House of Commons Hansard #23 of the 41st Parliament, 1st Session. (The original version is on Parliament's site.) The word of the day was jobs.

Topics

Opposition Motion--Canadian Economy
Business of Supply
Government Orders

3:25 p.m.

Conservative

Cathy McLeod Kamloops—Thompson—Cariboo, BC

Mr. Speaker, it has been a pleasure working with my hon. colleague in terms of both the pre-budget consultations and the finance committee.

What we perhaps need to recognize is that all the programs and opportunities that I have just talked about are in the budget. These are in phase two of the economic action plan. It is hardly an austerity program when we maintain increased health care spending to the provinces. It is hardly an austerity program when we maintain our transfers for social services and education.

Like everyone, we want the employment numbers to improve. The best way for employment numbers to improve is for businesses to have confidence and be competitive in a worldwide environment where they are going to want to spend their hard-earned money. The finance committee this morning heard about the importance of having a really competitive tax environment for businesses to invest in.

Opposition Motion--Canadian Economy
Business of Supply
Government Orders

3:30 p.m.

Liberal

Kevin Lamoureux Winnipeg North, MB

Mr. Speaker, when I reflect on the government's policy, in terms of priorities it was not that long ago when it said its first priority was to give huge tax breaks to corporations.

I listened to the member speak. We were talking about jobs and the need to create and generate jobs here in Canada. The government seems to be downplaying infrastructure jobs.

My question to the member is this: does she not recognize that, depending on what government does with its potential to generate revenue and how it spends its money, in certain areas more jobs can be created through creating infrastructure than by handing down a tax break or something of that nature? In fact, a good way to increase the number of jobs is through infrastructure and construction jobs. Sometimes investing in infrastructure programs will deliver more jobs than a corporate tax break. Would she not agree with that?

Opposition Motion--Canadian Economy
Business of Supply
Government Orders

3:30 p.m.

Conservative

Cathy McLeod Kamloops—Thompson—Cariboo, BC

Mr. Speaker, again I have to reflect back on what has happened over the last couple of years, when extraordinary support was given for infrastructure across Canada. In my riding, there were roads, sewers and water. There were unprecedented expenditures in that area.

I also look at what is happening going forward with the building Canada fund. That fund still exists and is something that municipalities look forward to. Let us not forget about the gas tax. For the first time, municipalities are going to have a source of revenue for their infrastructure that they can count on.

We absolutely believe that infrastructure is important; we also believe it is critical to have a competitive tax environment to create jobs in this country.

Opposition Motion--Canadian Economy
Business of Supply
Government Orders

3:30 p.m.

Conservative

John Weston West Vancouver—Sunshine Coast—Sea to Sky Country, BC

Mr. Speaker, I have a question related to the one just asked by the Liberal member.

Bertrand Russell said that not only does the heart affect language, but language affects the heart.

Time and again we hear our colleagues across the floor talking about these tax breaks as if people are giving money to corporations.

I would ask my colleague to remind us that these companies, which create jobs, are still paying taxes, and the more revenues they make, the more taxes they pay so that government services can be provided.

I know it is a very simple thing, but I think that thought gets lost in their rhetoric. Perhaps the member could elaborate on that.

Opposition Motion--Canadian Economy
Business of Supply
Government Orders

3:30 p.m.

Conservative

Cathy McLeod Kamloops—Thompson—Cariboo, BC

Mr. Speaker, that is a very important question. It not only is about the industries putting back, but people also often do not follow what happens with the profits from our corporations. Those profits from our corporations are part of what funds our Canada pension plan and part of what funds the investments of our grandmothers' RRSPs. They count on companies that are successful in Canada.

If companies are profitable and can make more money, they pay more taxes. Ultimately, what we have to ask is what happens to those profits, and they help everyday Canadians in many ways.

Opposition Motion--Canadian Economy
Business of Supply
Government Orders

3:30 p.m.

NDP

Mike Sullivan York South—Weston, ON

Mr. Speaker, in her statement the member suggested that the Conservative government is investing heavily in research and development, and we applaud that investment. I do not remember voting against it, though I know the government bundled it all together into a big thing. When it bundles things together and says we voted against specifics, it is difficult.

My concern, though, is that the member referred to the forest industry being given $60 million to innovate and tap into new opportunities abroad. We know there is a lot of research and development done in Canada, and there are examples in Canada of research and development being done in the country and the manufacturing being done outside the country. The best and the most heinous example of that is Nortel, and we know where that went.

What do you say to that kind of approach? Is it right to be spending the money on R and D here and then shipping the jobs elsewhere?

Opposition Motion--Canadian Economy
Business of Supply
Government Orders

3:35 p.m.

Conservative

The Acting Speaker Barry Devolin

I would like to remind all hon. members that comments and questions are directed to the Chair and not to their colleagues. I know this is an unusual structure for some.

The hon. parliamentary secretary.

Opposition Motion--Canadian Economy
Business of Supply
Government Orders

3:35 p.m.

Conservative

Cathy McLeod Kamloops—Thompson—Cariboo, BC

Mr. Speaker, I think there are two important things to look at here. One is that the Forest Products Association of Canada put the highest priority on that particular fund in terms of encouraging innovation.

When I talk about abroad, I am talking about the development of markets. One of the companies in my riding of Kamloops—Thompson—Cariboo, for the first time ever, was looking to ship its products over to China. We are talking about expanding markets, which is absolutely critical for our forestry industry and its ability to innovate at home.

Opposition Motion--Canadian Economy
Business of Supply
Government Orders

3:35 p.m.

NDP

Robert Aubin Trois-Rivières, QC

Mr. Speaker, I thank the member for her presentation. I would like to reassure her and say that the fact that we do not vote with her every time does not mean that we do not understand the government's proposals; it means that we believe that we can do better by doing other things. In this regard, I read a study about inequality released this summer by the IMF. It indicated that the more equitable the distribution of income, the longer and the more stable the periods of economic growth.

In light of this study, I would like to know how the member justifies the government's policy, which consists of giving gifts to big business, gifts that end up in investors' pockets and not in our country's economy.

Opposition Motion--Canadian Economy
Business of Supply
Government Orders

3:35 p.m.

Conservative

Cathy McLeod Kamloops—Thompson—Cariboo, BC

Mr. Speaker, again I thank the member for asking what I think is a very important question.

The best thing we can do for Canadians to change the distribution of wealth is to create jobs. That is what phase two of our economic action plan would do. We know that providing people with opportunities to have the jobs they want and need is the best thing we can do for Canadians and for the economy.

Opposition Motion--Canadian Economy
Business of Supply
Government Orders

3:35 p.m.

NDP

Guy Caron Rimouski-Neigette—Témiscouata—Les Basques, QC

Mr. Speaker, first, I would like to mention that I will share my time with my colleague from York South—Weston. You will no doubt be happy to know that I will not be reading from a newspaper today, so I should not have any problems with this speech.

I know that this debate has to do with the economy and job creation. I am going to assume that our colleagues on the government side are interested in creating jobs. We are as well. However, what we hear a lot from the government is rhetoric, slogans or mantras claiming that there is a direct correlation between tax cuts—particularly corporate tax cuts—and job creation.

Let us be clear. There are a number of ways to create jobs. There are a number of ways for the government to stimulate the economy and create jobs. Tax cuts may be one way, but there are also other ways, such as investing in infrastructure, redistributing wealth or making direct investments to benefit low-income households or the unemployed. All of these measures will have very different effects on economic recovery and economic stimulus. These are effects that can be assessed, and this has been done by the Department of Finance, so by a government department.

A few of these measures were evaluated based on their multiplying effect on the economy. For example, the Department of Finance determined that for each dollar of corporate tax cuts, approximately 30 extra cents would be added to the GDP. That is the least effective measure of the six evaluated by Revenue Canada. One of the most effective measures involves direct help for the poorest households or the unemployed; for each dollar invested this way, $1.70 is added to the GDP. In terms of infrastructure investments, $1.60 is added to the GDP for each dollar invested.

And for measures related to housing investments, $1.50 in economic growth is generated for each dollar invested. These measures have very different effects. Some are more successful and promising than others. Corporate tax cuts are the least promising and successful.

This is easy to understand. Direct measures to help low-income families and the unemployed generate so much economic growth because the money is immediately invested in the economy. Households need this money to invest directly because they have no money to save. It is invested directly into the economy. Investing in infrastructure or housing is just as easy to understand. It creates direct jobs and allows private businesses to benefit from infrastructure to make the economy work.

These three measures have direct, positive impacts on the economy. When it comes to reducing income tax, the impact is extremely weak. Can corporate tax cuts help the economy? In certain cases, yes. Take, for example, a private business that does not have the cash needed to make investments. It wants to invest in the economy but does not have the money to do so. At that point, income tax and corporate tax cuts will generate the money it needs to be able to invest.

However, that is not the current reality. The liquid assets the private sector currently has available, in dividends, investments or funds set aside, have increased, going from $157 billion in 2001 to $477 billion today. Let me be clear: Canadian companies are currently sitting on a mountain of $477 billion. That is money they could be investing. It is an increase of $320 billion in 10 years. Of that $320 billion, I would like to specify that roughly $120 billion comes, once again, from the Canadian public purse through the corporate tax cuts enacted by the previous Liberal and Conservative governments.

What are the corporations doing with this $477 billion? They are not investing it right now. Why not? There are a number of reasons that we will not necessarily get into at this time, but the economic context is such that they have decided not to invest.

What impact will corporate tax cuts have on the Canadian private sector? They will not lead to more investment. If the profitable corporations are currently not investing, if they find the current context not suitable for investing the $477 billion they have today, not to mention the additional revenue they will earn, then they will see no additional reasons to invest.

That is why corporate tax cuts are not the best approach in the current Canadian economic context. However, it is the only significant way the government has found, with what it calls the low tax agenda, to stimulate the Canadian economy. The Department of Finance has clearly stated that corporate tax cuts have no impact on job creation. The proof is in budget 2009, budget 2010, but not in budget 2011. We can presume that the government was too embarrassed to add those cuts in budget 2011. Budgets 2009 and 2010 clearly show that corporate tax cuts have no impact on job creation. I repeat: they have no impact on job creation. And the government has no proof that a single job has been created as a result of its corporate tax cut initiative.

What impact will this have on the Canadian treasury? We are talking about a loss of $4 billion to $6 billion this year. That is a loss of approximately $10 billion to the Canadian treasury over two years. That $10 billion was not invested; rather, it has helped to build the mountain of cash on which private companies are now sitting. In the past 10 years, we are talking about a net loss of $120 billion to the Canadian treasury. This money could have been invested in infrastructure rather than transferred to companies where it is not doing any good.

We are currently talking about an infrastructure deficit of approximately $100 billion. The hon. members for Quebec know that there are striking examples in Montreal. We need to invest to replace the Champlain Bridge. This summer, we saw the news about the Ville-Marie tunnel; this is symptomatic of the state of our infrastructure. This type of problem exists in the larger centres and in my riding of Rimouski—Neigette—Témiscouata—Les Basque, where I spent the summer meeting with municipal councils. I have 39 municipalities in my riding and most of them need infrastructure, whether it be recreation centres, new municipal offices, road infrastructure or water systems. There are pressing needs. We are talking about $100 billion for Canada.

According to Revenue Canada's figures, the money that is currently being given to companies so that they can add it to their mountain of cash—the money that is not being used for anything—could be invested in a more beneficial manner.

Let us be clear. If companies want to invest, they can do so. They are currently in a position to invest but they choose not to do so. They are not going to choose to invest more and create jobs if they are given tax breaks such as the ones the federal government gave them in previous plans.

According to the Department of Finance's figures, the NDP's program is much more effective in terms of stimulating the economy and creating jobs. We are talking about investing in infrastructure and providing direct support to low-income households and unemployed workers. These are measures that will help to increase employment. The direction that the Conservatives are taking and their failure to act are putting us in an increasingly perilous situation, as demonstrated by the warnings from financial firms, banks and the International Monetary Fund, among other things.

By adopting the NDP's plan, we would be going in the right direction; we would be creating employment and stimulating the economy. I would like to invite the government to go in this direction, specifically by voting in favour of the motion put forward by my colleague, the finance critic.

Opposition Motion--Canadian Economy
Business of Supply
Government Orders

3:45 p.m.

Saint Boniface
Manitoba

Conservative

Shelly Glover Parliamentary Secretary to the Minister of Finance

Mr. Speaker, I would like to ask a very clear question, and I hope our colleague can give us a clear answer.

The NDP and our government clearly disagree when it comes to taxation. The NDP wants to raise taxes on Canadians, and we believe in lower taxes. This was demonstrated when our Conservative government reduced the GST twice, from 7% to 6%, and then again to 5%, thereby easing the tax burden on Canadian households.

The NDP voted against lowering the GST both times. It is even proud of its position. This is what the current NDP finance critic had to say:

“Cuts to the GST take us in the wrong direction. I am very proud that our caucus stood opposed to that”.

Is the NDP still proud of its vote against cuts to the GST? Does the NDP still believe that lowering the GST was a bad idea?

Opposition Motion--Canadian Economy
Business of Supply
Government Orders

3:45 p.m.

NDP

Guy Caron Rimouski-Neigette—Témiscouata—Les Basques, QC

Mr. Speaker, I am very pleased to answer this question because what she said is true. It is not just the NDP that has said so. Most serious Canadian economists have shown that if stimulus and economic recovery were the goal, lowering the GST was probably one of the least effective ways of achieving it.

The Conservatives should have lowered income taxes, but we did not have that debate. Cutting taxes would have been a much more effective recovery measure. Decreasing the GST from 7% to 5% reduced federal tax revenues. This contributed in great part to the fact that, between 2006 and 2011, we slipped into the red: the federal government went from a $13 billion surplus to a deficit even before the recession.

Cutting the GST was probably the worst measure that this government could have adopted. It was a purely political move that did nothing to stimulate the economy or promote recovery.

Opposition Motion--Canadian Economy
Business of Supply
Government Orders

3:50 p.m.

Liberal

John McCallum Markham—Unionville, ON

Mr. Speaker, I would like to congratulate my colleague on his speech. I have a question to ask him about the government.

As we know, the budget was tabled eight months ago, in February. The Conservatives seem to think that nothing has changed. In fact, last February, the world was in fairly good economic shape. Now, the opposite is true. The global economy has been dealt a serious blow.

How can the Conservatives believe that a policy that was appropriate 10 months ago, is still appropriate today, when the circumstances have changed dramatically?

Opposition Motion--Canadian Economy
Business of Supply
Government Orders

3:50 p.m.

NDP

Guy Caron Rimouski-Neigette—Témiscouata—Les Basques, QC

Mr. Speaker, I thank my colleague for his very relevant question.

I feel as though we are in Groundhog Day today. This situation reminds us of what we went through before 2008, when the federal government was hiding and denying that we were about to enter an economic recession. Today, the same government is still blind to the fact that we are about to enter a recession. It is not the NDP saying this. The majority of financial and economic institutions are saying that we are in danger of soon heading into a recession and that immediate, concrete measures to stimulate the economy are necessary.

The Minister of Finance seems to have his head in the sand and, as he did during the previous recession, he is denying that there are problems that require solutions other than slogans or mantras. Some facts are even substantiated by his own department, so it appears that he does not read the documents.