Mr. Speaker, today's Liberal motion from the member for Markham—Unionville evidently is supposed to talk about the importance of a competitive and productive economy. However, before I continue I will briefly comment on the state of our economy.
Before I do that, I should acknowledge that I will be splitting my time with the member for Crowfoot, and I thank my colleague for that.
While there are always opportunities to do more, our economy is strong and we are focused. To illustrate this point, let me reference a few facts and figures.
We are experiencing the second longest period of economic growth in the history of Canada. Core inflation has remained within our set range of 1% to 3%. Our unemployment rate is the lowest in more than 30 years and there are more Canadians participating in the workforce than ever before in the history of Canada. We are reducing debt at a record rate. We are on the best financial footing of any country in the G-7 and we are the only country of the G-7 not having a yearly increase in the national debt.
As the latest CIBC World Markets Report stated that Canada had a healthy economic picture, especially when compared to our neighbours. It said:
For the first time in a generation, Canada is enjoying a major reversal of fortune versus the U.S., one characterized by superior economic growth, stronger job creation, outperforming asset markets and unmatched fiscal latitude.
Nevertheless, we must remain prepared for the challenges that confronts us. These challenges include: the significant rise in the Canadian dollar and its impact on the manufacturing sector; increased competition from emerging economic giants like China and India; and a shortage of skilled workers and an aging population.
We have a long term economic plan for Canada. It is a plan that will lead to a more rewarding future for Canadians and their families, including those families in my riding of St. Catharines. It is a plan to give Canada and Canadians the key advantages to compete effectively and attract new growth and further investment.
That plan is entitled “Advantage Canada”. Advantage Canada focuses on creating five key advantages: first, a tax advantage, reducing taxes for all Canadians and establishing the lowest tax rate on new business investment in the G-7; second, a fiscal advantage, eliminating Canada's total government net debt in less than a generation; third, an infrastructure advantage, building modern world-class infrastructure that promotes economic growth, a clean environment and international competitiveness; fourth, a knowledge advantage, creating the best educated, most skilled and most flexible workforce in the world; and fifth, an entrepreneurial advantage, reducing unnecessary regulation and red tape and increasing competition in the Canadian marketplace.
This plan has been praised repeatedly. For instance, the Canadian Chamber of Commerce said the plan was, “a great road map. It's got all the elements of things we need to do.” and that it recognized the importance of productivity to the long term health of our economy, business growth and Canadians' standard of living.
I can go further. The Canadian Federation of Independent Business also commended the plan noting that its “ focus is certainly the key issues that our members say should be focused on, whether it's debt, taxes, a skilled workforce or the whole red-tape and paper burden”.
How are we achieving the first of these advantages, the tax advantage? The government is building a business tax environment that is internationally competitive and neutral with respect to business and investment decisions. This is crucial for the right conditions for business to grow and to prosper.
Our government committed in our economic plan to make Canada's overall tax rate on new business investment the lowest, yes, the lowest in the G-7.
Since 2006, the government has taken a number of actions to enhance business tax competitiveness. We eliminated one of the most inefficient taxes, the federal capital tax, in January 2006. We eliminated the corporate surtax for all corporations, large and small, in 2008, thereby reducing their tax rates by 1.12%. We will reduce the corporate statutory income tax rate to 18.5%, by 2011, from 21% in 2007.
When a company builds a new building or an addition, it can write off the cost of that building within the useful life of that facility. We have aligned capital cost allowance rates with useful life. When companies invest in equipment within the building, they now can write down that investment within two years, instead of eight, ten or fifteen years.
It is not only the federal government that can provide tax relief to Canadian businesses. Provinces also have an important role in improving Canada's business tax competitiveness. To encourage further provincial action, budget 2007 put in place a financial incentive to work toward the elimination of provincial capital tax.
Canadians are already reaping the rewards of the first of these measures. Since the announcement of the measure to encourage provinces to eliminate their capital taxes as soon as possible, Quebec and Ontario have both acted to qualify for that incentive, and Manitoba has also announced its intention to do so.
Canada now has a solid statutory corporate rate advantage over the United States, and this advantage will just continue to grow through 2011. We are well on track to having the lowest overall tax rate on new business investment in the G-7.
The motion also highlights the importance of research and development. The government recognizes that private sector research and development is crucial for the long term growth and prosperity of our economy. The scientific research and experimental development tax incentive is a program that is one of the most advantageous in the industrial world. In fact, this incentive provided over $3 billion in tax assistance to Canadian businesses in 2006.
The scientific research and development tax incentive program plays, and will continue to play, a leading role in fostering a competitive and dynamic business environment in our country.
Other countries are not standing still and neither will we. We want to maximize the efficiency of our research and development incentives for Canadian innovators.
On October 5, the government launched public consultation on the scientific research and experimental development tax incentive program. These consultations, which are taking place as we speak and will continue through the month of November, up until November 30, will advance the government's long term economic plan to establish an entrepreneurial advantage. We want to create a business environment that unleashes private investment and a knowledge advantage by creating the best educated, most skilled and most flexible workforce in the world.
The consultations also provide the foundation for the government to fulfill its commitment in budget 2007, its science and technology strategy, mobilizing science and technology to Canada's advantage to identify opportunities for improving the scientific research and development tax incentive program to further encourage research and development within the business sector here in our country.
With Advantage Canada, our government has laid out a sensible economic plan to secure better paying jobs, solid growth and a bright future for Canadians. We have already taken action to implement this plan, but we will do more. As part of ensuring economic security for Canadians, our government will bring forward a long term plan of broad based tax relief for individuals, for businesses and for families. We will continue to make Canada more productive and more competitive.
To that end, tomorrow in the riding of St. Catharines a manufacturing company will be making a significant announcement as to its ability to do business in the Niagara region. One of the reasons is based on the fact that it will be able to take advantage and implement part of the manufacturing and business tax incentives included in the 2007 budget. Inside work, the equipment it needs to purchase to have that business function, will be written down over a period of two years, instead of ten or fifteen years. This speaks loudly, not only in St. Catharines and in Niagara but across our country, that our plan is working.
