Bill C-45 (Historical)

Jobs and Growth Act, 2012

A second Act to implement certain provisions of the budget tabled in Parliament on March 29, 2012 and other measures

Part 1 implements certain income tax measures and related measures proposed in the March 29, 2012 budget. Most notably, it
(a) amends the rules relating to Registered Disability Savings Plans (RDSPs) by
(i) replacing the 10-year repayment rule applying to withdrawals with a proportional repayment rule,
(ii) allowing investment income earned in a Registered Education Savings Plan (RESP) to be transferred on a tax-free basis to the RESP beneficiary’s RDSP,
(iii) extending the period that RDSPs of beneficiaries who cease to qualify for the Disability Tax Credit may remain open in certain circumstances,
(iv) amending the rules relating to maximum and minimum withdrawals, and
(v) amending certain RDSP administrative rules;
(b) includes an employer’s contributions to a group sickness or accident insurance plan in an employee’s income in certain circumstances;
(c) amends the rules applicable to retirement compensation arrangements;
(d) amends the rules applicable to Employees Profit Sharing Plans;
(e) expands the eligibility for the accelerated capital cost allowance for clean energy generation equipment to include a broader range of bioenergy equipment;
(f) phases out the Corporate Mineral Exploration and Development Tax Credit;
(g) phases out the Atlantic Investment Tax Credit for activities related to the oil and gas and mining sectors;
(h) provides that qualified property for the purposes of the Atlantic Investment Tax Credit will include certain electricity generation equipment and clean energy generation equipment used primarily in an eligible activity;
(i) amends the Scientific Research and Experimental Development (SR&ED) investment tax credit by
(i) reducing the general SR&ED investment tax credit rate from 20% to 15%,
(ii) reducing the prescribed proxy amount, which taxpayers use to claim SR&ED overhead expenditures, from 65% to 55% of the salaries and wages of employees who are engaged in SR&ED activities,
(iii) removing the profit element from arm’s length third-party contracts for the purpose of the calculation of SR&ED tax credits, and
(iv) removing capital from the base of eligible expenditures for the purpose of the calculation of SR&ED tax incentives;
(j) introduces rules to prevent the avoidance of corporate income tax through the use of partnerships to convert income gains into capital gains;
(k) clarifies that transfer pricing secondary adjustments are treated as dividends for the purposes of withholding tax imposed under Part XIII of the Income Tax Act;
(l) amends the thin capitalization rules by
(i) reducing the debt-to-equity ratio from 2:1 to 1.5:1,
(ii) extending the scope of the thin capitalization rules to debts of partnerships of which a Canadian-resident corporation is a member,
(iii) treating disallowed interest expense under the thin capitalization rules as dividends for the purposes of withholding tax imposed under Part XIII of the Income Tax Act, and
(iv) preventing double taxation in certain circumstances when a Canadian resident corporation borrows money from its controlled foreign affiliate;
(m) imposes, in certain circumstances, withholding tax under Part XIII of the Income Tax Act when a foreign-based multinational corporation transfers a foreign affiliate to its Canadian subsidiary, while preserving the ability of the Canadian subsidiary to undertake expansion of its Canadian business; and
(n) phases out the Overseas Employment Tax Credit.
Part 1 also implements other selected income tax measures. Most notably, it introduces tax rules to accommodate Pooled Registered Pension Plans and provides that income received from a retirement compensation arrangement is eligible for pension income splitting in certain circumstances.
Part 2 amends the Excise Tax Act and the Jobs and Economic Growth Act to implement rules applicable to the financial services sector in respect of the goods and services tax and harmonized sales tax (GST/HST). They include rules that allow certain financial institutions to obtain pre-approval from the Minister of National Revenue of methods used to determine their liability in respect of the provincial component of the HST, that require certain financial institutions to have fiscal years that are calendar years, that require group registration of financial institutions in certain cases and that provide for changes to a rebate of the provincial component of the HST to certain financial institutions that render services to clients that are outside the HST provinces. This Part also confirms the authority under which certain GST/HST regulations relating to financial institutions are made.
Part 3 amends the Federal-Provincial Fiscal Arrangements Act to provide the legislative authority to share with provinces and territories taxes in respect of specified investment flow-through (SIFT) entities — trusts or partnerships — under section 122.1 and Part IX.1 of the Income Tax Act, consistent with the federal government’s proposal on the introduction of those taxes. It also provides the legislative authority to share with provinces and territories the tax on excess EPSP amounts imposed under Part XI.4 of the Income Tax Act, consistent with the measures proposed in the March 29, 2012 budget. It also allows the Minister of Finance to request from the Minister of National Revenue information that is necessary for the administration of the sharing of taxes with the provinces and territories.
Part 4 enacts and amends several Acts in order to implement various measures.
Division 1 of Part 4 amends the Trust and Loan Companies Act, the Bank Act, the Insurance Companies Act and the Jobs and Economic Growth Act as a result of amendments introduced in the Jobs, Growth and Long-term Prosperity Act to allow certain public sector investment pools to directly invest in a federally regulated financial institution.
Division 2 of Part 4 amends the Canada Shipping Act, 2001 to permit the incorporation by reference into regulations of all Canadian modifications to an international convention or industry standard that are also incorporated by reference into the regulations, by means of a mechanism similar to that used by many other maritime nations. It also provides for third parties acting on the Minister of Transport’s behalf to set fees for certain services that they provide in accordance with an agreement with that Minister.
Division 3 of Part 4 amends the Canada Deposit Insurance Corporation Act to, among other things, provide for a limited, automatic stay in respect of certain eligible financial contracts when a bridge institution is established. It also amends the Payment Clearing and Settlement Act to facilitate central clearing of standardized over-the-counter derivatives.
Division 4 of Part 4 amends the Fisheries Act to amend the prohibition against obstructing the passage of fish and to provide that certain amounts are to be paid into the Environmental Damages Fund. It also amends the Jobs, Growth and Long-term Prosperity Act to amend the definition of Aboriginal fishery and another prohibition relating to the passage of fish. Finally, it provides transitional provisions relating to authorizations issued under the Fisheries Act before certain amendments to that Act come into force.
Division 5 of Part 4 enacts the Bridge To Strengthen Trade Act, which excludes the application of certain Acts to the construction of a bridge that spans the Detroit River and other works and to their initial operator. That Act also establishes ancillary measures. It also amends the International Bridges and Tunnels Act.
Division 6 of Part 4 amends Schedule I to the Bretton Woods and Related Agreements Act to reflect changes made to the Articles of Agreement of the International Monetary Fund as a result of the 2010 Quota and Governance Reforms. The amendments pertain to the rules and regulations of the Fund’s Executive Board and complete the updating of that Act to reflect those reforms.
Division 7 of Part 4 amends the Canada Pension Plan to implement the results of the 2010-12 triennial review, most notably, to clarify that contributions for certain benefits must be made during the contributory period, to clarify how certain deductions are to be determined for the purpose of calculating average monthly pensionable earnings, to determine the minimum qualifying period for certain late applicants for a disability pension and to enhance the authority of the Review Tribunal and the Pension Appeals Board. It also amends the Department of Human Resources and Skills Development Act to enhance the authority of the Social Security Tribunal.
Division 8 of Part 4 amends the Indian Act to modify the voting and approval procedures in relation to proposed land designations.
Division 9 of Part 4 amends the Judges Act to implement the Government of Canada’s response to the report of the fourth Judicial Compensation and Benefits Commission regarding salary and benefits for federally appointed judges. It also amends that Act to shorten the period in which the Government of Canada must respond to a report of the Commission.
Division 10 of Part 4 amends the Canada Labour Code to
(a) simplify the calculation of holiday pay;
(b) set out the timelines for making certain complaints under Part III of that Act and the circumstances in which an inspector may suspend or reject such complaints;
(c) set limits on the period that may be covered by payment orders; and
(d) provide for a review mechanism for payment orders and notices of unfounded complaint.
Division 11 of Part 4 amends the Merchant Seamen Compensation Act to transfer the powers and duties of the Merchant Seamen Compensation Board to the Minister of Labour and to repeal provisions that are related to the Board. It also makes consequential amendments to other Acts.
Division 12 of Part 4 amends the Customs Act to strengthen and streamline procedures related to arrivals in Canada, to clarify the obligations of owners or operators of international transport installations to maintain port of entry facilities and to allow the Minister of Public Safety and Emergency Preparedness to require prescribed information about any person who is or is expected to be on board a conveyance.
Division 13 of Part 4 amends the Hazardous Materials Information Review Act to transfer the powers and functions of the Hazardous Materials Information Review Commission to the Minister of Health and to repeal provisions of that Act that are related to the Commission. It also makes consequential amendments to other Acts.
Division 14 of Part 4 amends the Agreement on Internal Trade Implementation Act to reflect changes made to Chapter 17 of the Agreement on Internal Trade. It provides primarily for the enforceability of orders to pay tariff costs and monetary penalties made under Chapter 17. It also repeals subsection 28(3) of the Crown Liability and Proceedings Act.
Division 15 of Part 4 amends the Employment Insurance Act to provide a temporary measure to refund a portion of employer premiums for small businesses. An employer whose premiums were $10,000 or less in 2011 will be refunded the increase in 2012 premiums over those paid in 2011, to a maximum of $1,000.
Division 16 of Part 4 amends the Immigration and Refugee Protection Act to provide for an electronic travel authorization and to provide that the User Fees Act does not apply to a fee for the provision of services in relation to an application for an electronic travel authorization.
Division 17 of Part 4 amends the Canada Mortgage and Housing Corporation Act to remove the age limit for persons from outside the federal public administration being appointed or continuing as President or as a director of the Corporation.
Division 18 of Part 4 amends the Navigable Waters Protection Act to limit that Act’s application to works in certain navigable waters that are set out in its schedule. It also amends that Act so that it can be deemed to apply to certain works in other navigable waters, with the approval of the Minister of Transport. In particular, it amends that Act to provide for an assessment process for certain works and to provide that works that are assessed as likely to substantially interfere with navigation require the Minister’s approval. It also amends that Act to provide for administrative monetary penalties and additional offences. Finally, it makes consequential and related amendments to other Acts.
Division 19 of Part 4 amends the Canada Grain Act to
(a) combine terminal elevators and transfer elevators into a single class of elevators called terminal elevators;
(b) replace the requirement that the operator of a licensed terminal elevator receiving grain cause that grain to be officially weighed and officially inspected by a requirement that the operator either weigh and inspect that grain or cause that grain to be weighed and inspected by a third party;
(c) provide for recourse if an operator does not weigh or inspect the grain, or cause it to be weighed or inspected;
(d) repeal the grain appeal tribunals;
(e) repeal the requirement for weigh-overs; and
(f) provide the Canadian Grain Commission with the power to make regulations or orders with respect to weighing and inspecting grain and the security that is to be obtained and maintained by licensees.
It also amends An Act to amend the Canada Grain Act and the Agriculture and Agri-Food Administrative Monetary Penalties Act and to Repeal the Grain Futures Act as well as other Acts, and includes transitional provisions.
Division 20 of Part 4 amends the International Interests in Mobile Equipment (aircraft equipment) Act and other Acts to modify the manner in which certain international obligations are implemented.
Division 21 of Part 4 makes technical amendments to the Canadian Environmental Assessment Act, 2012 and amends one of its transitional provisions to make that Act applicable to designated projects, as defined in that Act, for which an environmental assessment would have been required under the former Act.
Division 22 of Part 4 provides for the temporary suspension of the Canada Employment Insurance Financing Board Act and the dissolution of the Canada Employment Insurance Financing Board. Consequently, it enacts an interim Employment Insurance premium rate-setting regime under the Employment Insurance Act and makes amendments to the Canada Employment Insurance Financing Board Act, the Department of Human Resources and Skills Development Act, the Jobs, Growth and Long-term Prosperity Act and Schedule III to the Financial Administration Act.
Division 23 of Part 4 amends the Canadian Forces Superannuation Act, the Public Service Superannuation Act and the Royal Canadian Mounted Police Superannuation Act and makes consequential amendments to other Acts.
The Canadian Forces Superannuation Act is amended to change the limitations that apply in respect of the contribution rates at which contributors are required to pay as a result of amendments to the Public Service Superannuation Act.
The Public Service Superannuation Act is amended to provide that contributors pay no more than 50% of the current service cost of the pension plan. In addition, the pensionable age is raised from 60 to 65 in relation to persons who become contributors on or after January 1, 2013.
The Royal Canadian Mounted Police Superannuation Act is amended to change the limitations that apply in respect of the contribution rates at which contributors are required to pay as a result of amendments to the Public Service Superannuation Act.
Division 24 of Part 4 amends the Canada Revenue Agency Act to make section 112 of the Public Service Labour Relations Act applicable to the Canada Revenue Agency. That section makes entering into a collective agreement subject to the Governor in Council’s approval. The Division also amends the Canada Revenue Agency Act to require that the Agency have its negotiating mandate approved by the President of the Treasury Board and to require that it consult the President of the Treasury Board before determining certain other terms and conditions of employment for its employees.

Job and Growth Act, 2012

[David Wilks, Conservative, Kootenay—Columbia, BC]

How many?

[Leon Benoit, Conservative, Vegreville—Wainwright, AB]

It is 820,000. That is a remarkable number when in many other countries the number of employed people is not going up. It is something that Canada is successful at whereas many others are not.

One of my colleagues who spoke before me pointed out that the opposition should be a little more positive about what we are doing, because we are being successful. When compared to many other countries in the western world, we are extremely successful. I wish opposition members would take a little more positive approach to this and work with us on the budget's implementation. That would help an awful lot.

I want to focus on the same issue that my colleague touched on, the Navigable Waters Protection Act. The member for Halifax has made statements over the past couple of weeks that the Navigable Waters Protection Act is really about protecting the environment. She is completely wrong on that. This act was put in place in 1882, an awful long time ago, and it is clear that it was about navigation on Canada's waterways. Of course, in 1882 navigation by river was particularly important; it was certainly one of the major modes of transportation at the time. The act remained largely unchanged until about three years ago when our government finally made some important changes to it. Those changes were very much needed. I want to talk a bit about the process that led to those changes.

I have been in the House for 19 years today. This is my 19th anniversary. About 12 years ago, I was doing my usual tour of county councils, municipal district councils and listening to councillors about the issues that were important to them and how the federal government might work with them to improve things.

Something that started coming up on a regular basis during my tours, and brought to my attention, was that the navigable waters act was causing them problems in areas where there was clearly no navigable water at all. They used the example of a culvert, just an 18-inch culvert across a country road, not even a heavily travelled road, which might normally cost $75,000 to replace. However, because of the navigable waters act and the process that municipalities were required to go through, that cost would double in most cases. That burdened municipalities, which just do not have a lot of money. Many of these municipalities have maybe 2,500 residents, and so that kind of cost, multiplied by perhaps 10 or 20 projects a year, was creating serious difficulties for them.

I want to make clear what the so-called navigable waters were. They were waterways that farmers farmed through in the spring and actually seeded crop in, in many cases. The waters would just be a little stream going through for maybe two weeks in the spring. One has to wonder how this ever got started, but we had people from the transport department who dealt with the navigable waters act come in and say, “We must have a study done on this. Clearly, there is a problem here”. That is not exaggerating. It is exactly what was happening. From a little waterway, with water only running for a couple of weeks a year, this serious problem was created, costing these municipalities hundreds of thousands of dollars a year. Clearly, changes had to come about.

I pushed for changes when the Liberals were in government and nothing happened. When we first formed government in 2006, many of my colleagues and I brought the issue to the transport minister . The transport committee took this issue on and was successful, because the changes made back then made a lot of difference. What they did was to clearly define what a navigable water was. Water like those little creeks that would run two or three weeks of the year, or a month of the year, were not navigable and the act no longer applied to them.

In about 2008-09 I went back to the same councils and they said the issue had been dealt with.

However, about a year later, around 2009 or 2010, I toured the municipalities again and they said it was unbelievable but that the fisheries department had filled that void and was coming in and requiring a study, because water was running for a couple weeks a year and might affects the fish habitat. Again, it was a complete misapplication of what should have been happening.

Our government is dealing with that. Things will get better.

Certainly, the changes that have been made to the navigable waters act, including changing the name to the proposed navigation protection act so the act deals with navigation and nothing else, are extremely important. It means a lot to the councils in my area, right across western Canada and, I believe, across the country.

The member for Halifax can continue to make false statements about what the existing act's intent was. It is clear that the intent had nothing to do with the environment; it had to do with navigation. This is the final step in fixing that problem for the good people of my constituency and across the country.

It is a small change. I could talk about maybe 200 other changes in the budget implementation bill that are just as important. However, for a particular group of people and a particular group of taxpayers, it has meant an awful lot, because in the end the taxpayers pay for this extra cost.

I want to commend the Government of Canada for making this change. I thank it for finally putting this issue to bed once and for all and to say that this budget really will lead to prosperity and jobs and will continue to lead to growth. Our government should be commended for that. I am thankful for what our government is doing.

[The Acting Speaker, Bruce Stanton]

It is my duty, pursuant to Standing Order 38, to inform the House that the questions to be raised tonight at the time of adjournment are as follows: the hon. member for Cape Breton—Canso, Employment Insurance; the hon. member for Thunder Bay—Superior North, The Environment; and the hon. member for Scarborough Southwest, Science and Technology.

I will now recognize the hon. member for Portneuf—Jacques-Cartier.

[Élaine Michaud, NDP, Portneuf—Jacques-Cartier, QC]

Mr. Speaker, I heard the member ask the opposition members to try to be more positive about the bill and to work with them in government, but ever since the government tabled this we have not seen any willingness on its part to actually work with the opposition.

Our leader, the Leader of the Official Opposition, asked the government yesterday to split the bill among 12 committees, which it refused to do. We have also been asking that committees be able to propose amendments and change the bill. The government has been dismissing our concerns as only futile discussions about process. To prove my point, I will quote the member for Saint Boniface from yesterday. She said: “From the opposition members, we will hear a lot of talk about process and procedure, or what some would call 'inside baseball', that appeals to a small number of Canadians, mostly located in Ottawa”. Later she also said: “In other words, it is really meaningless to the everyday lives of the vast majority of Canadians--”. I was really disappointed to hear that, because discussion and process is actually the basis of our democracy—

[The Acting Speaker, Bruce Stanton]

Order, please. I know there are other members. We have five minutes for questions and comments, so we will need to go to the response now and the hon. member for Vegreville—Wainwright.

[Leon Benoit, Conservative, Vegreville—Wainwright, AB]

Mr. Speaker, that is an important question because there clearly was a lot in our budget, as there usually is. Budget implementation bills are usually large omnibus bills and this is no different. However, the one thing we have committed to, in my understanding anyway, is that the bill will go to the finance committee. It will be divided from there and other committees will examine parts of the bill. Other than process maybe, I believe that is basically what the Leader of the Official Opposition was asking for. To me, what we are proposing is a reasonable process to follow.

Nonetheless, I do know that if the bill were divided into several parts and we tried to pass it through the House piece by piece, our budget from the last spring and summer would not be implemented within the next two years. It would not be implemented.

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

Mr. Speaker, I want to congratulate the member on one point then ask a question.

The point on which I congratulate him is this. I always hear Conservatives saying, “We created all these jobs” as if government had created the jobs. Particularly for a Conservative, that is a weird thing to say. I congratulate him because he made it clear that it was not the government that created the jobs but the people and the companies of Canada. That is a pleasant change from what we usually hear from that side of the House.

On the process, I do not think this gesture of handing stuff out to committees goes anywhere far enough to what the opposition wants and to what is appropriate in a democracy. If we were able to split it into two by taking the MPs' pensions out, we can also split it into 10 parts. It could then go to committees where amendments could be proposed and then it would go through. That is the normal democratic way to do it. It would not take until next summer. The government has a majority; it has the means to get things done. It could have been done expeditiously but democratically.

[Leon Benoit, Conservative, Vegreville—Wainwright, AB]

Mr. Speaker, I am not going to bother responding to the member's comments on process, because most Canadians really do not care an awful lot about process. However, they do see it as a very positive step that this budget implementation bill will be examined by as many committees as makes sense. That is important to note.

Conservative MPs really do give credit where credit is due when it comes to creating jobs, and that is to large businesses, medium-size businesses and especially small businesses. They are the ones that drive the economy; they do create the jobs. Government creates the framework, along with some stimulus programs, which I admit I hesitated about when they were first announced. However, they do work. On that we have to be pragmatic. The framework our government has put in place, along with the stimulus package, clearly has worked in setting the framework. However, it is the business people of our country who create the jobs. I wish the opposition would remember that when they are beating up on business.

[Sean Casey, Liberal, Charlottetown, PE]

Mr. Speaker, I wish to advise the House that I will be sharing my time with the hon. member for Malpeque.

It is a pleasure for me to speak to the jobs and growth act, part of economic action plan 2012, and to talk about how economic action plan 2012 is playing out in my province.

I will give a little refresher for those here. Prince Edward Island is the birthplace of Confederation. It is still a province and thereby an equal partner in Confederation, although sometimes we wonder. Prince Edward Island has 140,000 people. It has a seasonal economy. Its biggest industries are agriculture, the fishery and tourism. Not many potatoes are dug in January, not many fish are caught and not many tourists land in Prince Edward Island through the winter. As a result, through the winter months about 27,000 of its citizens rely on the employment insurance system. The second largest employer in my province is the Government of Canada. One in twenty of all workers is employed by the Government of Canada. The economic policies of the Conservative government as they relate to the civil service and as they relate to employment insurance are absolutely critical.

I want to start with the policies of the government with respect to employment insurance and talk about three of them in particular: the working while on claim provisions that we have heard so much about from the member for Cape Breton—Canso; the frequent user provisions that are part of economic action plan 2012; and something that was quietly done last month, the changes to a pilot program for high employment areas.

I want to tell the House a story about a gentleman by the name of Roger Byers . Roger Byers has given me permission to use his last name because he wants his story to be told. In fact, Roger is going to be at a rally on Saturday in front of the office for the minister of the Canada Revenue Agency and he is going to be telling his story in front of a large crowd.

Roger Byers is a real person. He lives in a real apartment on Hillsborough Street. He works for the city of Charlottetown sweeping streets. He makes $17 an hour, works 40 hours a week, six months of the year. In addition to that six month full-time job, Roger works 20 hours a week calling bingo at a local bingo hall. For six months of the year Roger Byers works 60 hours a week. He is not lazy. For the other six months of the year, he works at the bingo hall making $10 an hour, $200 a week. Under the provisions of economic action plan 2012, $100 of his $200 a week will be clawed back through the winter.

Late on a Friday afternoon on a break week, the government announced that it would make changes to the working while on claim provisions. Mr. Byers had the opportunity to elect under the old rules, which was a much smaller clawback of only about $6 a week. However, those changes will come into effect January, February and March of the new year. Therefore, Mr. Byers, through the winter, will be in a situation where one-half of his wages will be clawed back. That is how he will get through Christmas thanks to economic action plan 2012.

Economic action plan 2012 also targets frequent users of the employment insurance system. Prince Edward Island has 27,000 of them. This will have a devastating effect on our economy.

There is a trend in the country of people moving from small communities to bigger centres and people moving from east to west. Apparently it is not happening fast enough for the government. The economic policies of the government will gut small communities, eastern communities and places that rely on seasonal economies, as it will in my community.

Finally, I want to talk about something that happened just last month.

There was a pilot project to help in areas of high unemployment, such as my province. Quietly, without notice to the participants, without notice to the provinces, this program was cut. This means that people who rely on employment insurance in areas of high unemployment, such as Prince Edward Island, will get five weeks less in benefits. Their benefits will run out in the middle of the winter.

If this is not bad enough for the citizens of Prince Edward Island, what about the provincial government? These people are invariably headed for the welfare rolls. We have the downloading of a social program to another level of government. The provincial government will have to look after these people on the welfare rolls.

However, this is entirely consistent with what the Prime Minister said in 1995, “Caring for the poor is a provincial responsibility”. Now that he has his majority, we see that being played out.

I wish to invite all hon. members to a rally that will take place in front of the office of the Minister of National Revenue on Saturday afternoon at one o'clock. We expect a big crowd. The leader of the Liberal Party will be there. It would be great for members on the government benches to come and listen to how the economic action plan is working on the ground in Prince Edward Island. I would very much appreciate seeing some Conservative members there to listen to how their policies are working.

I indicated at the outset that the second largest employer on Prince Edward Island is the Government of Canada. On page 221 of the budget, there was an indication that when the civil service cuts took place that no region would be unfairly treated, that the regional distribution of civil service jobs would be largely unaffected. However, the cuts to the civil service across the country was 4.8%, but not in Prince Edward Island where it was 10% to 12%. Therefore, when the axe was applied to the civil service, it was applied in the province of Prince Edward Island twice. This is the continuation of a very disturbing trend that we have seen in recent years.

In recent years, the civil service actually had grown across Canada from 2009-2011. There was a growth in civil service jobs in the country of about 2.9%, with 5.1% in Ottawa, but not in Prince Edward Island where it had declined by 3.5%. Therefore, the budget is a further insult to a gradual withdrawal of jobs from my province and it is a direct hit on our economy.

As I have indicated, we have a seasonal economy. We have 27,000 people dependent on employment insurance for their livelihoods during the winter. Some of the good paying jobs in my province are federal civil service jobs, but they are leaving at a rate twice the national average because of the economic policies of the Conservative government.

However, worse than the impact on the civil servants themselves and the businesses they frequent in my community is what is happening to front line services.

In every province in the country, if taxpayers wants to talk to a live person about their income tax returns, they can go in to a Canada Revenue Agency office and speak to a live person, but not in Prince Edward Island. If veterans want to talk to a live person at a district office, they can do that in every province in the country, but not in Prince Edward Island. If immigrants want to talk to a live person about their situation, a person employed by the Department of Citizenship and Immigration Canada, they can do that in every province in the country, but not in Prince Edward Island.

Prince Edward Island is still a province. The economic policies of the government are punishing Prince Edward Island. In our country, that is not right.

[Claude Gravelle, NDP, Nickel Belt, ON]

Mr. Speaker, I would like to share with the hon. member some of the things that have happened in Nickel Belt with all of these cutbacks.

At one time, immigrants could go to a government office and talk to a live person. At one time, the people in Sturgeon Falls could visit a Service Canada office. However, I received a note a couple of days ago about people in Sturgeon Falls visiting the Service Canada office. They were seniors who were not capable of operating a computer as they did not know how. They were told by the people in Service Canada to come back with somebody who knew how to operate a computer next time as they could not help them.

Could the member comment on that please?

[Sean Casey, Liberal, Charlottetown, PE]

Mr. Speaker, it is a problem that we have seen in Prince Edward Island, really in the last year or two, as a result of the policies of the government.

As I indicated, in every province in Canada taxpayers can talk to a live person but not in my province. In every other province in Canada veterans can access services in person.

Now what we will hear from the Minister of Veterans Affairs and from the parliamentary secretary is that they will deliver services through Service Canada and they will take our case managers and move them to New Brunswick, but they can be accessed by phone, and all of this is available on line.

At the same time, the government is withdrawing funding from CAP sites. In Prince Edward Island we have 140,000 people and last year there were 88,000 sign ins at CAP sites and the government is closing them.

[Wayne Easter, Liberal, Malpeque, PE]

Mr. Speaker, I know my colleague is the critic for veterans affairs. Quite a number of veterans affairs people employed by the federal government are in his riding, in the city of Charlottetown, and many of them live in my riding as well.

Could the member expand on the damage that is being done to federal government services at Veterans Affairs and the impact the layoffs are having on Prince Edward Island, on the business community and on the lives of individuals affected by the cut-and-slash policies of the federal government?

[Sean Casey, Liberal, Charlottetown, PE]

Mr. Speaker, if I could, I will focus in on the cuts at veterans affairs for a moment.

There is no question that good paying permanent jobs have a multiplier effect in the community in terms of the economic impact. There was an excellent study done by one Canada's leading law firms, McInnes Cooper, with respect to the economic impact of the job cuts on Prince Edward Island. A lot of the statistics that I cited came from that study.

With regard to Veterans Affairs, the government does not justify the cuts by saying it has to balance the books, although we know it is balancing the books on the backs of veterans. What it says is that traditional veterans are dying and therefore its needs to change the way it delivers services.

The Auditor General, in his report of last week, indicated that Veterans Affairs' forecasts did not take into account information about the increasing number of Canadian Forces members with mental health issues, such as post-traumatic stress disorder. Basically what he said was the basis on which the cuts were happening at Veterans Affairs was flawed.

[Claude Gravelle, NDP, Nickel Belt, ON]

Mr. Speaker, I want to apologize to my colleagues on the far side. A while ago I had my back to them and they were yelling at me. I want to apologize for that.

What does the member behind me think about the Conservatives turning their backs on Canadians?

[Sean Casey, Liberal, Charlottetown, PE]

Mr. Speaker, this gives me a chance to redo my speech, but I am sure you will not allow me to do that.

In Prince Edward Island we feel left out. With respect to the economic policies of the government, they seems to relate to the oil sands and economies that are blessed with natural resources. We are in a situation where we are being overlooked and social programs are being gutted. The civil service, which is extremely important to us, is being reduced at a rate greater than the national average.

We would like to remind the government that we are still a province. Regions should be treated fairly. There should not be this income inequality between individuals or between regions in the country.