Good afternoon. I'm Fraser Young. I'm with the Green Vehicle Exchange, a non-partisan, non-lobbied organization of my own that's spent two and a half years advancing a significant and profound system that I've developed and designed for rapidly extracting old cars and polluters from the roads, similar to the cash for clunkers program that we're all very well aware of.
Today I'm here to pitch and propose that a GST freeze should be implemented in the upcoming budget. I'm prepared to defend that case with 15 different ways in which it would pay for itself within the economy.
Basically, the proposal is that not only would you be provided that GST credit, but it would only be provided on the basis that one vehicle was retired from the fleet in excess of over 10 years of age, and also that one decent vehicle would be also passed down from a person with a seven-, eight-, nine-, or ten-year-old vehicle to somebody who also has a secondary badly performing vehicle but who can no longer afford to purchase a new vehicle. The benefit of that is you don't leave the poor behind and you allow the people who have the wealth and the means and the jobs to purchase a vehicle to do so.
The object here is to advance an industry that's in deep decline. In Canada alone we've seen it drop as the GDP's number one producer from 19% to 12.5%. We've seen jobs drop in DesRosiers report as of today, or yesterday I believe I received it, from 150,000 down to 100,000. So we have a one-third decline in our automotive industry. That's evident in the Ontario budget preamble today indicating the shortfalls in the economy.
One of the strongest pieces on advocating for such a proposal is that this would reduce the requirement for provincial transfer funds. The result of more people purchasing vehicles in other provinces where they have to have transfer funds is of course that they get more retail sales tax revenue. Retail sales tax revenue occurs at its highest point from vehicle sales. It's 20% of basic general revenues for the governments.
The proposal goes on to say that for 100,000 vehicles based on an average purchase price of $25,000, the cost to the government is $1,250 per vehicle, or $125 million. This is no staggering amount: it could stimulate the economy by $3 billion for every $125,000 given up.
I'll give you the rationale for why we want to propose this on an argumented position that it will be either revenue neutral or revenue positive to the government by doing so. I have 15 different examples of why this will be that way.
If you are only talking about a 5% give-up, what you're getting in these next 15 issues described... I could not do the algorithms. The math is very extensive to try to do 20, 30, 40 different equations to produce the true outcomes. But when you listen to these features, you will understand why, with the combination of these 15, returns in the economy will far outweigh the 5% give.
First of all, you would bring back 18,000 related jobs for every 100,000 vehicles produced.
Second, as I mentioned, the PST revenues produced would reduce the amount of transfer payments required from the federal government to the provinces.
Third, corporate and personal income tax revenues would immediately rise.
Fourth, Canadian government stock values in General Motors and Chrysler would be protected and preserved, and the likelihood of getting our money back would be greatly improved.
Fifth, the likelihood of repayment of these bailed-out companies would be more likely to occur.
Sixth, the GDP output across the entire economy resulting from the trickle-down of all of the car purchases, the car dealers, the car salespersons, and all the people in the related industries would also help to offset this.
Seventh, there would be reduced unemployment costs. We would have less employment insurance as people would be going back to work who have been laid off.
Eighth, we would have reduced retraining costs. Instead of spending money retraining people, let's put people back in jobs that already existed and should still be there.
Ninth, we would reduce our health care costs as a result of decreased pollution. We have a proven statement in Ontario that 6,000 people in this province die each year in direct relation to air pollution. That was published two years ago and again last week. It would also reduce accidents and health care cost demands.
Tenth, we would have less demand on the costly direct subsidies that are being given to the OEMs, and therefore less demand on these manufacturers to keep requesting more money--