Mr. Chair, I appreciate the opportunity to be here this evening with the minister. I would like the opportunity to discuss our government's commitment to opening new markets for Canadian exports.
Over the next several minutes, I am going to provide an overview of our government's actions that have opened new markets for Canadian businesses, allowing them to thrive and compete in the global economy, much like the Montreal Canadiens did tonight as they opened a new market called the “conference championship”, so it is good to see that.
Through Canada's economic action plan, our government has delivered remarkable economic results for Canadians following the deepest global economic recession since the 1930s. We have provided a balance between stimulating our economy for the short term, balancing the budget in the medium term, and building our capacity in the long term.
Contrary to what the opposition leaders may believe, our country remains in a very enviable position. Since the depth of the recession, over one million net new jobs have been created, most of them in high-wage industries. There are now over 600,000 more jobs than at the pre-recession peak, which is among the strongest job-growth records among G7 countries over the course of the recovery. Almost 90% of all jobs created since July 2009 have been full-time positions, with close to 85% of those coming from the private sector. It is clear that Canada's economic action plan has established a solid foundation that has allowed Canadian businesses to create jobs and drive economic growth.
That said, our government is under no illusions that our work here is finished. We have some major challenges ahead. The global economy remains fragile, with growth in advanced economies slower than expected. Canada is at risk from the financial instability beyond our shores. Indeed, the head of the IMF recently noted that the great recession is not yet completely over for many countries, noting specifically:
...that does not mean that the crisis is over and our mission accomplished.
She argued that the crisis will not be over until the flow of credit from banks in southern Europe is repaired, adding:
In addition, the permanently low inflation brings additional risks.
Given this environment, our government understands that Canadians' standard of living and future prosperity depend on growing trade and investment. That is why Canada's economic action plan actively pursues new trade and investment opportunities, particularly with large, dynamic, and fast-growing economies. I was particularly encouraged to hear our Minister of International Trade speak today in question period about his upcoming trade missions to China and to Africa, as the hard-working minister continues to develop our trade markets around the world.
Our government has pursued the most ambitious trade agenda in Canadian history. Since 2006, our government has increased the number of free trade arrangements Canada has from five countries to an astounding 43 countries.
Looking forward, the Canada–European Union comprehensive economic and trade agreement would eliminate an additional $750 million in annual tariffs on imports from the EU. The Canada–European Union comprehensive economic and trade agreement is by far Canada's most ambitious trade initiative, deeper in ambition and broader in scope than the historic North American free trade agreement, which we all refer to as NAFTA. In fact, the comprehensive economic and trade agreement would add more than 80,000 new jobs to the Canadian economy.
John Manley, president and CEO of the Canadian Council of Chief Executives, had this to say:
A strong and ambitious trade agenda continues to be at the core of this government's strategy for jobs and economic growth.... On both sides of the Atlantic, the CETA will create jobs, spur investment and promote economic growth.
Indeed, this historic agreement will produce substantial gains for many of Canada's key sectors, generating significant benefits for businesses, workers, and workers' families. Almost 94% of E.U. agricultural tariff lines will be duty free when CETA comes into effect.
I would be remiss if I did not talk a bit about the impact this would have in New Brunswick as well. When we look at some of our major sectors in New Brunswick, we see that just in the service sector, approximately 75% of the provincial GDP in New Brunswick comes from the service sector, and it employs over 277,000 people.
Access to the European service economy, which is valued at $12.1 trillion, opens up a significant market to auditing, architecture, engineering, finance, investments, software development, health and life sciences, and aerospace development and defence.
I should also indicate that between the exports of fish and seafood products, as well as value-added forestry, and New Brunswick's world-class agriculture and agri-food products, we are talking somewhere in the order of about 30,000 direct jobs just in those three sectors in the New Brunswick economy. I have probably one of the largest per capita potato-producing regions in the country, with two large McCain Foods plants. The tariffs on frozen potato products going to the EU is currently 17.6%. This trade agreement is significant for New Brunswick. It is significant for those major industries. When we look at the value-added wood products again, plywood, veneer products, there is a 10% duty. This means significant benefit to New Brunswick, not just in sectors but clear across the country.
Our government has successfully negotiated an outcome that allows Canadian exporters to benefit from tariff-free access, as I have indicated, making Canadian products cheaper and more competitive, and providing our exporters a significant advantage over their competitors. In this deal we are ahead of the U.S. in getting entry into that market.
In addition to opening new markets in Europe for Canadian exporters, we are also concentrating our sights on the lucrative and fast-growing Asian market. For example, we recently reached a landmark agreement with South Korea. This is Canada's first trade agreement in this Asia-Pacific region and will provide new access for Canadian businesses and workers to the world's fifteenth largest economy and the fourth largest in Asia. South Korea is not only a major economic player in its own right and a key market for Canada, it also serves as a gateway for Canadian businesses and workers into the dynamic Asia-Pacific region as a whole. The agreement will eliminate an additional $176 million in annual tariffs on imports from Korea.
Canada is also actively engaged in the trans-Pacific partnership negotiations that will open new markets and deepen our ties with several Asian economies, including Japan. Canada was built on trade and now more than ever before we are looking to diversify and deepen our trade relationships. Unlike the opposition, our government understands that pursuit of free trade is key to our growth agenda. Too often, as we often hear in this House, growth policy is characterized by only fiscal stimulus. Growth policy is dictated by trade and a low-tax environment for our businesses.
In our view, a diverse and balanced growth agenda includes structural reforms, including trade liberalization, that allow for Canadian businesses and their workers to compete more effectively in global markets. With one of the most successful economies in the world today, Canada offers many advantages as an investment destination and partner for global business. Canada's competitiveness, excellence, depth of talent, innovation, and creativity offer a great environment to potential investors from around the globe.
Our government remains firmly committed to supporting Canadian jobs and fostering long-term prosperity for Canadians and their families. The low-tax approach I just mentioned in Canada's economic action plan continues to be a beacon to other nations around the world in a time of global economic uncertainty.
In 2007, prior to the global crisis, Canada passed a bold tax reduction plan designed to brand Canada as a low-tax destination for business investment and we have since been recognized the world over for just that.
The KPMG publication “Competitive Alternatives 2012” rigorously analyzed the impact of federal, state, provincial, and municipal taxes on business operations. KPMG concluded that Canada's total business tax costs are more than 40% lower than those in the United States, and confirmed that Canada has the lowest business tax costs in the G7.
Ernst & Young has noted that Canada has become one of the top five destinations in the world to start a business, saying:
Canada has emerged as a real leader in fostering an entrepreneurial culture.
[We offer] a supportive tax and regulatory environment for entrepreneurs.
Canada's government has been highly supportive of entrepreneurs, providing regulatory and tax regimes that have enabled start-ups and growing companies to flourish.
We have also been recognized by Bloomberg as the second best country in the world to do business.
Along with our support for free and open trade, the government continues to support the low tax environment that is required to create jobs and economic growth in any condition. That being said, we support low taxes; we do not support higher taxes in the form of any kind of carbon tax.
Our Conservative government understands that Canada's competitive tax system plays a crucial role in supporting economic growth. These tax reductions leave more money for the private sector to reinvest in machinery, equipment, information technology and other physical capital that will further boost the recent productivity gains we have seen in businesses across Canada, including the Forest Products Association of Canada, which has experienced a 2.5% productivity growth.
That said, could the Minister of Finance please tell us how Canadians will benefit from various trade agreements that are part of the government's economic action plan?
