Mr. Speaker, I am pleased to speak to this motion introduced by the Liberals.
This motion raises real questions. As the preamble says, current economic growth in Canada is quite fragile and this reverberates in most of the provinces. Alberta is a special case. It should not be included in the Canadian average, in order to get a real sense of the situation in Canada. Quebec is also affected by this fragility in growth, but also and especially by the fragility in the Canadian manufacturing sector. This is true for Quebec and Ontario.
On January 27, Statistics Canada issued a telling figure: from 2002 to 2005, some 149,000 manufacturing jobs were lost in Canada. This is a 6.4% decrease. Two-thirds of these job losses occurred in 2005. Clearly there is a problem, but future difficulties are being downplayed. It is like the Titanic heading toward the iceberg: the tip of the iceberg is approaching in the distance, but no one is worried about it. If the Conservative government were not worried about this problem—I hope it is worried—it would come across as irresponsible. It would be shirking its responsibilities. It has the means to do something about this. That is the type of debate we should be having. Unfortunately, and that is where the problem lies, the Liberal motion proposes solutions that infringe on provincial jurisdictions and ignores any solution that has to do with federal matters.
The Bloc Québécois, as defender of Quebec's interests and Quebec's jurisdictions and the interests of Quebeckers, will have no choice but to vote against this Liberal motion. Again, the problem it addresses is real. I will list the proposed solutions. I will not read the motion; if I did, I would not have enough time left to explain the Bloc Québécois' positions.
The proposed solutions target education. Is there a more provincial jurisdiction than that? The motion refers to tuition, which is connected to education; labour market development—the labour market comes under provincial jurisdiction; training, another form of education; university research—the universities come under the provinces and form part of the education system; recognition of foreign degrees, which also relates to education; and professional associations, another provincial responsibility.
Aside from those pertaining to the Kelowna accord, the solutions proposed in the Liberal motion relate to areas of provincial or Quebec jurisdiction. At the same time, the motion contains no solutions that come under federal jurisdiction. That may seem troubling, but knowing the Liberals, it is not so troubling as all that, because we have seen them in action for the past 13 years.
This motion has a paternalistic ring that we drew attention to on numerous occasions under both Jean Chrétien and the current member for LaSalle—Émard. The message seems to be that the provinces, particularly Quebec, are unable to find solutions to the challenges of the future. They have to be taken by the hand and told what to do in their areas of jurisdiction. Quebec, whether under the Parti Québécois or the Quebec Liberal Party—I do not always agree with their solutions and will mention one later that I particularly disagree with—is well aware that it faces a growth and employment challenge.
In some areas, such as Gaspé, the unemployment rate is unacceptable. In others, such as Montérégie, Montreal and Lanaudière, shortages of skilled labour are restricting our economic development capacity. Quebec has an employment policy. We have local development centres and local employment centres. The structure is in place. What is missing is federal money.
The federal government, meaning the Conservative government, has only one responsibility to Quebec and the provinces with regard to their areas of jurisdiction—education, skills training, labour market development, labour policy and employment policy. The federal government's only responsibility is to correct the fiscal imbalance.
The Prime Minister has made a commitment to correct it by February 2007. Unfortunately, I have to say that we were particularly disappointed in the last budget.
Despite the government’s commitment to correct the fiscal imbalance by February 2007, we would have liked to see more investment than has been announced, particularly in universities.
I remind hon. members that professors, rectors, students and support staff in the university community, all across Canada, unanimously called for a reinvestment of $4.9 billion per year to offset the underfunding of post-secondary education. What was announced in the budget? A non-recurring amount of $1 billion. That is a long way from assuming responsibility for correcting the fiscal imbalance.
However, we shall let the government have its chance. We have been promised that, by February 2007, this problem will be addressed, this problem which is a federal responsibility and which was caused by the federal government, that is, the previous Liberal government. So we shall leave the federal government free to face this challenge I mentioned, namely to reduce unemployment rates in certain regions and tackle the skilled labour shortages in certain sectors.
I return quickly to this idea of the Liberals that the provinces are incapable of assuming their responsibilities. To refute it, I give the example of the accessibility of education in Quebec. When we look at the public funding of education, we see that there is more of it in Quebec than anywhere else in Canada. The Government of Quebec presently allocates 1.91% of GDP to university education, compared with 1.59% in the rest of Canada. Truly, what we have here is a societal choice. Public funding of education accounts for 7.5% of GDP in Quebec, versus a Canadian average of 6.6%. If we were to subtract the Quebec rate, the Canadian rate would be 6.4%. Quebec invests 17.4% more in education than the rest of Canada. That is the first element, the public funding of education.
As for tuition fees, there is no need for me to insist: they are the lowest in Canada. We care a great deal about this. This is an ongoing debate, but the consensus has always been in favour of keeping these tuition fees as low as possible. The reason for this is so that we can do precisely what the Parliamentary Secretary to the Minister of Foreign Affairs was saying, that is, give students a real choice as to their education and their career. Equal opportunity is achieved through modest tuition fees.
The third element is more generous financial assistance. We know that Quebec has a scholarships and loans program which, compared with what exists in the rest of Canada, is not extremely generous—that would going a little too far—but relatively generous.
As I was saying, we will be voting against this motion. Although it highlights a real problem, it falls short of the true responsibilities of the federal government in terms of finding solutions for strengthening economic growth in Canada and Quebec and for ensuring that the manufacturing sector plays its role in that growth and is sufficiently strong.
The real challenge, as we well know, is to achieve growth in an increasingly globalized world, while respecting the environment.
We need a strong manufacturing sector. I often hear certain people say that nowadays this accounts for only 20% of our jobs; well, it still accounts for 80% of our exports. As a small market—I am thinking of Canada, but this is also true of Quebec—we need to export to other markets. The American market is extremely important. We know that when it comes to job creation and the impact of investment, the manufacturing sector has a much bigger effect than the services sector, even though that sector also includes extremely promising industries that have to be developed. We cannot have an economy based solely on services, however. We need a manufacturing sector that will promote growth, that will stimulate job creation, and that will obviously have an effect on the services sector as a whole, whether it be services to businesses or to individuals.
We therefore need a strong manufacturing sector and we need investment. That is what is cause for concern. For a long time, we have been told—Mr. Dodge, the Governor of the Bank of Canada, has repeated this—that with a strong dollar, businesses will be able to invest, to import technology and modernize their production and the way they do things. Now we see that even though the dollar is worth more than 90¢ US, investment growth is very weak in Canada and Quebec.
In Quebec, investment will grow by less than 1% this year, at a time when profits in most businesses and economic sectors in Canada have surpassed historical averages. We had not seen this for years, but for a number of quarters now the profit portion of Canada’s domestic product is above its historical average. So the profits are there. The dollar is strong, so we can import technology, machinery, ways of doing things, but it is not happening. We have to wonder what the reason is.
The question has been put to a number of employer representatives, and they too are wondering why Canadian and Quebec businesses are not investing up to the level that we might expect.
I will give a few figures so that we can see how serious the situation is. Canada is dragging its feet when it comes to research and development, and obviously Quebec is not receiving its share. Overall, Canada ranks 13th among OECD members when it comes to research and development. This is a fundamental component of investment, as we know, particularly in an economy that is increasingly globalized. In the G-7 we rank fifth—in other words, we’re really bringing up the rear.
Now, when it comes to research, Canada, without Quebec, spends 1.38% of GDP. As I said, we fall into the category of countries that invest very little in research and development. As I also said, when we add Quebec, we come in at about 2.26%. Quebec itself invests 2.7% of GDP in research and development. Canada is therefore lagging behind. Quebec has made a special effort, particularly under the Parti Québécois government. Mr. Landry, as minister and premier, did a lot to stimulate research and development. We have made a special effort in this regard, although the federal contribution to funding in this area has fallen over the last 30 years. That is true for both Canada as a whole and for Quebec.
In 1971, Ottawa’s research and development spending accounted for 45% of the total in Canada. By 2001, it was only 18%. As I was saying, Quebec does not get its fair share. Overall, Quebec accounts for 26.6% of all research and development spending in Canada, but it receives only 23.8% of the federal funding, in comparison with 48.3% for Ontario. Insofar as the research done directly by the federal government is concerned—the research that it decides for itself—Quebec gets only 19.6% of the spending while Ontario gets 57.7%. Yet Quebec represents more than 23% of the population of Canada.
It is obvious that not only does Canada lag behind, not only does the federal government fail to assume its responsibilities in regard to research and development, but its policies also ensure that Quebec is systematically disadvantaged, especially when it comes to structural spending like that on research and development.
I will conclude with a final statistic. Federal spending in Ontario on research and development accounts for 80%, while in Quebec it accounts for 39.9%.
It is very apparent, therefore, that there is a concern because these efforts should be made on innovation, research and development, improving Canada’s productivity and investment. That is not being done. Why? Because of the uncertainty.
Business people wonder whether they will have a market in five years, first of all because of the emerging economies. We already discussed that. It is not just a matter of clothing, textiles and furniture, although these sectors are obviously very hard hit by the competition from countries in south-east Asia in particular. It is true as well of communications equipment. China is becoming an extremely important manufacturer of computer technology. Brazil exports not only beer and samba but lumber as well. In aeronautics, it is a major competitor. We are all aware of the battle over regional jets between Embraer and Bombardier. India is very competitive in services. So there is this first factor, which is the ever increasing presence of emerging countries in world trade and on Canadian markets.
Second, there is the Canadian dollar. It is true in Quebec but everywhere in Canada too: people always want to know why the Bank of Canada is increasing interest rates at a time when inflation is within its target range and the Canadian dollar is worth more than 90¢ U.S. Maybe it is just because we like to shoot ourselves in the foot. I remember the recession of the early 1990s, which was entirely a product of the Bank of Canada and its monetary policy.
It seems that, unfortunately, Canada does not learn from past mistakes.
This has an effect on the American market. As I mentioned earlier, the job losses I referred to are largely due to the rise in the Canadian dollar by nearly 30 or 40% in 2005.
There is a third factor that concerns people, and that is the American economy. We can definitely sense that it is going to slow down. We cannot ignore this, since this building and growth boom cannot go on forever. The American population is not growing that fast. Residential, commercial and industrial construction will inevitably slow down. We must get ready for this, since 84% of Canadian exports go to the American market.
I have some figures to bring this home. In 1995, the net savings of American households were 7%; that fell to 1.7% in 2004; and it is currently negative, less than 1%. Not only are American households not currently saving, they are dissaving. Naturally, this has an impact on consumption. However, there is a limit. As individuals, we cannot continuously go further and further into debt. For the government, going into debt is altogether different. At some point, individuals will begin to save again. If they are saving, then unavoidably, they will consume less. What happens when they consume less? They import less. If they import less, this will affect the Canadian economy.
I hope the Conservatives are aware of this fact. I hope the finance minister, the industry minister and the international trade minister are starting to think of ways to counter this slowdown, which will have an impact on the Canadian economy.
We saw American protectionism first-hand in the softwood lumber dispute. We have also seen it in agriculture. It is increasing rapidly these days. Allow me to give an example. I do not disagree with the choice made by American senators and members of Congress. The Central American Free Trade Agreement was passed by just one vote in Congress. Recent surveys have shown that Americans are against this free trade agreement, and for good reason, because it is clearly a bad deal, but also for bad reasons linked to rising protectionism.
There is also the matter of emerging countries' share of the U.S. market. Here are a few little statistics, probably the same ones the Conservatives are looking at. In 1990, 19% of U.S. imports were from Canada, and in 2004, it was 17%. It has hardly changed, so why should we be worried? The trend is the same for Quebec. However, in 1990, 3% of U.S. imports came from China; in 2004, it was 13%. In 1990, 6% of U.S. imports came from Mexico; by 2002, that had dropped slightly to 12%.
We have lost some of the market share we should have had to other economies. I am talking about emerging countries, but I am sure the same thing has happened with industrialized countries.
Naturally, there are the issues of energy and the looming shortage of skilled and unskilled workers. There is also the sense of abandonment felt by Canadian and Quebec manufacturers. I will be speaking about this in the time remaining.
Mr. Charron, CEO of the Quebec division of the Canadian Manufacturers and Exporters, spoke to us about how manufacturers feel abandoned, which in my mind is the case. The federal government has abandoned its responsibilities towards the manufacturing sector. This is the case across sectors. We have seen it in clothing and textiles. The assistance plan was merely a public relations exercise that was completely ineffective in terms of helping revitalize this sector, an extremely important one for the Montreal region and for Quebec. This was also the case for softwood lumber. Then there was the decision to ignore the recommendation of the Canadian International Trade Tribunal regarding bicycles and barbecues.
The time has come for the federal government, for the Conservatives, to send out a strong message. We want a very strong manufacturing sector in Quebec and Canada in order to be able to face the challenges of the future. This will require some action in these sectors.
To conclude, there must be support for modernization of traditional economic sectors, support for industrial research and research and development, measures enabling industries to exploit their capabilities in a highly competitive context, measures that will offset increased oil costs with the development of clean and renewable energy.
We must make this collective effort. Programs in support of older workers are also needed, in order to restructure traditional sectors requiring modernization.
There will be job losses, but at least we will be able to keep these sectors alive.
A collective effort of solidarity must be made; otherwise, not only will the Conservative government have abandoned its responsibilities, but there will be an increase in protectionism in Canada, Quebec and Ontario, placing everyone at a disadvantage.