Mr. Speaker, if things get really desperate, I will be splitting my time with the member for Brant.
These are issues of huge importance that we are dealing with today. Sometimes in the cut and thrust of debate and repartee, I am sure Canadians wonder just what the point is that we are trying to make. I want to try to make a balanced commentary on what has been proposed.
Every Conservative member who spoke has emphasized how important it is to get the capital regime in place that fits right within the global economy. That is based on the ever-pressing assumption that within the global economy the movement of capital is absolutely fundamental to the health and welfare of a modern global economy, of which Canada, Europe, Japan and China are a part. In a competitive world, all those that we are in competition with to add value to our economy need to get the capital regime in place that will add value to our economies.
The proof of that is that every member has addressed part of that regime. One cannot talk about the accelerated capital tax write-off for capital equipment without relating that to what value it adds in a competitive regime. It would add nothing if every country with a modern economy did exactly that, so it needs to be more.
In global capital markets, it is important that we have a free trade approach to the investment through securities. The government has indicated that it is moving in that direction. If every modern economy did that, that alone would not give Canada the competitive edge.
We can talk about a global commercial strategy with respect to breaking down cross-border tariffs and so on. Again, that alone would not give Canada the competitive edge.
The bottom line is that what will give Canada the competitive edge is to have something more that makes Canadian investments both in Canada and abroad more attractive in a competitive global world. That, in turn, will add jobs, which means that we can reinvest in our health care system and produce a civil society that has a quality of life that we want for all Canadians.
I do not want Canadians who are still watching, if, indeed, they ever were watching this particular cut and thrust of debate, although I am sure many are, to conclude that it is an either/or, that they must take the Conservative government position or the Liberal position, because the nature of the motion is to ask for sober second thought. Given the commentary with respect to interest deductibility, for example, and the implications that are being drawn, is it time to take a step back and re-evaluate that particular policy?
When the C.D. Howe Institute comes forward and says that the proposed changes in the Canadian tax system could place Canadian companies at a significant disadvantage both abroad and even in Canada in competing with its foreign counterparts, one cannot just slough it off as being irrelevant. When KPMG comes forward and says that more foreign takeovers of Canadian companies stifle Canadian investment in global markets and an exodus of head offices and a weaker Canadian economy overall will occur, we cannot say that is a one-sided commentary or a partisan shot at the government.
We could also quote from KPMG on interest deductibility. It states:
This is just disastrous and disables all businesses who wish to expand in a foreign jurisdiction, because they cannot borrow money outside and deduct interest on that money. It means everyone must rearrange their affairs and set up a U.S. subsidiary, which costs more money.
We cannot take that commentary and just say that it is totally irrelevant to this debate.
The nature of the global economy is one of an integrated economy. We used to have a subsidiary economy based on U.S. and multinationals. Now investment is going every way. We just had an example of that on the financial page of today's Globe and Mail where it was being cited that Magna was looking for a Russian investor.
When we talk about integrated investment, if we have a company that is active in China, that company in turn invests through Canadian capital in operations in Canada and employs people. It is a check and balance on foreign exploitation.
We cannot just simply take a partisan perspective on this and say that the government is all wrong and the opposition is all right. What we can say is that given what we understand of the movement of capital and the fact of where barriers are placed in stopping capital from moving in a liquid fashion, there is no question that Canadian companies and Canadian society will suffer.
The general bottom line of those experts is what this side has said to the government, through this motion, that we should have another look at what we are doing with respect to interest deductibility.
I will not make comments on income trusts but there are similar comments that can be made in terms of process. I am focusing more on interest deductibility because there is a huge body of opinion that is saying to the government that this is a time to take a step back.
I think the Minister of Finance himself is coming to the conclusion that once we can get past the issues related to double-dipping and using straw horse investment facades behind which corporate tax returns can be fudged, we should put in a regime that will protect Canadians against that kind of exploitation.
However, once we have done that then we need to get to the essential issue of what this is doing as a mechanism that undermines investment and high value added activity that will benefit Canadians. That is the message that the opposition is trying to give the government.