions about every spending program.

We looked at every program and asked the question: why is a public dollar being spent on it? Is it only there because of inertia? Is it something the private sector should be doing?

The battle to eliminate the deficit has been won. But the battle-plan still makes sense. The same sensible, accountable approach that we used to cut spending should also be utilized to assess any new spending proposal. We should continue to do what you do in running your business. We must do what millions of Canadians do in running their households: Make strategic choices. Focus on priorities. Make sure that our investments count in the lives of Canadians, and in the future of our country.

And again ¾ this is a perspective that crosses party lines. The Alberta government, for example, has not hesitated to spend money in some crucial social areas. The debate is not about whether to spend. It is about whether the spending will be smart and focused ¾ and whether it will result in tangible benefits for Canadians and their families.

That’s why we’ve seen, for instance, such an emphasis by all governments on investing in universal health care. Canadians have made it clear that health care is a priority. Similarly, Canadians have made it clear that a secure retirement for all is a priority. The federal government ¾ in partnership with the Provinces ¾ – has taken the steps necessary to ensure the Canada Pension Plan is something that all Canadians can count on.

But what about beyond these areas of relative agreement? Where else should smart governments be investing to help people prepare for the changing and challenging world economy of the 21^st century?

Certainly one of our most important priorities has to be in the area of education. Skills, knowledge, training, and retraining ¾ these are the key steps on the path to a lasting prosperity in which we can all share.

Education is the instrument for spreading opportunity and continually increasing the size of the middle-class. It is the great leveler.

Education is the means by which to bring Canadians together and to provide shared experiences upon which to draw. It is the great integrator.

And education is the tool for expanding the economy, advancing technological progress and raising standards of living. It is the great wealth creator.

What kind of resource do you need most to build your business? Human resources. The industrial economy that helped Canada achieve prosperity in this century was built with bricks, mortar, and steel. The knowledge economy that will grow our prosperity in the next century will be powered by people.

Some call this a knowledge economy or an information economy or a high-tech economy. I call it a people economy. Because it is people who acquire the knowledge, disseminate the information, and develop and utilize the technology. How well we educate our children, train young people, and retrain middle-aged workers will largely determine how productive, competitive and prosperous we become as a nation.

Of course, I don’t need to tell members of the Canadian Chamber of Commerce how important an educated population is to our economic future. That’s not just preaching to the converted, it’s preaching to the preachers. When we talk to business people, one of the things you always remind us of is your escalating need for people with the skills, knowledge and all-around preparedness to help Canadian enterprises take their place in the global economy.

This is an area where governments clearly have a role.

The federal government has already introduced several measures that are helping Canadians obtain the skills and knowledge they need in a skills and knowledge economy. Investments like the $2.5 billion Millennium Scholarships so young people looking at the cost of a post-secondary education know they have support. Tax incentives like the topped-up contributions to the Canada Education Savings Grant, so parents looking at the cost of educating their children know they have someone behind them.

These programs help address some of the concerns I hear most frequently from my own constituents: Will my children be able to get the education they need? Will my kids have a place as the economy becomes more and more competitive?

We have set in place a foundation. We must build on it. Education is the building block. The most important work in ensuring Canada’s future prosperity will not take place in Parliament or at the Cabinet table. It will take place in a 4^th grade class, where a dedicated teacher inspires a young person to become an engineer. It will take place in a university lab, where scientists develop the next great technological breakthrough, perhaps one that will eclipse the microchip. It will take place in businesses like yours, where you develop, produce, and market the products and services that generate wealth, create jobs, and raise living standards.

Ladies and gentlemen, the first role of government is to get the fundamentals right and we’ve done that. We’ve got out public finances in order. Deficits have been replaced by balanced budgets. Government spending has been reformed, and targeted in a balanced way where it can yield the most profound social and economic benefit: to boost knowledge and innovation, enhance health care, combat child poverty, cut taxes and reduce our public debt.

But there is more work to be done. Government must continue to strive to provide a sound physical infrastructure and solid social infrastructure for our children and our grandchildren. We must promote the environment that allows that 4^th grade schoolteacher I spoke of to open the door to opportunity, so that 4^th grade student can walk through it. We must provide the resources that ensure there is a well-equipped university lab where that technological breakthrough can happen. And we must make sure that entrepreneurs like you have the opportunity to expand your businesses and put more Canadians to work.

Where do most Canadians stand when it comes to the government’s agenda? They don’t stand on the right or on the left. They stand for progress. They stand for opportunity. They stand for growth. They stand for fairness. We can achieve these goals ¾ with a broad-based agenda, not a narrow one. With government that does not try to do everything, but which succeeds in doing what must be done. We can achieve our goals by providing Canadians with the tools they need to succeed. That is the formula for economic growth in the 21^st century. And with your help, and the help of all Canadians, I know that we can continue to achieve it.

Thank you.