This bill is from the 39th Parliament, 1st session, which ended in October 2007.
Jim Flaherty Conservative
This bill has received Royal Assent and is now law.
This is from the published bill.
Part 1 implements the following income tax measures proposed or referenced in Budget 2006:
– the new Canada Employment Credit;
– the new Textbook Tax Credit;
– the new tax credit for public transit passes;
– the new deduction for tradespeople’s tool expenses;
– a complete exemption for scholarship income received in connection with enrolment at an institution which qualifies the student for the education tax credit;
– the new Children’s Fitness Tax Credit;
– a doubling, to $2,000 from $1,000, of the amount on which the pension income credit is calculated;
– an extension of the $500,000 lifetime capital gains exemption, and various intergenerational rollovers, to fishers;
– the new Apprenticeship Job Creation Tax Credit;
– a reduction of the current 12 per cent small business tax rate to 11.5 per cent for 2008 and to 11 per cent thereafter;
– an increase, to $400,000 from $300,000, of the amount that a small business can earn at the small business tax rate, effective January 1, 2007; and
– a reduction of the minimum tax on financial institutions.
Part 2 implements the proposal in Budget 2006 to lower the income tax rate on large corporation dividends received by Canadians.
Part 3 implements the proposal in Budget 2006 to reduce excise duties for Canadian vintners and brewers.
All sorts of information on this bill is available at LEGISinfo, an excellent resource from Parliament. You can also read the full text of the bill.
Bill numbers are reused for different bills each new session. Perhaps you were looking for one of these other C-28s:
Budget Implementation Act, 2006, No. 2Government Orders
Dennis Bevington NDP Western Arctic, NT
Mr. Speaker, it is my pleasure to speak in this budget debate. I noted with interest some of the comments the Parliamentary Secretary to the Minister of Finance made at the beginning of her speech. She set the tone that the government wanted to follow. With this bill, she felt it was opening up new opportunities for Canadians to be better served in the tax system and she spoke to a number of specific instances of that.
She also spoke of the importance of working Canadians as part of the whole tax structure, and in a way we all are. Working Canadians are the wealth creators. I come from a region of the country which is doing very well in creating wealth for Canadians, with the diamonds, oil and gas in the Northwest Territories. We are starting to push a lot of wealth into the rest of the country.
We can look the oil and gas industry in northern B.C. and say the same thing. People working in that part of the country are creating a lot of wealth for the country. We could say the same thing about northern Alberta. We can go to northern Saskatchewan where the uranium mines are now pumping out enormous profits, another indicator of wealth creation.
The development of hydroelectric power in Manitoba will create more wealth. The northern Ontario diamond mines, the potential great hydroelectric developments in Quebec, the Labrador nickel, and the list goes on, create more wealth. Throughout northern Canada, working people create wealth for the rest of the country. Wealth is a good thing; it makes our world work.
Within the concept of that, we need workers in the north. We need people to live, work raise their families and have a normal life there, just like every other Canadian. That is very important. It creates wealth and helps the whole country out.
In the mid-eighties we had some pretty far-sighted Conservatives in the Mulroney government who realized it was important that northerners be well protected in terms of their ability to live and work. To their great credit, they created what was called the northern residents' tax deduction. That spoke to fairness.
However, when we look at 2006, and in preparation for next year's budget, we need to talk about what the north needs. We need measures to deal with the high cost of living. The tax deduction created in 1986 and remains the same amount in 2006 does not accomplish that purpose. It does not deliver that for northerners any more.
According to information provided by the NWT Bureau of Statistics, a food item which costs $1 in Yellowknife, on average costs $1.35 in Fort Liard, $1.70 in Wekweti, $1.91 in Fort Good Hope and $2.22 in Pawitik. These increased costs do not reflect the fact that the costs of items in Yellowknife are already significantly higher than southern Canadian cities like Edmonton.
On average, households of northerners spend $15,000 more per year on living essentials than other Canadians. Some will argue that higher northern wages make up for these increased costs. If we were talking about a time many years ago, we might say that was the case. However, when we look at Statistics Canada and we look at the wages across the country, we see it is not the case.
The other day I had the opportunity to travel on a plane with a young fellow from Newfoundland who had worked in northern Canada and in Alberta. When I asked him if he was better paid in the north, he said that his paycheque was larger for less work in Alberta than it was when he worked at the diamond mines in the Northwest Territories. This young fellow was a skilled tradesman whose skills could be used anywhere in the country. It is not working for northerners any more.
High wages are not really the answer. It is not about that. High wages only benefit those who have a job which pays well. For the unemployed and the working poor, the high cost in the north only adds to their burdens. The majority of people in northern communities across the country are working for very low wages in very substandard conditions.
Some would say that the much promoted cut to the GST has helped northerners to deal with the high cost of living. In reality, the 1% cut lowered the price of a cup of coffee in Yellowknife by a whopping 1%. A 1¢ drop in the price of a cup of coffee really helps when the price of a litre of milk is $4 or $5 and when someone needs a loan to buy fresh fruit, vegetables and groceries. The GST is very perverse in what it does to northern communities where the cost of living is high. Northerners pay more GST for every item they buy than southerners. In some respects, we in the north pay more taxes than those who live in the southern part of Canada. The GST, the tax on consumption, exacerbates that issue.
If the government really wants to help northerners, and I am talking about northerners in every province and territory, then it should increase the northern residents tax deduction. This is a pretty simple thing to do.
As many members know, since being elected to the House, I have called for the northern residents tax deduction to be increased by 50%, with future increases indexed to a northern inflationary measure. It has been estimated that for each increase of $1,000 to the deduction, $3 million would be put back into the pockets of northerners.
If the Minister of Finance cannot take my advice, then perhaps he will take the advice of the Canadian Chamber of Commerce. At its annual general meeting in Saskatoon, chamber members, those very progressive and enlightened people we all know as the backbone of the country with their large and small businesses, voted to support the federal government in: reviewing the provisions allowing for income tax deductions for northern residents and increasing the housing deduction to reflect the actual inflation index costs of housing in northern areas; reducing record burdens by eliminating the current employer specified vacation travel deduction and replacing it with a standardized inflation indexed northern vacation deduction based on the number of people in the taxpayer's household and the area of residence; and dispensing with the limit on medical travel being the lowest return air fare and allowing northern taxpayers the deduction for their actual costs incurred in medical travel.
These tremendously progressive statements came from the Canadian Chamber of Commerce. I thank the members for those statements. I thank them for their support because they truly recognize that northern workers are making a difference to our economy. They will continue to add wealth into the country and will continue to support the efforts of southern Canadians to live in a good fashion.
Maybe the Minister of Finance will take the advice of the legislative assembly in the Northwest Territories that unanimously supported a motion to increase the deduction.
Also calling for this change is the NWT Chamber of Commerce and the Hay River Chamber of Commerce. The head of the Hay River Chamber of Commerce said:
Hay River is experiencing a period of rapid economic growth, but to sustain this prosperity we must retain and attract residents.
He went on to point out that in order to address this need for residents, there must be an increase in the northern residents tax deduction. What a good idea.
I do not know if the federal government realizes this, but if we pay the cost of flying people in and out of the north, that adds to the company's costs and reduces its taxes, which go back to the federal government.
By encouraging northerners to live in the north, we are going to improve the financial viability of companies and we are going to see a return to the federal government. That is not a bad idea; it is a good idea. This is what we want to create in our country.
Increasing the northern residents' tax deduction will help ordinary northerners, but more is needed, and I will not stop there. I speak to that first because it is an issue for people and people first is the way our party deals with things. We also need to speak to the increased need of funding to our territorial governments.
During the election, the Prime Minister wrote to the Premier of the Northwest Territories, saying:
We recognize the unique circumstances faced in the North regarding the delivery of programs and services to residents [in small, remote communities] and we are prepared to discuss the challenges regarding the costs and circumstances for the delivery of those services.
I appreciate the Prime Minister's comments. We all appreciate them. We want them backed up in the budgets of the government so they reflect what the Prime Minister said. That seems to be pretty straightforward. The government has had plenty of time to talk. It has had an expert panel report, advising how to change the funding formulas for the territories.
The Northwest Territories has identified four key issues that stand in the way of the north achieving its full potential. First among them is a need for a new fiscal relationship with Ottawa, one that reflects the needs of the Northwest Territories. The current fiscal arrangement simply cannot continue. They are deep-seated. Our territorial government, representing the full number of the people in the Northwest Territories, can only borrow up to $300 million. Most of that is tied up already in debt on public utility systems, which of course it has to provide.
Budget Implementation Act, 2006, No. 2Government Orders
The Acting Speaker Royal Galipeau
It is with regret that I interrupt the hon. member. When we return to the study of Bill C-28, there will be seven and a half minutes left to the hon. member for Western Arctic.
It being 1:30 p.m., the House will now proceed to the consideration of private members' business as listed on today's order paper.
The House resumed from December 8 consideration of the motion that Bill C-28, A second Act to implement certain provisions of the budget tabled in Parliament on May 2, 2006, be read the third time and passed.
Budget Implementation Act, 2006, No. 2Government Orders
The Acting Speaker Royal Galipeau
When we last considered Bill C-28, the hon. member for Western Arctic had seven and a half minutes left for his comments. He has the floor.
Dennis Bevington NDP Western Arctic, NT
Mr. Speaker, during my previous speech I spoke about the serious issue of tax fairness for northern people. As I indicated, the other issue that I wanted to speak to in this discussion regarding northern issues is the need to change the way that we are funding northern territories. We have had an expert panel reporting on how to change the funding formula for the territories, and I had just started in on this when my time was up on Friday.
I will just repeat that we have identified four key issues that stand in the way of the north achieving its full potential.
The first is a new fiscal arrangement with Ottawa, one that truly reflects the needs of the Northwest Territories. The current fiscal arrangement cannot continue. Not only is it inadequate but in many ways it acts as a disincentive to the Northwest Territories moving forward.
My territory is very much controlled by this august Parliament, unlike the other provinces and regions of this country. This Parliament really does play such an important role in what happens in the north. As a northerner, I have railed against that for my whole life. I have felt, in some ways, the inadequacy of my citizenship, living where I do in the north. Certainly, part of it is the way that the Government of Canada deals with northerners.
As such, we all hope that as the resources of our territory are extracted and developed, they will mean more self-determination for us as citizens of the north. There is no question about that. If our resources simply get taken and we end up, at the end of the day, with what we have now, that would be a tremendous letdown and a tremendous failure of the Canadian system which is to recognize that we are all equal across this country and that we all have equal political rights.
The federal government provides about 70% of the funds for the Northwest Territories, but that really does not make the NWT a have region because this government, not the northerners, owns the vast riches of the territories. Nearly as much goes to Ottawa in royalties, in land sales and in corporate taxation. Nearly as much goes to Ottawa right now from the Northwest Territories as comes in to the Northwest Territories.
With a proper fiscal regime that would put our resources on the same level as other provinces where governments collect considerably more royalty revenues, we would be in a positive situation in the Northwest Territories. We would be ahead of the game.
The Government of Canada has chosen to subsidize businesses that develop in the north at the expense of royalties and taxation that could make the difference between us being a have and a have not province. Province is a term I use somewhat lightly because we are a province in waiting. In the Prime Minister's letter to the NWT, he wrote:
The Conservative Party of Canada agrees unequivocally with the principle that northerners should be the primary beneficiaries of the revenues generated by resource development in the Northwest Territories similar to other jurisdictions in Canada. We also agree that the transfer of authority over lands and resources from Canada to the Northwest Territories (devolution) is the next logical step in the political development of the Northwest Territories.
Northerners would really like to know when this is going to happen and how this is going to happen. If this is the mandate of the Government of Canada, will it say it very clearly to its new emissary, Mr. Harvie Andre?
In 2004-05, public accounts showed that the federal government took in over $270 million in royalties and resource revenue from the Northwest Territories and the amount is growing every year. That amount went up quite a bit last year as well. Those figures have not come out, but that is because our second diamond mine is now into production. At the same time that does not include the corporate taxation that goes with that.
In comparison, the Northwest Territories public accounts showed only $3.5 million in corporate income taxes in that same year. This goes back to a problem that we have just like every other province or political region in the Northwest Territories and that is, if we set our corporate tax rate a little higher than anyone else, then of course the corporations are all filing somewhere else.
We have bounced around over the years because where we had huge surpluses, we lowered the rate and then everyone followed us down and then we balanced out. Then we raised the rate and then we got nothing. That is a fundamental problem with the tax system in Canada which should be addressed by the federal government. There should be some federal-provincial understanding on corporate taxation to avoid this kind of loophole, to avoid this kind of competition that takes the money out of the hands of the provinces and the regions.
People in the north simply want a fair deal from Canada in how our interests are treated. Whether it is on taxation or funding for government programs and services, we actually want to benefit and build our territory on the resources that we have. We want to make that happen for Canadians for the future. I hope in the future that the government will do much better than this budget in dealing with northern concerns and issues. The improvement has to take place.
Budget Implementation Act, 2006, No. 2Government Orders
The Acting Speaker Royal Galipeau
Questions and comments. Resuming debate, the hon. member for Esquimalt—Juan de Fuca.
Budget Implementation Act, 2006, No. 2Government Orders
The Acting Speaker Royal Galipeau
My apologies to the hon. member for Timmins—James Bay. I did not see him. I recognize him under questions and comments.
Charlie Angus NDP Timmins—James Bay, ON
Mr. Speaker, I was thinking I might have to start wearing some brighter coloured clothes like my colleagues from the Bloc just so that I would be recognized.
I would like to ask my hon. colleague a question based on his experience in the Northwest Territories because what he speaks of mirrors so closely the experience we have in northern Ontario. We too are a region which is based on resources. We are based on hydro. We produce some of the cheapest hydro in the world and yet our industries have no access to that cheap hydro. We are paying what they pay in Mississauga when they turn on their air conditioners in the summer.
We are based on mining and mining is non-renewable. We have had many communities that have been driving the economic engine of Ontario through hard times, yet when these towns fall on hard times, they disappear off the map.
We have forestry which is another mainstay of our economy. Many of our forestry communities are going under. There is question that has been asked again and again in northern Ontario. A fundamental disparity exists when a region is resource-based. It has to be able to access some of the wealth of the region in order to diversify and build an economy that is not simply based on drawing out the water and cutting the trees, but is based on taking that wealth and building a sustainable and diverse economy.
Given the hon. member's experience in the Northwest Territories, how does he suggest a region like the Northwest Territories, the northern Arctic or northern Ontario can move forward with an agenda that works for the resource-dependent regions of the north?
Dennis Bevington NDP Western Arctic, NT
Mr. Speaker, I know my colleague sometimes blends into the windows that are behind him.
Dennis Bevington NDP Western Arctic, NT
And he is so shy that it makes it difficult.
There are fundamental differences in the Northwest Territories, which is an autonomous region and which theoretically, quite plausibly, along with northern Ontario should be a province in waiting.
What is not different about those areas is what the member alluded to. He said that when the government does not pay attention to the northern regions, when it allows them to be exploited without building the infrastructure and proper communities, without making the things happen that will leave behind substance, we end up with something far less satisfactory.
When the government does not do that and we allow ourselves to be manipulated by government and large corporations into doing things in the cheap and dirty fashion, which has been the practice for the last 20 years and which is a practice that has to stop in this country, we end up with something that is far less satisfactory than what we have.
I know that the hon. member's riding has representation at Queen's Park. Ontario is one of the dominant provinces of Canada. How these conditions can go on in this region year after year is something that really shocks me.
In my own territory, I can always blame it on Ottawa. I am able to say that Ottawa is not doing its share. My colleague has to deal with that provincial relationship.
What binds us across the north are the things that the federal government is able to do. I spoke about this earlier when I talked about tax fairness. We need some fairness in the system. The federal government agreed in the 1980s that it was fair to offer northerners right across the country an extra tax break because of their high costs. The government has recognized northern and remote communities in Parliament and in our taxation. What we need to do is to make it fair again.
Keith Martin Liberal Esquimalt—Juan de Fuca, BC
Mr. Speaker, it is a pleasure to speak on Bill C-28, A second Act to implement certain provisions of the budget tabled in Parliament on May 2, 2006.
When looking at a budget, the challenge of any government is to balance a budget that is going to ensure economic productivity and competitiveness and ensure people have money in their pockets. It should try to find a balance, that yin and yang between being able to have a productive dynamic economy and having the resources to provide the social programs we enjoy. As well, ensuring that individual Canadians have the maximum amount of money in their pockets and that governments do not waste money is the challenge of any budget.
The fundamental question of this budget is whether it meets that test. Does it enable our country to have a productive, dynamic economy and also provide the resources to allow us invest in the infrastructure we require in order to have a productive economy? Does it enable us to have the resources to provide for the social programs that all Canadians enjoy? I would argue that this budget fails on all of those counts. I will go through the reasons.
If we look at the global context, we can see in the future a greater amount of competitiveness in the world from giants such as India and China. They are on an economic juggernaut that will increase as time passes. It is up to us to change, modify, improvise and become more dynamic in order to stay ahead of those countries. If we fail to do so, we will suffer.
Right now Canada stands at eighth or ninth in the world in terms of economic productivity. That is okay, but we can do better. I am going to outline ways in which this budget fails as well as solutions for how our country can improve its productivity, for the reasons I mentioned.
This bill deals with a number of income tax measures. I am going to go through them in a second. I also want to say that the fundamental aspects of a balanced budget that will be useful are that the budget is indeed balanced, that there is responsible spending, there is debt reduction and there are tax reductions so that we will have a competitive international tax rate. I have mentioned the reasons why we ought to do that.
I also want to mention one of the profoundly disappointing aspects of this budget. Canadians would be very interested and very disappointed, I think, to know that this budget by the present government actually increases the taxes on the most vulnerable in society, the poor and the lower middle class.
How does it do that? The government increased the lowest tax rate that exists in our country. It also reduced the basic personal exemption. The government argues that the balance to that is the dropping of the GST, a consumption tax, but does a consumption tax really benefit the middle class and the poor? Dropping a consumption tax like the GST benefits primarily the rich, because in order to benefit from that, one has to spend. The more one spends, the more one benefits.
The people who are struggling to survive do not spend that much; ergo, they do not benefit as much. When government takes money out of the pockets of Canadians, it hurts Canadians selectively. Therefore, the wisest thing the government could have done in terms of productivity and of fairness, I would argue, would have been to drop the lowest income tax rates and increase the basic personal exemption. That puts real money in the hands of Canadians.
There is a reason why this budget is so peculiar and particular in certain areas, why it cherry picks certain benefits and does not deal with global tax reductions for individuals, particularly the poor and middle class. The reason is that this is a cynical budget. It is a budget that is designed to curry favour with the electorate. Naturally all political parties want to do that, but to do that by cynically parking one's brains at the door and not implementing solutions based on fact, reason and science is irresponsible.
Instead, the government and this budget are engaging in irresponsible behaviour because the solutions are based on cynically trying to curry favour with the public and putting forth woolly-headed solutions that sound good on the one hand but are not very effective. I gave the example of the GST cut. On the surface it sounds very exciting and good, but unless one spends a whole lot of money, which means one is rich, it is not really going to benefit the rest of Canadians. The fact is that Canadians with low or modest incomes are struggling hard these days. The increased tax burden on them is irresponsible.
One of the tax benefits the government has introduced in this bill is something called the Canadian employment tax credit. On the surface, that sounds wonderful. It is $1,000, but in reality, if we read carefully, we see that it is a tax credit for those who are working. Those who are unemployed and those who are really struggling, the most vulnerable, cannot access this. In fact, those who are working and making minimum wage or close to it do not pay very much in the way of taxes, so this kind of tax credit is not of as much benefit to the most vulnerable in our society at all. It does not help them at all.
What would be smarter? Earlier this year, I introduced something called the Canadian low income supplement, for which I have a private member's bill that will be introduced in the House in the next little while, a bill saying that a person who makes $20,000 or less will receive a cheque for $2,000, tax free. That number will decline to zero in a linear fashion, down to $40,000.
Why? Because this is real money in the hands of those who need it the most. A tax credit for those who do not make much money is utterly immaterial, because either they do not pay tax or the tax is so small that it does not really amount to much. When we so-called help those who are of modest means, we give them $50 a year.
Also, my bill does not apply only to people who work. It applies to people who do not work and who are on fixed incomes. For example, all of us here know seniors in our ridings who are living on fixed incomes. They have given their lives to our country and are living on a very tiny amount of money. The amount of money in my bill, the $2,000, is real money, tax free, in their hands. It will enable them to live and put food on the table. If people are younger, this will enable their children to have various benefits. If people are older and retired, it will enable them to pay for medications that are not covered, as well as a host of other challenges our seniors face day in and day out.
The Canadian low income tax supplement that I introduced earlier this year is something that the government ought to adopt. I hope Canadians who are listening will put pressure on the government, because this would mean real money in the hands of the most vulnerable in our society. It is fair, equitable and humane. It will help those in our society who are most impoverished.
Let us look at another couple of tax measures that are in this bill. One is the Canadian textbook credit of $500 annually, a credit for textbooks for students. On the surface it sounds good, but how does it actually materialize and get into the hands of a student? The tax credit is multiplied by the lowest income tax bracket. Therefore, this tax benefit is actually worth only $77.50. That is right. This $500 tax credit is worth only $77.50 in the hands of students. That, as we know, will not pay for even one single textbook for most courses in post-secondary education.
The next issue is the transit tax to reduce greenhouse gas emissions. We know that the government's so-called clean air act has been an absolute bust full of hot air. What would be a series of solutions that would actually reduce greenhouse gas emissions? I will give members a few.
If we take a look at greenhouse gas emission reduction, we will see that it is tied to our burning of fossil fuels, so the question is, how do we reduce fossil fuel consumption? I have a few suggestions.
Perhaps the simplest way of doing that is tied to how we build our homes. We lose an incredible amount of energy in our homes. We know that the technology exists today to build our homes more efficiently and substantially reduce our consumption of fossil fuels. China is making buildings that produce 70% less greenhouse gas emissions than buildings of a similar size in North America.
What the government can do is go back to adopting the EnerGuide program that it so callously cut because it was so-called Liberal. It may be something that we introduced, but the reality is that the EnerGuide is a good program. It enables people to have the tools, resources and know-how to provide and implement those changes in their homes that will reduce the consumption of fossil fuels and, therefore, the production of greenhouse gas emissions.
I have another couple of suggestions. As we know, cars made before 1986 produce 37 times the number of greenhouse gas emissions produced by a car made after 1996. That is absolutely staggering. By removing from the road one car built prior to 1986, we are actually reducing by the equivalent of removing 37 cars made after 1996.
The government should provide a tax break or eliminate the GST for anybody who takes a 1986 car off the road and buys a car made after 1996. It would be simple and easy to do. In effect, this is an example of tax shifting. The Minister of Finance should take a look at it. Frankly, it ought to be in this bill. It would enable us to shift the tax and encourage people to adopt actions that are more energy sensitive and environmentally sensitive.
Another issue is the Canadian children's fitness tax credit. This is a $500 tax credit for a parent, but again, it is only worth $77.50 because it is multiplied by the lowest tax rate. A parent would actually receive $77.50, not $500. The purpose behind this tax credit was noble: helping parents get their kids to become more active. We know that childhood obesity is at epidemic proportions in our country. How do we deal with this issue?
It would be smart to do two things. First, as I have argued repeatedly in the House, and in fact we passed it in this House in 1998, would be a headstart program for children. It could be adopted in the following way. The Minister of Health should call together all the ministers of health and the ministers of education from across Canada and tell them they should be providing this program for all children up to and including grade 3. Parents would be allowed to go into the class once every two weeks for two hours, if they wanted to, and they would deal with issues such as physical education, literacy and nutrition. Parents would be working with their kids on these three important things.
Literacy and physical education would be used, along with proper discipline, proper care and nutrition. This would have a profound impact on the lives of these children. The pillars and benchmarks would be laid for a solid individual in the future. Prior to the age of 8, neurons in a child's brain are actually quite malleable. They change. What a child experiences at that time could have a positive or negative impact on their future. It would be a smart move if the Minister of Health worked with his counterparts across the country to implement a headstart program.
The other thing that could be done is the implementation of a mandatory physical education program in schools, up to and including grade 11. Mandatory physical education would be very helpful in getting kids physically active during the course of the day.
As I said, it is very important that a budget such as this deal with productivity. I am going to outline a few solutions we could implement that would dramatically improve our productivity and enable us to be really competitive with those giants at our heels right now, particularly India and China.
First, we could reduce the basic personal exemption. Second, we could reduce the lowest tax rate. Third, we have to make sure that we reduce the tax rates on businesses so they are competitive across our country. Ensuring that we have a competitive business tax regime is extremely important.
With respect to surpluses, we should implement the one-third, one-third, one-third rule. One-third would be debt reduction; one-third would be spending on critical areas, which I will mention in a second; and one-third would be tax reductions for businesses and individuals.
With respect to investment, it is very disappointing that the government did not continue the research and development investments that my party made over the last five years. Rx and D is an absolutely integral part of our ability to be competitive. Therefore, I have no idea why the Conservative government chose to dramatically decrease research and development investment. This is one of the pillars of a vibrant and productive economy. Some of that money ought to be going to universities and colleges. Some of it should be used to encourage the private sector to reinvest profits into businesses.
The government should work with the provinces to harmonize the PST and GST to ensure that provincial sales taxes are not applied to business inputs but into their businesses.
The PST in some provinces is exempt from business inputs and in others it is not. The federal government could work with the provinces to ensure there is no PST or GST on business inputs, which would enable companies to make the investments they require.
On education, let us enable our students to get the higher education they require. With costs escalating, I find it reprehensible that individuals in our society are barred from accessing higher education because of the amount of money in their pockets. A fundamental tenet of our country is that everyone has the equal opportunity for success, not equal outcomes but an equal opportunity to be the best that they can become.
The fact that tuition fees have escalated so high and, quite frankly, have become a barrier for some people to access the education they require, is something the government should put its full effort into with its provincial counterparts.
In infrastructure, the government should be adopting the cities agenda that we started. The cities agenda is extremely valuable in ensuring that investments and monies that we have at the federal level will be driven at the municipal level for the needs of local communities. We did that. The agreements were hammered out with the provinces and municipalities and the Federation of Canadian Municipalities was very happy with that. I implore the government to continue with the program.
As the House knows, there are greater barriers to trade east-west than there are north-south. My province of British Columbia has signed a landmark deal with the province of Alberta to dramatically reduce and almost remove the barriers to trade between British Columbia and Alberta. There is no reason that the federal government cannot take a leadership role with the provinces to do this.
How would it work? The Minister of Finance, the Minister of National Revenue and the Minister of Industry should work with their provincial counterparts to call a trade council together where we put forward the trade barriers, eliminate those that are unnecessary and useless and we move on. It is a major restriction.
I will give one example, which is labour. The fact that somebody who is trained in Ontario cannot work in British Columbia or that somebody trained in B.C. cannot work in Newfoundland is ridiculous. The fact that we are all trained in the same country and yet our skills are provincial specific is an absurd situation. It is a major restriction to labour mobility and a major drain on the ability of our country to be economically competitive. I encourage the government to work with its provincial counterparts to do that.
When we were in government we started the smart regulation initiative, which took a ruthless look at the regulations. We started hacking away at and removing all those regulations that were unnecessary. The groundwork is there. The minister should take a look at this, continue with the smart regulation initiative and reduce those barriers to trade.
My last point is on the issue of immigration. With our changing demographics we know that the ratio between the retired population to worker population is increasing. We can do two things. First, retire the mandatory age of retirement. If the 65 of today is the new 50, why on earth do we not allow people who are 65 and above to work? It is absurd given the demographic changes that we require. These are smart, productive, willing people who want to work. They would be a boon to our economy.
Second, with respect to immigrants, many of the immigrants in our country are working on the margins because they may be here illegally. However, to ensure we honour the law but also enable these people to become integrated into our society and not live at the margins, we should give these people an opportunity to come in from the cold, apply for a worker's permits, give them a two year permit and renew it a couple of times. If they are law-abiding, pay their taxes and are employed, we then give them the chance to become Canadian citizens.
I have provided the government with a series of solutions and opportunities that it can take which would enable our country to be more productive. I am sure the government will find widespread support from across Parliament to give effective solutions to the benefit of our great people.
John McKay Liberal Scarborough—Guildwood, ON
Mr. Speaker, I want to pick up on the notion of moving up the mandatory retirement age from 65. I think that is a good idea and something that needs to be looked into.
One of the things we have repeatedly heard at the finance committee concerns bumping up the age at which we need to convert our RRSP into RRIF. The suggestion has been that we move the age from 69 to 71, which is what it was before the change was made about 10 years ago.
I wonder whether the hon. member has a comment on whether that appears to be a good idea. It is consistent with his notions of changing the retirement date. Does he have any thoughts as to whether, given his mental--I mean medical background, possibly his mental background as well or possibly his heavy metal background, for which I am sure there is some hearing loss, 71 or 73 might be a more appropriate age given that we are all medically a little healthier than we were in the past?