House of Commons Hansard #126 of the 40th Parliament, 3rd Session. (The original version is on Parliament's site.) The word of the day was liberals.

Topics

Opposition Motion--Tax Rate for Large Corporations
Business of Supply
Government Orders

12:15 p.m.

Conservative

Mike Wallace Burlington, ON

Madam Speaker, the member and I obviously disagree.

Since my colleague is the finance critic for his party, I assume he takes a lead role on the financial positions and policies of that party. If his party were to form a coalition with the Liberals and the Bloc, would that coalition raise taxes on businesses and individuals in order to carry out its additional social policies? Would the coalition cut in various areas and if so, what areas would those be?

Opposition Motion--Tax Rate for Large Corporations
Business of Supply
Government Orders

12:20 p.m.

NDP

Thomas Mulcair Outremont, QC

Madam Speaker, unlike the Liberals who signed the coalition and then tried to back away from it, we have never shied away from the word. We understand that in today's world, especially now that we are in our third consecutive minority Parliament, it is a very healthy way of governing and it is the type of thing that we will not back away from.

With regard to the member's question as to our policies and who has a coalition going right now, I would just remind my colleague from Burlington that we found out yesterday that behind closed doors a new friendship is developing between his Prime Minister and the leader of the Bloc Québécois. Perhaps the Bloc Québécois' leader is suffering from the Stockholm syndrome. Five years later he is so happy a few crumbs were thrown his way that he thinks we should stop acting as members of Parliament. We in the NDP are going to require that every bill still go to committee and be the proper object of analysis.

With regard to the differences between his opinion and ours, they are well-known and they are well-defined. The problem is that the Conservatives have always been able to count on the Liberals to get their budgets through because the Liberals do not believe in anything. They have no policies. They are the biggest bunch of phonies to have ever sat in this House.

Opposition Motion--Tax Rate for Large Corporations
Business of Supply
Government Orders

12:20 p.m.

NDP

Brian Masse Windsor West, ON

Madam Speaker, it is a pleasure to rise on this important issue.

I want to take a moment to look at where this started from. It is important to recognize that the corporate tax reduction rate and the agenda for this really started in the year 2000. It was around 29% at that time and since that time it has been reduced to 15%. The consequence is that we have actually stripped ourselves of our fiscal capacity to deal with many serious issues that we have.

At the same time, when we look at value added employment over that period of time, it has diminished and productivity in Canada has gone down. Therefore, the theory that cutting corporate taxes leads to higher productivity, leads to better paying or value added jobs, leads to a panacea, is not true.

Interestingly, I had a paper commissioned last year dealing with this and looking at the most recent round of corporate tax cuts. The TD Bank's forecast deficit for Canada was $171 billion over that period of time. What it found was that roughly we had lost $171 billion. We are really in debt today because we have been reducing corporate taxes at a rate that is not sustainable.

That is important to recognize because we are not getting the investment back in this country. We are witnessing the surplus of our trade being diminished and eliminated while actually becoming a net importer. All the evidence out there pointing to the benefit of just simply reducing corporate taxes is not true.

If we ask corporations if they want a reduction in taxes, of course they will say yes. That is like asking a fish if it wants water. They will want to have that no matter what. It is a simple decision-making process that we require regarding our resources.

It is interesting that since the Conservatives have been in power, and I do want to note this because the member for Outremont noted it a bit, the Bloc Québécois supported the first two Conservative budgets. It had its coalition there. We have had the deepening of the corporate tax cuts come along and now the Liberals have introduced this motion despite them actually supporting the last budget that took place.

What we are doing with this motion, which is rather bizarre and peculiar, is we are being asked to vote against the fact that the Liberals supported the actual original budget. How they can twist themselves in a pretzel around that and come here today is beyond me because it makes no sense. They have a motion today that attacks their own position that they took. That is what is happening.

We are spending the whole day discussing the Liberals and why they want to attack themselves for something they did in the past because it is law. The tax cut reduction of 15% that we have happening is actually law passed in Canada, put by the Conservatives, they were clear on that, and supported by the Liberals. Now they want to go back in time and pretend it did not happen, pretend that they did not understand we were in a deficit.

We knew at that time that we were in a deficit. It was very clear. We had the economic recession. We had a series of things happen and the continued policy was there. We had so many different comments being made by their leaders and their finance critics, and so forth talking about how they wanted them deeper and faster.

It is important when we look at this budget, that we clarify a couple of things on where expenses and revenues will go. A couple of things really come to mind.

First of all, there is the HST money. We are borrowing $5.6 billion to give to Ontario and British Columbia to bring in the HST. We have that being stripped out of the reserves right there. The fact is we are borrowing that money to bring in that policy. What is important to recognize here is that was a shift from commercial taxes to that of consumer and individual taxes. That is what the HST is.

In theory, in the manufacturing and other sectors, it was supposed to eliminate the cascading effect of tax after tax. However, we have yet to see any of that benefit passed on to consumers because consumer products and services have not actually replicated what the HST was supposed to do. We are just paying more. It shifted it. That is critical because that is like a corporate tax cut reduction.

I know the money goes to Ontario and British Columbia. However, if we lived in Alberta, Manitoba, Saskatchewan, Quebec, or any of the Atlantic provinces, we should be really upset that we and our families borrowed money to bring in a new tax policy for the residents of two other provinces and we are paying for it. Of those provinces, at least Ontario, where I live, will receive $4 billion out of it. At the same time, we will be paying that back. Talk about a raw deal.

We have discussed the HST in many ways, but talk about a raw deal. Those living in Alberta just subsidized two other provinces bringing in a new ideological tax on consumers that they and their children are going to pay for.

I had an economic paper commissioned to look at the borrowing costs of the HST. If we paid it off in 10 years, and if we get back into a surplus and we have the money to pay it back, which are really big ifs, it is going to cost over $7 billion when we look at the overall borrowing rate. We are going to be spending another $1 billion and borrowing to bring in a new tax on ourselves.

That brings it up, in that budget as well, to $8.6 billion that will be lost out of the revenue from the general coffers to pay for this corporate tax cut that is being implemented. We have $14.2 billion that is going to benefit mostly the private corporations, especially the rich ones. The member for Outremont noted the banks, for example, with their $20 billion profits and $10 billion bonuses that their CEOs got in this last year.

Interestingly enough, we do not follow through, at the very least, like they did in the United States and in the U.K. where they put caps on the bonuses. If we go back to all the problems we have today, it was the financial sector and its mismanagement that brought us to this type deficit problem today.

It was the private sector that brought us this problem. It was the private sector that asked the public sector to bail it out. It is the private sector that continues to ask for all kinds of grants, subsidies, loans and corporate tax cut reductions. We have yet to see the reciprocal happen with regard to increasing employment.

In Windsor we finally actually went down below 10% unemployment. We have been mired in high unemployment. That has nothing to do with a reduction in corporate tax cuts. We continue to undermine ourselves because the vast majority of this money does not get invested back in Canada.

If the Conservatives do not believe us, they can believe their own Department of Finance. Their own Department of Finance talks about job growth when doing corporate tax reductions. It is 20¢ growth for every dollar in terms of a tax cut. However, for infrastructure and other spending, supports for unemployment, we actually get $1.40.

There actually cannot be a better system in place by making other choices. That is what this is about. We are deciding to do what the United States has done. The United States is in serious financial mismanagement because it has been borrowing money for tax cuts for a whole series of things for a number of years. It is unsustainable.

It is unsustainable and inappropriate, and it is also going to cost us. When we talk about social responsibility and the $14 billion gift that the government has given to the wealthiest corporations, and also by bringing in the HST on individuals and consumers, that is money that could go into our environment, training for manufacturing, and a series of different things that would actually benefit this country.

When it comes to the corporations, it is like asking a fish if it wants water. They are going to say yes. Where are the other questions that talk about Canadians? Do Canadians want affordable housing? The answer is yes. Do Canadians want to have a health system that protects them and their families? They are going to say yes. Do Canadians want to have clean energy and clean air to breath for them and their families in the future? They are going to say yes.

How do we do that? We have to have some type of fiscal capacity. I noted a quote earlier from the former Liberal finance critic. He talked about wanting Canada to become the Ireland of North America. There is a country that gutted itself, and has huge fiscal and social problems right now because it cannot even respond.

I would argue that undermining our fiscal capacity undermines our security as a country. When we look at the fact that border and other types of issues that are important for the protection of Canadian citizens are being cut back, we are denying the basic elements of a civilized society, and that is to provide a safe place to live, an open democracy and a future for our children. We are undermining that with unsustainable giveaways to large corporations that do not invest back in Canada.

Opposition Motion--Tax Rate for Large Corporations
Business of Supply
Government Orders

12:30 p.m.

Conservative

Mike Wallace Burlington, ON

Madam Speaker, I appreciate the intervention from my colleague from the NDP.

He is from an area that is heavily involved in the automotive industry. I am glad to hear that the unemployment numbers are coming down. I do have a quote and would appreciate a comment from the hon. member. It was at our finance committee, which I am a member of, back in October. The Canadian Automobile Dealers Association, not the manufacturers but the dealers, said:

--we would recommend that the already announced corporate tax reductions be fully implemented in coming years. The best way for the federal government to spur investment in job creation is to allow businesses to reinvest more of their profits to fund self-sustaining private sector growth.

It is automobile dealers; it is small business. It is those who are going to benefit from the planned corporate tax cut. I would like a comment from my colleague from the automotive area.

Opposition Motion--Tax Rate for Large Corporations
Business of Supply
Government Orders

12:30 p.m.

NDP

Brian Masse Windsor West, ON

Madam Speaker, the Canadian Automobile Dealers Association is an important arm of the automotive industry, but let us talk about recovering the automotive industry.

The automotive loans that the government provided were at 11%. Right now Chrysler is identifying its biggest threat going forward, which is the loan value is so high that it is crippling its recovery. That came out recently.

When we look at that and the fact that the Conservative government has produced a high dollar policy for oil and gas, how do we compete when we have an artificially high dollar? We are watching the U.S. dollar devalue and the exports for raw materials and manufacturing is taking it on the chin. That is the worst type of policy and it needs to change. This is the real problem.

Opposition Motion--Tax Rate for Large Corporations
Business of Supply
Government Orders

12:30 p.m.

Liberal

Paul Szabo Mississauga South, ON

Madam Speaker, there is the issue of whether tax cuts will deliver any additional jobs at this point, considering the economic lags. There is another issue on the table and I will ask the member his views on it.

The member agrees that the measure of success of a country is not an economic measure, but rather a measure of the health and well-being of the people. The assessment today is that people are hurting. Health care costs are up, personal debt is up, et cetera. Maybe the timing of the tax cuts is the critical issue, not that tax cuts might be good or bad in certain circumstances. Right now we know one thing, and that is people are hurting.

Opposition Motion--Tax Rate for Large Corporations
Business of Supply
Government Orders

12:30 p.m.

NDP

Brian Masse Windsor West, ON

Madam Speaker, absolutely, when we have a surplus, we can examine a whole variety of things as possible ways to spend to stimulate the economy or improve productivity. That is why New Democrats like reductions on taxes on, for example, equipment that has to stay in Canada and other types of training that stays in Canada.

One of the problems with the budget, which the Liberals are now trying to reverse themselves on, is that we have $14 billion-plus of borrowed money. We had to borrow that money for the HST and the corporate tax cut reductions. We have to take that from the future of our youth, pay it out now and pay interest on it until we are back in surplus.

Opposition Motion--Tax Rate for Large Corporations
Business of Supply
Government Orders

12:35 p.m.

NDP

Nathan Cullen Skeena—Bulkley Valley, BC

Madam Speaker, it is interesting to note the set of priorities of the Conservatives and the way they have cut taxes. First, it is indiscriminate. I am sure my colleague will recognize that innovation, research and development for the education economy is critical, but tax cuts are across the board and indiscriminate. More specific, the largest corporations receive more than 50% tax cuts, whereas small businesses get less than 1%.

Why are the Conservatives so bent on only giving assistance to the largest corporations, the most profitable, and not small businesses that generate 8 out of every 10 jobs in this economy?

Opposition Motion--Tax Rate for Large Corporations
Business of Supply
Government Orders

12:35 p.m.

NDP

Brian Masse Windsor West, ON

Madam Speaker, the Conservatives whip everybody up on this stuff, just like a lot of their other issues, but small business can really be hurt by this. We see the exodus of far more capital that could be used in local communities. That is why having, for example, employment insurance augmented is far greater because people spend money at small businesses in their areas. It is very important they not be left behind.

Opposition Motion--Tax Rate for Large Corporations
Business of Supply
Government Orders

February 8th, 2011 / 12:35 p.m.

Conservative

Mike Wallace Burlington, ON

Madam Speaker, I will be sharing my time with my colleague from Edmonton—Leduc, potentially the future premier of Alberta. Therefore, I am happy to share my time with him.

I rise today to speak to this ill-advised Liberal motion that will turn back the clock on our Conservative government's low tax plan that promotes economic growth and job creation. When the world's worst global recession since World War II hit Canada's shores, our Conservative government took action. We introduced Canada's economic action plan, a timely, targeted and temporary plan to stimulate Canada's economy to help create jobs.

Canada's economic action plan and our low tax plan are working. Canada has weathered the recession better than most industrialized countries. We have had five straight quarters of economic growth. Indeed, only last week we got further good news, with the strongest GDP growth in eight months to last November. The IMF and OECD both project Canada to be among the fastest growing economies in the G7. Canada's financial system has been ranked the soundest in the world for the third straight year by the World Economic Forum.

Canada has created 460,000 jobs since July 2009. That is the best in the entire G7. Canada also has one of the strongest fiscal positions in the G7. We have among the lowest deficits in the G7 and the lowest net debt. In the words of the IMF:

Canada’s overall fiscal outlook in the aftermath of the crisis stands out as among the best in the G20. Net debt is the lowest in the G7.

Clearly, on the economy, Canada's economic action plan and our government have delivered. Canada's economy has weathered the recent global economic storm better than most. That has not gone unnoticed around the world.

For instance, The Economist, the magazine that most of us read, calls Canada “an economic star”. The OECD says, “Canada looks good—it shines, actually”.

The Los Angeles Times has praised Canada, saying:

Americans have almost never looked to Canada as a role model…But…on such critical issues as the deficit, unemployment…and prospering in the global economy, Canada seems to be out performing the United States.

The Washington Times holds Canada up as an example to follow. It says:

We could learn a lot from them.

Look what’s not happening in Canada. There is no real estate crisis. There is no banking crisis. There is no unemployment crisis. There is no sovereign debt crisis....It may not be long before Americans see our northern neighbor as the land of the future.

The Wall Street Journal proclaims:

Twenty-two years ago, we wrote an editorial...warning Canada that economic prosperity isn't a birthright but requires sound policies like free trade. Nowadays, that's a lecture Canada could credibly deliver to Washington...

However, it is not about numbers. It is not about the international praise we have received. It is about Canadian families. This is about creating the jobs and promoting the economic growth we need to prosper. Those jobs and that growth will not and cannot be created and sustained on an ongoing basis with the Liberal plan for higher and higher taxes, bloating government and deficit spending. The Liberal leader wants us to believe the engine of the Canadian economy should be big government, reaching back to the failed and tried economic policies of the 1960s and 1970s. The Liberal leader is wrong.

While a temporary stimulus was necessary to help boost Canada's economy during the worst of the global recession, it must end. The private sector must return as the primary engine of growth, not big government fuelled by higher and higher taxes. Our Conservative government is focused on promoting economic growth and growth creation, through lower taxes to support a sustainable private sector led recovery. That is why we are implementing our job-creating low tax plan.

By lowering taxes on job creators, we are making Canada a destination for investment. Increased investment means more jobs for Canadians and for their families.

We have heard the studies from independent, third-party voices like Jack Mintz and the Canadian Manufacturers & Exporters that our low-tax plan is and will create hundreds of thousands of jobs. If the Liberals do not believe them, maybe they would listen to former Liberal deputy prime minister, John Manley. He said:

—I support the federal plan to lower the statutory corporate tax rate to 15 per cent by 2012. ....Canada needs a significant tax advantage....I don’t think we should underestimate the benefits of these changes.... we are transforming how Canada is seen by investors looking for good places in which, and from which, to do business globally....So reforming the tax system in a way that promotes business investment and growth is a hugely positive move.

By lowering taxes on job creators, we are letting businesses keep more of their hard-earned money. That is what we believe in, lower taxes and a low tax plan, a low tax plan for businesses and individuals.

Indeed, since we formed government in 2006, we have cut taxes in every way government collects them: personal, consumption, business, excise and more. We cut the GST to 5%. We cut the lowest personal income tax rate to 15%. We increased the amount of money people could earn before paying taxes. We introduced pension income splitting for pensioners. We reduced taxes on small businesses by lowering their taxes to 11%. We introduced the tax free savings account, the biggest change in personal savings since the introduction of the RRSP, with nearly five million Canadians currently taking advantage of this savings tool.

What does this mean to the average Canadian? All together, we have cut over 100 taxes since taking office, saving the average Canadian family $3,000. That is $3,000 they can spend on their priorities. This is the lowest overall tax burden in nearly 50 years. Again, we believe in lower taxes.

While our Conservative government thinks Canadians pay enough taxes, the Liberal leader thinks government should be digging deeper into the pockets of hard-working Canadians, especially job creators. What Liberals are proposing is the hiking of business taxes.

The tax relief we are talking about was passed in the budget of 2007 by the House, including support from the Liberals. To pull the rug out from under our job creators, who have made their investment and hiring plans based on what Parliament passed years before is simply irresponsible. It would be a disaster.

Businesses do not plan their affairs on a month to month basis, but look years ahead and plan for those years. They make investment decisions partly based on their expected taxes. To pull the rug out from under them and raise their taxes after the fact will seriously dampen our economic growth and job creation.

In the words of the Hamilton Chamber of Commerce:

Our members are from all sectors and collectively employ 75,000 citizens....In 2007, the federal government announced a series of graduated business tax reductions designed to keep Canada competitive with our trading partners...Employment and investment has been predicated on the availability of funds that, if the tax changes are reversed, will no longer be available. This will have a negative impact on economic growth.

That is from the Hamilton Chamber of Commerce, the industrial heartland of Ontario, my neighbour, and I agree with that quote. It has the pulse on the business community and that is the answer it is bringing forward. In other words, people would lose their jobs. Families would be hurt.

How can the Liberals think of these tax hikes when we are trying to shake off a global recession? The facts are clear. The Liberal plan to hike taxes on job creators is dangerous as it threatens our fragile economic recovery. That is why I firmly stand in not supporting the Liberal motion before us today.

Opposition Motion--Tax Rate for Large Corporations
Business of Supply
Government Orders

12:45 p.m.

Liberal

Shawn Murphy Charlottetown, PE

Madam Speaker, the member for Burlington keeps repeating the mantra, which, obviously, is in the speaking notes, that deficit spending is advocated by the Liberals. What planet does he spend most of his time on?

The last time his party was in power, it left Canadians saddled with a deficit of $43 billion, the highest deficit this country ever recorded.

When the Liberals came to power, we recorded surplus budgets for 11 straight years, the debt to GDP ratio decreased from 73% to 38%, interest rates were lower and employment was up mainly because of the fiscal and monetary policies of the government.

What happened when the Conservatives again came to power? The deficit went from a $13 billion surplus to a $56 billion deficit. When we ask why that is, or is it bad luck or is it bad management, they just shrug their shoulders.

The last Conservative prime minister to balance the books was Sir Robert Borden in, I believe, 1911.

what is that causes these extraordinary deficits to occur every time we have a Conservative government? Why is it that government spending increased by 38%? Why is it that all these things happen and the government just does not have any explanation?

Opposition Motion--Tax Rate for Large Corporations
Business of Supply
Government Orders

12:45 p.m.

Conservative

Mike Wallace Burlington, ON

Madam Speaker, it is somewhat shameful. The member has been here quite a while so he should be able to understand basic economics and what has happened around the world with the recession and the deficit spending.

I was on city council at the time the Liberals were in power. I can tell members that because of the Liberal cuts to the provinces, they were downloaded to the municipalities and they would balance the books easily. They just took money away from other governments that were providing services to pay for their own expenditures. It was a simple way of doing it. That is not the way the Conservative Party will do it. We will rely on the private sector, with a proper low tax system, to generate jobs and generate revenue so we can get back to balanced budgets by 2015.

Opposition Motion--Tax Rate for Large Corporations
Business of Supply
Government Orders

12:45 p.m.

NDP

Jim Maloway Elmwood—Transcona, MB

Madam Speaker, just a few months ago, the Liberals were supporting tax cuts and supporting the Conservative government. In order to justify their flip-flopping, they seem to be arguing today that although they believe in corporate tax reductions, only if the country is in surplus. However, now that the country is in deficit, they do not agree that corporate taxes should be reduced.

The point is that just a few months ago they were on the side of supporting corporate tax reductions when in fact the country was in a deficit position.

Could members help me out here? Why did the Liberals have this sudden change of heart? Did they do some polling that showed that corporate tax cuts are not popular and now they have changed their mind?

Opposition Motion--Tax Rate for Large Corporations
Business of Supply
Government Orders

12:45 p.m.

Conservative

Mike Wallace Burlington, ON

Madam Speaker, I think the Liberals are confused. They have no idea what they stand for and their leadership does not know what they stand for. They supported one item a few months ago and then they changed their mind. At least, with my New Democrat fans, even though I completely disagree with their stand on most things, we know where they stand.

With the Liberal Party in this country, who knows where it stands. Who knows where its leader is?

Opposition Motion--Tax Rate for Large Corporations
Business of Supply
Government Orders

12:50 p.m.

Conservative

Rod Bruinooge Winnipeg South, MB

Madam Speaker, in his presentation, the hon. member indicated that there was not an employment or job crisis in this country. I just want him to expand upon somewhat of a crisis in Manitoba where we have a situation where employers cannot find people to employ. How would this plan help employers to expand and provide more jobs?