Thank you very much for the opportunity to appear before the committee for the first time in my new role, to discuss economic action plan 2014.
I would like to provide a brief overview of the objectives of Bill C-31 and highlight some of its key initiatives.
This is our government's 10th budget since 2006. Over that period, our country has been confronted by unprecedented economic challenges from beyond our borders. With the help of our economic action plan, Canada's economy has seen the best economic performance among all G-7 countries in recent years, both during the global recession and throughout the recovery.
Nearly a million net new jobs have been created since July 2009; we have the best job creation record in the G7. Over 85% of those new jobs are full time, and over 80% are in the private sector. Some two-thirds are in high-wage industries.
However, in light of ongoing global economic uncertainty, Canada cannot rest on its laurels. That is why economic action plan 2014 focuses on creating jobs and the right conditions for long-term economic prosperity while remaining committed to returning to a balanced budget in 2015.
To that end, this government understands, as do most Canadians, that balancing a budget takes a sound fiscal plan and discipline. The budget will not balance itself. Balancing the budget keeps taxes low and ensures that government services are sustainable over the long-run. It also gives us the flexibility to deal with the unexpected, like the recent economic shocks we've had to overcome.
Our government has not wavered from our objective, and it has cut the deficit by nearly two thirds since the economic downturn. Our goal is now within sight. Including the measures announced in economic action plan 2014, we expect to realize a surplus of $6.4 billion in 2015-16, including a $3-billion amount, an annual adjustment for risk. Unlike previous governments, we are not returning to balance by raising taxes on Canadians or cutting transfers to persons or to other levels of government. In fact, major federal transfers to provinces and territories for health care and social services will reach a record high of almost $65 billion in 2014-15, an increase of over 50% since 2006. Instead, we have focused on controlling the size and cost of government. Overall, since 2010, our actions are saving taxpayers roughly $19 billion every year. That is economic leadership and a testament to my predecessor the late Jim Flaherty.
Canada has the lowest overall tax rate on new business investment in the G-7.
However, to achieve Canada's full economic potential, we have to ensure that Canadians have the skills they need to succeed in today's economy and be first in line for available jobs.
To increase responsiveness of training to labour market needs, the Canada job grant will be implemented this year, placing skills training decisions in the hands of employers. This will be the cornerstone of new labour market agreements with the provinces and territories.
Bill C-31 takes further steps to ensure that federal programs are directed towards meeting labour market requirements. They include strengthening the labour market opinion process to deter employers from breaking the rules with a system of administrative monetary penalties for employers of foreign workers, and supporting the successful implementation of an expression of interest economic immigration system.
The government has increased Canada's openness to trade and investment, promoted business competitiveness, and strengthened the financial sector. Today's legislation builds on this foundation by cutting red tape for more than 50,000 employers, by reducing the maximum number of required payments on account at source deductions, and reducing barriers in the international and domestic flow of goods and services.
Natural resource economic development projects are a major source of job creation in all regions of Canada. Our natural resources sector represents 18% of our economy, supports 1.8 million jobs directly and indirectly, and generates some $30 billion per year in government revenues.
Bill C-31 is in line with our government's responsible resource development plan because it supports mining exploration by small companies by extending the 15% tax credit for flow-through share investors for one year and eliminating tariffs on mobile offshore drilling units.
Mr. Chairman, I would like to turn to the financial sector. It plays a fundamental role in transforming savings into productive investments in the economy. Bill C-31 proposes new initiatives that will build on Canada's financial sector advantage.
First, our government is at the forefront of the global fight against money laundering and terrorist financing, and implementing measures that safeguard the integrity of Canada's financial system and the safety and security of Canadians. That is why Bill C-31 will enhance the ability of the Financial Transactions and Reports Analysis Centre of Canada, FINTRAC, to disclose to federal partners threats to the security of Canada.
Mr. Chairman, while Canada's financial system has been rated one of the soundest in the world, it has the only capital markets regulatory system in the world that does not have a single national securities regulator. Critics of the current system believe that it is overly complex, inefficient, and a barrier to foreign investment in Canada, and they are right.
That is why, last September, our government and the governments of British Columbia and Ontario, agreed to establish a cooperative capital markets regulatory system. The cooperative system will better protect investors to enhance enforcement, support more efficient capital markets, and more effectively manage systemic risk. Our government invites all provinces and territories to participate in the implementation of the cooperative system.
Bill C-31 includes a measure to make payments to participating jurisdictions that will lose net revenues as a result of the transition to the cooperative system.
Finally, Mr. Chairman, our legislation builds on previous actions by our government to support families and communities, and improve the quality of life for hard-working Canadians. Specifically, Bill C-31 proposes to increase the maximum amount of the adoption expense tax credit to $15,000 to help make adoption more affordable for Canadian families.
The bill would also introduce a search and rescue volunteers tax credit, for search and rescue volunteers who perform at least 200 hours of service in a year.
It proposes to exempt acupuncturists and naturopath doctors' professional services from the GST/HST.
It would also expand the current GST/HST exemption for training that is especially designed to help individuals cope with a disorder or disability.
And finally, it would enhance access to employment insurance sickness benefits for claimants who receive parents of critically ill children and compassionate care benefits.
In summary, the economic action plan is working. It's creating jobs, keeping the economy growing, and returning to balanced budgets. By staying the course, and sticking to our proven economic action plan, Canada remains on track for a more prosperous future.
Now I invite questions from the committee. Government officials have also joined us today to answer any questions you may have about this bill. Thank you very much.
