House of Commons Hansard #27 of the 39th Parliament, 2nd Session. (The original version is on Parliament's site.) The word of the day was money.


Budget and Economic Statement Implementation Act, 2007Government Orders

11:40 a.m.


Alexa McDonough NDP Halifax, NS

Mr. Speaker, I have to say in listening to the member for Esquimalt—Juan de Fuca that one has the sense he and his party are still fighting the last election instead of addressing this issue, the current bill that is before us, Bill C-28, which effectively combines the budget in the spring with the mini budget that was brought in this fall. I am not sure how that serves Canadians.

I listened very carefully when he conducted what was a fairly vicious attack, actually, on my colleague, the member for Trinity—Spadina, around the issue of balance. His criticism of her speech on the budget before us, and also on the NDP's decision to oppose this budget, was that budgets need to be about balance.

Speaking of balance, I am sure the member is well aware that the government's corporate tax cuts alone will cost $50.5 billion, phased in over six years, and will keep costing the treasury $14.8 billion every year. If this member has done his homework, and he usually does, then he will also know that this budget actually will benefit the average hard-working Canadian by about $1.50 a day.

I want to ask the member whether this is his idea of balance. If it is not, why is it that not only this member but his entire caucus have decided that instead of taking a stand against the lack of balance contained in this budget, they are actually going to sit in their seats, as they have already done, and are not prepared to commit themselves or vote one way or the other?

Budget and Economic Statement Implementation Act, 2007Government Orders

11:40 a.m.


Keith Martin Liberal Esquimalt—Juan de Fuca, BC

Mr. Speaker, we actually do support the tax cuts that are in this bill. We support the personal income tax cuts because that puts money into the pockets of Canadians. We think a cut to the GST is not wise. We do support the corporate tax cuts. The member from the NDP does not support that.

We believe that in order for us to be responsible to Canadians, Canadians need to have jobs and the Canadian private sector must be competitive. Also, a competitive private sector enables us to generate the tax base upon which to pay for the very programs that the hon. member and all of us support: things such as child care, health care and education, the myriad social programs that Canadians need and want and that in fact enable us to help the underprivileged.

In my speech, I have offered, as have my colleagues, constructive solutions that the government could adopt to have more balance in its budget and to address problems it is neglecting, such as, and the hon. member is quite correct, day care, early learning programs, tax reductions for the poor, more money in the hands of the poor, the disabled and seniors, and health care.

There is a lot more. I could go on. I would be happy to answer another question if she would like to respond.

Budget and Economic Statement Implementation Act, 2007Government Orders

11:40 a.m.


Alexa McDonough NDP Halifax, NS

By way of a supplementary, Mr. Speaker, the member for Esquimalt—Juan de Fuca just made my point. He knows perfectly well that the very things which not just he alone but every one of his members is standing up and calling for the government to support, the very things that he is criticizing the government for not having done with this budget, cost money.

If we give away over $50 billion in tax cuts to the corporations--and let us be clear, the single biggest beneficiaries of these tax cuts are the banks that are gouging people with service fees and the oil companies that are gouging people at the pumps--then there will be no money to support the projects that he is talking about and that his members are criticizing the government for not funding.

Where is the sense in that? Is this just an act of hypocrisy? Or is this the case of an entire Liberal caucus that has not done the math and has not done its homework in analyzing the negative impact of this budget that is taking us in the wrong direction?

Budget and Economic Statement Implementation Act, 2007Government Orders

11:45 a.m.


Keith Martin Liberal Esquimalt—Juan de Fuca, BC

Mr. Speaker, we, obviously, have a different view of the economy.

I would draw the member's attention to the socialist economic interventions that took place in northern Europe in the eighties where taxes were raised quite high. The private sector was constricted which meant people lost their jobs. The loss of jobs meant people were more dependent on social programs. There was less money for those social programs because, in the contraction of the private sector that occurs, when we raise taxes and make our country's economy non-competitive, ironically, we actually damage the people we want to help. We damage the ability of the tax base to fund research and development, health care, education, social programs and all the things Canadians need. It is a matter of balance.

We have some criticisms of some of the tax cuts, specifically the GST. The government should lower the tax burden on the poor and middle class, which it has not done, in a way that is broad based. Our colleagues have put forth solutions to enable the government to do that.

We will be hearing from the member for York West, who will be giving an absolute barnburner of a speech.

Budget and Economic Statement Implementation Act, 2007Government Orders

11:45 a.m.


Judy Sgro Liberal York West, ON

Mr. Speaker, when talking about budget bills, a ways and means motion is something I think all of us have a real interest in. When we have an opportunity, whether it is a last minute opportunity or not, to stand and speak in the House on things that matter to us, I am glad to have that opportunity.

Bill C-28, which we are talking about today, is not something with which we are 100% happy but, at the same time, do Canadians want an election? No. We have had plenty of them. The next election will be my fifth in eight years and I am not anxious to go on the hustings again. In fact, the $500 million that an election costs, which is the last number that I heard, I would much rather see it being invested in our children, our seniors or helping to lower the tax rates, a variety of things.

A far better idea for us is to keep the government going and move it forward for all of us.

As my colleague said, we are supportive of a variety of things in the bill but there are other issues that we are not. The economic policies of the current Conservative government are different in some ways from the policies of the Liberals. They are much more designed to be focused on the next election, which the Conservatives have been most anxious to have. I am not sure they are as anxious today to have it as they were previously, but they were quite anxious to have one. Our party and our leader were quite clear in not taking the bait and falling into that trap of going back into an election that, at this particular time, is unwarranted and could quite possibly bring us back into the same situation, except we could be on the other side of the House rather than on the opposition side.

However, I for one am not interested in going down that road at this particularly moment. I want to go down that road when we have clear, decisive issues on which the public can make a decision.

Even though we support some of the measures in Bill C-28, the idea of reinstating our Liberal personal income tax cuts was quite interesting. We had reduced it to 15% but in the Conservatives' very first budget, which, to me, indicates who they really care about, they increased the very lowest rate up to 15.5%. That rate is not one that the corporations or the rich worry about but it is certainly one that affects thousands of low income Canadians.

Again, that, as with many other issues, has indicated to me where the Conservatives' priorities lie and they do not lie with many people in Canada who need that helping hand up, which many of us support.

We also oppose the Conservatives' economic vision. I do not think they have one. I think they have a vision strictly on the next election and on how to get there and how to get a majority government, which is not why Canadians sent us here. They sent us here to effect a positive Parliament and to work on behalf of all Canadians, not to have an eye on how soon we can have an election campaign so we can get a majority. Our job is to come here every day and to work in the best interest of Canadians, period, for those who are rich and well off and for those who are not as wealthy as they might like to be.

The GST cut is ridiculous. I know it was a political move by the government but I look at all of the things in which we could be investing that $5 billion GST cut, whether we are talking about investing it in our seniors, in child care or in learning opportunities. We could be doing so much with that $5 billion.

I am sure the Canadian public could think of what we should do with the $5 billion rather than cutting the GST. We only need to look at our cities and the campaign in Toronto, which is the city I represent, for the 1¢ now out of the GST. We could take that $5 billion and reinvest it in our communities or even target it to our major cities.

This week, campaign 2000 released a huge report about how much poverty there is in Canada. A lot of people like to think that the poverty level is quite low. It has been a very difficult issue to deal with and as much as we try to move forward and reduce it, we are reducing it very slowly.

Far more investment needs to be made in education so we can ensure people get an education because, as far as I am concerned, education is the key to ending poverty. A good education reduces poverty because education opens the door to many opportunities. However, education for some people is way beyond their means. Refocusing some of the $5 billion on those opportunities would have been a good thing to do.

Early learning and child care would probably have been this century's newest and best social program. It would have provided help for a lot of struggling single parents. One area in my riding is quite affluent but I also have areas that are very high need areas. Many women in my riding who are single moms went back to school to get a job but now they cannot afford to put their children into child care where it is safe for their children or the waiting list for subsidies is huge.

As much as we say that we want to get people into a healthy economic stream, if we do not provide learning opportunities for them and safe environments for their children, then we are wasting our time. We can spin our wheels as much as we want talking about how we will end poverty, but if we are not providing the opportunities for those people who are at the minimal level, then we will never succeed.

The Liberal Party made a commitment to early learning and child care, although it did take us a while to get it because when we came into government in 1993 we had a $43 billion deficit. Canada was almost at the point of bankruptcy. It took six or seven years for us to deal with that issue and to get the country's finances in order. From that point, we were able to start reinvesting and working on achieving the goals that we all wanted to see go forward.

Unfortunately, that did not happen. We did not end up with the support of the NDP and the government was defeated. I expect that it will be a very long time before there will be a desire to have that new social program here in Canada again.

It took a long time to get the provinces on board and to do all of the work that is required for these kinds of agreements. They do not happen overnight. A lot of great work was done by my colleague and it is unfortunate that we were not able to see that program come to fruition. It was just one more casualty, but I do not think the people who voted thought that would happen.

Politics being what it is, governments come and governments go, as the Conservative government will. We will continue to ensure we move rapidly forward so that when an election does come, we will have plenty of opportunity to lay out our platform showing where we will go to ensure we have a richer, fairer, greener Canada.

If we want to have enough money to invest in our children, in low income seniors and so on and so forth, we need to ensure we also have a strong economy. Our manufacturing sector and our auto industry are suffering tremendously as a result of the rising loonie and we need to deal with that issue. We need to find a way to protect jobs.

When we talk about jobs we are not talking about $7 an hour jobs. For people to feed their family and pay the mortgage, they need to earn more than $7 an hour. The comment about how the number of jobs has increased is not a valid comment. As a result of various issues, we are losing the good quality jobs that Canadians had but we do not hear the Conservative government telling us how it will offset this problem.

An important issue for all of us is to ensure that Canadians are employed. We do not want our country to go into a recession. Many of us remember how difficult that was for many people. We want to have a strong Canada and we need to ensure we are moving forward in a positive way.

Budget and Economic Statement Implementation Act, 2007Government Orders

11:55 a.m.


Alexa McDonough NDP Halifax, NS

Mr. Speaker, I know the Liberal member who has just spoken is not from Atlantic Canada, but hopefully we are all here in this place continuing ongoing nation-building.

The member will be very aware of the fact that what was originally labelled the Atlantic accord has become a major source of Atlantic discord. I am sure that the member will be aware that her members, together with all other opposition members, were represented in a briefing that finally came about. It was like a Keystone Cops routine, three times scheduled, three times cancelled.

It finally took place and what became most clear of all is that there is enormous discord between the federal government's interpretation of what the new provisions contained in the bill that is before us mean and what the Nova Scotia government interprets it to mean, and in fact was set out in a householder that went out to every single Nova Scotian.

I wonder if the member could comment on whether she thinks it is not really a cop-out for the Liberal opposition members to sit in their seats rather than take a stand against the budget for a number of reasons. Among them, there is the fact that the Atlantic accord, in its original form, a signed, sealed, legal document, no longer exists, and actually it exists in a form that is so wide open to interpretation that it actually is the same thing as shredding the Atlantic accord.

Budget and Economic Statement Implementation Act, 2007Government Orders

11:55 a.m.


Judy Sgro Liberal York West, ON

Mr. Speaker, I recognize that the hon. member is from Nova Scotia but I would like to remind her, in case she forgot, that I was born in the Maritimes, in Moncton, New Brunswick. There is a piece of one's heart, I believe, that is always where one is born, so the issues in and around the Maritimes are always things I am pretty sensitive to and am always concerned about, as I am for all of Canada, but I think all of us carry that little special part in our hearts about where we were born.

I would like to remind the hon. member, referring to Tom Flanagan's book on our current Prime Minister, that on page 230 there is a quote in regard to our last election. It says, “No matter how well-designed our campaign had been, it would have been hard for us to win if the NDP had not held up its end.”

Therefore regrettably, when the accord was dismantled and put together again in what the Conservatives think is an acceptable way, which clearly is unacceptable to me or to the member, we would not be dealing with this issue had the NDP not supported the bringing down of the government.

However, in addition to dealing with the accord, there is the issue of $39 million being cut from the regional economic development agencies. That is just one of the many cuts that the Conservatives made in the last budget.

I am sure that $39 million would have been very helpful in the Maritimes in dealing with many of those challenges. They have to make sure that jobs are created, that money is reinvested in manufacturing and all of the other issues and the pressure areas that they deal with in the Maritimes, as they deal with other issues in the west and in central Canada.

There was an $18 million cut from the literacy skills program. Again, there are areas of our country that use these programs intensely and welcome them. That was cut again. We have also called for that to be reinstated. Those continue to be just a variety of some of the many cuts that have been the Conservatives' priorities, rather than reinvesting in Canadians.

Budget and Economic Statement Implementation Act, 2007Government Orders



Thierry St-Cyr Bloc Jeanne-Le Ber, QC

Mr. Speaker, I am pleased to speak to the budget implementation bill that is currently before us.

The Bloc Québécois will not support this bill to implement, among other things, the economic statement and the Atlantic equalization accord. The major sticking point is the fall economic statement that we opposed both because of what it contained and because of what it did not.

Throughout Canada, in Quebec and in our communities, people are experiencing a range of serious socio-economic problems. Even though the government has recorded significant surpluses despite tax cuts and all kinds of breaks for oil companies, it has refused to act. For a government that prides itself on taking action and keeping its promises, the mini-budget, the economic statement, was pretty pathetic.

I want to start by talking about the crisis in the manufacturing and forestry sectors. We keep hearing about more and more forestry and manufacturing businesses closing their doors and going through tough times. These are not just numbers we are talking about; these are lives and this is reality. These workers, their families and everyone around them are going through very difficult times. This kind of economic upheaval affects communities in cities where factories can improve quality of life, boost prosperity and keep them from becoming ghost towns.

The Bloc Québécois proposed a number of solutions to help the manufacturing industry, but the government has refused to take action and always hands us the same line. The optimist party of Canada's Minister of Finance says that everything is just fine. The optimist party of Canada says that employment has never been as low as it is now, that the growth rate is good, that profits in Canada are high and that companies are making lots of money. But the optimist party of Canada's minister is out of touch with reality. In both Quebec and Ontario, where manufacturing and forestry industries are major parts of the economy, things are not looking so good.

The figures from the optimist party of Canada do not take into account that reality is being obscured by the oil boom in Alberta. Here is a simple example. If you go to a bar in a small town where people have just lost their jobs, and twenty or so unemployed people are there when Bill Gates, the president of Microsoft, walks in, statistically everyone in the bar is a millionaire. Obviously, it is just statistics. Once Bill Gates leaves, everyone is still unemployed and facing the same problems.

The same thing is happening in Canada. While statistically there is an economic boom in Alberta, the situations are extremely difficult in Quebec and Ontario and economists are predicting a downturn because of the high dollar. Such is the economic reality and the effects and after-effects will not be felt until one, two, even three years down the road. If we do nothing about it right now, we will end up with even bigger problems in a few years. We need to take action right now.

Everyone who has come to see us in the Standing Committee on Finance lately, from employers, to unions, to representatives from society in general, has told us it is imperative to take immediate action in light of the high Canadian dollar and other problems the manufacturing and forestry sectors are experiencing.

In this context, it is rather sad to see that the government has preferred to push ahead with measures that have so little, if any, value added in terms of economic development. One need only think, for example, of the reduction of the GST. We will agree that it is certainly a popular measure. Of course, everyone is happy to pay less tax. In reality, however, all the economists who have spoken on this issue have said that reducing the GST will produce very little in economic terms.

The same goes for lowering corporate taxes for the big oil companies. They are already making exorbitant profits. The fact that they will now make even bigger profits will not help the manufacturing and forest industries because those companies are in trouble and are not making any profits. If they do not make a profit; they do not pay taxes. A drop in the tax rate is no help and does not improve their position.

However, they are starting to talk about it. The Bloc Québécois has been talking about this for a long time. Recently, we heard the minister say he recognizes that the manufacturing industry is having difficulties and that, perhaps, it may be necessary to act. Let us hope this change of heart will continue. The Bloc Québécois will continue to apply pressure.

That gets me thinking about the fiscal imbalance. At first, the Bloc Québécois was the only party talking about it. The other parties said there was no fiscal imbalance, it did not exist and we were inventing it. Finally, we succeeded in obtaining a significant amount in the 2007 budget for the fiscal imbalance, although the situation is not completely sorted out yet. There has been a transfer of money but still no transfers of tax fields. Yet, this was a situation that people thought was a fabrication by the Bloc Québécois. Now, we are getting some solid results.

We are in the process of doing the same work on behalf of the manufacturing industry. Only a few months ago, in fact, only a few weeks ago, the government was still saying here in this House that everything was fine, that there was no problem and the economy was doing very well. Now, we see that they are starting to change their position a little. We will continue to apply pressure to obtain measures for the manufacturing industry as quickly as possible.

One important measure that could have positive results, despite its rather technical nature, is refundable tax credits to companies for research and development. To offset the strength of our dollar, which makes our companies less competitive in the United States and elsewhere in the world, we need to encourage companies to invest in research and development, as well as new equipment to increase productivity.

Traditionally, in most advanced countries with strong economies, companies receive tax credits to encourage this. This is currently the case in Canada, except that these tax credits are non-refundable. So, companies that do not turn a profit cannot claim them. They bank them and when they do turn a profit, they can claim the tax credits. For the government, that is a future tax expense. In a few years, when a company turns a profit, it can claim those tax credits.

The Bloc Québécois wants these tax credits to be immediately refundable for a company that does not turn a profit, but that decides to invest in order to increase productivity, become economically viable and then make a profit. In fact, when a company is not turning a profit and is experiencing difficulties is when it needs that money, that cash, to compete and to invest in equipment and research and development. Later, when it turns a profit, it will pay the taxes.

The government argued that this measure would be too costly. Obviously, if tomorrow morning companies started claiming all these tax credits, even if they are not generating a profit, there would be an increase in claims. They say it would cost billions of dollars. However, the government's calculations are incorrect, because they were done on an annual basis. But if they are managing a country and claim to be running it, they need a more long-term vision.

If we look over time, what is going to happen? In terms of the tax credits and refunds that the companies are calling for now, even if they are incurring losses, they would claimed those tax credits in the future. So it is a measure that has virtually no effect. I will come back to this. There are costs, certainly. However, we have to take into account costs that will have to be covered in any event, in terms of tax revenue and tax spending in future.

Perhaps the example that is best known among the public and even members here is RRSPs. RRSPs are not income tax exemptions. They are deferred taxes. The money is deducted from the tax payable during our working years. When we reach retirement and withdraw the money from our RRSP, then we pay taxes.

That means the tax is simply moved to a later time. It is the same thing for converting these research and development tax credits into a refundable tax credit. You are doing the same thing, but you could really say it is the opposite. The principle is the same, however: giving an immediate tax refund that might have to be paid back later.

If we take a model over 10 years, or over a longer period of time, and exclude cases where companies go bankrupt, and compare the two systems, non-refundable tax credits versus refundable tax credits, the cost should be zero, because over time, for the taxes we are refunding now, they would have to be paid back later in any event. Obviously, the cost is not zero, because inflation is going to eat up some of the difference. That is because a 2007 dollar is worth a little more in 2008, a little more in 2009, and a little more in 2010. But it is a cost that is ultimately marginal, in terms of the measure as a whole.

The second case where there would be a cost is obviously if a company that did not make a profit went bankrupt. In the existing system, a company that does not make a profit accumulates non-refundable tax credits, never claims them, builds them up, but when it goes bankrupt, it loses that bank of tax credits, and that represents a tax savings for the government.

If we had a system of refundable tax credits, as the Bloc Québécois is proposing, obviously, the government would have to pay back the refundable portion to the companies, as they incurred research and development expenses, and that would mean that this system would cost slightly more.

We are not saying there is no cost involved in this measure. Obviously there is a cost, but it has to be assessed in comparison with the benefits to society. When the manufacturing industry representatives and research and development people appeared before the Standing Committee on Finance, I was struck by the testimony of one person in particular.

We were told that manufacturing industries can be divided into three broad categories based on their position in this crisis. The first involves companies that are doing well, that are strong and that will get through the crisis no matter what, regardless of whether we help them or not. At the other extreme, obviously, there are companies that are in serious difficulty, that have major structural problems. Whether we help them or not, those companies are not going to get through the crisis. In the middle, obviously, is a category of companies that are promising, that are having problems at this point in time, and that could get through the crisis if the government took the trouble to give them the hand they need.

Let us take a closer look at the effects of the measure proposed by the Bloc Québécois, namely, to make the research and development tax credit a refundable credit for these three categories of businesses.

As for the companies that are doing well, that are making huge profits and getting through the crisis, our measure would have absolutely no effect, no impact, and would change nothing. It would be business as usual. In other words, they are already making a profit and claiming their tax credits. Whether they are refundable or not, this would not change anything; they would get them immediately.

This is an interesting point. Indeed, a general tax cut, like the one brought in by the Conservatives, helps businesses that are making a lot of money, but does not help those that are not turning a profit. Our measure does the opposite: it does not help those that have lots of money—it is status quo for them—but it helps those that need a hand to make it through this crisis.

Consider the second category of businesses, those that are having difficulty, but can make it through the crisis. It is precisely this kind of measure that can give them the boost they need to get through this crisis, because, among other things, this would give them cash assets by making the tax credits refundable. This would then give them the money they need to get through the crisis, while, under the current system, they will not get the money they need until later, although they need it now. How ridiculous.

In this case, as I mentioned earlier, this would not cost the government very much. It would basically mean the cost of inflation, since the tax credit would be postponed. If we take into account the fact that the boost will allow businesses to remain open, to pay taxes, to pay their employees who will also pay taxes, one can see how this measure would be beneficial for the entire Canadian tax system.

Take finally the last category of businesses, those that will probably not survive the crisis. If these tax credits are immediately refunded to them and they end up going bankrupt, the costs will be greater than what we have under the current system. If a company goes bankrupt now, these accumulated unused tax credits are just lost, which means more income for the Canadian tax system.

We certainly hope that this category of businesses that do not make it through the crisis in manufacturing will be as small as possible. In the view of the Minister of Finance from the optimist party of Canada, which has a very positive view of our economy, not many businesses are likely to fall into this category. As a matter of fact, the more we help them, the fewer there actually will be.

All this is to say that the proposed measure to make research and development tax credits refundable is much less costly than the government claims. It would simply move up in time tax credits that in most cases would otherwise constitute an expense for the tax system if the companies earned a profit.

I have not mentioned accelerated depreciation yet for structuring investments, such as investments in machinery and equipment. The principle is the same. When accelerated depreciation is allowed at some point in time, there is a tax saving. However, as soon as the company has finished amortizing the equipment, it starts paying taxes. Once again, therefore, tax that is payable now is simply postponed until later. There is a cost to the government because inflation has to be taken into account, but the cost does not match the actual expense. The expense has to be spread out over a number of years and its total impact calculated.

As I said, we are opposed to this mini-budget because there is not much in it for our manufacturing industries. Other things are missing as well, but I did not have time to talk about them. I wanted instead to go into detail to explain our proposal on the refunding of research and development credits. There was no money to make the guaranteed income supplement fully retroactive, a promise that the Conservatives broke. There was no money for a program to help older workers. The government promised this in its first Speech from the Throne, but we have not seen the money yet. I also could have told the House about equalization, which is turning to Quebec’s disadvantage. I will certainly have other opportunities, though, to talk about these things.

Budget and Economic Statement Implementation Act, 2007Government Orders

12:20 p.m.


Dan McTeague Liberal Pickering—Scarborough East, ON

Mr. Speaker, I would like to point out to the member that the Standing Committee on Industry, Science and Technology submitted recommendations that received unanimous approval. Clearly, the government has failed to incorporate those recommendations. Now that the Minister of Finance is supporting just one of the recommendations that were adopted, we are having a hard time seeing how all 22 can be implemented.

Would the member elaborate on these issues, specifically as they relate to the manufacturing sector crisis in his province, Quebec, and in Ontario? Would he also discuss the impact of energy costs, the value of the Canadian dollar, and emerging problems in the service sector that we have to take into account?

Budget and Economic Statement Implementation Act, 2007Government Orders

12:20 p.m.


Thierry St-Cyr Bloc Jeanne-Le Ber, QC

Mr. Speaker, over a year ago, the Standing Committee on Industry, Science and Technology unanimously adopted a report in which all parties, including the Conservatives, made 22 recommendations. In the last economic statement, just one of those recommendations was implemented, and only halfway at that.

Yesterday, the Standing Committee on Finance passed a motion asking the Minister of Finance to implement those of the industry committee's 22 recommendations that relate to fiscal measures. Once again, I do not know whether this is unanimous or not because the Conservatives did not vote. It is strange that the Conservatives are hesitating to implement recommendations that were unanimous.

The crisis is a major concern in Quebec and Ontario. The finance committee was impressed to see such rare unanimity among unions, management, industry and cities. Everyone is saying that something must be done right now.

This is especially important because we heard repeatedly about the problem of the time lag between the rise in the Canadian dollar and energy costs and the economic consequences in terms of plant closures and job losses. People said that one, two or even three years can go by between the two. For example, the plant closures that are happening at present are due to the strength of the dollar perhaps a year ago, when it was worth $.80 American. In one, two or three years, when we see the impacts on our economy because the dollar is at $1, $1.01, $1.02, $1.03, $1.04, $1.05 and so on compared to the U.S. dollar, it will be too late. The situation will already have deteriorated.

It was unanimous. Everyone said that action was urgently needed. No allies of the Conservative government came to tell the Standing Committee on Finance that the situation was not that pressing, that manufacturers could wait until the next budget and that the minister had been right not to include any measures in his economic statement. Everyone said that the government needed to take action right away. That is why we could not support this economic statement. These measures absolutely must be included in the next budget. They should even be implemented as soon as possible.

I can guarantee the Minister of Finance that if he wants to put forward measures to help the manufacturing and forest industries in Quebec earlier than planned and he needs our cooperation in this House, we will give it to him so that we can take care of this quickly, if that is what he wants, of course.

Budget and Economic Statement Implementation Act, 2007Government Orders

12:25 p.m.


Mark Holland Liberal Ajax—Pickering, ON

Mr. Speaker, when talking about the budget and the economic statement, the important thing to do is to start with context and how we came to be where we are today.

I can recall the year 1993. It is a good place to start. I had just graduated high school at the beginning of that year. I had the idea that I would get involved in my first federal election. I decided I would get very involved. I recall the state of the economy at that point in time. I recall the then prime minister was Brian Mulroney. I think he is currently being spoken of in another room at this particular moment. One of the things I remember is what a bad place Canada was in.

At that point in time we were going into debt some $40 billion a year. That was our annual deficit. Our inflation rate was 14%. The unemployment rate was 12%. In fact, our situation was so dire that the Wall Street Journal at that time said Canada was an honorary member of the third world. Our position within the G-7 was hardly strong. In fact, it could be argued by many that we were losing any sort of relevance within the G-7. We were losing our way as an economic middle power.

In that environment, everyone can imagine, for those who were like me, who were getting ready to enter university or college, to begin a trade or to start off their careers, they were bleak times. They were times without a lot of hope or opportunity for the future of the nation.

We move forward to 2006. What a different story it was at that time. Canada had gone from having the worst debt to GDP ratio in the G-7 to having the best, from having the worst record on job creation in the G-7 to having the best, and from having record inflation that was crippling the economy to having record lows in both inflation and interest rates, allowing Canadians to buy their homes more cheaply and be able to afford their lives more easily.

We know that the economy was on fire. Instead of running huge deficits, we were running surpluses. Instead of running up more debt, we were paying our debt down. It was through sound economic policies and decisions between the period of 1993 to 2006 that were employed by the Liberal government which allowed our economy to get on its feet, to move from the bottom of the pack of the G-7 on almost every single economic indicator to the top of the pack.

With all of that prosperity, the decision is how to continue it. How do we make sure that we continue with the advances that we have made? Now that we were at the head of the G-7 how would we continue that position? We could continue the prosperity. We could ensure that Canadians continued to see an augmentation in their quality of life and we could address many of the issues that we could not address when we did not have the financial resources to do so.

Naturally, one would assume when we are in a position of such strength, when we are able to turn in the kind of revenues that we are turning in, when our economy continues to move forward in the way it does, that it is time to take action on things like poverty, on access to post-secondary education, on the climate change crisis that grips most of our attention, and on things like infrastructure. Instead what we have gotten through two consecutive budgets, mini-budgets and economic statements is gimmicks. Probably the best example of this is the cut to the GST.

Probably the best way to assess the impact of the cut to the GST is to look at a single mother struggling to get by, struggling to pay her rent and struggling to afford groceries. Conversely, we can look at a Canadian who has been blessed with a lot of wealth, somebody who is maybe fortunate enough to buy a luxury car, a luxury yacht and take luxury vacations in luxury hotels. How are those two individuals impacted by the GST cut?

The first 1% cut cost us over $5 billion and now there is another 1% cut that will cost us over another $5 billion. The single mother who is buying her groceries will not see any benefit. For the rent that she pays, there is nothing. In point of fact, the GST cut did nearly nothing to improve her lot or give her the opportunity to make a difference for her children. Conversely, the individual who is fortunate enough to afford items of luxury is enjoying a massive windfall, incredible amounts of money coming back from luxury items that he or she would have purchased with that reduction now in the GST.

Instead of getting Canadians targeted relief to those who need it the most, making a difference for people who are struggling to get by and working so hard, there is a disproportionate tax cut that most advantages those who need it the least.

I will read two quotes on this decision. One was made by Marc Lee, senior economist for the Canadian Centre of Policy Alternatives, who said, “I think”--this tax cut--“also shows they're really out of touch with the reality that most Canadians are facing”. I could not agree more. Don Drummond, chief economist at TD Bank, said, “The federal surpluses have offered a golden opportunity to move forward in a very decisive manner. The GST cuts don't move that agenda forward at all”.

Let us delve deeper into the government's approach to tax cuts. Virtually all economists, perhaps with the exception of those who are under the employ of the Prime Minister or the Conservative Party, are united against the GST cut. Even a report by the Department of Finance agreed that cutting the GST was the worst strategy for Canada in reducing income taxes or reducing taxes generally. It does nothing to improve the fairness of our tax system and the money that goes back into the pockets of Canadians is for the most part marginal, unless they are earning very large sums of money.

In point of fact, the finance minister once called cutting the GST a “relatively useless measure”, because it only advances spending “that would happen in any event”. The finance minister said he preferred cutting personal income taxes because it provides a “direct stimulus”. It seems that the finance minister once had the wisdom of trying to apply the Liberal vision of how tax cuts should be implemented. When he was the finance minister of Ontario, in fact, he was quoted as saying that he agrees with the member for LaSalle—Émard. He went on to say, “With respect to reducing the GST federally and the RST provincially, I also agree with the federal minister, and we've talked about this. All you get is a short-term hit, quite frankly”. And this is my favourite part, “It has no long-term gain for the economy”. That is from the Ontario legislature Hansard of November 5, 2001.

The finance minister himself felt that a cut to the GST had no long term gain for the Canadian economy, but he chose to cut this tax, which has cost the government billions and yet gives Canadians nothing.

It would seem to me that this money should have, logically, gone to a couple of different areas. To continue on tax cuts, it should have gone where it would have made a real difference, such as helping Canadians who are struggling to get by and those who are in the middle class to reduce their burden, but instead of reducing income taxes in the last budget, the government increased them from 15% to 15.5%. To go back to the example of a single mother or someone earning a marginal income, that individual actually saw, on a net basis, his or her income tax burden rise. It is an utterly shameful thing, but it is the truth.

Now the government has said that it has reduced income taxes. The reality is it has simply brought them back to where they were in the beginning. We have seen the government raise the income tax rate from 15% to 15.5% and now, in a much heralded fashion, the government has reduced it back to 15% again. The bottom line is the government has not done anything in that area that would make the biggest difference to Canadians, the biggest difference on a real basis of allowing people to have more money in their pockets to improve their quality of life.

We in the Liberal Party believe that income tax cuts need to be targeted, that they need to focus first on those who need the help the most. We also believe firmly that a plan to reduce income taxes must include a reduction in the corporate income tax rate. When the Liberal government came to power, corporate income taxes were at 28%. There was legislation passed that took that down to 19% and would be implemented for the year 2010. The Conservatives, again in a much heralded way and with a lot of spin, announced that they were taking it down to 18.5% for the year 2011, a difference of .5%. That is it.

I know some in the NDP caucus would fight and rail against a reduction in income taxes saying that it is part of a right-wing agenda. The reality is it is part of an intelligent, middle of the road approach that has worked very successfully for other nations.

We can take a look, for example, at Ireland or Sweden which have made large reductions in their corporate income tax rates and at the same time have seen much progress on social issues and on social programs. They recognized that as smaller nations they could have lower corporate tax rates, attract businesses to their jurisdictions, create more economic activity and that larger jurisdictions like the United States or other large European countries could not match those reductions simply because their scale was so much larger. The net result of it was more money and more resources to be able to move forward on progressive programs on social issues. Clearly, our position is that the .5% reduction, which is hardly a very visionary or meaningful reduction, is something that needs to be looked at further, and that further cuts are still desired.

When we take a look at some of the gimmicks that have been put in place and the rather backward strategy that is nearly impossible to find any economist to agree with, it will not be very hard to understand why or where this came from. I also happened to be a municipal councillor during the period of time that Ontario had a Conservative government provincially and the provincial finance minister then is the federal finance minister today.

What we do know is that Ontario was left with a deficit of $5 billion. There were decisions like the selling off of highway 407, an impact that has had major ramifications in my own riding where the 407 ends at Brock Road. We look at that decision which in the very short term may have rounded the figures and made it look as though the deficit was not as bad as it was. What it has done in the long term is given a foreign company a massive amount of annual revenue and left taxpayers with an extremely expensive route when almost no options are available to get in and out of the city. People are forced to pay extremely high prices, the profit of which is not going back to improving infrastructure or making lives better or more accessible, but instead it is leaving Canada in profits to a foreign company.

Then too we saw tax cuts that most benefited those who needed it the least. When we talk to the average Ontarian about the difference those tax cuts made, it was marginal at best. At the same time, if we ask them how they noticed reductions in service levels, how they noticed the difference when they walked into a hospital or when their son or daughter went to school, those differences were big. They saw massive reductions in services. They saw big increases in property taxes because there was a downloading from the province onto the municipalities, but in terms of money in their pockets and increased quality of life, at the end of the day it simply was not there.

I am going to continue on the theme of municipalities. As I mentioned, I was fortunate enough to serve for nearly seven years as a councillor for the city of Pickering in the region of Durham before I came to this place. I witnessed how some of these strategies that are employed by the now finance minister impacted our municipality at that point in time.

I can recall vividly things like housing stock, where we were downloaded all kinds of housing responsibilities from the province. We were told that we had to bring those up to code, that we had to do all kinds of work to make sure that the housing stock was up to speed and yet we were given no resources to do it. We were left with no recourse but to either increase taxes or cut services to handle the downloading that had been given to us.

Ambulance services were handed down to us and again we were given no resources, no money. Yet we were told that we had to increase service, that we had to decrease response time. Again we were left with no choice but to either pass tax increases or to cut services. This is part of the shell game that is played. Announcements are made, proclamations, big cheques, a lot of spin but underneath it all, it is just things being moved around, no substance, just gimmicks.

What we are left with in the municipalities is a government that is showing nothing but contempt. Municipalities and mayors are saying that they need money to fight critical issues like infrastructure, to deal with things like housing within their boundaries. What the Conservatives are saying to them is, “Be quiet. Stop whining. Go back and figure it out yourselves. It is not our problem”.

In terms of the amount Canada gives to municipalities, in terms of the relationship of the federal government to the municipalities, it is one of the most backward anywhere in the modern world. The problems that are being faced by municipalities only started to be dealt with under the last government in a new deal for cities and communities in a recognition that municipalities needed to be treated as equals, in recognition of the fact that often municipalities are the engines of our economy.

They are the places that make the biggest difference in things like quality of life and often can make a huge difference in terms of the quality of our economy by making sure that they have the conditions right to hold, retain and allow businesses to grow.

Today, in a riding like mine, we face massive infrastructure challenges. Individuals who want to go to work in the morning, and I have a large population of people who commute, are faced with incredible gridlock. Options on transit are nearly non-existent.

Some of the measures brought in by the government, like this tax measure where people would get a bit of money back at tax time if they bought a transit pass, are utterly meaningless. Why would people buy a transit pass that does not take them anywhere?

If I were to leave from my house in Pickering and try to get to the GO station, that unto itself would be about a 30-minute or a 40-minute exercise. By the time I do get to the GO train, it is then another 40 minutes or 45 minutes to get into the city. It would take people almost an hour and a half when by car that same ride would only take perhaps 30 or 40 minutes, and that is if they are lucky enough to be working in downtown Toronto.

If people work in Scarborough or in Markham, transit can take two or three hours to get there. So, who is going to buy a bus pass that does not really take them anywhere? It does not make any sense. What we should be doing is investing in the infrastructure required to make transit meaningful and real as an option for individuals who want it.

Municipalities today are struggling under the crippling responsibility of aging infrastructure, but they are also fighting a real battle that we need to be seized with here; that is, sustainable development.

We can talk about the environment, but how communities are structured, how they are built, what resources they have available to them, things like transit, how dense a core they have and what kind of cultural and recreational infrastructure they have within their boundaries so people can actually spend a day or an afternoon within their own municipality, becomes very relevant as well.

However, in the fight against climate change, municipalities have to be partners, not somebody we scold and boss around and pretend is not there but partners, people we invest in, people we work with on things like sustainable development. That is why the money that was flowed through, through the new deal, said that those projects had to go to improve sustainable development.

So, too, should money that flows to the municipalities as we assist them, whether it is in addressing the payment in lieu of property tax problem that leaves so many municipalities shortchanged or whether or it is as an additional revenue. This should go to say that that money that flows to the municipalities should result in meaningful changes, such as reducing the consumption of carbon-based fuels and reducing greenhouse gases, so that municipalities are making a contribution to reducing greenhouse gases and climate change emitting products.

On the environment, more broadly, what we have seen from this government is complete contempt for the issue of the environment and climate change. In fact, last January, almost a year ago, the Prime Minister was calling greenhouse gases “so-called greenhouse gases”. The government websites systematically, after the last election, eradicated any reference to climate change. It deleted them. It got rid of them.

We were getting calls from teachers who were using government websites to help teach their students how they could reduce their emissions and how they could make a difference to the planet. They were asking what happened to these aids on the Internet that they were using to help teach students how to create reductions. They were completely deleted.

We saw more than $5 billion in cuts to climate change programs and instead replaced with only $2 billion later with much fanfare when the Conservatives were pretending to do something.

We are the only member of the Commonwealth standing in the way of ensuring that we are a major partner in fighting climate change. We are blocking the rest of our Commonwealth partners, as example, at the conference that just happened, from joining together as a unit, setting mandatory targets and leading the world.

In short, what we are seeing in this and in so many other areas is a government that is focused on spin and gimmicks, and nothing on substance, that is so focused and preoccupied with trying to get to 41% or 42% that it is doing nothing on the real issues.

Budget and Economic Statement Implementation Act, 2007Government Orders

12:45 p.m.


Rick Norlock Conservative Northumberland—Quinte West, ON

Mr. Speaker, I listened to my colleague across the way discussing Bill C-28 and some other issues surrounding that and how it does not help some of the less privileged Canadians, I think were some of his words, or lower income people, especially those who may be single and raising a family.

I think the member forgot that Bill C-28 has the working income tax benefit. This is concrete action to help low income Canadians with various measures, not the least of which is WITB, as the finance minister calls it. I suppose we could say that it would be our spin that it is a good idea because it is a good idea and we are saying it is. However, there are other folks who are saying it is a good idea.

The United Way of greater Toronto has said that it is a positive change that will help improve the situation of low income families. The Rotman School of Management sings its praises. The Ontario Liberal finance minister said, “It's a positive move. I think it will help those at the lower end of the income ladder and I think the federal government has taken a good step”.

Indeed, the NDP member for Winnipeg North has said that WITB is an important program that goes in the right direction.

When the hon. member says that there is no help for lower income families, he is exaggerating profoundly the great benefits of Bill C-28. He says it is full of gimmicks. I see no gimmick when it does not take out of the pockets of the Canadian people some $190 billion over the next five years and brings taxes to their lowest levels in about 50 years. There is some great amount of exaggeration going on here.

If I could enlighten those folks who might be listening, the member said the GST reduction to a family of limited income does not do anything. When this family goes to the grocery store, or the young mother who has young children, they are buying products that have a tax on them. The young mother may not even be paying any income tax. People who do not pay any income tax at all are receiving a tax break through the GST rebate.

I ask the hon. member: Has he really read Bill C-28? Has he really thought through all the comments he has made?

Budget and Economic Statement Implementation Act, 2007Government Orders

12:45 p.m.


Mark Holland Liberal Ajax—Pickering, ON

Mr. Speaker, I would begin by saying, and it may come as a surprise to the member, that most groceries are in fact actually not taxed. Things such as everyday grocery items do not have the GST applied to them. If we take rent as an example, it does not have the GST applied either.

Someone of limited means and with most of their income going toward groceries and rent is deriving no benefit, or extremely little benefit. Maybe when they buy some Hubba Bubba gum or something, then they are going to get a cent off.

The member has mentioned one program and that is well and good. The reality is that the GST cut represents more than $10 billion in the 2% that is being removed. Imagine what the government could do to help a single mother with something like early childhood development by having a national early childhood development strategy that places creating nurturing advanced environments for those children to make sure that they get an edge on life, particularly when we know that those three years are so critical.

Imagine what some of that $10 billion could have done for students. In many cases, students do not find post-secondary education something that they can access. Imagine what could have done with accessibility.

Imagine what could have been done with that $10 billion to help in a targeted way those who are in the middle income bracket, those who really need the break, and those who really need the change. Instead, what we got was a gimmick. The problem was that it cost us $10 billion of other opportunities.

Budget and Economic Statement Implementation Act, 2007Government Orders

12:50 p.m.


Olivia Chow NDP Trinity—Spadina, ON

Mr. Speaker, Canada's productivity has dropped to 16th place, the U.S. dropped to 6th and Ireland has gone down to 21st in ranking, whereas the high taxing countries, Switzerland, Finland, Sweden and Denmark have gone up. They are always at the top in their productivity. They put a lot of money into innovation and research and development.

The hon. member talked a lot about investing in municipalities and investing in the social good, yet he would not say how much the investment would be, where would the money come from? Is it coming from an increase in income tax? Is it hiking the GST?

The Liberal Party talked about reducing the corporate tax rate of 18.5%. After the speech by the Leader of the Liberal Party, the Conservatives did reduce it. It announced the corporate tax rate would go from 18.5% to 15%. I cannot tell the difference between the two parties because they say to bring it down further.

Where would the money come from and what is in this mini-budget? Is the corporate tax rate 18.5% or is it 15%?

Budget and Economic Statement Implementation Act, 2007Government Orders

12:50 p.m.


Mark Holland Liberal Ajax—Pickering, ON

Mr. Speaker, I am not in a place today to launch the Liberal Party platform for the next election and to speak about the specifics of exactly how we will implement all the things that we are talking about. I thank the hon. member for her enthusiasm to see the Liberal platform. I just ask her to hold on a little bit. Depending on how things roll out here, she will get ample opportunity to see just how we are going to implement this ambition for Canada.

Budget and Economic Statement Implementation Act, 2007Government Orders

12:50 p.m.


Penny Priddy NDP Surrey North, BC

Mr. Speaker, I actually want to agree although I have a question. For single moms, particularly working single moms, like the one who I saw at our food bank who was there with her little girl, who was about seven, and she tugged on her mother's sleeve and said, “Don't worry mommy, I will try not to eat so much”, this budget makes absolutely no difference.

For the parent who has to pay $1,400 a month for licensed infant care, this budget has made no difference whatsoever. There is no support, there is no education, there is no child care, and it makes no difference for the single mom.

I am wondering, for that single mom who the member describes in his riding and who I see in mine, what does that mean when the Liberal caucus refused to stand up, take a position, and say that it cares about those single mothers who are not able to make ends meet without the food bank, who are not able to get child care? When they see the entire Liberal caucus sitting there, and abstention is really a yes, what is the message that goes to that parent?

Let me tell you, the parents who have talked to me have said that means they will talk about it, but they will not stand up for it.

Budget and Economic Statement Implementation Act, 2007Government Orders

12:50 p.m.


The Acting Speaker Conservative Andrew Scheer

I remind the hon. member for Surrey North to address her questions and comments through the Chair and not directly at members. The hon. member for Ajax—Pickering.

Budget and Economic Statement Implementation Act, 2007Government Orders

12:50 p.m.


Mark Holland Liberal Ajax—Pickering, ON

Mr. Speaker, we will do precisely that. The difference is we are not going to do it when the NDP tells us to do it.

We have a responsibility as the official opposition to choose when we are going to go into an election, to choose what issues we are going to go on, how we are going to fight that, and what is the best way to ensure that Canadians have all of the choices presented for them so that they can choose the best direction for this country.

When the time is right, we will stand up, and we will fight against what is a regressive, backward budget that puts the priorities of Canadians way down and instead focuses on gimmicks and tricks.

Budget and Economic Statement Implementation Act, 2007Government Orders

12:50 p.m.


Rick Norlock Conservative Northumberland—Quinte West, ON

Mr. Speaker, just a short period ago the member said that $10 billion could go a long way to helping people meet their family needs. That is precisely why the government reduced the GST and intends to reduce the GST further. It is because it is $10 billion that stays in the pockets of Canadians and specifically those Canadians who do not pay any taxes.

The member might be shocked to learn that I in my previous occupation happened to do the shopping for my family for about 30 years. Therefore, I am very much aware of what is taxed and what is not.

What is taxed are a lot of the necessities, like keeping our clothes clean, like keeping ourselves clean, and like those personal products that everyone buys. That is $10 billion that are in the pockets of Canadians and allows them to meet additional needs of their families. Perhaps the member needs to rethink that amount.

Budget and Economic Statement Implementation Act, 2007Government Orders

12:55 p.m.


Mark Holland Liberal Ajax—Pickering, ON

Mr. Speaker, if they want to give $10 billion back to Canadians, then they should do it in an intelligent way. They should have targeted at those who need it the most and make a difference for students, those who are in low income situations and those who are in the middle class. Instead of giving 2% off a million dollar yacht or a $100,000 car, luxury items that most individuals could never dream of affording, they should focus that money on individuals who really need it.

Budget and Economic Statement Implementation Act, 2007Government Orders

12:55 p.m.


Jean Crowder NDP Nanaimo—Cowichan, BC

Mr. Speaker, I am pleased to speak today to Bill C-28. In the view of New Democrats, this was an unprecedented opportunity to invest in Canadians. Instead we see a Conservative government that continues to take Canada in the wrong direction.

It was not a balanced approach. It could have provided targeted tax relief for those who needed it most, instead of providing billions of dollars in tax relief to the friends of the Conservatives, the oil and gas companies. It was an opportunity to close that ever increasing prosperity gap. However, as we have seen in many of the programs and legislation that comes from the Conservative government, it has not invested in working class and middle class families, in ordinary Canadians.

With regard to the wrong direction, the Canadian Centre for Policy Alternatives, in a 2007 paper called “Why Inequality Matters: The Canadian Case”, talks about that growing prosperity gap. It see income distribution deteriorating.

The rich and poor gap is at a 30 year high, in after tax terms, the fastest growth in the past 10 years under economic conditions that traditionally lead to it falling. There is a far greater polarization of incomes. The bottom half has been shut out of economic gains of the last 30 years, despite working more hours. As a cohort, these families raising children are better educated and working more than those 30 years ago. On average, those families are working 200 hours more a year. That truly is a prosperity gap.

In the economic statement, the government talks about delivering broad based tax relief for individuals, families and businesses. Let us do a bit of a reality check around that.

The government's own document says that families earning between $15,000 and $30,000 will pay on average almost $180 less in tax in 2008. My question has always been this. Exactly how many child care spaces, how many child care days, does $180 in tax relief pay for?

Social Planning Cowichan recently issued a report in October. It talks about quality child care. I will read briefly from that because my community is in a crisis around child care. It says:

Quality, affordable child care is crucial to the social and economic welfare of the Cowichan Region. The successful development of our children, especially in the early years, has a long term impact on our region....

Currently, there is a critical lack of licensed child care spaces in the Cowichan Region, with enough spaces to serve only 48 percent of the estimated 4,862 children under the age of 12 who need child care. For the estimated 1,047 aged three and under who need child care, there are only 165 licensed spaces, or 16 percent of the number needed.

This situation continues to worsen due to the current labour shortage and increasing cost of housing which requires that most families need two incomes to afford a home which is resulting in an estimated 70 to 75 percent of mothers entering the workforce.

Three significant barriers to providing quality child care are consistently identified by information gathered from interviews with local informants as well as the websites of many provincial, national and international organizations involved in promoting quality, affordable child care: lack of child care spaces; funding for child care services and programs; staffing, training, recruitment and retention in birth to three year services.

The economic statement would have been an opportunity to take meaningful action around child care. The Conservatives will talk about choice in child care when they talk about the $100 a month, but that $100 a month simply does not create new child care spaces.

The New Democrats have put forward Bill C-303, which calls for meaningful attention to early learning and child care. One would hope, with the kind of support this bill has garnered, that the Conservatives would have seen fit to take the opportunity in the economic statement to invest in the creation of child care spaces and in early learning. Instead, we have seen tax relief of $180 a year for people earning between $15,000 and $30,000 a year. This kind of tax relief will not create child care spaces.

In my province of British Columbia, and I know in other provinces, many industries are facing severe labour shortages. We could have encouraged people to join the labour force by ensuring there would be affordable, quality, regulated child care. This was a missed opportunity to invest in working and middle class families. This was a missed opportunity to close that prosperity gap.

Another element that is of critical importance to Canadians, certainly to those living in my riding of Nanaimo—Cowichan, is housing. On October 22, the United Nations special rapporteur on adequate housing, Miloon Kothari, took a preliminary look at the Canadian housing situation. I will quote from his report because he says it far better than I could. He says:

Everywhere that I visited in Canada, I met people who are homeless and living in adequate and insecure housing conditions. On this mission I heard of hundreds of people who have died, as a direct result of Canada's nation-wide housing crisis. In its most recent periodic review of Canada's compliance with the International Covenant on Economic, Social and Cultural Rights, the United Nations used strong language to label housing and homelessness and inadequate housing as a “national emergency”.

This is an international overview of what is happening in Canada. People are saying that the housing situation is in a crisis.

Mr. Kothari goes on in his report to talk about why there has been a significant erosion of housing policy rights over the past two decades. Not only is the current Conservative government not taking the kind of action that is required in terms of a national housing strategy, but when the Liberals were in government, they directly contributed to the crisis that we are in today.

Mr. Kothari says:

—Even more dramatic housing cuts in the coming years as the federal government “steps out” of its financial commitments under the 1973 to 1993 national housing programme.

--Reductions in income support programs at the federal level, and in every province, that have left many Canadians with little money to pay for ever-increasing housing costs, and

--A shift in housing policy to provide support for homeownership, mainly through the tax system, while eroding support for social and rental housing.

It is clearly a failure of leadership, both under the Conservatives and under the previous Liberal government.

The Cowichan Valley fall 2006 report talks about the crisis that has emerged in Nanaimo—Cowichan. It talks about the fact that no new rental units have been built in the Cowichan region during the last 20 years, therefore the supply is scarce. Vacancy rates in private rental buildings in the city of Duncan and in North Cowichan have declined in recent years from 8.4% in October 2002 to 1.6% in October 2005.

Under rents and incomes in the same report, in 2001 more than 6% of households in the CVRD had incomes of less than $10,000, and an additional 14% had incomes of between $10,000 and $19,999 and a further additional 12.9% had incomes between $20,000 and $29,999, in total, 35% of the households. Clearly, the ability to afford rent is a significant issue for many people in the region. The proportion of households spending more than 30% of their gross income on rent was higher in the CVRD than for B.C. as a whole. Thirty-five per cent of the households in my riding are making under $30,000. The $180 tax relief is in the pockets of 35% of the households in my riding. How will $180 help someone rent an apartment when rents are rising because of the severe shortage in supply?

A national housing strategy looked at a continuum housing, from homelessness, transitional shelters, accommodation for singles and families, up to aging in place. We need a continuum. We need that national strategy. That was in the Cowichan Valley. It is no different in the city of Nanaimo.

Another report talked about the market rental and row housing vacancy. It was 3.4% in 2002 and down to 1.4% in 2005. They are turning away people from emergency shelters. Transition houses that responded cited the increasing cost of housing, both owned and rental. They also cited the increasing incidence of homelessness and raised concerns about the declining stock of rental and market housing.

A number of suggestions have been made on actions that can be taken to deal with it. It is no surprise that people in Nanaimo are calling for a range of housing types catering to different ages, family types and income levels, including smaller unit sizes to low income single adults and seniors.

Back in March, a panel, sponsored by the Nanaimo Canadian Federation of University Women, talked about the fact that there were a significant number of women in Nanaimo living on the streets. The Haven Society's Willow WAI for Women have said that 99% of homeless women generally have addiction or mental health issues, are undereducated, lack employment life skills and many commit crimes to support an addiction. They become homeless because of estrangement from their families due to violence or drug use, or marital breakdown or incarceration, or they have been evicted and lack affordable housing.

Affordable and adequate safe housing is only one part of dealing with homelessness in a community. We certainly see that very visible face of homelessness in many of our communities. The economic statement and the throne speech were an opportunity to take leadership both in Canada and internationally in a meaningful national housing strategy. It was a failure in dealing with some of these very serious issues confronting our communities.

Again, the economic statement talked about the fact that people who worked on our shop floors and assemble lines or in our forests and mills were struggling, that the manufacturing and forestry sectors were bearing the brunt of a strong Canadian dollar, that they were facing increased competition from emerging economies and that this is a difficult situation.

I argue the fact that a difficult situation is probably an understatement. In many of communities in Nanaimo—Cowichan our forestry sector reeling. Another one of the pulp and paper mills in my riding has applied for bankruptcy protection, and those are important jobs in our community. Forestry is not a sunset industry. Forestry is a vibrant and vital industry in the province of British Columbia and in other provinces across the country. We are not seeing a strategic investment and national leadership in forestry.

In my province and in my riding, raw log exports continue to be a source of aggravation. Our raw resources are being shipped elsewhere for processing as our sawmills close down. The closure of those sawmills is having repercussions for the pulp and paper mills. When the Bloc put forward a motion calling for some attention to manufacturing and forestry, the Conservatives voted against it and the Liberals abstained, instead of taking a strong stand for our forestry communities across the country.

Our critic for industry, the member for Parkdale—High Park, has compiled some good statistics. She talks about the fact that we have seen significant job loss. She said that there were job losses resulting in 8% of wood products. In British Columbia the manufacturing and forestry sector has lost 13,700 jobs. That is partly to do with the softwood lumber agreement. It did not take into consideration the downturn in the housing sector in the United States. This means the price per board foot has now dropped below that threshold, so we are now paying a 15% tax.

The economic statement acknowledged that forestry was struggling, that these were difficult times, yet there was no commitment in either the throne speech or the economic statement to develop a national strategy to ensure that our forestry sector would remain as a vibrant and vital part of our economy.

When we are talking about closing the prosperity gap, let us just turn for one moment to first nations.

First nations, Inuit and Métis across this country continue to be the poorest of the poor. One of the pillars that we know will contribute to raising people out of poverty is education. The throne speech did mention education. The minister said that there needed to be investment in skills training and development with regard to industries emerging in the north. I would argue that there needs to be a far broader plan for education in this country.

We are seeing discrepancies throughout the first nations education system from coast to coast to coast. In an article today in the Winnipeg Free Press, there is an editorial on education on reserves. The numbers here highlight the difference. On one hand, we hear the Minister of Indian Affairs and Northern Development talking about the importance of standards and looking at provincial standards, curriculum and those kinds of things, and yet, on the other hand, he is telling first nations schools on reserve that he wants them to meet the standards but that he does not actually want to give them the same amount of money.

We have provincial standards on a per capita basis that talk about how much provincial governments say is necessary to provide an adequate education in the K to 12 system, but then we have the federal government telling first nations on reserve schools that it wants to deliver the same standards of education but that it does not want to give the money needed to do it.

Let us talk about some of these numbers. In this editorial it states:

The base funding--per student grants--from Indian and Northern Affairs Canada for on-reserve schools across Canada is lower than provincial grants, and that extends to grants that cover special education. As an example, in Manitoba the Opaskwayak Education Authority receives total federal funding that works out to $6,400 per student.

Contrast that to the Wapanohk Community School in Thompson--whose student body is almost entirely aboriginal--which is under a public school board that spends an average $9,384 per student. On average, Manitoba school boards spent $8,900 per pupil. Across the western provinces, the average was $8,386, according to a report compiled by the Society for the Advancement of Excellence in Education.

There is roughly a $3,000 difference between what the province of Manitoba is spending and what is funded for, in this case, one on reserve school. This is not atypical. This is happening in provinces across this country.

In 2004, the Auditor General said that the department did not have a good handle on the funds that were required for education and did know whether or not it was actually getting results for the money it was spending.

Right now the first nations educational renewal is up in 2008 and there is something called a band operating funding formula. Here we are, at the end of November, and there still has not been agreement on this band operating funding formula. We know there are huge discrepancies. At a meeting with the department and the minister this morning, they said that it was difficult and that there were different things happening in different provinces.

We talk about a prosperity gap. First nations are certainly in the middle of that prosperity gap. One in four first nations children live in poverty, which means their families live in poverty. We know that one of the elements to raising people out of poverty is adequate education so why are we not investing in education?

The same thing is happening with the building of schools. We have schools in Manitoba that have been on wait lists forever. We have schools in Saskatchewan where, from the department's own records, there is a serious problem with the funding. We heard from the department today that it is juggling funding around when there is an emergency.

If we truly mean that we are committed to education, we need to put the money into the education system for first nations, Métis and Inuit so they have access to an adequate education.

The economic update and the throne speech are missed opportunities to close that prosperity gap and it clearly takes Canada in the wrong direction. Therefore, we will not be supporting that.

Budget and Economic Statement Implementation Act, 2007Government Orders

1:15 p.m.


Larry Miller Conservative Bruce—Grey—Owen Sound, ON

Mr. Speaker, while I obviously disagree with some of the comments made by my NDP colleague to my right, I do appreciate her passion in wanting to help Canadians, and that is to be commended.

I want to go back to something that was said earlier today. I am not sure whether my colleague was in the House but I know some of her other colleagues were. The member for Halton stood and talked about the things he wanted to see in the bill.

My question for the member goes back to the credibility of the member for Halton on commenting on this. We must remember that the member for Halton was a so-called professional financial advisor who advised all the people he worked for and his clients to put all their money into Nortel. We know the record on that and how good that was. He was also a member who deliberately wrote statements in his blog that were not true and he lied about other members of Parliament.

From that standpoint, does the member think that member has the right to have that kind of opinion on a budget like this that we would all like to see pass?

Budget and Economic Statement Implementation Act, 2007Government Orders

1:15 p.m.


Jean Crowder NDP Nanaimo—Cowichan, BC

Mr. Speaker, I am not prepared to comment on the performance of another member of the House. The most logical people to comment on someone's performance and veracity would be his or her constituents.

What is important is that we take the opportunity that is before the House to invest in working and middle class families, to ensure that working and middle class families have adequate, affordable housing and access to education. We know post-secondary student loan debt is through the roof. We should ensure that working and middle class families have access to quality, good paying jobs. This is a missed opportunity.

The member talked about members of the House supporting this legislation. I can assure him that the New Democrats do not support this legislation. We see this as taking Canada in the wrong direction. The Conservatives chose to put this forward and the Liberals chose to abstain.

I am proud to stand and talk about these issues that are very important to working and middle class families. I would encourage members of the House to get together and talk about how we can invest in our communities in a meaningful way.

Budget and Economic Statement Implementation Act, 2007Government Orders

1:15 p.m.


Shawn Murphy Liberal Charlottetown, PE

Mr. Speaker, I have a question for the member across. I concur with what the member said in regard to the government's direction. The government certainly seems to be going in the wrong direction.

A number of groups have been on the Hill over the last couple of weeks and I am sure the member opposite has met with them. There have been mayors of the municipalities, cities, towns and communities; the students; people from aboriginal communities; and farmers from certain sectors that are really experiencing difficulties. All we are hearing is that there are some tax cuts.

The Prime Minister has introduced legislation dealing with restrictions to the federal spending power which was used to develop medicare, the old age security, the Canada pension plan, et cetera. Again, he answers all the groups that have come here, especially the students.The script from the Prime Minister's Office talks about tax cuts.

Does the member agree with this concept of limiting and restricting the federal spending power, which ties the hands of the federal government, a federal government that is supposed to speak for all Canadians from coast to coast with a pan-Canadian vision?

Budget and Economic Statement Implementation Act, 2007Government Orders

1:20 p.m.


Jean Crowder NDP Nanaimo—Cowichan, BC

Mr. Speaker, over the last number of weeks we have been meeting with groups that are being impacted by the throne speech and the economic update. One of the groups that the member talked about was the municipalities. I was a former municipal councillor and what we know is that trouble rolls downhill.

We are seeing, whatever it is called, the offloading, downloading or softloading to the municipalities. In my municipality we are looking at transportation as a critical element. For example, we have a rail line that runs through my community but there are not enough dollars to help smaller communities. People keep talking about infrastructure and investment in transportation. Our rural communities, which are not part of the big cities, simply do not have enough dollars to invest in the kind of transportation that is needed.

The rail line is a good example. It crosses different regional boundaries and provincial boundaries. When we are talking about roles and responsibilities, we need to listen to people like the Canadian Federation of Municipalities to ensure the people on the ground are included in decision making and in the allocation of funds in a meaningful kind of way.

The Canadian Federation of Students and the Canadian Federation of Municipalities are really important groups that should have some inclusion in the process when we are making decisions on how money is allocated.