House of Commons Hansard #73 of the 39th Parliament, 2nd Session. (The original version is on Parliament's site.) The word of the day was rights.

Topics

The House proceeded to the consideration of Bill C-207, An Act to amend the Income Tax Act (tax credit for new graduates working in designated regions), as reported (with amendment) from the committee.

Speaker's Ruling
Income Tax Act
Private Members' Business

11 a.m.

Liberal

The Speaker Peter Milliken

Order, please. There are two motions in amendment standing on the notice paper for the report stage of Bill C-207. Motions Nos. 1 and 2 will be grouped for debate and voted upon according to the voting pattern available at the table.

I will now put Motions Nos. 1 and 2 to the House.

Motions in Amendment
Income Tax Act
Private Members' Business

11 a.m.

Bloc

Robert Bouchard Chicoutimi—Le Fjord, QC

propose:

Motion No. 1

That Bill C-207 be amended by restoring the title as follows:

“An Act to amend the Income Tax Act (tax credit for new graduates working in designated regions)”

Motion No. 2

That Bill C-207 be amended by restoring clause 1 as follows:

“1. The Income Tax Act is amended by adding the following after section 118.7:

118.71 (1) The definitions in this subsection apply in this section.

“base period” means the first 52 weeks of the aggregate of all periods each of which is a period during which the individual

(a) holds qualifying employment; and

(b) ordinarily performs the duties of the qualifying employment at an establishment of the individual’s employer situated in a designated region or is ordinarily attached to such an establishment.

“designated educational institution” has the meaning assigned by subsection 118.6(1).

“designated region” has the meaning assigned by section 3 of the Regional Development Incentives Act.

“qualifying employment” means an office or employment that the individual begins to hold in the 24-month period that follows the date on which the individual successfully completes the courses and, where applicable, the internships leading to the awarding of a recognized diploma, or the date on which the individual is awarded a recognized diploma that is a master’s or doctoral degree under an educational program requiring the writing of an essay, dissertation or thesis, if

(a) the individual begins to perform the duties of the office or employment after January 1, 2007;

(b) at the time that the individual takes up the office or employment, the establishment of the individual’s employer at which the individual ordinarily performs the duties of that office or employment, or to which the individual is ordinarily attached, is situated in a designated region; and

(c) the knowledge and skills obtained during the individual’s training or educational program are related to the duties performed by the individual in connection with the office or employment.

“recognized diploma” means a degree, diploma or attestation awarded by a designated educational institution.

(2) For the purpose of computing the tax payable under this Part by an individual for a taxation year, there may be deducted an amount equal to the lesser of

(a) the amount that is 40% of the aggregate of all amounts each of which is the salary or wages of the individual for the year from qualifying employment and attributable to the individual’s base period; and

(b) the amount by which $8,000 exceeds the aggregate of all amounts each of which is an amount that the individual is deemed to have paid to the Receiver General under this section for a preceding taxation year.

(3) For the purposes of paragraph (2)(a), an individual who was resident in a designated region in Canada immediately before the individual’s death is deemed to be resident in a designated region in Canada at the end of December 31 of the year in which the individual died.”

He said: Mr. Speaker, I am very pleased to have the opportunity to discuss Bill C-207 again today at the report stage and I would like to thank everyone taking part in today's debate.

Bill C-207 is designed to fight two problems that affect the regions facing economic challenges: the exodus of young people and the shortage of skilled labour. Briefly, Bill C-207 would give an income tax credit of up to $8,000 to recent graduates who accept employment in a region that is facing economic and demographic difficulties.

I would like to use the short time I have to respond to some of the concerns regarding Bill C-207 raised by my colleagues at the Standing Committee on Finance meeting held on February 27, 2008. Above all, I would like to appeal to the two Conservative members from Saguenay—Lac-Saint-Jean, who are fully aware of the benefits of this measure, to support Bill C-207, which will hopefully help convince their colleagues to also support this bill.

All the members of this House know that the most isolated regions are the ones losing the most residents. In many cases, they depend on one type of industry—we call these single-industry regions. There is often little room in the traditional economic base of these regions for skilled jobs. So with the forestry crisis, the economy of a single-industry region will experience distinct ups and downs.

To compensate, new businesses in other fields must be developed to diversify the economy. Unfortunately, there are not enough workers in these regions to make it possible to create new businesses in new fields.

When the Government of Quebec examined the regions that depend on a single industry, it set three criteria: a decline in the economy, a shrinking population and the need for diversification. It looked at six administrative regions, in addition to some regional county municipalities that are part of certain administrative regions. For example, the RCM of Mékinac, in the north of Mauricie, was included because it is a single-industry community, its economy is declining, its population is shrinking and it needs diversification.

In Quebec, the total population of the regions where the tax credit for new graduates would apply is approximately 900,000 people, out of a total population of 7.5 million.

There is no denying that other areas, such as northern Ontario, are experiencing economic hardships. That region has lost a lot of young people in recent decades. These regions have a hard time staying vibrant and strong. Northern British Columbia is also experiencing economic difficulties, as well as the Cape Breton region of Nova Scotia, and northern Manitoba, an area where the economy is weak. This proposal would not apply only to Quebec. On the contrary, almost all the provinces could benefit from it.

This bill is not designed to discriminate against new graduates in major centres, as some Conservative members are implying, but simply to put in place a proven measure to help regions with declining populations.

Last week, in the newspaper Progrès-dimanche, MigrAction, an organization in Saguenay—Lac-Saint-Jean that encourages young people to settle in the region, said that the Government of Quebec's program is an excellent way to encourage people to come back to the region and that young professionals really seem to appreciate it.

We propose to use the Regional Development Incentives Act to determine the designated regions. In the part entitled “Designation of Regions”, this act sets specific rules for designating regions. First, the federal government and the province have to agree on the designated regions; a region must have an area of not less than 12,500 square kilometres; and the region must be in economic difficulty.

There are communities in every province that meet these criteria.

We must take action to prevent hundreds of cities and towns from disappearing in future because no one is settling there. This is the danger facing many communities in Quebec and Canada.

I am counting on the Conservative and Liberal members from Quebec to make their Canadian colleagues aware of the how effective the Quebec legislation has been and what a positive impact it has had.

To allay some Conservative members' fears that such a measure will cause a loss of productivity, I want to point out that the Government of Quebec set up the Gagné commission to study tax measures targeting the regions. The commission found that productivity increased much more slowly in resource regions than in urban and central areas. Productivity rose by 2.5% from 1998 to 2005 in Quebec as a whole, by 3.5% in metropolitan areas, but by only 0.2% in resource regions or remote areas.

The Gagné commission found that growth in the highest value added businesses, in other words leading edge, secondary and tertiary processing businesses, was behind the increased productivity. It also noted that the difficulty attracting skilled labourers to remote areas prevented leading edge and processing businesses from opening in those regions. The purpose of this measure is to avoid that type of situation and to resolve the problems of low productivity in the more remote regions or regions that are far from major centres.

As far as the cost of such a program is concerned, based on the new criteria established by the Government of Quebec in 2006, this Quebec program cost $30 million in the first year. In 2007, the estimated cost of the program was $45 million and, in 2008, the cost is estimated at $60 million. The cost should then level off at around $60 million for subsequent years.

When economists were asked to estimate the cost of such program for all of Canada, they estimated it would be $90 million the first year, $135 million the second year, $180 million the third year and roughly $180 million in subsequent years.

I am calling on all hon. members of this House of Commons and the hon. members from Quebec—specifically the two Conservative members from Roberval—Lac-Saint-Jean and Jonquière—Alma in my region—who are well aware of the effectiveness of such a program, to help our regions support their young people. We have to put a stop to this population hemorrhage and start allowing the processing industry to develop by giving our entrepreneurs the chance to get the skilled workers they need.

I will close with a summary: if the majority of hon. members voted in favour of Bill C-207, it would provide tax creditof up to $8,000 over a certain number of years that a young person could use to pay off student loans or as a down payment for a home. These are measures that would encourage our young people to move back to the regions where there is a dwindling population, an economic downturn and economic difficulties.

Motions in Amendment
Income Tax Act
Private Members' Business

11:10 a.m.

Macleod
Alberta

Conservative

Ted Menzies Parliamentary Secretary to the Minister of Finance

Mr. Speaker, it is my pleasure to stand in this House and speak to this private member's bill.

Motions in Amendment
Income Tax Act
Private Members' Business

11:10 a.m.

Liberal

Wayne Easter Malpeque, PE

Get the PMO notes gathered up.

Motions in Amendment
Income Tax Act
Private Members' Business

11:10 a.m.

Liberal

Maria Minna Beaches—East York, ON

Can't speak without them.

Motions in Amendment
Income Tax Act
Private Members' Business

11:10 a.m.

Conservative

Ted Menzies Macleod, AB

It is wonderful to be back here and hear the accolades coming from the other side so early in the morning. It is nice to see that they are up and atom.

I do welcome this opportunity to continue the debate on private member's Bill C-207, on which, by the way, we heard the witnesses who appeared and we debated at the finance committee, so we do actually understand what is in this legislation.

This bill is sponsored by the hon. member for Chicoutimi—Le Fjord. As the hon. members are aware, it proposes an income tax credit for new graduates taking employment in certain regions. The credit would be equal to 40% of earnings from the first 52 weeks of qualifying employment, to a maximum credit of $8,000.

Qualifying employment would be employment in a designated region and employment duties would need to be related to the graduate's education. A designated region for purposes of the credit is an area defined in section 3 of the Regional Development Incentives Act.

While I can appreciate the intent of this proposal to a certain degree, I have to make it very clear that I consider there to be a number of significant practical problems associated with this bill, issues that should be of concern to members of this House and which should preclude them from supporting it.

One of my first concerns is that there appears to be no coherent rationale or specific identifiable necessity underpinning the proposed tax credit. In other words, the hon. member for Chicoutimi—Le Fjord has not demonstrated that there is in fact a shortage of skilled workers in the designated regions targeted by this bill.

Is there any evidence, for example, that employers in these regions cannot find the skilled workers they need, even if they offer competitive compensation and working conditions? Even if there is, why then would the measure only target new graduates and not all qualified skilled workers relocating to these designated regions? Why propose a credit available to all recent graduates, regardless of occupation? Above all, what is the rationale for providing significant federal government support to entice recent graduates to work in certain regions instead of others?

The designated regions that the bill references are drawn from a list that has not been updated in over two decades and which simply does not account for economic changes that have taken place in the interim. The credit proposed in this bill would also introduce very serious inequalities in the tax system between recent graduates and those who graduated earlier, and inequities between new graduates who work in different regions.

Finally, the credit would incur a substantial fiscal cost to taxpayers in terms of forgone revenue for a tax measure that may ultimately not result in any new jobs for any new graduates anywhere in the country. This is simply not consistent with the government's approach of dedicating federal resources to where they will have the greatest positive economic impact.

If anything, this bill would, if passed, divert fiscal resources away from programs that actually do support regional economic development and that do foster the kinds of economic conditions under which all regions of Canada can grow and prosper.

This bill would only provide tax relief with respect to a new graduate's first 52 weeks of qualified employment. This raises a fairly obvious question in my mind. If the proposed credit were actually needed to encourage new graduates to work in designated regions, what would happen after the initial 52 weeks when the credit is no longer available? Moreover, why not provide incentives to other skilled workers who are not new graduates, if the member's concern is truly skills shortages in these regions?

All of these issues raise significant questions about whether this bill would yield long term benefits to the intended target regions and whether it would even have an impact in the short term beyond reducing taxes for certain groups of workers.

The bill is inadequate in meeting its intended objectives in a range of areas. It, for example, does not even make any attempt to target skill sets that are in short supply in a designated region or which could assist in its development.

I would like to take a moment to return to the concerns I outlined at the outset with respect to the bill's definition of “designated region”.

As we all know by now, the credit is only provided to new graduates who take up work in a designated region, a term taken from the Regional Development Incentives Act. The term refers to a region in which, to quote the act, “existing opportunities for productive employment in the region are exceptionally inadequate”.

As I said, the list of regions specified in the act has not been updated in over 20 years. This list simply does not reflect the current economic reality of Canada's regions. I might add, as an example, 20 years ago the oil sands projects were very much in their infancy, and that is one of the highest demand regions for skilled labour that we have in this country now.

Let us take a couple of glaring cases in point.

I will draw hon. members attention specifically to the fact that the provinces of Saskatchewan and Manitoba are included on this list in their entirety, yet both provinces have recently displayed unemployment rates that are below the national average. If anything, Saskatchewan is one of the country's recent economic success stories with its economy booming as a result of the ongoing development of its extensive energy reserves.

That being the case, and given the significant economic challenges being faced elsewhere in the country, it would be inappropriate to dedicate limited federal resources to ensuring new graduates in these provinces pay up to $8,000 less in federal income tax than those not working in regions designated as having inadequate opportunities for productive employment 20 years ago.

Clearly, Bill C-207 would lead to some unfair and almost surreal regional de facto subsidies if it were adopted.

The bizarre inequities introduced by this bill would not only occur between regions but also between individuals or groups of graduates. For example, graduates who finish their respective programs roughly concurrently but who live and work in different regions could face completely different income tax burdens in their first year of employment. At the same time, two graduates working in the same job and region but whose graduation dates are a year apart would also face that $8,000 gap in their respective tax burdens.

Canadians simply cannot and should not be expected to support a program that introduces such inequitable outcomes into our tax system.

What is more, the tax credit proposed under Bill C-207 is also incredibly expensive. Estimates suggest that it could represent up to $600 million in forgone revenue each year to the federal government. As I have suggested, these are funds that would no longer be available to other priorities for which there is a great deal of public support.

In the real world, the conditions that Bill C-207 is trying to address would not be solved through temporary and arbitrary tax benefits like those proposed.

For these reasons, I am unable to support this private member's bill and would encourage hon. members to simply reject it, so that the significant financial resources that it entails can be more effectively dedicated to meeting the priorities of Canadians.

Motions in Amendment
Income Tax Act
Private Members' Business

11:20 a.m.

Liberal

Geoff Regan Halifax West, NS

Mr. Speaker, it gives me great pleasure to join the debate this morning on private member's Bill C-207, An Act to amend the Income Tax Act (tax credit for new graduates working in designated regions), in other words, particularly in rural regions or regions of the country that have economic challenges, that face real problems in terms of people leaving those regions for other parts of the country, moving to, for instance, urban areas or other provinces to find work and opportunities.

These are also communities that are losing some key people they need, whether it be doctors or other professionals whom they need in those communities. We need to have measures to encourage young people to go back to those communities to work in those communities.

I am actually speaking today as a replacement. I am here because I received a call on Friday from my good friend and colleague, the member for Dartmouth—Cole Harbour, who sadly had to remain in the riding for a very good reason, and that is for the funeral of Mr. Jim Connors.

All members from Nova Scotia would probably know Mr. Connors as a very distinguished person in Nova Scotia, a very well liked person, who fought a hard struggle with cancer over the past while. I know that colleagues will all join me in expressing our condolences to the family of Mr. Connors and his friends, who are gathering today, as is my colleague from Dartmouth—Cole Harbour, for that funeral.

I am pleased to be here on my colleague's behalf to talk about the bill. Let us recognize that clearly there are hot spots in our economy.

For example, in large cities, the economic situation is usually stronger, and the economy is growing. We often see youth leaving their small rural communities for urban centres such as Montreal, Toronto, Vancouver and so on. It is their right to decide where they want to live, where they want to stay. However, at the same time, we need to have young people in rural communities, in the regions. It is very important to have young professionals and youth with a lot of skills. They have gone to university or community college, and we need to recognize that taxes paid by both rural and urban taxpayers help universities and community colleges to exist, to pay their costs. They have the same interest in seeing the graduates from these institutions return to their communities.

We should be looking at this measure because we have seen across the country a movement from rural to urban, out of regions like mine in Atlantic Canada to other parts of the country.

There are two challenges. One of the challenges that the bill does not really address directly is the challenge of economic development in the regions of this country, particularly regions that are facing greater challenges. This bill does not respond to that challenge but proposes a measure that would assist in getting young people to go back to those communities. The way it does that is by providing a 40% tax credit up to a maximum of $8,000 for the first 52 weeks a young person works after getting a degree.

I am concerned about some aspects of this bill. There is a question about whether young people would actually go for one year, then depart and take advantage of the $8,000 or the 40% tax credit to lower their tax payable and to have that benefit in the one year. The intent is that they would be active in the community, get jobs in the community because of this and would stay there.

It is reasonable to assume that many would in fact stay in those communities because of the encouragement and incentive to go there to begin with, where they could get jobs and further the contacts they have had from their youth. This could be a beneficial instrument, although perhaps it would be better if it were a longer period. I am not sure that one year is adequate.

I suppose one way to do this could be to have a declining level of some sort, a process where they could get so much in the first year, maybe the next year 30%, then 20% and so forth so that it encourages young people not only to go to a community or region of the country to begin with but to stay there a longer term. We also need to have in those communities the kind of job creation that makes young people want to be there.

It is important to recognize that in the less developed or challenged regions of this country there are communities that are thriving. Rural communities are thriving, although there are not enough of them. A lot of communities in Atlantic Canada have seen many people go down the road, as they say, to Toronto, Alberta and so forth, for opportunities. We need to be very concerned about that.

A few years ago I had the occasion to visit the riding of Labrador with my hon. colleague, the member for Labrador. We visited his home community of Williams Harbour which has a population of 40. They are 40 of the friendliest people one would ever meet. It was a wonderful, short visit. In fact, as we flew in to Williams Harbour in a little twin prop plane, it looked like the runway was not nearly long enough. The landing strip looked like it was not nearly long enough to actually land and stop. It made us feel like the plane was going to fall into the water after the short runway, but we managed. It is a bit like Pangnurtung in Nunavut. Once one is on it, it is longer than it looks like from above, thank goodness, and planes can land there.

The same day we also visited the community of Black Tickle, Labrador, which, 15 years ago, had a population of 400. Today, it is 200. It is a community that has clearly suffered because of the downturn in the fishery.

Throughout Atlantic Canada, we have seen many communities suffer because of the decline in finfish, particularly the cod of course. We hear a lot about groundfish and cod is the prime example. What that has meant is that with less cod there have been more shellfish.

When one catches a lobster, generally speaking there is not a lot of onshore processing. In other words, what often happens is that lobster goes in a box, which is shipped off to Boston, New York, Paris or wherever and it does not create the kinds of jobs where, for instance, cod would go onshore to a plant where it would get gutted, filleted and processed in various ways, which involved a lot more work in those coastal communities that today are not seeing nearly as many of those kinds of jobs. They are seeing a decline. There are people there still who need doctors and young people to be the bankers and to do the many important jobs that are still required in those areas.

It seems to me that this bill would assist in encouraging those young people who want to reside in one of those areas. It is really a question of choice. They have the right to go where they wish. A very important part of our Charter of Rights and Freedoms is to have the freedom of mobility.

However, the idea of offering young people a little encouragement if they choose to reside in one of these economically challenged areas makes absolute sense. It will not mean they will go if there are no jobs there. We need to do more to support the development of jobs in those areas. However, it will mean that some of those young people will try to go back to their home communities or other communities in rural and less developed parts of this country to give it a shot and get involved in that community where they can make a difference.

It is not only those communities. It is this country as a whole in terms of the fabric of our society that benefits when our rural and remote communities are thriving.

The feeling I got in the communities of Williams Harbour and Black Tickle was a very warm one. Those are wonderful people and they are an important part of the fabric of this country.

Motions in Amendment
Income Tax Act
Private Members' Business

11:30 a.m.

NDP

Denise Savoie Victoria, BC

Mr. Speaker, I am pleased to speak to Bill C-207, which seeks to amend the Income Tax Act in order to encourage new graduates to return to their region of origin, and therefore better support the regions and curb the exodus of young graduates.

I am a little bit confused by my Liberal colleague's speech because he does not seem to agree with his colleagues on the Standing Committee on Finance where, unless I am mistaken, the Conservatives and the Liberals attempted to gut this bill.

I support the original bill which provided a non-refundable tax credit of 40% of the graduate's salary to a maximum of $8,000 for the first 52 weeks of employment in the region.

This bill is based on the Quebec tax model that has helped 1,300 people a year in that province at an estimated cost of $21 million. The amount that was cited by my Conservative colleague seems to be an exaggerated amount if extended across Canada.

There were, indeed, problems with the bill but none of those problems were insurmountable.

It is said that there is none so deaf as he who will not hear. I am afraid that the Conservatives simply did not want to have anything to do with it. I will speak about this in more detail later.

First, I would like to talk about a few problems with this bill, including the definition of the regions. As pointed out, the definition is based on an act that has not been amended for a number of years, specifically since 1982. That is a problem. When we refer to new graduates, do they have to have graduated very recently or could it simply mean graduates?

As I mentioned, these are not insurmountable problems. They could have been fixed in committee.

It does not surprise me that the Conservatives did not understand the possibilities of this bill. It could be a step, in my view, in the right direction in terms of levelling the playing field and possibly bridging the divide between rural and urban areas which have a significant advantage right now in attracting qualified workers.

For example, we know that urban areas depend on good food. Concerns about food security are increasing in Canada. This would be a way of encouraging value added industry related to food production in rural regions by motivating young people to go back to rural areas.

This bill could have had a positive effect on low and middle income families in those regions. Canadian communities need the economic and social conditions to thrive. All regions in Canada need those conditions.

One of my colleagues on the finance committee made a statement.

I have a copy of the document, from which I will quote. He indicated that Canada presently has a productivity problem, according to the statistics. He said, “Now, typically speaking, Canada is a country that suffers from a productivity challenge.” I do agree with that.

And then he continued, “We have economists come forward and talk to us about that all the time. This bill would seem to set up a counter-intuitive incentive to improving Canada's overall productivity.”

I do not agree with that. It may not be an intuitive solution but if our goal, in Canada, were simply to send workers to the regions that are already thriving, this would not help all Canadian regions to flourish, and that is the point of this bill.

In my opinion, the role of government is not simply to send workers as widgets to fill a need for industry. It is also to ensure that all regions in Canada develop and are allowed to maintain their integrity. This is where a law such as this would help assist workers to encourage them to go back to their region.

In British Columbia there is a very strong economic growth right now but that there are also smaller regions, for example, forestry regions where workers are unemployed and suffering from the beetle kill, where this law would assist those small regions.

I would ask my colleagues to think about this, and those in Alberta perhaps know it better than anyone else, the impacts of the tar sands and the development of the oil industry, which has produced riches no doubt, but it has also created terrible social and economic problems.

I do not think the objective that we should have as government leaders is to only feed those industries, continue to feed that one part of Canada that is going full steam. Certainly that should be part of it but there are other regions in Canada that should be better supported.

The bill offers one small piece of the puzzle. It is not the total answer but it would help encourage graduates to go back to regions or to go to rural areas and provide some of the technical knowledge they have acquired at university, the expertise, the ingenuity, the creativity that would bring an enrichment and renewal to these regions that may be economically depressed.

Therefore, I am pleased to support the amendment to re-establish the integrity of the bill and to reject the amendments of the finance committee. I understand that there is a new amendment that will be coming forward to further make this bill more acceptable. I hope my colleagues from the Liberals and the Conservatives will be supportive.

We did not support the gutting of the bill at committee. As I said, we saw it as a first step to draw young graduates to economically depressed regions. It could act as an incentive to motivate regions toward greater economic development within the context of an overarching regional government strategy.

As I said at second reading, when I spoke to the bill, it does require a regional development plan but I could see very easily where a bill of this kind could be paired with a good regional development plan that would really allow the region to grow in a way that it would not without the bill.

In conclusion, we support reinstating the bill's content. We would have proposed that it could have been strengthened with specific definitions but that in itself is not adequate to vote it down.

Motions in Amendment
Income Tax Act
Private Members' Business

11:40 a.m.

Bloc

Paul Crête Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC

Mr. Speaker, I am very pleased to speak today about this bill that would increase the impact of an existing Government of Quebec measure giving recent graduates a tax credit when they move to a remote region, to a region that truly needs this type of additional resource.

I would like to congratulate the member for Chicoutimi—Le Fjord for his initiative on this. It truly reflects who he is—a regional member who works for the people in his region, people he hopes will be able to keep their region alive. This is the exact opposite of another member and minister from this same region who said that if someone is looking for work and cannot find it in his area, he need only go to Alberta.

Luckily, this bill offers a different version, a version that is more in line with what Quebec wants. It is not a measure invented by the Bloc; it has already been used in Quebec for a number of years and has produced good results.

In the region I represent, the Lower St. Lawrence, this is one of the measures, although not the only one, that have started to reverse the trend of a constantly dwindling population. The population decline that had been seen for several years has been reversed. For the past year, we have begun to feel the effects and have even seen an increase in the population, particularly with the influx of young people. Thanks to such a measure, young people are settling in the region, often with their spouses, and some are even deciding to raise a family. Thus, we are reversing the trend of devitalization and moving instead towards a revitalization of the regions. In that regard, the initiative put forward by the hon. member for Chicoutimi—Le Fjord should be commended.

I find it absurd that the Conservatives are opposing this bill so unconditionally, although that is pretty much their style. I would like to thank the NDP for their support this morning. As for my Liberal colleague's speech, I am rather surprised, but somewhat encouraged. In fact, it would seem that members from the regions have managed to convince the entire party to change its position, even though the Parliamentary Secretary to the Minister of Finance told us there were some problems in the legislation and some issues to resolve.

As I recall, these amendments could have been proposed at the Standing Committee on Finance and the text could have been corrected in order to improve it. That was not done, and in fact, someone decided to gut the bill. Perhaps this parliamentary procedure is not very clear for our viewers at home, but in committee we can decide to gut a bill without killing it by voting against all the clauses of the bill. That is what the Conservatives did, with the support of the Liberals. We will now have to see what this means when it comes time to vote.

This measure allows us to send a message to young people who often leave their region to study when there are no universities or colleges in their area that offer the programs they want to take. The same is true for occupational training. This bill sends them the message that if they return to their region, they will be eligible for an income tax credit. This message has produced positive results in Quebec and we would like to see it continue.

This measure would give people an opportunity to choose a society, to choose where they want to live, instead of letting the market regulate everything and decide where they will go. We must not say that if jobs move because of the energy industry in western Canada, then people simply have to move out there. This is not the reality in Quebec. We are the only francophone nation in North America, and we need to ensure our survival and continuity. Simply relying on the rules of the economic market is not a solution for us.

This is why we have made proposals like the one in this bill. After the debate that started today, we will have to vote to decide whether we will restore the bill to its original form. That would be the best thing that could happen, since this is a good bill.

Since the majority of members in committee voted to gut the bill, I would hope that we can study it and see if it is possible to make some amendments.

We are told, for example, that the list of regions is based on a 1982 statute. But this act says that regions are defined by and after consultation with the provinces. So if such a bill were passed, each province would simply have to update its list of regions, and the tax credit would be more advantageous. This can be done without having to make amendments.

However, it may be useful to amend some other parts.

In line with what my Liberal colleague was saying earlier, if I understood him correctly he said that if the tax credit were to apply over three years, he might be interested in voting in favour of the bill. The Bloc Québécois has a constructive attitude toward this and hopes that hon. members will be open to possible amendments that could respect the spirit of the legislation and help achieve results. We are not closed-minded about this and we are open to possible corrections.

In that vein, I am putting forward an amendment that I will now read. It is quite long and rather technical so I will get started.

I move, seconded by the hon. member for Saint-Maurice—Champlain:

That the motion proposing to restore clause 1 of Bill C-207 be amended by deleting all the words in paragraphs 118.71(1) and (2) and substituting the following:

118.71 (1) The definitions in this subsection apply in this section.

“base period” means the first 52 weeks of the aggregate of all periods each of which is a period during which the individual

(a) holds qualifying employment; and

(b) ordinarily performs the duties of the qualifying employment at an establishment of the individual’s employer situated in a designated region or is ordinarily attached to such an establishment.

“designated educational institution” has the meaning assigned by subsection 118.6(1).

“designated region” has the meaning assigned by section 3 of the Regional Development Incentives Act.

“qualifying employment” means an office or employment that the individual begins to hold in the 24-month period that follows the date on which the individual successfully completes the courses and, where applicable, the internships leading to the awarding of a recognized diploma, or the date on which the individual is awarded a recognized diploma that is a master’s or doctoral degree under an educational program requiring the writing of an essay, dissertation or thesis, if

(a) the individual begins to perform the duties of the office or employment after January 1, 2008;

(b) at the time that the individual takes up the office or employment, the establishment of the individual’s employer at which the individual ordinarily performs the duties of that office or employment, or to which the individual is ordinarily attached, is situated in a designated region; and

(c) the knowledge and skills obtained during the individual’s training or educational program are related to the duties performed by the individual in connection with the office or employment.

“recognized diploma” means a degree, diploma or attestation awarded by a designated educational institution.

(2) For the purpose of computing the tax payable under this Part by an individual for a taxation year, there may be deducted an amount equal to the lesser of

(a) the amount that is 40% of the aggregate of all amounts each of which is the salary or wages of the individual for the year from qualifying employment;

(b) $3,000; and

I will now finish reading the amendment:

(c) the amount by which $8,000 exceeds the aggregate of all amounts each of which is an amount that the individual deducted under this section for the purpose of computing the tax payable, or that the individual is deemed to have paid to the Receiver General under this section for a preceding taxation year.”.

I apologize for being so tedious, but I am required to read the text. I therefore move this amendment, which should support the argument presented by my Liberal colleague and allow us to get the Liberals' support.

Motions in Amendment
Income Tax Act
Private Members' Business

11:50 a.m.

Conservative

The Acting Speaker Royal Galipeau

I have listened carefully to the reading of this motion, and I declare it to be in order.

Resuming debate, the hon. member for Burlington.

Motions in Amendment
Income Tax Act
Private Members' Business

11:50 a.m.

Conservative

Mike Wallace Burlington, ON

Mr. Speaker, it is my pleasure today to talk about Bill C-207.

Canada's Conservative government takes seriously the challenges of ensuring that Canada is equipped to succeed in an increasingly competitive world. Our vision for success includes all regions of this great country. This vision is set out in our “Advantage Canada” economic plan and has been acted on in real terms.

“Advantage Canada” sets out a blueprint for the best educated, most skilled and most flexible workforce in the world, and it does so on the understanding that all of our young people need to be given the opportunity to acquire the skills and training they need to give Canada the knowledge advantage it needs to succeed.

When Canada succeeds, we all succeed. That is why Canada's Conservative government brought forward its vision in “Advantage Canada” and that is why we are acting on that plan in real terms, delivering real results for Canadians.

Our plan is about achieving a higher standard of living and a better quality of life for Canadians as the world economy continues to transform. It is about helping people reach their full potential and ensuring that they have the incentives, opportunities and choices they need to achieve a better quality of life.

This government understands that high taxes limit Canadians' opportunities and choices and hinder economic growth. With a more focused government, we can lower taxes to create incentives for all Canadians to succeed, regardless of where they live and work.

An essential element of our “Advantage Canada” plan to secure Canada's economic future involves attaining one of the most competitive business tax regimes in the world. The Government of Canada has made enormous strides in this regard.

With the $60 billion in tax cuts announced in our fall economic statement, including another one percentage point reduction in the GST, the total actions taken by this government to date are approaching $200 billion in tax cuts over this and the next five years. This will bring federal taxes to their lowest level in nearly half a century. The federal tax burden measured by the total federal revenues as a share of the economy will fall to 15.1% by 2011-12, the lowest ratio in nearly 50 years.

Key to our objectives for a strong business environment is the reduction of the federal corporate income tax rate from 22% to 15% by 2012. This will make Canada's corporate income tax rate the lowest among the world's major developed economies. This will give Canada a substantial tax advantage over the United States, with a statutory tax rate advantage of over 12 percentage points and an overall tax rate on new business investment advantage of more than 9 percentage points by 2012.

Along with a reduction in corporate income tax, we also have eliminated the corporate surtax for all corporations. This not only reduced the corporate tax rate by 1.12 percentage points in 2008, but also simplified the tax system.

We eliminated the federal capital tax two years ahead of schedule.

We provided an incentive to encourage provinces to eliminate their capital taxes.

We reduced the small business tax rate to 11% from 12% beginning in 2008.

We increased the small business limit to $400,000 from $300,000.

This competitive tax regime will be a powerful brand for Canada globally and will leverage economic growth and the creation of employment opportunities for all Canadians, regardless of which region of Canada they choose to live and work in.

Bill C-207 proposes to use a tax credit to encourage young people to stay in a particular region. Yet, unlike “Advantage Canada”, it would not help to create the types of employment opportunities that would provide an incentive for a young person to stay.

The bill ignores the very nature of Canada's economy. Economic adjustment is an ongoing reality of a healthy, dynamic, diversified economy.

The Government of Canada supports regional economic development and devotes significant resources to programs that are responsive to local needs, make strategic partnerships with other stakeholders, and are multi-faceted in their approach. Our government proposes a visionary plan to improve the standards of living and quality of life of Canadians and to make Canada a world leader for today and for future generations. Bill C-207 would do nothing like this. Instead it proposes to spend up to $600 million on a tax credit that does not help create a single additional job.

For these reasons, I am unable to support this private member's bill. I encourage hon. members to similarly reject it as the significant financial resources that it entails could be more effectively dedicated to meeting the priorities of Canadians.

With the time I have left, I want to go over some of the issues we had with the bill. As a member of the finance committee, I had the opportunity to discuss the private member's bill with the member who brought it forward and with some of the staff he had brought forward to help with those decisions.

There were four or five key points that were made during those meetings. As we can see, the bill has been changed considerably since being brought to committee. I will explain the reasons why we believe those changes are important.

For example, no particular professions or skill sets are targeted. The bill said that no matter what the job was, if people worked in the region, they could get the credit if they came from that region. If people were in a profession that was well represented in the area and there were no particular skills set that they brought to the table, the bill did not address that. The credit would effectively go to all post-secondary and university graduates.

The bill did not do what the member wanted it to do in terms of creating jobs in the home area from where the young people came. If the area is already saturated with that type of employment and has those opportunities, there is really no need for that tax credit. That money could be used to target, as we have done “Advantage Canada”, opportunities for people across the country and not in specific areas. Since regions with high economic growth are also likely to witness shortages of skilled workers, encouraging graduates to remain in economic depressed regions could aggravate these shortages.

That is exactly one of our points. I come from an area in Ontario that is doing well. There are areas in the country that are not doing well. However, I have always believed in the mobility of labour. I want young people from my region to be able to work in any region in Canada where they find satisfactory and challenging work. This has economic benefit not only to them, but to the country as well.

The bill does not encourage that. In fact, it does the opposite. That is another reason why, at committee and here in the House, I did not support the original bill brought forward by the Bloc member. The credit would provide tax relief only with respect to the first 52 weeks of qualified employment and would not necessarily provide long term solutions. This is the specific comment I made at committee. It is a very short term, short-sighted solution. Areas that need help do not need it for only 52 weeks. They do not need people who are just there to get a tax credit. They need a longer term vision.

I would hate to see young individuals, who make these moves to these areas to get these jobs, stay at home for 52 weeks for the tax advantage. I do not think it does anything for the economic development.

Those are just three of the things I spoke to at committee. There is a variety of others.

I will not support Bill C-207 when it comes to a vote in the House of Commons. I did not support it at committee. There are better ways to proceed, such as what the Conservative Government of Canada has done. We will proceed with “Advantage Canada”, making a difference for all Canadians in all regions of the country.

Motions in Amendment
Income Tax Act
Private Members' Business

Noon

Conservative

The Acting Speaker Royal Galipeau

The time provided for the consideration of private members' business has now expired and the order is dropped to the bottom of the order of precedence on the order paper.

The House resumed from April 4 consideration of the motion that Bill C-50, An Act to implement certain provisions of the budget tabled in Parliament on February 26, 2008 and to enact provisions to preserve the fiscal plan set out in that budget, be read the second time and referred to a committee, and of the amendment.

Budget Implementation Act, 2008
Government Orders

Noon

Liberal

John McKay Scarborough—Guildwood, ON

Mr. Speaker, last night I flew into Canada from the United States. On the runway approach into Toronto, we fly over literally hundreds, possibly even thousands, of manufacturing establishments. As the jet descended onto the runway, we cane closer and closer to a huge basis for Canada's economic well-being.

When I flew over these buildings on our approach to landing, my mind was cast back to a conversation I had with a friend on the weekend. My friend is an owner and president of a fairly significant manufacturing entity. It is a family business that he inherited from his father. It employs quite a number of people in the Mississauga area and it ships internationally. His primary business is in the domestic market, but it is also international. He uses wood products as the basis for his manufactured product.

The conversation was to the effect that he did not know how he would survive. He would have to make a fairly significant decision, in a very short period of time, as to whether he would de-camp from Mississauga, Ontario and from Canada and move his operation offshore. At this point, it is the only alternative he can see. This would result in an obvious loss of quite a number of jobs in the Mississauga area, which would have the ripple effect into the other areas of Canada from where he gets his base resources to build his product.

It was not a very happy conversation. It was a difficult one, one which he had done a lot of thinking. In some respects it was reflective of the difficulties that many people in Canada currently have and speaks to why Bill C-50 is such an inadequate document.

The previous speaker talked about “Advantage Canada”, and the Conservatives beat that drum every time. I raised with my friend some significant tax relief contained in previous budgets and he somewhat scoffed at it. He was not terribly interested in tax relief because he had no income on which to be taxed. We went through other initiatives that had been put forward by the government and said that there was really nothing there for him.

It is somewhat confirmed by the government's materials in the budget document. I would direct attention to chart 2.2 on page 31 of the budget plan 2008. It shows very clearly a significant decline in employment, both on a regional basis and on a national basis, with respect to those who are employed in the area of manufacturing.

Probably hardest hit in manufacturing is Quebec, although Ontario is neck in neck with Quebec. Although it may not be in the future, manufacturing is such a significant component of the economies of both of those provinces. It gives, in graphic terms, a classic illustration of the conversation with my friend over the weekend about the decision he has to make to lay off quite a number of people, close his business in Canada and move it offshore, with obvious losses all the way around.

This shows the indifference of the Conservative government to these difficulties. It also shows the indifference of the government and its lack of a plan to address these difficulties. We can see this directly in its budget documentation in Bill C-50.

This is a very difficult issue. We layer this on to the reality of manufacturing loses and the personal conversations and apparent hostility of the Minister of Finance and the Prime Minister to the aspirations and desires of the people in the province of Ontario, suggesting to them, and indeed to the world, that Ontario would be the last place in which one should invest. I do not think that particular comment by the finance minister was appreciated by my friend. It has reduced his alternatives to try to keep his manufacturing facility in Mississauga. He could bring in a partner who would help him survive this period of economic turmoil in this country.

When the finance minister says that Ontario is the absolute last place in the world that one should invest in, we have to wonder what he is thinking about.