Thanks, Chair. I'm sorry that President Georgetti couldn't be here.
Because time is short, I'll try to speak very briefly to two or three key points.
The first point we'd like to make is that we would hope that there will be some sort of public process to look at the reductions in expenditures flowing out of program review. As we all know, there was a commitment in the last budget that there would be $1 billion in spending cuts, some of the fiscal room that was being provided by the previous government through expenditure review. Frankly, the rumour mill I hear was talking about very large cuts in all kinds of grants and contribution programs, some to areas that we would see as very important areas of activity by the federal government.
I ask you, if you cast your minds back to when the Mulroney government came into power, there was a major review of government spending that was chaired by Mr. Nielsen. I think it's quite appropriate for a new government to scrutinize areas of government spending, the need for focus, but I think there is a need for public input in the results of that process as it unfolds.
The second point I'd like to make is with respect to the issue of corporate taxation. The CLC at the moment is very seized with the scale of the economic restructuring that's going on in our manufacturing sector in particular. We're seeing thousands of jobs lost every month in manufacturing, and it's quite serious. I think if we were to see a turndown in the resources boom, a slowdown in our economy, those jobs would not be easy to get back.
We do agree with many people in the business community who have rightly pointed to the importance of incentives for new investment in the manufacturing sector at the moment. Because of the high dollar, the reality is many companies are looking at the stark alternative of also closing down or restructuring through new investment.
However, our preferred instrument would not be another cut to the general corporate income tax rate, but much more targeted measures. I draw to your attention the recent TD economics report, “The Economists' Manifesto for Curing Ailing Canadian Productivity”. It's not that I'd endorse every word in it, but I note that Don Drummond is calling for much more targeted measures, such as an investment tax credit that would go specifically to new companies making major new investments.
The problem with cutting the general corporate tax rate is that a huge amount of the benefit goes to the energy sector and the financial sector, which really don't need it. It's of no use to companies that aren't making a profit. We feel a much more targeted measure to deal with the crisis in the manufacturing sector is needed.
I want to say a few words about the importance of the skills agenda. To be blunt, what we fear at the moment is that the federal government might be inclined to take a very narrow view of its jurisdiction in this area and withdraw from what we would see as some very important areas of programming, everything from support for apprenticeship training to literacy training to settlement programs for new immigrants. Frankly, we thought we were on the right route with the previous government, with the conclusion of labour market partnership agreements with three provinces. It was going to roll out to more. There was a lot of flexibility in there to accommodate provincial priorities.
What parliamentarians really have to bear very much in mind is that Canada has a national labour market. We're seeing skills shortages in specific parts of the country and major adjustment challenges in other parts of the country. There really is a major role for the federal government in terms of training for national skills shortages, in promoting labour mobility across Canada, credential recognition, and recognition and upgrading of the skills of recent immigrants. I would hope that in this budget we don't see a major federal withdrawal from a very important area.
I would point to the importance of the employment insurance program. We're seeing many workers at the moment who have paid into that program all their lives and made very little use of it. The scale of assistance people get from the program in cases of layoffs and plant closures now is very limited. If you want an unemployed forest worker from northern Ontario to make the trek to Alberta, frankly you don't want a program that's going bludgeon them into taking the first available job just to keep an income stream going. You really have to support people through a period of reasonable job search and enable them to move across the country if that's their choice. I hope the committee looks carefully at that as well.
I'll wind up with that.