House of Commons Hansard #13 of the 41st Parliament, 1st Session. (The original version is on Parliament's site.) The word of the day was businesses.

Topics

Opposition Motion—Small Businesses
Business of Supply
Government Orders

June 22nd, 2011 / 5 p.m.

Liberal

Joyce Murray Vancouver Quadra, BC

Madam Speaker, I am pleased to join the debate on the motion put forward by the member for Thunder Bay—Superior North.

Small businesses are the bedrock of the Canadian economy. The people who lead them and work in them are the lifeblood of Canadian society. That is why the Liberal Party has traditionally supported any efforts to help small businesses grow stronger.

One part of that mix is lower taxes. Lowering the burden for small business should always be a goal whenever it is affordable. It was under the Liberal government of Paul Martin, when the government was running record surpluses, that the government passed some of the biggest corporate and personal tax reductions in Canadian history. The Liberals believe in keeping taxes as low as is practical while providing high-quality public services and ensuring the sustainability of our society.

Before I give further thoughts on this particular motion, I want to highlight what small business means to Canada.

There are over one million small businesses in Canada. As defined by Industry Canada, those are businesses having fewer than 100 employees. In fact, 98% of all businesses are small businesses and they employ nearly half of the people in the country's private sector. Canada is a trading nation and 87% of our exporters are small businesses responsible for $84 billion in exports.

Small business is a hugely important source of employment. Many women who wish to have the flexibility to parent and work at the same time choose entrepreneurship to support that objective. In fact, 46% of small businesses have some degree of female ownership.

Small business is a major creator of wealth and a source of employment for new Canadians. It offers new arrivals to the country an avenue to contribute to the growth of their community and the well-being of their own families.

The driver of our economy is small business. Over a 10 year period, nearly 80% of our net job growth came from small business, with large firms shrinking the net number of jobs over that period. That is one of the reasons these tax cuts to large corporations are so egregious. Those funds are being directed at the very organizations that are net job losers at the expense of providing tax cuts to small companies that are the job creators.

Small businesses are flexible and nimble and they can recover more quickly from a difficult period, like the recession that we have just experienced. They hold on to their employees longer and they pick them up more quickly afterward. They can innovate more easily and, when given the right support, they can grow by leaps and bounds.

There are a number of things that small businesses need, not just a lower tax rate. They also need a government that makes it easier for them to do business, one that invests in research and development and makes it easier for innovative firms to commercialize their products. The Conservative government has fallen flat in all of these areas.

The government fell flat when it comes to taxes, something it really likes to thump their chests about, but it turns out that it really did not help small business at all.

One of the first things the Conservative government did when it came into office was to raise personal income taxes. Given that many small businesses are run either as sole proprietorships or partnerships where business income is taxed at the personal rate, the government actually raised taxes on small business owners.

Although much has been made of the corporate tax cuts included in the previous and current budget, these cuts only help the largest and most profitable corporations. As I said, these are the ones that are seeing net job losses.

The government has chosen big business over small business during a time of record deficits and when it was already slashing programs and eliminating thousands of public service jobs from people who spend money in the small business sector.

On the issue of affordability, the government thinks that money grows on trees, not produced by hard-working Canadians and small businesses. A government can only deliver low taxes if it spends wisely. Unfortunately, the Conservative government has proven to do just the opposite.

The Auditor General and now the RCMP have called into question $50 million in misappropriated border infrastructure funds that the member for Parry Sound—Muskoka used in his own riding.

We have seen a government pleading with the public service to find efficiencies, while simultaneously increasing spending of ministers and perks in their own ministerial offices and increasing government advertising by 215%.

All told, government spending rose by 40% during the Prime Minister's first four years. These decisions have meant that small businesses are left without real support and taxes have been kept high.

An area where the government could have helped small business was by supporting research and development, but it cut research budgets for the granting councils. The National Research Council, which supports small business in its R and D efforts through the industrial research assistance program, is being cut a huge 20%. Therefore, where is the vision? Where is the plan that fosters equal opportunity and prosperity for all Canadians? Where is the vision for green technology, innovation, sustainability leadership and the green jobs on which we know the future will be built.

The Conservative government appears to be only governing for the short term and is ignoring the kinds of strategies and investment in innovation that are needed for Canadians to maintain their standard of living.

I do not want to ignore the NDP record with regard to business, because that also has been a reason that there has been lack of support for small business. The government fails to understand the needs of modern business. I am sure the NDP and my hon. colleague from Thunder Bay—Superior North have the best of intentions in bringing this motion forward, but they represent a party that is fundamentally anti-business.

It is important for members of the House to understand that the NDP has, at its core and is guided by, an ethos that stands opposed to the very nature of the marketplace. I will read from the NDP constitutional preamble, the very principles the party maintained at its recent convention. It states, “the production of goods and services shall be directed to meeting the social and individual needs of people within a sustainable environment and economy”. That is good as far as it goes. It continues on to say, “and not to the making of a profit”.

I wonder if members of the NDP can explain how small businesses can contribute to job creation and economic growth if it believes that profit is a dirty word. Without profit, businesses cannot reinvest and grow, cannot hire new employees, cannot innovate and cannot contribute to the development of sustainable technology and business practices. They simply would not exist. To deny that the basic necessity of a business, which is to earn money and profits, is revealing a fundamental lack of understanding of business.

I hope my colleague from Kings—Hants will not complain when I quote him when he said, “The NDP doesn't know a stock from a sock”.

While I served as environment minister in British Columbia, I co-founded a company that incorporated sustainable principles into our business model, focusing on reforestation and ecological renewal. However, we could not have done so, we could not have grown and expanded this company without capital and that capital was the reinvestment of profit.

Thinking that profit is a bad thing discredits the New Democrats among small business owners and proves them not capable of providing the type of leadership that the small business community so desperately needs.

The Liberal Party supports efforts to lower the tax burden on small businesses, but such efforts must be part of a larger strategy that validates the importance of small business and their profitability and that supports research, provides tools and mechanisms for companies to grow their operations and focuses on key factors, not a scattershot approach.

The Conservative government's record on small business is abysmal and, unfortunately, the NDP does not think small business should be allowed to make a profit. The one option is too hot and one is too cold. It is clear why small business needs a Liberal option that is just right for the people who are at the heart of small business and a long-term vision for their success.

Opposition Motion—Small Businesses
Business of Supply
Government Orders

5:10 p.m.

NDP

Pat Martin Winnipeg Centre, MB

Madam Speaker, I only just tuned in the last few minutes, but I heard some discouraging remarks about the NDP's reputation when it comes to small business.

I come from the socialist paradise of Manitoba and I think my colleague might be interested to know that when we took power in 1999, the most recent government, the government of Gary Doer, one of the most successful provincial governments in the history of Canada, the small business tax imposed by the Conservatives was 11%. I think my colleague would be interested to know that it went down from 11% to 10% to 9% to 8% to 7% to 6% to 5% to 4% to 3%.

I think my colleague would be interested to know that the small business tax in Manitoba is now zero. It is a big fat goose egg. There is no small business tax in Manitoba.

My colleague is sadly mistaken about the treatment of small businesses. Her colleague from Winnipeg North will say that there is a payroll tax. The payroll tax is for businesses with a payroll of $1 million-plus, and it is 2%.

Maybe she should get her facts straight before she starts slagging the NDP's position toward small business. Small business has only one friend in this Parliament and it is the New Democratic Party.

Opposition Motion—Small Businesses
Business of Supply
Government Orders

5:10 p.m.

Liberal

Joyce Murray Vancouver Quadra, BC

Madam Speaker, I have to wonder whether the member was at the NDP convention last weekend, where the preamble about socialist principles and the aversion to profit was kept in its constitution. Perhaps the member missed that.

I want to celebrate the accomplishments of that member's provincial government. However, I would point out that in my province of British Columbia, British Columbia went from the strongest growing economy in Canada to the worst growing economy in Canada in the decade of the 1990s under the stewardship of a high tax NDP government.

Opposition Motion—Small Businesses
Business of Supply
Government Orders

5:10 p.m.

Conservative

Kevin Sorenson Crowfoot, AB

Madam Speaker, there were aspects of the member's speech with which I agreed. I agreed with pretty well everything she said when she talked about the pathetic policies of the New Democratic Party in regard to any type of business, whether it was small, medium or large.

I was a little disappointed with her attack on the government and our want to see our economy grow. Government has a role in reducing taxes and reducing a lot of other things, especially red tape.

I do not believe the member was a member when the Liberals were in government. While her party served as government of our country, we saw red tape and regulation grow like never before. The Liberal Party of Canada believed that everything had to be regulated.

The Canadian Federation of Independent Business and many other small business organizations applaud this government in its ability to recognize the need to reduce red tape, regulations and those things that handcuff small and medium-sized businesses.

The member from the NDP who brought this motion forward at one time said, “There are elements in our party that have not been adequately concerned about the health and growth of business”.

It is time for the member to stand and recognize that there are elements in that Liberal Party that would just love to see red tape continue to grow and handcuff small business.

Opposition Motion—Small Businesses
Business of Supply
Government Orders

5:15 p.m.

Liberal

Joyce Murray Vancouver Quadra, BC

Madam Speaker, I am very disappointed in that member supporting his government's tax regime, claiming that it is about making the economy grow when in fact it is things like the GST reduction and corporate tax cuts that economists themselves say are not elements for growing the economy. They are actually the wrong taxes for growing the economy. They may be politically popular, but they are not the right thing to do.

I would love to invite the member opposite to look at the red tape reduction initiative of the government that I was part of in British Columbia. In one year 33% of regulations were reduced. The member's government is talking about 20% by the time it has been in government for six years.

I want to hear about that red tape reduction program protecting the regulations that are important for health, safety and the environment.

Opposition Motion—Small Businesses
Business of Supply
Government Orders

5:15 p.m.

NDP

Alain Giguère Marc-Aurèle-Fortin, QC

Madam Speaker, I would like to take this opportunity to congratulate you on your appointment. I would also like to inform you that I will share my time with the hon. member for Parkdale—High Park.

I would like to thank all of my constituents in Marc-Aurèle-Fortin for giving me the privilege and honour of representing them here in the House. I would also like to thank all those who helped me throughout the election campaign: my many friends and particularly my family, including my sister Marianne and my niece Stéphanie.

I rise today in support of this resolution in favour of small businesses. I support it because, historically, the CCF and the NDP have always been in favour of small business. We must remember that, historically, the founding members of the CCF were farmers, people who ran their small agricultural businesses, people who worked in transport, in construction, who had small businesses. These people got together in 1933 for their first big battle: creating the Canadian Wheat Board. They succeeded in 1935. Throughout the economic recession, they understood that uniting their small businesses could help create large Canadian institutions. These small businesses continued to prosper and now, these same small businesses create the majority of jobs. They also represent 30% of our exports.

Small businesses in Canada are firmly committed to innovation. Quite often, these small businesses are the creation of young university grads who, upon getting their university degree, set up small laboratories, innovative companies. They create companies that they hope will become successful. They hope that they will grow and will create jobs.

Clearly, we must support small businesses. That is why the NDP resolutely decided to show its complete trust in them, as demonstrated in our platform. The NDP would like the government to give a $4,500 tax credit for each job created. A $4,500 tax credit could be a lifeline for a small business. Not only would this allow it to create jobs, but it could even help the company survive. Indeed, we must not kid ourselves; the first few months for any SME can be excruciating and difficult. However, SMEs create jobs. They create real wealth, not speculation. That is not something that can disappear in just a few days, at the speed of an email. That is what happened in the U.S., a country that is big on deregulation, big on perfect and free enterprise, a country that systematically favours large institutions. At this time, the U.S. government has had to go heavily into debt in order to save institutions that may not have deserved to be saved. A $4,500 tax credit for each job created in an SME could go a long way.

We will also support scientific research and experimental development. The government had the opportunity to increase funding for small businesses. It did not do so. Yet we all know that innovation in biotechnology, electronics and all the areas that represent Canada's economic future takes research and development funding. The government missed a good opportunity to support this segment of the economy.

They are also lowering taxes. At present, small businesses are taxed at 11%. That rate could have been lowered to 9%. Lowering taxes in a sector that creates jobs is important.

We have to support job creation and lower taxes for industries that agree to create jobs. Unfortunately, after 12 years of programs from Paul Martin and the current finance minister, we have not seen the major beneficiaries of the tax cuts pass on the slightest benefit to the Canadian public by creating massive numbers of jobs. Twelve years is a relatively long time over which to evaluate a program. This program of systematic corporate tax cuts has clearly not worked, while, despite all the challenges they face, small businesses are creating jobs.

We also generally see in SMEs all the problems that come from the absence of a pension plan. They are too small to qualify for the major private pension plans. The NDP is in favour of revitalizing the Canada pension plan by increasing the pension benefit from 25% to 50% in order to guarantee Canadian workers 50% of their salary as a pension regardless of where they work.

The Canada pension plan was tailor-made for SME employees who do not have access to major pension plans. The NDP has continued working for small business. We believe that SMEs are the future. Entrepreneurs are focusing more and more on the social economy, the environmental economy, the knowledge economy, and they are increasingly running their businesses as co-operatives. They are following in the footsteps of those who created the CCF and the NDP.

This motion simply acknowledges the fact that Canada's economy and job creation are actively supported by SMEs. Without this economic activity, the recession would have hit much harder. We would have suffered a much higher unemployment rate. As in the United States, we would have suffered from the social exclusion of the poorest people. SMEs, firmly focused on the social economy, work to care for and support the poorest in our country who have reached an age where they need active support to stay in their homes. Yes, this social economy will continue to grow. It would be nice to see the government actively supporting it.

The knowledge economy will continue to grow at the speed with which students graduate from university, trained and ready to apply their knowledge to wealth creation and not speculation. This SME economy is firmly focused on job co-operatives, social housing co-operatives, and fishery development co-operatives. Co-operatives can be created in any sector. This economy is based on the idea that wealth creation should belong to those who create wealth, not those who invent it through speculation.

We are strongly opposed to all of the economic activities proposed by the Government of Canada, which aim only to support big businesses and which do nothing for Canada.

Opposition Motion—Small Businesses
Business of Supply
Government Orders

5:25 p.m.

NDP

Christine Moore Abitibi—Témiscamingue, QC

Madam Speaker, I thank my colleague for his speech.

I would like him to explain in more detail how reducing the tax rate for small businesses makes it possible for them not only to create jobs but also to improve working conditions for their employees.

Opposition Motion—Small Businesses
Business of Supply
Government Orders

5:25 p.m.

NDP

Alain Giguère Marc-Aurèle-Fortin, QC

Madam Speaker, as a general rule, any business that is taxed will immediately reinvest its profits in the growth of the company.

SMEs do not accumulate capital. They do not resort to tax havens. They take their profit and immediately reinvest it in new equipment and manufacturing processes, in scientific research and innovative development.

They cannot waste their resources on tax havens or public private partnerships.

Opposition Motion—Small Businesses
Business of Supply
Government Orders

5:25 p.m.

Conservative

Brad Butt Mississauga—Streetsville, ON

Madam Speaker, I appreciate my friend's comments on the motion but I was a bit confused and not because the member was speaking very eloquently in French and my French is not that good. I was more confused that I believe I heard him say, in his speech, that he does support cutting taxes for small business but he somehow does not support tax cuts for other business. Then, I heard my good friend from Winnipeg Centre brag about the tax reductions in Manitoba by an NDP government.

I am really trying to understand what is the position of the New Democrats. Do you believe in cutting taxes for business to create job growth for all business or do you not?

Opposition Motion—Small Businesses
Business of Supply
Government Orders

5:30 p.m.

NDP

The Deputy Speaker Denise Savoie

I would just remind all members to direct their comments through the Chair.

The hon. member for Marc-Aurèle-Fortin.

Opposition Motion—Small Businesses
Business of Supply
Government Orders

5:30 p.m.

NDP

Alain Giguère Marc-Aurèle-Fortin, QC

Madam Speaker, the Conservative member has just put his finger on the problem. We must support measures that help Canada and avoid measures that harm Canada.

At present, tax reductions for big business, banks and oil companies have not yielded the expected results.

Where are the numerous jobs that these businesses have created? There are none. Where are the great social benefits they have created? There are none.

When taxes are cut for SMEs, they immediately reinvest in the economy. They do not wait years to go ahead with international purchases. The SMEs act immediately.

We will support measures that help Canada and stop cutting taxes for those that have benefited from these cuts and done nothing for Canada.

Opposition Motion—Small Businesses
Business of Supply
Government Orders

5:30 p.m.

Liberal

Kevin Lamoureux Winnipeg North, MB

Madam Speaker, the member makes reference to, and we are glad to see that the NDP has recognized the need for, small business tax breaks. We understand and we appreciate the vital role that small business across Canada plays.

Earlier today in question period, one of the member's colleagues made reference to the free trade argument. Small business is dependent on expanding markets in the world. Has the NDP position on the idea of freer trade in certain circumstances changed? Does the NDP see the value in terms of potential job creation for small business by looking into those types of agreements in the future?

Opposition Motion—Small Businesses
Business of Supply
Government Orders

5:30 p.m.

NDP

Alain Giguère Marc-Aurèle-Fortin, QC

Madam Speaker, earlier I pointed out that SMEs account for 30% of our exports. Quite often the exports are technologies that they have developed, an unparalleled know-how. In that regard, it does not really matter whether or not there is a good market or a free market. They can get into the market because of the excellence of their products. That is what distinguishes Canada's small businesses. They get good results. They are excellent.

Opposition Motion—Small Businesses
Business of Supply
Government Orders

5:30 p.m.

NDP

Peggy Nash Parkdale—High Park, ON

Madam Speaker, I would like to begin by thanking my colleague from Thunder Bay—Superior North for crafting this opposition day motion, as well as for his excellent work in supporting small business. This motion is very important and indicative of long-standing NDP policy in the area of support for small business.

I want to reiterate the motion, which states:

That, in the opinion of the House, the government should recognize the important role Canadian small businesses play in creating employment in their communities by lowering the small business income tax rate in order to encourage job creation.

Small business plays a huge and vital role in our communities. Small- and medium-size businesses employ about 56% of all Canadian working people. That is a huge number. About eight million Canadians work for small- and medium-size businesses and small business makes up almost 98% of all Canadian enterprises. It is a huge segment of our economy.

There are 2.3 million small businesses in Canada and about half of Canadian GDP is generated by small and medium business. We are talking about a huge and important sector of our economy.

I would also point out that about one-third of all self-employed persons in Canada are women and they have ownership stakes in about 45% of small and medium business. This number is growing.

I would like to talk for a minute about the small businesses in my riding of Parkdale—High Park. It is a fairly well established, older community in the west end of Toronto and is one of the most desirable communities in the city because of the presence of small businesses. It is a community with older, tree-lined streets where people do not have drive to big box stores but can walk to their neighbourhood grocers, the Home Hardware store on Roncesvalles, clothing stores, shoe shops, restaurants and all of the services that are provided by small businesses in the community. I believe that the quality of life is increased immeasurably in my community because of small businesses.

The people who own these businesses work incredibly hard. Many of them live in the neighbourhood. Some of them live above their stores, others live in the neighbourhood and they have a stake in the community. Yes, their business is there, but, as I say, many of them live there and their kids go to the school.

They are tremendously engaged in the community and they express that engagement not only by the services and goods they provide through their businesses but by sponsoring sports teams, raising funds for community initiatives like creating the Wabash Community Recreation Centre or the Parkdale Activity Recreation Centre.

They are very active in neighbourhood business improvement associations. These associations were actually pioneered in Bloor West Village thanks to Alex Ling, who was a visionary in this area. The BIAs have championed the beautification of the business areas and neighbourhoods but also how to attract investment in the community, how to draw people into the neighbourhood.

Therefore, small businesses do not just serve the people who live in the neighbourhood, but attract people from all over the community. They are huge sponsors of festivals, such as the Ukrainian and Polish festivals. They are incredibly important to the lifeblood of the community.

We have moved this motion because, unfortunately, both the Conservative government and the Liberals have been supporting tax cuts across the board without any job creation measures attached. The current tax cut that is going forward, which both the Conservatives and the Liberals voted for, has no job creation measure attached to it, whereas this motion speaks to cutting small business taxes.

We know that small businesses are not going to ship jobs out of the country, but that they employ people in our neighbourhoods. In fact, they provide good jobs, they train people, they innovate and they are creative businesses in our communities. Whether in boom periods or recessions, they try as much as possible to maintain the stability of their employment in their businesses. They will do their darndest not to lay people off, even when they are really struggling as businesses. We have certainly seen many small businesses struggling in our cities and neighbourhoods.

Reducing small business taxes from 11% to 9% is a way of providing an incentive for small businesses to take on more staff to grow their businesses. We also propose a tax credit to offset some of the costs of hiring new people, a credit of up to $4,500, including a job retention measure.

These tax cuts are concrete measures tied to job creation. We believe they would create over 200,000 new jobs. That is why we believe this proposal is so important and significant.

We are talking about sustainable job creation because we know that when small businesses expand and take on staff, they tend to retain their staff. We have seen the good quality jobs they create right in our own neighbourhoods. We have seen their resiliency in good times and bad, and we seen the community investment these small businesses provide right in our own communities, because they roll their money right back into the community. They expand their business locally and create jobs locally. The people they employ, for the most part, live right in our neighbourhood. When they get employed, they spend their money in the neighbourhood and pay taxes. This is good for everyone.

In summary, our motion speaks to the important role in the Canadian economy played by small businesses. We want to help small businesses play that important role. We want to see them grow and thrive, create jobs and invest in our communities. We believe a tax cut for small business would encourage them to hire more staff. Our tax credit would, in fact, tie strings to the hiring. That makes much more sense.

Unfortunately, the party opposite has tied a very short-term credit to EI increases, which are completely unnecessary. We are going to have a $17 billion EI surplus over the next five years, on top of the $57 billion that has already been rolled into paying down the deficit. I would like to discount that approach and say how strongly I support this motion, because it is the right measure for small business in Canada.

Opposition Motion—Small Businesses
Business of Supply
Government Orders

5:40 p.m.

Delta—Richmond East
B.C.

Conservative

Kerry-Lynne Findlay Parliamentary Secretary to the Minister of Justice

Mr. Speaker, I am fascinated by what I am hearing from the opposition members. During the campaign that we all just went through, I remember very distinctly both the NDP and Liberal commentary that our government's proposals for lower taxes did not equal job creation. In fact, many a time we were told that, and yet I am now hearing the opposite from the other side.

Given the convergent view of the opposition parties on big business and small business, do they not understand that many small businesses depend entirely on big business, because they are the suppliers and subcontractors who help large businesses operate and profit.