An Act to amend the Income Tax Act (tax credit for new graduates working in designated regions)

This bill was last introduced in the 39th Parliament, 2nd Session, which ended in September 2008.

This bill was previously introduced in the 39th Parliament, 1st Session.

Sponsor

Robert Bouchard  Bloc

Introduced as a private member’s bill. (These don’t often become law.)

Status

Not active, as of May 9, 2007
(This bill did not become law.)

Summary

This is from the published bill. The Library of Parliament often publishes better independent summaries.

This enactment amends the Income Tax Act to give every new graduate who settles in a designated region a tax credit equal to 40% of the individual’s salary or wages, but not exceeding $8,000.

The purpose of this measure is to encourage new graduates to settle in designated regions, thereby curbing the exodus of young people from those regions and promoting their economic development.

Elsewhere

All sorts of information on this bill is available at LEGISinfo, provided by the Library of Parliament. You can also read the full text of the bill.

Votes

June 12, 2008 Passed That the Bill be now read a third time and do pass.
June 12, 2008 Passed That Bill C-207, An Act to amend the Income Tax Act (tax credit for new graduates working in designated regions), as amended, be concurred in at report stage with further amendments.
June 12, 2008 Passed That Bill C-207 be amended by restoring Clause 1 as follows: “1. The Income Tax Act is amended by adding the following after section 118.7: 118.71 (1) The definitions in this subsection apply in this section. “base period” means the first 52 weeks of the aggregate of all periods each of which is a period during which the individual ( a) holds qualifying employment; and ( b) ordinarily performs the duties of the qualifying employment at an establishment of the individual’s employer situated in a designated region or is ordinarily attached to such an establishment. “designated educational institution” has the meaning assigned by subsection 118.6(1). “designated region” has the meaning assigned by section 3 of the Regional Development Incentives Act. “qualifying employment” means an office or employment that the individual begins to hold in the 24-month period that follows the date on which the individual successfully completes the courses and, where applicable, the internships leading to the awarding of a recognized diploma, or the date on which the individual is awarded a recognized diploma that is a master’s or doctoral degree under an educational program requiring the writing of an essay, dissertation or thesis, if ( a) the individual begins to perform the duties of the office or employment after January 1, 2007; ( b) at the time that the individual takes up the office or employment, the establishment of the individual’s employer at which the individual ordinarily performs the duties of that office or employment, or to which the individual is ordinarily attached, is situated in a designated region; and ( c) the knowledge and skills obtained during the individual’s training or educational program are related to the duties performed by the individual in connection with the office or employment. “recognized diploma” means a degree, diploma or attestation awarded by a designated educational institution. (2) For the purpose of computing the tax payable under this Part by an individual for a taxation year, there may be deducted an amount equal to the lesser of ( a) the amount that is 40% of the aggregate of all amounts each of which is the salary or wages of the individual for the year from qualifying employment and attributable to the individual’s base period; and ( b) the amount by which $8,000 exceeds the aggregate of all amounts each of which is an amount that the individual is deemed to have paid to the Receiver General under this section for a preceding taxation year. (3) For the purposes of paragraph (2)( a), an individual who was resident in a designated region in Canada immediately before the individual’s death is deemed to be resident in a designated region in Canada at the end of December 31 of the year in which the individual died.”
June 12, 2008 Passed That the Motion proposing to restore Clause 1 of Bill C-207 be amended by deleting all the words in paragraphs 118.71(1) and (2) and substituting the following: “118.71 (1) The definitions in this subsection apply in this section. “base period” means the first 52 weeks of the aggregate of all periods each of which is a period during which the individual ( a) holds qualifying employment; and( b) ordinarily performs the duties of the qualifying employment at an establishment of the individual’s employer situated in a designated region or is ordinarily attached to such an establishment.“designated educational institution” has the meaning assigned by subsection 118.6(1). “designated region” has the meaning assigned by section 3 of the Regional Development Incentives Act. “qualifying employment” means an office or employment that the individual begins to hold in the 24-month period that follows the date on which the individual successfully completes the courses and, where applicable, the internships leading to the awarding of a recognized diploma, or the date on which the individual is awarded a recognized diploma that is a master’s or doctoral degree under an educational program requiring the writing of an essay, dissertation or thesis, if ( a) the individual begins to perform the duties of the office or employment after January 1, 2008;( b) at the time that the individual takes up the office or employment, the establishment of the individual’s employer at which the individual ordinarily performs the duties of that office or employment, or to which the individual is ordinarily attached, is situated in a designated region; and( c) the knowledge and skills obtained during the individual’s training or educational program are related to the duties performed by the individual in connection with the office or employment.“recognized diploma” means a degree, diploma or attestation awarded by a designated educational institution. (2) For the purpose of computing the tax payable under this Part by an individual for a taxation year, there may be deducted an amount equal to the lesser of ( a) the amount that is 40% of the aggregate of all amounts each of which is the salary or wages of the individual for the year from qualifying employment;( b) $3,000; and( c) the amount by which $8,000 exceeds the aggregate of all amounts each of which is an amount that the individual deducted under this section for the purpose of computing the tax payable, or that the individual is deemed to have paid to the Receiver General under this section for a preceding taxation year.”.
June 12, 2008 Passed That Bill C-207 be amended by restoring the title as follows: “An Act to amend the Income Tax Act (tax credit for new graduates working in designated regions)”
May 9, 2007 Passed That the Bill be now read a second time and referred to the Standing Committee on Finance.

Income Tax ActPrivate Members' Business

March 25th, 2010 / 6:15 p.m.
See context

Bloc

Robert Bouchard Bloc Chicoutimi—Le Fjord, QC

Mr. Speaker, first, I want to once again thank the hon. member for Laurentides—Labelle for introducing and vigorously defending the bill which, as we all know, had reached the Senate before the October 2008 election was called. I am also taking this opportunity to thank Liberal members who have spoken so far, whether to address the first bill, namely Bill C-207, or this one, Bill C-288. I also want to thank NDP members.

The tax credit is for a graduate who, in the 24-month period that follows the date on which he successfully completed his studies, begins to hold a job in his area of specialization, in a region that is facing economic and demographic difficulties. The bill provides for a tax credit of up to a maximum of $8,000 to a young graduate, for a minimum of three years.

The purpose of this legislation is to curb the exodus of young graduates towards large urban centres, to encourage them to settle in regions to undertake their professional career, and to hire, for the regions' benefit, a skilled workforce.

The tax credit applies to an individual who, in the 24-month period that follows the date on which he successfully completed studies leading to the awarding of a recognized diploma, begins to hold a job in his area of specialization, in a designated region where he is going to settle.

At second reading, some members pointed out that the bill should be complemented by a comprehensive regional development plan. I certainly agree with this view, but Bill C-288 is a first step that will allow our regions and our regional businesses to hire and keep a skilled workforce.

I am very grateful to all those who have expressed their support here for this legislation, and to those who came to support us at various events, including the Fédération étudiante universitaire du Québec (FEUQ), the Fédération étudiante collégiale du Québec (FECQ), the Fédération de l'âge d'or du Québec (FADOQ), the Liberal member for Honoré-Mercier, and the NDP member for Churchill, who were present at the press conference organized by the Bloc Québécois to support these measures. All these stakeholders expressed their support for this concrete and effective incentive, which consist in giving a tax credit to young graduates who settle in a designated region to work there.

A similar tax credit implemented by the Quebec government has proven its worth. The program was established in 2003, which means that it is almost in its eighth year. It helps new graduates settle in resource regions, the description used by the Government of Quebec. In the first year of the program, 2,000 young people applied for the tax credit; this number has since risen to 9,000. Some regions are beginning to feel the positive effects of this program. In my region, in Saguenay—Lac-Saint-Jean, migration is still negative but has almost reached zero.

Therefore, I am asking the members of this House to help our rural areas and to help our regions experiencing economic difficulties and losing population by supporting our youth. We must stop the population drain and the exodus of youth. These are two important issues in our regions. We must help develop processing industries by providing our businesses with access to the skilled labour force they need.

No one in the House would be surprised to hear me say that the regions of Quebec, and a number of regions in other Canadian provinces, are at the end of their rope and have been since long before the economic crisis. I am thinking about northern Ontario and British Columbia, New Brunswick, Nova Scotia, Newfoundland and Labrador and Prince Edward Island. Several parts of these regions have been hurting for years. It goes without saying that a tax credit to encourage young people to settle or even stay in a region would be greatly beneficial.

Our regions are going through a real crisis and the Conservative government is not paying any attention. I hope that this time the members opposite will have a little more humility and sensitivity and listen to the cry for help coming from the regions and the young people who live there.

I am especially disappointed in the Conservative members from Quebec and even more so in the two ministers from my region of Saguenay—Lac-Saint-Jean, who are very familiar with this measure that was implemented by the Government of Quebec in 2003, as I was saying earlier.

Again, I am calling on the Conservative members from Quebec, more specifically the hon. members for Roberval—Lac-Saint-Jean and for Jonquière—Alma who, I repeat, are well aware of the importance of and benefits derived from this legislation and this program, to pass along the message within their caucus about the positive aspects of such a measure.

For those members who do not realize, the Government of Quebec is not the only one that has adopted such programs. The Saskatchewan provincial government has had a similar program for a few years, which gives a credit of up to $20,000 over a period of seven years.

The Parliamentary Budget Officer's report mentions five Canadian provinces—Nova Scotia, New Brunswick, Quebec, Manitoba and Saskatchewan—that have introduced incentive measures to attract young people to regions that are experiencing economic difficulties or that are losing young people.

The bill addresses a very serious problem. Many regions are in a period of economic distress, which of course is only increasing the trend of youth out-migration. Indeed, the further we go from the main centres, the more the population is declining. Quebec, like Saskatchewan, has taken measures to stem the tide. As I mentioned earlier, other Canadian provinces have adopted incentive measures.

The exodus of youth and the depopulation of the regions are not new phenomena. However, for decades, they were offset by high birth rates. With the drastic decline in the birth rate, the challenge today is to keep these young people in the regions and to attract others to come and settle there. Time is of the essence because the trend has continued since the 1990s and the situation is worsening in several areas of Quebec and Canada.

At present, the population is declining in 6 of the 17 administrative regions in Quebec, including the Lower St. Lawrence, the North Shore, Saguenay-Lac-Saint-Jean, Gaspé and Mauricie. The regions need young people, especially skilled young people. With youth out-migration, the population ages faster and regions become less vital. The exodus of skilled individuals reduces the average education level of the people left behind, which undermines regions' ability to innovate. These factors affect the potential for development and could send the regions into a downward spiral that will ultimately destroy them. It is a downward spiral that cannot be stopped.

The shortage of skilled workers in the regions is not solely a matter of training. In fact, the young people from the regions are no less educated than those in the big cities. The problem is rather that young people from the regions do not live there any more. There is an out-migration of young people and skilled workers.

I would like to remind the members of the House that when the Standing Committee on Finance studied this bill, an amendment was added to ensure that this program was truly directed to the regions. Metropolitan regions with a population of more than 200,000 are excluded.

I would like each member of the House, particularly those in the Conservative Party, to take the time to study this bill closely so that they can see the positives in this measure that would help the regions and young people.

Income Tax ActPrivate Members' Business

May 15th, 2009 / 1:50 p.m.
See context

Bloc

Robert Bouchard Bloc Chicoutimi—Le Fjord, QC

Mr. Speaker, I want to thank my colleague from Sault Ste. Marie for his excellent speech. I hope that the member for Saskatoon—Rosetown—Biggar listened to some of what he had to say.

Unfortunately, she left before the member for Sault Ste. Marie finished speaking, but if she had listened to his whole speech, I believe she would have seriously reconsidered her own position.

I would also have liked it if the Conservative members had listened more carefully to the speech by the member for Sault Ste. Marie and had distanced themselves from their Conservative ideology. I believe that if they had been more attentive, we would have more support for this bill, at least I hope so.

I would like to thank my colleague from Laurentides—Labelle for agreeing to introduce the bill, which gives a tax credit to new graduates working in regions with demographic and economic problems.

I have to say that my colleague from Laurentides—Labelle and I have visited a number of regions of Quebec in the past two months. Everywhere we went—Chicoutimi, Forestville, Matane, Trois-Pistoles, Baie-Comeau, Rimouski, Rouyn-Noranda, Val d'Or, Mont-Laurier, Maniwaki and La Tuque—we heard the same message: this sort of measure is needed to help young people and the regions.

I will come back to the speech given by my Conservative colleague from Saskatoon—Rosetown—Biggar. She raised a number of points. First, I have to say that if the member had consulted her people in Saskatoon, she would have realized that the Government of Saskatchewan has just introduced an identical program to help graduates who settle in economically depressed regions with declining populations.

The member also said that the Regional Development Incentives Act needed to be updated because it was out of date. I agree that this act should be updated, but it is not the role of this bill to do that. It is up to the government.

She also said that this program would cost $100 million a year and that it was far too expensive. Hon. members will recall Bill C-207. The Conservatives who spoke to that bill said it was far too expensive. They were talking about $600 million at the time. I see they have finally got their estimates down to more reasonable figures.

To give my colleagues of the House some context, I will give a brief outline of the bill. The tax credit is intended for students who, in the 24 months following the successful completion of their studies, accept employment in their area of specialization in a region that is facing economic and demographic difficulties. The bill would give an income tax credit of up to $8,000 to recent graduates for a minimum of three years.

In the 2006 election, I promised to introduce legislation to help young people who want to settle in the regions. I am talking about Bill C-207, which I introduced in April 2006. It was supported by a majority of members of the House at all readings and even made it to the Senate. Unfortunately, when an election was called in the fall of 2008, the bill was stopped in its tracks.

I am therefore very pleased to see that the bill is being debated again here today in this House. I am also happy because it gives me the opportunity to clarify a few things. By voting against the former Bill C-207, the Conservatives denied young people access to a tax credit they could have used as of this year's tax return. I was especially disappointed by the Conservative members from Quebec, particularly the two ministers from my region who, incidentally, are very familiar with this measure, since the Quebec government has had a similar measure in place since 2003.

Once again, these members have proven that those who are members of governing parties in Canada tend to close their eyes and forget about standing up for the people they represent. This time, I hope that Conservative members from Quebec, especially the members for Roberval—Lac-Saint-Jean and Jonquière—Alma, will pass along a message within their caucus explaining the benefits of such a measure.

It is a surprise to no one in this House when I say that the regions of Quebec, as well as several regions in other Canadian provinces, are in the midst of an economic crisis that began long before the current crisis struck. I am speaking of northern Ontario and northern British Columbia and of several large regions in decline in New Brunswick, Nova Scotia, Newfoundland and Labrador and Prince Edward Island. These regions have had economic woes for many years. It goes without saying that implementing a tax credit to encourage young people to live in the area, or to remain there, would be very beneficial.

Our regions are experiencing a real crisis that the Conservative government is completely ignoring. I hope that, this time, my colleagues opposite will show a little more humility as they listen to the cries for help from the regions and the young people living there.

Quebec is not the only province to adopt such a program. Following the speech by the member from Saskatoon—Rosetown—Biggar, I stated that the provincial government of Saskatchewan instituted a similar program a few years back.

Many regions are in a period of economic distress, which of course only increases the trend of youth out-migration. Indeed, the further we go from the main centres, the more the population is declining. Quebec, like Saskatchewan, has taken measures to stem the tide. The exodus of youth and the depopulation of the regions are not new phenomena. However, for decades, they were offset by high birth rates. With the drastic decline in the birth rate, the challenge today is to keep these young people in the region and to attract others to come and settle there. Time is of the essence because the trend has continued since the 1990s and the situation is worsening in several areas.

At present, the population is declining in 6 of the 17 administrative regions in Quebec, namely Abitibi-Témiscamingue, the Lower St. Lawrence, the North Shore, Gaspé and the Magdalen Islands and part of Mauricie and Saguenay—Lac-Saint-Jean. In fact, in my region, Saguenay—Lac-Saint-Jean, young graduates about to marry or start a family leave every day. A region that loses its young people is condemned to certain death, in the medium or the long term. To make matters worse, the departure of one young person often sets off a chain reaction and many more people leave their regions.

Young people who leave their regions to go study in Quebec City or Montreal end up making connections and friends and developing a network there. As such, it is more than likely that, once they have completed their studies, they will want to settle in their new community rather than return to their home region. That is what happened in my own family. There are five children in my family. My three sisters, my brother and I have 11 children all told, all of them born in the Saguenay—Lac-Saint-Jean region. Now, only three of them remain in my region, while eight have gone to live elsewhere.

In closing, I would like the members to bear in mind that this bill has two goals: stem the outgoing tide of young people and bring skilled workers back home. This tax credit would go a long way toward developing the regions.

Income Tax ActPrivate Members' Business

May 15th, 2009 / 1:30 p.m.
See context

Conservative

Kelly Block Conservative Saskatoon—Rosetown—Biggar, SK

Mr. Speaker, I appreciate the opportunity to engage in debate on Bill C-288, An Act to amend the Income Tax Act (tax credit for new graduates working in designated regions), a proposal to grant preferential tax treatment to a chosen few graduates in designated regions who take up qualifying employment for a limited period, after graduation.

I would like to remind the House that this proposal is nearly identical to one considered in the last Parliament, known as Bill C-207, a proposal, I further note, that was soundly rejected by the majority of all party finance committee after it conducted a detailed examination only last year.

Why did the committee reject this proposal? It was more than likely due to the numerous problems associated with this legislation, problems I will briefly outline.

First, it would basically provide preferential tax treatment to recent select post-secondary graduates working in a designated region, regardless of whether there would be a surplus or a shortage workers with their particular skills.

Second, what this proposal would classify as economically depressed designated regions is informed by another piece of legislation that has not been updated in nearly three decades. This would lead to both Saskatchewan and Manitoba, which have among the lowest unemployment rates in Canada, to be comically classified as “depressed regional economies”.

Is Manitoba, with an economy that has remained so strong that it is launching television ads aimed at attracting workers from other parts of Canada, a depressed region?

Is Saskatchewan, with the lowest unemployment rate in the country and labour shortages, a depressed region?

Listen to what the Canada West Foundation had to say about Saskatchewan's economy:

Not only did Saskatchewan lead Canada in economic growth last year, it is also in solid contention for doing the same this year. In fact, many analysts expect the economy of every other province but Saskatchewan to shrink this year....In 2008, Saskatchewan created more jobs than ever in its history. Things were so hot that some industries faced labour shortages, to the point that Premier Brad Wall visited job fairs outside the province to try to attract new workers.

Is Saskatchewan a depressed region? Clearly, the answer to that question would be an emphatic “no”.

Moreover, a proposal based on the assumption that both provinces are economically depressed and in need of special assistance would not only be ineffective, it would be preposterous.

Third, there is no guarantee that new graduates attracted to a designated region would remain there once their eligibility for the credit expired.

Fourth, Bill C-288 would be tremendously expensive, representing $600 million annually in lost tax revenue. Is $600 million for a proposal that would likely not result in any meaningful economic activity and likely not create a single job efficient? Again, clearly, the answer is an emphatic “no”.

Fifth, this proposal would be exceedingly unfair in that it would grant preferential tax treatment to a select few and nothing for others. For example, a new graduate working in Saskatchewan, one of the outdated depressed designated regions, and earning around $33,400 would not pay a penny of federal income tax for three years. Whereas some in Ontario, not included in the nearly three decades old list of designated regions, would pay almost $2,700 per year in federal income tax.

Without a doubt, this proposal is fatally flawed and one that the House should reject. Not only is it costly and ineffective, it would do nothing to ensure Canada generates the highly-skilled workers we need to succeed in the global knowledge-based economy and meet the needs of employers across Canada.

A skilled, educated and adaptable workforce will greatly influence Canada's ability to compete in a global marketplace and ensure we remain a prosperous country. That is why our Conservative government has remained focused on helping provide the highest quality education and skills training.

One of our Conservative government's ongoing commitments has been to strengthen post-secondary education to enable more Canadians to pursue studies and better link the skills and expertise of students to real world needs.

We have not merely been talking about that. We have taken real action through significant new investments to make that happen. These include: an additional $800 million per year to the provinces and territories through the Canada social transfer to strengthen post-secondary education; support that will reach $430 million annually for a new consolidated Canada student grant program designed to increase post-secondary participation and, ultimately, graduation; $205 million in new annual funding to granting councils to support research and development at Canadian universities, creating new training opportunities for graduate students; close to $200 million per year in new tax measures to help students and families with the costs of college or university, including the textbook tax credit, a full exemption for scholarship and bursary income and making the registered education savings plan more flexible and generous; and, measures to directly support academic excellence by supporting the following: the creation of an additional 1,000 Canada graduate scholarships awards for outstanding Canadian masters and doctoral students; the establishment of 500 new prestigious scholarships to attract the top Canadian and international doctoral students to Canadian institutions; and, the creation of new practical research and development internships for graduate students at Canadian companies to provide students with hands-on experience and understanding of the research challenges of the private sector.

Our Conservative government has also taken action in support of skilled trades. These include: a new apprenticeship job creation tax credit, which provides eligible employers a tax credit equal to 10% of the wages paid to qualifying apprentices in the first two years of their contract, up to $2,000 per apprentice per year; a new apprenticeship incentive grant that will provide $1,000 per year to apprentices in the first two years of an apprenticeship program in one of the nationally recognized red seal trades; and, a new tools tax deduction of up to $500 to tradespeople for the cost of tools in excess of $1,044 that they must acquire as a condition of their employment.

Also in budget 2009, we provided even further opportunities for short and long term skills upgrading. This included a targeted program for apprentices and new summer youth employment initiatives, such as $15 million to the YMCA and YWCA to place young people in internships in not for profit and community services organizations. As YMCA Canada noted, the latter initiative will “assist young people to gain valuable employment skills and mentor civic engagement”.

We have also recognized that a fair and competitive tax system is fundamental to ensuring ongoing economic prosperity, providing incentives for youth to obtain further skills and knowledge and fueling entrepreneurship and investment. That is why we have slashed taxes nearly $220 billion since forming government in 2006.

Unmistakably, our Conservative government has a comprehensive and long term plan to address current economic challenges while laying the groundwork for future prosperity. We cannot be sidetracked and we cannot afford to be derailed by expensive and ineffective proposals such as Bill C-288, a proposal that would do nothing to further regionalize economic development or lead to job creation.

Bill C-288 is a poorly targeted and unfair tax measure that is constructed on an outdated piece of legislation that has not been updated or revised in nearly three decades. That would absurdly classify Saskatchewan and Manitoba as depressed economic regions despite overwhelming evidence to the contrary.

I am unable to support this proposal and would encourage the House to similarly reject it, as the all party finance committee did after examining it in-depth last year.

Income Tax ActPrivate members' business

March 30th, 2009 / 11:50 a.m.
See context

Conservative

Mike Wallace Conservative Burlington, ON

Mr. Speaker, it is my pleasure today to stand in the House and debate private member's Bill C-288. I want to make one comment before I begin. My discussion in the next 10 minutes will be focused on the bill in front of us. It will not be all over the place, as was the discussion of the member from the Liberal Party a few minutes ago.

The proposal in Bill C-288 is to grant preferential treatment for a select group of new graduates in designated regions. If the bill becomes law, it would set out different regions that selected new graduates would work in and they would receive a benefit. As previous speakers have noted, this bill was originally introduced in the last Parliament as Bill C-207, where after an in-depth study that exposed the bill's numerous shortcomings it was soundly rejected by the House of Commons finance committee.

As a member of the finance committee in both the previous and the current Parliament, I can say that the bill was thoroughly discussed.

It was revealed in the last Parliament that there were a number of major problems with that bill. In fact, the Liberal Party members of that committee also felt the same way and had gutted the bill at that particular time.

Therefore, I was a little bit surprised when the member from the official opposition got up today and said that party was in favour of it. However, he did qualify it by saying that some people are in favour of it. Hopefully the information will get out to all their members and they will see the light of day and not support the bill going forward.

Nothing has changed in the interim. Essentially, this is exactly the same proposal as in the last Parliament, with exactly the same flaws. As a result, I and the rest of the Conservative members cannot support the bill.

As previous speakers have outlined, there are many problems with this proposal. They include the following.

While the proposal attempts to compel new graduates to settle in designated regions, it does nothing to create new employment opportunities or economic development in these regions.

On this point, all this bill does is say that an area is under-serviced or needs help. It does not create any jobs or provide any incentive for business to create jobs. It simply identifies the area. This bill would say to a new graduate that an area is underserved and it would ask the new graduate to stay there in exchange for an $8,000 tax credit. In theory, the bill would try to attract back home those people who are leaving a region that is under-serviced.

This bill does not do any of that. It does not provide young people the opportunity they are looking for.

I have two young people of my own. One will be graduating from high school this May and will be entering university in the fall to do her four years. We are from Burlington, in southern Ontario. That region will not be identified, so my daughter will not get the same benefit as somebody else in her graduating class because that person happens to be from a designated region. There is also no guarantee that they will have a job to go to, yet the taxpayer of Canada would still give them a tax credit for living there. I do not think that is accurate.

It is poorly targeted, and no particular skills or occupations are singled out. The list of designated regions is based on a list that is nearly 30 years old and outdated. For instance, it lists Saskatchewan and Manitoba as economically depressed regions.

Mr. Speaker, let us take your home province of Saskatchewan. In terms of any of the economic factors today, we are all suffering from the worldwide recession, of course, and our economic action plan is in place to address that. However, there are areas of this country that are doing better than others, and Saskatchewan is one of those areas. It is unbelievable that this bill would identify it as a designated area.

Let us take the skills and occupation aspect and consider, for example, a person who graduates with a degree in fine arts, maybe performing arts. I am a big fan of performing arts. Last Friday, we turned the sod on a new performing arts centre for Burlington, which this government has helped with $4 million in support.

However, my point is this: If I have gone through school for performing arts and want to become an actor but my area is under-serviced, I can go home to that region whether there is a job in the performing arts or not and I would be entitled to an $8,000 tax credit. It does not make any sense that the jobs are not identified. The skill sets are not identified or the occupations that they are looking for.

This is not fair to other regions. It is not fair to other graduates who are not able to attract this tax credit just because they are from a certain area or they move to a certain area.

This country was built on the mobility of labour. People moved to where jobs were available, where growth was happening. In my view, the government cannot have a law or policy that restricts the mobility of labour, that encourages a lack of mobility of labour.

I want to use my own family as an example. When I was very young, my father who was starting out in his career in his early twenties had to make a decision to move from an area of Ontario that was doing okay but was not seeing growth. There were job opportunities eight hours away, an eight-hour drive to the other side of Ontario.

My father made the decision, for the betterment of himself and his family, to make that move, to move to where the job was. That is what the country was built on. That is why people settled the western provinces. That is why there has been growth in Ontario. That is why there is growth in Newfoundland and Labrador; people are coming back to that province because there are opportunities there. People are coming to Saskatchewan these days because there are opportunities in Saskatchewan.

We cannot have the taxpayer of Canada supporting one region over another and trying to keep young people there just for the sake of saying we have young people in the area.

The member from the Bloc talked about every part of the country being deserving of the same level of service. Every graduate of a university, college or training program deserves the same level of treatment as every other graduate. That is why the bill is a flawed concept.

In the previous Parliament, this concept came forward through a private member's bill and made it to the finance committee. The finance committee, through its study of the issue, looked at all the implications of having regions, based on data that is outdated, data that is 30 years old, treating individuals differently from one province to another, from one region within a province to another, that it was just not fair, it was just not accurate, and it is just not the way that Canada has built itself up as the country we have here today.

Mobility of labour is very important to me. This approach does not look at the investments that we have been making into economic development. It is economic development that drives jobs. It is the money we have spent on organizations, whether it be on the east coast or the new southern Ontario development agency. That agency was announced in our economic action plan that was just passed in the House and we are hoping the spending has happened through the other place.

It is these organizations that help businesses and individuals create employment. It is the creation of employment and opportunity that will attract bright young people, the future for our country, the development of our country.

It is that type of investment by this government and by the provinces in their own economic development activities that will support businesses, support individuals by creating new jobs and creating wealth that will attract young folks.

It is not a tax credit. We will not get young people deciding to stay in one region or another because they get a tax credit. Of course they will use it because it is available, but it will not be in their decision-making aspect in terms of why they should go there.

Young people today, including the members of my own family, want an opportunity for growth. They want an opportunity to serve their family.

I cannot support this private member's bill.

Income Tax ActPrivate members' business

March 30th, 2009 / 11:25 a.m.
See context

Macleod Alberta

Conservative

Ted Menzies ConservativeParliamentary Secretary to the Minister of Finance

Mr. Speaker, I welcome the opportunity to contribute to the debate on Bill C-288, concerning a proposed new income tax credit that would be restricted to a select number of graduates taking employment in a limited number of designated regions.

For background, it should be noted that this bill is nearly identical to private member's Bill C-207 from the previous Parliament. In that Parliament, the all-party finance committee had an opportunity to engage in the study of that bill. After concluding that study, which uncovered a number of serious flaws, the majority of the finance committee declined to support the bill.

Like its predecessor, Bill C-288 contains serious flaws and does not merit the support of this House. Among them, it is poorly targeted. It creates unfairness in the tax system. It proposes a flawed, short-term band-aid for a long-term problem. There is a $600 million per year cost. It represents a substantial loss of tax revenue at a time of significant economic uncertainty.

One of my first concerns is that this proposal haphazardly selects regions in which new graduates would be eligible for the credit. The proposed credit would be limited to new graduates who take up work in a designated region as defined in the Regional Development Incentives Act. This term is supposed to refer to a region in which, and I quote the act, “existing opportunities for productive employment in the region are exceptionally inadequate”. The problem with using this act to define regions for this kind of tax measure is that the list of regions in it is seriously outdated. In fact, this list has not been amended or updated in nearly 30 years, October 1981 to be exact.

I think most rational people would agree that Canada's labour market has changed significantly since the early 1980s and that defining regions in this way would poorly target a proposal that is supposed to address current labour market conditions. To illustrate this point, I will draw the House's attention to the fact that the provinces of Saskatchewan and Manitoba, in their entirety, are included on that list. If we think about that for a moment, this proposal would enact legislation that would permanently label the economies of Saskatchewan and Manitoba as “exceptionally inadequate”.

Even a brief study of the state of provincial economies in Canada would quickly reveal that such a statement is ludicrous. First, both Saskatchewan and Manitoba have unemployment rates well below the current national average, with employment opportunities much stronger compared to other parts of the country. Second, both Saskatchewan and Manitoba have been recognized as the strongest economies in Canada.

For example, a March 2009 Conference Board of Canada report declared:

No province is immune to the effects of the global recession, but the momentum in the domestic economies of Saskatchewan and Manitoba will cushion the blow from the downturn.... Saskatchewan will again post the strongest growth among the provinces.... Manitoba is also in a good position to ride out the global recession.

Clearly, this is a serious failing of this proposal.

Another deficiency of Bill C-288 is its complete failure to identify the specific skill sets it is trying to retain in these designated regions. In fact the credit does not target any particular skills or professions and it is available to all recent graduates. What is the rationale for a tax credit that provides incentives to work in select regions that have ample employment opportunities and that is totally disconnected from the actual skill requirements that each and every region faces?

This leads me to yet another major concern about this proposal, namely, the unfairness that it would create in the tax system, unfairness manifested through very serious inequities in the tax system between new graduates who work in different regions. The proposed tax relief in Bill C-288 would give a select few an extremely generous tax break. Effectively, the select taxpayers qualifying for the proposed credit earning around $33,400 would be completely exempt from federal tax. On the other hand, every single other graduate earning at least $33,400 would have to pay almost $2,700 per year in federal taxes. How is that fair?

Under this proposal, two people working at similar jobs making the same salary would face completely different tax burdens because they work a few kilometres apart. Canadians expect a tax system that treats them fairly. To the average Canadian, the inequity proposed in Bill C-288 would be completely unacceptable.

Another major concern with this proposal is that it fails to provide a long-term solution to the problem that it is actually trying to address. People choose where to settle and work based on a wide range of considerations. While special tax relief for a select group of graduates may temporarily influence choices regarding where to settle and work, it is only a band-aid. What happens when they are no longer eligible for the credit?

All of this points to a significant concern about the long- and short-term benefits and the impact of this proposal. Indeed, the only thing of which we can be certain is that this proposal would be restricted to a select group of taxpayers at a very significant cost.

This brings me to my final concern with this proposal, and that is the price tag. The proposed tax credit would result in $600 million per year in lost tax revenue at a time of significant economic uncertainty. That is $600 million for a tax cut that most likely would not result in any new jobs for new graduates.

We are facing very difficult and challenging economic times that have resulted in some difficult budgetary choices. One such choice was the deliberate choice to run a short-term temporary deficit in order to provide stimulus to the economy in order to protect and create Canadian jobs. However, we understand that many Canadians, recalling the legacies of deficits past, have reservations and concerns about deficits, as they should. That is why we initiated a plan to move back into surplus as the economy recovers. We also looked to ensure that all measures undertaken during this period would provide the greatest benefit possible for the overall Canadian economy.

The Bloc's prebudget submission included this proposal that we are discussing today. We reviewed it and determined, for the reasons mentioned previously in my remarks, that it did not meet this core objective.

Instead, we pursued an economic action plan that includes significant measures, one that will boost confidence, economic growth and create and maintain jobs. This includes up to $200 billion to improve access to financing for consumers and businesses, $20 billion in personal income tax relief, $12 billion in infrastructure investments, $7.8 billion to stimulate housing construction, and much more than that.

Bill C-288 undermines this effort by advocating a flawed and restrictive proposal that will do little to promote economic growth. It is highly unlikely that a single new job for new graduates would be created.

I encourage members to follow the example of the House of Commons finance committee in the last Parliament and reject this proposal.

Income Tax ActPrivate members' business

March 30th, 2009 / 11:05 a.m.
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Bloc

Johanne Deschamps Bloc Laurentides—Labelle, QC

moved that Bill C-288, An Act to amend the Income Tax Act (tax credit for new graduates working in designated regions), be read the second time and referred to a committee.

Mr. Speaker, I would like to begin by giving credit where credit is due. I must thank my colleague, the member for Chicoutimi—Le Fjord, for all the work he did during the 39th Parliament.

Bill C-207, which he introduced on October 16, 2007, was supported by a majority of members of the House at all readings and even made it to the Senate.

Now we are back with Bill C-288, An Act to amend the Income Tax Act (tax credit for new graduates working in designated regions), and I promise my colleague and young people in the regions of Quebec that I am just as determined as he was to get this bill passed.

I would also like to mention the role played by the government members representing Saguenay-Lac-Saint-Jean—the members for Roberval—Lac-Saint-Jean and Jonquière—Alma. During election campaigns, federalists like to go on and on about how the Bloc Québécois is useless and does not have any power. But in this case, my two Conservative colleagues proved to their voters that being on the side in power is always bad for the regions of Quebec.

When the Conservatives voted against the old Bill C-207, they denied young people access to a tax credit they could have used as of this year's tax return. Conservative members from Quebec proved that their party line is more important than their regions' needs.

Once again, these members have proven that those who are members of governing parties in Canada tend to close their eyes and forget about standing up for the people they represent. This time, I hope that Conservative members from Quebec, especially the members for Pontiac, Roberval—Lac-Saint-Jean and Jonquière—Alma, as well as the independent member for Portneuf—Jacques-Cartier, will recognize that they must put their regions' interests before their party's interests. I hope that they will support Quebec regions and the young people who live there.

It will come as no surprise to anyone in this House that the regions of Quebec, like many regions in other Canadian provinces, are in the midst of an economic crisis, and they were already struggling long before the current financial crisis hit. Northern Ontario and British Columbia, New Brunswick, Nova Scotia, Newfoundland and Labrador, and Prince Edward Island are all regions that have been struggling economically for a number of years.

The lumber crisis that has been affecting many places for over five years now, a crisis that the Conservative government has done virtually nothing to address apart from handing out a few scraps, was the first indication of the deteriorating economic situation. Meanwhile, the auto and oil and gas industries are rolling in billions of dollars. Our regions are going through a terrible crisis that the Conservative government is completely ignoring. I can only hope that my colleagues across the floor will show a little humility this time by listening to the cry for help from the regions and the young people who live there.

The regions are in a period of economic distress, which of course only increases the trend of out-migration from the regions. Indeed, the further we go from the main centres, the more the population is declining. It feels as though Quebec is shrinking. The central regions, where people live within 150 km of Montreal or Quebec City, are faring better than the outlying regions. Some places are beginning to feel the devitalization, with the exodus of young people and the aging of the population.

Youth out-migration and rural depopulation are not new phenomena, but for decades, they were counterbalanced by high birth rates. With the drastic drop in the birth rate, the challenge now is to keep our young people in the regions and encourage even more to settle there. Time is of the essence, because this trend has continued since 2002 and the situation is getting worse in some places.

At present, the population is declining in six of the seventeen administrative regions in Quebec: Abitibi-Témiscamingue, Bas-Saint-Laurent, Côte-Nord, Gaspésie—Îles-de-la-Madeleine, Mauricie (except for Trois-Rivières) and Saguenay-Lac-Saint-Jean. For residents of the Saguenay, a yellow bus filled with young people leaving the region for Quebec City and Montreal every week is the symbol of this decline. Given the statistics, I ask myself how my Conservative colleagues from this region can justify opposing Bill C-288.

My area in particular—from Ferme-Neuve to Notre-Dame-du-Laus, Mont-Laurier, L'Annonciation and Labelle—has been hit hard by the forestry crisis over the past four years.

Every day young graduates leave before they start a family. A region that loses its young people is condemned to certain death, in the medium or the long term. To make matters worse, the departure of a young person often sets off a chain reaction and many more young people leave their regions.

Young people who leave the regions to study in Quebec City or Montreal will establish ties, friendships and a network. It is more likely that, at the end of their studies, they will be more inclined to settle in their new environment rather than returning to the regions where they grew up. That is even more likely because, depending on where they came from, it is very likely that a good number of their friends have also left the region and moved to a major centre. I personally know a number of families who have been affected. The parents have quickly decided to follow their children so they will not be too far from their grandchildren. I ask you, what is left when a region loses its youth and its baby boomers?

The regions need young people, especially skilled young people. With youth out-migration, the population ages faster and regions become less vital. The exodus of skilled individuals reduces the average education level of the people left behind, which undermines regions' ability to innovate. These factors affect the potential for development and could send the regions into a downward spiral that will ultimately destroy them.

Regional economies were traditionally based on the extraction and primary processing of natural resources such as wood and ore. These sectors require a large, but unskilled and uneducated workforce. Since outlying regions have few openings for skilled workers, young people with post-secondary education often leave the regions for the city and stay there, because they cannot find suitable work in their home region. Gone are the days when resource regions could prosper based solely on extracting natural resources for primary processing elsewhere. In order to grow, the regions will have to look to technology and develop their processing industry more.

It is often said that one reason for the problems outlying regions are facing is the fact that people there do not tend to start up businesses, but this is completely false. There are as many business start-ups per capita in outlying regions as in central regions. Today, a number of entrepreneurs are looking to lengthen the production chain by marketing products made from the resources they are already using. Others are using their expertise in raw material extraction to produce specialized equipment or are creating businesses in fields that have nothing to do with natural resources, such as fibre optics in the Lower St. Lawrence, video lottery terminals in Gaspé, diamond cutting in Matane or plastic parts in Saguenay—Lac-Saint-Jean.

In 25 years, outlying regions' dependence on the primary sector decreased by half. There were nearly four times more processing companies in outlying regions in 2001 than in 1975. In Abitibi-Témiscamingue, only 11% of jobs were in the primary sector in 2001, compared to 24% in 1975. In Saguenay—Lac-Saint-Jean, the rate declined from 10% to 6% over the same period. On the North Shore, it went from 19% to 9%.

The trend is certainly real but inadequate. In terms of jobs, these companies are still not managing to recoup the revenues lost in the resource sectors. Compared with those in the rest of Quebec, processing companies in the outlying regions are clearly growing less quickly and have lower survival rates. Even though companies in the regions have certain advantages—the lower cost of land, their proximity to resources—they also face difficulties that are peculiar to them.

One of these difficulties is the lack of skilled labour. There is less of it in the regions than in the big urban centres. This is a major hindrance to the development of secondary industry and high-tech. In all the studies that have been done, many companies said they would only be able to stay in their region if they did not grow very much. So long as the business stays small, they can do the work requiring professional or technical skills themselves. If the company grows, they have to hire skilled workers and the difficulty of finding them in their region might force the company to move.

The federal government is not responsible for education and workforce training. However, the shortage of skilled workers in the regions is not solely a matter of training. In fact, the young people from the regions are no less educated than those in the big cities.

The problem is rather that young people from the regions do not live there any more. There is an out-migration of young people and skilled workers. The federal government could help solve this problem without interfering in any of Quebec’s jurisdictions. That is the purpose of Bill C-288.

I want to turn now to the purpose and effects of the bill. Its principal purpose is to attract young graduates to the regions in order to help solve two main problems: the exodus of young people and the serious shortage of skilled labour. The bill gives a tax credit to young graduates who settle in a resource region and take up a job there. According to the current wording, this credit would be 40% of an eligible graduate’s salary in his or her first year in the region, up to a maximum of $8,000.

As the Province of Quebec has shown, it is, once again, more in touch with the regions' needs and realities. In 2003, Pauline Marois, then-finance minister in the Landry cabinet, introduced a similar tax credit. Since then, the program has been very popular and has delivered excellent results. In 2003, the first year it was available, over 2,500 young people benefited. In 2004, that number rose to 10,000 young people per year and has remained at that level ever since. Over 1,200 young people have come back to Abitibi-Témiscamingue, over 1,600 to the lower St. Lawrence, over 800 to Gaspésie—Îles de la Madeleine, over 1,000 to the north shore, and over 4,000 to Saguenay—Lac-Saint-Jean.

The tremendous increase in the number of young people who benefited from the program during its first and second years suggests that some 7,000 young people would not otherwise be living in the regions of Quebec. That means that 7,000 young people would have taken their first jobs in Montreal or Quebec City instead of in the regions, and would have started their families in an urban centre instead of in the regions. One of the big reasons they decided to settle in the regions is Quebec's tax credit, a measure that cost the province only about $30 million out of a $60 billion budget, or about $5,000 per young person.

My colleague from Chicoutimi—Le Fjord and I toured eastern Quebec during the week of March 16, 2009, to raise public awareness concerning Bill C-288. That tour has clearly shown that this tax credit is very necessary and very welcome to the local elected officials and all the groups we met. Whether in Chicoutimi, Escoumins, Forestville, Baie-Comeau, Matane, Trois-Pistoles, Rimouski or Rivière-du-Loup, not one regional stakeholder we met with indicated any objection to this Bloc Québécois initiative. Every single one of them talked about the advantages of the tax credit put in place by Quebec and they all fervently hope that Ottawa will bring in such a tax credit. Once again, the Bloc has shown that it is very much attuned to the reality of Quebec and the relevance of the Bloc cannot be disputed.

During our tour, we met with Carrefour jeunesse emploi representatives, leaders of student organizations, mayors and municipal councillors, MLAs and MPs, representatives of local development centres, regional conferences of elected officials, chambers of commerce, unions, the UPA, representatives from youth round tables, youth homes, youth employment centres and many others, and they all expressed their unwavering support for our initiative.

In closing, I would like to ask all members of this House to study Bill C-288 carefully, and to think about the future of the regions of Quebec and Canada. The estimated cost of this measure, $270 million, is very minimal compared to the potential benefits for the future of our young people and our regions.

Tax Credit for New GraduatesStatements by Members

November 20th, 2008 / 2:10 p.m.
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Bloc

Robert Bouchard Bloc Chicoutimi—Le Fjord, QC

Mr. Speaker, during the previous Parliament, Bill C-207, which I introduced, reached third reading. The bill proposed a tax credit of up to $8,000 for new graduates working in economically troubled regions.

All members of the previous Parliament, except for the Conservatives, supported this measure designed to stem the exodus of young people and to help bring skilled workers back to the regions.

This bill will be a priority for the Bloc Québécois in the coming session. That is why I am once again asking all members of the House for their support. In particular, I am asking the Conservative members from my region to set aside their party's ideology and put the interests of young people and their region first by supporting this measure. Conservatives cannot keep ignoring the regions of Quebec.

Status of WomenCommittees of the HouseRoutine Proceedings

June 18th, 2008 / 4:40 p.m.
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Bloc

Nicole Demers Bloc Laval, QC

Mr. Speaker, I will respond to the Parliamentary Secretary to the Minister of Human Resources and Social Development by simply saying that if there really was a strategy to decrease poverty in Quebec and Canada, the Conservative government would have voted in favour of Bill C-207 to keep young people in the regions. The Conservative government would have voted in favour of Bill C-269 to give women and youth access to employment insurance. The Conservative government would have voted in favour of Bill C-490 to give seniors the right to an increased and retroactive guaranteed income supplement. And the Conservative government would have voted against Bill C-484 to ensure that women will always have access to legal and free abortion.

Mr. Speaker, as you can see, I do not need two-and-a-half minutes to respond to the Parliamentary Secretary to the Minister of Human Resources and Social Development because I think I have summarized the situation.

Tax Credit for New Graduates Working in Designated RegionsPetitionsRoutine Proceedings

June 13th, 2008 / 12:10 p.m.
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Bloc

Robert Bouchard Bloc Chicoutimi—Le Fjord, QC

Mr. Speaker, today I have the honour to present a third petition about Bill C-207, which provides an $8,000 maximum tax credit over several years for new graduates working in designated regions.

As we all know, this bill was passed yesterday at third reading and is now before the Senate. This petition supports the bill, and it is my honour to present it.

Income Tax ActStatements By Members

June 13th, 2008 / 11:15 a.m.
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Bloc

Robert Bouchard Bloc Chicoutimi—Le Fjord, QC

Mr. Speaker, yesterday, a majority of members of this House voted in favour of Bill C-207 at third reading. The members for Roberval—Lac-Saint-Jean and Jonquière—Alma ignored the message from Saguenay—Lac-Saint-Jean and its representatives. It is deplorable that these two elected representatives and their colleagues from Quebec chose to blindly follow their party's right-wing ideology, the laissez-faire ideology the Conservatives are known for.

Yesterday, we saw proof of these members' impotence as they put their party ahead of the regions of Quebec that are in economic difficulty.

The Conservative government must now accept the verdict of the House. It has a moral obligation not to impede the bill's progress toward royal assent.

I want to thank all the people, municipalities, youth organizations and student associations who fought with me against the Conservative ideology.

Income Tax ActPrivate Members' Business

June 12th, 2008 / 11 a.m.
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Bloc

The House resumed from June 6 consideration of Bill C-207, An Act to amend the Income Tax Act (tax credit for new graduates working in designated regions), as reported (with amendment) from the committee, and of the motions in Group No. 1.

Income Tax ActOral Questions

June 10th, 2008 / 3 p.m.
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Macleod Alberta

Conservative

Ted Menzies ConservativeParliamentary Secretary to the Minister of Finance

Mr. Speaker, as members know, the finance committee has studied Bill C-207 and the Liberal members, along with the Conservative majority, recognize the many flaws in the bill.

It would be unfortunate, but should it pass, it would cost the federal government $600 million in foregone revenues, with no evidence that this would help regional economic development. I would encourage all members of the House to act responsibly and oppose this private member's legislation.

Income Tax ActOral Questions

June 10th, 2008 / 2:55 p.m.
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Conservative

Denis Lebel Conservative Roberval—Lac-Saint-Jean, QC

Mr. Speaker, tomorrow the House will vote on private member's Bill C-207 introduced by the Bloc. The bill was rejected by the majority of members of the Standing Committee on Finance because the financial implications were too great, it would not obtain the desired results and it did not constitute a long-term solution.

Canadians want real solutions like our targeted initiatives for regional economic development—for example, the $1 billion national community development trust—and not Bloc proposals that are riddled with serious shortcomings.

Could the Parliamentary Secretary to the Minister of Finance explain to the House the ramifications of passing such a bill?

Income Tax ActStatements By Members

June 10th, 2008 / 2 p.m.
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Bloc

Robert Bouchard Bloc Chicoutimi—Le Fjord, QC

Mr. Speaker, this Thursday, members of the House of Commons will have an opportunity to vote on Bill C-207 at report stage from the Standing Committee on Finance. I introduced this bill in 2006.

Since then, a number of individuals and organizations have expressed their approval for a tax credit for new graduates working in designated regions. Some 60 municipalities, RCMs, youth forums, educational institutions, youth employment centres and chambers of commerce have decided to support Bill C-207.

New graduates working in Haute-Mauricie, Gaspésie—Îles-de-la-Madeleine, Abitibi-Témiscamingue, the upper Laurentians, the North Shore, Saguenay—Lac-Saint-Jean and northern Quebec would be entitled to a maximum tax credit of $8,000.

We need measures to stop youth out-migration and promote the retention of skilled workers in economically depressed regions. Bill C-207 meets that need.

Income Tax ActPrivate Members' Business

June 6th, 2008 / 1:55 p.m.
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NDP

Dennis Bevington NDP Western Arctic, NT

Mr. Speaker, it is a pleasure to stand and speak to Bill C-207, An Act to amend the Income Tax Act (tax credit for new graduates working in designated regions). The bill would give each graduate who settles in a designated region a credit equal to 40% of the individual's salary, up to $8,000. This would encourage new graduates to settle in designated regions.

This is an important concept but it only goes so far in the whole context of what is happening in the northern regions of Canada. I also have full sympathy for northern students because almost all of them must travel to institutions in different cities to get a degree in a particular subject. In my own riding in the Northwest Territories, the government invests heavily in community colleges, to the point where students can now stay in the Northwest Territories and get a degree in education or in nursing, but that is about it.

In order for students in a designated region to get the education they want, they need to travel. The expenses are greater for them at the beginning. They also do not have the luxury of living at home when they are going to school. Once again the burden is greater on students from the far reaches of our country in achieving the education they need. These things all add up and make it very difficult for students.

When I went to school, our federal government at that time--

Income Tax ActPrivate Members' Business

June 6th, 2008 / 1:50 p.m.
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Liberal

Paul Szabo Liberal Mississauga South, ON

Mr. Speaker, I am pleased to rise during private member's business to speak to Bill C-207 put forward by the Bloc member for Chicoutimi—Le Fjord.

As has been covered in the debate, and I do not want to spend too much time describing the bill, it prescribes a tax benefit through a tax credit to allow employees, in areas which have economic challenges, who may have skills needs but may not be able to compete with some of the more attractive centres, an opportunity to work in those centres.

I can only imagine what Canada would be like if some of the smaller, economically challenged regions and communities in our country were to continue to fall behind. The population and businesses would decline, people would move away, jobs would be lost, and companies would shut down.

I believe this bill is important for Canada because it has to do with the shared value of the need for regional economic development. There are areas within our country that need some assistance from time to time to ensure they have some of the tools they need to continue to be economically vibrant.

We can imagine new graduates with the needed skills having opportunities to go to work in Quebec City, Montreal, Toronto or Vancouver. What about a place like Abitibi-Témiscamingue? Is it going to be able to compete with the fancy job in Montreal? Is it going to be able to pay the same money to attract a skills set to that area?

When I look around the country, I feel like saying that Canada is a picture or painting which has many aspects to it. How many of those parts of the picture can be taken away and still retain the integrity of the picture? It is very easy to imagine that Canada could shrink to urban economic centres. Eighty per cent of our population lives within 100 kilometres of the U.S. border.

There is a real threat and it affects not just agricultural communities, not just resource communities but thriving communities that have good fundamental economic bases, and they are at risk. That is why we have regional economic development programs because we need to ensure that there is a continuation of operations and the sustainability of communities.

When I spoke to the hon. member for Chicoutimi—Le Fjord, I looked at some of the names of the places. I do not know how many members may have been to places like Avalon Peninsula, Newfoundland and Labrador; Cape Breton; the north shore of Nova Scotia; Miramichi or Edmundston in New Brunswick; Gaspésie; Îles-de-la-Madeleine, Quebec; Estrie, Quebec; Laurentides; and Abitibi-Témiscamingue.

Windsor-Sarnia right now is undergoing a tremendous downturn in its economic outlook. Housing has gone down and unemployment has gone up. This was not the case a long time ago. Communities like Windsor were vibrant. The economic spin was going very well. Now, Windsor is becoming a have not area. It is just like a number of other communities across the country, whether it be in eastern or western Canada, northern Ontario or within Quebec. Circumstances change.

In fact, we are experiencing a significant shift in wealth and economic activity in Canada right now. Resource provinces are doing extremely well: Alberta, Saskatchewan and now Newfoundland. But 60% of the economic activity in Canada is in Ontario and Quebec collectively. That is where there is a lot of manufacturing going on and that is where there are going to be great pressures in terms of both employment and population dropping.

Populations are shifting where the resources are. I do not know what happens when finite resources start to disappear. I assume that people will migrate back again to the next best opportunity.

In the meantime, what will be the consequences? What areas will have to be sacrificed because we have not taken the initiative to provide certain incentives to allow them to sustain themselves when there are significant economic challenges.

We need our young people to be proud and to continue to be part of the communities in which they were raised. We do not want them all to stay in that community. We need to allow them to be as good as they can be. It may be a matter of graduates being able to go into another community which may be very similar, maybe not an urban centre, but chances are the economic advantages will not be there and will not be attractive enough for them, compared to other opportunities.

This particular bill provides at least initial economic assistance for these individuals to go, to take that job in a community that they know is the best fit for their skills, or is in an area in which they feel most comfortable. It is a win-win situation, not only for these individuals but also for the community and for the country as a whole.

I looked at the evidence presented at the finance committee. Everybody thinks that the committee did a very good job on this. I must say that I was a little concerned because one of the members of the committee, and I will not name the member or his party, but the member did say:

So the goal of your bill is to get young people to stay where they're from; it has nothing to do with making sure that the skill sets are meeting the needs of certain areas.

That tells me that this member did not even read the bill nor even understand the bill. In fact, the objective of the bill is quite the opposite. It is not to ask people to stay where they are, it is to give them the opportunity to go where they have the best opportunity to get that job and to develop those skills.

Then I hear another member over here saying, “You give them a tax benefit for one year, and then what are they going to do?” He has a lot of studies. I did not see any, but I can only assume. He can make that assertion. He asks, “After one year, what will they do?” He would say that they may leave because they are just there for the little tax credit, but once the tax credit ends, they are gone.

I know of members, even in my own caucus, who said, “My kid went to a community. He said he is going there for a year or two years”. That was eight years ago and that individual is still there doing that job because when a person gets that first job and develops that skill, his or her career is starting to build. People do not build careers by bopping around, job to job, every year, looking for a tax credit. We have to respect people's intelligence a little bit more than that.

I see that my time is up. I have a few more things that I really would like to say about the bill, but let me just say that I have taken enough time to look at it and I believe that the approach of the bill is sound.

There may be some disagreement or some discussion about the mechanics, but Quebec has had such a program since 2006. I understand that about 10,000 graduates were eligible. It is estimated that some 30,000 Canadian students, graduating with good skill sets, ready to serve Canada no matter in what region they choose to, would be eligible for such a program.

How can we be against that? It is the right thing to do. I support it and I will encourage my caucus to support the bill.

Income Tax ActPrivate Members' Business

June 6th, 2008 / 1:40 p.m.
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Conservative

Steven Blaney Conservative Lévis—Bellechasse, QC

Mr. Speaker, you can hear them, too. I would like the members to listen to me. I had enough respect to listen to them and I would like them to do the same.

This is yet another in a slew of disappointing and really poorly thought-out economic proposals coming from the Bloc Québécois, proposals that really do not address the priorities of Quebeckers in any meaningful way. It is such poor proposals that have even led the sponsor’s Bloc colleague, the member from Longueuil—Pierre-Boucher, to admit, and I quote:

The economy is constantly an albatross for us. We are profoundly uncomfortable when it comes to discussing the economy.

The Bloc members had the chance to support budgets that included concrete measures to help Quebec's economy, but they remained seated. Other colleagues, such as the member for Roberval—Lac-Saint-Jean, rose in this House and stood up for the people of Lac-Saint-Jean by supporting these measures. Colleagues like the member for Charlesbourg—Haute-Saint-Charles rose and stood up for Quebeckers. They are working here, proud to be both Quebeckers and Canadians.

Why did the majority of the members of the Standing Committee on Finance vote against this bill? Because of its many serious and glaring flaws and the fact that it does not hold water.

First, the designated regions referenced in the bill are drawn from a list that has not been updated in over 20 years and does not account for the economic changes that have taken place during that time.

Second, the tax credit would also introduce inequities in the tax system: inequities between recent graduates and those who graduated earlier, and inequities between new graduates who work in different regions.

Third, the credit would be exceedingly expensive. The money could be invested elsewhere to support our manufacturing sector, which would create jobs and keep our young people in regions such as Bellechasse, Les Etchemins and other regions throughout Quebec.

Bill C-207 tries to use the tax system to encourage new graduates to work in certain regions of Canada in order to address perceived skills shortages, but attempts to do that in ways which, in the end, would make the tax measure ineffective. It would, for example, only provide tax relief to a new graduate's first 52 weeks of qualified employment. What happens after the initial 52 weeks when there is no longer a credit available? Clearly, this type of measure cannot yield long term benefits to regions, and I am not even sure it would have an incremental impact in the short term beyond reducing taxes for a selected group of workers.

Another concern with the bill is that it does not make any attempt to target skills sets that are in short supply in a designated region or that could benefit its development. As I just mentioned, it has been 20 years since the list of designated regions was updated.

That is not all. There are other flaws in the bill. As I said, it would create severe inequities by discriminating between regions, and between groups of graduates.

Graduates who finish their programs around the same time, but who live and work in different regions, could face entirely different income tax burdens during their first year of employment. That would result in inequities and create two classes of graduates. As well, two graduates working in the same job and region, but whose graduation dates are a year apart, would face an $8,000 gap in their respective tax burdens. This, too, is patently unfair.

Finally, this bill would be incredibly expensive. Not only would it be ineffective, it would be costly. Estimates suggest that the credit could cost up to $600 million, money that would be taken away from other areas on a tax measure for which the outcome is uncertain.

This bill is the wrong way to go.

Income Tax ActPrivate Members' Business

June 6th, 2008 / 1:40 p.m.
See context

Conservative

Steven Blaney Conservative Lévis—Bellechasse, QC

Mr. Speaker, I am very pleased to rise today to speak to Bill C-207.

Unfortunately, I cannot support this bill, because it is flawed and expensive.

However, I supported a bill that created a fund for the manufacturing industry and I supported a budget that creates a package through which manufacturing businesses throughout Quebec can expand and create good, well paying jobs.

As usual, the sponsor of the bill introduces bills to impress the gallery, but unfortunately, he did not act at the right time. He did not stand up for Quebeckers, to support concrete measures for Quebec industry.

I would simply like to remind the sponsor of this bill that the economic outlook is very encouraging at this time. The manufacturing sector in Quebec saw an employment increase in the last quarter. Imagine that. These are encouraging numbers in terms of job creation in the manufacturing sector. There was also an increase in the net number of jobs created in Quebec.

Income Tax ActPrivate Members' Business

June 6th, 2008 / 1:30 p.m.
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Bloc

Mario Laframboise Bloc Argenteuil—Papineau—Mirabel, QC

Mr. Speaker, I am pleased to speak on behalf of the Bloc Québécois about this excellent private member's bill, introduced by my colleague from Chicoutimi—Le Fjord, a member who does an excellent job. I would also like to say that the member for Chicoutimi—Le Fjord is an example for everyone in the Saguenay—Lac-Saint-Jean region, a region that, for various reasons, is not always favoured economically. One of those reasons is the current serious forestry and manufacturing crisis.

Obviously, one way to deal with the forestry and manufacturing crisis is to encourage businesses to hire young people. That is what this wonderful bill, Bill C-207, introduced by my colleague for Chicoutimi—Le Fjord, seeks to do.

I will summarize the bill for you. The Bloc Québécois does not reinvent the wheel. Our goal in this House has never been to claim that we are all-knowing. We are able to look at what other parliaments are doing and borrow their positive initiatives. One of those positive initiatives came from the Quebec government, which implemented a similar credit in 2003. Their goal was to curb the exodus of young people—this bill has that same goal—as well as to deal with the shortage of skilled labourers.

This bill would introduce a tax credit for young graduates who accept jobs in a resource region. Under the bill, this credit would be equal to 40% of the young graduate's salary for the first year, to a maximum of $8,000.

In 2003, the first year the Government of Quebec instituted a similar credit, 2,500 young workers applied for it. In 2004, the number rose to 9,700. There was a tremendous increase of 7,000 young workers between 2003 and 2004.

This applies to all designated regions, which are regions with a declining population. That is the bill's objective. As I have already said, and will continue to say, my colleague from Chicoutimi—Le Fjord is being practical. He looked at the situation in Saguenay—Lac-Saint-Jean, decided to take the bull by the horns and deal with depopulation.

There is not one member in this House who can afford to ignore such situations. When areas such as Saguenay—Lac-Saint-Jean experience an exodus of youth we must try to find solutions. The member for Chicoutimi—Le Fjord has made a good attempt, in tabling Bill C-207, to do something about the exodus of youth and the shortage of skilled labour.

This tax credit for designated regions will not apply to just the Saguenay-Lac-Saint-Jean area. The bill will apply to all Quebec and Canadian regions that may experience depopulation so that we can retain our youth and deal with the shortage of skilled labour.

We will see, in this House, those members who care about the regions. We will see where political parties stand when they vote on Bill C-207. I cannot fathom that there would be a Conservative member who would vote against. The former mayor of Roberval is from the Saguenay—Lac-Saint-Jean region and the member forRoberval—Lac-Saint-Jean. I met this member when he was mayor of Roberval and he had a backbone. It seems that he has become spineless since becoming a member of the Conservative Party. We will see what he does and how he will react to the vote on Bill C-207.

Once again, the minister responsible for this region, the member for Jonquière—Alma, has already said he opposes this bill. That is not surprising because he was already a spineless Conservative. He only has himself to blame.

There is one thing, however. Once again, this bill, which was introduced by my colleague, the hon. member for Chicoutimi—Le Fjord, simply duplicates a measure adopted by the National Assembly of Quebec in 2003 that produced positive results. I invite people to listen to the figures once again. I am pleased to repeat them, since some of my colleagues in this House seem to prefer to hold the party line. They will be given documents prepared by their research staff and what I have to say will certainly not appear in their documents.

With respect to the program instituted in Quebec, in 2003, 2,500 people took advantage of it and in 2004, that number rose to 9,700 people. It continues to increase all the time. This therefore allows businesses to hire young people and allows the regions to stop the exodus of young people. It does not apply to all regions of Quebec. Some regions of Quebec are seeing a growth in population, like elsewhere in Canada.

The regions that are experiencing growth do not warrant such assistance, but we must do everything we can to keep young people and jobs in the regions with declining populations. We must stop the decline of the regions. That is the major problem created by the current crisis in the forestry and manufacturing sectors. We run the risk of losing our entire work force in the regions, of losing all the expertise and experience of those men and women who were the economic driving force of our regions.

And this is all because the Conservative Party decided not to give businesses direct assistance. They offer tax credits, but those are not refundable. A forestry or manufacturing business that is not turning any profit will not get any tax credits and cannot benefit from the advantages of the budget that was tabled. The Conservatives do not seem to understand that if a business is not paying taxes, tax credits must be refundable.

We also need a plan to help companies modernize. In the case of the forestry sector, trees will continue to grow. It is not a matter of telling people, as the Conservatives are doing, to try to find a new career, when forestry workers have experience in that field. They are being told to go into computer technology or into other economic diversification sectors. Meanwhile, the trees will continue to grow. If we want to compete, we need to modernize our companies and help them purchase state-of-the-art technology so that they can become more competitive and regain their position on the market.

The Conservatives decided to leave it to the free market. They saw that smaller companies had been taken over by larger ones, and that the larger ones will not make it through the crisis. The situation will play out as they want it to. There will be regions living off the forest that will no longer have an economy, and the people will move to larger centres. That is not what the Bloc Québécois wants.

My colleague from Chicoutimi—Le Fjord is doing excellent work. I am always surprised by what I read in the news in his region. Even the media, which is often rather tough on the Bloc Québécois, believe that he is doing excellent work. That is to his credit, but not to the credit of the two Conservative members from the Saguenay—Lac-Saint-Jean region.

I am anxious to see how the Conservative members will vote on this bill. I thought that the former mayor of Roberval, the member for Roberval—Lac-Saint-Jean, found it interesting. Then he realized that there is the Conservative Party line to toe when the minister, the member for Jonquière—Alma, said that he opposed the idea. He is probably about to vote against a measure that would help young workers in his region and stop them from leaving the area.

I always find that surprising. I am always amazed to see a Quebecker buckle before the Canadian right and to give in. I have a great deal of difficulty with that. He is repudiating our values, the interests we defend and our citizens for the sake of the future of a political party that no longer has a future and that will see what happens in the next election. Perhaps the time has come for Quebec MPs to rise and defend the regions of Quebec, whether they are Conservatives or Liberals.

They will be in a position to say to Quebec's designated regions experiencing depopulation and the exodus of their youth that, for once, they will implement a positive measure on their behalf—one that produced results in 2003 when implemented by a similar law by the Quebec government. Quite simply, it would give this opportunity—

The House resumed from April 7 consideration of Bill C-207, An Act to amend the Income Tax Act (tax credit for new graduates working in designated regions), as reported (with amendment) from the committee, and of the motions in Group No. 1.

Bill C-207PetitionsRoutine Proceedings

June 6th, 2008 / 12:05 p.m.
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Bloc

Robert Bouchard Bloc Chicoutimi—Le Fjord, QC

Mr. Speaker, today I am presenting a second series of signatures from Quebec citizens who support Bill C-207. There are several hundred citizens in Quebec regions who support Bill C-207. This bill would give an income tax credit of up to $8,000 to recent graduates who accept employment in a region that is facing economic difficulties.

I would like to read a few words from the petition: “Considering that Bill C-207 would come to the aid of regions [facing economic difficulties] and that a similar program exists in Quebec and has proved successful. We [,the citizens,] are calling on the House of Commons and all members of Parliament to support Bill C-207.”

I present this petition on behalf of these citizens.

Income Tax Act—Bill C-207PetitionsRoutine Proceedings

May 14th, 2008 / 3:20 p.m.
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Bloc

Robert Bouchard Bloc Chicoutimi—Le Fjord, QC

Mr. Speaker, I am honoured to present a petition on behalf of citizens from various regions of Quebec who support Bill C-207. This bill would give an income tax credit of up to $8,000 to recent graduates who accept employment in a region that is facing economic difficulties. The bill is designed to keep our young people in the regions, to develop a skilled labour force and to reduce or stop the exodus of these young people.

There will be a vote in the House in early June. I hope the members across the floor, particularly the Conservative members, will vote in favour of this bill. I am optimistic that this bill will pass.

Motions in AmendmentIncome Tax ActPrivate Members' Business

April 7th, 2008 / 11:50 a.m.
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Conservative

Mike Wallace Conservative Burlington, ON

Mr. Speaker, it is my pleasure today to talk about Bill C-207.

Canada's Conservative government takes seriously the challenges of ensuring that Canada is equipped to succeed in an increasingly competitive world. Our vision for success includes all regions of this great country. This vision is set out in our “Advantage Canada” economic plan and has been acted on in real terms.

“Advantage Canada” sets out a blueprint for the best educated, most skilled and most flexible workforce in the world, and it does so on the understanding that all of our young people need to be given the opportunity to acquire the skills and training they need to give Canada the knowledge advantage it needs to succeed.

When Canada succeeds, we all succeed. That is why Canada's Conservative government brought forward its vision in “Advantage Canada” and that is why we are acting on that plan in real terms, delivering real results for Canadians.

Our plan is about achieving a higher standard of living and a better quality of life for Canadians as the world economy continues to transform. It is about helping people reach their full potential and ensuring that they have the incentives, opportunities and choices they need to achieve a better quality of life.

This government understands that high taxes limit Canadians' opportunities and choices and hinder economic growth. With a more focused government, we can lower taxes to create incentives for all Canadians to succeed, regardless of where they live and work.

An essential element of our “Advantage Canada” plan to secure Canada's economic future involves attaining one of the most competitive business tax regimes in the world. The Government of Canada has made enormous strides in this regard.

With the $60 billion in tax cuts announced in our fall economic statement, including another one percentage point reduction in the GST, the total actions taken by this government to date are approaching $200 billion in tax cuts over this and the next five years. This will bring federal taxes to their lowest level in nearly half a century. The federal tax burden measured by the total federal revenues as a share of the economy will fall to 15.1% by 2011-12, the lowest ratio in nearly 50 years.

Key to our objectives for a strong business environment is the reduction of the federal corporate income tax rate from 22% to 15% by 2012. This will make Canada's corporate income tax rate the lowest among the world's major developed economies. This will give Canada a substantial tax advantage over the United States, with a statutory tax rate advantage of over 12 percentage points and an overall tax rate on new business investment advantage of more than 9 percentage points by 2012.

Along with a reduction in corporate income tax, we also have eliminated the corporate surtax for all corporations. This not only reduced the corporate tax rate by 1.12 percentage points in 2008, but also simplified the tax system.

We eliminated the federal capital tax two years ahead of schedule.

We provided an incentive to encourage provinces to eliminate their capital taxes.

We reduced the small business tax rate to 11% from 12% beginning in 2008.

We increased the small business limit to $400,000 from $300,000.

This competitive tax regime will be a powerful brand for Canada globally and will leverage economic growth and the creation of employment opportunities for all Canadians, regardless of which region of Canada they choose to live and work in.

Bill C-207 proposes to use a tax credit to encourage young people to stay in a particular region. Yet, unlike “Advantage Canada”, it would not help to create the types of employment opportunities that would provide an incentive for a young person to stay.

The bill ignores the very nature of Canada's economy. Economic adjustment is an ongoing reality of a healthy, dynamic, diversified economy.

The Government of Canada supports regional economic development and devotes significant resources to programs that are responsive to local needs, make strategic partnerships with other stakeholders, and are multi-faceted in their approach. Our government proposes a visionary plan to improve the standards of living and quality of life of Canadians and to make Canada a world leader for today and for future generations. Bill C-207 would do nothing like this. Instead it proposes to spend up to $600 million on a tax credit that does not help create a single additional job.

For these reasons, I am unable to support this private member's bill. I encourage hon. members to similarly reject it as the significant financial resources that it entails could be more effectively dedicated to meeting the priorities of Canadians.

With the time I have left, I want to go over some of the issues we had with the bill. As a member of the finance committee, I had the opportunity to discuss the private member's bill with the member who brought it forward and with some of the staff he had brought forward to help with those decisions.

There were four or five key points that were made during those meetings. As we can see, the bill has been changed considerably since being brought to committee. I will explain the reasons why we believe those changes are important.

For example, no particular professions or skill sets are targeted. The bill said that no matter what the job was, if people worked in the region, they could get the credit if they came from that region. If people were in a profession that was well represented in the area and there were no particular skills set that they brought to the table, the bill did not address that. The credit would effectively go to all post-secondary and university graduates.

The bill did not do what the member wanted it to do in terms of creating jobs in the home area from where the young people came. If the area is already saturated with that type of employment and has those opportunities, there is really no need for that tax credit. That money could be used to target, as we have done “Advantage Canada”, opportunities for people across the country and not in specific areas. Since regions with high economic growth are also likely to witness shortages of skilled workers, encouraging graduates to remain in economic depressed regions could aggravate these shortages.

That is exactly one of our points. I come from an area in Ontario that is doing well. There are areas in the country that are not doing well. However, I have always believed in the mobility of labour. I want young people from my region to be able to work in any region in Canada where they find satisfactory and challenging work. This has economic benefit not only to them, but to the country as well.

The bill does not encourage that. In fact, it does the opposite. That is another reason why, at committee and here in the House, I did not support the original bill brought forward by the Bloc member. The credit would provide tax relief only with respect to the first 52 weeks of qualified employment and would not necessarily provide long term solutions. This is the specific comment I made at committee. It is a very short term, short-sighted solution. Areas that need help do not need it for only 52 weeks. They do not need people who are just there to get a tax credit. They need a longer term vision.

I would hate to see young individuals, who make these moves to these areas to get these jobs, stay at home for 52 weeks for the tax advantage. I do not think it does anything for the economic development.

Those are just three of the things I spoke to at committee. There is a variety of others.

I will not support Bill C-207 when it comes to a vote in the House of Commons. I did not support it at committee. There are better ways to proceed, such as what the Conservative Government of Canada has done. We will proceed with “Advantage Canada”, making a difference for all Canadians in all regions of the country.

Motions in AmendmentIncome Tax ActPrivate Members' Business

April 7th, 2008 / 11:30 a.m.
See context

NDP

Denise Savoie NDP Victoria, BC

Mr. Speaker, I am pleased to speak to Bill C-207, which seeks to amend the Income Tax Act in order to encourage new graduates to return to their region of origin, and therefore better support the regions and curb the exodus of young graduates.

I am a little bit confused by my Liberal colleague's speech because he does not seem to agree with his colleagues on the Standing Committee on Finance where, unless I am mistaken, the Conservatives and the Liberals attempted to gut this bill.

I support the original bill which provided a non-refundable tax credit of 40% of the graduate's salary to a maximum of $8,000 for the first 52 weeks of employment in the region.

This bill is based on the Quebec tax model that has helped 1,300 people a year in that province at an estimated cost of $21 million. The amount that was cited by my Conservative colleague seems to be an exaggerated amount if extended across Canada.

There were, indeed, problems with the bill but none of those problems were insurmountable.

It is said that there is none so deaf as he who will not hear. I am afraid that the Conservatives simply did not want to have anything to do with it. I will speak about this in more detail later.

First, I would like to talk about a few problems with this bill, including the definition of the regions. As pointed out, the definition is based on an act that has not been amended for a number of years, specifically since 1982. That is a problem. When we refer to new graduates, do they have to have graduated very recently or could it simply mean graduates?

As I mentioned, these are not insurmountable problems. They could have been fixed in committee.

It does not surprise me that the Conservatives did not understand the possibilities of this bill. It could be a step, in my view, in the right direction in terms of levelling the playing field and possibly bridging the divide between rural and urban areas which have a significant advantage right now in attracting qualified workers.

For example, we know that urban areas depend on good food. Concerns about food security are increasing in Canada. This would be a way of encouraging value added industry related to food production in rural regions by motivating young people to go back to rural areas.

This bill could have had a positive effect on low and middle income families in those regions. Canadian communities need the economic and social conditions to thrive. All regions in Canada need those conditions.

One of my colleagues on the finance committee made a statement.

I have a copy of the document, from which I will quote. He indicated that Canada presently has a productivity problem, according to the statistics. He said, “Now, typically speaking, Canada is a country that suffers from a productivity challenge.” I do agree with that.

And then he continued, “We have economists come forward and talk to us about that all the time. This bill would seem to set up a counter-intuitive incentive to improving Canada's overall productivity.”

I do not agree with that. It may not be an intuitive solution but if our goal, in Canada, were simply to send workers to the regions that are already thriving, this would not help all Canadian regions to flourish, and that is the point of this bill.

In my opinion, the role of government is not simply to send workers as widgets to fill a need for industry. It is also to ensure that all regions in Canada develop and are allowed to maintain their integrity. This is where a law such as this would help assist workers to encourage them to go back to their region.

In British Columbia there is a very strong economic growth right now but that there are also smaller regions, for example, forestry regions where workers are unemployed and suffering from the beetle kill, where this law would assist those small regions.

I would ask my colleagues to think about this, and those in Alberta perhaps know it better than anyone else, the impacts of the tar sands and the development of the oil industry, which has produced riches no doubt, but it has also created terrible social and economic problems.

I do not think the objective that we should have as government leaders is to only feed those industries, continue to feed that one part of Canada that is going full steam. Certainly that should be part of it but there are other regions in Canada that should be better supported.

The bill offers one small piece of the puzzle. It is not the total answer but it would help encourage graduates to go back to regions or to go to rural areas and provide some of the technical knowledge they have acquired at university, the expertise, the ingenuity, the creativity that would bring an enrichment and renewal to these regions that may be economically depressed.

Therefore, I am pleased to support the amendment to re-establish the integrity of the bill and to reject the amendments of the finance committee. I understand that there is a new amendment that will be coming forward to further make this bill more acceptable. I hope my colleagues from the Liberals and the Conservatives will be supportive.

We did not support the gutting of the bill at committee. As I said, we saw it as a first step to draw young graduates to economically depressed regions. It could act as an incentive to motivate regions toward greater economic development within the context of an overarching regional government strategy.

As I said at second reading, when I spoke to the bill, it does require a regional development plan but I could see very easily where a bill of this kind could be paired with a good regional development plan that would really allow the region to grow in a way that it would not without the bill.

In conclusion, we support reinstating the bill's content. We would have proposed that it could have been strengthened with specific definitions but that in itself is not adequate to vote it down.

Motions in AmendmentIncome Tax ActPrivate Members' Business

April 7th, 2008 / 11:20 a.m.
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Liberal

Geoff Regan Liberal Halifax West, NS

Mr. Speaker, it gives me great pleasure to join the debate this morning on private member's Bill C-207, An Act to amend the Income Tax Act (tax credit for new graduates working in designated regions), in other words, particularly in rural regions or regions of the country that have economic challenges, that face real problems in terms of people leaving those regions for other parts of the country, moving to, for instance, urban areas or other provinces to find work and opportunities.

These are also communities that are losing some key people they need, whether it be doctors or other professionals whom they need in those communities. We need to have measures to encourage young people to go back to those communities to work in those communities.

I am actually speaking today as a replacement. I am here because I received a call on Friday from my good friend and colleague, the member for Dartmouth—Cole Harbour, who sadly had to remain in the riding for a very good reason, and that is for the funeral of Mr. Jim Connors.

All members from Nova Scotia would probably know Mr. Connors as a very distinguished person in Nova Scotia, a very well liked person, who fought a hard struggle with cancer over the past while. I know that colleagues will all join me in expressing our condolences to the family of Mr. Connors and his friends, who are gathering today, as is my colleague from Dartmouth—Cole Harbour, for that funeral.

I am pleased to be here on my colleague's behalf to talk about the bill. Let us recognize that clearly there are hot spots in our economy.

For example, in large cities, the economic situation is usually stronger, and the economy is growing. We often see youth leaving their small rural communities for urban centres such as Montreal, Toronto, Vancouver and so on. It is their right to decide where they want to live, where they want to stay. However, at the same time, we need to have young people in rural communities, in the regions. It is very important to have young professionals and youth with a lot of skills. They have gone to university or community college, and we need to recognize that taxes paid by both rural and urban taxpayers help universities and community colleges to exist, to pay their costs. They have the same interest in seeing the graduates from these institutions return to their communities.

We should be looking at this measure because we have seen across the country a movement from rural to urban, out of regions like mine in Atlantic Canada to other parts of the country.

There are two challenges. One of the challenges that the bill does not really address directly is the challenge of economic development in the regions of this country, particularly regions that are facing greater challenges. This bill does not respond to that challenge but proposes a measure that would assist in getting young people to go back to those communities. The way it does that is by providing a 40% tax credit up to a maximum of $8,000 for the first 52 weeks a young person works after getting a degree.

I am concerned about some aspects of this bill. There is a question about whether young people would actually go for one year, then depart and take advantage of the $8,000 or the 40% tax credit to lower their tax payable and to have that benefit in the one year. The intent is that they would be active in the community, get jobs in the community because of this and would stay there.

It is reasonable to assume that many would in fact stay in those communities because of the encouragement and incentive to go there to begin with, where they could get jobs and further the contacts they have had from their youth. This could be a beneficial instrument, although perhaps it would be better if it were a longer period. I am not sure that one year is adequate.

I suppose one way to do this could be to have a declining level of some sort, a process where they could get so much in the first year, maybe the next year 30%, then 20% and so forth so that it encourages young people not only to go to a community or region of the country to begin with but to stay there a longer term. We also need to have in those communities the kind of job creation that makes young people want to be there.

It is important to recognize that in the less developed or challenged regions of this country there are communities that are thriving. Rural communities are thriving, although there are not enough of them. A lot of communities in Atlantic Canada have seen many people go down the road, as they say, to Toronto, Alberta and so forth, for opportunities. We need to be very concerned about that.

A few years ago I had the occasion to visit the riding of Labrador with my hon. colleague, the member for Labrador. We visited his home community of Williams Harbour which has a population of 40. They are 40 of the friendliest people one would ever meet. It was a wonderful, short visit. In fact, as we flew in to Williams Harbour in a little twin prop plane, it looked like the runway was not nearly long enough. The landing strip looked like it was not nearly long enough to actually land and stop. It made us feel like the plane was going to fall into the water after the short runway, but we managed. It is a bit like Pangnurtung in Nunavut. Once one is on it, it is longer than it looks like from above, thank goodness, and planes can land there.

The same day we also visited the community of Black Tickle, Labrador, which, 15 years ago, had a population of 400. Today, it is 200. It is a community that has clearly suffered because of the downturn in the fishery.

Throughout Atlantic Canada, we have seen many communities suffer because of the decline in finfish, particularly the cod of course. We hear a lot about groundfish and cod is the prime example. What that has meant is that with less cod there have been more shellfish.

When one catches a lobster, generally speaking there is not a lot of onshore processing. In other words, what often happens is that lobster goes in a box, which is shipped off to Boston, New York, Paris or wherever and it does not create the kinds of jobs where, for instance, cod would go onshore to a plant where it would get gutted, filleted and processed in various ways, which involved a lot more work in those coastal communities that today are not seeing nearly as many of those kinds of jobs. They are seeing a decline. There are people there still who need doctors and young people to be the bankers and to do the many important jobs that are still required in those areas.

It seems to me that this bill would assist in encouraging those young people who want to reside in one of those areas. It is really a question of choice. They have the right to go where they wish. A very important part of our Charter of Rights and Freedoms is to have the freedom of mobility.

However, the idea of offering young people a little encouragement if they choose to reside in one of these economically challenged areas makes absolute sense. It will not mean they will go if there are no jobs there. We need to do more to support the development of jobs in those areas. However, it will mean that some of those young people will try to go back to their home communities or other communities in rural and less developed parts of this country to give it a shot and get involved in that community where they can make a difference.

It is not only those communities. It is this country as a whole in terms of the fabric of our society that benefits when our rural and remote communities are thriving.

The feeling I got in the communities of Williams Harbour and Black Tickle was a very warm one. Those are wonderful people and they are an important part of the fabric of this country.

Motions in AmendmentIncome Tax ActPrivate Members' Business

April 7th, 2008 / 11:10 a.m.
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Conservative

Ted Menzies Conservative Macleod, AB

It is wonderful to be back here and hear the accolades coming from the other side so early in the morning. It is nice to see that they are up and atom.

I do welcome this opportunity to continue the debate on private member's Bill C-207, on which, by the way, we heard the witnesses who appeared and we debated at the finance committee, so we do actually understand what is in this legislation.

This bill is sponsored by the hon. member for Chicoutimi—Le Fjord. As the hon. members are aware, it proposes an income tax credit for new graduates taking employment in certain regions. The credit would be equal to 40% of earnings from the first 52 weeks of qualifying employment, to a maximum credit of $8,000.

Qualifying employment would be employment in a designated region and employment duties would need to be related to the graduate's education. A designated region for purposes of the credit is an area defined in section 3 of the Regional Development Incentives Act.

While I can appreciate the intent of this proposal to a certain degree, I have to make it very clear that I consider there to be a number of significant practical problems associated with this bill, issues that should be of concern to members of this House and which should preclude them from supporting it.

One of my first concerns is that there appears to be no coherent rationale or specific identifiable necessity underpinning the proposed tax credit. In other words, the hon. member for Chicoutimi—Le Fjord has not demonstrated that there is in fact a shortage of skilled workers in the designated regions targeted by this bill.

Is there any evidence, for example, that employers in these regions cannot find the skilled workers they need, even if they offer competitive compensation and working conditions? Even if there is, why then would the measure only target new graduates and not all qualified skilled workers relocating to these designated regions? Why propose a credit available to all recent graduates, regardless of occupation? Above all, what is the rationale for providing significant federal government support to entice recent graduates to work in certain regions instead of others?

The designated regions that the bill references are drawn from a list that has not been updated in over two decades and which simply does not account for economic changes that have taken place in the interim. The credit proposed in this bill would also introduce very serious inequalities in the tax system between recent graduates and those who graduated earlier, and inequities between new graduates who work in different regions.

Finally, the credit would incur a substantial fiscal cost to taxpayers in terms of forgone revenue for a tax measure that may ultimately not result in any new jobs for any new graduates anywhere in the country. This is simply not consistent with the government's approach of dedicating federal resources to where they will have the greatest positive economic impact.

If anything, this bill would, if passed, divert fiscal resources away from programs that actually do support regional economic development and that do foster the kinds of economic conditions under which all regions of Canada can grow and prosper.

This bill would only provide tax relief with respect to a new graduate's first 52 weeks of qualified employment. This raises a fairly obvious question in my mind. If the proposed credit were actually needed to encourage new graduates to work in designated regions, what would happen after the initial 52 weeks when the credit is no longer available? Moreover, why not provide incentives to other skilled workers who are not new graduates, if the member's concern is truly skills shortages in these regions?

All of these issues raise significant questions about whether this bill would yield long term benefits to the intended target regions and whether it would even have an impact in the short term beyond reducing taxes for certain groups of workers.

The bill is inadequate in meeting its intended objectives in a range of areas. It, for example, does not even make any attempt to target skill sets that are in short supply in a designated region or which could assist in its development.

I would like to take a moment to return to the concerns I outlined at the outset with respect to the bill's definition of “designated region”.

As we all know by now, the credit is only provided to new graduates who take up work in a designated region, a term taken from the Regional Development Incentives Act. The term refers to a region in which, to quote the act, “existing opportunities for productive employment in the region are exceptionally inadequate”.

As I said, the list of regions specified in the act has not been updated in over 20 years. This list simply does not reflect the current economic reality of Canada's regions. I might add, as an example, 20 years ago the oil sands projects were very much in their infancy, and that is one of the highest demand regions for skilled labour that we have in this country now.

Let us take a couple of glaring cases in point.

I will draw hon. members attention specifically to the fact that the provinces of Saskatchewan and Manitoba are included on this list in their entirety, yet both provinces have recently displayed unemployment rates that are below the national average. If anything, Saskatchewan is one of the country's recent economic success stories with its economy booming as a result of the ongoing development of its extensive energy reserves.

That being the case, and given the significant economic challenges being faced elsewhere in the country, it would be inappropriate to dedicate limited federal resources to ensuring new graduates in these provinces pay up to $8,000 less in federal income tax than those not working in regions designated as having inadequate opportunities for productive employment 20 years ago.

Clearly, Bill C-207 would lead to some unfair and almost surreal regional de facto subsidies if it were adopted.

The bizarre inequities introduced by this bill would not only occur between regions but also between individuals or groups of graduates. For example, graduates who finish their respective programs roughly concurrently but who live and work in different regions could face completely different income tax burdens in their first year of employment. At the same time, two graduates working in the same job and region but whose graduation dates are a year apart would also face that $8,000 gap in their respective tax burdens.

Canadians simply cannot and should not be expected to support a program that introduces such inequitable outcomes into our tax system.

What is more, the tax credit proposed under Bill C-207 is also incredibly expensive. Estimates suggest that it could represent up to $600 million in forgone revenue each year to the federal government. As I have suggested, these are funds that would no longer be available to other priorities for which there is a great deal of public support.

In the real world, the conditions that Bill C-207 is trying to address would not be solved through temporary and arbitrary tax benefits like those proposed.

For these reasons, I am unable to support this private member's bill and would encourage hon. members to simply reject it, so that the significant financial resources that it entails can be more effectively dedicated to meeting the priorities of Canadians.

Motions in AmendmentIncome Tax ActPrivate Members' Business

April 7th, 2008 / 11 a.m.
See context

Bloc

Robert Bouchard Bloc Chicoutimi—Le Fjord, QC

propose:

Motion No. 1

That Bill C-207 be amended by restoring the title as follows:

“An Act to amend the Income Tax Act (tax credit for new graduates working in designated regions)”

Motion No. 2

That Bill C-207 be amended by restoring clause 1 as follows:

“1. The Income Tax Act is amended by adding the following after section 118.7:

118.71 (1) The definitions in this subsection apply in this section.

“base period” means the first 52 weeks of the aggregate of all periods each of which is a period during which the individual

(a) holds qualifying employment; and

(b) ordinarily performs the duties of the qualifying employment at an establishment of the individual’s employer situated in a designated region or is ordinarily attached to such an establishment.

“designated educational institution” has the meaning assigned by subsection 118.6(1).

“designated region” has the meaning assigned by section 3 of the Regional Development Incentives Act.

“qualifying employment” means an office or employment that the individual begins to hold in the 24-month period that follows the date on which the individual successfully completes the courses and, where applicable, the internships leading to the awarding of a recognized diploma, or the date on which the individual is awarded a recognized diploma that is a master’s or doctoral degree under an educational program requiring the writing of an essay, dissertation or thesis, if

(a) the individual begins to perform the duties of the office or employment after January 1, 2007;

(b) at the time that the individual takes up the office or employment, the establishment of the individual’s employer at which the individual ordinarily performs the duties of that office or employment, or to which the individual is ordinarily attached, is situated in a designated region; and

(c) the knowledge and skills obtained during the individual’s training or educational program are related to the duties performed by the individual in connection with the office or employment.

“recognized diploma” means a degree, diploma or attestation awarded by a designated educational institution.

(2) For the purpose of computing the tax payable under this Part by an individual for a taxation year, there may be deducted an amount equal to the lesser of

(a) the amount that is 40% of the aggregate of all amounts each of which is the salary or wages of the individual for the year from qualifying employment and attributable to the individual’s base period; and

(b) the amount by which $8,000 exceeds the aggregate of all amounts each of which is an amount that the individual is deemed to have paid to the Receiver General under this section for a preceding taxation year.

(3) For the purposes of paragraph (2)(a), an individual who was resident in a designated region in Canada immediately before the individual’s death is deemed to be resident in a designated region in Canada at the end of December 31 of the year in which the individual died.”

He said: Mr. Speaker, I am very pleased to have the opportunity to discuss Bill C-207 again today at the report stage and I would like to thank everyone taking part in today's debate.

Bill C-207 is designed to fight two problems that affect the regions facing economic challenges: the exodus of young people and the shortage of skilled labour. Briefly, Bill C-207 would give an income tax credit of up to $8,000 to recent graduates who accept employment in a region that is facing economic and demographic difficulties.

I would like to use the short time I have to respond to some of the concerns regarding Bill C-207 raised by my colleagues at the Standing Committee on Finance meeting held on February 27, 2008. Above all, I would like to appeal to the two Conservative members from Saguenay—Lac-Saint-Jean, who are fully aware of the benefits of this measure, to support Bill C-207, which will hopefully help convince their colleagues to also support this bill.

All the members of this House know that the most isolated regions are the ones losing the most residents. In many cases, they depend on one type of industry—we call these single-industry regions. There is often little room in the traditional economic base of these regions for skilled jobs. So with the forestry crisis, the economy of a single-industry region will experience distinct ups and downs.

To compensate, new businesses in other fields must be developed to diversify the economy. Unfortunately, there are not enough workers in these regions to make it possible to create new businesses in new fields.

When the Government of Quebec examined the regions that depend on a single industry, it set three criteria: a decline in the economy, a shrinking population and the need for diversification. It looked at six administrative regions, in addition to some regional county municipalities that are part of certain administrative regions. For example, the RCM of Mékinac, in the north of Mauricie, was included because it is a single-industry community, its economy is declining, its population is shrinking and it needs diversification.

In Quebec, the total population of the regions where the tax credit for new graduates would apply is approximately 900,000 people, out of a total population of 7.5 million.

There is no denying that other areas, such as northern Ontario, are experiencing economic hardships. That region has lost a lot of young people in recent decades. These regions have a hard time staying vibrant and strong. Northern British Columbia is also experiencing economic difficulties, as well as the Cape Breton region of Nova Scotia, and northern Manitoba, an area where the economy is weak. This proposal would not apply only to Quebec. On the contrary, almost all the provinces could benefit from it.

This bill is not designed to discriminate against new graduates in major centres, as some Conservative members are implying, but simply to put in place a proven measure to help regions with declining populations.

Last week, in the newspaper Progrès-dimanche, MigrAction, an organization in Saguenay—Lac-Saint-Jean that encourages young people to settle in the region, said that the Government of Quebec's program is an excellent way to encourage people to come back to the region and that young professionals really seem to appreciate it.

We propose to use the Regional Development Incentives Act to determine the designated regions. In the part entitled “Designation of Regions”, this act sets specific rules for designating regions. First, the federal government and the province have to agree on the designated regions; a region must have an area of not less than 12,500 square kilometres; and the region must be in economic difficulty.

There are communities in every province that meet these criteria.

We must take action to prevent hundreds of cities and towns from disappearing in future because no one is settling there. This is the danger facing many communities in Quebec and Canada.

I am counting on the Conservative and Liberal members from Quebec to make their Canadian colleagues aware of the how effective the Quebec legislation has been and what a positive impact it has had.

To allay some Conservative members' fears that such a measure will cause a loss of productivity, I want to point out that the Government of Quebec set up the Gagné commission to study tax measures targeting the regions. The commission found that productivity increased much more slowly in resource regions than in urban and central areas. Productivity rose by 2.5% from 1998 to 2005 in Quebec as a whole, by 3.5% in metropolitan areas, but by only 0.2% in resource regions or remote areas.

The Gagné commission found that growth in the highest value added businesses, in other words leading edge, secondary and tertiary processing businesses, was behind the increased productivity. It also noted that the difficulty attracting skilled labourers to remote areas prevented leading edge and processing businesses from opening in those regions. The purpose of this measure is to avoid that type of situation and to resolve the problems of low productivity in the more remote regions or regions that are far from major centres.

As far as the cost of such a program is concerned, based on the new criteria established by the Government of Quebec in 2006, this Quebec program cost $30 million in the first year. In 2007, the estimated cost of the program was $45 million and, in 2008, the cost is estimated at $60 million. The cost should then level off at around $60 million for subsequent years.

When economists were asked to estimate the cost of such program for all of Canada, they estimated it would be $90 million the first year, $135 million the second year, $180 million the third year and roughly $180 million in subsequent years.

I am calling on all hon. members of this House of Commons and the hon. members from Quebec—specifically the two Conservative members from Roberval—Lac-Saint-Jean and Jonquière—Alma in my region—who are well aware of the effectiveness of such a program, to help our regions support their young people. We have to put a stop to this population hemorrhage and start allowing the processing industry to develop by giving our entrepreneurs the chance to get the skilled workers they need.

I will close with a summary: if the majority of hon. members voted in favour of Bill C-207, it would provide tax creditof up to $8,000 over a certain number of years that a young person could use to pay off student loans or as a down payment for a home. These are measures that would encourage our young people to move back to the regions where there is a dwindling population, an economic downturn and economic difficulties.

The House proceeded to the consideration of Bill C-207, An Act to amend the Income Tax Act (tax credit for new graduates working in designated regions), as reported (with amendment) from the committee.

FinanceCommittees of the HouseRoutine Proceedings

February 28th, 2008 / 10:05 a.m.
See context

Conservative

Rob Merrifield Conservative Yellowhead, AB

Mr. Speaker, I have the honour to present, in both official languages, the fourth report of the Standing Committee on Finance, related to Bill C-207, An Act to amend the Income Tax Act (tax credit for new graduates working in designated regions).

February 27th, 2008 / 3:40 p.m.
See context

Bloc

Robert Bouchard Bloc Chicoutimi—Le Fjord, QC

Thank you, Mr. Chairman.

Accompanying me today are Mr. Marc-André Roche and Mr. Alexandre Cliche. I wish to thank you for welcoming me today to discuss Bill C-207, a bill concerning tax credits and amending the Income Tax Act.

In concrete terms, the goal of this bill is to reverse the exodus of young graduates who are moving to large urban centres and to encourage them to begin their professional careers in the regions which would benefit from skilled labour.

During second reading of this bill, certain members of Parliament asked questions. I would like to take a few moments to address their concerns with respect to Bill C-207.

According to the Emploi-Québec economist, Mr. Clément Desbiens, all regional employment sectors will be increasingly affected over the years to come. In a document entitled “Employment Perspectives 2005-2009”, it was stated that in the Province of Quebec alone, there will be 251,000 positions to fill during this period. In my region of Saguenay—Lac-Saint-Jean, Emploi-Québec estimates that 18,000 new positions will have to be filled during the same period of 2005 to 2009.

In addition, some colleagues have pointed out that this bill should be accompanied by an overarching plan for regional development. I am in full agreement with these statements; however, Bill C-207 is simply a starting point which will allow our regions and regional companies to recruit and retain skilled workers.

In fact, a similar tax credit has proven to be successful for the Government of Quebec. This tax credit was implemented in 2003 and provides assistance to new graduates who are settling in regions that have been designated by the Government of Quebec. The number of young people benefiting from this tax credit has gone from 2,000 to 9,000 between 2003 to 2007. Obviously, this program has proven to be successful in Quebec.

In 2006, the program was launched at a cost of $30 million to the Government of Quebec. If the program were nationalized, this program would cost the federal government $90 million in 2006, which is a small investment if we want to encourage young people to migrate to the regions.

This bill, therefore, seeks to create a non-refundable tax credit. A young person must pay taxes prior to receiving a tax credit of a maximum of $8,000 for a given period.

I therefore ask the members of the Committee on Finance to help our regions support our young people. We must put a stop to the demographic hemorrhaging and the exodus of our young people to major urban centres. We must foster development of our manufacturing and processing industries, by opening the pool of skilled labour to our entrepreneurs.

In conclusion, I wish to add that young graduates in remote areas are fewer and far between. The regions are suffering as a result of the exodus of young people and specialized workers. The acceleration of the aging of the population in our regions is just one of the problems that is the result of this exodus. When a region loses its young people who have special training in specific sectors, a region's vitality diminishes. The exodus of young people undermines a region's ability to innovate. Indeed, young people with specialized training are better educated than those who stay behind.

That concludes my presentation. I am ready to answer your questions. The two people accompanying me will also assist me.

Business of the HouseOpening of the Second Session of the 39th Parliament

October 16th, 2007 / 6:45 p.m.
See context

Liberal

The Speaker Liberal Peter Milliken

Order. It appears we have a few moments and to save time later I will inform members of something they are just aching to hear about now.

As hon. members know, our Standing Orders provide for the continuance of private members' business from session to session within a Parliament.

The list for the consideration of private members' business established on April 7, 2006, continues from the last session to this session notwithstanding prorogation.

As such, all items of private members' business originating in the House of Commons that were listed on the order paper during the previous session are reinstated to the order paper and shall be deemed to have been considered and approved at all stages completed at the time of prorogation of the first session.

Generally speaking, in practical terms, this also means that those items on the Order of Precedence remain on the Order of Precedence or, as the case may be, are referred to committee or sent to the Senate.

However, there is one item that cannot be left on the Order of Precedence. Pursuant to Standing Order 87(1), Parliamentary secretaries who are ineligible by virtue of their office to be put on the Order of Precedence will be dropped to the bottom of the list for the consideration of private members' business, where they will remain as long as they hold those offices.

Consequently, the item in the name of the member for Glengarry—Prescott—Russell, Motion M-302, is withdrawn from the Order of Precedence.

With regard to the remaining items on the order of precedence let me remind the House of the specifics since the House is scheduled to resume its daily private members' business hour starting tomorrow.

At prorogation, there were seven private members' bills originating in the House of Commons adopted at second reading and referred to committee. Therefore, pursuant to Standing Order 86.1:

Bill C-207, An Act to amend the Income Tax Act (tax credit for new graduates working in designated regions), is deemed referred to the Standing Committee on Finance;

Bill C-265, An Act to amend the Employment Insurance Act (qualification for and entitlement to benefits), is deemed referred to the Standing Committee on Human Resources, Social Development and the Status of Persons with Disabilities;

Bill C-305, An Act to amend the Income Tax Act (exemption from taxation of 50% of United States social security payments to Canadian residents), is deemed referred to the Standing Committee on Finance;

Bill C-327, An Act to amend the Broadcasting Act (reduction of violence in television broadcasts), is deemed referred to the Standing Committee on Canadian Heritage;

Bill C-343, An Act to amend the Criminal Code (motor vehicle theft), is deemed referred to the Standing Committee on Justice and Human Rights;

Bill C-377, An Act to ensure Canada assumes its responsibilities in preventing dangerous climate change, is deemed referred to the Standing Committee on Environment and Sustainable Development; and

Bill C-428, An Act to amend the Controlled Drugs and Substances Act (methamphetamine), is deemed referred to the Standing Committee on Justice and Human Rights.

(Bills deemed introduced, read the first time, read the second time and referred to a committee)

Furthermore, four Private Members' bills originating in the House of Commons had been read the third time and passed. Therefore, pursuant to Standing Order 86.1, the following bills are deemed adopted at all stages and passed by the House:

Bill C-280, An Act to Amend the Immigration and Refugee Protection Act (coming into force of sections 110, 111 and 171);

Bill C-292, An Act to implement the Kelowna Accord;

Bill C-293, An Act respecting the provision of official development assistance abroad; and

Bill C-299, An Act to amend the Criminal Code (identification information obtained by fraud or false pretence).

Accordingly, a message will be sent to inform the Senate that this House has adopted these four bills.

Hon. members will find at their desks an explanatory note recapitulating these remarks. The Table officers are available to answer any further questions that hon. members may have.

I trust that these measures will assist the House in understanding how private members' business will be conducted in this second session of the 39th Parliament.

(Bills deemed adopted at all stages and passed by the House)

The House resumed from May 2 consideration of the motion that Bill C-207, An Act to amend the Income Tax Act (tax credit for new graduates working in designated regions), be read the second time and referred to a committee.

Income Tax ActPrivate Members' Business

May 2nd, 2007 / 7 p.m.
See context

Bloc

Robert Bouchard Bloc Chicoutimi—Le Fjord, QC

Mr. Speaker, I would like to thank all the members who spoke in this debate today, as well as the members who spoke in the first debate. Bill C-207 is designed to fight two problems that affect the regions: the exodus of young people and the shortage of skilled labour in the regions.

In the next few minutes, I would like to respond to certain concerns my colleagues have about Bill C-207. According to Mr. Clément Desbiens, an economist with Emploi-Québec, all employment sectors in the regions will be more affected in the coming years. A document entitled Perspectives professionnelles 2005-2009 states that the demand for workers in fields related to retirement will increase. However, according to the study, workers in the regions are likely to leave for urban centres where there are more jobs in sectors such as retail sales, services, administration and finance.

According to Emploi-Québec's estimates, 250,000 jobs will be created during that period. Emploi-Québec anticipates that, for the Saguenay—Lac-Saint-Jean region alone, 18,000 new jobs will have to be filled. According to the economist, the aging of the population will be felt across the country, but its impact will be even more disastrous in the regions. The country's population growth tells the tale. Between 1996 and 2006, that is over a period of 10 years, Canada's population increased by 9.4%, while the population decreased by 8.5% in Newfoundland and Labrador, by 2.2% in Saskatchewan, and by 1.1% in New Brunswick. During that same period, the population increased by 20.9% in Alberta, by 12.7% in Ontario, and by 10.2% in British Columbia.

I would also like to provide other statistics affecting my region. Over a period of 10 years, from 1991 to 2001, the population of the Lower St. Lawrence region decreased by 2.9%. During that same period, the population of the Saguenay—Lac-Saint-Jean region decreased by 2.9%, and I could provide more examples. I now come to the most affected region, that of Gaspé and the Magdalen Islands, where the population decreased by 7.7% over the same period.

This is why we support this bill which addresses all the problems. It is a tool that our regions and regional businesses can use to have access to skilled labour.

The bill provides for a tax credit not exceeding $8,000 over a 52 week period. Some have suggested that it would be better if the maximum of $8,000 could be used over three years instead of one. This is, of course, something we could discuss at committee, and we are open to such a suggestion. I therefore ask all the members of this House to act on behalf of our regions and our young people.

The Conservative members opposite who spoke in the first debate, and in this one, said that the total cost would be $600 million a year. I say that they are trying to scare the public and the members of this House. For Quebec, it would come up to $30 million. So, we are talking about approximately $150 million. I will close by encouraging all members to support this bill, to really help our young people and those regions with a declining population.

Income Tax ActPrivate Members' Business

May 2nd, 2007 / 6:50 p.m.
See context

Conservative

Mike Wallace Conservative Burlington, ON

Mr. Speaker, today we are continuing the debate on Bill C-207, a bill proposing a tax credit for new graduates working in certain designated regions.

While one can recognize the aim of such a measure and the desire to foster economic development in forming that measure, the proposal in Bill C-207 is saddled with a number of fundamental flaws.

The chief flaw of Bill C-207 is that while it encourages recent graduates to remain or relocate in designated regions, it does nothing to generate new employment in those regions. As a result, it could be argued that the proposed credit would primarily benefit individuals working in such regions regardless of the presence or absence of the tax credit. In that light, such a measure would clearly not be an effective avenue for this purpose.

This also speaks to a larger problem with Bill C-207. The bill proposes to address the issue of economic development in essentially a temporary or fragmented manner. Properly fostering economic development involves a multi-faceted approach responsive to local needs and creating strategic partnerships between businesses and public institutions, the community and other stakeholders.

Canada's national economy is highly diversified across different economic regions with varied needs in terms of workers' skills. The skill sets needed to work in the offshore oil industry in Newfoundland differ significantly from those needed to work in the high tech sector in Waterloo. As well, at any point in time each of these sectors will experience business cycles and economic adjustment.

Economic adjustment is constantly taking place and is a sign of a healthy and flexible economy. Most economically successful adjustments happen naturally and without intervention from government.

Governments, domestic and international, have been moving away from subsidies. Instead they have been focusing support toward fostering high valued added economic activity through education, innovation and infrastructure.

Canada's new government promotes innovation, research and development and post-secondary education through a variety of programs that benefit directly and indirectly students pursuing post-secondary education. For instance, as confirmed in budget 2007, federal investment in granting councils and the Canada Foundation for Innovation, among others, will total $1.4 billion this year.

We also support an assortment of economic development programs totalling $1.2 billion through the regional development agencies, like the Economic Development Agency of Canada for the Regions of Quebec.

The regional development agencies work in partnership with stakeholders to tailor their specific programs to meet the economic development needs of their local communities. These programs include support for small to medium size enterprises which can benefit recent graduates.

The Atlantic Canada Opportunities Agency, ACOA, has a program that provides an excellent illustration of this approach. The export internship for trade graduates initiative provides training and employment opportunities to international trade specialists graduating from colleges and universities in Atlantic Canada.

Small and medium size enterprises receive help to acquire the expertise they need to successfully develop and implement an international marketing plan. Eligible companies work with ACOA and post-secondary institutions to select qualified graduates with training in international business. Together the employer and the intern develop and implement a strategic export plan for that company. At the conclusion of the internship, the employer can apply through ACOA for assistance to retain the graduate's services for up to three additional years.

The Economic Development Agency of Canada for the Regions of Quebec offers other examples of how Canada's new government supports similar programs that involve a multi-faceted approach to regional development. The innovation, development, entrepreneurship and access program for small to medium enterprises is a financial assistance program that fosters the growth of small and medium size enterprises in Quebec, helping these businesses become more competitive in the world markets in activities ranging from product development to marketing plans.

Also, the community economic diversification initiative - vitality, CEDI-vitality, is an initiative designed to support communities in seven regions and 21 Quebec regional county municipalities with slower economic growth. The initiative helps foster economic development by supporting the diversification of the economic base of these communities to create sustainable long term jobs, jobs that will stem, or even prevent, the exodus of youth from these regions.

Small and medium size enterprises, business groups and industry associations can all apply under vitality for assistance in the development of strategies and action plans, capital projects for enterprise startup and business expansion, and marketing of new products and services. The program also assists with the establishment of entrepreneurship support organizations, projects aimed at enhancing cooperation between knowledge institutions, such as universities and colleges, and the business community.

In 2006-07 total government support of these programs will total over $380 million.

These are the types of regional development measures that define a multi-faceted approach. They are forward looking in promoting export markets in an increasingly globalized economy. They involve key stakeholders, employers and post-secondary institutions to help create new opportunities for new graduates, and they work.

Bill C-207 proposes a tax credit nowhere near as well targeted. It proposes a tax credit that would do nothing to foster economic development conducive to job growth. It would do nothing to create the opportunities vital for the retention of those new graduates. Yet the proposed credit would cost up to $600 million annually. I submit that this would be an inefficient use of public funds.

Canada's new government takes seriously the challenge of ensuring Canada is equipped for an increasingly competitive global market. We are all working for all regions of Canada. All young people need to be given the opportunity to acquire the skills and training so that Canada can have a knowledge advantage with the best educated, most skilled and most flexible workforce in the world.

Canadian businesses need to operate in an environment that encourages investment and innovation. When Canada succeeds, we all succeed.

Bill C-207 proposes to use a tax credit to encourage young people to stay in a particular region. Yet it does not help create the type of employment opportunities that would provide an incentive for a young person to stay there. It ignores the varied nature of Canada's economy and that economic adjustment is an ongoing reality of a healthy, dynamic, diversified economy.

The Government of Canada supports regional economic development and devotes significant resources to programs that are responsive to local needs, employ strategic partnerships with other stakeholders and are multi-faceted in their approach.

This Conservative government is working to improve the standard of living and quality of life for all Canadians. This government is working to make Canada a world leader for today and for future generations.

Bill C-207 does nothing like that. Instead, it proposes to spend up to $600 million on a tax credit that would not help create a single additional job.

For these reasons, I am unable to support this legislation. I hope that my colleagues, after taking full account of the larger picture, will decline to support this bill.

Income Tax ActPrivate Members' Business

May 2nd, 2007 / 6:40 p.m.
See context

Bloc

Paul Crête Bloc Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC

Mr. Speaker, I am very pleased and proud to speak to the bill introduced by the member for Chicoutimi—Le Fjord. First, I would like to congratulate him.

The bill tabled amends the Income Tax Act to give new graduates working in designated regions a tax credit. This is a concrete example of social and economic measures that Quebec has taken over the years. We have developed all kinds of original social initiatives, such as child care centres.

What about land occupancy? To ensure that our population will continue to have the requisite resources in our villages and municipalities, the Government of Quebec has developed a practice that it has already implemented. It gives a tax credit to a young person who settles in a region, in order to counter the exodus of youth and avoid the shortage of skilled labour.

This measure is available in my region and has had a positive impact. For example, population movement had been declining for a number of years. Now it seems that this measure has tempered matters in this regard. Additional efforts are required to achieve an even better result, to add a sort of catalyst that will result in further progress.

Bill C-207 is a step in that direction because it simply suggests extending this measure to all of Canada by defining the regions where these credits can be claimed. Consequently, in the end, this will provide an incentive for youth to settle in the regions. This is not charity. It is important for all of our land to be used and developed and for benefits to be found in every location. It is to the advantage of the major centres for the regions to be strong. This bill will help make this happen.

The original project was tested in Quebec. It allowed a new graduate to get an income tax credit equal to 40% of earned salary, up to a maximum of $8,000. That measure was implemented in 2003. That same year, 2,500 people applied for the credit. In 2004, it was claimed by 9,700 people from different regions, including 1,200 from Abitibi-Témiscamingue, 1,600 from the Lower St. Lawrence, 800 from the Gaspé and Magdalen Islands, 1,000 from the North Shore and 4,000 from Saguenay-Lac-Saint-Jean. We can easily understand why the hon. member for Chicoutimi—Le Fjord is so interested in the measure. His region did benefit from the initiative put in place by the government of Quebec. Now, we want to broaden the measure.

The experience Quebec has had with it must be taken into account. In fact, the original measure has been amended. The changes made could be included in the bill when it is studied in committee.

I listened to the speech made by my colleague from the NDP and I agree with him. I recognized an interesting principle, a positive way of doing things. For Quebec, the system is already in place and there is no need to reinvent the wheel. We only need to apply the federal tax credit in the same regions where the Quebec credit applies. As for the other provinces, we need to identify the right regions where the tax credit should be offered.

I invite hon. members to consider the results this type of measure can achieve. Young people are moving to the regions and sometimes they stay for a number of years. We would be prepared to consider an amendment, among other things, to spread out the tax credit over three years, like it was done in Quebec. This encourages applying for the credit just once. When someone moves to a region, they often get the urge to invest the rest of their life there and to contribute to the development of that region. The result is quite interesting.

Indeed, an amendment could be adopted in committee to make the tax credit more flexible and make it apply over a number of years. The incentive would have a more lasting effect.

As I was explaining, another amendment could be made with regard to eligible regions to ensure that this will truly be a positive incentive. Furthermore we have to avoid future disputes as much as possible, since there are always borderline areas in these cases. Nonetheless, as far as I am concerned, this issue should not prevent us from implementing a tax credit where it would be appropriate to do so.

Let us take for example the regions I mentioned. My colleague from Haute-Gaspésie—La Mitis—Matane—Matapédia, our party's regional development critic, is certainly aware of this reality.

We have seen the figures for his region in the Gaspé peninsula and for the Lower St. Lawrence. We are well aware that in terms of regional development, we now have to deal with the natural market forces inherent to globalization, which is causing our regions to lose their populations. One might say that that is how the market operates and we have to let the market dictate how this works, but this has a significant impact on support for municipal structures and support for our regions.

When the population of a town diminishes, it does not take long before it can no longer offer services. This disorganization, this de-institutionalization is very negative for our society. In my opinion, it is up to the government to go ahead with measures like this. They do not cost very much and they provide a return. For example, in the medium term, the bill will ensure that schools in villages stay open because young people will settle there, couples will form and children will be born. In that sense, we are keeping the wheels turning and making sure that life can go on in the communities.

It is important to move ahead with the bill so that it can be referred to a committee that will study it, hear witnesses and obtain the necessary expertise. The basic principle is that population movements are not solely a matter of economic markets. It is a question of regional development.

In the past, there were all sorts of initiatives like this that attracted people to regions throughout Quebec and across Canada. We need more such initiatives, because if we do not act, the consequences will ultimately be negative.

Look at what is happening in major cities in countries in the south. Artificial towns are being creating around the cities, where people from rural areas are settling. This is happening in China, and it is creating serious problems.

I hope that we will have the support of the majority of members of this House so that the bill will get through the report stage, come back to this House with any amendments we have suggested and have an impact so that this measure will be implemented in the short term or at least in the next budget. Then, the efforts of the member for Chicoutimi—Le Fjord will have paid off.

In the next budget, there will be such a measure, and it will improve the situation in our regions and their ability to attract young people. I believe we will all benefit from such measures.

My time is almost up, so I will just remind this House that we are elected in ridings and that when a member like my friend from Chicoutimi—Le Fjord has the interests of his own riding and all rural regions at heart, he deserves to be heard by this House. I hope that hon. members will support the bill so that it can move on to the committee stage.

Income Tax ActPrivate Members' Business

May 2nd, 2007 / 6:35 p.m.
See context

NDP

Charlie Angus NDP Timmins—James Bay, ON

Mr. Speaker, I am pleased to speak to Bill C-207, An Act to amend the Income Tax Act (tax credit for new graduates working in designated regions). The designated regions are those regions that have traditionally high levels of youth out-migration.

I am interested in the bill because it closely mirrors work that we have been doing in my office for my region of northern Ontario because it has suffered from massive levels of youth out-migration. It is not just affecting our economic potential but it is seriously affecting the future of our region.

A number of players in the Timmins region have been trying to bring issues to bear on this, such as the Far Northeast Training Board, Northern College and Collège Boréal. Mike Kentish, who has been involved in adult literacy, learning and training, has also come forward with a number of ideas similar to those in the bill.

I find that the bill does have some vague areas which we could actually tighten up in terms of defining what regions would merit this and whether or not a year is enough. I do not know if that is worthwhile. I think young people who commit to returning to a region after a certain period of time would merit the tax credit. However, it is important because some of our northern communities are seeing 20% of their young people leaving and when they leave they do not go back. There are a number of reasons that is happening.

Our regions include the northern mining belt. The gold region extends from Val-d'Or over to Sudbury and Timmins. In the early days the mines were founded by immigrant miners because in those days the mining companies did not want Canadians working in the mines. They hired young men from Yugoslavia, Croatia and Bulgaria on short term work contracts because the work was hard.

My family were immigrant miners who came to Canada to do this work. The miners did not want their children to work in the mines. The old Croatian miners used to tell their kids that they would break their legs if they went underground. That may not actually be what they said but they did want their young people to get an education because they valued it. Those men worked hard and died young so their children could get an education. However, when they got their education they left. Year after year they left and new workers arrived.

However, the economy changed and by the 1970s and 1980s we were not seeing the same level of immigration in the north. Young people were still being encouraged to get an education and leave but now there is a serious problem. However, we do have economic potential in a region where there are opportunities for work but our young people are still leaving.

What do we need to do? We need to start focusing on the trades and training to ensure that our young people have the opportunity to work. In northern Ontario, the young people who want an education go to Guelph, to Ottawa or to Toronto where they spend four years in school. What happens when they finish? They end up with $40,000 worth of debt. While they are there, what else happens? They fall in love and now have $60,000 or $80,000 worth of debt.

We can rest assured that these young people are not going back to northern Ontario because starting over in northern Ontario becomes too difficult financially. As a result, we are losing our best young people who are our greatest resource. They are a much greater resource than gold, diamonds, the white pine, nickel or copper. Our young people are our resources and we need to find a way to encourage them to go back to their regions.

The story in northern Ontario is similar right across Canada.

I would like to talk about the young Franco-Ontarians who must leave northern Ontario to get a post-secondary education or to get a job in Alberta or in southern Ontario.

When young Franco-Ontarians leave a community such as Smooth Rock Falls, Kapuskasing or Timmins, they leave behind their Franco-Ontarian community and culture. When we lose our young people, we lose our future.

It is critical that the provincial and federal governments provide sufficient resources for the construction of a new Collège Boréal campus in Timmins. It is equally critical that we give our young people the opportunity to learn a trade in their own language.

In the region of Timmins, a new Collège Boréal campus is essential for the development of the Franco-Ontarian community. It is essential for the development of a new economy in the north.

We need to work on education. We need to ensure that our young people have the opportunities to get trained in the trades and trained in university in their own regions and in their language so they can stay in our region so that when the opportunities do arise we will have given our young people the chance to stay and to have a new future.

The bill does speak to some of the areas of how we can start to encourage young people to come back. As I said, some more work needs to be done on the bill to fine-tune it to focus on kinds of incentives and where. Right now I think the area is somewhat vague. I do not think all regions of this country need it. We are looking at how to tweak certain areas that are suffering from extreme high levels of youth out-migration. Other areas are much more stable.

However, as federal members we need to recognize that rural Canada plays an important role and that the communities of rural Canada need to be maintained and the vitality of these communities can only be maintained if we have young people who are still living there.

What does happen when our young couples are down in Guelph, Ottawa, the University of Calgary or wherever with their $50,000, $60,000 or $70,000 worth of debt? As we said, they fall in love and stay wherever they are. What happens then is that they have a family and then the grandparents start to go south to visit them. Sooner or later, after the young people leave, the parents leave to be with their grandchildren because it is too hard to be so far away.

The youth out-migration is the first step to the loss of the population of our region and then it is followed by the older generation. Once we lose enough of a critical mass we lose the vitality that holds our northern communities together.

I am very interested in this bill. As a New Democrat, I would be more than willing to work on how we can tweak it to improve it, but it is taking us in a direction that will help us in the north build and maintain the communities that we are so proud of.

Income Tax ActPrivate Members' Business

May 2nd, 2007 / 6:25 p.m.
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Liberal

Sukh Dhaliwal Liberal Newton—North Delta, BC

Mr. Speaker, I am pleased to rise to debate Bill C-207, An Act to amend the Income Tax Act (tax credit for new graduates working in designated regions).

Let me begin by saying that I believe hot spots in our economy, mostly in urban centres, tend to draw young Canadians away from the less populated regions when they begin to look for work after college or university.

That is why I commend my colleague from Chicoutimi—Le Fjord for recognizing the need to ensure that our regions have the workers they need in order for their economies to thrive. His private member's bill certainly has this principle at its heart.

The bill proposes to provide a non-refundable tax credit to recent graduates who take their degrees into one of the regions identified as a designated region by the Development Incentives Act and find work related to their degree. Young Canadians who meet the qualifying employment criteria are able to claim a non-refundable tax credit of 40% of their salary up to a maximum of $8,000 for the first 52 weeks of employment.

The principle of the bill is a good one. It encourages young Canadians to settle in these designated regions after graduation. During that time, they will hopefully create ties to the local community, develop friendships and perhaps family and then choose to remain there when the 52 weeks qualifying period has ended.

While I have no doubt that the bill would offer some amount of success in achieving this, it does, however, miss the larger picture. The fact is if we want young people to settle in these regions, we need to ensure there are well-paying jobs for them there.

If we were to ask ourselves what is more likely to attract young workers to the regions, a one year tax incentive that will put $2,000 into their pockets if they find employment there, or the creation of real well-paying jobs that will provide for that young person year after year, most people would accept the latter.

What about the people who live in these regions and are struggling to find meaningful employment? In short, what we really need are the kinds of comprehensive regional development strategies that the party of the member for Chicoutimi—Le Fjord is quite simply against.

We need something just like the previous Liberal government's regional development plan. The 2005 budget included $800 million to provide over five years for the creation of new initiatives through Canada's regional development agencies, ACOA, FedNor, WD and Canada Economic Development for Quebec, which received roughly $300 million of that investment.

This showed real investment and real commitment from the Liberal Party, a commitment that the current Conservative government seems to lack.

I will not get into all the details about the views of the Conservatives on regional development as most of us know them well. I could tell the House for hours about how the government, time and time again, fails British Columbians.

I am sure that most of us can recall any number of quotes from the Prime Minister that illustrate his disdain for Canadian regional economic development. We can recall speeches, for example, where the Prime Minister has accused Atlantic Canadians of relying on a “culture of defeatism”, or the Secretary of State (Multiculturalism and Canadian Identity) calling for the elimination of western economic diversification.

Today, we can still see the disregard of the Conservatives for the regions, and all these good things they have done for Canadians, including my constituents in Newton—North Delta. For instance, look at their decision to eliminate the summer career placement program, a program that was designed to find college and university students summer employment, which, for the most part, was in the very regions we are discussing today.

Thankfully, after much pressure, the government relented and reinstated the program by changing its name to the summer jobs program. The Conservatives, however, only gave the revamped program half of the resources of the previous Liberal program. This will no doubt result in many fewer students finding summer jobs in the regions.

Returning more directly to Bill C-207, I believe the bill represents one potential tool that will help to ensure young people settle into regions, but it is just one small tool when what we need in Canada is a box full of tools.

I also have some concerns regarding some technical aspects of the bill. I believe some of the wording needs to be tightened up. For instance, the bill does not clearly define what “employment related to their degree” actually entails. Without clarification the measure might possibly become prone to abuse.

Second, I wonder if the 52 weeks that the bill allows for is a long enough time period to create a real incentive for young Canadians to decide they want to work in one of Canada's designated regions.

All in all, however, the bill does have some merit and I will be pleased to lend my support to it at second reading. I hope, as it moves through committee stage, the members there will give the bill serious consideration and return it to the House with these questions addressed.

Once again, I would like to congratulate the member for Chicoutimi—Le Fjord for his work.

The House resumed from January 31 consideration of the motion that Bill C-207, An Act to amend the Income Tax Act (tax credit for new graduates working in designated regions), be read the second time and referred to a committee.

Income Tax ActPrivate Members' Business

January 31st, 2007 / 6:35 p.m.
See context

Conservative

Dean Del Mastro Conservative Peterborough, ON

Mr. Speaker, it is a privilege to engage in debate today in the House on Bill C-207 sponsored by the hon. member for Chicoutimi—Le Fjord.

Bill C-207 proposes an income tax credit for new graduates taking employment in certain regions. The credit would be equal to 40% of earnings from the first 52 weeks of qualifying employment to a maximum credit of $8,000. “Qualifying employment” would be employment in a “designated region” and employment duties would need to be related to the graduate's education. A “designated region”, for the purpose of the credit, is an area defined in section 3 of the Regional Development Incentives Act.

There are a number of very significant problems with this bill that should be of concern to the members of the House. The bill proposes to create a tax credit to address skill shortages in designated regions but no evidence is provided as to the existence of these shortages. The “designated regions” that the bill references are drawn from a list that has not been updated in more than two decades. It simply does not account for the economic changes that have taken place during that period of time.

The credit proposed in the bill would also introduce very serious inequities in the tax system: inequities between recent graduates and those who graduated early, and inequities between new graduates who work in different regions.

Finally, the credit would entail a very large fiscal cost for a tax measure that would ultimately not result in new jobs for new graduates anywhere in the country. This squanders public money and diverts fiscal resources away from measures that could actually help regional development that do create the type of economic environment within all regions of Canada to help them grow and prosper.

The bill tries to use the tax system to encourage new graduates to work in certain regions of Canada in order to address perceived skill shortages but attempts to do that in ways that, in the end, would make the tax measure ineffective. The bill, for example, would only provide tax relief with respect to a new graduate's first 52 weeks of qualified employment, but if the proposed credit were truly needed to encourage new graduates to work in designated regions, what would happen after the initial 52 weeks when the credit is no longer available?

Why would incentives not be provided to other skilled workers who are not new graduates if the concern is skill shortages in these regions? Clearly, this type of measure cannot yield long term benefits to regions and I am not even sure it would have an incremental impact in the short term beyond reducing taxes for a selected group of workers.

Another concern with the bill is that it does not make any attempt to target skill sets that are in short supply in a “designated region” or could benefit from its development. This makes me question what the economic rationale is behind the bill.

This brings me to a concern regarding the definition of “designated region”. The credit is only provided to new graduates who take up work in a “designated region”, a term taken from the Regional Development Incentives Act. The term refers to a region in which “existing opportunities for productive employment in the region are exceptionally inadequate”.

The list of regions from this act has not been updated in 20 years. This certainly does not reflect the current economic situation of Canada's regions. Let me give two examples to support my point.

On this list, the provinces of Saskatchewan and Manitoba are included in their entirety and yet, in October 2006, both provinces had unemployment rates two full percentage points below the national average, which is presently slightly above 6%. With facts like these, I find it hard to support the idea that these are regions with limited employment opportunities and that new graduates in these provinces should pay up to $8,000 less in federal income tax than those not working in designated regions.

This leads me to my next point, which concerns the significant inequities that would be created if Bill C-207 were adopted. The bill could create inequities in the tax system by discriminating between regions and groups of graduates. Graduates who finish their programs around the same time but live in different regions could face entirely different income tax burdens during their first year of employment. As well, two graduates working in the same job and region but whose graduation dates are a year apart would also face an $8,000 gap in their respective tax burdens. This is patently unfair.

Finally, Bill C-207 proposes a tax credit that is also incredibly expensive. Estimates suggest that the credit could cost up to $600 million each year to the federal government. These are funds that would be taken away from other priorities, such as measures to help make the tax system fairer, foster economic growth and benefit all Canadians, regardless of where they work or live.

I am aware that some provinces have credits or, in some cases, tuition rebates for new graduates who work in their home provinces or who relocate there. Saskatchewan, Quebec, New Brunswick, Nova Scotia and, most recently, Manitoba, have introduced these. Most of these measures are fairly recent and there is no evidence to date that they have had an impact on graduates' choices of where to work and yet Bill C-207 proposes to spend $600 million on a tax measure for which the outcome is completely uncertain.

The success of Canada's economy is well-known by the members of the House. We have the strongest growth on record of the G-7 since 1996 and we are currently enjoying the lowest unemployment rate in 30 years. Given the current economic climate, new graduates can generally find excellent opportunities to work in many parts of the country, including regions that the hon. member for Chicoutimi—Le Fjord seeks to support with generous and unwarranted tax incentives.

An efficient and effective labour market is necessary for a country to succeed in a highly competitive global economy. Workers must be able to pursue the best employment opportunities across the country and practise their occupation wherever those opportunities exist. However, Bill C-207 strives for the opposite. It attempts to use the tax system to reduce labour mobility.

I am sure all members of the House would agree that it is important to support the creation of economic opportunities all across Canada, opportunities that help to keep our best and brightest in this country. I am sure all members of the House would also agree that it is important to provide a helping hand to those who need support in joining the workforce, to attract the immigrants Canada will need in the years ahead and to provide our young people with the training and education opportunities they need to compete in a knowledge-based economy.

Income Tax ActPrivate Members' Business

January 31st, 2007 / 6:15 p.m.
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NDP

Denise Savoie NDP Victoria, BC

Mr. Speaker, it is a pleasure to rise and speak on Bill C-207 put forward by the hon. member for Chicoutimi—Le Fjord. This bill amends the Income Tax Act for the purpose of giving tax credits to new graduates working in designated regions. It is designed to encourage new graduates from universities, colleges and other institutions to settle in economically depressed areas by offering them a non-refundable tax credit for the first year.

I happen to represent a region where employment is very high and the economy very strong, but it was not always so. Could this kind of measure have helped, I wondered? It was also helpful, in considering this bill, to have the opportunity, last week, to meet 30 or so young people from rural British Columbia. Among them were new graduates as well as soon to be graduates. This fuelled my thought process and led me to the following conclusions.

In my opinion, the NDP could, with some reservation, support this bill in principle because it would level the playing field for rural communities, given that urban centres have a clear advantage over them when it comes to recruiting qualified workers. The bill would benefit low and middle income families in rural communities across Canada and help consolidate the social and economic situation of these communities by addressing depopulation and youth out-migration.

That said, it should be pointed out that this bill is but a tiny step in the right direction. For example, it encourages graduates to find work in economically depressed areas, but does so only for one year, as our colleague said a moment ago. The Quebec program from which this bill draws, if I heard correctly, takes a more gradual approach, providing a maximum credit of $3,000 per year, up to a lifetime maximum of $8,000. It also includes a financial incentive for three years or more. Personally, I am not sure that a one-year financial incentive would be sufficient to achieve the objectives sought by the hon. member.

Our second reservation about the program has to do with the fact that it could prove to be extremely ineffective if it is not rounded out by a comprehensive regional development plan. The proposed tax credit would be granted to recent graduates working in a region that is, pursuant to the terms of the Regional Development Incentives Act:

...determined to require special measures to facilitate economic expansion and social adjustment.

And, more precisely, a region where:

...existing opportunities for productive employment in the region are exceptionally inadequate.

Is it wise to send recent graduates to regions where employment opportunities are exceptionally inadequate, according to the terms in the act? For the people who already live in such areas, we should be finding ways to create more jobs before trying to draw more workers.

Instead or perhaps in addition to this tax credit incentive, it would be wiser to enhance the summer career placement program as opposed to cutting it in half, as the Conservatives are proposing to do. This would have the benefit of increasing employment opportunities in economically depressed regions.

The Conservatives saw some flaws in this program that are real but should have and could have been remedied. Rural and low employment communities as well as non-profit sector employers in urban areas should continue to benefit from this program, especially in light of the enormous student debt that new graduates are facing at the moment.

In the last Parliament an all-party committee in a unanimous report by the human resources committee recommended substantial changes to the funding allocation formula for the summer career placement program which is presently based on the number of students in the riding.

When the 2001 census numbers were factored into the formula, there were significant cuts in several ridings, especially the rural, northern, inner city or smaller ones. The committee recommended that disadvantaged and rural populations be factored into riding allocation formulas. The committee also recommended that students over 30, often single mothers, be eligible. Right now only students 15 to 30 may apply.

The summer career placement program is a very valuable one for numerous non-profit groups who could not otherwise offer competitive wages or afford to hire students at all to do valuable work in the community; as well, for small town rural business people to help students avoid having to go to bigger cities to find work.

The government is saying it will better target the program to at risk youth and to ensure that profitable businesses who can afford to pay higher wages do not get subsidized.

I agree that the program could be better targeted but targeting does not mean cutting. The government could target better at current funding levels and have a far greater impact.

The NDP would propose instead to restore full funding for the summer career placement program and implement the committee's recommendations that I have already mentioned. The NDP would also get to work in tackling the root of the problem and that is unaffordable post-secondary education especially for rural and low income families. If we want to attract graduates to economically depressed areas, ideally they should be from these regions and be coming home to work.

Right now tuition and other education costs have grown out of reach for even middle income families in Canada. That is the problem that we must tackle. Debt burdens are overwhelming for Canadian graduates and just as they begin their careers they are foreclosing their options and their career choices.

The traditional Liberal-Conservative answer has been to make student loans more accessible and therefore dramatically increase student debt in Canada. It has allowed students from rural areas to benefit and to get post-secondary education, but they simply complete their program burdened with unacceptable debt.

As I said, what we would propose is to tackle the root of the problem by making post-secondary education more affordable, by creating a national program of non-repayable grants that would prevent these huge debt levels. We would also propose to overhaul the student loan system which has become very inflexible.

Retargeting to those in greater need is really a piece of the solution that I hope my colleague from the Bloc, who has proposed this bill, would consider as a partial solution to the problem that is faced in certain areas.

The intention behind the bill is commendable. The bill represents the beginnings of a solution to a serious problem in certain regions of Canada. However, I urge the hon. member for Chicoutimi—Le Fjord to convince his colleagues from the Bloc and all members of the House to support the NDP's vision for post-secondary education, which proposes a global, comprehensive view, in order to inspire hope in our students and in Canada's rural areas and small communities.

Income Tax ActPrivate Members' Business

January 31st, 2007 / 6:05 p.m.
See context

Calgary Nose Hill Alberta

Conservative

Diane Ablonczy ConservativeParliamentary Secretary to the Minister of Finance

Mr. Speaker, it is a privilege to engage in debate today with my hon. colleagues on Bill C-207, sponsored by the hon. member for Chicoutimi—Le Fjord.

The bill proposes to provide a non-refundable tax credit to new graduates who engage in “qualifying employment” within two years of graduation. I will get into what that means in a minute. The credit would be the lesser of 40% of earnings in the first 52 weeks of qualifying employment or $8,000 and could be used over two years.

For the purposes of the credit, qualifying employment would involve duties related to the skills the new graduate attained during his or her education or training, and this work would have to be carried out in a “designated region”, which refers to any of the regions listed in the Regional Development Incentives Act. The proposed definition of designated region is one of the things that I will be talking about in a minute.

I think that all of us in the House want to make sure that all regions of the country flourish and have the workers and the skills they need and we also want to encourage young people to look at not just the big centres, the hot centres, but at the advantages of being in another part of the country. I commend my colleague for addressing this issue.

However, although the proposal before us sounds good in theory, there are a number of inconvenient and rather cold practical facts that I think the House needs to consider when looking at this measure.

The first concern is that there appears to be no clear rationale or specific necessity behind the proposed tax credit. There is a kind of feeling that it would be nice to help young people settle wherever they want even if it is not in a hot centre, but there are no demonstrated facts.

The hon. member has not shown that there is a particular shortage of skilled workers in these designated areas. There are no facts to show that employers in the regions are unable to find the skilled workers they need. There is no evidence to show that even if employers are offering good compensation and working conditions skilled workers are unwilling to come.

If there is a real need for skilled workers, then why a measure that only targets new graduates? All skilled workers wanting to relocate into such a region should be considered.

Why propose a tax credit available to recent graduates if there is no demand for their newly acquired skills in a particular region?

Above all, we need to remember that we are the Government of Canada, so a government putting forward a measure to entice recent graduates to work in certain regions rather than others can hardly be called a good national policy.

These are just some of the gaps in the proposed credit brought forward in this bill. There does not appear to be any concrete reason to provide additional incentives, just some suggestion that maybe people could settle and raise families in certain regions, but they could do that anyway.

I think we have to question the effectiveness of the time-limited credit that would provide tax relief for the first 52 weeks of a new graduate's qualifying employment but then would stop. I fail to see how a 52 week tax credit would really be able to attract and retain skilled workers. I fail to see how we would have people settling and raising families, as the member has talked about, for just a 52 week tax credit. It is more likely that a tax credit might bring people into a particular region for a short term, but they then would move on to greener pastures.

If it is true that a tax credit is helpful, then the very generous tax incentives would be needed for skilled workers to choose work in these regions. If that is the case, if there are generous tax credits needed, then would they stay when those credits are no longer available? Is it good policy? Is it a good use of public funds to pay large subsidies that will clearly produce no lasting benefits? I think we would have to conclude that the answer is no.

One also has to question the appropriateness and fairness of using the tax system to provide benefits to graduates choosing to work in certain regions but also to exclude graduates who choose to work in other regions. A new graduate working in one of these designated regions would be able to earn up to about $56,000 in their first year of employment without paying any federal tax at all, but the same graduate doing the same work a mere kilometre outside the boundary of one these regions would pay an extra $8,000 in federal income tax on the same earnings, and the co-worker of this new recruit would also pay $8,000 in federal tax.

This can hardly be considerable equitable from anyone's standpoint. I think members of this House would certainly expect to hear complaints from those who do not qualify for the credit. This, of course, would result in pressure to greatly expand the existing list of special designated regions and extend it to all workers who are not recent graduates.

One of the other problems is that the bill does not identify specific occupations or skills that are supposed to be in short supply in any of the designated regions. The bill uses some broad language about eligible work being that for which the duties relate to the graduate's training or education, but that would be extremely difficult to enforce.

In practice, those with training and skills in low demand would receive the same tax credit as those with training and skills that are strongly needed. This goes against the supposed purpose of ensuring that designated regions have better access to needed skills. New graduates could come into these regions with unneeded skills or with low demand for their skills and get the very same $8,000 tax credit as those that the regions actually really need, so the bill would not help to encourage specific graduates to stay and relocate where they are needed most.

Another issue to be considered is that the proposed credit may cause undue strain on other regions of the country that are also trying to attract Canada's recent graduates. There would be an $8,000 disparity in the tax burden between new graduates who worked in these designated regions and those who did not. This could mean that regions not fortunate enough to be included in the list of designated regions could experience greater difficulty attracting new talent, especially if they are located near designated regions.

How could it possibly be the role of the Government of Canada to provide incentives to recent recruits to locate in certain regions of the country to the detriment of other regions?

The definition of a designated region leads me to another point, an important point, because the list of these special regions is found in a supplementary section to the Regional Development Incentives Act, which I already have mentioned.

This act has quite an interesting list of regions. For example, the list in this act includes whole provinces and territories: Newfoundland and Labrador, Prince Edward Island, Nova Scotia, New Brunswick, Manitoba, Saskatchewan, Yukon, and the Northwest Territories.

All of those are designated regions under the act, so every single graduate working in any part of these provinces would be eligible for an $8,000 credit against federal income tax.

Every part of the country that needs equal opportunity to attract workers based on current economic conditions and labour market needs would lose out because of the arrangement being suggested in this bill.

For example, the entire province of Saskatchewan is a designated region under the act, where, says the act, “existing opportunities for productive employment in the region are exceptionally inadequate”. But the fact is that unemployment in Saskatchewan is currently at 3.9%, well below the national unemployment average, which is just over 6%.

Another example is Manitoba. It is included in the list, but its unemployment rate is 4.2%, again well below the national average.

The proposed credit would provide inequity among the regions. It would involve significant costs. It would also be a disincentive for areas that need particular skills in being able to attract them.

Because this measure is not shown to be necessary, is poorly targeted and is manifestly unfair, I am unable to support this private member's bill. I trust that my colleagues will carefully consider the points I have raised today and also vote against the bill.

Income Tax ActPrivate Members' Business

January 31st, 2007 / 5:40 p.m.
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Bloc

Robert Bouchard Bloc Chicoutimi—Le Fjord, QC

moved that Bill C-207, An Act to amend the Income Tax Act (tax credit for new graduates working in designated regions), be read the second time and referred to a committee.

Mr. Speaker, in order to curb the exodus of young graduates to large urban centres and to encourage them to move to the regions to begin their professional careers, I am proposing an amendment to the Income Tax Act to introduce a non-refundable tax credit for new graduates working in designated regions. I myself live in a resource region in Saguenay—Lac-Saint-Jean and I see first-hand everyday the impact of the exodus of young people on our region.

The tax credit would be for individuals who, in the 24 months following the date on which they successfully complete the courses leading to the awarding of a recognized diploma, begin to hold employment in their field of specialization in a designated region.

Recognized diplomas generally mean those awarded for technical training, or college, occupational or university studies. This bill allows individuals, for a maximum of 52 weeks, to benefit from a tax credit totalling a maximum of $8,000. Based on this year's taxation table, here are a few examples of how beneficial such a tax credit could be.

For an individual earning $30,000, the amount of federal income tax payable will be $2,695. This amount will be credited in full with the implementation of such a tax measure for new graduates. If the individual has income of $40,000, the amount of the credit will be $4,172, whereas someone who makes $50,000 will receive a tax credit of $6,000. I would like to specify that this is a credit for new graduates working in designated regions and that these figures represent the situation of a taxpayer without a basic personal tax credit.

I would like to inform the members of the House of Commons that the Quebec government adopted a similar measure in 2003. In the first year after it was implemented, 2,500 individuals benefited from the new Quebec government tax measure. The year after, the number rose substantially, to 9,700 individuals. The measure had a definite impact on several administrative regions in Quebec.

In 2005, many individuals benefited from this tax credit: more than 1,200 in Abitibi-Témiscamingue, more than 1,600 in the Lower St. Lawrence, almost 800 in Gaspésie—Îles-de-la-Madeleine, more than 1,000 on the North Shore and more than 4,000 in Saguenay—Lac-Saint-Jean. In the second year, almost 10,000 individuals took advantage of the tax credit.

These people might not otherwise have come to the regions to take their first job after graduating. In many cases, they came with spouses who decided to look for work in the regions as well.

Last spring, the Government of Quebec changed the tax credit, which is now a maximum of $3,000 per year and can reach $8,000 over three years, rather than over one year. Bill C-207 provides only for a credit for a one-year period. This will make it easier for us to assess the impact of this sort of measure on young people and will let us make any changes that are needed in due course.

In addition to the large number of young people who are leaving our regions, the shortage of skilled labour is a real problem for the regions, which are losing workers to larger centres. Putting this sort of measure in place will stop the population drain and make it easier to develop processing industries by providing businesspeople with the skilled labour they need.

Specialized workers are needed for many regional jobs, especially in primary resource processing and secondary and tertiary processing in forestry, metallurgy, electrical technology and other fields.

Unfortunately, specialized labour is often easier to find in major centres than in the regions, forcing many businesses to move to large cities or close their doors. Without the labour they need, many businesses in the regions are forced to stay small or have trouble expanding. But there is hope for our young people in the regions.

People who do not live in a resource region cannot truly understand the demographic problems many regions are experiencing. Out-migration is having a devastating impact on regional economies. Young people leaving the regions and new arrivals prefer to settle in major centres. We cannot abandon the men and women living outside these centres. Smaller communities are beginning to decline, with the exodus of young people and the aging of the population.

The exodus of young people is not a new phenomenon, but for many years the birth rate compensated for it. That is no longer the case. That is why, for the past few years, the Government of Quebec has been trying to bring young people back to the regions and encourage them to stay there. Some municipalities have decided to follow suit by offering new residents property tax breaks for a certain number of years. For example, the City of Mont-Joli, in Gaspésie, was offering a three-year property tax holiday to everyone who decided to build a new home there. Businesses are also offering a number of incentives to new property owners. This is just one example to illustrate the urgency of the situation.

The Government of Quebec, some municipalities and some businesses are doing everything they can to save the cities and towns that are part of our shared heritage. The federal government must do its part to keep our young people in the regions and encourage them to settle there. That is why I have decided to introduce Bill C-207 on behalf of my party, the Bloc Québécois. I myself am from a resource region, so it is clear to me that both the Saguenay—Lac Saint-Jean and my riding, Chicoutimi—Le Fjord, are in an unenviable position.

In 2006, the Government of Quebec's tax credit for new graduates cost about $30 million. We can therefore assume that a similar program on a national scale would cost about four to five times as much. The Government of Canada can afford such a measure, which is sure to benefit all Canadians and Quebeckers.

Although the situation is not as serious everywhere in Canada, economic activity has gradually been moving from resource and rural regions to larger centres, a phenomenon that, in places like Saskatchewan and Manitoba, is creating economic difficulty in regions with shrinking populations. This situation remains a concern for every one of Canada's provinces.

I would invite members of this House to support this bill so we can help our resource regions and rural communities keep their young people who, in many cases, want to stay.

Income Tax ActRoutine Proceedings

April 6th, 2006 / 10:35 a.m.
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Bloc

Robert Bouchard Bloc Chicoutimi—Le Fjord, QC

moved for leave to introduce Bill C-207, An Act to amend the Income Tax Act (tax credit for new graduates working in designated regions).

Mr. Speaker, I am very pleased to present my first bill in this House. Its purpose is to amend the Income Tax Act to provide a tax credit for new graduates working in designated regions.

The purpose of this bill is to encourage new graduates to settle in regions experiencing economic difficulties, thereby curbing the exodus of young people. This bill will provide graduates of vocational schools, colleges and universities with a maximum tax credit of 40% of their earnings, up to $8,000.

I am proud to be tabling a bill that will enable thousands of young people in my riding, Chicoutimi—Le Fjord, in my region Saguenay—Lac-Saint-Jean, in several regions in Quebec and throughout the country to work where they grew up.

In closing, I would like to thank my colleague from Saint-Hyacinthe—Bagot , the Bloc Québécois finance critic, for his support and advice while preparing this bill.

(Motions deemed adopted, bill read the first time and printed)