Bill C-288 (Historical)

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

This enactment amends the Income Tax Act to give every new graduate who settles in a designated region a tax credit equal to the lesser of
(a) 40% of the individual's salary or wages,
(b) $3,000, and
(c) the amount by which $8,000 exceeds all amounts paid for a preceding taxation year.
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.

Income Tax Act

[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.

[Harold Albrecht, Conservative, Kitchener—Conestoga, ON]

Mr. Speaker, I listened closely to the member as she was indicating the basic objective of the bill. If I understood her correctly, she said it is to attract young people, graduates, to regions that are economically depressed. It proposes that there be tax credits to settle in an area that is exceptionally inadequate. It seems to me that the basic problem with the bill is that the list of regions that it labels as economically depressed is based on a nearly 30 year old piece of legislation that is called the Regional Development Incentives Act.

The bill actually labels an area like Saskatchewan, which currently has one of the lowest unemployment rates in Canada, as economically depressed, while an area like Windsor or even where I come from, the Waterloo region, where the unemployment rate has risen dramatically in the last number of months, is not considered to be in any condition of distress or in her words would be fine economically. To me, that seems rather bizarre. I wonder if the member would like to comment on that.

Finally, has she or will she submit the bill to the Parliamentary Budget Officer for costing and analysis, and then, will she share those findings with the House?

[Johanne Deschamps, Bloc, Laurentides—Labelle, QC]

Mr. Speaker, I would like to answer my colleague's second question first. As I said in the preamble to my speech, this bill was introduced in the previous Parliament by my colleague from Chicoutimi—Le Fjord. It went through all three stages and even reached the Senate. It was also submitted to the parliamentary budget officer for costing.

I will go back to his first question. This measure has been implemented in Quebec, and I see no reason why Canada could not implement this bill. The bill refers to “designated regions” mentioned in the act. In committee, the members will be able to discuss how this bill could apply to every province in Canada. In Quebec, we have already come up with the formula, and the legislation has been working very well there since it was passed in 2004.

[Paul Szabo, Liberal, Mississauga South, ON]

Mr. Speaker, I want the member to know that I will be supporting the bill and will encourage my colleagues to do so as well.

We are in very difficult times. Although this is not a job creator, it is a job sustainer. I am sure members can pick lots of little holes in it, but the important thing is that it is moving in the right direction. We should be encouraging these kinds of initiatives that received parliamentary support in the last Parliament. It gives us an opportunity to fine-tune them and deal with some of the minor problems.

I want the member to comment further on the success the Quebec government experienced in terms of the 2,500 people who took advantage of that program. It is reflective of the potential benefits.

[Johanne Deschamps, Bloc, Laurentides—Labelle, QC]

Mr. Speaker, I thank my colleague for his comments, and I see that he is also very much in favour of the bill. I thank him and ask that he convince all his colleague. It is very important that this measure take effect.

As I mentioned a bit earlier, we have been making a tour of Quebec, which will end next week. All the stakeholders we have met with in our regions have said that this measure is needed both to keep young people in the regions and to stop the hemorrhaging that is happening when they leave.

I come from a region that is being affected by youth out-migration, and I can tell you about the negative effects it is having. Towns and municipalities are closing. When young people leave the region, they probably leave as a family, and that means children leave. If our regions lose families and children, then their lifeblood is drained away, and schools, services and churches have to be closed. Eventually, the municipality closes its doors.

[The Deputy Speaker, Conservative, Andrew Scheer]

The hon. member for Berthier—Maskinongé for a very quick question.

[Guy André, Bloc, Berthier—Maskinongé, QC]

Mr. Speaker, I would like to congratulate my colleague for her excellent speech. I would like her to tell me something.

I, too, am from a rural area. The youth employment centres have put in place some initiatives, such as Place aux jeunes, to combat the rural exodus by youth. We are finding it difficult. In fact, with regard to international productivity and globalization, our companies must be more productive, improve, incorporate more technologies, and have more specialists to help companies be more competitive globally.

I would like to hear what my colleague has to say about this and how this bill can truly help rural regions to reverse their decline and especially to halt the exodus of young people.

[The Deputy Speaker, Conservative, Andrew Scheer]

The hon. member for Laurentides—Labelle has less than 30 seconds to reply.

[Johanne Deschamps, Bloc, Laurentides—Labelle, QC]

Mr. Speaker, that is not much time, but I can give an example.

In my RCM, which has felt the effects of the forestry crisis over the past few years, we are trying to establish secondary and tertiary processing. To that end, we need skilled young people and we must keep them by adopting measures such as this one. If we cannot retain our young people, then we will be unable to develop such secondary and tertiary processing.

[Ted Menzies, Conservative, Parliamentary 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.

[John McCallum, Liberal, Markham—Unionville, ON]

Mr. Speaker, as we all know, members are free to vote as they wish on this bill. As party critic, I plan to vote in favour. It does have some shortcomings, but it is, overall, a good bill.

First, the Liberal Party believes that strong regions make for a strong national economy. This bill will help those who want to go back to their region after completing their post-secondary studies. Even if the tax credit is offered for just one year, once people are settled in a region, chances are they will stay there.

On balance, this is a good law but there are a couple of weaknesses that might be addressed in committee. The definition of depressed region is perhaps too broad. Much of the county is included in that, other than the three, four or five largest cities. Maybe there is a way to more directly target regions that might genuinely be regarded as depressed. However, that is the kind of issue that can be taken up in committee.

Although the bill is essentially the same as Bill C-207 from a previous Parliament, there is a major difference in terms of the context in which we live, that is say that we now live in a time of economic crisis at a time when the government, through its budget, has provided inadequate support for the economy. We voted for it and pushed it through quickly because it was the only game in town but we saw many weaknesses in the budget.

On top of the overall positive virtues of this bill in general, the fact that it would inject more money into the economy at a time of economic crisis and at a time when the Prime Minister is now talking about totally withdrawing support for the economy in two years, it would, in an indirect way, have a positive effect.

I might take a little time on that topic because the timing of the withdrawal of the fiscal support by the government is an important issue. On page A-1 of the Globe and Mail today there is an article. It quotes at some length one of Canada's best economists, I would say, in the private sector, Derek Holt, the vice-president of Scotia Capital Inc. For the purpose of disclosure, 10 years ago, when I was at the Royal Bank, he worked for me and I came to know him to be a person of great abilities.

Derek Holt is quoted as saying the following in the Globe and Mail today, “There are many reasons to believe Canada won't recover first”, and he gives a few reasons. First, we are more “exposed to the U.S. economy than most”. Second, “the collapsing auto sector is more important to Canada's economy than it is to the American economy”. Third, “a simple rebound in commodity prices is not enough to pull Canada out of the doldrums, as some in the government have...argued”.

He goes on to say:

That's because a rise in commodity prices will bulk up the profits of existing producers, but won't do anything to bring back cancelled investments unless they stay high for a long time.

You need a global recovery to get a Canadian recovery.

This is the critical point that relates to this bill. He says:

Until that happens, Ottawa is best to let deficits run their course and do their work in reviving demand, rather than try to fight them by curtailing spending before recovery is well in hand, he added.

he said.

The greater danger lies in removing fiscal stimulus prematurely in succumbing to pressure to rein in deficits. Japan is a lesson in that regard, as it prematurely removed fiscal stimulus on two occasions during its long-lived crisis, and their economy immediately deteriorated on both occasions.

Given the apparent determination of the Prime Minister to remove the fiscal stimulus very quickly, irrespective, it seems, of the state of the Canadian economy or based on what most would regard as his mistaken belief or unlikely belief that Canada will somehow snap back first all by itself, the additional reason to support this bill is that it would provide additional fiscal stimulus for the economy.

One would hope that the government will not be the government in two years' time when these matters may come to pass but one never knows for sure. For all those reasons I, personally, and I believe many of my colleagues, fully intend to support the bill.

[Jean-Yves Roy, Bloc, Haute-Gaspésie—La Mitis—Matane—Matapédia, QC]

Mr. Speaker, I would like to thank my colleague from Toronto for speaking in favour of the bill. I would like to comment on the parliamentary secretary's statements. Earlier, he said that the bill did not make sense and had some major shortcomings, such as the fact that it includes Manitoba and Saskatchewan. I have news for the parliamentary secretary: maybe he should check his facts, because rural regions in Saskatchewan and Manitoba are the ones that are really suffering. Their population is dropping faster than anywhere else in Canada.

Contrary to what the parliamentary secretary said, things are not as bad in Quebec as they are elsewhere in Canada. Take Newfoundland and Labrador, for example: right now, working people are fleeing the province, headed for Toronto and the western provinces.

Unfortunately, the same is true of New Brunswick: people are moving to the western provinces. The Government of New Brunswick has made an effort to bring workers back home and stem the flow of people toward large urban centres at the expense of the province's population, towns and regions.

Why introduce a bill like C-288? Why is the Bloc member for Chicoutimi—Le Fjord introducing such a bill in Parliament?

First, as my colleague from Laurentides—Labelle said earlier, we introduced it before. And the bill was supported by the House and by all parties, except the party in government, which does not seem to understand the meaning of regional development. The whole model of regional development has to be re-examined. In a time of crisis, especially, it is vital to ask questions and to realize that the established economic model undergoes cycles of major crisis every 10, 20 or 30 years.

Perhaps the entire model must be re-examined. Bill C-288 gives us a fine opportunity to examine where we live in this country and the governments' desire to have us live throughout the country, including in the regions.

I have heard the government talking, for example, about wanting to ensure Canada's sovereignty in the far north and especially further north than at the moment, because we must defend our territory. In the meantime, the government is allowing the regions and areas communities to be drained of their inhabitants. Rural communities are almost being left on their own.

What is the effect of the exodus of young people to major centres or more populated regions?

First, this is an entirely unique phenomenon. The regions deemed to be losing inhabitants are significantly short of skilled labour. By skilled labour, I mean doctors, nurses, teachers and other skilled people. There is a desperate need for skilled labour in very specialized areas. Unfortunately, the regions do not manage to meet these needs. In Quebec, thanks to a program of tax credits for young graduates returning to the regions, we have managed, despite problems, not to stop the exodus, but to slow it.

I have seen another phenomenon. The parliamentary secretary was speaking earlier about unfairness to major centres in that it was totally unfair for a graduate to get a tax credit for going to live in a region when a graduate from the same university not moving to a region did not. I have news for him. In order to attract doctors, among others, to the regions there are programs all across the country to encourage doctors to settle in the regions. Some provinces have even gone so far as to lower the salaries of doctors who remain in the city compared to salaries for those who move to outlying regions.

I think this is an excellent example of an initiative that has allowed the regions to seek out the minimum level of services they needed. I said the minimum level, because the problem is still not completely solved, and it will take some time before that can be done. Perhaps more rigorous, draconian measures will be needed in order to fill the positions available in the regions.

We must bear in mind that the regions also pay for training people and, like the rest of the population, people there are entitled to the same services under Quebec's health and social services legislation. That legislation clearly establishes that everyone is entitled to the same level of services to the extent possible and based on the ability of governments.

Over the past 30 or 40 years, the regions have seen an exodus to big cities. This exodus has devitalized rural communities and all the regions. Unfortunately, governments have not done enough to respond to this exodus. I would like to talk about the regional development model. We should think about what Scotland and the Nordic countries like Norway are doing to populate the land and encourage people to return to the regions. I am referring to deconcentration, but not decentralization. Decentralization has been used in the past to allow governments to offload the services they no longer wanted to provide. Although they offloaded services, they did not necessarily transfer any money to all the provinces. People are therefore a little skeptical when it comes to decentralization. Additional powers have been dumped on the regions, although they were not necessarily given the financial resources or money they needed to fulfill their new responsibilities.

The model used in the past was a model of concentration. Governments concentrated their administration in the capitals. Unfortunately, this model is still prevalent. Our review of cuts to the federal public service since 2004 indicates that 80% were made in the regions. While the number of public servants was increasing significantly in Ottawa, federal jobs in the regions were being eliminated. I am not saying that it is any different at the provincial level. I do not have any statistics, but I am convinced that, in the provinces, there is a strong tendency to concentrate power in each capital. Today, with the communication techniques at our disposal, it would be very easy to deconcentrate responsibilities to the regions. It is not just a question of decentralizing but also of deconcentrating the government administration so that public servants have as much contact as possible with the population of Canada and Quebec.

If we continue with our current approach to regional development, it is obvious that we will not be able to stem the regional exodus and to have people settle in the regions as they should. In some countries, the deconcentration of power has lead to the economic revitalization of the regions. If a funding department is moved from the capital to a region, there is a strong possibility that companies will establish themselves near the department in question because it gives money to businesses.

To conclude, in my opinion, it is very important for this bill to pass. This could be a first step for the federal government. It does not run counter to what is happening in Quebec and could even be complementary. It is up to the each of the provinces to identify the regions it wants to benefit from the bill when it is adopted.

[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.

[Guy André, Bloc, Berthier—Maskinongé, QC]

Mr. Speaker, I have the pleasure to conclude this time for debate on Bill C-288, An Act to amend the Income Tax Act (tax credit for new graduates working in designated regions). During this hour, some of my colleagues and some members of the other parties have said some interesting things about the issues in rural areas. Unfortunately, I was listening to the Conservative member opposite, and I am very sorry to hear him talk that way about rural regions.

In Mauricie, the region of Quebec I represent, 80% of the people are rural dwellers. There are many economic activities in rural areas. Members are aware of the issues related to forestry, tourism—more and more people from urban areas are coming to rural areas to enjoy fishing and hunting and stay at resorts—farming, which is important to rural communities, and manufacturing, which has developed over the years.

We have to provide tools to help rural communities develop. Quebec has a number of organizations, such as our local development centres. There is also the CFDC, which is under federal jurisdiction and plays an important local development role in these communities. We have also set up youth employment centres, which are based in rural communities and responsible for stimulating the economy and making sure that young people can find work in the community. A lot has been done to make sure that our rural communities maintain their economic vitality. Lately, people have been moving to urban centres. A few years ago, rural communities were in decline and losing population. We had to deal with two problems: an aging population and the exodus of young people.

A lot is being done. People have been working hard together to achieve incredible results. In Berthier—Maskinongé, RCMs are working with socio-economic groups and regional development councils. All of these organizations are working together for local development. They are setting up socio-economic development projects that respond to regional needs, interests, resource potential and people. Development tools introduced by the Government of Quebec, such as the Pacte rural, have provided rural municipalities with a development budget.

The policies set out in this bill would encourage students to return to the regions—

[The Deputy Speaker, Conservative, Andrew Scheer]

The time provided for the consideration of private members' business has now expired, and the order is dropped to the bottom of the order of precedence on the order paper.

The hon. member for Berthier—Maskinongé will have six minutes when the House resumes consideration of this bill.