Mr. Speaker, it is a pleasure to speak on Bill C-35. I would like to thank my colleagues from the government and all members in the House today who have allowed me to speak for 10 minutes on Bill C-35 which is the Special Import Measures Act. This is an important bill. It goes into some extremely important issues that are affecting my constituents in British Columbia and are affecting Canadians across this land.
British Columbia has been particularly hard hit by the economic downturn the whole country has seen. Some people point legitimately to the Asian flu and others point to the Russian meltdown. Although those have had a contributory effect, there is much we can do within our own house to rectify the situation at least in part. I would ask the government to please look into this.
To the government's credit, it has actually employed something from Industry Canada that has improved the Small Business Loans Act. It is going to provide small businesses with an added amount of capital which will enable them to restructure and work on their businesses and become more competitive.
One of the problems is that the private sector is finding it increasingly difficult to actually work in today's environment. I am going to illustrate some of these areas and try to develop some solutions that exist and which we can use in this House. We can gather together with other Canadians and even our provincial counterparts to employ them in the policy area to help the private sector employ more Canadians and become more competitive in an economic environment which is becoming increasingly more global and more competitive.
The first area which I alluded to yesterday was our high taxation rates. The high taxation rates today when we compare them to the situation down south are quite traumatic. An American two-earner family will take home 44% more in their pockets than a Canadian two-earner family. That is a significant difference. Also, the top marginal tax brackets make it very difficult for business people to invest in their businesses.
Some very interesting work has been done on surtaxes. If we look at the many surtaxes that now exist in our country, those surtaxes significantly compromise people to invest in companies, hire more people and invest in the future of the country. It is estimated that a $1 extra surtax would actually diminish productivity by about $64. The reason is that taxing more at the top end or adding more taxes on to anybody actually decreases the amount of investment that goes into the private sector. The behaviour of individuals is such that they work less and because they work less, less money is paid in taxes to come back to the public coffers.
Not only do we have a decrease in competitiveness by taxing more, we also have a decrease in the ability of people to work harder and a diminishment of money that comes into the public coffers. What does that do to the most disadvantaged people in our country? With less money coming into the public coffers, less money is available for our social programs, for health care, education, pensions and others.
In the Conservative regime, I believe it was in 1992 when Mr. Mulroney actually decreased taxes for a short period of time and there was an actual increase in the amount of money going into the public coffers. This would have provided governments with more money for programs necessary to help the most underprivileged in our country, to help our health care system and to provide for the educational framework our young people desperately need to become employable in the future. After that the Conservative government then taxed more which actually resulted in a decrease in money going into the public coffers. This is very significant and something we cannot ignore.
The other added factor of increasing taxes is that it actually drives our best and brightest to south of the border and to other countries. It also drives Canadian companies to other countries. We have had a massive brain drain. In my profession among physicians, some of our best specialists, particularly our orthopaedic surgeons and neurosurgeons have gone south of border, two-thirds of our neurosurgeons and one-third of our orthopaedic surgeons.
We are going to have a gap in specialists in nephrology dealing with people with kidney problems. We are going to lose about 40 people from this country over the next 10 years. This is a significant problem given the fact that more and more people are actually going to need specialist care for renal problems.
The cause of this is the high taxation rates and the dampening effect of the egregious rules and regulations that we have which prevent the private sector from being as aggressive as it can be.
One of the things that is killing our private sector, if we speak to the business community, is the corporate surtaxes, the surtaxes that occur in specific businesses. There is also the capital gains tax which is preventing them from being able to sell their businesses and properties and reinvest that money in their own companies. That is why a lot of companies are holding onto their assets. The corporate tax rate is a huge disincentive. If they sell their assets the capital gains will be so high they will incur a loss.
The status quo with high taxes, and specifically with the capital gains tax on corporations, causes an inertia within the system that prevents companies from generating the finances to reinvest within their own companies. The government should carefully look at removing those taxes. It would benefit the people who are most disadvantaged in our society. If companies cannot hire, people will be unemployed. That causes a greater demand on our social programs and also, from a societal perspective, greater social problems.
We could also create strategic alliances. The Canadian Export Development Corporation has been very much an innovator in developing ideas of strategic partnerships. I implore the government and companies to look at strategic alliances where companies that have different areas of specialty can work together to further a particular product. That situation can even occur across borders.
A natural alliance would be the United States. There are companies in the U.S. and Canada that have specialties in certain areas. If they were to form strategic partnerships they could be a very aggressive tool and an effective marketer of their particular business abroad. Since we live in an era of globalization, that would make Canada a more effective competitor internationally.
Years ago I tried to take all the best ideas I could find from Canadians across the country and put them on my website. The private sector could then extract the information and use it to their advantage. I know there are members of the House who will be working very hard to stimulate companies in their ridings to be more effective.
Although we support Bill C-35, there are some amendments that could be made. Examples have been put forth by my colleagues with respect to baby food. Heinz got a monopoly because the public interest was not taken into consideration. Those things must be carefully looked at when dealing with international trade issues.
The government has to deal with decreasing taxes in an effective manner, looking at innovative ways in which it can provide a lower tax rate for people in the lowest socioeconomic area. If these things can be done we will be able to provide a better state of affairs for Canadians across the country.
The government can also increase the foreign ownership maximum on RRSPs from 20% to 30%. With the lack of confidence that Canadians have in the CPP, it would be very important and useful for the government to give Canadians the option of helping themselves by enabling them to increase the foreign ownership content of their RRSPs.