To begin, muted congratulations are in order for balancing the 97/98 budget. We anxiously await your economic statement later this fall for a formal announcement on this matter.

However, the real thanks should go to hard-working Canadian taxpayers. Sure, you have cut program spending by $15.2 billion over the past four years. But taxes have increased by $24.9 billion over this same period. And $11.9 billion of this bonanza comes from personal income taxes.

Which is why we find it astounding that you boast that you have not increased taxes.

Such an assertion is 100% less than truthful. Taxes have increased consistently every year since 1992 due to bracket creep. Bracket creep occurs because income tax brackets do not move with inflation until the annual rate surpasses 3%.

So workers who receive raises to keep pace with the cost of living have actually fallen behind as their higher incomes mean higher taxes which means less take home pay.

And the Finance Committee estimates that bracket creep has moved 840,000 low-income families onto the tax rolls. The OECD estimates that 18% of Canadian workers have been moved onto the tax rolls or into higher tax brackets due to bracket creep.

StatsCan has also identified the increasing tax burden on Canadian families. Twenty-two cents of each family dollar now goes to pay income taxes. This is more than families pay for food, shelter or transportation. And this tax burden has increased by 15% between 1992 and 1996.

All the while you claim that when tax relief comes, it will be targeted to the poor in our society. Forgive me for sounding skeptical, but your failure to act on bracket creep for almost five years betrays your newfound interest in tax relief for poor Canadians. Shame!

As for the much-ballyhooed surplus that you will announce for the 98/99 budget, four words come to mind: debt and tax relief.

Half of the surplus should go to debt relief. To this, you can also add the $3 billion contingency reserve fund. The markets are waiting for that symbolic first installment, and successive installments, on the debt.

The other half of the surplus should be put towards tax relief. A fiscal surplus means that government is taxing more than it needs. This money belongs back in the pockets of taxpayers, period.

Removing the stealth tax of bracket creep will put $700 million back into the pockets of Canadians for each percentage point of inflation.

But don't stop there. Trash the Mulroney-Wilson 3% and 5% surtaxes that were brought in as temporary weapons in the war against the deficit. With the deficit battle won, the raison d'être for these taxes has vanished. Eliminating both these taxes would leave $2.6 billion in the pockets of Canadians.

And before you spend a penny of the surplus on programs, clean up your own backyard. Money for health care or education can be found within current budget envelopes. You can start by trimming $1.8 billion from Industry Canada and its corporate welfare subsidy programs. Than take $800 million from Heritage Canada communications activities. Other areas include our international commitments, belt tightening at Indian Affairs, selling crown corp. assets and a more aggressive schedule of alternate service delivery across various departments.

The ball's in your court!