Mr. Speaker, it is a pleasure to rise and debate Bill C-71.
This bill is part of what the government introduced in the budget in February. It gives us a good indication of where the government's head is at when it comes to some of the big issues that confront the country today in terms of the economy and those sorts of things.
I want to talk a bit about one of the big current debates in the country. In fact it is a debate that the government helped initiate, mainly the industry minister. It has to do with the issue of productivity. Most people who follow this issue closely would acknowledge that improving the productivity of the nation is critical if we are going to give Canadians an improved standard of living, something that we have enjoyed almost every generation since Confederation.
The question I pose to the government is does this budget really improve the nation's productivity? Does it take a step in the right direction in terms of making the country more productive? Does it at least help us reach our potential when it comes to being more productive?
On close analysis this bill does not come anywhere near doing that. I do not think it makes Canada more productive. I do not think it helps us improve our standard of living. I do not think it helps us improve our health care anywhere near the degree that Canadians are expecting.
At the finance committee discussions are being held on the issue of productivity. Yesterday we had several people before the committee, some economists, some from banks, insurance companies and the conference board. There were people representing particular interests such as the education sector, the biotech sector, the high tech sector, and so on.
All have acknowledged that we have to improve our productivity if we want to improve our standard of living. We are far behind our major trading partner, the United States, in terms of our productivity. There is some debate as to whether or not that gap is getting worse, but everyone acknowledges that for the last 10 years we have been substantially behind the United States. The consensus yesterday was that the gap would be about 20% behind. When we have a gap that big, it means that our standard of living is also that much further behind that of the United States.
Some people ask why compare ourselves to the United States, the Americans are bad and that kind of thing. It is important to look back and remember that Canada used to have a standard of living that was actually superior to that of the United States. We had a standard of living where we were their economic betters.
It is wrong for us to settle to be the poor cousins of the United States. We deserve to have a standard of living that is as good or better than theirs. It is something that my parents grew up with and people became accustomed to over a long period of time. Sadly we seem to have fallen behind the Americans now and I think it is time to reclaim our rightful place as their economic equals at the very least, if not their betters.
The question is how do we improve our productivity? How do we get to become a more productive nation? This is something we put to the experts who were assembled around the table. While there was not necessarily a consensus on what we should do, there was some agreement on what the key factors are for improving productivity.
Among them is a good education system. In Canada people would have to acknowledge that we do have a good education system but certainly it could be improved. It is also a fact that we spend more on education than almost any other country in the world. We do put a lot of money into it. I do not think it necessarily needs more money but it probably could be improved in various ways, shapes and forms. It is important to point out that most of that responsibility falls on the provinces because education belongs to them according to the Constitution.
There was some agreement that we have to put money into infrastructure in Canada. That makes sense to me. Of course most of that responsibility does fall on the provincial governments, even though it is interesting to note that the federal government does take about $3.8 billion a year from consumers through gas taxes and fuel taxes of various kinds. Most people would say it would make sense to put that back into highways and that kind of thing, but the federal government only puts a few hundred million dollars of that $3.8 billion back into highways. The government is probably not doing the job it could be doing to improve infrastructure in Canada.
It is interesting that over the last generation or so the size of government grew dramatically and money did not go into one of the most important things for improving our overall productivity which is infrastructure. It went into all kinds of soft programs, such as social programs, which are well and fine but they do not necessarily improve our productivity as a nation, something the government claims to be very concerned about.
One of the things that improves productivity, and I know there is a consensus on this, is a country that does not burden the people who create the wealth with all kinds of rules and regulations. There has been some progress made in that way over the last many years.
We have entered into free trade agreements which have helped improve the flow of goods and services between Canada and the United States and Canada and other countries, as we now trade freely with several countries, more or less. There are always trade disputes but basically that was one of the other factors which improves our ability to trade.
Sadly we still have all kinds of internal trade barriers in Canada between provinces. Although the federal government promised it would deal with this, and this was something the industry minister said he would address a long time ago, frankly the federal government has done very little to improve the state of trade within Canada. We still have many internal trade barriers.
We also have a tremendous amount of regulation in Canada. I remember one day phoning the Library of Parliament. When I asked them to tell me how many federal regulations are on the books in Canada today, they basically laughed at me. Every year we produce hundreds of regulations. It makes it extraordinarily difficult for business people to do what they do best which is produce wealth, prosperity and jobs for people when they have to sit down and fill out forms and obey regulations that someone produced 50 years ago that in many cases probably are not applicable any more. Sadly we still have to contend with that. This government has not done a good job of eliminating burdensome regulation.
There are probably other factors as well that I have not mentioned.
Finally we come to an issue that the Reform Party has pushed for as well as other people who are very concerned with the state of the Canadian economy, which is simply that we have an extraordinarily high tax burden in Canada today, and that does hurt our productivity. It hurts it in a number of ways. This was an issue that was debated a bit yesterday as well.
First, when we have taxes that are as high as they are in Canada it causes many people, who in many cases are very skilled and have great talents, to go elsewhere to pursue their careers. We see this all the time.
People on the government side are saying there really is not a brain drain, that it is not a problem because we are bringing in as many people as we are losing and they are highly educated people. I do not buy that for a second. Yesterday we had all kinds of people appear before us. They told us they were in the high tech field and that they know what is happening. They said they are losing people from their companies who go to the United States because there are more jobs, they pay better, they tax them more lightly and they can purchase more with the money they earn because their dollar is more valuable.
We hear that over and over again. We hear it from companies like Nortel. I would argue that Nortel is the leading company in Canada. It employs 76,000 people, many of whom are in Canada. It is a real world leader in all kinds of high tech areas. It is involved in things like telephone switching, and now the Internet. It is doing wonderful things. It employs tens of thousands of people who are given a chance to have wonderful careers with wonderful salaries. Officials of Nortel are now saying to the government that it must start to cut taxes because if it does not they ultimately may have to follow all those employees they have lost to the United States.
It is not often that a leader of business will stand in front of the government and say that its policies are wrong. It takes policies that are so wrong-headed that they are having a real material affect on the bottom line of those companies. For obvious reasons these companies do not want to alienate government.
It speaks volumes when a company like Nortel speaks up. However, it is not just Nortel. My goodness, we had Mr. Desmarais speaking out. He has very close connections with the Prime Minister. We had Mr. Pattison speaking out. These are captains of industry in Canada who are saying “If you continue to tax us this heavily we are going to have to seek opportunities elsewhere in the world and we will no longer be able to continue with the same level of investment in Canada that we have in the past”.
This is not me speaking. In many cases it is people who have close ties with the government who are speaking out, saying “This must come to an end because we are driving some of our best and brightest out of Canada”. That is the first point I want to make.
We also heard yesterday from someone who is involved in the biotech field. That gentleman told us that it is not just a question of salaries, but because there is so much more economic activity going on in the United States and its economy is booming, it is able to offer this gentleman, a brilliant scientist, a geneticist, an extraordinarily interesting job. That is what motivates a lot of these people. It is not just the money, it is the jobs as well. He had been offered an opportunity to head up a $15 million research project in the United States. He did not tell us whether he was seriously considering it, but the very fact that companies are coming to Canada and making these offers to some of our people should concern us.
There is another reason that has to do with high taxes which is causing people to go to the United States. When there are lower taxes, as there are in the United States, there is more economic activity because there is more money in people's pockets. There is more wealth being created. They are able to provide more money for all of these wonderful research projects.
I recall recently an article in the Globe and Mail that talked about a biotech firm in Quebec that was simply unable to attract senior researchers to the company because they were going instead to the United States.
We recently had people from the universities appear before the committee who said that their problem was not that they could not find people, it was that they had lost their senior people to the United States. It is usually the United States, but not exclusively. They were having to fill those positions with very junior people. Then the cycle continues. Once those people get some experience, many of them head off to the United States.
This is an extraordinarily serious problem and it obviously impacts our productivity. When we lose all of these highly skilled people it means they are not producing wealth and jobs for Canadians. That ultimately means, of course, that our standard of living falls. As I pointed out earlier, in Canada we are accustomed to seeing our standard of living actually double every generation, but that is not happening now. Our standard of living is much lower than it used to be relative to our major trading partner, the United States. We have fallen far behind. There is a consensus on that.
In fact, I must point out that even the Minister of Industry has made an issue of this. He has suggested that our standard of living has fallen below that of Mississippi, Alabama and Georgia. He gave a speech on this in February.