Mr. Speaker, it is always a pleasure to be able to get up and remind Canadians of the economic performance of the Conservative government, and I am pleased to have a few minutes this morning to do just that.
I hope that Canadians and our media, and everybody who is watching the proceedings in the House today will not be too amazingly distracted by what happens in the ethics committee and Mr. Schreiber's testimony. There are a lot of things that affect individual Canadians in their everyday lives and we tend to lose sight of them sometimes around this place as we go for the headline grabbing sensational.
I am pleased to talk a bit about the economic reality for a lot of Canadian families. There are some issues that I know are very much on the minds of Canadians.
One of them of course is our high Canadian dollar. The Canadian dollar has gained about 28% in value in the course of a single year. That is very substantial. The shock to a lot of Canadian industries has been breathtaking because the acceleration in the value of the dollar has been far faster than those industries have been able to cope.
Why has the dollar gone up so quickly? There are a number of reasons. Obviously our dollar is considered to be a petro currency and because of the rise in oil prices that is one reason. Also, the American dollar has fallen in value against almost every currency in the world and Canada's is no exception. Our dollar has gone up relative to the American dollar going down.
We cannot do a lot about those things, but there are some factors here that are Canadian. The root and cause is found in the actions of the Conservative government. For example, the government has been spending more money than any previous Canadian government. In fact, the rate of increase in government spending is now about twice the rate of inflation.
Inflationary spending by government tends to have an impact on inflation, the CPI, and that tends to have an impact on the currency. It also affects fiscal monetary policy. We end up with a lot of money coming to Canada from around the world for a number of reasons and that has only accelerated our problem. Canada has a high dollar, a high interest rate, and high inflationary policy, and this is hurting Canadians.
What damage is being done? Retailers, the tourist industry, manufacturers, shippers, the resource sector, and automakers are very much on the front line of what is happening today. Plants are closing . Factories are going idle. Equipment has been unbolted from its cement pads in factories, crated up, and sent to China.
I was in an aerospace manufacturing facility in my riding the other day where hundreds of high qualified, high skilled jobs are in peril right now. People are contemplating selling much of the equipment in that plant and shipping it to China. I found out during my tour that there are more of these high quality, very expensive metallic fabricating machines sitting in crates in China ready to be installed in factories than there are existing now in all of Canada. That is a very disturbing situation.
In the past year, 350,000 Canadian workers in the manufacturing sector have lost their jobs. The finance committee has been spending a bit of time looking into this issue. We found out from experts at committee, a lot of them economists from unions and banks and industry, that this is just as they called it, the tip of the iceberg. They are expecting at least another 300,000 jobs to be lost in the next year.
If the Canadian dollar remains at parity or above the American dollar in value over the next two years, probably an equivalent number of jobs will be lost each year. That means two years from now the accumulated loss of manufacturing jobs could be close to one million. That is breathtaking.
This is an issue that goes to the fundamental economic management of the government because it is not managing this problem. The finance minister runs around the country and talks about the strong Canadian dollar. It is not strong. It is toxic. A lot of Canadians are seeing their jobs go as a result.
One example is in the Minister of Finance's own riding. He represents Whitby—Oshawa. One of the premier yacht building companies in Canada is in Whitby. It is called PDQ Yachts. It went bankrupt last month. The reason it went bankrupt is that it could not cope with a 28% rise in the value of the Canadian currency. Why? Because almost all of its sales are to the United States.
What company can take a 28% drop in the price of its product being shipped to its clients? Almost no company can do that. PDQ Yachts, in the Minister of Finance's own riding, went bankrupt. On December 13, the equipment in that plant is going to be sold at public auction. It is not good when we see companies deserting. It is a small company. It has only 100 employees. However, when we go a hundred by a hundred by a hundred in riding by riding by riding and in community after community in this country, suddenly we have a jobs crisis.
What are those workers supposed to do? They are highly skilled. How about their families? How about their mortgages? People who live in the Minister of Finance's riding, where houses are not cheap, spend $300,000 to $500,000 buying a home and have to finance it. They have mortgages to pay and their jobs are now gone. This goes to the very heart of the economic mismanagement by the government.
Second, after the high Canadian dollar and the way that has been mismanaged, we have an income tax situation that is very troublesome indeed. The government, in its first budget, raised income taxes. The basic income tax rate was raised in the first budget and then it was raised in the second budget. This is the same government that campaigned on taxes. I admit it, I was a Conservative candidate in the last election, and I did not go from door to door promising people that their income taxes would be increased. I was rather shocked when it happened, but it did nonetheless.
Canadians had two income tax increases. In its last economic statement in October, the government finally relented and brought taxes back down to where they were two years ago, but not only two years ago, $2 billion later, $2 billion from Canadian families in overtaxation, which we finally see ending. Thus, income tax is the second problem.
Third is family financial stress. Our families are under a lot of stress. In this place, we are insulated. We are surrounded by opulence and gold leaf on the ceiling and stained glass windows. We make $150,000 as members of Parliament. Ministers make another $70,000 more. We have lovely offices. We live in a bubble here in Ottawa.
We do not see the financial stress that is going on across our country, but families are under financial stress. They have seen higher income taxes. They have seen higher mortgage rates because the government has inflationary spending that has forced the Bank of Canada to raise interest rates over the past few months. They are seeing higher energy costs. It costs $1.04 for a litre of regular gasoline. Families have a hard time coping with all of that and now there are reduced employment prospects because of the devastation that has been wrought in the manufacturing sector by the Canadian dollar.
We have a high dollar, loss of jobs, higher taxes and family financial stress. That is four strikes against the government, but it does not end there. There is another thing the government has done that two million Canadians will never, ever forget. They are the two million Canadians who were income trust investors.
I would like to read for a moment from testimony given before the House of Commons finance committee this week. It was delivered by Margaret Lefebvre. She is executive director of the Canadian Association of Income Funds.
Here is what Margaret had to say to our committee: “This committee should be aware that the damaging consequences of the government's actions continue. Since October 31, 2006 there have been more than 42 transactions that involve the selling, merging or acquisition of income trusts with an enterprise value in excess of $31 billion. The majority of these transactions by dollar value involve foreign buyers of Canadian assets. Most have gone into the hands of private equity and pension funds and virtually all of these entities pay little or no tax”.
This is probably the greatest failing and I think the greatest symbol of the government's economic mismanagement: campaign on one thing and deliver another. Campaign and tell Canadians that it will never tax income trusts and turn around 10 months later and impose a 31% tax. The consequences of that, although unintended in large part, have been devastating, and two million investors will never forget.
I could go on for some time, but I see that my time is up. I would simply end by saying it is my conviction that our Minister of Finance is out of his depth. He has done many things on his watch that have hurt this economy. They have wounded it. More importantly, they have hurt Canadian families. For that, so many millions of them will not forget, and when they come to cast their ballots, and soon, I would say, the consequences will be obvious and painful for our friends across the way.