Mr. Speaker, I would like to thank you and my colleagues for giving me the opportunity to participate in the debate on Motion M-158 concerning the textile and apparel industries.
Before discussing the merits of this motion, I think this is a good time to remind the members of what our new government has done and what it is still doing to help these two industries compete in an ever more demanding global market.
Among our government's many initiatives worth mentioning, I would like to highlight the in-depth review of several proposals concerning an outward processing program to open new markets for the textile and apparel industries; measures to meet the changing needs of workers in these changing industries through the employment insurance program; and efforts to determine and reduce customs tariffs on textile inputs to improve cost competitiveness.
The 2007 budget offered even more support to the textile and apparel sectors. It contains a measure encouraging investment in manufacturing and processing equipment between now and 2009 by applying a 50% straight line write-off for two years. It also increases the capital allowance rate on buildings used for manufacturing and processing from 4% to 10%.
Canada's new government is providing tangible proof of its commitment to helping these industries by taking steps to reduce or eliminate customs tariffs on certain textiles used in the apparel industry. In addition to enabling apparel manufacturers to save nearly $4.5 million per year in customs costs, these measures will help companies maintain jobs for Canadians by making those companies more productive and competitive. This announcement was very well received by industry representatives. Elliot Lifson, president of the Canadian Apparel Federation, was very happy with this measure, which is a step in the right direction. He said that the industry has been asking for this for a long time.
Our new government has also demonstrated its continuing support of the Canadian Apparel and Textile Industries Program, or CATIP. That program provides financial support for the textile and apparel industries to help them become more competitive. Working in partnership with industry associations and other stakeholder organizations, CATIP assists Canadian textile and apparel firms to adjust to impacts of globalization through numerous approaches including: industry-wide branding initiatives; support for domestic and international marketing activities such as trade shows, match-making events and marketing materials; support for best practices and diagnostic sessions for companies; development of national textiles and apparel portals and e-commerce awareness activities; and, staging of domestic industry conferences. These are examples of initiatives that receive financial support from our government to help manufacturing industries position themselves on the global market.
Another unique component of this program, the textile production efficiency component, more commonly called CANtex, helps companies enhance their productivity and reorient production toward other value-added products for growth markets.
The measures I have just outlined clearly demonstrate that Canada's new government has been and continues to be determined to help these two important industries address the challenges of a global market, which, as we know, is increasingly competitive. But if the textile and apparel industries are going to meet the challenges that extend well beyond their own industry, our government, for its part, must also create an economic climate that encourages business to invest and expand. To help Canadian companies withstand competition and succeed on international markets, we need a specific, long-term economic plan.
That is why Canada's new government has created Advantage Canada, an ambitious plan based on the principles set out in the 2006 budget, a plan that looks to the future and that is designed to make this country a world leader, now and for future generations.
It is these commitments, and the other measures announced in that plan, that will enable the Canadian textile and apparel industries, and other businesses in Canada, to adapt to rapid changes in the world economy.
Advantage Canada will have a real impact on companies that invest in equipment, innovation and training. One of the fundamental principles of this plan is our government's firm belief that business must be free to grow and succeed. We realize that companies do not necessarily need the government to be directly involved in how they manage their business, and that rather what is needed is for government to act judiciously to guide the economy. They need the government to create a favourable climate that will enable them to excel at what they do best: investing, growing and creating jobs.
One element of the Advantage Canada plan is the reduction of income tax on investments by businesses, an essential measure to ensure our long-term prosperity. Canada wishes to maintain an advantage respecting the taxation of businesses, in order to encourage them to invest here rather than elsewhere. The tax relief plan for businesses introduced in the 2006 budget enables Canada to maintain a competitive advantage over the United States concerning the statutory tax rate for income from manufacturing, while increasing Canada’s advantage respecting the general tax rate. We have also enhanced Canada’s tax advantage by committing ourselves to establishing the general tax rate for businesses at 18.5% in 2011.
Many other measures designed to improve Canada’s fiscal competitiveness have been adopted under Advantage Canada, such as establishing the lowest tax rate on new business investment in the G-7 countries and envisaging the possibility of reducing tax distortions that work to the advantage or disadvantage of certain business sectors or structures.
Our plan is designed to eliminate repetitive and costly administrative procedures that prevent businesses from investing and innovating. Though it is important and necessary to maintain a certain level of regulation when justified by circumstances, we should take energetic measures to eliminate unnecessary regulations that put our country at a competitive disadvantage. As indicated in a study completed by the OECD in 2001, small businesses, the SMEs like those in Lévis—Bellechasse, or businesses found in the automobile sector in the riding of Chatham—Kent Essex, of my colleague here, are penalized the most by the administrative burden. Our new government has already lightened this burden and will lighten it more by adopting a versatile approach that includes the following measures: working with the Canadian Federation of Independent Business in order to reduce businesses’ administrative burden by 20%; developing a modern approach to intelligent regulation based on results rather than processes; and targeting the important sectors for small businesses, such as the expansion and implementation of appropriate programs.
Generally speaking, we will take steps to help Canadian businesses deal with the challenges of global competition by giving them every opportunity to succeed. Businesses that invest in Canada bring with them expertise and innovation, while foreign trade and investment provide our Canadian businesses with the expertise they need and increase their ability to take advantage of investments and innovation. Opening ourselves up to trade and investment creates opportunities here, and that is why we wish to create a favourable climate.
We want to work with business and Advantage Canada has thus provided these four key elements that are going to support the manufacturing industry: tax reduction; a fiscal advantage, notably by eliminating the debt and thus reducing the Canadian tax burden; a knowledge advantage, in order to have educated, skilled and efficient workers, and an infrastructure advantage, through record, historic investments of $32 billion over seven years to guarantee the free circulation of goods and services.
It is not surprising that the reaction to Advantage Canada has been positive and I will be pleased to talk further about the support our government is giving to manufacturing businesses and the Canadian textile sector.