:
Mr. Speaker, I will pick up at jobs in the economy because I think since I was elected in 2008, it is consistently what our government has actually talked about.
Indeed, with the global economic recovery so fragile, as demonstrated by the ongoing events in Europe, keeping Canada's economy on the right track must remain our priority. While Canada's economy has created nearly 600,000 net new jobs since July 2009, the strongest job growth in the G7, too many Canadians are still looking for work.
That is why we are working hard to implement our prudent, low tax plan to support Canada's economic recovery and help create jobs through the next phase of Canada's economic action plan.
Indeed, our Conservative government remains focused on ensuring Canada continues to offer the right environment to attract investment necessary to create more and better paying jobs, thereby improving the living standards of Canadians.
Ironically, one of the most proven ways to that end is an action opposed by the NDP, to give job creators the means to hire more workers by lowering their taxes, which is exactly what our government is doing. It is also exactly what we have done since coming to office and what we told Canadians during the election that we would continue to do if we were returned to government.
Given the results of May 2, it is safe to say that Canadian families prefer our low tax plan over the tax and spend plan of the NDP. Families know that our Conservative government is acting on what matters to them as we steer them through this turbulent global economic period.
Indeed, unlike what the NDP would have Canadians believe, our Conservative government has a strong and proven record on the economy, one that Canadians can look to and trust.
In the words of Bank of Montreal deputy chief economist, Doug Porter, appearing before the finance committee this week:
--compared to policy making in the rest of the world, Canada's economic policy-making has been exemplary. I don't think there's been a significant misstep in recent years.
That is very high praise.
Let us listen to the IMF:
Canada is actually matching up quite well on a relative basis...the recession was not too deep, they haven't had a financial crisis to the extent that the U.S. has had or the Europeans are having it. And so all in all Canada is actually doing quite well.
However, it is vitally important Canada maintains our hard-earned fiscal advantage that underpins the confidence that investors around the globe have in Canada and which encourages job growth.
That is why our stimulus spending was temporary and targeted, without jeopardizing Canada's long-term fiscal advantage.
In budget 2010 and 2011, we started the process of returning to balanced budgets by doing such things as closing tax loopholes and launching a comprehensive review of government spending to improve efficiency and effectiveness.
Our Conservative government has been very clear and consistent that we will not raise taxes or cut transfers to other levels of government in support of health care and social services, like the shameful record of the Liberals in the 1990s.
As the member for , the current Liberal finance critic, nonetheless publicly declared, the Liberal government balanced its books by slashing transfers. Provinces have been put in serious fiscal peril because of this irresponsible slashing.
Unlike the tax and spend NDP, our Conservative government is focused on creating the right conditions for jobs and long-term economic growth. Budget 2011, the next phase of Canada's economic action plan, will invest in the key drivers of economic growth: innovation, investment, education and training. It will seek to foster an environment in which all Canadians contribute to and benefit from a stronger economy.
Unfortunately the NDP voted against the next phase of Canada's economic action plan and its important investments.
Let us take some examples: investment in innovation, education and training. Let me expand on that because it is important that the NDP understands just exactly what it voted against. The NDP has a motion here today, but it does not know what it actually voted against.
In looking to the future, it is important to help develop and attract talented people to strengthen our capacity for world-leading research and development, and to improve the commercialization of research.
Since forming government in 2006, each successive budget we have tabled has demonstrated our Conservative government's commitment to implementing our science and technology strategy and our ongoing determination to invest significant amounts in research and development, while encouraging the partnerships with the private sector that can turn promising concepts into groundbreaking applications.
In my own riding of , for example, the Thompson Rivers University received almost $900,000 from our government last month to purchase a low-temperature incubating facility. It is a very long and complicated piece of equipment, but it is really focused on meat research and development. It will help many local small and medium-sized enterprises that are closely linked to the agriculture, bioproduct and natural resource sectors in the B.C. interior and beyond.
Programs such as the Vanier Canada graduate scholarships, the Canada excellence research chairs, and the recently announced Banting post-doctoral fellowships program cover the full spectrum in attracting, retaining and developing world-class talented researchers in Canada. We had the brain drain not so many years ago, and that is reversing.
The research these programs support, and the researchers they develop, will help sustain Canada's economic advantage well into the future.
However, we understand more needs to be done to ensure Canada is the leader in research and innovation to succeed in the global knowledge economy.
That is why the next phase of Canada's economic action plan will build on earlier investments by providing significant new resources to advance a digital economy strategy, strengthen Canada's global research leadership, and support the commercialization of research by fostering business innovation.
Some examples are $80 million to support collaborative projects between colleges and small and medium-sized businesses that accelerate the adoption of information and communications technologies; $53.5 million to expand the Canada excellence research chairs program; and $60 million to promote increased student enrolment in key disciplines related to the digital economy.
The Canadian Federation for the Humanities and Social Sciences praised these investments, declaring they will “substantially boost Canada's capacity for research and innovation”. Amazingly again, the NDP voted against every one of those investments in research and development.
This takes us to another area, support for industries and communities. In planning for the future, we should not overlook the traditional industries working hard to adapt to an increasingly competitive global marketplace.
The next phase of Canada's economic action plan gives significant support to the long-term competitiveness of vital sectors in regions and communities across Canada.
For example, in recent years, the forestry sector has taken important steps to embrace innovative technologies and transition to higher value activities.
Government investments are helping the forestry sector to accelerate its transformation and to enhance its long-term future, a goal that is particularly important for many of my constituents.
The next phase of Canada's economic action plan takes additional action to support the transformation of the forestry sector by providing $60 million to help forestry companies innovate and tap into new opportunities abroad. This funding will support the development of emerging and breakthrough technologies for the forestry sector through the transformation technology program.
It will also help forestry companies to diversify and to expand their markets through the value to wood program, the Canada wood export program, and the North American wood first initiative. Little wonder the Forest Products Association of Canada said of the next phase of Canada's economic action plan:
This Budget continues the process of developing a policy framework aimed at fostering innovation and the type of strategic investments needed for the Canadian forest products industry to lead the world. This will bolster rural communities and protect jobs, strengthen the economy and advance Canada's environmental reputation.
Stunningly, again, the NDP voted against helping the forestry sector.
With regard to agriculture, our government is taking important steps to support a strong and competitive agricultural sector. It is important that it remains on the cutting edge of innovative science and technology.
Effective management of plant and animal diseases serves to reduce the likelihood of future outbreaks, which can have a significant economic impact on production and the livelihood of producers. We just have to look at BSE and what happened there.
The next phase of Canada's economic action plan proposes measures that will support innovation and the long-term profitability of this key sector. Here are some of the things we are going to do.
We will provide $50 million for an agricultural innovation initiative to support knowledge creation and increase commercialization of agricultural innovation;
We will extend the initiative for the control of diseases in the hog industry and provide $24 million to complete initiatives directed at national biosecurity standards;
We will provide $17 million for a management and monitoring strategy to contain and prevent the spread of the plum pox virus, and much more.
It should not come as a great surprise that organizations like the Canadian Cattlemen's Association were supportive of budget 2011. It stated that it:
--appreciate[d] the Government of Canada's focus on research and innovation in the agricultural sector--
It went on to say that these are areas that are:
--crucial to the long-term competitiveness of the Canadian cattle industry.
Again, the NDP, disappointingly, voted against helping Canada's agricultural sector.
I would like to speak now about the Canada-India research centre of excellence. For these and all sectors, the trend toward globalization and foreign investment provides many benefits to Canada and it is important to adopt policies that encourage trade and investment.
Emerging economies such as India, for example, are increasing their capacity to undertake advanced research that can make important economic and social contributions around the world. Canada is going to benefit from stronger links with researchers and institutions in India by partnering to produce new ideas that create economic opportunities, while developing and attracting highly skilled personnel.
The next phase of Canada's economic action plan proposes $12 million to help establish a new Canada-India research centre of excellence. This centre is going to lever the considerable relationships that already exist between post-secondary institutions, researchers and students in Canada and India for the benefit of both countries. As the University of Alberta president, Indira Samarasekera, asserted, this investment supported “the goal of reaching the world, of promoting Canada's international brand”.
Unbelievable as it might seem, although no surprise, the NDP again voted against it.
As I have already demonstrated, our government responded quickly to the global economic downturn with our economic action plan by taking decisive steps to protect incomes, create jobs, ease credit markets, and help workers and communities get back on their feet. Part of this plan was an investment to improve infrastructure in the communities across the country.
Now, with the next phase of the economic action plan, we are proposing targeted investments in infrastructure.
The plan includes working with the provinces, territories, the Federation of Canadian Municipalities and other stakeholders on the development of a long-term plan for public infrastructure, and that is beyond the building Canada plan and legislating a permanent annual investment of $2 billion in the gas tax fund to provide predictable long-term infrastructure. Again, that was in the last budget. My municipalities are absolutely delighted with that secure investment into infrastructure. Providing up to $150 million to support the construction of an all-season road between Inuvik and Tuktoyaktuk that completes the Dempster Highway, connecting Canadians from coast to coast; and providing $228 million to fund repairs and major maintenance on federal bridges in the greater Montreal area to ensure that the bridges continue to serve the needs of the commuters while meeting the highest safety standards.
A more local example was $4 million to build the new transit centre in Kamloops and over $900,000 to the Kamloops airport to improve safety features. Again, that is very important in my riding.
The list just goes on. As the Federation of Canadian Municipalities stated, budget 2011 “makes it clear: strong communities--with quality infrastructure--are essential to a strong economic future”.
Yet again, the NDP voted against it.
Just as planning by our Conservative government before the recession meant a softer landing than many other countries have faced, so too will the low-tax economic policies we are now taking enable us to have a strong economy well into the future.
In every region of Canada, families and businesses are paying less tax and unemployed workers are receiving better support and new training. Major job-creating infrastructure projects are improving the quality of life in communities while creating new jobs. Colleges and universities are benefiting from new investments.
Canadians can rest assured that our Conservative government believes that encouraging investment and economic growth is the best way to create jobs and a brighter future for Canadians. It is what Canadians expect of us and it is what we must deliver.
:
Mr. Speaker, first, I would like to mention that I will share my time with my colleague from . You will no doubt be happy to know that I will not be reading from a newspaper today, so I should not have any problems with this speech.
I know that this debate has to do with the economy and job creation. I am going to assume that our colleagues on the government side are interested in creating jobs. We are as well. However, what we hear a lot from the government is rhetoric, slogans or mantras claiming that there is a direct correlation between tax cuts—particularly corporate tax cuts—and job creation.
Let us be clear. There are a number of ways to create jobs. There are a number of ways for the government to stimulate the economy and create jobs. Tax cuts may be one way, but there are also other ways, such as investing in infrastructure, redistributing wealth or making direct investments to benefit low-income households or the unemployed. All of these measures will have very different effects on economic recovery and economic stimulus. These are effects that can be assessed, and this has been done by the Department of Finance, so by a government department.
A few of these measures were evaluated based on their multiplying effect on the economy. For example, the Department of Finance determined that for each dollar of corporate tax cuts, approximately 30 extra cents would be added to the GDP. That is the least effective measure of the six evaluated by Revenue Canada. One of the most effective measures involves direct help for the poorest households or the unemployed; for each dollar invested this way, $1.70 is added to the GDP. In terms of infrastructure investments, $1.60 is added to the GDP for each dollar invested.
And for measures related to housing investments, $1.50 in economic growth is generated for each dollar invested. These measures have very different effects. Some are more successful and promising than others. Corporate tax cuts are the least promising and successful.
This is easy to understand. Direct measures to help low-income families and the unemployed generate so much economic growth because the money is immediately invested in the economy. Households need this money to invest directly because they have no money to save. It is invested directly into the economy. Investing in infrastructure or housing is just as easy to understand. It creates direct jobs and allows private businesses to benefit from infrastructure to make the economy work.
These three measures have direct, positive impacts on the economy. When it comes to reducing income tax, the impact is extremely weak. Can corporate tax cuts help the economy? In certain cases, yes. Take, for example, a private business that does not have the cash needed to make investments. It wants to invest in the economy but does not have the money to do so. At that point, income tax and corporate tax cuts will generate the money it needs to be able to invest.
However, that is not the current reality. The liquid assets the private sector currently has available, in dividends, investments or funds set aside, have increased, going from $157 billion in 2001 to $477 billion today. Let me be clear: Canadian companies are currently sitting on a mountain of $477 billion. That is money they could be investing. It is an increase of $320 billion in 10 years. Of that $320 billion, I would like to specify that roughly $120 billion comes, once again, from the Canadian public purse through the corporate tax cuts enacted by the previous Liberal and Conservative governments.
What are the corporations doing with this $477 billion? They are not investing it right now. Why not? There are a number of reasons that we will not necessarily get into at this time, but the economic context is such that they have decided not to invest.
What impact will corporate tax cuts have on the Canadian private sector? They will not lead to more investment. If the profitable corporations are currently not investing, if they find the current context not suitable for investing the $477 billion they have today, not to mention the additional revenue they will earn, then they will see no additional reasons to invest.
That is why corporate tax cuts are not the best approach in the current Canadian economic context. However, it is the only significant way the government has found, with what it calls the low tax agenda, to stimulate the Canadian economy. The Department of Finance has clearly stated that corporate tax cuts have no impact on job creation. The proof is in budget 2009, budget 2010, but not in budget 2011. We can presume that the government was too embarrassed to add those cuts in budget 2011. Budgets 2009 and 2010 clearly show that corporate tax cuts have no impact on job creation. I repeat: they have no impact on job creation. And the government has no proof that a single job has been created as a result of its corporate tax cut initiative.
What impact will this have on the Canadian treasury? We are talking about a loss of $4 billion to $6 billion this year. That is a loss of approximately $10 billion to the Canadian treasury over two years. That $10 billion was not invested; rather, it has helped to build the mountain of cash on which private companies are now sitting. In the past 10 years, we are talking about a net loss of $120 billion to the Canadian treasury. This money could have been invested in infrastructure rather than transferred to companies where it is not doing any good.
We are currently talking about an infrastructure deficit of approximately $100 billion. The hon. members for Quebec know that there are striking examples in Montreal. We need to invest to replace the Champlain Bridge. This summer, we saw the news about the Ville-Marie tunnel; this is symptomatic of the state of our infrastructure. This type of problem exists in the larger centres and in my riding of Rimouski—Neigette—Témiscouata—Les Basque, where I spent the summer meeting with municipal councils. I have 39 municipalities in my riding and most of them need infrastructure, whether it be recreation centres, new municipal offices, road infrastructure or water systems. There are pressing needs. We are talking about $100 billion for Canada.
According to Revenue Canada's figures, the money that is currently being given to companies so that they can add it to their mountain of cash—the money that is not being used for anything—could be invested in a more beneficial manner.
Let us be clear. If companies want to invest, they can do so. They are currently in a position to invest but they choose not to do so. They are not going to choose to invest more and create jobs if they are given tax breaks such as the ones the federal government gave them in previous plans.
According to the Department of Finance's figures, the NDP's program is much more effective in terms of stimulating the economy and creating jobs. We are talking about investing in infrastructure and providing direct support to low-income households and unemployed workers. These are measures that will help to increase employment. The direction that the Conservatives are taking and their failure to act are putting us in an increasingly perilous situation, as demonstrated by the warnings from financial firms, banks and the International Monetary Fund, among other things.
By adopting the NDP's plan, we would be going in the right direction; we would be creating employment and stimulating the economy. I would like to invite the government to go in this direction, specifically by voting in favour of the motion put forward by my colleague, the finance critic.
:
Mr. Speaker, I rise in support of the motion presented this morning by my colleague from . I would like to thank her for her excellent work. I represent a riding which is a perfect example of the need for immediate action on the economy. The Conservatives say that they have a jobs plan and that it is working. That is just not true, and is nowhere more evident than in my riding.
The riding was once the proud home to much of the Canadian manufacturing industry. As we have heard this week, Ontario has lost 300,000 manufacturing jobs in the recent years. York South--Weston had: Canadian Cycle and Motor Company; Moffat stoves; McClary appliances; Massey-Harris; de Havilland; Fruehauf; Scott-Woods; Canadian Gypsum; MacMillan Bloedel Limited; A.P. Green; Dominion Bridge Company; Ferranti-Packard; Kodak Canada; Levis; Crosley Radio and Television; Schnier; Carl Austin; Acme Screw and Gear; Pepsi-Cola; and lots more. They are all gone.
Tens of thousands of good manufacturing jobs are now lost. Some companies went out of business, some went elsewhere in Canada and some began manufacturing in the U.S. or overseas to take advantage of cheaper labour. No one in the government did anything to try and stop them. Therefore, with all these jobs lost, what remains are service sector jobs at minimum wage or unemployment.
My riding has 25% higher unemployment than anywhere else in Toronto and Toronto's unemployment is already higher than the national average, currently at 8.9%. Cuts to Service Canada offices in such a needy area will make the difficult task of accessing employment insurance and other services provided by these offices even more so.
In addition, my riding is home to a population which is nearly 60% immigrant and over 10% of the people in my riding are not yet Canadian citizens. Immigrants have a much more difficult time finding work, as language and other barriers are more difficult to climb for them. Recent cuts to immigrant services by the Conservatives has had a devastating impact on settlement service agencies and other community agencies that assist these immigrant populations. Further cuts by the government would make an already intolerable situation much worse.
The government frequently points to its record in infrastructure spending as having successfully reversed the recent recession. It is not so in York South—Weston.
First, there was virtually no infrastructure spending in my riding. Most of the projects were for the city of Toronto to replace some water mains. The total spending was well under $5 million and well under the $50 million spent in . We received perhaps 100 temporary jobs, no permanent infrastructure jobs. That did not make much of a dent in the 7,000 or so people who are currently unemployed in the riding.
The spending spree is over but the problem persists. The unemployed in my riding sometimes are lucky enough to find jobs outside the riding. However, without investment and transit infrastructure, these folks spend as much as four hours each day commuting to work. Plans for a new light rapid transit system were recently shelved and the federal government did not offer any contribution toward its construction.
Here is a great example of where the government could be creating local employment and helping the economy of Canada generally. I have long advocated the use of electric trains for regional rail services in Toronto. The government could both contribute to greenhouse gas reduction and economic development by providing infrastructure funding for electrification of rail services. The current plans for diesel trains, some of the money coming from the federal government, has neighbourhoods angry. Provincial leader Andrea Horwath of the NDP has made electrification of rail services a part of her strategy for carrying Ontario forward. She said:
New Democrats won’t put people’s health at risk by sending dirty diesel trains through people’s backyards. We'll take a new, cleaner, greener approach and use electric trains from the get-go.
We would like to see that part of the strategy for moving Canada forward. Therefore, we continue to have productivity sapping road congestion with no alternative and no vision for one.
The national public transit strategy put forward by my colleague from is a way to encourage the Conservative government to take a more active role in helping build the infrastructure we need and create jobs. Cutting back on public transit funding, if that is part of the upcoming austerity plan, is taking Canada backward.
A huge proportion of the unemployed in the riding are young people. For them, the unemployment rate is significantly higher still. None of the measures put in place by the government has helped them secure family-supporting jobs.
These kids are part of a group that service agencies call “the Mike Harris generation”. They are the kids whose mothers and fathers were punished by the Conservative government in Ontario in 1995 with huge cuts to their support systems. These kids have learned that governments are the enemy, that governments punish them not help them. In desperation, some of these kids turn to criminal activities. The government's answer is to build jails. That way at least part of the social housing crisis would be taken care of.
What is wrong with Conservative economic policies is that they are not forward looking. Steady as she goes, doing the same thing we did last year allows other countries the opportunity to leapfrog over Canada in the race to be on the leading edge of economic growth.
For example, we all know that carbon-based fuels are a finite resource. We are all concerned about air pollution and climate change caused by burning fossil fuels in ever-increasing quantities. We all know that creating and harvesting alternative sources of energy as well as becoming more energy efficient will be important activities for any country to move forward. However, the Conservatives will soon end the energy efficiency credits for homeowners yet they have done nothing to spur investment in green energy technology.
There are huge demands for windmills and solar panels but most are built in other countries. We are not investing in Canadian-made electric trains for regional and long distance service. We should be leading the way. That requires decisive action by the government.
Many of my constituents are seniors living on fixed incomes. Their costs keep rising. They would love to make their homes more energy efficient. The jobs that might be created to do this work would be sorely welcomed in the riding. However, the uncertainty of the assistance available from the government makes this another temporary solution.
I recently met with the president of Greensaver, a Toronto-based energy retrofit company that pioneered the idea of an energy audit to show where savings would be best in a home. It assembled a team of trained workers to install solar water heating systems but had to lay them off when the government assistance dried up. Companies need predictable long-term programs not makeshift temporary plans.
The Conservative government has made quite a few comments about how raising taxes on big businesses would kill jobs. That is not true. We are not asking for a raise in taxes, just to reverse the tax breaks. Tax breaks given to large corporations by the Conservatives have gone directly to increase the profits of those already profitable corporations. They are not creating jobs. In turn, these excess profits are used to line the pockets of the directors and shareholders of these corporations. These tax breaks are not linked to job creation but to increasing profits. If members do not believe me, here is a quote which backs up my assertion:
The Leader of the Opposition has called for an increase in taxes on these very same enterprises from 15% to 19.5%. That means that the after tax profits, which come from these companies and go directly into the pension fund of the workers the member purports to defend, would be reduced.
It does not state that jobs would be lost. Rather, it states that profits would be reduced.
Who said that? It was the .
As my colleague from has stated, the NDP does not wish to raise taxes. We merely wish to reverse the Conservative tax giveaways to already profitable corporations. The government has admitted that its tax giveaways went directly to profit levels not to creating jobs.
:
Mr. Speaker, before I begin my speech, I would like to say that I will be sharing my time with the member for .
Throughout the country, growth is slowing down, jobs are being lost and there is record unemployment among youth. A government's main task is to ensure prosperity, not only for our country, but also for every Canadian. No one should be forgotten.
The believes his plan to rebuild our economy is very easy. It involves cutting corporate taxes and reducing the government's role. This means cuts and job losses, but the government should be focusing on preserving and creating jobs.
As the party that put the Canadian economy back on track on the heels of poor Conservative fiscal management, we know what it takes to deal with a debt crisis and a deficit. It takes fiscal discipline along with growth and healthy revenues. In other words, people need to be working.
How do the Conservatives respond to all of this? They cut corporate taxes and the government's role. If you are worried about losing your job, the government thinks it is your problem. If you have already lost your job and cannot find another one, the government thinks it is your fault.
Unlike this government, the Liberals are focusing on policies that ensure prosperity, growth and jobs. We are here to say, as has been said in other eras when unemployment was high and times were tough, that it is the government's responsibility to work with companies, large or small, to increase business opportunities, give hope, and provide more opportunities for change and development.
Canada's economic prosperity has always depended on strong international trade. Under the Conservative government, Canada is now seriously lagging behind on the international scene. A significant rise in job creation will not come without a serious effort focused on international trade.
Canada's trade deficit with the rest of the world was $753 million in July 2011. That was our fifth consecutive month with a trade deficit. Since January 2009, Canada has only had nine months of trade surpluses, but 22 months of trade deficits.
The Conservatives' failure to act has led to a contraction of the Canadian economy at a time when we simply cannot afford it. Our real gross domestic product fell by 0.1% in the second quarter. This latest decline in the GDP is a good indication of the ineffectiveness of the Conservative plan, which focuses too much on corporate handouts that are not reinvested, instead of focusing on Canadians and their needs, such as job creation, education, professional training and health care.
Young people are especially affected by the government's failures and its inaction when it comes to the things that matter the most. Statistics on the high youth unemployment rate this summer prove that this government did nothing to create the jobs students needed precisely when they were trying to save money for the upcoming school year.
This summer, for instance, the average unemployment rate for students aged 15 to 24 was 17.2%, up from 16.9% in the summer of 2010. As a point of comparison, the unemployment rate in the summers from 2006 to 2008 was below 14%.
Another sector that suffered this summer was tourism, which this Conservative government consistently neglected. Worse still, this government even made decisions that were extremely detrimental to the tourism industry. We are already going through very tough economic times, and the Canadian industry cannot survive if this government brings in policies that undermine entrepreneurs.
From eliminating the GST visitor’s rebate, to hiking the air travellers’ security tax by 55% for foreign flights, to refusing to send a Canadian pavilion to Expo 2012, this government has done nothing but hurt Canada’s tourism Industry. Foreign tourism is a very lucrative source of revenue on which the various levels of government in Canada and hundreds of Canadian communities rely, and those communities deserve federal leadership to help bring tourists to our shores.
But the Conservatives' attack on employment extends far beyond tourism and young people. Small businesses have also been completely ignored by the Conservative government. Small and medium-sized business owners and municipal leaders are absolutely shocked that Canada will not have a presence in South Korea for Expo 2012, when South Korea is such an important trade partner for Canada. Our 2010 Expo pavilion in Shanghai saw over 6.4 million visitors and facilitated 46 high-level business meetings that generated many agreements and partnerships.
The Conservatives prefer to ignore all that because making cuts is more important to them than maintaining and creating jobs. The lack of skilled workers, the need for more investment in infrastructure and the increasing burden of red tape are a constant source of frustration for small business owners. The only thing holding a number of them back from expanding is that they cannot find the skilled labour they need. What is more, after three years of promising to cut red tape, all this government has done is conduct another study. We need measures right now because Canadians need jobs right now.
Since this government is more concerned with its ideological beliefs than the needs of Canadians, it is not surprising that the Conservatives have completely shirked their responsibilities in a number of recent developments with our trade partners, which could have an adverse effect on Canadian businesses and workers.
The government was asleep at the switch when President Obama announced the provisions of his “Buy American” policy in his economic recovery plan earlier this month. It was taken by surprise even though, in two speeches before the bill was tabled, the President clearly indicated where his administration was headed. The so-called exemption for Canada in 2009 was clearly ignored in the $400 billion plan proposed by President Obama. The consequences for Canada will be serious and the Conservatives' incompetence in this matter is unacceptable.
With the “Buy American” policy promoting the purchase of American products, country-of-origin labelling for agri-food products, and the Canada-U.S. tax treaty, Canadian interests have been systematically ignored by the Americans and the Conservative government has not done its job.
It is high time to focus on what is important: jobs. No miracle will save Canada from the troubling economic situation in which it finds itself. The government must invest in people, in our infrastructure, and in our capacity for research and development. The government must invest in helping needy Canadians rather than wasting taxpayers' money on punitive laws that will not make our streets safer and on fighter jets that Canadians do not need.
:
Mr. Speaker, it was not so long ago that I was talking about NDP economic policy. I used to use words like, “neanderthal”, “crazy” and “far left”, but I will confess that in the last little while, perhaps since the leadership of Jack Layton, its policies have become somewhat less neanderthal, somewhat less crazy, somewhat less far left and perhaps a little less crass.
[Translation]
I hope that my NDP colleagues will take those comments as a compliment, because that is how they were intended.
[English]
However, when I turn from the NDP to the Conservatives, I am afraid I will be a little harsher.
[Translation]
Perhaps before I do that, I should mention that the NDP motion makes a lot of sense and that the Liberals are happy to support it today.
[English]
As for the Conservatives, this triumphalist talk about the economic action plan, as if it has created every one of these 600,000 jobs, which is what the said today in question period, “...the economic action plan which resulted in 600,000 jobs”.
Conservative parties usually have the motto “governments don't create jobs, the private sector creates jobs”. Here the Conservatives have put it on its head and claim responsibility that they have created every job. Does that mean that the Conservatives think that Canada's natural resources, the oil and metals in the ground that have helped our recovery, were created by the Conservative Party of Canada?
[Translation]
Do they think that the Conservative Party was behind Mr. Chrétien's measures in the 1990s?
[English]
Do the Conservatives think that Mr. Chrétien balanced the books and reduced the debt because of them? Do they think that Mr. Chrétien refused to deregulate banks and refused to allow bank mergers because of them, when they in fact were urging deregulation, which led to huge problems in the U.S. and the U.K?
There are good mergers and bad mergers.
Hon. John McCallum: It is crazy to be witness to Conservative Party members saying that the private sector, history and natural resources have absolutely nothing to do with the recovery, but that every job is due to them.
I will get more to the point in today's situation. The budget was introduced in February of this year. We should think back to those long six month and how things have changed. It is now almost October, and even if the economic action plan in that budget of February 2011 was the right thing to do at that time, although I do not accept that, but even if it were, the whole world has changed in the last six months. Therefore, what was right in February 2011, is not right today in late September 2011. We should think back to February of this year. What was happening? The stock market was going up nicely. Now it has tanked by close to 20%.
Everybody thought the U.S. economy was proceeding fine in those days, but now we see what has happened to the U.S. Every indicator points to bad news. We have dysfunctional politics south of the border. We have the crazy situation about the debt limit and the incapacity in the United States to act politically. Therefore, what was one thing in February is totally different and far worse, both economically and politically, today.
Let us look at Europe. Nobody was talking about the eurozone ending. Nobody was talking about Greece defaulting. Nobody was talking about European banks defaulting. However, that is exactly what they are talking about now. It seems that the European leaders cannot get their act together, cannot agree on what to do, so we have a real possibility of a really dangerous situation, both in Europe and in the United States.
I will quote from an article in The Economist that came out just today. It is entitled “Be Afraid”. It states:
But governments are not just failing to act; they are exacerbating the mess.
My point is that if the government does not adopt something like what the NDP motion calls for, it will be not just failing to act, but exacerbating the mess.
I will proceed further to talk about three people and institutions that agree with what I have just said, and they can hardly be regarded as raving socialists.
First, the IMF went into countries, forced them to cut spending and were really mean to the small countries, et cetera. It is fiscal conservative. What does the IMF say? The new head of the IMF, Christine Lagarde, recently, in her opening speech to the annual meeting, said that what governments today should do is that they should have a medium term plan to balance the books and pay down debt, but, in the short run, they should take action to support jobs and the economy.
She is the head of the IMF. The government should do what she said. We certainly have the room. We should take action to support jobs and the economy in the short run, while having a plan to balance the books in the longer run.
We also have Sherry Cooper, the chief economist at Bank of Montreal. I used to be the chief economist at the Royal Bank and the golden rule for chief economists is to never ever criticize the federal government or the boss will get mad. Maybe her boss is mad at her but she spoke truth to power and said what was right. She said that the actions of the government were like the actions of Herbert Hoover during the Great Depression. We do not raise taxes or cut spending when times are super tough. That is what Herbert Hoover did and it caused the Great Depression. That is what the government seems to be poised on doing, unless it follows the advice that it is receiving today.
I will talk about The Economist. Everybody would agree that The Economist is a small “c” conservative magazine. It is not raving socialist. It is fiscally very conservative most of the time. It understands that times are different, times are tough, times are extremely dangerous, so it has been urging for a number of weeks now the same thing as the head of the IMF and the same thing as Sherry Cooper.
They are saying that, during these difficult and dangerous economic times, it is not the time for governments to cut. It is the time for governments to support the economy. They are complaining that the problem we have is not just that governments are failing to act but that they are exacerbating the mess.
I would conclude that these are unusual times and they are dangerous times from an economic point of view. I am not saying that the government's plan back in February was appropriate but it can make a case that it was. However, even if it were appropriate in February, it is not appropriate in September. Additional actions need to be taken unless the government wants to be part of the mess rather than part of the solution.
:
Mr. Speaker, I will be splitting my time with the member for .
I am very pleased to stand in the House today to speak to the very important motion put forward by the hard-working member for .
Although my Conservative colleagues continue to boast about Canada's economic recovery, more and more I am hearing stories from members of my community of that times remain tough and that high-quality, well-paying jobs just are not there in the numbers that they used to be.
Under the Conservative's stewardship of the economy, far too many of these family supporting jobs have been lost and Canadian households are increasingly feeling the squeeze of crippling household debt. Meanwhile, global economic instability and stagnation threatens already meagre economic growth in Canada.
I will focus on the issue of Canada's infrastructure deficit and how strategic investment by the federal government can have a real impact on stimulating both short-term and long-term economic growth.
Whether it is the Champlain Bridge linking Montreal with the South Shore or crumbling roads and sewage systems in my riding of , it is clear that Canada is in desperate need of a major nationwide infrastructure-building project.
In Laval, Quebec, in 2006, we saw first-hand what can happen when we allow infrastructure to deteriorate beyond the point of repair. Five people were killed, including a young child, when a highway overpass collapsed. Just last month, we also witnessed issues related to falling debris on a Montreal highway, leading to its closure and ultimately resulting in additional traffic congestion and additional delays for commuters and businesses.
Is the government prepared to wait until we see a major bridge collapse, like the one in Minnesota in 2007, to take action?
This seems to be an extremely opportune time for the government to invest in a national infrastructure project. Interest rates remain at an historic low, making public infrastructure investment less expensive than it would have been in the past. Why is the government not undertaking such an initiative now while money is cheap and Canadians desperately need jobs? After all, the Department of Finance itself has noted that infrastructure investment has more than five times the economic impact of corporate income tax cuts. In fact, it published this fact in the appendix of budget 2009.
Why, then, is the Conservative government pursuing an economic avenue that neglects infrastructure and focuses, instead, on giving corporate handouts to Bay Street executives in the form of corporate tax cuts? Why not strategically focus on infrastructure investment, something that would produce jobs in all regions of the country immediately?
I am also very curious as to how the Conservatives propose strategic review will affect employees in the public sector.
In my riding of , the Canada Revenue Agency is a major presence and is truly one of the vital employers in our region. Staffing cuts at this CRA facility would have large-scale negative effects on the greater community and the economic spinoffs associated with the CRA facility are numerous in my community of .
's economy is still recovering from the year long strike at Vale. I fear that should layoffs occur at the CRA Sudbury site, they will have extremely negative consequences for small businesses that rely on these public sector employees to maintain their bottom line.
I have similarly grave concerns over staffing levels at the Sudbury Service Canada office, which is another important employer in the riding that provides vital services to the members of my community.
I, therefore, urge the to immediately reconsider all actions that reduce the public sector contribution to the economy. The government should be taking a more flexible approach than it has been. Myself and many hard-working Canadians believe that the government should, therefore, reconsider its planned spending cuts, in light of global economic instability.
More and more often I am hearing from seniors who are unable to stretch their pension cheques to meet the inflationary increase in the cost of living. This is because the real value of the Canadian pension plan--the CPP, as most of us call it--is not keeping up with the cost of living, and many individuals who have invested in other pensions are seeing their value slip away as pension funds lose money in stock markets or try to change payout rules to shift the risk onto their shoulders.
People who have paid into the CPP and have saved up for their retirement for all of their working lives are now finding that the rules of the game were always secretly stacked against them. The only way to ensure that all Canadians are adequately supported in their retirement is a phased-in increase in the CPP.
Previously, the Conservatives indicated that they may be open to this option, but they have since turned their backs on this proposal. Despite the 's refusal to seriously consider this option, the proposal has a large amount of support, including support from a previous chief actuary of the CPP. Moreover, the CEO of the CPP Investment Board has said that the administrative costs of increasing the CPP would be lower than the private plan the has proposed.
We must now act to ensure that Canadian seniors are able to live without financial hardship. We cannot simply close our eyes to the issue, because it will only get worse as the next generation of Canadians begins to retire, increasing the percentage of Canadians receiving CPP.
In conclusion, New Democrats are not talking about spending but investment: investment in targeted incentives for real job creators; investments in critical public infrastructure, such as roads, bridges, public transit and broadband Internet; and investing in the training of workers for the 21st century global economy.
New Democrats know that now is the time to make strategic investments to promote economic growth and attack the jobs deficit. Now is the time to put partisanship aside and work together on pragmatic, practical policy solutions that encourage job creation, economic productivity and the kind of investment that builds expertise in the Canadian workforce.
I challenge those on the other side of the House to work together with New Democrats to meet the expectations of Canadians struggling to make ends meet during tough economic times by reaching across the aisle to develop concrete long-term economic solutions that will be beneficial to hardworking Canadians.
:
Mr. Speaker, it is an honour for me to speak in the House to support the motion from the hon. member for . This motion is particularly important in this economic context, which is so difficult, dangerous and worrying for Canadians. Our fellow Canadians are overburdened with debt and are stuck in low-paying, precarious jobs that have limited prospects for the future. Unlike the rosy world this government repeatedly talks about, the reality is far different for most people. Prospects for the future are bleak for all of us. Here are some powerful examples.
The Conference Board of Canada says that the gap between the rich and the poor in this country has been widening for the past 15 years. And it is widening at a faster pace than it did in the United States over the same period, which threatens the fundamental Canadian values of justice and equality in our society.
In addition, Charles Sirois, chair of the CIBC board, and Stephen Jarislowsky, a major Montreal investor, are worried about how dependent the Canadian economy is on the development and export of our natural resources. These two men, who have decades of expertise in global economic issues, believe that our economy—with its lack of diversity—cannot handle the challenges we face from emerging countries.
In the wake of major American investor Warren Buffett's statement, highly respected businessman Jean Coutu also expressed his belief that there is a completely incomprehensible fiscal imbalance and, as a result, he pays too little in taxes as compared to the Canadian public. He is therefore calling on the government to make the tax system fairer and more equitable so that he can do his part.
Contrary to this government, the NDP is advocating an economic approach that has worked for a long time. For a long time, the state has had a key economic role to play; to deny this is to turn a blind eye to the truth. Historically, we can see that periods that were the most economically successful in the long term achieved that success through major state intervention. When the state sets a strong and clear common goal of development, with rules of good governance and fairness on the markets, growth is impressive and sustainable.
The thirty glorious years provide an excellent example of economic measures to adopt when the economy is going downhill. Let us remember that, during that period, taxpayers' dollars were used to rebuild Europe, develop infrastructure, strengthen companies in North America and implement universal social programs that, for a long time, guaranteed a solid education system, health benefits that were accessible to everyone and the opportunity for most to retire with dignity.
All this is threatened by the economic approach of this government, which is irrationally obsessed with its weight, to the detriment of overall economic health. To paraphrase the great economist John Kenneth Galbraith, if it were only money at stake, we would not necessarily have much to worry about, but the plight of the millions of people who will suffer as a result of the action taken by this government is a matter of very great concern. It must be the main focus of our concern. In other words, we see that there are two conflicting visions of the economy in this House: that of the government, where finance takes precedence over the individual, and that of the NDP, where the individual is the centre of the economy. This could boil down to a simple ideological debate but, even then, the inescapable reality supports the NDP's approach.
First of all, one of the founding fathers of economics, Adam Smith, after making a harsh observation about the reality of his time, condemned that reality by advocating a moral approach to economic issues, an approach that took human needs into account. But unfortunately, Adam Smith was taken hostage by a simplistic economic vision endorsed by the Chicago school, which underhandedly did away with Mr. Smith's conclusions, maintaining only the observation and establishing it as dogma.
This sectarian approach has been very costly for many countries, especially in Latin America. Consider the example of Argentina, which went through a many lean years after applying measures similar to those proposed by this government. In addition, many Conservative governments in Canada have gone down paths similar to the one this government is taking, with disappointing and sometimes even disastrous results. To refresh everyone's memories, consider the following examples: the budgetary and economic trials and tribulations of the Diefenbaker government led to his defeat in 1962, when the public deficit had ballooned after a series of tax cuts—what a surprise—and after the value of the Canadian dollar dropped considerably compared to the American dollar; the Mulroney government ended a nine-year reign with an abysmal deficit of $42 billion as the ugly result; some 20 years ago, the Grant Devine government in Saskatchewan left the province's finances in ruins. After that, an NDP government led by Roy Romanow took over and in the early 1990s, despite the burden it inherited, it accomplished the amazing feat of achieving the first balanced budget of any government in Canada, whether provincial or federal.
The damage to the Conservatives' reputation at that time and later was so great that they had to reinvent themselves under another name, the Saskatchewan Party.
But the best example is the Ontario government of Mike Harris, which dismantled social programs and Ontario Hydro to the ongoing and costly detriment of the province's taxpayers. If we heed the debates raging in the current Ontario election campaign, the Harris legacy is still strong. The question is: do we want that kind of legacy?
In another part of the world, in Denmark, where a social democratic government was recently elected after 10 years of a depressing coalition of the right obsessed with austerity and border security, the new left-leaning prime minister is going to invest more than $3 billion in her country's small, rich and egalitarian economy.
Despite the fact that it has few natural resources, and personal income taxes of up to 60% as well as a 25% sales tax, Denmark's per capita GDP is comparable to that of Canada. What is even more interesting is that employment rates for all age brackets are invariably higher in Denmark than in Canada. Denmark invests heavily in education, research and development, and in its workforce, whereas Canada relies too heavily on the abundance of its natural resources as justification for a laissez-faire attitude that puts us at the mercy of economic ups and downs.
According to the Conference Board of Canada, the government must adopt an economic approach that concentrates on specialization, that is the processing of goods, in order to control a larger portion of what is called the distribution chain. In short, our country exports too many raw resources for processing abroad. We recently came to an astounding realization: employment in manufacturing, which was previously significant, is rapidly decreasing. This realization only reinforces the NDP position: Canada's competitiveness requires the diversification of activities and strategic support for sectors that create employment in order to ensure that the Canadian economy is not governed solely by the “invisible hand” of the market.
:
Mr. Speaker, it is a real pleasure to take part in this debate today. I have been listening to a lot of it this afternoon and it has been quite an interesting discussion between two sides of the House.
In defence of my colleagues in the NDP, it was interesting to hear the member for saying that the NDP had changed its position and had come to his side. In fact, the NDP has consistently held its view, but the Liberals have completely changed their position. The member for Markham—Unionville used to be in favour of lowering taxes as a way to stimulate jobs and create investments. Therefore, I think we should say that the NDP has been consistent and the Liberals have changed. The NDP may not be consistently right, in my point of view, but it has been consistent and I appreciate that.
As we all know, this is a time of global economic turbulence. We are following the markets every day and, certainly in Europe, nations are in severe trouble because of their debt situations. There are countries like Greece that have taken on unsustainable levels of debt and are having a very difficult time dealing with it. We see the situation in the United States, which has not experienced the level of job creation that we have here in Canada, unfortunately, and it is obviously causing some real hardship for the world economy as well.
We understand that, the understands that, and so does the . That is why the finance minister has been very active with his counterparts across the globe in terms of finance ministers and central bank governors. He and the Governor of the Bank of Canada, Mark Carney, were recently in Washington for IMF, World Bank and OECD meetings.
It has been necessary to respond to this global challenging time, especially to the global recession in 2008-09. There was a concerted response from OECD countries from the G20 both in terms of monetary policy and fiscal stimulus. That is certainly one reason why we argue that the situation here in Canada has been relatively better than the situation in most industrialized countries.
To look at promoting job growth and job creation, which is what this motion talks about, we argue that we have a very strong record in that sense. We have created approximately 600,000 jobs. I should not say “we”. The private sector has created 600,000 jobs since July 2009. In fact, if we look at the past year, there has been extraordinary job creation growth, especially in terms of full-time employment. There has been some very good numbers in terms of job creation.
The member opposite was saying that it is not the government that creates jobs. However, it is the government that puts in place the policies that enable job creation to occur. It was the government, in November 2007, that introduced a long-term plan to reduce taxes for small and medium-sized businesses that enabled job creation to go forward. Actually, it was pressing in terms of timing because it enabled some measures to take place before we were hit by the fiscal crisis in 2008.
We are very much focused on the economy. We are very much focused on growth. We are also focused on the prudent management of taxpayers' dollars.
It is interesting to hear the opposition talk about being in a period of austerity now; we were in a period of stimulus and now we are in a period of austerity. I would encourage them to reread the budget that was passed in June of this year. There are increases in this budget: 6% per annum to 2014 and beyond for health care; 3% per year for education and social assistance; research and development, which was praised by the Association of Universities and Colleges of Canada; clean energy research; and things like neurological research. There are some strategic investments going forward and there are many other measures that I will touch upon as well, especially with respect to small businesses.
We understand that small businesses generate a lot of the growth in this country. We understand that they are the primary employers of people in this country and that is exactly why we have put in place certain policies. I would like to emphasize these policies, such as: reducing the small business tax rate from 12% to 11%; and raising the amount of business income eligible for that rate from $300,000 to $400,000 to $500,000.
We did that for small businesses to enable them to create more jobs. It enables them to keep more of their own revenues and to invest more for themselves, their business and their employees. As small businesses grow, they will also benefit from the reduction in the general corporate income tax rate, which will be 15% in 2012.
There has been a lot of talk in the chamber about how these tax reductions only benefit certain types of companies, and we hear banks and oil companies mentioned all the time.
It is important to note that if a business has an income above $500,000, that business will pay the higher federal corporate tax rate right now of 16.5%. A business with an income of $600,000 is not a massive enterprise in Canada.
People need to understand it is not just about reducing tax rates for certain industries, whether it is oil and gas or the financial sector; it is about reducing it for every single business in this country that has business income above that $500,000 rate. I would hope all members would recognize that that includes a lot of small- and medium-size enterprises that we all admit are the primary generators of jobs in this country. That needs to be recognized.
In terms of lowering business taxes, as I mentioned, the economic update in the fall of 2007, which basically laid out this five year plan for reducing taxes, was to ensure that we were competitive on a global basis.
I would encourage members to go to the OECD website and look at the general corporate tax rates of certain countries. Countries like Chile, Sweden, and the Netherlands, countries that we are competing with, have tax rates very similar to ours. If we combine our federal tax rate of 16.5% generally with a provincial rate of about 10%, that totals 26.5%. We hope it will be 25% combined in January 2012. This makes us very competitive with a lot of these countries. Members should go to the OECD site to see where Canada fits in that.
A lot of people across the aisle will say that the Americans have higher taxes on businesses than we do. Yes, they do, but in our view that is the wrong approach. They have a lot more loopholes and they have a higher overall tax rate. What we are doing as a government is lowering the overall rate but aggressively going after some of the loopholes, which I think some members on the other side of the aisle do support. If we want more jobs, if we want higher wages, if we want this business tax advantage, then we have to follow this approach.
I did refer to the OECD in terms of where we fit in, but I would like to quote the OECD. It recently declared that Canada's corporate income tax reductions “should lower the cost of capital and buttress investment intentions. These advances...drive productivity gains and enhance employment prospects.” The fact is that the OECD has recognized what Canada has done and continues to do.
I would like to return to what I was saying about what was in the budget that we passed in June.
The first thing I would like to talk about is the hiring credit for small business. It is a hiring credit of up to $1,000 against an employer's increase in 2011 for EI premiums over those paid in 2010. This is a very important point. I suspect frankly that there are members on the other side of the House who support this initiative. It was brought forward by some very responsible groups, like the Canadian Federation of Independent Business, in terms of what we can do to assist these small businesses.
This temporary hiring credit for small business will be available to approximately 525,000 employers whose total EI premiums were at or below $10,000 in 2010, which will reduce their 2011 payroll costs by about $165 million. This is very important. I would challenge members on the other side to indicate whether or not they support this initiative, and if not, why not. If they do support it, then they should consider supporting the economic action plan that we are putting forward.
We have also taken a lot of action in terms of small business through business financing programs. I would like to highlight some of those initiatives.
The Canada small business financing program supports about $1 billion in loans to approximately 7,500 small businesses each year to either help them get started or to expand. Our government increased the maximum loan amount under this program from $250,000 to $500,000, of which up to $350,000 can be used for equipment and leasehold improvements. This is part of our economic action plan.
This is important as well, because one of the main points small businesses will make is the challenge they face in terms of access and capital. They have raised it with all of us as their members of Parliament. They will often go to a financial institution and have a tough time either accessing capital or accessing it at a cost they can afford in order to expand their business or hire more people. This obviously helps those small businesses address that problem directly.
We are doing more especially for small- and medium-size businesses. We are cutting red tape.
As of 2009, we have eliminated almost 80,000 red tape requirements for small- and medium-size businesses. To build on that, earlier this year we launched the Red Tape Reduction Commission to find even more ways to reduce the burden of federal regulatory requirements on Canadian enterprises.
In the next phase of the economic action plan, we have also included a number of additional initiatives, including support to make our BizPaL initiative permanent. This initiative enables businesses to go online to complete all their requirements. This online service significantly reduces the red tape burden on small business owners by allowing them to quickly and efficiently access the necessary permits and licences from all levels of government to operate their specific businesses.
Finally in this area, we committed that the Canada Revenue Agency will consult with the business community and key stakeholders to identify opportunities to further improve its services and reduce the administrative burden while respecting the overall integrity of the tax system.
With all of these initiatives recognizing the importance of small business within the Canadian economy, it is no wonder that the president of the CFIB, Catherine Swift, has said:
In this Year of the Entrepreneur, we give credit to the government for continuing to work to balance its books while finding important, low-cost ways to help small firms grow the economy. With measures focusing on reducing red tape, the introduction of an Employment Insurance (EI) tax credit and better transparency and accountability at Canada Revenue Agency (CRA), government took some important steps to enhance job creation and recognize the economic contributions of small businesses in Canada
Our government has done this because we believe the best way to build a more competitive economy is to create a business environment that allows the large and small private sector businesses and employers who employ the vast majority of Canadians to succeed and to expand, not stand in the way of their success with high taxes and needless red tape. It is working and we should continue down that road.
The IMF was mentioned by my friend across the way earlier. I would like to quote the IMF as well:
Canada is actually matching up quite well on a relative basis....[T]he recession was not too deep, they haven't had a financial crisis to the extent that the US has had or the Europeans are having it. And so all in all Canada is actually doing quite well.
We continue to encourage the spark of entrepreneurial creativity in Canada with a number of important initiatives which we target at small business entrepreneurship. Another example is we provided the Canadian Youth Business Foundation with support, giving young entrepreneurs access to business loans and mentoring services as they start up and operate new businesses. That mentoring aspect is very important. There is an initiative in Alberta called Productivity Alberta which is about people with a lot of experience, particularly in the manufacturing sector, mentoring some younger people in the manufacturing sector. That mentoring of the next generation of business leaders is as important as or even more important than access to financing.
In terms of the Canadian Youth Business Foundation, this is on top of the federal small business internship program that each year helps about 400 students across Canada gain valuable experience and helps entrepreneurs adopt competitive e-business practices. This was obviously well received. The Canadian Youth Business Foundation said this:
This contribution will allow CYBF to continue to support the ideas, the innovation and the entrepreneurial spirit of Canada's youth, ultimately creating jobs and strengthening our economy.
In this same spirit, the government is also providing $15 million on an annual basis to support the Canada business network. This provides essential information to help business owners start up and grow their businesses, all available through a national website, a national toll-free telephone line, and 13 regional service centres.
In terms of some EI measures that are directly targeted toward job creators, especially toward smaller businesses, our plan that we announced in March and then in June, which was passed, is going to provide $420 million to renew two special EI measures for a year. First, the working while on claim measure will allow EI claimants to earn additional money while receiving income support. This will be renewed until August 2012. Second, the best 14 weeks measure allows claimants in 25 regions of higher unemployment to have their EI benefits calculated based on the highest 14 weeks of earnings over the year preceding a claim. This will be renewed until June 2012.
There obviously is a number of initiatives that are designed to help especially people in some very challenging areas. We have certain regions which are experiencing very high economic activity and certain regions which are not. We are very cognizant of that fact and we are responding to it.
As an aside, at some of the round tables I have been doing with some of the small businesses in my area, when I ask what the greatest challenge is, many will say that their biggest challenge is access to people, finding enough people who will work in their enterprises. It goes across all sizes of business.
There was an individual in my office recently. He is my age. He is a very young CEO. He said that he could hire 75 people for his service business today, but he simply could not find them. Perry at the Denham Inn in Leduc said that he needs about six people. He put out the notice, received replies from 38 people who had an interest, but all 38 people turned him down. He looked at me and asked what he should do because he needs people. This is one of our challenges going forward. Even as we have a relatively high unemployment rate, there are going to be businesses that increasingly find it a challenge to find people, whether it is skilled or unskilled labour.
I also want to highlight the initiative that dealt with rural physicians. It was in the budget and it was mentioned in the last election campaign as well. Starting in 2012-13, practising family physicians will be eligible for federal Canada student loan forgiveness of up to $8,000 per year to a maximum of $40,000. Nurse practitioners and nurses will be eligible for federal Canada student loan forgiveness of up to $4,000 per year to a maximum of $20,000.
By getting doctors and nurses into our rural communities, and my riding certainly has a rural part, we are helping all Canadians access essential health care services no matter where they live in this country.
Another aspect of our program that I would like to highlight is the whole trading agenda. It is interesting. An economist from a bank was talking about the response to the Great Depression, Herbert Hoover and all of this. I find it quite farcical, frankly. If we look at what the response was in the 1930s, it was one of raising tariffs, shutting down trade, and raising taxes.
What our government has been doing, especially two budgets ago, is eliminating tariffs. We are now eliminating tariffs especially as inputs for the manufacturing sector. The other thing we are doing is embarking on a very aggressive trade agenda. We realize that we have to diversify our trade. We are obviously very closely linked to the United States, with 85% or so of our trade linked to the United States. We need to expand and diversify our markets. That is why the did his southern tour this summer, to really work on those markets to expand and diversify our trade opportunities. Countries like Colombia and Brazil are prime opportunities for us.
It is interesting, even when asking companies in my riding how they are doing on their exports, a lot of them will say that in terms of their U.S. exports, they are down about 25% or 30%, but their exports to Brazil have taken almost all of that up. If we focus on diversifying trade, we are obviously going to be helping many of these companies.
I want to talk about our response on the innovation side. Again, I would return to the rhetoric. Many opposition members are saying that we are now in an austerity period. We are not in an austerity period. We are still in a fiscal period of stimulus where we are strategically investing.
One of the areas we are investing in is research and development and innovation. We obviously did that through programs like the knowledge infrastructure program in terms of actual infrastructure at universities and colleges across the country. We are also investing in people through the three federal research granting councils which received increased funding. We are addressing things like the indirect cost of research, which universities and colleges have raised with us for years.
I would like to quote the Association of Universities and Colleges of Canada:
The Association of Universities and Colleges of Canada strongly welcomes the Government of Canada’s continued support for university research and international engagement as announced in Budget 2011.
“We're pleased with the strengthened investment in university research and innovation in this budget”.... “This support will increase Canada's capacity for discovery and innovation, and enhance the university learning experience for all students.”
“This budget represents tremendous progress for the university sector: more funding for the research councils, promotion of international educational marketing, additional support for students, and a range of measures to foster innovation and research.
The president of the University of Alberta, of which I am an alma mater, praised it in terms of our response on the innovation and research agenda.
In closing, I want to emphasize it is a time of global economic uncertainty, but the government is on the right path in terms of continuing to strategically invest while continuing to respect taxpayer dollars and moving towards a position where we can balance our budget by 2014-15.
:
Madam Speaker, I would like to speak today about the increasingly obvious issue of poverty as well as the growing gap between the rich and the poor in this country. I agree with my colleagues, who are outraged at this government's lack of action. It is not taking concrete measures to deal with an alarming economic situation that is affecting Canada and all of its communities.
I think it is time for the government to take its head out of the sand. While it brags to potential foreign investors and the media about how strong and safe our economy is in these tumultuous times, it needs to understand that Canadians are not stupid and they know how fragile the country's economy really is. Numerous recent reports paint a very different picture of the reality all Canadians will have to face, if they have not faced it already.
A recent Conference Board report says that the gap between the rich and poor in Canada is widening, even more than in the United States. What is worse, Canada had the fourth largest increase in that gap among the 17 most industrialized countries. Obviously this is an unacceptable situation and urgent measures must be taken to strengthen the country's economic policy and provide more fair and equal distribution for everyone.
In light of this, it is quite understandable that Canadians wonder why the government is choosing to make the rich richer and the poor poorer.
When a country is going through difficult times that could jeopardize its economic health, every second counts. Although other countries around the world seem to be experiencing even greater difficulties than we are, globalization means that our economy is very dependent on events beyond our borders. Therefore, the government must make a commitment to the voters and implement appropriate and equitable initiatives that will protect our economy, create jobs and ensure a well-deserved retirement for our seniors and a prosperous future for our youth. The government must be accountable for its actions and ensure the economic protection of the people. The solution to poverty is to be proactive and not passively implement reactive measures that come too late and are often inadequate.
In the National Council of Welfare's fall 2011 report, the chairperson indicates that readers will see a disturbing picture of poverty in Canada. He also confirms that the toll of poverty on the Canadian economy is too high, and I share that sentiment. To back up what I am saying, here are a few examples.
In 2007, the public cost of poverty, that is, government expenditures—and we have not even mentioned the private cost of poverty—totalled $24.4 billion. This figure is twice the poverty gap, which is the amount of money required to bring all Canadians out of poverty. Can Canadians afford to carry this fiscal burden when studies prove that investments in well-being are more profitable in the long term? The answer is no.
The annual cost of housing an offender in a prison cell is up to 10 times greater than the cost of supervised housing. We know very well that thousands of prisoners are incarcerated for minor crimes, that they have mental health issues, and that they do not receive adequate care for their conditions because of a lack of resources.
Twenty per cent of health care costs are directly related to socio-economic gaps. If the population that is in a precarious financial situation was not in that position, it would be healthier and more able to work.
At this point in time, the Canadian economy is losing between $3.5 billion and $5 billion dollars a year because the skills and experience of immigrant workers are not recognized. These are just a few examples of what poverty costs all Canadians every day.
Other troubling figures also confirm the concerns of Canadians, including the people of my riding who have trusted me to represent them. While poverty among families and seniors is becoming a major source of concern, which the government must pay more attention to, the unemployment rate among young people, even though they are healthy and well qualified, continues to rise.
If the government still believes that Canada's economy will survive the global economic turmoil, why is Canada's labour market so stagnant? Why are Canadian families finding it harder and harder to make ends meet and why are they being forced to drastically lower their standard of living in order to survive?
At this time, we all know that the labour market is weaker than it was even before the financial crisis in 2008. Canada has recorded a net job loss for the first time since last March. In question period, the government boasts about the fact that it has created 600,000 net jobs. We cannot help but wonder about the beginning and end dates of that job creation.
According to Statistics Canada, in August 2011 employment was little changed for the second consecutive month and the unemployment rate edged up slightly to 7.3%. In the past 12 months, employment has grown by 1.3% and 223,000 jobs were created, primarily in Ontario and Alberta, and in the private sector. That is nowhere near 600,000 jobs. Where do those 600,000 net jobs come from, the ones several ministers, including the , keep talking about in question period?
Economists everywhere and the major banks have had to lower their growth forecasts.
Canadians are worried about their retirement and their savings for when they are older.
Madam Speaker, I forgot to mention that I will be sharing my time with the hon. member for . I apologize for not mentioning it earlier.
The overall debt of the average Canadian family has now reached a record level—previously established at 150%. Families with two parents working full-time who used to be middle class are now on the low end of the income scale. Canadian families are suffocating and in debt. They do not have enough money and they do not have time to work more because they are already working as many hours as they can.
The unemployment rate among students reached 17.2% this summer, an increase of over 3% as compared to the rate before the 2008 recession. Students represent the workforce of the future; if they manage to graduate, they are the ones who will be actively participating in our collective growth by paying taxes. Without jobs, the cost of living is too high for students to be able to make ends meet, which leads them to drop out of school.
Is this the dark and difficult future that the government wants to offer these people? It seems clear to me that the government is completely out of touch with the everyday lives of voters and is not taking their situations into account when it implements strict measures and makes drastic budget cuts. Just when Canadians need the government—when they need support and resources to get their heads above water—the government is letting them down.
The numbers speak for themselves. If the government is bragging about keeping the Canadian economy healthy, it needs to redo its calculations. There are good economic strategies and there are optimal strategies. There is a huge difference between spending and investing and the government must recognize that once and for all. Why does the government not see spending to combat poverty as an investment in society?
Maximizing our collective wealth potential depends on full employment. That is why the government must act now to develop a clear and optimal national strategy that will attack poverty directly at the source of the problem rather than adopting strategies that only treat the symptoms.
If Canada is trying to help people survive poverty, I will admit that we are having some success. However, what the government is doing now has significant social costs. If, on the other hand, we want to work together to eliminate poverty and its costly effects, we must adopt a different approach.
What the NDP is proposing in its motion is a true investment strategy in order to optimize Canadian resources, a strategy whose benefits will be seen and felt in the long term. This is a strategy that puts more emphasis on preventing poverty than on spending once the harm has already been done.
:
Madam Speaker, I am pleased to speak to this opposition day motion.
Just this week economists before the finance committee commented on the situation that Canada faces during this current economic turmoil. They were nearly unanimous in their view that due to the lack of investment by the business community combined with Canadians' personal debt burden neither would be likely to stimulate our economy in this time of need. We were told there are some $500 billion that corporations are holding onto. In fairness to corporations, when we consider the experience they had in the recent lending crunch in the last recession it is quite understandable that they would want to protect their cash assets not knowing what the next months and years might bring.
The economists were united in stating that it was time for the government to take up the slack in our economy and invest in our infrastructure. Today in Canada there is a 7.3% unemployment rate. New Democrats believe that it is closer to 11% when we include the people in society who have given up and lost hope. Really we are saying that one in ten Canadians is not working or contributing to our economy and, in many cases, he or she is sadly nosediving into poverty.
Last week the Social Planning & Research Council of Hamilton released a report about seniors poverty. As members will know, in the last session I was the critic for seniors and pensions, but the member for has taken over the seniors part of it. This report was very striking. It reported that 7.5% of seniors in Hamilton live in poverty and the rate of poverty among senior women is double that of senior men.
During the last session, I stood in this place month after month calling for the government to dramatically increase the guaranteed income supplement to deal with this untenable situation of seniors poverty. The government responded and in its budget gave them $50 a month as an increase to the guaranteed income supplement. That is a pittance. We need to understand that seniors are living on about $15,200 a year. The poverty line is above $22,000 a year. When I say that $50 is a pittance, I am glad we no longer hear it being trumpeted in the House because it was very troubling to hear that day in and day out.
New Democrats know what is needed. The government needs to stop talking about its record and stop trumpeting its recent electoral victory. Conservatives are the government of the day. It is a victory that cannot be used to once again justify putting on the blinders when it comes to dealing with the needs of Canadians across our country who are facing a crisis. Conservatives continually repeat in this place that they have a clear majority. A clear majority of 61% of Canadians did not vote for the Conservatives or their agenda.
We need spending that is targeted to: real job creators; the $130 billion deficit in our infrastructure, as identified by the Canadian Federation of Municipalities; construction and the repair of roads and bridges, like the bridge in Montreal; and, public transit. Discussions are taking place regarding a Quebec to Chicago high-speed rail link. There are examples of things that we could be doing.
We also need to target the training and retraining of Canada's workforce. When I was a school board trustee in Hamilton there was a dropout rate of about 28%. In so doing, those people were isolating themselves from being part of the economy. We all understand the need for education and retraining. In my community of roughly 500,000 there are over 112,000 people living in poverty. We need to find a way to bridge the gap between these people and work. Over the next five to eight years employers are going to be crying out for skilled workers.
One of the presenters at our committee today was from a community college. That individual talked about the gap that is going to be there even with our new immigration policy. The gap figure that we will not be able to fill was 30% I believe. Yet, we have people living in poverty who have the capacity to work, if we can find a way to bridge them to that work.
I want to quote Glen Hodgson, the chief economist for the Conference Board of Canada, who was one of the presenters at committee. He said, “We believe that we're severely under-invested as a country in infrastructure. We haven't got the numbers, but others have, engineers have, the federation of municipalities has, and I think their number of going back five years was a deficit of about $130 billion in terms of infrastructure investment”.
He further commented, “This tells me there is huge scope for realigning government spending priorities and making sure we're making adequate investments in roads, in ports, in bridges to ensure that--”, and I am paraphrasing, he said economies like that of Montreal function well. If we lost the bridge in Montreal, what would that do to the economy of that community and the economy of our country? It cannot be allowed to happen.
There are other things that he went on to talk about, such as social infrastructure. Again, he was commenting on the facing of an aging population. We would like to see more Canadians working, and he stressed more women and aboriginals working.
There are programs such as childcare that we could put in place to allow more women to go back to work and improve our labour force participation and make sure companies have the workers they need.
Another presenter at committee was Marc Lavoie. He is a professor with the department of economics at the University of Ottawa. To paraphrase, he said that the Canadian government already in his opinion should abandon this goal of balancing the budget that has been set for 2014-15. It should give up its budget cuts already announced. It must establish a new stimulus package on infrastructure.
We need to put what is being proposed into perspective. The government is proposing to cut services in this country that Canadians need. It is proposing to take some of the workers who work for the government in various programs and put them on the street. We should find a way to move forward.
I know we have great debates in this place over taxes. I keep hearing commentary from the other side stating that the NDP wants to raise taxes. The corporate tax rate in this country in 2000 was 38% and the American rate was 36%. The finance minister to the previous prime minister lowered the Canadian tax rate to 20%, right in the middle of the G20. It was a more than reasonable move, but it took billions of dollars out of the economy, billions of dollars out of this place that we could have used to help Canadians.
What did the present Conservative government do? It took that corporate tax rate of 20%, which was already well below the American 36% rate, and dropped it to 15%. It is on its way to 15%. That takes $16 billion a year out of the government's ability to do things for Canadians in this time of crisis. We had a report of a $12 billion deficit a year ago. Is it not interesting how that matched up very closely with the changes that the government had made? This was a planned deficit that was put in place by the Conservative government.
I recall a minister of education in the government of Ontario talking about causing a crisis in education so the government could address it. We have a government here that has not caused the economic crisis, but it is not responding to it properly. It is exacerbating the crisis and making it much worse than it needs to be.
:
Madam Speaker, I am pleased to rise and speak to this very important topic. I am pleased to have the opportunity to speak to the opposition motion on pension and retirement income issues. As we know, our government's top priority remains jobs and the economy. Certainly, this is a priority for many retirees and retirement savers.
Today, I would like to speak to what our Conservative government has accomplished in the area of retirement income security. However, before getting into the details, I will touch on what our government has done for the overall economy.
In 2008 Canada was faced with the worst global recession since the 1930s. Our government acted quickly and decisively. Through Canada's economic action plan, we delivered extraordinary support for jobs and growth during a turbulent global economic period, and it worked. With the creation of almost 600,000 net new jobs since July 2009, Canada has more than recovered all of the jobs lost during the recession. It has posted the strongest employment growth among the G7 countries.
Canada has also maintained the best fiscal position among the G7 with the lowest net debt and among the lowest deficits in the G7 as well. Even better, the IMF and the OECD both project Canada to be among the strongest in growth in the G7 and, for the fourth straight year, the World Economic Forum rated our banking system the world's best. Undoubtedly, Canada has an enviable position relative to our G7 counterparts.
Along with our strong fiscal position, solid financial system, and our low tax approach to encourage investment, we are helping to ensure that Canada is well positioned to address any challenge ahead.
As prosperity ties into savings and ultimately retirement, I will move from the topic of overall economy and back to pensions. In so doing, let me begin by saying that our government shares the deep-rooted concerns of many Canadians about their retirement security. We understand the importance of a secure and dignified retirement, especially after a lifetime spent building a better Canada through hard work.
For that reason we have been aggressively working and focusing on improving our retirement income system. Indeed, we have already taken major action to strengthen Canada's retirement income system.
What have we done? First, in recognition of their life-long contributions to the country and our government's core belief that Canadians should keep more of their hard-earned tax money, we dramatically lowered the federal tax bill for seniors and pensioners.
Since forming government in 2006, our enviable record includes more than $2.3 billion in annual targeted tax relief such as increasing the age credit amount by $2,000; doubling the amount the of income eligibility for pension income credit; and increasing the age limit for maturing pensions and registered retirement savings plans to 71.
We have introduced the tax free savings account, particularly beneficial to seniors as it helps them meet their ongoing savings needs on a tax efficient basis after they are no longer able to contribute to an RRSP.
Jonathan Chevreau, a noted financial commentator, has declared, “TFSA is also a welcome tax shelter for Canadian seniors”. On pension income splitting for 2007 and subsequent taxation years, Jamie Golombek, a financial commentator, has noted that, “Pension splitting is probably one of the biggest tax changes in decades, in terms of the amount of tax savings this can mean for pensioners”.
Furthermore, our record also includes important improvements to several specific retirement income supports. We have dramatically increased the amount working seniors can earn before facing a clawback under their guaranteed income supplement, GIS, allowing them to keep more of their hard-earned money.
We have enhanced the guaranteed income supplement, GIS, for those seniors who rely almost exclusively on their old age security and GIS, and may therefore be at risk of experiencing financial difficulties. This measure will provide a new top-up benefit of up to $600 annually for single seniors and $840 for couples. This measure will improve the financial security of more than 680,000 seniors across Canada.
Finally, we increased flexibility for seniors and older workers with federally regulated pension assets that are held in life income funds.
Second, we took major steps to reform the legislative and regulatory framework respecting federally regulated private pension plans. Indeed, these steps represented the most significant reforms in nearly 25 years.
Announced in October 2009 after extensive cross-county and online public consultations held in the months beforehand, the reforms include enhancing protections for plan members, allowing sponsors to better manage their funding obligations, making it easier for participants to negotiate changes to their pension arrangements, improving the framework for defined contribution and negotiated contribution plans, and modernizing the investment rules.
These key reforms are warmly applauded across Canada. A diverse and broad group of public interest groups ranging through the National Association of Federal Retirees; the Association of Canadian Pension Management; the Canadian Institute of Actuaries; CARP, Canada's association for the 50-plus; the Common Front for Retirement Security; the Bell Pensioners Group; the Canadian Life and Health Insurance Association; and even the Canadian Labour Congress welcomed and expressed their pleasure with it.
A Globe and Mail editorial heralded the reforms as a good step. John Manley, a former Liberal Party of Canada member of Parliament, finance minister and deputy prime minister of Canada, declared them significant reforms that will enhance protection for plan members.
However, those reforms to federally regulated private pension plans were only one step in a much larger process. This leads to the third and final area of our focus on improving retirement security and pensions in Canada, wherein we are working with our provincial and territorial partners.
While many Canadians may not realize it, the vast majority of pension plans, approximately 90% in Canada, are provincially regulated. In other words, the federal government only has the constitutional authority to make laws related to the private pension plans of federally regulated employers, such as airlines, chartered banks and others, which employ fewer one than one in ten of all workers in Canada.
That is why, to address larger pan-Canadian concerns about pensions, we have been examining the relevant issues with our provincial and territorial counterparts in a co-operative and constructive manner.
We have demonstrated this by establishing a joint research working group on retirement income adequacy and by holding numerous federal-provincial-territorial summits on the issue.
We also fundamentally believe that the Canadian public had a fundamental right to be involved in and at the centre of this debate. That is why we have ensured that Canadians from coast to coast to coast have had the opportunity to have their voices heard in person and online.
From March to May 2010, we invited public input through round table discussions, expert conferences, online consultations and public town hall meetings to gather feedback directly from Canadians.
Even labour organizations like CUPE, typically not supporters of our government, were forced to begrudgingly admit we had conducted a serious public policy discussion.
Following these extensive and necessary consultations, the findings strongly suggested we explore opportunities to build further on the strength of Canada's retirement income system. As a result, we agreed, along with the provincial and territorial governments, to explore a set of innovative improvements.
Indeed, it is one of those innovative improvements I would like to talk about for the remainder of my speech: pooled registered pension plans.
These pooled registered pension plans, PRPPs, available to employers, employees and the self-employed, will provide Canadians with a new low-cost accessible vehicle to meet their retirement objectives.
Once implemented, PRPPs will play a critical role in improving the retirement options available to Canadians, providing a low retirement savings option. Indeed, PRPPs will be a new savings option for the millions of Canadians who have never had a private pension before.
As Rob Brown, a former professor at the University of Waterloo and past president of the Canadian Institute of Actuaries recently stated, “Pooled Retirement Pension Plans could be a big step towards the redesigning the retirement income security systems required for Canadians for the 21st century. Pooled Retirement Pension Plans are a good idea; one clearly worthy of pursuing. Furthermore, PRPPs will be especially important to small businesses and their employees who will now have access to a low-cost private pension plan for the very first time. As many small business employees and employers will pool their pensions, a lower management cost will be achieved, meaning many new savers and Canadians will be buying retirement savings in bulk”.
As a small business owner Ingrid Laderach Steven from Toronto Swiss-Master Chocolatier knows firsthand, after meeting with the about PRPPs, and here is what she had to say--