House of Commons Hansard #52 of the 40th Parliament, 3rd Session. (The original version is on Parliament's site.) The word of the day was chair.

Topics

The Economy
Private Members' Business

May 31st, 2010 / 11:05 a.m.

Conservative

Lee Richardson Calgary Centre, AB

moved:

That, in the opinion of the House, the government should:

(a) recognize that improved competitiveness will continue to stimulate economic growth and create jobs for Canadians; and

(b) continue to diversify and expand markets for Canadian goods and services by encouraging investment in Canada through lower corporate tax rates, maintaining a stable economy and the signing of free trade agreements.

Mr. Speaker, in support of this motion I would like to highlight a number of the government's initiatives to support a competitive, innovative economy as set out in “Advantage Canada” and as supported by Canada's economic action plan and budget 2010.

The government is committed to improving competitiveness, stimulating economic growth, creating jobs for Canadians, and diversifying and expanding markets for Canadian goods and services particularly in difficult times. It is the right thing to do. It is not enough to have the right idea or the right strategy, it is about implementation, getting it done, and in this regard Canada has made remarkable progress.

Even before the recession, the government laid the foundation for future prosperity through “Advantage Canada”, a strategic long-term economic plan designed to improve our economic prosperity. “Advantage Canada” focused on reducing taxes, paying down debt, fostering skills development, investing in roads, bridges, waterways and other vital infrastructure. The government also improved business conditions by implementing corporate tax reductions that are making Canada a more competitive country in which to do business.

In response to the global recession, the government acted quickly to support Canada's economy by introducing new measures under Canada's economic action plan; a comprehensive stimulus package to spur growth, create jobs and contribute to Canada's long-term competitiveness. Our opposition screamed “it's taking too long, you're not spending enough”. Now members are saying we spent too much.

It is important to find the right balance and it appear we have, better than other country because the long-term implication of too much state intervention is renewed inflation, rising interest rates, crowding out of investments, and prolonged sluggish economic performance. Our approach is working, demonstrated by the creation of 12,000 infrastructure programs begun or completed and nearly 285,000 jobs created in Canada in the last 10 months.

Budget 2010 follows through on the economic action plan and introduces new measures to create an environment that promotes investment and innovation, and contributes to enhanced competitiveness. Combined, the economic action plan and budget 2010 support measures to ensure that the conditions are in place for sustained growth. We will continue to deliver results for business. We have enhanced our access to finance through additional resources for the Export Development Corporation and the Business Development Bank of Canada. We have reduced the cost of doing business by eliminating all remaining tariffs on manufactured inputs, machinery and equipment by moving to cut red tape for businesses.

We are also on track to have the lowest statutory corporate income tax in the G7 by 2012. Through budget 2010 and previously introduced measures, we are also striving to improve Canada's appeal as a place for foreign investment. We are also conscious of the need to create the best educated, highest skilled, and most flexible workforce in the world. We are doing so by supporting skills development training and by helping to prepare our citizens for the labour market of today and for the future.

Our plan is the right plan and it is having the desired effect.

Our stimulus plan helped slow the decline in Canada's real GDP in the second quarter of 2009, after two consecutive quarters in recession. In the last quarter of 2009 we had 5% real GDP growth and today Statistics Canada announced that Canada's economy grew 6.1% in the first quarter of 2010. This represents the strongest quarterly rate of growth in a decade.

I am happy to report that our growth forecasts are better than many other countries. Since the worst days of the crisis, we have managed a turnaround.

That turnaround was aided in part by the strength of our financial sector. The World Economic Forum says that Canada has the soundest banking system in the world. In contrast to many other countries, none of Canada's banks required any bailout or any taxpayers' money. Even during the worst days of the credit crisis, the health of our financial institutions allowed them to continue to raise equity capital. Our top five banks are among the top 50 in the world. Using capitalization numbers, our three largest insurance companies are among the top 10 in the world. So we should not be glib about the importance of the strength of our financial sector in Canada which is increasingly recognized around the world.

A number of leaders, including President Obama, have praised the Canadian financial system for others to emulate. What is more, the OECD recently singled out our country for praise saying, “Canada looks good--it shines, actually” as did a major CIBC report stating that, “stronger long-term fundamentals of Canada's economy could see the second decade of the 21st century be this country's time to shine”.

Our government understands that a competitive Canadian economy depends on enhanced competitiveness, investing in skills and innovation, and getting the domestic framework right. But, it also requires reaching out to partners around the world, as we always have.

When it comes to creating the economy of tomorrow one thing is clear, we are not going to beat China, India or Brazil on wages. We are going to do it through raising productivity standards and through the development of higher-end products and services. In other words, through innovation and by opening new markets for Canadian companies. That is why the government has introduced new measures to diversify and expand markets for Canadian goods and services.

As outlined in the global commerce strategy and the recent Speech from the Throne, the government is pursuing an ambitious international trade agenda aimed at creating jobs and promoting investment for the economy of tomorrow by attracting foreign direct investment from key markets by focusing on priority sectors where Canada has competitive advantages.

When we talk about free trade and expanding markets, we do so because opening doors to trade is in the best interest of Canadians. It is also in the best interest because Canadian businesses, firms and investors are the engines that drive our economy. When businesses succeed, Canadians succeed through jobs, prosperity and a quality of life upon which we all depend.

In addition to improving the climate for business and investing in innovation, the government is expanding market opportunities to move Canada's economy forward. We are doing so by implementing free trade agreements with Peru, the European Free Trade Association, Colombia, Jordan, and Panama, despite some obstructionist opposition and delay tactics of the socialist parties. The isolationist policies of the Bloc and the NDP are the policies of failed economies. Growth in global trade has been largely responsible for the creation of wealth worldwide. Enhancing trade and resisting protectionism are both essential to the new world economy.

We are also doing so by continuing trade negotiations with the European Union, the Republic of Korea, the Caribbean community and other countries of the Americas, while also building our position in Canada's most important market, the United states; by launching free trade negotiations with the Ukraine; by launching a joint study with India to explore the parameters of a possible comprehensive economic partnership; by seeking to become a member of the trans-Pacific partnership negotiations; by pursuing additional air service agreements to achieve more competition, more choice for Canadians and more economic growth; by working to conclude foreign direct investment promotion and protection agreements with a number of countries beyond the existing 23 agreements; by building upon the recent agreement reached on regarding buy American that gives Canadian companies permanent access to state and government procurement in the United States and by tackling remaining impediments to trade such as border delays and regulatory differences; and by opening new offices and adding personnel abroad in key emerging markets, as well as domestically within our own borders.

To put it in straightforward terms, by bringing down barriers to trade and investment, the government will help Canadian businesses compete in an increasingly competitive world while also providing stimulus to the Canadian economy.

This will allow us to innovate and to compete globally. These measures will continue to fuel our economy from the global recession, forge a competitive advantage, support growth and prosperity, and help create the economy of tomorrow.

The next 30 days are going to be remarkable for our country. It is a great time to be a Canadian. The Olympics in Vancouver earlier this year were spectacular and noticed around the world. In June we will host the G8 summit in Muskoka and the G20 summit in Toronto. To quote the Prime Minister from March 2009:

Notwithstanding all the troubles around us, Canada has real advantages, real assets, and we should not hesitate to remind investors, partners and leaders around the world of the comparative strengths of our country.

In this regard, we have been and will continue to implement the strategies to ensure economic recovery and sustainable growth.

The Economy
Private Members' Business

11:10 a.m.

NDP

Linda Duncan Edmonton—Strathcona, AB

Mr. Speaker, I would like to thank the hon. member for his motion. Certainly, there are perspectives in there that I support. I think it would be great if the current government put more effort into improved competitiveness in the renewable and energy efficiency sector. If the government would stop playing favouritism for one narrow sector, we could move forward and join the rest of the world in ensuring a cleaner, more sustainable planet.

Would the member please respond to the recommendations also apparently made by the environmentminister to the finance minister on removing the perverse incentives for the oil and gas sector and shifting over toward encouraging a cleaner, more sustainable energy future?

The Economy
Private Members' Business

11:10 a.m.

Conservative

Lee Richardson Calgary Centre, AB

Mr. Speaker, I thank the hon. member who is always supportive of industries in Alberta. I agree with her that we have improved competitiveness. The general strategy of the government is clearly working. I am delighted with her support. I wish she could convince other members of her caucus to support our free trade initiatives.

The Economy
Private Members' Business

11:10 a.m.

Liberal

Keith Martin Esquimalt—Juan de Fuca, BC

Mr. Speaker, I have two questions for my colleague.

Does he not think that the current economic situation we are in right now is, in large part, due to the fact that bank mergers were not allowed to go ahead by the Liberal government and, second, that the Liberals gave the current Conservative government very good fiscal footing having surplus budgets?

On the issue of moving toward green technologies and modernizing our economy, does he agree with the flowthrough tariff system, that is occurring in Germany as well as in Ontario under Premier McGuinty, that will enable us to incentivize the private sector in moving toward adopting new innovative green technologies?

The Economy
Private Members' Business

11:15 a.m.

Conservative

Lee Richardson Calgary Centre, AB

Mr. Speaker, absolutely, I agree that it has been a large part of Canada's success to have the foundation going into the recession, as I mentioned in my speech, not only the strength of the banks but Canadian regulation regarding banks, that unfortunately, many parts of the world did not have, including our largest trading partner. Canadian banks were, as I said, among the only ones in the world that did not need a bailout or taxpayers' money to get them through this.

There was that foundation but also the foundation of building infrastructure. The hon. member noted the balance in the budgets at the time. Unfortunately, due to the previous Liberal government they were draining the provinces of money for infrastructure, education and other policies that needed to be back-filled by this government when it was elected.

One of the good things about it was the tremendous infrastructure program that we had in a strong fiscal budget back in 2007. We led the recession in infrastructure programs, which set us up not only with the strength of the banks, as the hon. member mentioned, but with the infrastructure that we implemented to really fill in for the loss of infrastructure across the country that had been suffered under the previous Liberal administration.

It turned out to be fortunate for Canada. We brought in that program in order to have that kind of stimulus, $60 billion in the 2007 budget, to get us through the recession before it began. This was done in a fiscally responsible way.

All of those things combined, yes, I will agree with the member, set Canada up very well and will continue in the future.

The Economy
Private Members' Business

11:15 a.m.

Liberal

John McCallum Markham—Unionville, ON

Mr. Speaker, I am pleased to speak today to the motion tabled by the member for Calgary Centre.

Much of this motion contains material with which the Liberal Party can agree. We agree with the nice pleasantries about the importance of free trade agreements. It also speaks to the need to diversify our markets, and we agree with that. I would go further to say that one of the markets into which we have the greatest need for diversification and growth is China. We would be a whole lot further ahead today had the government not taken every opportunity to poke China in the eye.

The problem is the part about the corporate tax cuts, calling for corporate tax cuts at a time of deep deficit. If the motion had read “lower corporate tax rates once Canada could afford them”, then I would be happen to vote for it, but that is not what it says.

Similarly, I could have supported this motion a few years ago when Canada was running surpluses and paying down its debt. In fact, a few years ago the Liberal Party was urging the Conservatives to cut the corporate tax rate.

However, as it stands today, the Conservatives are running one of the largest deficits in our country's history. When a situation changes that dramatically, going from surplus to the largest deficit in Canadian history, it is incumbent upon any legislator to re-evaluate what the federal government can afford to do.

Today, unlike four years ago, the Government of Canada will have to borrow more and more money in order to proceed with these corporate tax cuts. In that sense, the motion itself is a little bit contradictory. It calls for maintaining a stable economy while simultaneously calling for more and more government debt. As we have seen in Europe, governments that cannot get a handle on their debt quickly discover that the effects of that debt on the economy are quite real.

The smart move today would be to make the tough choices, balance the budget and then cut the corporate tax rate. That is how the Liberals have done it in the past. In the mid-1990s, as Jean Chrétien's Liberals were reducing the previous Conservative deficit, pressure began to mount for the government to cut taxes before the books were balanced. In fact, at that time the Reform Party was urging tax cuts first and balanced books later. It did not understand how important it was to balance the budget.

Liberals believed that priority number one was getting Canada's fiscal house in order. Once the books were balanced and some of the debt had been paid down, Liberals began cutting the general corporate income tax rate. In fact, between 2000 and 2005 we took the general corporate income tax rate from 28% down to 21%. More important, the Liberal government also provided Canadian taxpayers with the largest personal income tax cut in history, and we did it all without adding a penny to Canada's national debt. Indeed, as I just said, we were paying down that debt over that period of tax cuts.

While the Liberal road to balanced budgets followed by tax cuts has proved successful in Canada, there have been other paths tried in other parts of the world. The idea that tax cuts should come first, that has been tried elsewhere and yet most of these attempts have been tremendously unsuccessful.

I will give an example. Ronald Reagan, a hero on the Conservative side no doubt, used to tell Americans that he would eliminate the deficit by cutting taxes. Cut taxes, he did, but when his eight years in office came to a close, America's national debt was three times bigger than the day he took office.

Former U.S. treasury secretary, Paul O'Neill, is said to have recounted how he tried to warn the George W. Bush administration of the dangers of rising debt levels in 2002. The response, he is reported to have gotten from Dick Cheney was “You know, Paul, Reagan proved deficits don't matter”.

That is the exact same economic mentality that now runs rampant in the Conservative Party of Canada. To a Conservative, deficits do not matter. That is why, just like Ronald Reagan, they want to cut the corporate tax rate while, at the same time, running the biggest deficit in our country's history.

It may just be arrogance. The Conservatives may feel that their base is so dedicated to the party that they can run never-ending deficits and not lose any support. It may be delusional. They might really believe, as Dick Cheney and Ronald Reagan did, that deficits do not matter. Maybe they do not see the effects of the sovereign debt crisis rippling through Europe today. Maybe they are just wilfully blind to it.

The rationale as to why Conservative MPs do not mind running up Canada's debt does not really matter that much for the purpose of this debate. What matters most is that their indifference to sovereign debt is dangerous and, if left unchecked for several years, will pose an economic threat to Canadian prosperity.

That indifference is why we did not hear a single Conservative member of Parliament raise his or her voice in concern about their government increasing the size of the federal government by 13% during its first years in office. It is because they were not worried about deficits.

That is why, in the third year of Conservative government, Canada's record string of uninterrupted balanced budgets came to an end, even well before the recession started. That is why it is currently running its third straight deficit and have no discernible plan to get out of it. That is why the Conservatives are insisting on borrowing even more money today to pay for corporate tax cuts.

Do members know who will have to pay back those billions of dollars in interest that will accumulate on the new debt? It will be Canadian families. Personal income taxes and the GST will account for 75% of all government tax revenues by 2014 and hard-working, middle-class Canadians will contribute the lion's share to that. They are the ones who will be called upon to pay back this new debt.

If only the government would balance the books first, it could cut those corporate taxes without having to ask Canadian families to give up more of their money down the road to pay servicing fees on this new debt. However, he Conservatives seem eager to foist these costs on to the middle-class.

There is another strange aspect to these tax cuts. The Conservatives only want to cut the corporate income tax rate for our largest companies. Small businesses, which are the backbone of our economy, will not get any tax break at all under the Conservative plan.

What small companies do get from the Conservatives is a tax hike in the form of higher employment insurance premiums. A small company of about 10 employees will have to pay over $9,000 more in tax over the next few years just for the privilege of keeping those people on its payroll. Business organizations are saying that this will kill more than 200,000 jobs across Canada. These job-killing Conservative EI premium hikes will kill more than 200,000 jobs.

Finally, I would like to touch on Canada's competitiveness in the world when it comes to taxation. Taxes are a moving target in almost every jurisdiction. We certainly never want to be caught up on the high end of the tax spectre. Let us look at some facts regarding Canada's tax competitiveness.

A few weeks ago, KPMG released a report showing that Canada had the lowest tax costs for business of all G7 countries and, out of all the countries studied by KPMG, only Mexico had a lower tax cost to operate a business.

My point is that, given we are already the most favourable tax environment, there is no need to go further into debt through a further cut in corporate taxes at a time when this country cannot afford it.

It is not as though we are in danger of becoming highly uncompetitive by delaying these tax cuts. Some of our competitor countries, such as Germany, have already come to the conclusion that they cannot cut their corporate tax rates at this time because of their high deficit.

In summary, I cannot support this motion because it calls for Canada to take on more debt to cut corporate taxes. I cannot ignore the results of this kind of recklessness achieved elsewhere, places like the United States where Ronald Reagan's premature tax cuts helped to triple the national debt in eight short years. This is not a good recipe for Canada.

The Economy
Private Members' Business

11:25 a.m.

Bloc

André Bellavance Richmond—Arthabaska, QC

Mr. Speaker, I am pleased to speak to the motion moved by the member for Calgary Centre regarding competitiveness. We did exactly the same thing all members will have done before commenting on this issue: we weighed the pros and cons. Unfortunately for the member who moved motion M-518, there are considerably more cons than pros, and the Bloc will therefore be voting against this motion.

There are two parts to this motion. We have no problem with the first part, which talks about recognizing “that improved competitiveness will continue to stimulate economic growth and create jobs for Canadians”. No one can be against that. The part we have a hard time with is the part that talks about continuing “to diversify and expand markets for Canadian goods and services by encouraging investment in Canada through lower corporate tax rates...”. This is wishful thinking on the part of the Conservatives.

We are not against tax cuts for certain companies, but businesses in the forestry sector, for example, are not even earning a profit. Even though they are being told that the government will lower their taxes to help them be more competitive, they are already not paying any taxes, since they are not earning any money. For many businesses, this solution is completely ridiculous under the circumstances.

In his motion, the member also suggests maintaining a stable economy and signing free trade agreements. The Bloc Québécois has made its position on bilateral agreements clear: we do not support them. We support multilateral agreements and we think that the Conservative government should focus on that rather than on signing agreements like the one with Colombia, a country that does not respect workers' rights, the right to freedom of expression or the environment. That is the kind of agreement this government wants to sign, but we think it is a bad idea.

Everyone knows that the economic future of Quebec and Canada depends on making our industries more competitive. The Conservative government's strategy, which focuses almost exclusively on corporate tax cuts and signing more bilateral free trade agreements, is not the right one.

Many sectors are going through such a difficult financial period that tax cuts are of absolutely no use in helping them develop new business plans. At the beginning of my remarks, I mentioned forestry companies. In Quebec, these companies are in dire need of access to cash so they can refinance, invest in modernizing their production equipment and start making money again. Once again, companies that do not make a profit do not pay taxes.

To deal with future economic challenges and compete with foreign companies that often benefit from significant advantages with respect to the cost of labour and weak environmental regulations, we have to focus on cutting-edge economic sectors, such as aerospace, green energy and high value-added products.

To support the development of these sectors and make the economies of Quebec and Canada more competitive, we recommend major investment in research and development and adequate financial assistance for industry stakeholders to help them modernize their facilities and develop new products. Unfortunately, none of that appears in the motion from the member for Calgary Centre.

We also recognize the key role that small and medium-sized businesses play in Quebec's economic development. I come from a region, a city, where there has been a proliferation of small and medium-sized businesses over the years. We have done relatively well, touch wood. These small and medium-sized businesses have given us the economic diversity needed to weather economic crises. However, this does not mean that we can sit on our laurels. We believe it is imperative that the federal government invest enough money to promote development and innovation when it comes to small and medium-sized businesses.

We do not agree with the increasing number of bilateral trade agreements. We believe that the government should instead be making an effort to restart multilateral negotiations, which are really the only way to encourage truly fair globalization.

The Bloc Québécois calls this globalization with a human face. It respects workers' rights, environmental rights and the general public, which is so often affected by development. In some countries we could even talk about reckless development, which requires limits to be set before a free trade agreement can be signed. Then they will realize that we will not accept things being done any way they please.

If we dissect the member's motion, we see those infamous tax cuts. Lower corporate taxes make sense when the economy is strong and exporters are looking for a comparative advantage. But they are practically useless during a crisis, and economists agree on that.

While it gave no less than $10 billion to save Ontario's automotive industry, the Conservative government is promising a mere $100 million over four years in its 2010 budget to help the forestry industry get through the worst crisis in its history. I will not dwell on the inequity created by the last budget, which was supported by the Conservative members from Quebec. Many of them come from forestry regions and yet they accepted the last budget's serious bias in favour of the automotive industry over forestry.

This funding for the forestry industry, which is going through a cash crisis, is not nearly enough to allow it to invest in the tools and production equipment needed to boost its productivity and competitiveness and make it profitable again. The Conservatives think that this industry should be happy to pay less tax. For the third time: if a business is not making a profit, it is not paying taxes either. This is not good news. It is not news at all. It is not a solution for the forestry industry. It is utterly ridiculous.

What is more, the money the Conservatives are investing in innovation in SMEs is totally ridiculous. The March 2010 budget allocates a measly $40 million over two years to just 20 projects across Canada. Needless to say that this is nothing but smoke and mirrors. These measures will simply not cut it when the time comes to modernize SMEs to make them more competitive.

As far as investment in research and development is concerned, after ending Technology Partnerships Canada, the main federal support program for research and development, on December 31, 2006, the Conservatives only partially reinstated it in May 2007. They simply changed the name to the strategic aerospace and defence initiative.

This new program is less generous than the previous one and is geared only to aerospace and the defence industry. As for other leading-edge sectors, such as pharmaceuticals, production technologies, environmental technologies or new materials, there is nothing left for them in this program. We were led to believe that the government was reinstating a program to help during the economic crisis, but in fact, it made cuts to some of the technologies that could have benefited from this type of research and development program.

In his motion, the hon. member could very well have called for reinvestment in research and development, but he did not. In other words, in the government's economic policies on the crisis, it made Quebec pay the price.

Given the nature of Quebec's industrial base, it is Quebec that is suffering the most from the Conservative's laissez-faire attitude.

In order to get the Bloc Québécois' support, the hon. member should have thought about adding policies to help not just the forestry industry, as I was just mentioning, but also SMEs and manufacturing industries, which were completely left out of the last budget. Such a motion could have paved the way to improving this situation.

That is not the case, and the Bloc Québécois is therefore opposed to Motion M-518.

The Economy
Private Members' Business

11:35 a.m.

NDP

Don Davies Vancouver Kingsway, BC

Mr. Speaker, I am very pleased to speak to Motion No. 518. The motion gives us an opportunity to debate competing visions for the economy, jobs and fair taxation systems in our country.

The New Democrat vision for the economy is very different from the government's. In the view of the New Democrats, we need to focus on job creation. We need to focus on creating and building a strong domestic economy. We need to develop an industrial strategy that will build a sustainable economy for the future, one that fuels economic growth by investing in green technology, green jobs and renewable energy and one that is built on a commitment to the principle of fair trade and a fair, just distribution of the wealth of our nation.

The New Democrats believe that the path to economic prosperity is built on creating a strong working class, a strong middle class. In that respect, we will create a truly strong economy. The bottom line is New Democrats believe the true measure of any functioning economy is to ask whether it benefits the majority of the people who take part in that economy. In this respect, New Democrats believe that any sound economic policy must benefit hard-working Canadian families.

We also believe in an economy where no one is left behind. That is why we always analyze every economic proposal, by looking at how it will affect the must vulnerable among us, our seniors, our children, our disabled. We know that the strongest chain is built on ensuring we take care of the weakest link.

The Conservative vision for the economy is very different. The Conservative government believes in shifting taxes from corporations to individuals and families. The Conservatives have continued the Liberal corporate tax cuts that began in the 1990s, which the Liberal speaker already highlighted. In the last budget, $6 billion were allocated for banks and oil companies in our country, and $6 billion has been given by the government to British Columbia and Ontario in incentives for those provinces to bring in the HST, which results in a huge tax shift from corporations to every family in those two provinces.

The Conservative government believes in more competition, but less co-operation, in more taxes like HST on families and less taxes on corporations and in more environmental degradation and less regulation in the environmental sector.

I want to talk for a minute on deregulation. The government in the budget before the House has move to exempt federal projects from environmental assessments. Right now we probably have the worst environmental disaster, perhaps in the world's history, going on in the Gulf of Mexico. Everybody knows that this is caused in large part by a failure to regulate the economic development of offshore drilling companies. What does the government want to do? At the very time that is going on, the government wants to take environmental assessments away from the Environmental Assessment Board and give it to whom? The National Energy Board. That is exactly the kind of misplaced, misguided policy that resulted in hundreds of thousands of barrels of oil being spewed into the Gulf every day of every week for the last three weeks.

The government has refused to support important measures to prevent another global meltdown in the financial services sector, touring the world to protect the banks of our country instead of touring the world to ensure there is not another financial disaster.

Before expanding further on these competing visions, I want to talk a bit about credibility. I was struck by the Liberal speaker who criticized the government for its corporate tax cuts. In the 2008 campaign and for the last two years the Liberal Party has been in favour of the corporate tax cuts proposed by the government. The ability of the Liberals to flip-flop, engage in crass opportunism and to say whatever they think is popular continues to shock all Canadians, I think.

I am glad to see the Liberals are finally supporting what the New Democrats have been saying for the last two years, which is in this economy, further corporate tax cuts are absolutely the wrong way to go.

Since the last election, every New Democrat member of Parliament has risen numerous times in the House to talk about building an economy that works for Canadians. We have talked about our plan to create jobs, to build an economy to emerge from the recession based on ensuring every Canadian who wants to contribute can have a well-paying, productive job. The economy is built on employment.

We have talked about our plan to build a green economy. The member for Edmonton—Strathcona has stood in the House time and time again and said that we do not have to choose between the economy and the environment. That is flawed thinking by members opposite that falsely tells Canadians there is a dichotomy between those two things. All thinking Canadians know that the environment is our economy. Without clean water, land or air, without raw natural capital, there is no economic activity. New Democrats understand that, but the government does not.

We have talked about our plan to foster an educated, skilled workforce to increase our competitiveness. I note the motion talks about improved competitiveness. I can tell everyone what we can do to be competitive in the decades ahead. We can ensure that every child, teenager and young adult has access to an affordable education so we build a country with skilled, educated people. That is how to built a modern economy in the world of today.

New Democrats have spoken about our plan to tackle poverty and help the unemployed.

I am looking at page 281 of the Conservative government's budget, where it estimates the stimulative effects of various ways to invest a government dollar. It says that for every $1 invested in housing, it returns $1.40 to the economy. Every dollar invested in low-income households and the unemployed returns $1.50 to the economy. Every $1 invested in reducing EI premiums adds a factor of 50¢. What has the government done? It has increased EI premiums.

Here is the kicker. For every $1 invested in corporate income tax cuts, it returns 20¢. The government spends $1 in corporate income tax cuts and gets back 20¢. That is from its budget document. What does this motion call for? Encouraging investment in Canada through lower corporate tax rates. That is what it wants to do. For every $1 it takes from hard-working Canadians, it wants to give it to corporations and turn that $1 paid by Canadians into 20¢. That is not sound economic management. That is foolishness.

We have risen to engage in a constructive and rational debate on the economy because Canadians want the government to engage in a respectful debate to fix our economy. Instead, the Conservatives respond with insulting and overblown rhetoric to dismiss any other idea or perspective on the economy.

I heard the hon. member for Calgary Centre call the New Democrats socialists. He called us isolationists. Invective is the lowest form of argument. It is name calling. Calling New Democrats isolationists is simply a straw man argument. Opposing free trade with countries like Colombia does not mean Canadians and the New Democrats do not believe we should engage in trade. Of course we do. It is nonsense for the government to suggest otherwise. What we do believe in is fair trade.

I want to point out that the government wants to sign free trade agreements, build an economic plan on free trade and have a trade agreement with Colombia, a narco state that has the dubious distinction of murdering the highest number of trade unionists in the world. The government wants to trade with that country. That is the best country it can find? That is the cornerstone of its economic trade policy? It should go back to the bargaining table.

New Democrats believe we can build country of fiscal prudence that has social justice. Tommy Douglas balanced his budget 10 years in a row. Allan Blakeney left a surplus when he left government in Saskatchewan. New Democrats have balanced their budgets the highest percentage of time for every year of government in the history of Canada. It was the Department of Finance that studied this. The highest deficits in Canadian history have been Conservative deficits, Brian Mulroney and the current finance minister.

In terms lecturing any party in the House about sound policy, the Conservatives should take a lesson from the New Democrats.

The Economy
Private Members' Business

11:45 a.m.

Conservative

Ron Cannan Kelowna—Lake Country, BC

Mr. Speaker, as a member of the international trade committee and part of this government, it is a privilege to rise in the House today to speak in favour of Motion No. 518 regarding expanding Canada's free trade agenda.

This government is committed to improving Canada's competitiveness and creating the economy of tomorrow as outlined in Canada's economic action plan and the Speech from the Throne. To do this Canada must open up as many foreign markets as possible for our producers, exporters and investors. I would like to take this opportunity to draw the attention of hon. members to some of the government's initiatives for expanding our network of trade agreements.

This government is committed to building on Canada's existing regional and bilateral free trade agreements. It is committed to increasing access to foreign markets for Canadian businesses, committed to helping Canadians compete with the best in the global economy and committed to an aggressive free trade agenda to support our goals.

Of course the World Trade Organization, otherwise known as the WTO, remains the foundation of our approach and Canada continues to be an active supporter of the Doha round of negotiations. A strong multilateral trading system has a critical role to play in the global economic recovery. We are working hard to achieve the best possible outcome from the round, and Canadian agricultural producers, manufacturers and service providers stand to benefit from the expanded access to global markets that an ambitious outcome would provide.

Canada is ready to do its part, but success in the round will depend upon the meaningful engagement and contributions of all members. With the uncertainty surrounding such a broad and ambitious process, we cannot rely exclusively on these negotiations to deliver the new opportunities that our traders need in order to grow and prosper. For that reason we also recognize the importance of bilateral and regional agreements.

Canada already has free trade agreements in force with the United States and Mexico through NAFTA, the North American Free Trade Agreement, 1994, as well as agreements with Israel in 1997, Chile in 1997 and Costa Rica in 2002. Last year we implemented a free trade agreement with the European Free Trade Association with the countries of Iceland, Norway, Liechtenstein and Switzerland on July 1, and with Peru on August 1.

The agreement with the European Free Trade Association is Canada's first free trade agreement with European countries. Thanks to this deal, Canadian companies are better positioned to expand commercial ties with the countries of the European Free Trade Association in particular and other European countries more broadly.

The Canada-European Free Trade Association Free Trade Agreement establishes a competitive advantage over exporters of our main competitors, such as the United States, that do not benefit from such an agreement. It places Canadian goods on an equal footing with goods from the European Union, Korea, Mexico and Chile, which already benefit from trade agreements with the European Free Trade Association.

The Canada-Peru Free Trade Agreement, which came into force along with agreements on labour co-operation and the environment, contains considerable benefits for Canada. Canadian producers immediately benefited from the elimination of tariffs on 95% of current Canadian exports to Peru, with most remaining tariffs to be eliminated over a five to ten year period. Products that received immediate duty-free access to Peru include wheat, barley, lentils, peas and selected boneless beef cuts, a variety of paper products, and machinery and equipment. Canadian businesses also received improved market access in other sectors of the Peruvian economy, such as mining, energy and professional services, as well as banking, insurance and securities.

This government is continuing to pursue ambitious trade agreements with others as well. On November 21, 2008, Canada and Colombia signed a free trade agreement along with parallel agreements on labour co-operation and the environment. The implementing legislation, Bill C-2, passed second reading and is now being studied by the Standing Committee on International Trade.

The Canada-Colombia free trade agreement will help to expand bilateral trade and investment with Colombia. Having the opportunity to personally visit Colombia with the trade committee, I believe it is important to engage the Colombians rather than isolate them, like some of the opposition parties would like to do.

We also want to deliver concrete progress on Canada's commitment of engagement in the Americas. The free trade agreement will provide greater market access for Canadian exporters of products such as wheat, pulses, barley, paper products and heavy equipment. It will also help the increasing number of Canadian investors and exporters that are entering the Colombian market by providing unprecedented levels of stability, predictability and protection for Canadian investors.

Less than a week later, on March 24, this government tabled implementing legislation for the Canada-Jordan free trade agreement and the related agreements on labour co-operation and the environment. This agreement would give Canadian businesses improved access in Jordan and a platform for expanding commercial ties in the broader Middle East.

Once this agreement comes into force, tariffs on over 99% of recent Canadian exports to Jordan will be eliminated.

Key Canadian sectors that will benefit from the immediate duty-free access include forestry--which is a great benefit for British Columbia where I am from, Quebec and Ontario and our softwood lumber agreements are providing great support for that as well-- manufacturing, and agriculture and agrifood.

The government's free trade agenda does not stop there. On May 14 of this year the Minister of International Trade and his Panamanian counterpart signed the Canada-Panama free trade agreement here in Ottawa. Parallel agreements on labour co-operation and the environment were also signed at the same time. All three agreements have been tabled in the House for 21 sitting days for review and debate. The free trade agreement will improve market access for goods and services and will provide a stable and predictable environment for investments in Panama.

This government is also working on numerous other fronts to provide Canadian businesses with better access to foreign markets.

Negotiations toward a comprehensive economic and trade agreement with the European Union were launched in Prague at the May 2009 Canada-European summit. This is by far Canada's most significant trade negotiation since the NAFTA with possibly up to $12 billion of new economic opportunities.

The successful negotiation of a high quality ambitious agreement with the European Union is a key priority for the government. Canada and the European Union have held three successful rounds of negotiations with four more scheduled to take place by spring 2011. The parties will continue to work toward an ambitious comprehensive agreement that will open markets and resist protectionist pressures in these challenging economic times.

Most recently, on May 18 in Kiev, Canada and Ukraine launched free trade negotiations. Canada already has strong cultural ties with Ukraine and our commercial ties have grown stronger over the last decade. Canadian companies are steadily building a deep business presence in areas like aerospace, communication technologies and agriculture.

A free trade agreement with Ukraine could further open markets for Canadian exports ranging from agriculture and seafood products to machinery and pharmaceuticals, and improve market access for services and help to address non-tariff barriers.

Negotiations with the Caribbean community are also progressing, and the second round of negotiations between Canadian and Caribbean officials took place a few weeks ago. Canadian officials also held a negotiating round in March 2010 with their counterparts from Central America as part of the ongoing negotiations between Canada and the four Central American countries of Guatemala, Honduras, Nicaragua and El Salvador.

This government remains dedicated to advancing our ongoing free trade negotiations with other partners including South Korea and the Dominican Republic, as well as seeking ambitious opportunities elsewhere. We are also engaged in a joint study with India to explore the parameters of a possible comprehensive economic partnership. We are involved in technical discussions with Japan aimed at improving and deepening our economic relations, including the possibility of a free trade agreement, a key interest for Canadian stakeholders.

We also remain engaged with the members of the trans-Pacific partnership and are watching those negotiations with interest.

Finally, trade opportunities with China and our Asian partners continue to expand. Canada's Minister for the Asia-Pacific Gateway was in China last week and our Minister of International Trade is in China this week building new markets.

What does an active trade agenda really mean for Canada? To put it in straightforward terms, by bringing down barriers to trade and investment the government will help Canadian businesses compete in an increasingly competitive world while also stimulating the Canadian economy. This is where free trade plays an important role. It reduces tariffs for Canadian producers and expands opportunities for Canadian investors and service providers.

In these difficult economic times we cannot hide behind trade barriers. Protectionism is not the answer; partnerships are. We want to innovate, to move up the global value chain and to compete globally. These measures will continue to fuel our recovery from the global recession, forge a competitive advantage, support growth and prosperity and help create jobs in the economy of tomorrow.

Through this record of success we are making Canada's economy stronger, more vibrant, more innovative and more competitive. That is why Canadians can count on this government to lead efforts in securing access to foreign markets for Canadian businesses and to take every opportunity to oppose protectionism and defend free and open trade on the world stage.

The Economy
Private Members' Business

11:55 a.m.

South Shore—St. Margaret's
Nova Scotia

Conservative

Gerald Keddy Parliamentary Secretary to the Minister of International Trade

Mr. Speaker, it is certainly a pleasure to rise in the House today to speak in support of the motion by my colleague from Calgary Centre. It allows me to reiterate that our government fully agrees that international trade and investment are vital to Canada's long-term growth and prosperity. Canada is a trading nation and Canadians have long participated in global commerce as exporters, as importers, as investors, and as those looking for investors and partners to help them grow, innovate and prosper.

Foreign direct investment has traditionally played and continues to play a significant role in Canada's economy. From British Columbia to Newfoundland and Labrador, foreign investment brings many benefits that help our businesses and communities build competitive advantage in high-value industries of the future. Foreign businesses operating here are major contributors to our economy. In fact, the level of foreign direct investment in Canada is equivalent to over 30% of Canada's annual output, or gross domestic product.

These companies are responsible for 45% of the merchandise exports, 27% of corporate profits and about one-quarter of all business non-residential investment in Canada, contributing directly to our economic growth and long-term prosperity. Foreign investors in Canada include household names like Microsoft, Nokia, Samsung, and Honda, which has had operations in Canada for over 40 years. These and hundreds of other foreign investors in Canada are creating jobs and opportunity for Canadians across many different industries and sectors.

Even before Canada fell victim to the global recession, with advantage Canada and the global commerce strategy the government has been striving to make Canada a destination of choice for global business and investment. We have focused on reducing taxes, paying down debt, fostering skills development and investing in transportation, research and innovation infrastructure, all in the name of making Canada a more competitive place to succeed globally.

These measures are helping to ensure that Canada's businesses are better able to compete in the global economy and contribute to Canada's appeal as a place for foreign investors to invest, grow, innovate and create jobs. The government's efforts in this regard are already paying dividends for Canadians. As the global economy has navigated its most serious downturn in a generation, Canadians too have been affected.

However, our country has shown remarkable resilience and strength in the face of these troubles. Our banking system, for example, remained strong throughout the crisis. None of our banks failed and none required public bailouts. Many of our banks are growing at an aggressive rate. This certainly would not be possible without a strong, stable and well-regulated financial system, cited as the most stable in the world by the World Economic Forum for the past two years in a row.

Canada's strong fiscal record has also proven to be a key strength. Because our government paid down debt in good times, we have had the flexibility to introduce Canada's economic action plan package to spur growth, create jobs and position our country for a strong recovery. Today, as many of our counterparts around the world face enormous debt loads, Canada stands to reap the benefits of a G7-leading debt to GDP ratio. We are in a strong position to return to fiscal balance more quickly than many of our counterparts and we are optimistic that we can do so while maintaining the tax advantage we have been building over the past few years.

The fact is that Canada has navigated the global economic downturn better than anyone in the G7. The experts at the International Monetary Fund are predicting that we will lead the G7 in growth in the next few years. The OECD is saying that Canada's economic recovery grew 6.2% in the first quarter of 2010. That bears repeating. Canada's economy grew 6.2% in the first quarter of 2010.

I am sure that all members in this place, even the opposition members, take great interest in those numbers and lay the tribute at the feet of the government where it belongs, quite frankly. I am sure that all members in the House would share that feeling.

We are well ahead of the 1.9% overall growth of the other G7 countries. We are optimistic that such growth will translate into G7-leading job growth, as was the case in the years leading up to the global downturn.

The world is taking notice of Canada's first rate economic performance. In fact, the business experts at the Economist Intelligence Unit are saying that Canada will be the best place to do business in the next five years.

Indeed, Canada has lots of advantages to offer foreign investors. In financial and business services, we have one of the largest and soundest financial sectors in the world. In life sciences, we host some of the most influential clinical scientists in the world and we offer one of the most generous research and development tax incentives.

In the auto sector, we are one of the world's largest exporters of automobile products. We are also home to world leaders in plastics and chemicals, digital media, aerospace, renewable energy and agri-foods.

I have more to say—

The Economy
Private Members' Business

Noon

Conservative

The Acting Speaker Barry Devolin

Order, please. The hon. parliamentary secretary will have four minutes remaining when the House returns to this matter.

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 May 27, consideration of Bill C-9, An Act to implement certain provisions of the budget tabled in Parliament on March 4, 2010 and other measures, as reported (without amendment) from the committee, and of the motions in Group No. 1.

Jobs and Economic Growth Act
Government Orders

Noon

NDP

Wayne Marston Hamilton East—Stoney Creek, ON

Mr. Speaker, as members know, the NDP, for a long period of time, has been calling upon the government to turn away from its agenda of tax breaks for the big corporations. In the throne speech, in the budget and now in Bill C-9, the government had choices to make and these choices should have been to favour the needs of Canadians. I believe the government had the option to stop the reckless de-funding of the government by way of corporate tax breaks that have taken away the fiscal capacity of the government.

On two occasions, the NDP has provided motions to the House concerning the needs of seniors and in Bill C-9 we do not see a response to either one of those bills. Our motions during the last Parliament set out the original seniors charter that recognized older Canadians are not only creative and active, but they are valued members of our society. The seniors charter would have enshrined the right of every senior in Canada to income security, accessible and affordable housing, wellness through health promotion and preventive care, health care through secure and publicly accessible health care, dental care, home care, palliative care, geriatric care and, of course, pharmacare. All of those things were laid out in the charter more than two years ago, again, a road map for the government as it moved forward and made plans for the future of seniors in this country.

In June of last year we set out another road map for the retirement security of seniors. It proposed an immediate increase of $700 million to GIS to help those seniors who live below the low income cutoff. They seem like nice words, “low income cutoff”, but those are seniors who live in poverty and there is no other word for it.

We also proposed a doubling of the CPP because today in Canada 63% of working Canadians have no pension and no savings and we must prepare them for the future. Doubling CPP over the next 40 years would ensure they have dignity in their retirement years. We also proposed in the same motion a national pension insurance plan paid for by the sponsors. Our motion was adopted unanimously by the House, so we were encouraged that perhaps the government was about to respond and give real consideration to the future of our seniors.

The government could have chosen to follow the will of Parliament on these two motions but what did it do? It chose the banks and the big oil and gas companies over the seniors of this country.

Throughout the winter of 2008-09, our party looked at the situation of pensions and we held round tables. As members have heard me report to the House before, as the critic for the NDP for seniors and pensions, I travelled to 31 communities asking seniors what they needed. They all took us back to the same discussion that we have been having about retirement income security.

Through the member for Outremont, we moved a motion to have the finance committee do studies on the pensions of Canadians and we have had people from all walks of life come before us.

My point is that, as a party, we have been out there for over a year on pensions and doing the due diligence that is important to this issue. However, as I said a moment ago, with Bill C-9, the government has confirmed its support for the tax breaks for the big corporations and the banks. It has taken $15 billion a year out of the fiscal capacity of the government to do those things that Canadians want done.

While the NDP has been saying that we should stop corporate tax breaks, I find it ironic that members of the Liberal Party rise in this House and talk about stopping these corporate tax breaks when they promoted them for years. This deathbed conversion happened following their conference in Montreal in February. Literally for years the leader of the NDP, the member for Toronto—Danforth, has been calling for the cessation of these particular tax breaks.

Many people in my riding of Hamilton East--Stoney Creek have raised concerns with me regarding Bill C-9 when they hear how broad, comprehensive and how large it is and the things contained in it. They wonder what it is all about, why it is such an omnibus bill and why it is necessary.

I know it sounds strange to some people to think that the NDP actually has conversations with the good folks in the financial services sector but we certainly do and they are really concerned about the sudden proposition that GST will be retroactive on commissions paid for their financial services. They are concerned about what it will do to the costs in their particular sector.

Hamilton is well known across this country as a working town with a lot of good, strong, healthy unions and a lot of working people who have contributed to the EI fund all of their working lives and have had the good fortune of never having had to use it. These people have heard the stories of how under the Liberal administration $57 billion went into the black hole of the budget and was paid down on the debt. They were counting on the Conservative government to do something about that. What happened in Bill C-9 just confirms the government's abuse of trust that took place under the Liberal government.

There is a grave sense in Hamilton East--Stoney Creek that the Conservative government is reckless when they hear about the astounding $1 billion for the G8 and G20 conferences. Our riding is a very diverse community and people are well aware of the number of new Canadians who are in this country. Good Muslims and good Sikhs are their neighbours and they do not fear these people. Is it fear that has driven the government to take hundreds of times the cost of other countries for this, and there is no other word for it, boondoggle? Security will amount to $1 billion. I note that there has been conversation about the Auditor General taking a look at these expenses. I would suggest that they be looked at before the money is spent.

The good citizens of Hamilton East--Stoney Creek lived through the Mike Harris years of government. They are starting to look upon the federal government as a Mike Harris-style government that is prepared to sell off anything and everything. Members may recall that the Mike Harris government in Ontario sold off the ETR Highway 407. We just need to look at the value that highway could have offered the government financially during this time.

Canadians are concerned about the potential sell-off of Atomic Energy of Canada, which the Conservatives seem prepared to sell-off for a quick buck.

I want to mention something significant, which I have said in this House before. Writer, Kris Kristofferson, said in one of his songs, The Law is for Protection of the People. Bill C-9 proposes to remove environmental assessments and proposes to give the scope of the assessments to the minister. Even if we are satisfied with the minister who is in the House today, we do not know who future ministers will be so we do not know what their competency will be in this area. The government is prepared to give up Canada Post's right on outgoing letters. What will be next within Canada Post or within the CBC? What else will come up for sale?

The Canadian people trust their government to protect their interests. I would suggest to all parties in this House that this is the time to take those items out of this bill that are problematic, items such as those that deal with the environment, AECL and others, and deal with them separately.

Jobs and Economic Growth Act
Government Orders

12:10 p.m.

Liberal

Paul Szabo Mississauga South, ON

Mr. Speaker, I would like to make a couple of comments with regard to the EI fund.

It is concerning, but I think the member may have misspoken. In fact, it was during the Brian Mulroney years that the Auditor General told the government that since the EI program was operating at a deficit, that deficit had to be included in the consolidated revenue fund on an annual basis so that it was reflecting the program performance of the entire government. It used to be a separate bank account, and then it was rolled in.

That means that when the Liberals took over in 1993 and eliminated the $42 billion deficit that was passed over, 10 years of surpluses started.

The point is that the change was made was at a time when there were deficits. When there were surpluses, we had EI premiums going down each and every year.

However, this year, under Bill C-9, the government in fact is eliminating the liability to employers and employees that they are entitled to, either by premium reductions or by improvement in programs.

I just thought the member would be interested in knowing a bit of the factual history.

Jobs and Economic Growth Act
Government Orders

12:15 p.m.

NDP

Wayne Marston Hamilton East—Stoney Creek, ON

Mr. Speaker, the factual history is that there were three majority Liberal governments with five surplus budgets that did not address the fact that the premiums that belonged to Canadians, that were paid by Canadians for the protection of Canadians, had been abused.

At the end of the day, we had a Conservative government followed by a Liberal government followed by a Conservative government that did not address this.

Prior to this change made by the previous Liberal government, 85% of people who applied for unemployment insurance received it, and received it for up to a year.

Now, there are about 29% who apply and they receive it for a variety of times, some as short as less than 26 weeks.

So there have been significant abuses of the unemployment system, or the employment system, whichever we want to call it, by successive Conservative and Liberal governments. Standing by the people of my riding who have suffered through these changes, I have no problem standing in this House and talking about the abuses of EI by both Liberals and Conservatives.