I agree with the minister. I certainly had a chance to work with a number of trade ministers on the other side, Roy MacLaren, Sergio Marchi, Art Eggleton and now the new minister. I have enjoyed my time. On balance, the Department of International Trade has been a very good department. However, I am afraid we are missing the big picture today.
The minister has brought forward a bill to the House to split the department, and maybe that will be important. Only time will bear out whether that is. I am reserving my judgment in that area. However, unless we address some of the basic problems and look at the bigger picture, splitting the department will not be as big a panacea as some might have us believe. It seems to me that we are suffering from two huge problems in this area, one being here at home and the other being internationally. I will just take a moment to talk about the international component first.
A considerable amount of work still needs to be done in international trade to advance the cause of free markets in order to give Canadian producers opportunities to access markets in other trade walks such as the European Union. There is a real need to reduce subsidies that are being used still, particularly in agriculture but in other industries as well. There is a real need to address the issues of export subsidies being used and the huge tariffs themselves. I am concerned that Canada is not taking the kind of leadership on this that we need. It bothers me that because of some domestic politics at home, maybe we are not putting our shoulders behind the wheel to the extent we need to pry markets open.
It seems to me that the case has been well demonstrated over the last 50 years, the need and the benefits that come from opening up markets and trade liberalization. I think it is pretty clear to most people. We thought we were making progress at the Doha round with the European Union and others to stop the terrible use of subsidies and export subsidies to hurt our Canadian producers. Now we see some slippage again, and it concerns me. There is work to be done there.
Work has to be done at NAFTA. The dispute settlement mechanism we have does not serve us. We know that. It is not serving us in softwood lumber. I would submit that we have been harassed in that industry for a very long time, and that is not changing. We have to advance this thing further. We have to grow our relationship with the United States and Mexico to try to open up NAFTA to benefit Canadians.
As my colleague from Newmarket--Aurora, the critic for our party said, what is this all about? It has to serve people. If it does not benefit the average Canadian, there is no point in this whole exercise. It is not an academic process. The lives of real Canadians are on the line in terms of needing to benefit and increase the standard of living. More needs to be done at the NAFTA level.
Surely we can get past the idea of countervailing and dumping being used against us so badly. It is ironic in the extreme that Canada introduced these trade laws back over 100 years ago. Now they are being used against us so badly by a number of our trade competitors. That is another area on which work needs to be done.
I reserve probably my worst judgment for what is happening here at home. I blame the Liberal government for the public policy it has engaged in for the last several years, which has not allowed our industries to take advantage and become more competitive and productive. Although the minister wants to change the department, which may be a worthy goal, unless we get things right at home in terms of taxation policy and regulation, it is all for naught because we will not grow the industry. We need to get our tax levels down. We had numerous studies at the Department of International Trade when I was there. The industry says exactly the same thing, that Canada has lost its way. We are one of the most heavily taxed countries in the world.
We are not competitive on the effective corporate tax rate with our major trading partner, the United States. There can be a debate on that. The minister has talked about whether we should look at expanding our trade with the United States or expanding it with other countries around the world. Surely we have to look at the United States as the best potential. We share a common culture, a common language and practices, but we need to give our Canadian companies an opportunity to benefit and take advantage of things that put them in a more competitive position.
I would start with taxation policy. I hope to see it in the upcoming budget. I hope the Minister of International Trade is prodding the Minister of Finance to get our corporate tax rates down.
The capital gains tax is another one. With the capital cost allowance, we cannot write our taxes off quick enough to adapt to the new realities. A certain amount of product and equipment we use goes out of date faster, especially on the information technology side. If government does not listen, we are not competitive.
Another area the minister talked about briefly was the whole area of investment now in his department. We are lagging badly behind in terms of investment. Canada's global share of direct foreign investment has been slipping for years. We are not being seen as a friendly place to invest. We have to overcome that or else we will not get the kind of investment which brings in the new technology that we need.
Canadians are finding it more attractive to invest outside the country than at home. Surely that says something. It says a whole lot about our public policy. Why can the Liberal government not get it right? For years it has been told that we are slipping in terms of our competitive edge. Our productivity is something like 84% of that of the United States. It is not because our average workers are working any less. In fact, they are working harder. It has more to do with government policy that stands in the way of workers and companies being able to take advantage of an opportunity to invest and compete where they need.
Those are limiting factors. Unless we get it right and start to address them, they will continue to hurt us. The minister has aspirations for the new department. I wish him well. I hope that he is listening today and can convince his counterparts on the other side that they have to do something to enable the new investment in the new department to find the groundwork and bear the fruit. Unless we do that, I am afraid this is all for naught and splitting the department will really be nothing more than just another side to a bureaucracy in the next few years.
With that, let us look forward to the next opportunities to make some changes in NAFTA. Every five years we have a chance to sit down and review the NAFTA agreement. I know the minister was not there the last time, but we did not take advantage of that. We did not look at some of the things that were wrong with the agreement or those things that we could have done better. I was really disappointed.
I know the government wants to protect certain industries, but it does not fit with the concept of free trade. It seems to me that we have to do a better job. If something is not working, we have to work with our counterparts in the United States and Mexico to do it better so we will all benefit. We have to get a better relationship with our major trading partner and move this portfolio forward in the interest of the living standards of all Canadians.