Mr. Speaker, I rise to speak to Bill C-28, referred to as the budget bill, that is shocking in many respects in terms of its consequence.
We need to put this in the proper context and I will spend most of my time addressing the corporate tax cuts.
It is important to look back as recently as the budget of 2007 when the government came forward with a series of substantial corporate tax cuts over the next four years. In that period of time, the corporate tax rate would have dropped from 22%, which is where it was at the time, down to 18.5% by the 2011 budgetary period.
We then jump forward to the October-November period with the throne speech and to, what in the common parlance is being referred to as the mini-budget, the economic update statement.
What do we see? First we see in the throne speech that the Conservative government will reduce the corporate tax rate. However, when we jump forward to the mini-budget, all of a sudden that drop has become accentuated. It has become accentuated because in between the throne speech and the finance minister standing in the House, although I am not sure he actually stood in the House or did it some place else, he told the country that he would introduce even greater corporate tax cuts. Now we have the corporate tax rate by 2012 going to 15% as opposed to just six or eight months ago the proposal that by 2011 would have been fixed at 18%.
What happened in that couple of weeks, maybe a month, between the throne speech by the government and the mini-budget? We heard the opposition leader and a number of other members of the Liberal Party saying that we needed bigger corporate tax breaks. What we had was the government of the day and the official opposition taking the same position.
What I find it most shocking is when I look at where the bulk of those corporate tax breaks will go. They will go to sectors of the economy that, quite frankly, do not need them: the oil and gas sector and the banking sector. A full 50% of every one of those tax dollar breaks will go to those two sectors.
In the figures that came out showing the profit levels of those two corporate sectors, banks were the highest. They made over $19 billion in profit last year and they will break $20 billion at the rate they are going this year, perhaps up to $21 billion or $22 billion. They will be getting a huge tax break because of the size of their profits.
We see similar figures, because of the international demand for oil and gas and the export rates at which we are selling it, that the oil and gas sector will get huge corporate tax breaks from this change that was very rapid. It was in less than nine months.
I come from a region of the country that has as its primary economic base the auto sector. In that same period of time, we saw thousands and thousands of jobs disappear from that sector and a substantial number of closings. We saw it again in some of the news reports this weekend, going through regions in southern Ontario, seeing auto parts supplier companies shutting down in large numbers.
It is estimated that over the last two and a half years--and this took place not just during the 22 months of the Conservative regime but a good number of the months when the Liberals were still in power, 250,000 to 300,000 jobs have disappeared in that sector and it is not finished.
When we look at these corporate tax breaks, 50¢ on the dollar will go to the banks and the oil and gas sector. What is happening in the auto sector? Actually, nothing is happening because there is very little profit. Even for the large manufacturers, the full-blown, primary manufacturers, particularly in the auto parts sector, there is very low profit, if any at all, because so many of them are going bankrupt or at least going out of business before they go bankrupt.
Those corporate tax breaks will do nothing for the auto manufacturing sector, whether in the parts sector or in the primary manufacturers.
In roughly that same period of time, when we jumped from giving the substantial corporate tax breaks to, in the latter part of the year, even more substantial corporate tax breaks, we see in just six months a 7% drop in the auto parts sectors in terms of its productivity. Those are the exports going out of the country.
In the same period of time we wonder what the government has done. We constantly hear the Finance Minister say that he is giving a tax break. It has already been shown that those are useless. He says that he has accelerated the ability to take write-offs on machinery. If we are not making any money and have no profit to write these off against, those write-offs are useless also.
This is not anything new being heard by the government. Both the manufacturers and the auto parts sector have told it repeatedly what is happening.
What do we need? We need those corporate tax cuts reduced dramatically and that revenue, which would have come in, used to help the auto parts sector get through this. We are hearing that it needs $400 million immediately in the form of loans. It would be in that form, not a tax break because that would not do any good, and not with write-offs because that would not do any good. The sector needs loan guarantees and outright loans to allow the auto parts sector to purchase equipment that will allow it to be more productive, more competitive and be able to put people back to work.
Are we seeing that? Absolutely not. The Conservative government has refused to do anything in that regard. We have seen the province of Ontario step in and the province of Quebec step in with direct assistance because manufacturers are in a crisis. This is not something where we can talk long term policy. For example, if we do this, that will happen eventually. We are away beyond that. By the time that happens we may have lost the auto sector in this country.
I say that advisedly. I have lived in the community of Windsor all my life and, for the first time in the last two and a half to three years, I have become convinced that at the rate we are going with our trade policies and with the kind of economic policies we have seen, both from the Liberals when they were in power and now from the Conservatives, which have policies that are almost identical, we are at serious risk of completely losing, by eyesight 20:20, our entire auto sector.
That is a shock because the auto sector, and nobody can debate this, is the sector that drives the entire economy in this country. By and large, in comparison with any other sector, it is the major driver, and both those political parties are prepared to sacrifice that because of their belief in free trade agreements, which do not work in that sector, and by economic policies that have no benefit to the auto sector whatsoever.