Debates of Feb. 9th, 2012

Mylène Freeman Argenteuil—Papineau—Mirabel, QC

Mr. Speaker, the Conservatives' no strings attached corporate income tax cuts should be cancelled immediately and the rate returned to 19.5%. Meanwhile, small businesses should have a tax rate of 9% instead of 11%.

The NDP prefers tax breaks in return for performance, not just throwing them at companies that are not even creating jobs. Small businesses create jobs. We should be rewarding the businesses that are creating jobs in Canada and not those that are pushing unions and workers into a corner, forcing them to take a cut in their salaries or move to the United States. That is not the kind of behaviour we should be rewarding.

I can assure the House that New Democrats would do things differently and in a way that would create jobs in this country.

Glenn Thibeault Sudbury, ON

Mr. Speaker, I would like to assure the member here that the member can ask me questions in the next round. I would also like to thank my colleague from Argenteuil—Papineau—Mirabel for sharing her time with me.

I am pleased to rise in the House today to speak to a very important motion put forward by the very well-respected member for London—Fanshawe.

Let me begin by stating that I could use this opportunity to exclusively reiterate how the failure of both this government and the previous Liberal government to modernize the Investment Canada Act has directly impacted my community of Sudbury through foreign takeovers of Canadian industrial icons, Inco and Falconbridge.

However, I think it is more appropriate to focus on the broader narrative of the repeated failure of both Conservative and Liberal governments to implement a sound industrial policy which would put the middle-class Canadian family ahead of corporate greed.

Whether we are talking about Inco, which is now Vale, or Falconbridge, which is now Xstrata in Sudbury, U.S. Steel in Hamilton, White Birch or Mabe in the province of Quebec, or Electro-Motive Diesel in London, it has become abundantly clear that the Investment Canada Act is broken and needs to be fixed immediately.

The Act has been broadly criticized by economists, industry observers and the provinces for its lack of transparency, consultation, effectiveness and enforcement.

In fact, the Premier of Ontario recently called on the Prime Minister to review Canada's outdated foreign investment legislation. He noted that the government has acknowledged the need for change, but has done nothing tangible to rectify this. This was made clear by witness testimony from Industry Canada officials at the standing committee on industry in October.

One specific aspect of the Investment Canada Act, which is inherently problematic, is the extremely rigid confidentiality provisions. These have made disclosure under the Act difficult. From my experience, dealing with the Inco and Falconbridge takeovers in Sudbury, it is clear that the transparency of these takeover agreements is paramount for enforcement of the Act. The terms of the takeover are still not publicly available, further allowing foreign companies to keep secret the terms of the sale of the agreement.

My colleague from Nickel Belt has introduced legislation to remedy this issue, so have no fear. I would encourage those on the other side of the House to examine these bills and get behind the proposals contained therein.

To bring this back to the broader narrative, this is about economic choices made by the Conservative government. For instance, on January 1, the latest round of new Conservative tax giveaways to profitable corporations came into effect. These Conservative tax cuts helped pad the margins of already profitable corporations that have failed to create jobs for Canadians.

A case in point is the recent lockout and resulting shutdown of Electro-Motive Diesel in London, whose owner, the American-controlled Caterpillar, proverbially took the money and ran. Unfortunately, this situation is not a catchy pop song from the Steve Miller Band. Instead, it represents a disastrous state of affairs for the families of employees of Electro-Motive and employees of small and medium-sized businesses in London who rely on good jobs like those at Electro-Motive to stimulate growth and make ends meet for families as well.

The most shocking aspect of Caterpillar's decision to shut down the plant is that the company posted a record profit of nearly $5 billion in 2011, accounting for an 83% increase over 2010 profits. According to Reuters, these earnings blew away Wall Street expectations.

Meanwhile, the companies outlook for 2012 is similarly strong. This begs the question: If profits remain at record levels, why is the company taking the Conservatives' gift in the form of blind corporate handouts and immediately turning around and killing Canadian jobs without a second thought? Sadly, the Electro-Motive example represents a broader trend of failed industrial policy exacerbated by Conservative inaction on this file.

In contrast to blind corporate handouts, which the Conservative government is advocating, New Democrats believe that instead of tax giveaways to big oil and profitable multinational corporations, we should implement targeted tax savings for companies that actually create Canadian jobs.

In the case of Caterpillar, if these tax breaks had been tied to job creation or part of a better Investment Canada Act review, we might not be in this position. This would have meant that it could not take the money and run, so to speak. Instead, in order to qualify for tax breaks, any financial incentive which companies like Caterpillar receive should be tied directly to job creation.

The Prime Minister consistently prides himself on being an excellent steward of the Canadian economy. However, the real track record in terms of job creation reveals a gaping rhetoric reality gap between the Prime Minister's tough talk and meagre action.

For instance, Canada has nearly lost 400,000 manufacturing jobs since the Prime Minister's government took office in 2006. We have lost over 40,000 manufacturing jobs in the last year alone. In fact, Canada is currently at a historic low in terms of manufacturing jobs, dating back to when these statistics were first gathered in 1976.

Meanwhile, our labour force and population have grown significantly over this period. Obviously the pace of economic growth in this sector is being outpaced by demographic realities, not to mention the direct loss of jobs which has been observed under the Prime Minister's watch.

As I explained earlier, it is these types of well paying, stable jobs in manufacturing and other primary sectors which create spinoff benefits in these industries within a community. Yet the Conservative approach seems unwilling to link support for job creation in primary industries with the spinoff effects that this has on tertiary sectors and ultimately the prosperity of entire communities.

Finally, I find it striking that a large proportion of the communities which have been affected by the failure of the Investment Canada Act have ultimately elected New Democrat MPs in response to the government's refusal to take a stand on approach to building a sound industrial policy which focuses on job creation in primary industries like mining and manufacturing, while also creating spinoff jobs in sectors which thrive as a result of well paying, stable industrial jobs.

From the Sudbury region to Hamilton and Niagara, from Alma to London, these regions now all have strong New Democrat representatives who have consistently stood up for a sound industrial policy in Canada. It leaves one questioning whether the Conservative government understands the backlash and outrage expressed by members of communities affected by the utter failure of the Investment Canada Act to protect Canadian jobs.

As my experience in Sudbury demonstrates, the failure to implement a sound industrial policy can have substantial long-term impacts on all aspects of a community from jobs and a family's ability to make ends meet, to workers' rights, and even to donations to charitable organizations, as the pot of money available to these organizations tends to dwindle when a community suffers an economic downturn.

In closing, I would implore my Conservative colleagues to re-examine their failed approach to industrial policy by strengthening the Investment Canada Act and tying corporate tax cuts to direct job creation for the sake of their communities' long-term economic and social well-being. If factories like Electro-Motive are allowed to be shuttered right across Canada as a result of inaction on this file, I firmly believe that Canadians will turn to the New Democrats to protect their jobs, standard of living and ultimately, the Canada we all deserve.

Finally, as a member of the Standing Committee on Industry, Science and Technology, I look forward to an opportunity to examine the Investment Canada Act at committee in the future so we can modernize the legislation and begin putting Canadian families ahead of CEO bonuses and failed industrial policy.

Denis Blanchette Louis-Hébert, QC

Mr. Speaker, I would like to thank the hon. member for his excellent speech. His comments are always relevant. In his speech, he said that the Investment Canada Act was outdated.

In Quebec City, we are losing the White Birch paper plant, a leader in the manufacturing industry. I would like the hon. member to tell us how we could improve this legislation in order to put an end to the job losses that are occurring right now in Canada's manufacturing industry.

Glenn Thibeault Sudbury, ON

Mr. Speaker, I can feel for what the member is saying.

In my community of Sudbury, when Inco was bought by Vale, within a few years we saw layoff after layoff. We saw a strike. Xstrata, within its first few years of taking over Falconbridge, laid off 686 workers.

We have started to see those jobs come back, but what we need to do, and it is something all parliamentarians in the last Parliament agreed to, is look at how we can make the Investment Canada Act stronger. We as New Democrats are proposing many things, such as the threshold for investments being subject to review, $100 million. We should get the communities and stakeholders that are being affected by this together at a table to talk with the companies so we know how our communities are going to be affected.

At the end of the day, we need to stop the blind corporate giveaways and the blind foreign investment that takes away Canadian jobs, and start supporting Canadian companies that want to create jobs here.

Pierre-Luc Dusseault Sherbrooke, QC

Mr. Speaker, I would like to ask the hon. member a fairly brief question.

Here are some figures related to the economy. The unemployment rate is 7.6%, which is the highest it has been since the last election. The unemployment rate among young people is 14.5%. The unemployment rate has therefore been on the rise for the past four months. A total of 1.4 million Canadians are currently out of work, and 60,000 full-time jobs have been eliminated since September 2011.

This clearly indicates that the Conservatives' plan is not working at all. The numbers I just mentioned speak for themselves and prove that the Conservatives' plan is not working.

Does the hon. member agree with me on this? Does he also think that the jobs lost at Electro-Motive are the result of a plan that is not working?

Glenn Thibeault Sudbury, ON

Mr. Speaker, the easy and quick answers are yes and yes, but there is a bigger picture that we are not looking at here.

Yes, there were 450-plus jobs lost at that plant, but we are forgetting about the spinoff jobs that come from that plant. I can speak directly about the spinoff jobs that occur in my community with Vale and Xstrata. We have 17,000 spinoff jobs in the mining supply and services sector. Some in my community say that number is even higher. If we start to see those numbers decrease as well, the unemployment figures are going to drastically rise.

We need to see the writing on the wall that the current plan is not a jobs plan. We need to ensure that we bring forward an agenda, budgets and ideas that will create jobs. Currently what we are seeing is the opposite.

Charmaine Borg Terrebonne—Blainville, QC

Mr. Speaker, I am fortunate today to rise in the House and talk about how the strategies of the Conservative Party are not working.

The Conservatives’ economic vision is centred around big business, and only big business. This vision falls short in the eyes of both those who voted for the Conservative Party and those who did not.

Canadians rely on their elected representatives to protect what they have, to promote a responsible environment in the long term, to stimulate the economy and to improve their future. The recent case of Caterpillar, in London, Ontario, is but one example of the many debacles that have affected Canadian workers. The workers are the ones who end up footing the bill when the law does not protect their jobs. The situation of Caterpillar in London is very simple: the US company came to take advantage of the Canadian government investments made possible by the Investment Canada Act. The company developed its technologies and patents, and when it had an opportunity to return to the United States, to a state where employees do not have to be unionized and are not as well paid, it closed its doors and thumbed its nose at its workers and the union.

But the worst part of all this is that the Canadian government did not deem it necessary to take a closer look at the investments made in this company. Today, I realize that Caterpillar used Canadian laws to finance its research before simply throwing families out into the streets, like garbage, families that count on this income to survive. Caterpillar in London, White Birch Paper in Quebec City, AstraZeneca and Mabe in Montreal all demonstrate this clearly: businesses can close their doors without respecting either the unions or workers.

I am disgusted to see that our workers and jobs are not better protected by a government that boasts about creating employment. Keeping jobs should be our greatest badge of pride. The residents in my riding are not fooled, and yet they have to bear the consequences of this government's choices. They suffered after the closing of GM and Electrolux, which are close to my riding. A lot of jobs were created when these businesses were established, but the companies were able to close their doors and leave their employees jobless. This kind of thing occurs despite the Conservatives' tax cuts, which do nothing to protect decent jobs that allow families to live in dignity.

What the Conservatives have to offer as proof of their accomplishments is a steady rise in the unemployment rate and a 6% tax cut for large corporations, even though it is estimated that the government loses $2 billion for every percentage point cut. I cannot think of a single country that can afford to throw away $12 billion a year, billions of dollars that would really improve the services provided to Canadians and that would create jobs in health care and other social services.

The Conservatives can bombard Canadians with a ton of numbers and try to confuse them, but the reality is very simple: increased unemployment, plants shutting down and families facing huge losses of income. Clearly, lowering taxes is not the way to create jobs.

Canadian taxpayers are fed up with paying for the subsidies given to businesses that can shut down whenever they like. Over the past year, hundreds of thousands of good, high-paying jobs—which Canadian families relied on to survive—have been lost. Those jobs allowed people to invest in the local economy and support their fellow citizens. Our entire social structure depends on this economic health, and entire communities suffer and die when the government acts irresponsibly. The NDP recognized the weakness of the Conservative economic vision a long time ago. We said no to the Conservatives' tax cuts and yes to an Investment Canada Act that would ensure that businesses that benefit from our market invest in long-term Canadian jobs.

In the last election, we made it clear that we recognize and support real job creators. Small and medium-sized businesses support the development of communities and stay in those communities. When large corporations like Electrolux and GM closed, small and medium-sized businesses were the ones that supported the regional economy in Terrebonne—Blainville. My constituents know this. Since they were elected, the Conservatives have made life difficult for small and medium-sized businesses. They benefit from a lower tax rate based on the size of the business, in order to compete with large corporations.

Small and medium-sized businesses used to enjoy a lower tax rate, but since coming to power, the Conservatives have chipped away at that advantage, hindering their ability to grow, to compete with larger companies and to create the local jobs that our economy needs.

I understand that foreign investment is important to our economy. However, as the member for Rimouski-Neigette—Témiscouata—Les Basques said, the act requires companies to show that their plan will have a net benefit for Canada and the local economy, but does not define exactly what that is.

When the legislation is not clear and precise, it opens the door to all manner of abuse, as we have seen over the past few years. The NDP has developed a pro-small business platform because it understands that small businesses are responsible for nearly half of all new jobs in Canada. That is why we have been fighting for them since the election.

Our platform includes a commitment to reduce the small and medium-sized business tax rate from 11% to 9%. We want to reinstate the job creation tax credit of up to $4,500 for each new job. This initiative would help create 200,000 jobs every year and would enable families to live with dignity. We want to strengthen the Investment Canada Act by reducing the threshold for investments subject to review to $100,000. We want public hearings that allow for community input into decisions on both the assessment of net benefit and conditions to apply to the investment.

The NDP is committed to supporting the real job creators: small and medium-sized businesses. We know that too many families are suffering because of the Conservatives' bad fiscal decisions. We want to support our local businesses so that they can create jobs for local workers and reflect our values.

In closing, I would like to share what Electro-Motive Diesel employee Ralf Zapke had to say about the social cost of gifts for big business. He said that many people with a family, children, a mortgage and a car loan are simply terrified at the prospect of losing everything, and that nobody knows what will happen.

The Conservative government claims to be managing our economy sensibly and reasonably, yet what it has clearly demonstrated is that its policies do not protect families and their future. It is therefore incapable of governing the country.

Charmaine Borg Terrebonne—Blainville, QC

Mr. Speaker, I want to thank the hon. member for the question. I want to point out that we cannot give tax cuts to corporations and then allow them to slam the door and put workers out onto the street. That is not allowed. We must review how we allow foreign corporations to operate in Canada. We must reassess the situation.

The Acting Speaker Bruce Stanton

It being 5:15 p.m., pursuant to order made earlier today, all questions necessary to dispose of the opposition motion are deemed put and the recorded division is deemed to have been demanded and deferred until Monday, February 13, 2012, at the end of government orders.

Gordon O'Connor Carleton—Mississippi Mills, ON

Mr. Speaker, I rise on a point of order. I ask that you see the clock at 5:30 p.m.

The Acting Speaker Bruce Stanton

Is that agreed?

The Acting Speaker Bruce Stanton

It being 5:30 p.m., the House will now proceed to the consideration of private members' business as listed on today's order paper.