Madam Speaker, I would like to thank the member for Kings—Hants and the member for St. John's East for bringing this important motion to the House.
The Minister of Finance was warned by university leaders months ago that a brain drain is drawing the intellectual life out of Canada. A prescription to remedy this problem is an infusion of dollars for research and training to increase participation.
It is time this government realizes that Canada is not an island on its own. We need to retain our human capital and convince Canadians to stay here in a country that has full potential to prosper internationally at an exceptional level. Right now is the time for this to happen.
Many of our country's most promising young researchers and academics are leaving for more enticing grounds, mainly to the United States. They are leaving because they cannot get the resources they need to thrive in Canada, namely research dollars, decent salaries and lower taxes.
Consequently this trend will ultimately damage our economy. Canada stands to lose domestic talent to our southern neighbour. Less homegrown research and development means fewer resources available to support our Canadian businesses. These same businesses are struggling to find well trained workers who will help them compete internationally.
The facts are clear. Canada is losing talent to the United States because American companies are offering Canadians higher salaries and the U.S. government can offer lower taxes.
High taxes in this country are also scaring away businesses to low tax U.S. and other destinations around the world. The tax rate for corporations ranges from 38% to 46% in Canada. In the U.S. it is considerably lower. If corporations are feeling the pinch, let us now consider young people and understand what drives them south of the border.
Studies indicate that as of late we are losing young talent and ambition. Our leaders are the future. A student graduating from university is faced with a high debt burden from years of student loans. When offered a high paying job, they obviously take it in anticipation of ridding themselves of debt and saving for the future. Paying off a debt of $25,000 to $30,000 when entering the workforce is unbearable. How are our young people ever to get ahead when they are suffocated with huge student loan payments monthly?
Debt repayment incentives are driving our teachers to Columbia, Mexico, Egypt and the United States. High debtloads are driving our engineers and computer scientists to the United States and many private school grads are deciding to work elsewhere to cover their debtloads.
I urge this government to seriously consider the implications it is imposing on our young graduates. Student debt burdens are a serious problem in Canada. The Minister of Finance must introduce measures in the upcoming budget that will repair the damage he has done to our young people.
The only way to ensure that the Canadian economy continues to grow is to empower the consumer. To do this requires an increase in the disposable income of Canadians. Unlike in the United States, disposable income has fallen in Canada. In fact, it has fallen or been flat for two years running. The unemployment rate in the United States has been considerably higher. Canada's unemployment rate, on the other hand, has consistently been higher than that of our southern partner.
The Liberal government has continued to cut, cut, cut. Now its eyes are finally opening, a little late I might add. Dramatic cuts in post-secondary education by this government have caused the average student debt to almost triple this decade from an average of $8,700 in 1990 to $20,000 this year and forecast to $25,000 in 1998.
I believe in the Liberal budget next week they will be coming out with the millennium fund of $1 billion. They have caused this student debt by tripling tuition fees in the 1990s. Maybe they should be giving the money back to the universities so that tuition fees can be reduced.
These disheartening figures point to another issue that is surfacing. The fear of enormous debt is driving qualified students away from the universities. How will this country compete internationally if talent is not encouraged to flourish? If this trend continues, what future does this country have?
We know that the personal income tax gap has widened between Canada and the United States.
This is due to many reasons. One which can be fixed in this upcoming budget is bracket creep. By indexing bracket creep we can realize almost a billion dollars returned to the hands of Canadians. It is time that we let Canadians spend their money instead of government.
A document compiled by the industry department raises serious concerns about whether Canada has much to brag about or not. This report is entitled “Keeping up with the Jones”, no relation I can guarantee. It reveals the true picture, not the rosy one this government keeps referring to.
Let me share with this House some of the findings since the Liberal government so quickly swept it under the carpet with embarrassment.
The national income gap between Canada and the United States is getting worse. Americans are now 25% richer than Canadians. The U.S. economy is getting richer and it is paying its workers better. The salary gap is especially pronounced in occupations requiring high skills. Engineers, computer scientists and architects are earning an average of $11,000 to $13,000 more than their Canadian counterparts.
The combination of lower taxes and higher income in the United States means working Americans have more money to spend. An example is a couple with $80,000 in taxable income and two children living in California will take home $7,000 more than a similar Canadian family.
Canadians pay about one-third more in taxes. Top corporate tax rates are significantly higher in Canada than in the United States.
Many state governments offer very generous tax and investment incentives to businesses for the purpose of attracting investment and innovation activities. Canada's ability to attract and retain knowledge workers is seriously undermined by its personal income tax structure.
Canadian workers hand over significantly larger portions of their earnings to the tax man than Americans. The top marginal personal income tax is 20% higher in Canada than in the United States.
The continual shortage of knowledge workers such as software engineers in this country poses a huge problem as Canadian business struggles daily with the year 2000 problem. It is estimated that there are 300,000 Canadians in California working in Silicone Valley.
It is time this government admits to these mistakes. It must undo the damage it has done. Cuts in transfers to the province have cost this government the credibility as an effective government and are costing Canada our talent.
The Liberal government must put a stop to this brain drain. Unless this government wakes up and starts now, we stand to lose more and more of our talent to the United States.