Keeping Canada's Economy and Jobs Growing Act

An Act to implement certain provisions of the 2011 budget as updated on June 6, 2011 and other measures

This bill was last introduced in the 41st Parliament, 1st Session, which ended in September 2013.


Jim Flaherty  Conservative


This bill has received Royal Assent and is now law.


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

Part 1 of this enactment implements income tax measures and related measures proposed in the 2011 budget. Most notably, it
(a) introduces the family caregiver tax credit for caregivers of infirm dependent relatives;
(b) introduces the children’s arts tax credit of up to $500 per child of eligible fees associated with children’s artistic, cultural, recreational and developmental activities;
(c) introduces a volunteer firefighters tax credit to allow eligible volunteer firefighters to claim a 15% non-refundable tax credit based on an amount of $3,000;
(d) eliminates the rule that limits the number of claimants for the child tax credit to one per domestic establishment;
(e) removes the $10,000 limit on eligible expenses that can be claimed under the medical expense tax credit in respect of a dependent relative;
(f) increases the advance payment threshold for the Canada child tax benefit to $20 per month and for the GST/HST credit to $50 per quarter;
(g) aligns the notification requirements related to marital status changes for an individual who receives the Canada child tax benefit with the notification requirements for the GST/HST credit;
(h) reduces the minimum course-duration requirements for the tuition, education and textbook tax credits, and for educational assistance payments from registered education savings plans, that apply to students enrolled at foreign universities;
(i) allows the tuition tax credit to be claimed for eligible occupational, trade and professional examination fees;
(j) allows the reallocation of assets in registered education savings plans for siblings without incurring tax penalties;
(k) extends to the end of 2013 the temporary accelerated capital cost allowance treatment for investment in machinery and equipment in the manufacturing and processing sector;
(l) expands eligibility for the accelerated capital cost allowance for clean energy generation and conservation equipment;
(m) extends eligibility for the mineral exploration tax credit by one year to flow-through share agreements entered into before March 31, 2012;
(n) expands the eligibility rules for qualifying environmental trusts;
(o) amends the deduction rates for intangible capital costs in the oil sands sector;
(p) aligns the tax treatment to investments made under the Agri-Québec program with that of investments under AgriInvest;
(q) introduces rules to strengthen the tax regime for charitable donations;
(r) introduces anti-avoidance rules for registered retirement savings plans and registered retirement income funds;
(s) introduces rules to limit tax deferral opportunities for individual pension plans;
(t) introduces rules to limit tax deferral opportunities for corporations with significant interests in partnerships;
(u) extends the tax on split income to capital gains realized by a minor child; and
(v) extends the dividend stop-loss rules to dividends deemed to be received on the redemption of shares held by certain corporations.
Part 1 also implements other selected income tax measures and related measures. Most of these measures were referred to in the 2011 budget as previously announced measures. Most notably, it
(a) accommodates an increase in the annual contribution limit to the Saskatchewan Pension Plan and aligns its tax treatment with that of other tax-assisted retirement vehicles;
(b) clarifies that the “financially dependent” test applies for the purposes of provisions that permit rollovers of the assets of a deceased taxpayer’s registered retirement savings plan or registered retirement income fund to an infirm child or grandchild’s registered disability savings plan;
(c) ensures that the alternative minimum tax does not apply in respect of securities that are subject to the election under section 180.01 of the Income Tax Act;
(d) clarifies the rules applicable to the scholarship exemption for post-secondary scholarships, fellowships and bursaries; and
(e) amends the pension-to-registered retirement savings plan transfer limits in situations where the accrued pension amount was reduced due to the insolvency of the employer and underfunding of the employer’s registered pension plan.
Part 2 amends the Softwood Lumber Products Export Charge Act, 2006 to implement the softwood lumber ruling rendered by the London Court of International Arbitration on January 21, 2011.
Part 3 amends the Customs Tariff in order to simplify it and reduce the customs processing burden for Canadians by consolidating similar tariff items that have the same tariff rates and removing end-use provisions where appropriate. The amendments also simplify the structure of some provisions and remove obsolete provisions.
Part 4 amends the Customs Tariff to introduce new tariff items to facilitate the processing of low value non-commercial imports arriving by post or by courier.
Part 5 amends the Canada Education Savings Act to make the additional amount of a Canada Education Savings grant that is available under subsection 5(4) of that Act available to more than one of the beneficiary’s parents, if they share custody of the beneficiary, they are eligible individuals as defined in section 122.6 of the Income Tax Act and the beneficiary is a qualified dependant of each of them.
Part 6 amends the Children’s Special Allowances Act and a regulation made under that Act respecting payments relating to children under care.
Part 7 amends the Canada Student Financial Assistance Act to provide that the maximum aggregate amount of outstanding student loans is to be determined by regulation, to remove the power of the Minister of Human Resources and Skills Development to deny certificates of eligibility, and to change the limitation period for the Minister to take administrative measures. It also authorizes the Minister to forgive portions of family physicians’, nurses’ and nurse practitioners’ student loans if they begin to work in under-served rural or remote communities.
Part 7 also amends the Canada Student Loans Act to authorize the Minister to forgive portions of family physicians’, nurses’ and nurse practitioners’ guaranteed student loans if they begin to work in under-served rural or remote communities.
Part 8 amends Part IV of the Employment Insurance Act to provide a temporary measure to refund a portion of employer premiums for small business. An employer whose premiums were $10,000 or less in 2010 will be refunded the increase in 2011 premiums over those paid in 2010, to a maximum of $1,000.
Part 9 provides for payments to be made to provinces, territories, municipalities, First Nations and other entities for municipal infrastructure improvements.
Part 10 amends the Canadian Securities Regulation Regime Transition Office Act so that funding for the Canadian Securities Regulation Regime Transition Office may be fixed through an appropriation Act.
Part 11 amends the Wage Earner Protection Program Act to extend in certain circumstances the period during which wages earned by individuals but not paid to them by their employers who are bankrupt or subject to receivership may be the subject of a payment under that Act.
Part 12 amends the Canadian Human Rights Act to repeal certain provisions that provide for mandatory retirement. It also amends the Canada Labour Code to repeal a provision that denies employees the right to severance pay for involuntary termination if they are entitled to a pension. Finally, it amends the Conflict of Interest Act.
Part 13 amends the Judges Act to permit the appointment of two additional judges to the Nunavut Court of Justice.
Part 14 provides for the retroactive coming into force of section 9 of the Nordion and Theratronics Divestiture Authorization Act in order to ensure the validity of pension regulations made under that section.
Part 15 amends the Canada Pension Plan to include amounts received by an employee under an employer-funded disability plan in contributory salary and wages.
Part 16 amends the Jobs and Economic Growth Act to replace the reference to the Treasury Board Secretariat with a reference to the Chief Human Resources Officer in subsections 10(4) and 38.1(1) of the Public Servants Disclosure Protection Act.
Part 17 amends the Department of Veterans Affairs Act to include a definition of dependant and to provide express regulation-making authority for the provision of certain benefits in non-institutional locations.
Part 18 amends the Canada Elections Act to phase out quarterly allowances to registered parties.
Part 19 amends the Special Retirement Arrangements Act to permit the reservation of pension contributions from any benefit that is or becomes payable to a person. It also deems certain provisions of An Act to amend certain Acts in relation to pensions and to enact the Special Retirement Arrangements Act and the Pension Benefits Division Act to have come into force on December 14 or 15, 1994, as the case may be.
Part 20 amends the Motor Vehicle Safety Act to allow residents of Canada to temporarily import a rental vehicle from the United States for up to 30 days, or for any other prescribed period, for non-commercial use. It also authorizes the Governor in Council to make regulations respecting imported rental vehicles, as well as their importation into and removal from Canada, and makes other changes to the Act.
Part 21 amends the Federal-Provincial Fiscal Arrangements Act to clarify the legislative framework pertaining to payments under tax agreements entered into with provinces under Part III.1 of that Act.
Part 22 amends the Department of Human Resources and Skills Development Act to change the residency requirements of certain commissioners.


All sorts of information on this bill is available at LEGISinfo, an excellent resource from the Library of Parliament. You can also read the full text of the bill.


Nov. 21, 2011 Passed That the Bill be now read a third time and do pass.
Nov. 16, 2011 Passed That Bill C-13, An Act to implement certain provisions of the 2011 budget as updated on June 6, 2011 and other measures, {as amended}, be concurred in at report stage [with a further amendment/with further amendments] .
Nov. 16, 2011 Failed That Bill C-13 be amended by deleting Clause 182.
Nov. 16, 2011 Failed That Bill C-13, in Clause 181, be amended (a) by replacing line 23 on page 206 with the following: “April 1, 2012 and the eleven following” (b) by replacing line 26 on page 206 with the following: “April 1, 2016 and the eleven following” (c) by replacing line 29 on page 206 with the following: “April 1, 2020 and the eleven following”
Nov. 16, 2011 Failed That Bill C-13 be amended by deleting Clause 181.
Nov. 16, 2011 Failed That Bill C-13 be amended by deleting Clause 162.
Nov. 16, 2011 Passed That, in relation to Bill C-13, An Act to implement certain provisions of the 2011 budget as updated on June 6, 2011 and other measures, not more than one further sitting day shall be allotted to the consideration at report stage of the Bill and one sitting day shall be allotted to the consideration at third reading stage of the said Bill; and That, 15 minutes before the expiry of the time provided for Government Orders on the day allotted to the consideration at report stage and on the day allotted to the consideration at third reading stage of the said Bill, any proceedings before the House shall be interrupted, if required for the purpose of this Order, and in turn every question necessary for the disposal of the stage of the Bill then under consideration shall be put forthwith and successively without further debate or amendment.
Oct. 17, 2011 Passed That the Bill be now read a second time and referred to the Standing Committee on Finance.
Oct. 6, 2011 Passed That, in relation to Bill C-13, An Act to implement certain provisions of the 2011 budget as updated on June 6, 2011 and other measures, not more than three further sitting days shall be allotted to the consideration at second reading stage of the Bill; and That, 15 minutes before the expiry of the time provided for Government Orders on the third day allotted to the consideration at second reading stage of the said Bill, any proceedings before the House shall be interrupted, if required for the purpose of this Order, and, in turn, every question necessary for the disposal of the said stage of the Bill shall be put forthwith and successively, without further debate or amendment.

Keeping Canada's Economy and Jobs Growing ActGovernment Orders

October 5th, 2011 / 3:25 p.m.
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Ted Menzies Conservative Macleod, AB

moved that Bill C-13, An Act to implement certain provisions of the 2011 budget as updated on June 6, 2011 and other measures, be read the second time and referred to a committee.

Mr. Speaker, thank you for the opportunity to begin debate on the keeping Canada's economy and jobs growing act. This act represents a key component of the next phase of Canada's economic action plan.

Today's legislation represents an ambitious, substantive, and positive response to the economic challenges of today and the opportunities of tomorrow.

Indeed, the global economic recovery is challenged, as demonstrated by ongoing events in Europe and in the United States. While the roots of these global challenges are not from within our borders, they could nevertheless impact Canada. That is why our Conservative government has remained squarely focused on helping protect and grow Canada's economy to the greatest extent possible since the onset of the global economic turbulence.

In our initial response, Canada's economic action plan, we delivered $60 billion in extraordinary investments to support jobs and growth during the worst of the global recession. It was a plan that helped families and businesses deal with the short-term challenges, while also supporting Canada's long-term prosperity through, for instance, landmark infrastructure investments in roads, bridges, universities, colleges, and many more.

It was a plan that, according to countless independent observers, worked.

As BMO economist Doug Porter publicly declared, it was, “arguably one of the most successful stimulus programs in the industrialized world”.

Earlier this year, our Conservative government built on that record of accomplishments with the next phase of Canada's economic action plan: a low tax plan for jobs and growth.

The next phase seeks to foster positive conditions for long-term economic prosperity, while staying on track to return to balanced budgets, while helping Canadian families.

The keeping Canada's economy and jobs growing act represents a vital component of the next phase as it implements many of its key elements. For instance, the act would promote job creation and economic growth by: providing a temporary hiring credit for small business, to encourage additional hiring; expanding tax support for clean energy generation, to encourage green investments; extending the mineral exploration tax credit for flow-through share investors by one year to support Canada's mining sector; simplifying customs tariffs in order to facilitate trade and lower the administrative burden for businesses; extending the accelerated capital cost allowance treatment for investments in productivity-improving machinery and equipment for Canada's manufacturing sector; and eliminating the mandatory retirement age for federally regulated employees in order to give older workers wishing to work the option to remain in the workforce.

The act would support communities from coast to coast to coast by: legislating a permanent annual investment of $2 billion in the gas tax fund to provide predictable long-term infrastructure funding for municipalities; enhancing the wage earner protection program to cover more workers affected by employer bankruptcy or receivership; introducing a volunteer firefighters tax credit for volunteer firefighters; and increasing the ability of Canadians to give more confidently to legitimate charities, by helping combat fraud and other forms of abuse by illegitimate charities.

The keeping Canada's economy and jobs growing act would help families by: introducing a new family caregiver tax credit to assist caregivers of all types of infirm, dependent relatives; removing the limit on the amount of eligible expenses caregivers can claim for their financially dependent relatives under the medical expense tax credit; and introducing a new children's arts tax credit for programs associated with children's arts, cultural, recreational and developmental activities.

The act would invest in education and training by: forgiving loans for new doctors and nurses in underserved rural and remote areas; helping apprentices in the skilled trades, as well as workers in regulated professions, by making occupational trade and professional examination fees eligible for tuition tax credit; improving federal financial assistance for students; and making it easier to allocate registered education savings plan assets among siblings, without incurring tax penalties or forfeiting Canada education savings grants.

Finally, it would respect taxpayers by: phasing out the direct subsidy for political parties and closing numerous tax loopholes that allow a few businesses and individuals to avoid paying their fair share of tax.

The keeping Canada's economy and jobs growing act includes so much more to help families, students, businesses, seniors, communities and obviously the economy and jobs. To keep Canada's economy on the right track, I am confident that Parliament will endorse today's legislation in a timely and overwhelming manner.

Before spotlighting a couple of the numerous and very positive measures in today's legislation, let me underline that, while indeed the global economy is in a period of turbulence and there are challenges that lie ahead, Canada has performed relatively well. Over the course of the debate on the keeping Canada's economy and jobs growing act, the opposition, NDP and Liberals, will attempt, in the starkest terms and with the greatest hyperbole, to talk down the Canadian economy with its non-stop negativity.

The NDP and Liberals will downplay the achievements of our businesses, our workers and our government that have in recent years made our economy stronger and more competitive. Carried by the weight of the heavy pessimism in their overstated rhetoric and tired talking points, the NDP and the Liberals will throw their collective hands up and claim that Canada has not been up to the challenges of the global economy.

That is where we on this side of the House must differ. As Winston Churchill once noted, “The pessimist sees difficulty in every opportunity. The optimist sees the opportunity in every difficulty”. Without a doubt, our Conservative government has seen, and sought to capitalize on, the opportunities and global economic turbulence of recent years. Unlike the NDP and the Liberals, we have believed that Canada and Canadians could meet that challenge, especially with the support of our low tax pro-growth economic policies.

Let me say it once again for the opposition. The facts are indisputable. Canada is standing tall.

On economic growth, both the IMF and the OECD forecast that we will have among the strongest economic growth in the G7 in the years ahead.

On jobs, Canada has the strongest job creation record in the G7 with nearly 600,000 net new jobs created since July 2009, with over 80% of those being full-time jobs.

On our financial sector, the World Economic Forum has, for the fourth straight year, rated our banking system the best in the world.

On our fiscal situation, Canada has, and will continue to have, by far the lowest total government net debt to GDP ratio in the entire G7 based on IMF projections.

On fiscal and economic fundamentals, Canada's credit rating, unlike numerous other countries, has been affirmed as being the highest possible by major rating agencies. Indeed, Moody's recently renewed Canada's triple A credit rating, praising our “economic resiliency, very high government financial strength, and a low susceptibility to event risk”.

On our competitiveness, Forbes, the influential business magazine, ranked Canada as the best country in the world for business to grow and create jobs, largely due to our low tax plan for Canadian businesses.

The list goes on.

There is little wonder that The Economist and global leaders have singled out Canada's economy and our Conservative government's economic leadership for repeated praise. BMO economist, Doug Porter, testifying before the finance committee this last week, declared, “--compared to policy making in the rest of the world, Canada's economic policy-making has been exemplary. I don't think there has been a significant misstep in recent years”.

We recall the words of U.K. Prime Minister David Cameron before this chamber:

In the last few years, Canada has got every major decision right. Look at the facts...Your economic leadership has helped the Canadian economy to weather the global storms far better than many of your international competitors.

As encouraging and positive as those facts and quotes may be, they should not serve as an invitation to rest on our laurels, especially in the light of the ongoing global economic turmoil in the EU and United States.

We all know resting on our laurels is no way to stay ahead. That is why, as I mentioned previously, our Conservative government remains focused on what matters to Canadians: creating jobs and promoting economic growth through the implementation of the next phase of Canada's economic action plan outlayed in today's legislation.

As I mentioned, the keeping Canada's economy and jobs growing act is a very substantive piece of legislation at over 640 pages. While there is no way I can spotlight each and every great measure in the bill, I would like to spotlight a couple of them, one of which garnered strong attention to date, and another that some have overlooked.

First, I would like to talk about a measure that has garnered pretty strong attention, that being the new volunteer firefighters tax credit and what it means for communities across Canada. Every day, without hesitation, volunteer men and women across Canada put their lives on the line to protect our families from harm.

Canada is incredibly fortunate to have volunteer firefighters across this country who are willing to put themselves at risk to protect the lives and the property of their fellow Canadians.

Our Conservative government is proud of these brave men and women who volunteer their time in the service of their and our communities.

While there is no way we can every truly repay them, we can show them we value all of the nearly 85,000 volunteer firefighters who keep our communities safe. That is why I am proud that we have proposed the volunteer firefighters tax credit in this legislation. It will help volunteer firefighters by providing them with a 15% non-refundable tax credit of $3,000.

Day after day, volunteer firefighters play a vital role in serving our communities. By helping these brave men and women, our government is working to make Canadian cities and towns safer.

I should note that this new tax credit has been received extremely positively. In fact, the Canadian Association of Fire Chiefs declared:

This measure will help with the recruitment and retention of volunteer firefighters across the country, which will in turn help protect Canadians and our communities.

The Charlottetown Guardian editorial remarked:

For all the time they devote to training and responding to fires in communities across the country, our volunteer firefighters deserve that's a gesture of appreciation for the work our firefighters do for Canadians.

Second, and lastly, I would like to briefly talk about a measure that has not received a lot of attention: tax relief to help apprentices in the skilled trades and workers in regulated professions with the cost of occupational trade and professional examination fees.

As we all know, apprentices in the skilled trades must complete certification exams at the end of their apprenticeship to practice their trade. Likewise, students in fields like nursing, medicine, law and accounting are also required to complete examinations to practice their occupations.

Until now, the cost of these certification examinations were generally not eligible for tax relief. The keeping Canada's economy and jobs growing act will now make all occupational trade and professional examination fees eligible for the tuition tax credit where the examination is required to obtain a professional status, certification or licence in a trade recognized by federal or provincial law that allows the individual to practice that profession or trade within Canada.

Examples of eligible occupations, trades and professions include: architects, machinists, bakers, bricklayers, carpenters, chartered accountants, dental technicians, hair stylists, motor vehicle body repairers, welders and much more. In fact, it is estimated that more than 30,000 individuals would benefit just this year.

The new tax relief for certification examinations builds on other measures the government has introduced since 2006 for students and those helping to improve their own skills. This includes the apprenticeship incentive grant and the apprenticeship completion grant under which eligible apprentices could receive up to $4,000 which can be used to pay for tuition, travel, tools or other expenses.

I should also note that this new measure was also very well-received. Engineers Canada has applauded it and has stated:

“Making professional examination fees eligible for the Tuition Tax Credit...demonstrates a real commitment to fostering the highly-skilled, and qualified talent the country needs to compete....It will help in the pursuit of a strong, diverse, and modern economy.”

The Canadian Home Builders' Association stated that the measure would “target a very important issue--the shortage of skilled people in our industry”.

Those are two of the countless measures in the Keeping Canada's Economy and Jobs Growing Act that are positive and should be supported unanimously by Parliament. The NDP and Liberal members have opposed the many positive measures that we have put forward in this legislation. Their constituents and I would be interested in hearing their explanations why.

Keeping Canada's Economy and Jobs Growing ActGovernment Orders

October 5th, 2011 / 3:40 p.m.
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Pierre Dionne Labelle NDP Rivière-du-Nord, QC

Mr. Speaker, I listened carefully to the speech by my Conservative colleague.

At no point did he mention the debt levels of Canadian families, which are among the highest in the OECD. I would like to hear what my colleague has to say about this.

Are there any measures planned to help families increase their purchasing power? I know that there is talk of a toll bridge, but these measures will not really help people increase their purchasing power.

Keeping Canada's Economy and Jobs Growing ActGovernment Orders

October 5th, 2011 / 3:40 p.m.
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Ted Menzies Conservative Macleod, AB

Mr. Speaker, I appreciate that the hon. member was not here for budgets 2010, 2009, 2008 and many budgets cumulatively since 2006, every one of which his party opposed, but we actually reduced taxes for a Canadian family of four by over $3,000. That means every family of four has $3,000 more to spend on what it wants. Whether families spend it on their children or their children's education is their choice. We have taken away the prerogative of their having to send it to Ottawa because we think it is better taken care of in the pockets of Canadian families.

Keeping Canada's Economy and Jobs Growing ActGovernment Orders

October 5th, 2011 / 3:45 p.m.
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John McCallum Liberal Markham—Unionville, ON

Mr. Speaker, the tax credits that are contained in the budget are non-refundable. That means that the benefit of the tax credit is subtracted from the income tax a person pays. However, a person with a low income who pays little or no income tax would get absolutely no benefit. This means the government has deliberately excluded low income Canadians from any benefit contained within those tax credits. Therefore, in the case of the children's arts tax credit, children of low income households need not apply. They will not get anything. As well, low income volunteer firefighters would get nothing at all.

Regarding the family caregiver tax credit, people who have low incomes or who quit their jobs to stay home to look after someone who is sick and therefore no longer have an income would again receive nothing.

It is unconscionable that Canadians with the lowest income are deliberately excluded from these benefits. I know the minister is a decent fellow, coming from the Progressive Conservative wing of his party. I cannot understand how he could possibly support these tax credits which benefit all Canadians except those with the lowest incomes and the most vulnerable.

Keeping Canada's Economy and Jobs Growing ActGovernment Orders

October 5th, 2011 / 3:45 p.m.
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Ted Menzies Conservative Macleod, AB

Mr. Speaker, I appreciate the accolades from the member opposite. He and I sat on the finance committee and discussed many important issues, including many of the most recent budgets.

In fact, since 2006 when we formed the government we have taken nearly a million Canadians off the tax roll. We have reduced taxes for that many Canadians. We want to help and want to support every Canadian. We have done that. We have reduced their cost of living.

We know that the NDP wants to raise taxes by $10 billion. I am not sure what the hon. member's party is suggesting we should do.

We believe it is very important to leave hard-earned money in the pockets of Canadians. We have reduced taxes for all Canadians so that they will have an opportunity to participate in these programs we are supporting.

Keeping Canada's Economy and Jobs Growing ActGovernment Orders

October 5th, 2011 / 3:45 p.m.
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Peggy Nash NDP Parkdale—High Park, ON

Mr. Speaker, the hon. member opposite made one statement that is a little perplexing.

He talked about the New Democratic Party wanting to raise taxes by $10 billion. Given that we have absolutely no proposals to raise taxes by $10 billion, can the hon. member explain where this figure comes from?

Keeping Canada's Economy and Jobs Growing ActGovernment Orders

October 5th, 2011 / 3:45 p.m.
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Ted Menzies Conservative Macleod, AB

Mr. Speaker, the number comes from a cumulative effect. In the last Parliament the NDP was supporting raising taxes on businesses for EI. I think the term that was used was “a 45-day work year”, which would cost a lot of money. That would hurt businesses. It would be a tax on Canadians.

The NDP wants to tax the oil sands in my province. I take it personally when the NDP attacks the producer of clean energy in my province of Alberta that generates incredible wealth that is spread across this country. The NDP wanted to put a tax on that. The NDP wanted an iPod tax.

I do not think it is $10 billion. It is probably higher. I stopped at $10 billion, but I can go further.

Keeping Canada's Economy and Jobs Growing ActGovernment Orders

October 5th, 2011 / 3:50 p.m.
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Mark Warawa Conservative Langley, BC

Mr. Speaker, it is good to be reminded of good things as well as the low tax programs of the government.

Has the member ever seen a time when the NDP or the Liberal Party have not wanted to have tax increases?

If we look at the GST, when a Liberal member said that we should do something for the people who are struggling with their finances our government promised to lower the GST from 7% to 6% to 5%.

I would ask the member about the history of the NDP. Did the NDP support it? Did the Liberals support it? Has there ever been a tax they did not want to increase?

Keeping Canada's Economy and Jobs Growing ActGovernment Orders

October 5th, 2011 / 3:50 p.m.
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Ted Menzies Conservative Macleod, AB

Mr. Speaker, the short answer is that I do not think the NDP has ever met a tax it would not like to raise. We have some contradictory taxes. The NDP voted not once but twice in the House against lowering the GST for Canadians, which was a very popular measure.

Then in Nova Scotia the NDP increased the GST by 2%. In B.C. the NDP was opposed to the GST. Then it applauded our settling the negotiation with Quebec on the HST.

I rest my case. The NDP loves every tax it can raise.

Keeping Canada's Economy and Jobs Growing ActGovernment Orders

October 5th, 2011 / 3:50 p.m.
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John McCallum Liberal Markham—Unionville, ON

Mr. Speaker, as the minister said, it is true that BMO economist Douglas Porter said nice things about the government.

However, he neglected to say that Douglas Porter's boss, Sherry Cooper, the chief economist at BMO, blasted the government, likening it to Herbert Hoover who put contractionary measures in place during the Depression and made the Depression worse. Sherry Cooper says that the government should not make cuts and should not increase EI premiums at this time.

The government is planning a 5.6% increase in employment insurance premiums starting in January of next year. This is a job destroying tax coming in at a time when we are concerned about the risk of a recession and when the global economy is in great turmoil.

How does the minister justify raising employment insurance premiums by 5.6% at this time?

Keeping Canada's Economy and Jobs Growing ActGovernment Orders

October 5th, 2011 / 3:50 p.m.
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Ted Menzies Conservative Macleod, AB

Mr. Speaker, I can quite easily justify a marginal increase in the cost of EI because we decided not to pick the pockets of labour as was done under the previous Liberal government, of which my colleague was a member.

The old adage “When we got there the cupboard was bare” is appropriate for the EI fund. The Liberals managed to take $60 billion out of the contributions of businesses and employees and squander it on their own political nest egg. That is why we have to get a handle on EI premiums.

Keeping Canada's Economy and Jobs Growing ActGovernment Orders

October 5th, 2011 / 3:50 p.m.
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Peggy Nash NDP Parkdale—High Park, ON

Mr. Speaker, I would like to add a bit of reality to this debate following on the hon. member opposite.

Let me begin with a recent report published in Toronto, Canada's largest city. It is a report called “Vital Signs”. It documents the transformation that is taking place in many Canadian cities but especially in Canada's largest city.

The report talks about a dramatic reduction in quality of life which could affect almost half the population of the city over the next 10 to 15 years. It does offer some good news. It claims that the quality of life for Torontonians is improving when it comes to the environment. Toronto is a healthier city. Its crime rates are lower than ever before, which is significant. However, it indicates that there are huge challenges which range from affordable housing to public transit.

I want to share a significant point with the members opposite: the gap between the rich and the poor in Toronto and in many other cities is growing. As well, skilled immigrants are twice as likely to face unemployment than workers born in Canada and when skilled immigrants are hired they usually receive about half the annual salary of other workers. During the period of growth from 1998 to 2007, one-third of the income growth across Canada went to 1% of the wealthiest Canadians, those averaging incomes of more than $400,000 a year. The country is becoming increasingly divided and that is what is playing out in our largest city.

Child poverty rates have increased by more than 40% in one year. As a result of the lack of investment in urban transit and transit infrastructure, lower income residents in Toronto live in what is being called transit deserts. They spend an hour a day on average trying to get from one part of the city to another and spend a greater portion of their income trying to get there.

Canadians need governments for affordable housing, transit, social connections, to get to jobs and for opportunities. Journalist Royson James reported that just when they need it most, our civic institutions and governments are looking to withdraw from the field. In other words, governments are withdrawing money. I use that as an introduction to my remarks.

In spite of the member opposite's glowing report on Bill C-13, this legislation represents what I assume are the government's best efforts to cope with Canada's current economic dilemma, but it is a disturbingly inadequate effort. I want to enter a few facts into this argument.

The government likes to pretend that we are in a recovery, but as this report indicates, two million Canadians would work if there were jobs available for them. The report makes it clear that talk of recovery not only is misleading but is dishonest when it comes to these Canadians who are unemployed or underemployed.

We have a continuing recession in the jobs market. Unemployment is far above what it was in the last recession. Job creation is well below what is needed just to maintain a steady employment. The government claims to have created 600,000 net new jobs, and it keeps repeating that number, but the facts clearly indicate otherwise.

We have seen the addition of barely 200,000 new jobs since before the recession in May 2008, but the labour force has grown by 450,000 since then. Therefore, we are short a quarter of a million jobs just to keep employment steady. This is nothing to brag about, but the government, instead, misleads Canadians rather than have an honest, open debate about where we need to go and how we put plans in place to get people back to work.

It is a fact that the job market is currently more fragile than it was before the October 2008 crisis. The unemployment rate has risen to 7.3%, while the number of part-time workers and the number of workers looking for full-time employment have increased very rapidly.

Quality, full-time jobs that allow families to make a living are very hard to find in many regions of the country.

Moreover, the actual unemployment rate, which includes discouraged workers who have left the labour force and part-time workers who would like to be working full-time, was 11.1% in July 2011, a very significant increase over the July 2009 rate of 9.4%.

Youth employment really is a disaster in this country. It really is quite shocking. The fact is that at the high point in May 2008 before the recession, 2.6 million Canadians between the ages of 15 and 24 had jobs, the participation rate was about 67.6% and the official unemployment rate about 11.9%. However, in August 2011, there were only 2.4 million 15 to 24-year-olds employed, the participation rate had fallen three percentage points and unemployment was at 14%.

This means there are almost 127,000 fewer jobs for 15 to 24-year-olds, 127,000 fewer jobs than before the recession. If we take the lower participation rate into account, in other words, a lot of people have just stopped looking, we would recognize that there are about 134,000 fewer jobs at the same participation rate.

Another fact is that the true measure of the jobs deficit for young people compared to May 2008 is about 260,000 jobs that were missing. Of course, another 85,000 young people have joined the labour force since May 2008, so there are even more young people looking for work. There are no net new jobs here, contrary to what the government says, just a gaping hole for young people to fall into and an enormous short and long-term loss to the economy.

The IMF recently predicted that Canada's unemployment rate will rise this year and in 2012 because our economy is growing far more slowly than anticipated.

In reality, real GDP growth of 2.5% annually is needed just to maintain the status quo, and growth has been much weaker since the start of the great recession.

It is a fact that economists everywhere have lowered their forecasts with regard to Canada's economic growth. Scotiabank economists have stated that we are facing a very real possibility that the Canadian economy could be the first to fall into a recession.

The BMO deputy chief economist has noted that even if Canada and the U.S. are able to avoid another recession, Ottawa will not achieve the rate of economic growth projected in the budget.

The budget was based on growth projections that are no longer realistic.

Another claim that the Minister of Finance and the Prime Minister tend to make is that the economic fundamentals of the Canadian economy are great. Let us examine that.

An economy depends on four key economic drivers for growth: private business spending and investment, consumer spending, exports, and the public sector.

The government has pinned all of its hopes on the private sector, spending billions of public revenues on rolling back corporate taxes. The result: very little investment, very little job creation. In fact, Canadian corporations are sitting on $500 billion in cash rather than spend or invest it. Of that, $120 billion has come from the government's no strings attached corporate tax cuts. That is $120 billion.

It is a fact that the combined federal and Ontario corporate tax rates were slashed from 45% in 1999 to 30% in 2010. That is a drop of 15%. Over the same period, investment in machinery and equipment fell from just over 8% to just over 5% of the province's gross domestic product. Therefore, a measure designed to increase investment and productivity in machinery failed. In fact, investment fell even though taxes were cut and we were shovelling over $100 billion back into corporate profits.

So much for the claim that corporate income tax giveaways boost business investment and job creation. Worse still, the government's response, illogical as it seems, it to just stay the course and waste more money on further tax cuts. Brilliant.

Instead of patting itself on the back because we are doing relatively better than some very sick economies, the government must put in place policies that encourage private sector investment in our economy here at home over the long-term. This budget is full of temporary half measures when long-term strategic action is needed.

We all know what happened to the second economic driver, consumer spending. There is a growing inequality in the distribution of income in this country, and I just cited one study. This is an inequality the government does not seem to worry or care about, but it means that Canadians have had to borrow to spend on essentials, and borrow they have. Canadians have never been more indebted; an average household owes 150% of its income.

We cannot count on overstrapped consumers to get us out of this mess. Consumer spending is tapped out. That is not the solution.

This summer the IMF published a study on inequality. It found that the more equitably incomes are distributed, the longer and more stable are periods of economic growth. The more equality, the longer the periods of economic growth. Even so, this budget does nothing to address inequality in Canada.

As for exports, the third driver, the IMF projects that Canada's balance of payments, deficit, as a percentage of GDP is on its way to becoming one of the worst among advanced economies; worse than that of the U.S. and soon to be worse than Italy or Spain.

The IMF predicts that our current account deficit will reach almost 4% of GDP in 2012. That is a major negative on our economy. However, we would never hear the government mention this piece of bad news.

With business, consumers and exports on the sidelines as drivers of economic growth, that leaves only the public sector. Once again, the government is doing the illogical thing in pursuing austerity, cutting back public services and missing the opportunity of a lifetime to invest in Canada and Canadians.

The Minister of Finance is accusing my party of recommending spending—according to him, that is why the European economies are bordering on ruin—without taking into account the role that private sector financial institutions, which are overenthusiastic, played in the impoverishment of our larger trading partners.

However, although the Minister of Finance must be aware of it, he does not seem to understand the difference between investments and expenditures. The NDP is not talking about expenditures; it is talking about investments in targeted sectors to promote job creation and in infrastructure, including roads, bridges, public transit and high-speed Internet. We are talking about investing to train our workers so that they are productive in the new economy, investing in housing, and investing in our children's education.

I attended a meeting recently where a former deputy minister of finance called for a division on the government's books to help overcome the failure to distinguish between investments, investments that create assets and lead to significant returns in the economy, productivity, employment, competitiveness and the public purse, the difference between these investments and spending on things like the government's beloved gazebos and fake lakes that are of little economic value.

The fact is that the Toronto Board of Trade emphasizes that a strong infrastructure foundation is a top priority in ensuring economic competitiveness now and in the future.

In fact, the OECD has concluded that Toronto's lack of transportation infrastructure is the leading drag on the region's global competitiveness. Yet, the bill contains no new investments in infrastructure. It is really shocking.

The Conservatives often like to compare the government to a business, as though that were a good thing. However, rare is the business that would cast aside the opportunities available to the government, such as the availability of a qualified workforce, a desperate need for infrastructure across the country, infrastructure that would earn a generous return on investment, and capital available at a rate that is at an almost record low. In similar circumstances, any self-respecting business person would invest extensively, but not this government. The Conservatives do not know how to recognize a good deal.

What we get are missed opportunities to build a world competitive economy with infrastructure second to none to attract new capital investment and to give our homegrown industries a permanent advantage over our competitors, and public policies that would only make the recession and the labour market more severe.

The Conservatives call themselves economic managers. It is a cruel joke.

Here is a bill that they claim would address the problems our economy faces. It would fall so far short of what is needed, it is really embarrassing.

Mr. Flaherty admitted yesterday the Conservatives would maintain their do-nothing approach to the economy. The New--

Keeping Canada's Economy and Jobs Growing ActGovernment Orders

October 5th, 2011 / 4:10 p.m.
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The Acting Speaker Conservative Bruce Stanton

Order, please. In fact, there are still two minutes remaining for the hon. member. I just remind her that the mention of other hon. members by name is not permitted in the House.

The hon. member for Parkdale—High Park.

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October 5th, 2011 / 4:10 p.m.
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Peggy Nash NDP Parkdale—High Park, ON

Thank you, Mr. Speaker. Let me correct what I said.

The minister admitted yesterday that the Conservatives will maintain their do-nothing approach to the economy. I am happy to repeat that line, but I am sad that is the approach of the government.

The New Democrat motion calling for immediate action on jobs passed unanimously. Even the government recognized the need for action. That is leadership on the economy, what we have proposed.

The minister's continued inaction shows the opposite: a lack of leadership. Sadly, the Conservatives are out of touch with the needs of so many Canadians, a growing number of Canadians who are falling further behind. Canadian families want action on job creation now, decent jobs that will help them pay their bills, not tax cuts, not tax giveaways that a lot of Canadians cannot even get access to.

Sadly, the budget just does not cut it.

We have a better proposal. We are happy to work with the government to really create jobs and investment for all Canadians.

Keeping Canada's Economy and Jobs Growing ActGovernment Orders

October 5th, 2011 / 4:10 p.m.
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Malcolm Allen NDP Welland, ON

Mr. Speaker, let me thank the hon. member for Parkdale—High Park for her impassioned speech and laying out for this House what really needs to get done when it comes time to help those who are really vulnerable in our communities.

I remind this House that Henniges Automotive, which used to be General Tire & Rubber Company, then became GDX, just closed in my riding of Welland on Saturday and threw the last 300 workers out of work. There were over 1,500 workers there at one point, not that long ago. Now they are all gone.

However, one of the things that has happened in our region that is of a positive note is the introduction of inter-regional transit; in other words, municipalities in the Niagara region will now have transit for the first time in a very long time. In fact, we would have to go back to my mother-in-law's day, rest her soul, which was many years ago, when they actually had a train system that went between communities.

I would ask my hon. colleague what she thinks the government should be doing when it comes to transit in this country, which seems to be always at the tail end of things, whether it be downtown Toronto and now my region of Niagara, where we are finally going to have an inter-regional transit, where people in Port Colborne, which has one of the highest rates of unemployment in the province, who are seeking employment need to get to my good friend the Minister of Justice's Niagara Falls riding to get a job, but who do not have a way to get there because they cannot afford a car now. Finally, they might have regional transit.

I would ask my hon. colleague to comment on what we need to do for transit.