Madam Speaker, it gives me great pleasure to enter into the prebudget debate in the House. I was very happy to have a town hall meeting in my riding of Durham which many of my constituents attended.
Reform members talked about their desire to consult their constituents. It is interesting to look at the back of this report. It talks about the members who actually submitted reports from their constituents to the finance committee. The list includes many of my own colleagues, many of the opposition party colleagues but not a single name of a Reform Party member. That is unfortunate because this was a great opportunity for Reform Party members to do what they are always saying in the House that they do, that they represent their constituents, that they want the views of their constituents heard in Ottawa.
I am happy to say that the people of Durham had a direct voice here. We had a very good and open discussion. Almost 70 people attended. They gave me their ideas on what should be done if there is a fiscal dividend. I was very happy to participate.
I have one slight criticism of the finance committee report. One of the recommendations is to allow for an increase in the deductibility in the foreign component of registered retirement savings plans. Within their RRSPs people can put up to 20% in so-called foreign investments, foreign assets. The finance committee has recommended that the limit be increased.
This is very important. This limit is used not only in RRSPs but in all aspects of the pension system. As I understand it, the newly formed Canada pension plan board would have a similar threshold. I object to this.
I believe we have to focus on what we are talking about when we are talking about RRSP deductions. RRSPs are used as a tax deduction. Essentially, the result of this would be to subsidize, and I underline the word subsidize, higher income earners to invest in foreign countries.
There are no laws in Canada against foreign investments. People are free to do that if that is their choice. However, they may have to do it with their tax paid money, in other words from their normal savings as opposed to actually getting a tax deduction, an incentive if you will, to invest in another country.
That is one small point on which I differ. I believe it would be improper and unwise to proceed in that direction.
A lot of the debate on budgetary items concerns expenditures. The Reform Party and others talk about government spending, spending, spending. What is missing when we talk about the expenditure of money is that sometimes, in fact a lot of the time, the expenditure is an investment.
We should all know the difference between investing and spending. When we invest in something, we expect a return. That is why it is important to recognize in the upcoming budget that we are not wasting money to spend money in areas of some things that will actually come back to us. In other words, that money did not disappear. It will come back to us in the form of a return on our investment.
One of those very important areas is science and technology. There is a general recognition that we must move forward and embrace the challenges which science and technology present to us.
Durham College is in my riding. It has a science and technology faculty. There is something like three jobs for every one of its graduates. We talk about youth unemployment on the one hand, but we also have on the other hand a disproportionate demand for people who are trained in certain areas.
Today I attended the industry committee and we heard from the granting councils. Representatives of the National Research Council, NSERC and MRC appeared before us. They pointed out that Canada's expenditures in research and development lag behind just about every other country in the western world. I think the only country that gives less money to research and development based on its gross domestic product is Italy. We need to invest more in the science field.
Recently the Conference Board of Canada published a very excellent report about the Canadian economy. It found some very remarkable things. It found that Canada is one of the highest spenders in education.
I should interject, Madam Speaker, that I am sharing my time with the hon. member for Oxford.
The Conference Board of Canada made a number of observations. Some of the very important ones were that in post-secondary education, Canada is one of the highest spenders in the world. At the same time, some of the performance in the area of science and technology is in fact some of the most mediocre. We need to revamp some of our educational institutions to ensure that we are training our people properly.
Having said that, it is interesting that one of the initiatives which our government is involved in is called technology partnerships. It is a program I am very proud of. In fact the member across the say said to give away money to Bombardier. Bombardier was a recipient of the technology partnerships program. But that just shows the lack of knowledge that exists on the other side of the House.
Technology partnerships matches the expenditures by companies in the area of research and development. It provides a degree of risk capital but it is an investment that is based on a royalty system. For instance as Bombardier sells more Dash-7 aeroplanes, money comes back into the government.
This program has only been around for about three years and just recently we received our first cheque, a royalty payment coming back to the government. It is very clear that the object of the exercise is to allow this funding to assist. It is sort of risk capital. We are matching money. We have a partnership going with small and medium size businesses to do this.
There is a company close to my riding called Camateoid which is another recipient of a technology partnerships venture capital loan. This is a very interesting company. It makes the paint for the Challenger aircraft. It is very much related to aerospace.
These are some of the ways we can use the resources we have in government to lever other forms of capital, pools of capital that possibly would not have been spent in the area of research and development. That generates all kinds of multipliers in our economy.
It allows our graduating students from high tech institutions to have a place to work in this country. We often talk about the brain drain and how people are being forced to leave this country because the opportunities are not there. This is a very specific way in which the government can invest in some of these sectors, not give the money away but invest it in such a way that the money is coming back to the people of Canada.
I hope that when we are putting our budget together we can find some room to move in these areas. As the granting councils and the Conference Board of Canada have said, Canada is lagging behind.
A lot of the growth in our economy has been based on the export sector, almost 40% now. If our Canadian dollar goes upward vis-à-vis the U.S. dollar which it probably should—and some people suggest the Canadian dollar is worth 85¢—if that happens, we are going to see a lot of unemployment because we have not kept up with the productivity challenges that are going to make this country great.
I reiterate it is important that this government puts more money into research councils and also the technological programs that will make this country strong.