That, in the opinion of the House, the government's mistaken policies with respect to interest non-deductibility and income trusts are making it increasingly difficult for Canadian businesses to succeed internationally, while making Canadian businesses increasingly vulnerable to foreign takeovers, thus putting Canadian jobs, head offices and investment at risk and contributing to a hollowing out of Canadian enterprise;
and this House calls upon the Prime Minister to instruct his Minister of Finance to resolve these dangers by withdrawing his interest non-deductibility proposal and entering into meaningful public consultations on appropriate measures to combat tax abuses, and by withdrawing his proposal to tax income trusts and replacing it with the Liberal alternative as summarized in the 14th Report of the Standing Committee on Finance, presented on February 28, 2007.
Mr. Speaker, I will share my time with the hon. member for Markham—Unionville.
I rise in the House today on behalf of all Canadian families and workers who want to know when this Conservative government will stop endangering Canadian jobs with its harmful, poorly designed policies.
The world economy is caught up in a frenzy of corporate takeovers. Canadian companies are being swallowed whole, and when head offices leave Canada, good jobs disappear along with them.
What is the government doing to protect these jobs? What is the government doing to ensure that the most highly trained and best educated Canadians can continue to work in our country and for our country?
What is our government doing to protect the next generation of Canadian professionals, the next generation of lawyers, accountants, managers, sales directors, advertising executives, business consultants, and the hundreds of thousands of service jobs that depend on the wealth that those professionals generate? What is the current government doing?
Under the current government, the sorry answer is nothing at all.
In fact, the government is doing worse than nothing. Doing nothing at all would be a substantial improvement for this government. Instead of helping, the government is making things worse.
First, the government broke its promise not to tax income trusts. Instead, it imposed a punitive tax of 31.5%. Canadian shareholders and pensioners paid the price and Canadian companies were weakened.
Not content to stop there, the government decided to follow one bad idea with another, by reversing Canada's policy on interest deductibility. That misguided decision is another blow to Canadian companies eager to compete on the world stage.
That this policy is a mistake is beyond question. Tax experts and business leaders have dismissed this policy as wrong-headed.
Tax expert Allan Lanthier calls the decision “the single most misguided policy I've seen out of Ottawa in 35 years”.
Nancy Hughes Anthony, president of the Canadian Chamber of Commerce, calls it “a real step in the wrong direction”.
The chief executive of the Ontario Teachers' Pension Plan says, “I can't believe any sensible person would do this”.
This policy makes it harder for Canadian companies to keep up with their competitors in other countries. Companies in the United States, Europe and Japan can all benefit from interest deductibility when they want to take over Canadian companies.
Why is the Prime Minister giving a green light to foreign takeovers in Canada and a red light to Canadian expansion abroad? Why? Does the Prime Minister not care that by hurting Canadian companies he is also hurting Canadian families, Canadian jobs and Canadian workers?
Instead of admitting that their policy is wrong-headed, the Prime Minister and his Minister of Finance are trying to fudge the issue.
The Minister of Finance, after weeks of ignoring the criticism of every expert, is now suggesting that he may extend the transition period for Canadian companies to adjust to his wrong-headed policy on interest deductibility.
What a ridiculous compromise. Executing a bad policy more slowly is not a solution.
Canada's companies should not be forced to compete with their hands tied behind their backs, and the issue is not how slowly or quickly we tie their hands. We should not be tying their hands at all.
Instead, we should be arming our companies with every available policy to help them compete. That is what a good government does and that is what Canadians expect.
Judging by this government's disastrous policies on income trusts and interest deductibility, Canadians have every right to ask themselves what is coming next.
What can we expect from a government that raised income tax? What can we expect from a government that cut new spending on research and education? What can we expect from a government that hurt Canadian exporters by closing consulates and cancelling trade missions? What can we expect from a government that, by design and by incompetence, is refusing to implement the most basic economic policies in order to serve Canadians' interests?
It is high time the Prime Minister put reason before ideology. I call on the Prime Minister to reverse his irresponsible decision and restore the previous policy on interest deductibility.
I call on the government to shelve its interest deductibility plan and create a task force to review Canada's international tax policy to ensure that it is addressing the competitiveness agenda while at the same time tightening up the system. The task force would review Canada's some 90 international tax treaties with a view to ensuring the treaty partners are living up to the original policy expectations.
I call on the Prime Minister to withdraw his proposal to tax income trusts and replace it with the Liberal plan, which would replace the Conservatives' 31.5% tax with a 10% tax refundable to Canadian investors.
I call on the Prime Minister to develop a comprehensive plan so that Canada comes out on top in the current frenzy of corporate takeovers and to present that plan to the House of Commons.
Canadians deserve a visionary government with an ambitious goal for our country, a government that seeks to make the most of our enormous potential instead of eroding it, a government that strengthens and energizes Canadian businesses and protects Canadian jobs instead of putting up obstacles to business. A Liberal government will implement policies to stimulate Canada's economy, just as the Liberal governments of Jean Chrétien and Paul Martin did.
While the Conservatives have slashed funding for research and education, we will invest in these crucial areas. While the Conservatives have cut ties with our trade partners, we will strengthen those ties. While the Conservatives have cut programs that encouraged companies to invest in clean energy, we will restore them to make Canada a green superpower. And while the Conservatives have hurt the competitiveness of Canadian businesses, we will help those businesses excel and prosper.
Until that time, we are left with the present government and the Prime Minister to whom, it seems, all we can ask, for the sake of working Canadians everywhere, is that he please stop making things worse.