Finance Committee on Nov. 2nd, 2010

[Scott Brison, Liberal, Kings—Hants, NS]

Thank you, Mr. Chair.

And thank you to each of you for your presentations.

Mr. Beatty, we believe very strongly in having competitive corporate tax rates. Currently we have the second lowest in the G-7 and corporate tax rates that are 25% lower than the U.S. This is as a result of Liberal governments under Mr. Chrétien and Mr. Martin cutting corporate tax rates from 28% to 21% during surplus, and then further cuts under the Conservatives to the current 18%.

You are referring to the further cuts that were proposed in Budget 2007. I'm just curious. Has anything changed in the global economy since 2007 that we should be aware of?

[Perrin Beatty]

Yes, certainly, Mr. Brison. There has been a significant slowdown in the global economy, which is why it's essential for us to ensure that the private sector can compete in Canada and can grow.

[Scott Brison, Liberal, Kings—Hants, NS]

Okay. Has there been—

[Perrin Beatty]

That's why it's vital that Parliament keep its word.

[Scott Brison, Liberal, Kings—Hants, NS]

Sure. So you're saying that despite the changes in the global economy, we should ignore the global economic financial crisis. We should not have had a stimulus, for instance? So we shouldn't—

[Perrin Beatty]

Absolutely not. What I'm saying is just the opposite. Far from ignoring the global economic crisis, what's vital is that as we are starting to see a private-sector-led recovery, we have to make sure we don't pull the rug out from underneath that by reversing the commitment that was made by Parliament.

[Scott Brison, Liberal, Kings—Hants, NS]

So the fact that we have the biggest deficit in the history of Canada shouldn't bother us? In fact, you say that deficit paydown is right on track. The fact is, this finance minister has missed every deficit target he has set.

Now, when you're talking about breaking promises, when the Prime Minister said he would practise restraint, before becoming Prime Minister, and then increased spending by 18% in the first three years, putting Canada into deficit before the downturn, did you run ads saying, “Prime Minister, don't break your word”? When the Prime Minister said, “I won't tax income trusts” and then proceeded to do that, throwing many of your members into a tailspin during a very difficult time, did you run ads saying, “Prime Minister, don't break your word”? When the Prime Minister said there would be no deficit—he was emphatic—and then ran Canada into the biggest deficit in Canadian history, did you run ads saying, “Don't break your word”?

[Perrin Beatty]

As you pointed out, there has been a change in the global economic circumstance in the course of the past few years. It's not surprising. I think every single member of Parliament took the position, correctly, supported by the Canadian Chamber of Commerce, that indeed there should be government stimulus and that it was essential in the short term for the government to run a deficit. But running ads against Parliament to argue that we shouldn't have had stimulus during that period wouldn't have been rational.

[Scott Brison, Liberal, Kings—Hants, NS]

But your ads are “Don't break your word”, and you've never held the Prime Minister to that standard, as president of your organization.

Furthermore—

[Perrin Beatty]

I'm sorry, Mr. Brison, I want to be very clear on this. You have put out an open letter to me—you haven't delivered it to me, to the best of my knowledge, as yet, but I have seen it—

[Scott Brison, Liberal, Kings—Hants, NS]

Yes.

[Perrin Beatty]

—because you believe that our ad that was run yesterday was aimed at the Liberal Party of Canada.

[Scott Brison, Liberal, Kings—Hants, NS]

No, no.

[Perrin Beatty]

It was addressed to all parliamentarians. The Liberal Party was not mentioned.

Our primary target is sitting across from you, and we are saying, particularly to the government, when the government is—and that's why I'm here today—preparing its budget, I'm saying to the Minister of Finance, don't break your word.

[Scott Brison, Liberal, Kings—Hants, NS]

No, no, Mr. Beatty, we can--

[Perrin Beatty]

You're asking me whether or not—

[Scott Brison, Liberal, Kings—Hants, NS]

Mr. Beatty, furthermore--

[Perrin Beatty]

—I'm prepared to hold the government to account if it breaks its word—

[Scott Brison, Liberal, Kings—Hants, NS]

Mr. Beatty.

[Perrin Beatty]

—and the answer is yes, I am.

[Scott Brison, Liberal, Kings—Hants, NS]

Mr. Beatty, the fact is that we have to be aware of what's happening in the world and how it affects Canada, and we have to get Canada out of deficit. You're saying on one hand we have to keep Canada out of deficit and on the other hand we need deeper corporate tax cuts that we can't afford right now, and I don't think that holds water.

Furthermore, we're now seeing on the horizon a demographic shift that is going to increase health care costs dramatically, there will be fewer Canadians working and a big hit on productivity, and you're saying cut corporate taxes further, right now, on borrowed money.

You've been part of a government in the past. What would you cut? What would you cut? Would it be education? Would it be health care? What would you cut? I just want to be able to tell people what you would cut.

[The Chair, Conservative, James Rajotte]

You have about 20 seconds to respond, Mr. Beatty.

[Perrin Beatty]

Twenty seconds.

[Scott Brison, Liberal, Kings—Hants, NS]

What would you cut?

[Perrin Beatty]

Mr. Chairman, what's abundantly clear is we would look at any area that was not economically productive as a primary candidate.