House of Commons Hansard #22 of the 40th Parliament, 3rd Session. (The original version is on Parliament's site.) The word of the day was billion.

Topics

Jobs and Economic Growth ActGovernment Orders

4:40 p.m.

NDP

Jim Maloway NDP Elmwood—Transcona, MB

Mr. Speaker, I want to thank the member for a very good speech on Bill C-9.

I want to ask the member about the type of thinking that the government must be engaging in that causes a government in a minority situation to introduce an 800-page bill.

I have been in this business for 24 years and I do not think I have ever seen a bill of this size introduced. On top of that, the government has put in measures that have absolutely nothing to do with what we are talking about here.

For example, the bill deals with postal remailing, which was variously presented in Parliament under bills C-14 and C-44 and probably one or two others in past years.

My question for the member is this. Why would a government that seems to be intent on not causing an election be putting in items like this that are only designed to cause people to want to vote against it? What would be the reasoning behind that?

Jobs and Economic Growth ActGovernment Orders

4:40 p.m.

Liberal

Massimo Pacetti Liberal Saint-Léonard—Saint-Michel, QC

Mr. Speaker, it is a good question. I will try to be a member of the government and respond by saying perhaps the reason that it put all these items in there is so we can have a fulsome debate, have all the finance members debate. I am on the finance committee and, seeing how we have a superior intellect, we are able to handle all these subjects all at once and perhaps we can modify, amend and spend the rest of our lives on this 800-page bill and make it better. But I do not think that is the reason.

I am not sure why the government would put in something as, I do not want to use the word “idiotic”, non-relevant as remailing of Canada Post. I have no idea.

Jobs and Economic Growth ActGovernment Orders

4:40 p.m.

NDP

Dennis Bevington NDP Western Arctic, NT

Mr. Speaker, I want to get the member's comments on some of the larger economic issues in front of us.

The Conservatives are claiming that this country is doing well with its banks. The record through the 1990s shows that the NDP stood up vociferously against deregulation of the banks. Heroes like John Rodriguez and Lorne Nystrom were people who stood up in this House over and over again and worked to block those types of moves, which would have left our banks in similar situations to those in the rest of the world. Clearly the NDP does well for banks; Canada does well for banks in 2010.

Now I see that the Liberal Party wants to follow us on another policy, which is to stop the erosion of the corporate tax base in this country. Provinces have spiralled down the corporate taxes and now we see the federal government doing the same. It has changed its mind on this. It is very rapid change—

Jobs and Economic Growth ActGovernment Orders

4:40 p.m.

Conservative

The Acting Speaker Conservative Barry Devolin

Order, please. The hon. member for Saint-Léonard—Saint-Michel.

Jobs and Economic Growth ActGovernment Orders

4:40 p.m.

Liberal

Massimo Pacetti Liberal Saint-Léonard—Saint-Michel, QC

Mr. Speaker, regarding the first part of the hon. member's question regarding the banks, he has got to look at it the other way. There was only one person who decided to maintain regulation in the banking sector, making sure there would not be any mergers and making sure Canada's financial system would be strong, and that person's name is Paul Martin, and the prime minister at the time was Jean Chrétien. I want to thank the NDP for supporting those initiatives, but let us face it, it is a Liberal initiative.

Jobs and Economic Growth ActGovernment Orders

4:40 p.m.

An hon. member

Thirteen strong years.

Jobs and Economic Growth ActGovernment Orders

4:40 p.m.

Liberal

Massimo Pacetti Liberal Saint-Léonard—Saint-Michel, QC

Thirteen strong years. Mr. Speaker, because of the interruption, I forget what the second part of this question was, so I would like to defer that to a later date.

Jobs and Economic Growth ActGovernment Orders

4:45 p.m.

NDP

Jim Maloway NDP Elmwood—Transcona, MB

Mr. Speaker, I basically want to follow up on the question of the member for Western Arctic about the Liberal Party and the Liberal leader's new-found embracement of keeping corporate taxes where they are and not lowering them any further, when in fact it was his party under the previous Liberal government that started the slide in corporate tax rates and corporate tax revenue.

Twenty years ago or so, I believe, the amount of revenue the government was getting from individual taxpayers was about equal to the amount it was getting from corporations. Now after all this time, it has got to the point where the working people in this country are contributing four times the taxation revenue to the government that corporations are contributing in their taxes.

I applaud the Liberals for getting on side, albeit belatedly, but at least they are beginning to recognize that this is the proper position to take, given that we need revenue for social programs and health care in this country.

Jobs and Economic Growth ActGovernment Orders

4:45 p.m.

Liberal

Massimo Pacetti Liberal Saint-Léonard—Saint-Michel, QC

Mr. Speaker, once again I would like to thank the NDP for supporting our previous tax policy and continuing to do so. It just means that the NDP wants to see us in power that much faster, if they agree with our tax policies. We are not sure when we will take over, so if that were to happen in the immediate future, our leader has already stated his position when it comes to corporate taxes.

Whether the mix is correct, between 40% for corporate taxes and 20% or 30% of the revenue coming in from personal taxes, is a debate we have to have in this country. We probably should look at tax reform, but I can say, with the way technology works, money has never moved faster. Money is being collected from different sources, different places. Once we take over we will look at the books, because if hon. members noted in most of my speech, I am not even sure what the deficit will be as of yesterday, because that was March 31, the fiscal year end, and the deficit numbers keep multiplying. Who knows what will happen in 2010?

Jobs and Economic Growth ActGovernment Orders

4:45 p.m.

Conservative

The Acting Speaker Conservative Barry Devolin

Order. It is my duty pursuant to Standing Order 38 to inform the House that the question to be raised tonight at the time of adjournment is as follows: the hon. member for Beaches—East York, Child care.

The hon. member for Elmwood—Transcona.

Jobs and Economic Growth ActGovernment Orders

4:45 p.m.

NDP

Jim Maloway NDP Elmwood—Transcona, MB

Mr. Speaker, I am very pleased to respond to Bill C-9, which is 880 pages long and a very good paperweight, I might add.

First I want to make some comments on what the member for Western Arctic said. The member for Western Arctic spoke briefly about the Canadian banking system, why it is as strong as it is and the fact that it has nothing to do with the actions of the government. The fact of the matter is that the banking system is as strong as it is because opposition parties like the NDP were here 10 years ago fighting in the House to stop the Liberals, at the time, from allowing the banks to merge.

Members will recall that 10 years ago the government of the day or at least the banks were very interested in following the policies of deregulation, financial institutions and the financial system going on in the United States. They were chafing at the bit. The five existing banks in this country wanted to amalgamate among themselves to become even more powerful institutions. They felt they had to do that to compete with the huge American banks. In other words, they wanted to be too big to fail.

It was the NDP at the time that chased and fought the Liberals on this issue and helped prevent the banks from merging.

Jobs and Economic Growth ActGovernment Orders

4:45 p.m.

Liberal

Maria Minna Liberal Beaches—East York, ON

On what issue?

Jobs and Economic Growth ActGovernment Orders

4:45 p.m.

NDP

Jim Maloway NDP Elmwood—Transcona, MB

Mr. Speaker, the member wants to dispute this, but all she has to do is read Hansard.

I have given the Liberals credit before by saying that, when they were in government, they turned down the big five banks' attempt to merge, I believe on more than one occasion. However, while all this was happening, where were the Conservatives? In those days, they were the Reform Party and they would have been pushing the Liberal government of the day to move forward, to deregulate even faster and allow the banks to merge.

The point is that it is really the Liberal government of the day that held firm and stopped this deregulation from happening, which is to the benefit of the Conservative government today. Internationally the Prime Minister walks around and says Canada is in great shape because we do not have the banking institution structures that they have in the United States, but he does not say that if he had had his way, Canada would have had the same type of banking institutions that exist in the States and would have been in a mess as big as or bigger than the one the Americans are in right now.

The reason the banking institutions are in the shape they are in right now has nothing to do with the Conservative government and everything to do with the government and opposition that were here before, which worked to make sure the regulations stayed where they were. It is proper for the government to recognize that it is in a very successful position not because of something it did but because of what it inherited. That is what the member for Western Arctic was talking about in his question.

In dealing with Bill C-9today, I want to talk about the issue of corporate tax cuts. Conservative governments literally around the world since Ronald Reagan's days, the 1980s, have been promoting tax cuts as a way to attract companies to their jurisdictions, to have these companies expand and create jobs. Essentially, what we have seen over the years has been a race to the bottom in corporation taxes, especially when some Nordic countries tax even today at rates of 50%.

When no less a person than George Bush, who became president of the United States, was running against Ronald Reagan in 1980 for the Republican nomination, he used the phrase “voodoo economics”. Everybody here has certainly heard the term voodoo economics used before. It was George H.W. Bush who called Ronald Reagan's program voodoo economics and said it would not work.

Then, when he lost the Republican nomination and Ronald Reagan became the successful nominee, Ronald Reagan chose him as his vice-president. So, George H.W. Bush, for eight years as the vice-president of the United States, had to live down his very insightful comments about his boss's economic policy. But yet he continued to follow that policy of Reagan and of Margaret Thatcher in England, to basically embark upon a whole system of deregulation.

Certainly, the financial deregulations that came about throughout that period have resulted in the past recession in the United States, and maybe even the one before, a recession so serious that it is not going to be resolved any time soon.

So, let us look at the whole issue of corporate taxes and what is the proper rate of corporate tax. I think all of us here could agree that we would not want our corporate taxes to be higher by much more than what the neighbouring jurisdictions would be.

I sat in a provincial legislature for 23 years and we were the government for significant parts of that time. I have to tell members opposite, and they know this, that the Government of Manitoba in the last 10 years did reduce corporate taxes. We did that, but we did that knowing that we had to do it because of our competitors.

Who are our competitors? They were the Government of Saskatchewan, the Government of Ontario. And of course, Saskatchewan had the deal with the province of Alberta. So when a competitor, the province of Alberta, reduces its corporate tax, then the Government of Saskatchewan is under pressure to follow suit. And being next to Saskatchewan, we were under pressure too.

We recognize that on a provincial basis our corporate taxes have to be competitive, at least with our neighbours, maybe not with maritime provinces that are half a continent away, but certainly with our neighbouring provinces in the west.

Having said that, the Canadian government is in a different league. Its competitor is the United States. So, when we are looking at corporate taxes of, say, 40% back a dozen or so years ago and the Americans were in the same range, maybe a little bit less, it made sense to lower our corporate tax rates.

But where we are going with this is that we are going to find that after the next reductions, which will be taking us down to 15% in 2012, we are going to bring it down roughly 12% lower than the corporate tax rate in the United States. That does not make sense to me.

If somebody can show me some study that says we have to be 12 points lower, then I might believe it. But that is certainly not the indication that I get. I would think that we would want to track the Americans. If the Americans decide they want to reduce their corporate income tax and they move down a couple of points, then it perhaps makes some sense for us to do the same. However, when we do that, we have to determine what sort of value we are getting out of that corporate tax reduction.

Let us look at what some people have said about corporate tax reductions. Statistics Canada and Finance Canada have said:

Despite a 36% drop in corporate taxes, both provincial and federal, in the last decade and record profits for much of this time, business spending on machinery and equipment has declined as a share of the GDP--

Well, that should not happen when one lowers these tax rates.

--and total business investment spending has declined as a percentage of corporate cashflow.

So, there we have evidence that this reduction is not producing the type of activity that we want to have.

The intensity of IT use by Canadian businesses is only half of that of the United States. In 2007 Canadian business spending on R and D was about 1% of the GDP and ranked 14th in the OECD, well below the average of 1.6% and only one-third that of Sweden, Finland and Korea. Despite Canadian corporate tax rates well below those of the United States, business sector productivity growth was actually worse in the last decade.

One would expect that, if the government goes to the effort to reduce corporate income taxes, we would be able to get positive responses and positive activity. We would be able to say that we have reduced corporate income taxes, that we have gained so many more companies and jobs and that, while we reduced the rate of taxation, we actually gained more absolute taxes at the end of the day.

What has happened over the last 20 years? I seem to recall a number of years ago that the taxation that was paid, collected by ordinary Canadians, was roughly equal to the amount of taxes collected by the corporate sector in this country. I am guessing that was 20 years ago. I think Canadians were reasonably happy with that.

Over the years, because of this race to the bottom in the corporate taxation field by the Liberals initially and now the Conservatives, we are finding that ordinary Canadians are paying four times the amount in personal income tax than that collected from corporations. How could it possibly be fair to the working people of this country to see their contribution to this country's taxation regime at a level of four times the amount of the corporate sector?

Let us look at some of those corporations. The biggest, best and most obvious sector I would prefer to take a quick look at would be those big banks that wanted to become too big to fail. They wanted to amalgamate in the last 10 years and compete with those American banks.

In the last year Canada's big five banks had profits of $15.9 billion. That does not sound like a sector that needs further corporate tax reductions.

I can see the argument being made that a certain group or sector of the economy would come forward and say that it is dying and suffering and that it needs corporate taxes reduced because it is marginally profitable at the moment. However, Canada's big five banks have a profit of $15.9 billion and we are telling them that they have done a nice job. We are giving them an even bigger benefit by reducing the corporate tax rate another three points to 15% by 2012.

Let us look at the salaries and benefits of the CEOs of these corporations and big banks. While 800,000 Canadians are drawing unemployment insurance, that unemployment insurance is certainly going to be running out. It has already in some cases, but 800,000 workers are on EI and their benefits are running out. There are no jobs for the people to go to. The government says that the economy is growing by 2.6%, yet the unemployment rate has increased from 8.2% to 8.5%.

There is a glimmer of hope. The minister talks about seeing some good results in the last two or three months and I applaud the government for that. We certainly want to be positive about improving results in the country, especially if the number of jobs increased, but we have a very high unemployment rate and we have a long way to go to get out of that.

While all of this is happening in the country, when it is going through a recession, we have the CIBC president earning $6.2 million. Now who in this country needs $6.2 million a year to pay their bills and live? The Toronto Dominion Bank's CEO was granted about $10.4 million. This is not the United States; this is Canada. We are in Canada and we are paying CEOs $10.4 million.

The Royal Bank of Canada president makes around $10.4 million as well. The Bank of Nova Scotia CEO was awarded the biggest increase of 29%, followed by the Bank of Montreal president at 25%. The first president was $9.7 million in 2009 and the second president was--

Jobs and Economic Growth ActGovernment Orders

5:05 p.m.

Conservative

The Acting Speaker Conservative Barry Devolin

Order. The hon. member for Simcoe North is rising on a point of order.

Jobs and Economic Growth ActGovernment Orders

5:05 p.m.

Conservative

Bruce Stanton Conservative Simcoe North, ON

Mr. Speaker, again, back to the issue of relevance, I appreciate that the member opposite is giving us quite a rhetorical history lesson, but it is important to stay on the orders of the day and near as I can tell this is on a completely different path. I wonder if he could get back to the orders of the day.

Jobs and Economic Growth ActGovernment Orders

5:05 p.m.

Conservative

The Acting Speaker Conservative Barry Devolin

I take the intervention from the member in good faith regarding the hon. member for Elmwood—Transcona. This is a large bill and I was about to say that significant latitude has been given. Does the member want to return to his speech or deal with the point of order?

Jobs and Economic Growth ActGovernment Orders

5:05 p.m.

NDP

Jim Maloway NDP Elmwood—Transcona, MB

Mr. Speaker, on the point of order, Speakers in legislatures across the country for many years have given latitude on bills. I have been around long enough to know what is relevant to the bill and what is not. I have sat here listening to every single speaker over the last couple of days and listened to speeches that definitely had nothing to do with the bill, where in fact, I have been the speaker who has actually waved this 800-page book around and asked, what does that have to do with Bill C-9? My speech is relevant to Bill C-9 and I will certainly indulge the member and deal with my remaining comments specifically on issues dealing with this particular bill.

But certainly, Speakers have always given latitude. You yourself, Mr. Speaker, indicated just a half an hour ago to another speaker that a lot of latitude has been given.

Jobs and Economic Growth ActGovernment Orders

5:05 p.m.

Liberal

John Cannis Liberal Scarborough Centre, ON

Mr. Speaker, a quick comment on the same point of order. When we come to this Chamber, there is a specific issue. In the 17 years that I have been so blessed and fortunate to be here, we have shown that flexibility. I would hope that all of us, myself included, would show that respect to everyone when we stand up and speak. Sometimes we tend to go off to make a point. I would ask that we not interrupt each other. That is basically all I am asking for.

Jobs and Economic Growth ActGovernment Orders

5:05 p.m.

Conservative

The Acting Speaker Conservative Barry Devolin

In response to the three points of order raised by the hon. members, just a general comment that the Chair does tend to grant leeway to members when they are speaking in the House, in particular when we are dealing with something as large as the bill before us now.

Members may recall earlier this week when we were dealing with two separate pieces of legislation, one specifically dealing with one trade agreement and the other with another, and when that line was crossed I think it was appropriate to bring members back to the subject at hand.

However, I am comfortable that in this case the member is speaking to something that is related to the bill. There is a lot in there and I would give the floor back to the hon. member for Elmwood—Transcona. He has one minute remaining in his time.

Jobs and Economic Growth ActGovernment Orders

5:05 p.m.

NDP

Jim Maloway NDP Elmwood—Transcona, MB

Mr. Speaker, thank you for the ruling.

I think I was just hitting a very sensitive topic for the members opposite, because no sensible person in this country can be happy with the five banks earning $15 billion and having their presidents paid $6.2 million when other jurisdictions, like the European Union, have restrictions on what corporate executives earn. I believe it has been a long-time tradition in Japan that corporate executives have had limitations on what they can earn.

Just recently one of the banks did indicate at its shareholders' meeting that it is now taking input from the shareholders as to what executives are being paid. They are saying that they will not let them vet what they give to the executives but at least they will listen to the shareholders.

It is about time the government starting taking some action here and putting in some guidelines and some restrictions on runaway corporate benefits and corporate salaries, especially when it is giving them extra incentives by reducing their taxes.

As I have indicated, this is an omnibus bill. The government is introducing all sorts of extra measures in here that have absolutely nothing to do with the subject at hand. One of the bills was the post office remailers, which has been brought in under various bills over the last three or four years, and as early as last year.

Since the government cannot get that bill through the House, it sticks it in Bill C-9 and basically defies the opposition to vote against it and cause an election. Maybe that is what the government really wants, an election.

Jobs and Economic Growth ActGovernment Orders

5:10 p.m.

Conservative

Dave Van Kesteren Conservative Chatham-Kent—Essex, ON

Mr. Speaker, we certainly had a very interesting speech from the hon. member across the way. He loves to talk about taxes. I have to say that our Conservative government has the record to prove that it does reduce taxes. Since coming to office in 2006, we have cut over 100 taxes. We have removed over one million low income Canadians completely off the tax rolls. We have reduced our tax burden to the lowest level in nearly 50 years.

The NDP members love to talk about cutting taxes but every time the government introduces tax cuts they vote against it. However, at least one member admits that his party should not be embarking down that path. This is what the NDP member for Thunder Bay—Superior North had to say, “There are elements in our party that have not been adequately concerned about the health and growth of businesses”.

I am wondering if the hon. member would care to comment on what his colleague from Thunder Bay—Superior North had to say.

Jobs and Economic Growth ActGovernment Orders

5:10 p.m.

NDP

Jim Maloway NDP Elmwood—Transcona, MB

Mr. Speaker, the government is pretending that somehow it is a big tax cutter. It is a big tax cutter for corporations but it has increased taxes. A 50% security fee will be paid for air flights. This will make airline passengers even happier with the government when they start paying their 50% security fee.

We have the whole issue with the debit card industry where the government has basically sat on its hands. It says that it will regulate the debit card industry but it is all on the basis of guidelines. I do not know too many of my constituents who are happy with the way they are treated by the credit card companies. They are looking to the government to do something about it but the government sits on its hands and does nothing.

The government is not consumer friendly at all. I would like somebody in this House to tell me one consumer issue where the government has sided with the consumers and not the industry. On the air passenger bill of rights, the government sides with the industry. The rest of us in opposition voted for the consumer. In the area of credit cards, the government sides with the companies and actually against small business because it is allowing these companies to increase the fees that the companies charge to small business in this country.

This is all being done under a Conservative government. The member does not need to talk to me about reducing taxes. The government is actually increasing taxes.

Jobs and Economic Growth ActGovernment Orders

5:10 p.m.

Liberal

John Cannis Liberal Scarborough Centre, ON

Mr. Speaker, with respect to the bank executives earning money, we should leave that up to the shareholders.

Does the member agree, given that this bill we are debating today is a jobs and economic growth bill, that the banks, even though there has been no move from the central bank, have the right to start jacking up interest rates? Does the member think it is right that with this bill the Conservative government is bringing in an EI employer-employee tax of over $13 billion? Will that help stimulate job growth and the economy?

Jobs and Economic Growth ActGovernment Orders

5:10 p.m.

NDP

Jim Maloway NDP Elmwood—Transcona, MB

Mr. Speaker, while the government talks a great line about reducing taxes, the reality is that it is increasing taxes in ways that the hon. member has indicated. It is raising the security fees. There is more than one way to raise taxes. A lot of governments say that they are reducing taxes but meanwhile user fees are going up throughout the whole system of the government.

We say that the financial services industry needs more regulation, not less, and that guidelines should be put in place for bank profits and the salaries of the bank executives.

Why can other jurisdictions in the world operate with reasonable CEO benefits and salaries, where in North America it is the law of the jungle? We have CEOs earning $10 million a year. How is that fair to working people in this country?

Jobs and Economic Growth ActGovernment Orders

5:15 p.m.

NDP

Dennis Bevington NDP Western Arctic, NT

Mr. Speaker, I thank my colleague for a really excellent presentation today. I am really enjoying hearing his point of view on this, but I want to go back to the corporate tax cuts.

In looking at this issue, I looked at many of the countries that have higher corporate tax rates and some of the rationale behind it. One of them is that setting a corporate tax rate much lower than the high personal income tax rate will encourage a slippage among the high personal income earners to corporate positions. That is one reason that economists in other countries are saying that there is a danger in making too large a separation between the large personal income tax rate and the corporate tax rate.

How does that fit with these $10 million salaries for the CEOs of these large banks?