Finance Committee on Dec. 8th, 2025

[Garnett Genuis, Conservative, Sherwood Park—Fort Saskatchewan, AB]

I have a point of order.

[The Chair, Liberal, Karina Gould]

Sorry, Mr. Sawatzky.

Mr. Genuis.

[Garnett Genuis, Conservative, Sherwood Park—Fort Saskatchewan, AB]

[Inaudible—Editor] here. I was here at the beginning, and I believe that Mr. Kelly had his name up. I think he's next. I don't quite understand how you've gone from Liberal to Liberal to Liberal without even seeming to look at this side of the table. I think Mr. Kelly should be next on the list.

[The Chair, Liberal, Karina Gould]

Thank you for your opinion, Mr. Genuis. I appreciate that.

I have him on the list, but he was on the list before the motion was introduced. He's on the main speaking list as opposed to this one.

If he would like to get on the list for the motion, then I'm very happy to put him there.

[Pat Kelly, Conservative, Calgary Crowfoot, AB]

I thought I had done so, but yes.

[The Chair, Liberal, Karina Gould]

Okay, I will add you to the list.

Thank you very much.

Mr. Sawatzky, please continue.

[Jake Sawatzky, Liberal, New Westminster—Burnaby—Maillardville, BC]

Thank you, Madam Chair.

As we've been talking about, it's really important to put through this productivity superdeduction. This is something we've been discussing, and I really hope we can make some movement here because some of these steps are really important. I think they would be very well received by the business community. Every business I've spoken to about some of these measures has certainly seen the immediate benefit.

Canada is at a pivotal moment, and we're facing challenges that are defining our future. It's really important that we become more productive as a country right now and have some measures that will help out. If we want higher wages, stronger growth and a competitive edge against the United States and the world, we need to invest and we need to do it now.

For our country to invest, of course, we need to allow our businesses to invest in themselves. That's why this new productivity superdeduction will make us the most competitive country in the G7 for new investment. That's the plan. That's not a slogan. We'll help businesses invest, expand and hire.

This is clearly something we need to do as soon as possible, which is why it's really important that we move towards the BIA and implement some of these things.

Some of the things that the productivity superdeduction can do are with manufacturing and processing machinery and equipment, allowing immediate writeoffs for them, as well as for clean energy generation and conservation equipment for zero-emissions vehicles; for productivity-enhancing assets like patents, data networks and computers; and for scientific research and experimental development.

For all these things, if we allow businesses to invest in themselves, the businesses will become more productive. They will be able to pay higher wages, and they will become more efficient. If all businesses in Canada are becoming more productive and more efficient, this will certainly grow the economy to a large extent.

Not only are we doing this, but we're going further.

There's immediate expensing for manufacturing and processing buildings acquired after budget day and used before 2030. If you think about how expensive these buildings would be, for those to be expensed immediately is very significant.

There are accelerated capital cost allowances for low-carbon LNG facilities with the highest standards for emissions performance. That, of course, helps us move towards our climate goals.

Private investment drives productivity. Every dollar invested in this new machinery, new technology and clean energy will help workers produce more in less time. Yes, that boosts wages, strengthens growth and keeps Canada competitive, and it is very important for us.

With these measures, Canada's marginal effective tax rate will drop by more than two percentage points. We need to be in a competitive place for investment right now at the international level. We want to be somewhere that, across the world, investors in other countries are looking at as a smart place to invest. Canada is a country that is open to investment and will be competitive with our marginal effective tax rate to ensure that people are seeing the return on their investment. We'll have the lowest marginal effective tax rate in the G7, and that's lower than the U.S. and lower than the OECD average, so that's very significant.

In manufacturing, Canada's METR will be 12.1%, and that's compared to 23.3% in the U.S. Think about that: a 12.1% marginal effective tax rate compared to 23.3% in the United States, which is a country that is also very competitive for investment. We're getting close to half their METR. That's a game-changer for competitiveness. It will certainly see a return and large investments into our country, which is critical for our economy at the moment.

Let's talk about the numbers a little more. We have $2.7 billion per year in accelerated depreciation and expensing support. We have up to $9 billion per year in economic output over the next decade. There are billions in private investment unlocked for Canadian factories, for clean tech and for innovation.

Think about manufacturing, for example. Let's take a Canadian manufacturer that wants to invest in new robotics to boost output. Under the productivity superdeduction, they can write off 100% of that cost immediately. That's not 90% and not 95%; it's 100% immediately. That means more investment, more jobs and more experts. By delaying the BIA, Conservatives are delaying that process.

There are lot of businesses that really need support right away. They cannot wait. Of course, layoffs are happening. The economy is in a tight spot, and it's really important that we're able to help these businesses out as soon as possible, because people's jobs are at stake. Every day and every week that this continues to be delayed, more people are getting laid off. It's a very unfortunate fact, but this is why it's so critical to make progress and move toward this BIA.

Let's take clean energy as an example. A company wants to build a solar farm or upgrade to zero-emission vehicles. Under our plan, they can expense those costs right away. That also means cleaner air, lower emissions and a stronger economy. Conservatives are saying no to that.

This is not only good for businesses; this is good for our environment because we have these measures that, if they were to be in place, would be moving us more toward net zero. We'd have more zero-emissions vehicles on the road, and we'd have, for example, more solar farms and a lot of new tech that would move us toward a cleaner economy.

Let's take innovation, for example. A tech firm wants to invest in patents, in data networks and in research and development. Under our plan it can expense those costs immediately. That also allows it to innovate more, have more intellectual property and gain more global competitiveness. Of course, Conservatives are saying no to that as well.

Productivity superdeductions increase real wages compared to the cost of living over time, which is exactly what we are focused on here.

The CPC has previously expressed support for multiple measures included in the BIA, such as the multi-unit residential building tax incentive, elimination of the underused housing tax, introduction of a productivity superdeduction and the increase in the lifetime capital gains exemption. Now it's up to them to decide whether they want to support these measures. Failing to do so proves that they're playing politics here and they just don't want to actually see good things for Canadians.

Given the track record of seeing what the CPC has advocated for, and then—when it comes to actually putting forward the BIA and making moves—completely falling flat makes it pretty clear what's going on.

Do they support the productivity superdeduction? I would assume so, based on the track record of what they've been advocating for. It's a set of enhanced tax incentives covering all new capital investments. It allows businesses to write off a very large share of the cost of those investments right away, but they're blocking that. They're blocking the BIA, which is the very legislation that makes this possible.

Let's be clear: Blocking the BIA means blocking GST for first-time homebuyers. Many people right now are looking for any amount they can save in buying a new home. They're not able to do that. Blocking the BIA means blocking Build Canada Homes, our $13-billion plan to build affordable housing at scale. This is very much needed right now. People are living paycheque to paycheque with their rent. People need affordable housing. Some people are losing their home because they simply can't afford it. They need the government to invest in building more housing and bringing the cost of housing down so that we can be a place where more people are able to afford homes.

The young generation is in a crisis. The cost of housing is much higher than we need it to be. The government has made clear that there is a plan. The plan is that, with Build Canada Homes, there will be a clear path toward bringing down the cost of housing, increasing the supply and increasing the number of housing starts. Unfortunately, this is not going through. We're not able to make any kind of motion here on the BIA.

Blocking the BIA also means blocking the productivity superdeduction. As we've talked about, this measure will make Canada the most competitive country in the G7 for new investments—the most competitive country and more competitive, by a large margin, than the United States. That is much needed right now. We talk all the time about how, yes, we want to be more competitive, so here's a plan. It's a plan to be more competitive. There is an opportunity to do that, but it's being stalled.

Conservatives are talking about competitiveness and about affordability, but when it comes time to vote, they're choosing to delay and obstruct. We hear a lot of slogans, of course, about a lot of things. They are typically three-word slogans, but slogans are not plans. We've put forward a plan. This is a plan right here, but there's no progress.

On November 17, at the Standing Committee on Industry and Technology, there were some quotes from Michael Graydon, the CEO of Food, Health and Consumer Products Canada, who appeared on productivity superdeductions:

Tax policy must play a central role. Budget 2025's new productivity superdeduction and enhanced capital cost allowance are significant steps in the right direction. Together, they make Canada's cumulative manufacturing tax incentives slightly more competitive than those in the United States. These measures will help de-risk capital investment decisions and encourage companies to modernize and expand here at home.

If government can continue to reduce the barriers, modernize regulation, upgrade infrastructure and sustain a competitive tax environment, Canada can begin to repatriate lost manufacturing. Converting even part of the 55% of imported centre-store goods into domestically produced products would create thousands of new jobs, strengthen regional supply chains and drive productivity growth in creating a level of food sovereignty that we have not experienced for many years.

That's a very moving quote.

Namir Anani, the president and chief executive officer of the Information and Communications Technology Council, stated at the same committee:

Certainly, the federal budget goes a long way toward achieving those with the productivity superdeduction.

He proceeded to say:

Indeed, it's important to help small or medium-sized businesses, or SMEs, acquire those technologies. I'd say that the federal government's newly announced program on introducing a productivity superdeduction is...on the right track.

It's the government's plan to enable $1 trillion in total investments over the next five years in Canada. That's $1 trillion in total investments. Think about the amount this will help our economy and really jump-start it, at a really slow time, when companies are dealing with the impacts of trade disputes with our longest trading partner, the United States.

We've been severely disrupted. The plan to enable $1 trillion in total investments is very timely and very critical. Through targeted tax incentives, major infrastructure projects, stronger competition and a bold new approach to attracting talent, budget 2025 sets the foundation for long-term prosperity so that we can build the strongest economy in the G7.

The government's plan to enable $1 trillion in total investments in five years includes the following measures. There is a productivity superdeduction to make it easier to do business and invest in Canada. Budget 2025 reinstates the accelerated investment incentive and includes immediate expensing for manufacturing or processing machinery and equipment, clean energy generation, energy conservation equipment and zero-emission technologies. It also moves forward with immediate expensing for productivity-enhancing assets and research capital expenditures for scientific research and experimental development. It introduces immediate expensing for new manufacturing or processing buildings and accelerated depreciation for low-carbon LNG facilities.

Together, these measures form a productivity superdeduction that will lower costs, spur private investments and reduce Canada's marginal effective tax rate to 13.2%, reinforcing that Canada is the most tax-competitive country for new business investment in the G7. It's very important. The marginal effective tax rate of 13.2% really says it all.

People will be looking at where to invest. These are companies from across the world that will be thinking about where the best place is. Not only does Canada have a reputation as a global leader in promoting peace and in being a safe place that is accepting of all people, but it also has a high code of ethics and care and a reputation for people in general being very nice. It's a good place to live, a very beautiful place to live with lots of nature and lots of industries.

Not only are we taking all of that, but now we're also adding to it that the marginal effective tax rate is 13.2%, which makes us a very competitive place from a business standpoint. This really gives us everything that somebody would want when they invest in our country. That is exactly what we need right now, and we can't afford to be wasting any more time in getting to the BIA. It's important that we get to this so that we can put these measures through.

There is also an accelerated investment incentive that provides an enhanced first-year allowance for eligible property that is subject to the capital cost allowance rules. In general, the incentive is made up of two elements, applying the prescribed CCA rate for a class up to one and a half times the net addition to the class for the year and suspending the CCA half year rule and equivalent rules for Canadian vessels and class 13 property. It also includes full expensing for manufacturers and processors, which allows businesses to immediately write off the cost of machinery and equipment used for the manufacturing or processing of goods and full expensing for clean energy investments that allows businesses to immediately write off the full cost of specified clean energy equipment.

I think I've made a pretty clear outline of why it is so important to move towards the BIA. My colleagues have made that pretty clear as well. I really hope that we can get to that as soon as possible.

Thank you, Madam Chair.

[The Chair, Liberal, Karina Gould]

Thank you, Mr. Sawatzky.

Mr. Leitão, you have the floor.

[Carlos Leitão, Liberal, Marc-Aurèle-Fortin, QC]

Thank you, Madam Chair.

It's my turn to talk about my colleague Mr. Turnbull's motion and, more generally, about the budget. I'll be relatively brief. Everything is relative.

My colleague's motion, which I obviously support, is important for two reasons. First, we need to start the work of implementing the budget. As we've all obviously seen, it's a doorstopper. There are a lot of measures, and they are important measures that require us to do our parliamentary work. It's important that we get to work so that these measures can come into force.

The motion is also important because, as our colleague pointed out, it contains measures to accelerate investment. I'm thinking particularly of the super-deduction for productivity. These are measures to encourage businesses to invest today. The time to invest is now. For both of those reasons, I think the motion is very important and deserves to be discussed and adopted.

I would like to comment on it. I would start by saying that the budget, in general, was very well received in Quebec. My colleague Mr. Turnbull talked about the Minister of Finance of Ontario and the Minister of Finance of Alberta. I would also tell him that Quebec's finance minister found that the measures—

[Garnett Genuis, Conservative, Sherwood Park—Fort Saskatchewan, AB]

I have a point of order, Madam Chair.

[The Chair, Liberal, Karina Gould]

Mr. Genuis.

[Garnett Genuis, Conservative, Sherwood Park—Fort Saskatchewan, AB]

Madam Chair, this is the fourth Liberal—

[Ryan Turnbull, Liberal, Whitby, ON]

It's not a point of order.

[Garnett Genuis, Conservative, Sherwood Park—Fort Saskatchewan, AB]

—you've gone to without any Conservative. Respectfully, I think the management of the speaking list is not happening in the way it should.

[The Chair, Liberal, Karina Gould]

Thank you—

[Garnett Genuis, Conservative, Sherwood Park—Fort Saskatchewan, AB]

I believe it should be Mr. Kelly next.

[The Chair, Liberal, Karina Gould]

—Mr. Genuis.

No. Mr. Genuis, I know you weren't here at the beginning of the meeting.

[Garnett Genuis, Conservative, Sherwood Park—Fort Saskatchewan, AB]

That's not true, actually. I was here from the beginning of the meeting.

[The Chair, Liberal, Karina Gould]

No, you weren't, Mr. Genuis.

[Garnett Genuis, Conservative, Sherwood Park—Fort Saskatchewan, AB]

Yes, I was in the back.

[The Chair, Liberal, Karina Gould]

No, I saw when you came in.

[Garnett Genuis, Conservative, Sherwood Park—Fort Saskatchewan, AB]

Anyway, that's not the point, but I was here.

[The Chair, Liberal, Karina Gould]

Mr. Genuis, I think what's important is that I'm basing it on the hands as they were raised. I appreciate your opinion, but their hands were raised first. When Mr. Kelly raised his hand and said, after your intervention, that he would like to join this part of the speakers list, I added him. We have Mr. Leitão, Mr. Turnbull and then Mr. Kelly.

Thank you very much for your—

[Garnett Genuis, Conservative, Sherwood Park—Fort Saskatchewan, AB]

Madam Chair, I'm going to challenge this decision of yours.

[Ryan Turnbull, Liberal, Whitby, ON]

You can't challenge the chair on a point of order. You need to have the floor.