House of Commons Hansard #35 of the 39th Parliament, 2nd Session. (The original version is on Parliament's site.) The word of the day was chair.

Topics

Aboriginal Affairs and Northern DevelopmentCommittees of the HouseRoutine Proceedings

10:40 a.m.

Some hon. members

Nay.

Aboriginal Affairs and Northern DevelopmentCommittees of the HouseRoutine Proceedings

10:40 a.m.

NDP

The Deputy Speaker NDP Bill Blaikie

In my opinion the yeas have it.

And five or more members having risen.

Call in the members.

(The House divided on the motion, which was agreed to on the following division:)

Vote #25

Committees of the HouseRoutine Proceedings

11:20 a.m.

NDP

The Deputy Speaker NDP Bill Blaikie

I declare the motion carried.

The House will now resume with the remaining business under routine proceedings.

Student LoansPetitionsRoutine Proceedings

11:25 a.m.

NDP

Bill Siksay NDP Burnaby—Douglas, BC

Mr. Speaker, I am pleased to table two petitions.

The first is signed by over 100 folks from the Lower Mainland of B.C., including people from my constituency of Burnaby—Douglas, students at Simon Fraser University and members of the congregation of St. John's United Church in Vancouver.

They call on the Minister of Human Resources and Social Development to change the student loan system to create a needs based grant system, reduce the student loan interest rate, create a student loan ombudsperson, improve interest relief provisions, establish standards of practice for student loan collection agencies, reduce the ban on bankruptcy protection for student loans and consider the recommendations of the Coalition for Student Loan Fairness and other student groups.

Automated Teller Machine FeesPetitionsRoutine Proceedings

11:25 a.m.

NDP

Bill Siksay NDP Burnaby—Douglas, BC

Mr. Speaker, the second petition is signed by many residents of Burnaby. They point out that Canada's banks are making record profits in the billions of dollars, while at the same time Canadians are being charged for using automated teller machines when they deposit, withdraw or transfer their own money.

They call on Parliament to amend the Bank Act to eliminate fees associated with the use of automated teller machines.

Violent CrimePetitionsRoutine Proceedings

11:25 a.m.

Liberal

Mario Silva Liberal Davenport, ON

Mr. Speaker, I have two petitions I would like to table today in the House.

The first petition asks Parliament to implement a three-pronged strategy of intervention, prevention and accountability to fight violence in our communities.

Parliament must intervene by funding community and social programs that will prevent children from pursuing a life of violence on the streets. Parliament must prevent violence by working with provincial and municipal partners for stricter gun control policies. Finally, Parliament must hold accountable offenders who use firearms and prosecute them to the full extent of the law.

Manufacturing SectorPetitionsRoutine Proceedings

11:25 a.m.

Liberal

Mario Silva Liberal Davenport, ON

Mr. Speaker, the second petition is from people across the province of Ontario who call on Parliament to develop and implement a plan of action to protect Canadian manufacturing jobs in consultation with stakeholders in labour and business communities.

Manufacturing jobs are important to Canada's national economy and Canada is losing thousands of manufacturing jobs every year.

Transit OperatorsPetitionsRoutine Proceedings

11:25 a.m.

NDP

Peter Julian NDP Burnaby—New Westminster, BC

Mr. Speaker, I am pleased to present a petition signed by hundreds of Canadians from coast to coast to coast. The petitioners include folks who are family members or neighbours of bus drivers and transit workers and also bus operators and transit workers themselves.

Given the number of assaults that we are seeing on bus drivers and transit operators across the country, it is an epidemic, the petitioners are asking the House of Commons to support the legislative initiative that comes from me extending to bus operators and transit operators the same protections under the Criminal Code that are afforded to police officers who are assaulted while performing their duties. This would establish stiffer penalties for their assailants.

Bus drivers, transit operators, their family members and neighbours are calling on government and the House of Commons to take action to protect bus drivers and transit operators.

Questions on the Order PaperRoutine Proceedings

11:25 a.m.

Macleod Alberta

Conservative

Ted Menzies ConservativeParliamentary Secretary to the Minister of Finance

Mr. Speaker, I ask that all questions be allowed to stand.

Questions on the Order PaperRoutine Proceedings

11:25 a.m.

NDP

The Deputy Speaker NDP Bill Blaikie

Is that agreed?

Questions on the Order PaperRoutine Proceedings

11:25 a.m.

Some hon. members

Agreed.

Budget and Economic Statement Implementation Act, 2007Government Orders

11:30 a.m.

Conservative

Budget and Economic Statement Implementation Act, 2007Government Orders

11:30 a.m.

Macleod Alberta

Conservative

Ted Menzies ConservativeParliamentary Secretary to the Minister of Finance

Mr. Speaker, I am very pleased to finally be able to present Bill C-28 today at third reading.

As we conclude what has already been, and even more so this morning, an exhaustive debate on this piece of legislation, I would like to thank most hon. colleagues in this House for supporting the motion to get us back to a serious debate on the implementation of Bill C-28. It is important that we get this done as soon as possible.

The bill before the House today proposes to implement the tax measures announced in this fall's economic statement, along with the outstanding budget 2007 measures not yet legislated.

Before continuing, I would first like to comment on the remarkable state of the Canadian economy. While cognizant of certain sector specific challenges, our economy has performed incredibly well over the first half of 2007, bolstering revenue growth and the overall fiscal position of the government. More important, it has yielded impressive employment growth. According to Statistics Canada's recently released November employment numbers, Canada created 42,600 new jobs last month alone. Contrary to declarations otherwise, these were chiefly good quality, well paying jobs.

As TD Securities economist Jacqui Douglas noted on the November job data:

The bulk of the employment growth came from full-time, as opposed to part-time...and even more importantly, the private paid sector actually added a significant number of jobs.

Furthermore, year to date, an astounding 388,000 jobs have been created in Canada.

Plainly speaking, our economic and fiscal positions are solid and ready to withstand challenges on the horizon. In the words of National Bank of Canada economist Stéfane Marion, with “the employment to population ratio at a new all-time high and job creation more evenly split between regions, the Canadian domestic economy remains in great shape to absorb the incoming slowdown in the United States”.

That strong position has allowed our Conservative government to proactively tackle two important priorities for Canadians: lowering taxes and reducing debt. Indeed, our planned debt reduction is $10 billion for 2007-08 and $3 billion in each year after that. This will bring a total debt reduction since 2005-06 to over $37 billion. That is lowering the federal debt burden that we are passing on to future generations by nearly an astounding $1,600 for every Canadian.

What is more, we have followed through on our promise to provide a tax back guarantee to ensure that interest savings resulting from debt reduction will be returned to Canadians through lower personal income taxes. As a result of the additional debt payment, the total value of personal income tax relief provided under the tax back guarantee will rise to $2.5 billion in 2012-13.

Canada's strong fiscal position has also allowed us to reduce Canada's overall tax burden for individuals and businesses by $190 billion over this and the next five fiscal years, and in doing so, bringing taxes for Canadians to their lowest level in 50 years, a remarkable achievement by this Conservative government.

I would now like to outline the initiatives in the bill associated with the fall's economic statement and follow by outlining key measures in Bill C-28 related to budget 2007.

The recent economic statement introduced broad based tax cuts that delighted most Canadians. John Williamson of the Canadian Taxpayers Federation was overwhelmed. He remarked the economic statement “exceeded our expectations…these are measures that are going to benefit every single tax payer in the country”.

Even typically reserved economists gushed with praise. For example, Patricia Croft, an economist with investment firm Philips, Hager & North, was moved to say the following:

It’s absolutely stunning the scope of the tax cuts that were put into place…there’s something for everyone in there…it’s…Christmas, Hanukah and News Years all rolled into one. Basically anything that had a pulse today got a tax cut.

What elicited such a positive, glowing response? I will start with the one percentage point GST reduction. Not only has this fulfilled our campaign promise to lower the GST to 5%, but it will save Canadian taxpayers approximately $12 billion next year alone. This is a significant tax reduction that directly affects Canadians whenever they purchase items subject to the GST.

Here are some examples of the savings that Canadians can expect. A couple that purchases a new $300,000 home will save almost $4,000 in GST. A family that does $10,000 of home renovations will save $200 in GST. A family that spends $30,000 on a new mini-van will save $600 in GST. No wonder so many diverse organizations have embraced this announcement.

Retail BC, for instance, remarked:

The GST cut is welcome news to consumers as well as Canadian retailers who are working to make their prices more competitive with the US.

Tourism Victoria's CEO, Lorne Whyte, liked the GST cut. He said it would “be good for the domestic market for tourism in Canada”.

Even former Liberal deputy prime minister, Sheila Copps, heralded our GST cut, noting:

Most Canadians don't like the GST and want governments to reduce it. Political parties who ignore the consensus do so at their peril. It would be suicidal for any opposition party to bring down the government on the GST.

To ensure continued assistance for low to modest income Canadians, the GST credit will be maintained at its current level. This translates into more than $1 billion in benefits annually for these individuals.

The economic statement also announced additional tax relief for individuals and families by increasing the amount Canadians could earn before they start to pay income tax, up to $9,600. What is more, this measure is retroactive to January 1. Also, a further increase to $10,100 is slated for January 1, 2009. These measures alone will provide $2.5 billion in tax relief over this and the next year.

Furthermore, the economic statement proposes to reduce the lowest personal income tax rate to 15%, retroactive again to January 1, that is this tax year. As a result of the personal income tax cut and the GST reductions announced in the economic statement, a family that earns between $15,000 and $30,000 will save $180 on average in 2008. The average savings for a family that earns between $80,000 and $100,000 will be $600. It is always good news when money is put back into the pockets of taxpayers where it belongs.

Additionally, the economic statement brought forward measures to help Canadian business prosper. First, Bill C-28 proposes to reduce the general corporate income tax rate to 15% by 2012. This will start with a 1% per cent reduction in 2008, beyond the already scheduled reductions previously introduced. In addition, the bill proposes to reduce the small business income tax to 11% in 2008, one year earlier than previously scheduled.

With these tax reductions, we have put business taxes on a five year downward track to help stimulate economic growth, create even more jobs and provide business predictability for future planning. These are proactive and strong measures to allow prosperity to grow in Canada. These are the right measures for Canada at the right time.

Indeed, the Canadian Chamber of Commerce lauded them as “exactly in line with what we had proposed on behalf of our members at the Canadian Chamber”.

The Canadian Federation of Independent Business lauded them as well, saying, “really encouraging because it sends a strong signal to business”.

Royal Bank of Canada chief economist Craig Wright declared “positive for growth prospects which should be positive going forward for the Canadian economy ”.

Finn Poschmann of C.D. Howe Institute simply noted them as “terrific to see”.

With these reductions, we will have established the lowest overall tax rate on new business investment in the G-7 by 2011 and the lowest corporate income tax rate among the major industrialized economies by 2012, another remarkable achievement by this Conservative government.

As I alluded to at the outset, Bill C-28 proposes to implement the numerous outstanding tax measures from budget 2007 not included in the first budget bill passed in Parliament in late spring.

While time precludes me from addressing every one of these measures, I will note Bill C-28 includes, among others, provisions to: eliminate income tax on elementary and secondary school scholarships; increase the lifetime capital gains exemption to $750,000 for small business owners, farmers and fishers; increase the meal expenses tax deductible for long-haul truck drivers; extend the mineral exploration tax credit; reduce the paperwork burden of small business by easing tax remittance and filing requirements; encourage businesses to create new child care spaces through an investment tax credit; waive income tax payable by non-resident athletes at the upcoming Vancouver 2012 games; and introduce the working income tax benefit and the registered disability savings plan.

It is those last two items that I will further highlight for Canadians. These are two progressive, compassionate initiatives that clearly illustrate how the Conservative government is assisting the most vulnerable Canadians while also prudently managing the economy.

To begin, let us discuss the new working income tax benefit. This initiative has been heralded by the Caledon Institute of Social Policy as a “welcome addition to Canadian social policy…fill(ing) a long-recognized gap in Canada’s income security system”.

The United Way of Greater Toronto report has celebrated it as well as a “positive changes that will help to improve the situations of low-income families”.

Why such accolades? It is because of the important contribution this initiative will make to help low income Canadians over the so-called welfare wall. The welfare wall refers to the fact that for too many low income Canadians, taking a job can mean being financially penalized.

For example, a typical single parent who takes a low income job can lose a large portion of each dollar earned to taxes and reduce income support. In addition, individuals who receive social assistance benefits could also lose in-kind benefits such as subsidized housing and prescription drugs.

The working income tax benefit will provide assistance up to $500 for individuals and $1,000 for families. This will reward and strengthen incentives to work for an estimated 1.2 million low income Canadians and give them a leg up to get over that welfare wall.

To continue, let us discuss the registered disability savings plan. Our Conservative government recognizes an important consideration for parents and grandparents of a child with a severe disability is how to best ensure that child's financial security when they are no longer able to provide support.

In 2006 the Minister of Finance appointed the expert panel to examine this issue and provide recommendations. The proposed measures in Bill C-28 act on the panel's recommendations by introducing a new registered disability savings plan. Based generally on the existing registered education savings plan design, the plan would help parents and others save toward the long term financial security of persons with severe disabilities.

I hope all members understand the significance of such efforts to assist disabled Canadians. I hope all members would put aside the typical partisan posturing to at least indicate support for this measure.

While to some members this might seem to be just another government program, it is much more. To those who truly understand the impact that this will have, this measure is of profound importance.

To quote a Vancouver Province editorial from earlier this year, “the great good it will do is beyond calculation in mere dollars and cents”.

Indeed, Al Etmanski of the Planned Lifetime Advocacy Network reflected in a radio interview that this measures announcement “actually bringing tears to my eyes...I think it was very emotional for us, not just personally, but I think we understood what this meant to people and families”.

Bill C-28 is a large and broad piece of legislation covering an assortment of issues and addressing numerous challenges, but its overarching theme is the promotion of a better, more prosperous Canada, an even better Canada to live in and to leave to our children and our grandchildren. However, to do so, we cannot afford to sit back and rest on our laurels.

To quote the English poet, Percy Bysshe Shelley, “Nothing wilts faster than laurels that have been rested upon”.

It is time to press ahead and build on our achievements. Bill C-28 does just that. That is why I call on the House to quickly pass this proposed legislation.

Budget and Economic Statement Implementation Act, 2007Government Orders

11:45 a.m.

NDP

Wayne Marston NDP Hamilton East—Stoney Creek, ON

Mr. Speaker, it is always good news when we hear that 388,000 jobs have been created, but I am sure the member is aware of the concerns raised by a number of members, day in and day out in the House, particularly the NDP and the Bloc, about the manufacturing sector and the tremendous job loss there.

First, what sectors were involved in the job creation? Second, when can the workers and companies in the manufacturing sector expect to receive from the government a strategy, a plan around protecting their jobs and enhancing that sector to create job growth?

Budget and Economic Statement Implementation Act, 2007Government Orders

11:45 a.m.

Conservative

Ted Menzies Conservative Macleod, AB

Mr. Speaker, I think the government has been very frank with its dealings with all industries. We do not want to pick winners and losers. We are putting in tax measures and tax reductions that provide opportunities for all industries from coast to coast to coast.

In fact, we are recognizing the north. Finally, we are realizing the disadvantaged region in the north that has not had a chance to catch up. We are the first government in history that has recognized the potential in that region and that is why through our Indian and northern affairs minister and his parliamentary secretary we are doing so much to promote that region.

I find it interesting that my hon. colleague from the NDP would ask this question because it was his party, I believe, that propped up the former Liberal government in its last budget. I would like to quote something that the Canadian Manufacturers & Exporters said about the Liberal Party's last budget that was supported by the NDP, “This is a clear example of opportunity lost”.

That happened in the Liberal budget, and did I mention that it was supported by the NDP? I think I did. It went on to say, “No action in this budget will preserve Canada's industrial base. Manufacturers feel their pleas are not being taken seriously”.

It is amazing to me that the hon. member would stand in the House and question the Conservative government on what we have done for industries when the Liberal-NDP budget of years gone by did nothing and was recognized by the industries to have done nothing to help them. Perhaps if they had stepped forward at that time those industries would be in a better position to be able to compete.

The accelerated capital cost allowance that the current finance minister put in place is $1.3 billion to help industries.

Budget and Economic Statement Implementation Act, 2007Government Orders

11:50 a.m.

Independent

Louise Thibault Independent Rimouski-Neigette—Témiscouata—Les Basques, QC

Mr. Speaker, like his colleagues on that side of the House so often do, the hon. member was just singing the praises of the Conservative government's vision, which aims primarily to put more money in the pockets of those who already have it. People who have money should not be criticized. They already have money and, of course, the factors that some people would like to improve in terms of tax measures and consumption incentives directly benefit those people.

A very important segment of our society is our seniors. As we know, those who receive only old age security and the guaranteed income supplement are living below what is called the “low income” bracket, a euphemism for “poverty”.

When will some very practical, concrete steps be taken to give these people an income, these people who have nothing else, in order to lift them above the poverty line? When will we see some recognition of the fact that seniors have unfortunately been swindled over the years, because they knew nothing about the guaranteed income supplement or any real retroactivity, although when certain people were on this side of the House, they were in favour of these measures? These are two very simple questions. When is someone really going to help our seniors and allow them to live in dignity?

Budget and Economic Statement Implementation Act, 2007Government Orders

11:50 a.m.

Conservative

Ted Menzies Conservative Macleod, AB

Mr. Speaker, we have heard the hon. member stand in this House and ask questions to support her constituents, so I understand her passion for this issue.

The minister has risen in this House many times in question period and talked about the support that this government has put forward for seniors and low income individuals. There were many comments in my speech about the working income tax benefit for those who are actually able to go back to work and the savings plan for disabled individuals who are unable to work. This would be a first to put this in place. We provided income splitting for seniors, in specific answer to the hon. member's question.

The tax benefits that are put forward in Bill C-28 need to get through this House as quickly as possible because Canadians are expecting them. Canadians have been promised tax savings retroactive to the full tax year 2007.

To hear the kind of comments that we are hearing from the members of the NDP who are blatantly trying to slow this legislation when many of us are wanting to get home to our families for Christmas, we all know the positions in this House that each party is going to take.

We spent hours debating this. We understand the benefits to Canadians. My suggestion to my hon. colleagues is to get on with the job that their constituents expect them to do; that is, to help them. This budget and economic statement implementation bill would do just that.

Budget and Economic Statement Implementation Act, 2007Government Orders

11:55 a.m.

Bloc

Thierry St-Cyr Bloc Jeanne-Le Ber, QC

Mr. Speaker, the economic statement does not include anything to help the manufacturing sector, despite unanimous recommendations issued over a year ago by the Standing Committee on Industry, Science and Technology. Two of those recommendations were particularly interesting. The first was accelerated capital cost allowance, which would make it possible for businesses to improve their productivity. The second was the refundable research and development tax credit to enable businesses to get the funds they need immediately.

The government told us that these measures would cost too much. But these are not tax expenditures for the government because they are actually deferred taxes. Businesses that benefit from accelerated capital cost allowance on investments pay less tax when they amortize the equipment, but once the amortization is done, they will pay more taxes, taxes that would otherwise have been paid sooner. The same applies to refundable research and development tax credits. If businesses try to claim the credit now, when they are not making a profit, that is indeed an expenditure for the government. At any rate, the tax expenditure would be engendered when the business makes a profit and claims these credits.

In this case, the two measures proposed by the Bloc Québécois and supported unanimously by members of the Standing Committee on Industry, Science and Technology would cost the government very little. They would give struggling businesses the resources they need to get through the manufacturing and forestry crises.

Instead, the government decided to put all of its resources into cutting taxes, a move that will only benefit companies that are doing well.

My question for the parliamentary secretary is as follows: Can he tell the House that he understands that these two specific measures are simply deferred taxes and that nobody is asking for special handouts for the manufacturing industry?

Budget and Economic Statement Implementation Act, 2007Government Orders

11:55 a.m.

Conservative

Ted Menzies Conservative Macleod, AB

Mr. Speaker, my colleague across the way and I have shared these discussions at the finance committee. I am absolutely interested to hear the recommendations of those witnesses that come and present before the committee. We of course take those recommendations to heart.

It is interesting to hear some of the varied comments and some comments from one of the Quebec industries said we need to have a 70¢ dollar in order to be able to compete. I think we all know that there should be no business plan that is prefaced on a 70¢ dollar.

However, I need to remind the hon. member that with the accelerated capital cost provision that we have provided to these industries there is investment in many industries that is creating more jobs when we look at the job numbers. I referred to the number of new jobs in my speech earlier.

Certainly, those jobs are changing, as everyone's life and every industry does. Things change. These jobs that we have created by helping industries compete internationally are high paying jobs. They are not low value jobs. These are high value jobs. Therefore, by implementing this legislation, we are looking at Canada becoming the lowest overall tax region in the G-7.

Budget and Economic Statement Implementation Act, 2007Government Orders

December 11th, 2007 / noon

Liberal

Roy Cullen Liberal Etobicoke North, ON

Mr. Speaker, I am pleased to participate in the third reading debate of Bill C-28, an act to implement certain provisions of the budget tabled by the Conservative government in March 2007 and also to implement certain provisions of the economic statement, or mini budget, tabled in October of this year.

The Conservative government has been in office now for close to two years and, apart from bringing in ideas and initiatives that were started under the Liberal government and complaining about the Liberal government in the 13 years that preceded it, it has not really brought in much in terms of a vision or a sense of direction for this great country of Canada. In fact, to coin the Conservatives' own phrase, they are just not getting the job done, and t his bill is a good example of that. It is deficient in a number of respects and I will attempt to highlight some of the concerns in a moment.

I would like first to comment on a couple of the positive elements of Bill C-28, the budget and the mini budget, and that is that the Conservatives, with this legislation, will bring back the personal income tax cuts that our government introduced in 2005, which reduces the basic rate from 15.5% to 15%. While the Conservative members opposite denied that they had actually increased personal income taxes in their budgets, they now recognize that they did increase personal income taxes and now, with Bill C-28, they will be reducing personal income taxes for Canadians.

If a federal government is going to reduce taxes for Canadians, which is laudable from time to time, getting the balance right in terms of reducing taxes and investing in our future is the careful balance that governments need to achieve. I do not think the government, frankly, is achieving that, but if it is going to reduce taxes, cutting personal income taxes is the way to proceed and not reducing the GST.

Economic advisors throughout the country have spoken of the poor economic policy that is associated with reducing consumption taxes like the GST. Of course, the Conservative Party ran on a promise to reduce the GST from 7% to 5%. It reduced it from 7% to 6% and now Bill C-28 further reduces it from 6% to 5%.

The cost of implementing that initiative for each percentage point is approximately $5.5 billion each and every year moving forward. Therefore, the combined reduction in the GST from 7% to 5% is $11 billion annually, in perpetuity, taken away from the fiscal capacity of the federal government. That would be fine if there were no needs facing Canadians that need investment, program focus and funding.

Let me start first with infrastructure. Our national infrastructure is in an enormous deficit and we need to start dealing with that. In fact, some competent bodies have estimated that our national infrastructure deficit is in the order of about $120 billion. Those are the investments needed to upgrade our sewer systems, water systems, bridges, roads, ports and airports, infrastructure that is critical to the safety of Canadians and to Canada's competitive positioning as a nation. The longer we wait, the more costly it becomes.

I, for one, think that, instead of reducing the GST from 6% to 5%, we could leverage that $5.5 billion with the provinces and municipalities and start to deal with our infrastructure deficit. That would be a far wiser decision than the one before us today in Bill C-28.

However, the reality is, and we all know it, Bill C-28 is a confidence bill. If it does not pass we will be into a federal election and, frankly, I do not think Canadians are ready for a federal election and therefore we may have to let the bill proceed.

Although the budget implementation act reflects the budget and the mini budget, the problem is that it lacks a vision or a sense of direction for Canada.

I mentioned infrastructure. What about the Kelowna accord? I do not see that financed in the budget implementation act. The needs of our aboriginal peoples in Canada are enormous. Our former prime minister, the member for LaSalle—Émard, met with aboriginal leaders and other stakeholders during our last mandate and agreed to invest in schools, in hospitals and in the basic infrastructure that is sorely behind the times for our aboriginal peoples. What has the government done? I do not see the $5 billion over a number of years to deal with our aboriginal people reflected in the budget.

I do not see the child care agreements, which were negotiated by our Liberal government, in the budget. Those agreements would have created real child care spaces in Canada so that working families could take advantage of them and work and nurture their children in an affordable and sensible way. I do not see that reflected in the budget.

I do not see anything in the budget implementation act that really deals with Canada's need to be a global competitor, to invest in research and development and to be innovative. The world is a rapidly changing place. Countries like Brazil, India, and China are expanding at an enormous pace and, hopefully, they will do that in a sustainable way. Jobs that used to be in Canada, in the United States or in Europe are now in places like Bangalore in India, in Shanghai in China or in places in Brazil.

Because labour costs are much lower in those jurisdictions, jobs are migrating. The trend is called offshoring or outsourcing and it is a trend that we cannot fight. It is a reality and we have to deal with it. The way to deal with that as a nation, in my judgment, is to start developing our workforce, which is highly trained but we can do better. We can create an even more educated and highly trained workforce and we can start pursuing the value-added opportunities that exist. Commodity type businesses will not operate so much here in Canada. They will be operating in countries like India and China.

I do not see much in the last two budgets that deals with making Canada innovative and research oriented and in terms of building a highly trained and educated workforce. I do not see much of that in Bill C-28 and that is a serious omission.

Members of my caucus met with some individuals at the University of Toronto not too long ago who are running the MaRS project. This is an organization that is an intermediary between the research that goes on in universities and the companies that actually commercialize this research and make it an economic development activity in Canada. It is a tremendous project.

We also met with some professors from the University of Toronto who had come up from the United States because of the research environment that had been created in Canada by our previous Liberal government when it invested in research chairs, in the Canada Foundation for Innovation, in the Canadian Institutes of Health Research and in the overheads that were needed to conduct this federal research.

We created the brain gain, not the brain drain that happened before us, and that took a lot of work. After we had dealt with the fiscal problems of this country, we started to reinvest significantly in research and development. Those professors spoke about the very positive research environment in Canada that attracted them to this country.

Sadly, however, under the Conservative government, investments in these initiatives have slowed down. It is creating an environment where the research environment in Canada is not as strong as it was. We are at risk of losing these scientists back to the United States and to Europe and, in fact, losing some of our own scientists who came back to Canada because of the very positive research environment that we had created.

If this were to happen, it would be a sad day for Canada, after going through all the work that was initiated and launched under the Liberal mandate. Our future is dependent on our ability to innovate, to be research oriented and to be at the leading edge of technologies in the future, which is where the future lies.

Although Canada's economy is still driven, to a large extent, by our natural resource economy, it has shifted significantly. Part of that is into areas like biotechnology, telecommunications, information technologies and the service sector. We need to recognize the importance of our natural resource economy. In fact, there is a lot of high technology embedded right in our natural resource economy. We also need to take advantage of these new and emerging economies and possibilities. The only way to do that is to invest in research, innovation and a highly trained workforce but I do not see much of that reflected in this particular budget.

As I said, we need to deal with infrastructure and build more public transit. The city in which I live and represent in a riding in the city of Toronto, we can see the effects of urban sprawl, of too many cars and of not having enough public transit. The air quality is suffering. We need to have more investments into public transit. We need to deal with urban sprawl and create the population densities that support more investments in public transit. I do not see much of that in this budget.

There are also some issues that are not really the focus of much attention by the government. A lot of market fraud is being perpetrated in our economy by people who are taking advantage of unsophisticated investors and/or who are taking advantage of our lax rules and regulatory environment with respect to the investment in securities in Canada.

Our government launched the integrated market enforcement teams that were meant to comprise a balance of law enforcement officers and lawyers to prosecute people who perpetrated stock frauds and who took advantage of investors in very sophisticated schemes. The reality is that these integrated market enforcement teams did not get off the ground. They are not doing much. The present government should be putting more resources into that initiative. Again, I do not see anything in Bill C-28 that would implement that measure.

We have many seniors in Canada who are investing through pension plans or directly. We see the effects of the stock market going up one day and down the next. I think that is as a result of many stockbrokers churning accounts, selling one day and buying the next. We have no real, independent body that can research, act and review on these particular matters. In my judgment, we need to do more to protect small investors.

The Standing Committee on Public Safety and National Security wrote a report.

In May 2007, the Standing Committee on Public Safety and National Security produced the report “Counterfeit Goods in Canada—A Threat to Public Safety”.

This report was followed a few weeks later by a report by the Standing Committee on Industry, which also had a number of recommendations to deal with the plague of counterfeit goods and piracy in Canada. Canada has become notorious--I was going to say famous, but notorious is a much more appropriate word--in the world for piracy and counterfeit goods.

Legislation was enacted last year to deal with the pirating of motion pictures. That is when individuals go into movie theatres with a video camera to record movies and then mass produce and distribute them. Notwithstanding that law, I am sure there is still some of that going on.

The public safety committee focused on those counterfeit goods that are creating safety and health issues for Canadians. We have read in the papers about the toothpaste that came from overseas. Regrettably I have to name China. China is a big player in counterfeit goods. I have to say that. There are tubes of toothpaste that do not contain toothpaste at all; it is sawdust or something, but certainly it is not toothpaste.

There are pharmaceutical products coming in from China and I suspect other countries where the pills or tablets are filled with something other than what the tablet or pill is supposed to contain. People are relying on these pills or tablets to cure some disease or infection, but the pills or tablets are actually filled with food colouring and other compounds.

There are some electrical products coming into our country with a forged Canadian Standards Association stamp which indicates that the product meets the CSA standard, but the products are substandard. In fact, they are a safety risk to Canadians. It used to be that people could only buy them at flea markets but the reality now is that these products are penetrating other retail establishments, dollar stores, et cetera. Extension cords and various other electrical products can be a huge safety hazard. They can short out, cause fires and cause ignition. Because these products can be imported from China at very little cost, the profit margins are huge and the sanctions are low. Organized crime is engaged very aggressively with counterfeit goods and pirated goods.

The government needs to respond aggressively to the reports from the Standing Committee on Industry and the Standing Committee on Public Safety and National Security, and enact the laws to toughen up the sanctions. Also, we have to give the Canada Border Services Agency the mission and mandate to search, seize, and within the laws of Canada, destroy counterfeit goods and pirated goods.

We saw a reference in the throne speech to intellectual property rights, but apart from that there has been nothing that I can see in the budget or the mini-budget and nothing that I can see in Bill C-28 to deal with these growing problems in Canada.

I see nothing in Bill C-28 that would reflect the government's recognition that it made a mistake on its decision to tax income trusts. I do not see anything in Bill C-28 that retracts from that position. It is fine to have a tough position. It is fine to say we are taking that position and sticking with it, but if it is the wrong position, that is not the right way to proceed.

We know that income trusts had to be dealt with. Certainly, I believe they had to be dealt with, because they were not meant as a tax avoidance scheme for the industrial sector. They were designed for a specific purpose, for energy companies, property development companies. However, it is the way in which the Conservatives went about dealing with income trusts after they promised they would not tax income trusts. People invested based on those undertakings, and they got hammered to the tune of $25 billion in lost market capitalization. I do not see anything in Bill C-28 that addresses that.

I do not see anything in Bill C-28 that deals with the wrong-footed decision of the government to deal with the interest deductibility of corporations. I do not have time to get into that now. We know that we need to deal with those who would deduct interest in Canada and have tax free income offshore, but we did not need the unintended consequences that that brought to us.

I think it is a flawed bill, but regrettably, it would mean a general election if it was defeated, so I rest my case.

Budget and Economic Statement Implementation Act, 2007Government Orders

12:20 p.m.

Conservative

Rick Norlock Conservative Northumberland—Quinte West, ON

Mr. Speaker, I listened with interest to my good friend's comments on the bill. I heard him make some comments with regard to the public safety committee of which he and I are members. I would like to take this opportunity to commend him and members of his side for their tremendous cooperation. The committee functions well because of the kind of true parliamentary attitude that we have on the committee.

Getting back to some of his comments with regard to his party's time in office, 13 years, and the short time that the current government has been in office, I would like to ask him a couple of questions.

Would he as an accountant not agree that by reducing the national debt in just a few short years on every Canadian's head by almost $1,600 is a good financial thing to do?

Is it not a good financial move to have one's country have the lowest corporate taxes in the G-7 so that money can flow into this country's investment community to create the kind of industries that we know we need, and create the kind of knowledge based economy to which he has referred?

Would he not say that it is an excellent idea that we reduce personal income taxes to the lowest in about 50 years?

Would he not say that it is very good financial management that we have the highest employment in this country in 32 years?

Are those not some of the positives that we have seen both in this budget and the last budget that have put Canada in one of the best financial positions in which it has ever been? Is two years not a really short time in order to have achieved all that?

Budget and Economic Statement Implementation Act, 2007Government Orders

12:20 p.m.

Liberal

Roy Cullen Liberal Etobicoke North, ON

Mr. Speaker, I will agree with my colleague from Northumberland—Quinte West that the Standing Committee on Public Safety and National Security is a model for how committees should work in a non-partisan way. The member opposite has fought very hard for a number of issues upon which we all agree, such as counterfeit goods, anti-terrorism legislation, et cetera. I thank him for that.

I would agree with him on certain aspects of what he said. I am not sure I would agree that in two years the government has laid some very new ground.

On the debt reduction, it was our Liberal government that started to pay down the national debt. When we came into office in 1993 we were faced with a $42 billion annual deficit. In three short years that was eliminated and we started to pay down the debt. In fact, at the end of our mandate I think our government had paid down something in the order of $55 billion in debt which saves the federal treasury, then and now, $3 billion per year in perpetuity. I am glad that the Conservative government has continued that trend and is paying down more debt.

On corporate tax reductions, I agree with him that having a low corporate tax rate is good. It attracts investment to Canada and by doing that, it creates jobs in this country.

Budget and Economic Statement Implementation Act, 2007Government Orders

12:20 p.m.

NDP

Alex Atamanenko NDP British Columbia Southern Interior, BC

Mr. Speaker, I would like to get the member's idea on some points.

In British Columbia we are told that we have a real prosperous economy and everything is going well and yet when we look around, we see what is happening. We see that we have the highest child poverty rate in Canada. We have seniors care which is in disarray. We have problems with our health care system. Certainly there is no affordable child care on a large scale.

If we look nationally, we have a budget where there are surpluses, but we do not have a national affordable housing program. Students are suffering, trying to get by so they do not have horrendous debts after finishing university. The health care system needs some help. We do not have a pharmacare system, which could help seniors. The infrastructure in our rural communities is crumbling. At the same time we are talking about corporate tax cuts, a surplus of over $14 billion and cuts to the GST.

I would like his comments on some of the points that I raised in regard to the big picture in Canada.

Budget and Economic Statement Implementation Act, 2007Government Orders

12:25 p.m.

Liberal

Roy Cullen Liberal Etobicoke North, ON

Mr. Speaker, I lived in British Columbia for 12 years and a part of me is still there. The problems, challenges and opportunities in British Columbia are replicated across the country.

I could not agree more that investments in infrastructure are needed. Reducing the GST is a misallocation, in my judgment, of federal government resources when we need these investments in infrastructure.

Our leader recently came out with our 50-30 plan to reduce child poverty. This House voted unanimously to reduce child poverty a number of years ago and we have not made much progress. Our party is committed to dealing with child poverty when we form the government the next time.

On affordable housing, the former Liberal government established agreements with most of the provinces. In my province of Ontario we had the Canada-Ontario affordable housing agreement, which consisted of two parts. One was investment in new stock. For people in my riding, it is not so much a need for new housing stock; it is to have affordable housing so they are not spending 40% to 50% of their income on housing. We need a combination, and that is what our program did. It created new housing stock, but it also created some subsidies for housing.

I agree with the member for British Columbia Southern Interior that there are many challenges. I do not agree with him though on the question of corporate income tax cuts because I think corporate income tax cuts, in the overall scheme of things, do not impact the fiscal situation of the government that severely. There is an opportunity there to attract investment, and if we attract investment we are going to create jobs and that will be good for all Canadians.