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House of Commons Hansard #151 of the 39th Parliament, 1st Session. (The original version is on Parliament's site.) The word of the day was companies.

Topics

Agriculture and Agri-FoodCommittees of the HouseRoutine Proceedings

12:20 p.m.

Some hon. members

Agreed.

Agriculture and Agri-FoodCommittees of the HouseRoutine Proceedings

12:20 p.m.

Conservative

The Acting Speaker Conservative Andrew Scheer

The House has heard the terms of the motion. Is it the pleasure of the House to adopt the motion?

Agriculture and Agri-FoodCommittees of the HouseRoutine Proceedings

12:20 p.m.

Some hon. members

Agreed.

Agriculture and Agri-FoodCommittees of the HouseRoutine Proceedings

12:20 p.m.

Conservative

The Acting Speaker Conservative Andrew Scheer

(Motion agreed to)

Opposition Motion--FinanceBusiness of SupplyGovernment Orders

May 10th, 2007 / 12:20 p.m.

Liberal

Scott Brison Liberal Kings—Hants, NS

Mr. Speaker, the NDP member likes to present this as some sort of battle between Main Street and Bay Street when in fact all Canadians, regardless of where they live, benefit from head office jobs here in Canada. Why does she believe it is a good thing for Canadian companies to pay tax when companies in the U.S., Japan and Europe do not pay tax?

Why does she believe that it is in our long term economic interests, and I am talking about all Canadians regardless of where they live, to lose head office jobs in Canada? How can she justify her position on this issue, which is one that would essentially destroy Canadian competitiveness in jobs, and at the same time demand that governments take action to stop international takeovers of Canadian corporate assets?

I questioned her economic capacity earlier because of the fact that she represents an economic position on one hand where she is saying that we must stop foreign takeovers of Canadian corporate assets when in fact she supports a policy by the government to encourage foreign takeovers of Canadian corporate assets to destroy Canadian jobs and to hurt people on Bay Street and Main Street.

Why is she supporting Wall Street in her assertion that we should actually help the big takeover artists on Wall Street take over Canadian companies? Why is she supporting--

Opposition Motion--FinanceBusiness of SupplyGovernment Orders

12:25 p.m.

Conservative

The Acting Speaker Conservative Andrew Scheer

The hon. member for Winnipeg North.

Opposition Motion--FinanceBusiness of SupplyGovernment Orders

12:25 p.m.

NDP

Judy Wasylycia-Leis NDP Winnipeg North, MB

Mr. Speaker, whenever anyone disagrees with a Liberal, that Liberal needs to put down the other person by suggesting that the person knows nothing about the economy. That has certainly been the strategy of the member for Kings—Hants who probably should be a little more guarded in his comments given his e-mail of November 22, 2005 dealing with the income trust file.

I would suggest that the member and his party consider the error of their ways on these two files, income trusts and interest deductibility. They should consider the following question. Why would Canada give up tax revenue to create economic activity and tax revenue in other countries? It would be to increase the profitability of Canadian banks that already are rolling in profits to the tune of $19 billion.

If the member is so concerned about the questions pertaining to other countries' taxation policies, he should be standing in the House today and making the recommendation that we start taxing corporations on a worldwide basis, something that he fails to consider. He never considered it when he was in the Conservative government and has never considered on the Liberal benches.

Opposition Motion--FinanceBusiness of SupplyGovernment Orders

12:25 p.m.

An hon. member

He's consistent.

Opposition Motion--FinanceBusiness of SupplyGovernment Orders

12:25 p.m.

NDP

Judy Wasylycia-Leis NDP Winnipeg North, MB

He is consistent, as my colleague points out. However, I think it is high time that we recognize the exact purpose of these measures and the motives behind the Liberals' motion.

Opposition Motion--FinanceBusiness of SupplyGovernment Orders

12:25 p.m.

Liberal

Yasmin Ratansi Liberal Don Valley East, ON

Mr. Speaker, I will be splitting my time with the member for Kings—Hants.

I rise in the House today to speak to the Liberal motion, which reads:

That...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....

Budget 2007, the second Conservative budget, contains what the former chairman of the Canadian Tax Foundation, Allan Lanthier, called “the single most misguided policy to come out of Ottawa in 35 years”.

I am not referring to the disaster caused by the Conservatives in the income trusts sector last October. I will return to that issue later. Rather, I refer to the tax measure tucked away on page 242 of budget 2007 regarding interest deductibility and foreign affiliates. It would easily throw a major hurdle in front of Canadian firms who want to make foreign acquisitions by removing the interest deductibility from money borrowed to carry out those transactions.

As I was listening to the member for Winnipeg North, I was flabbergasted by her lack of knowledge to the fact that it is the small and medium size enterprises that create jobs, that are in an expansion mode and in a growth mode. Those are the businesses that create jobs. Why would she be against those corporations trying to expand? Where would her constituents find jobs? Who creates those jobs?

While the Conservatives may fancy themselves as a party of free enterprise, the fact is that the Minister of Finance has no credibility. I would refer to the article by their biggest supporter, Diane Francis, talking about the total incompetence on the cabinet benches of the Conservative government.

As we move forward and we look at who the real job creators are, the engine of competitiveness, we destroy them by removing that interest deductibility. The Canadian Council of Chief Executives, Tom d'Aquino, has said that the decision to remove this deductibility may seriously undermine the competitiveness of Canada's homegrown champions, the companies that are most active and most successful in building global businesses from head offices in Canada.

I would hardly call that faint praise for a budget that is ironically entitled “Aspire”. What does it aspire? Does it aspire to remove the economic security of Canada? Does it aspire to destroy Canadian companies? That is what interest deductibility does.

We live in a global competitive world. We need to be smart and let our companies, the small and medium size enterprises, which are in expansion mode, expand.

I am afraid that what the Minister of Finance calls a tax loophole is actually a competitive edge for Canadian firms to compete globally on an even playing field with firms enjoying similar tax measures in the United States, Japan and Europe. It is beyond me why the minister is so determined to hobble the Canadian economy.

According to tax specialist, Neal Armstrong:

it is typical for a Canadian parent company to arrange most of its borrowing in Canada, then use the funds to invest in foreign acquisitions.

However, the Conservatives want to take this tool away from business. It makes no sense whatsoever.

As Mr. Armstrong points out, the result is that Canadian banks will lose income from those loans and in turn the government will lose the tax benefit from that income.

Mr. Armstrong goes on to say:

And that doesn't do us any good, because the bank in the foreign country isn't paying any [Canadian] tax.

What should businesses in Canada expect from the proposal of the Minister of Finance?

Tax specialist, Karen Atkinson, predicts that many companies will have to “jump through hoops” to create financing structures, calling the finance minister's proposal a “make-work project for lawyers and accountants”. Is that what we want to do? We must remove red tape in order to make our companies competitive. We do not need to hobble these companies.

Len Farber, a former senior official at the Department of Finance, is equally baffled by the proposal. According to Mr. Farber, what the minister calls double dipping is what gives Canadian corporations the competitive edge internationally. He suggests that the minister could have the measure apply to only foreign multinationals operating in Canada but exclude Canadian companies. That is why the Liberal motion today calls on the Minister of Finance to rethink his strategy and enter into meaningful consultation.

At this stage, I would like to congratulate my hon. colleague, the member for Markham—Unionville, who has done a splendid job in bringing this issue to the attention of all Canadians. The hon. member is a well-recognized economist and former minister who eloquently points out that:

[It] is not that we should oppose foreign ownership, but that we should oppose tax measures that tilt the playing field in favour of foreign companies and at the cost of homegrown Canadian companies.

This is not the first major misstep by the Minister of Finance. I am still receiving desperate letters and phone calls from constituents in Don Valley East who took the Conservatives at their word when they made an election promise to not tax income trusts.

Thousands of investors, many of them seniors, lost the bulk of their retirement savings because of this finance minister, when he broke his promise in October last year. What are my constituents going to aspire to when half of their savings have been wiped out by the Conservatives' incompetence?

Sadly, it is a fact that many of the Prime Minister's cabinet just do not have any experience in the business world. The result is simply bad policy and bad business environment.

Instead of tapping into this country's entrepreneurship, the Conservatives are hobbling Canadian businesses. Instead of being proud Canadians, being economically independent and competing in the global market, we are hobbling our Canadian companies, our pride, our enterprise, and our ability to create and maintain jobs.

Instead, we are now becoming economically dependent on other countries and foreign takeovers. In the past few weeks we have seen foreign takeovers by China, the United States and India. Where are the high-paying jobs going? They will go south, or anywhere, except stay in Canada.

The policy of non-deductibility is not a very intelligent policy and I would like to urge the government to rethink it.

Opposition Motion--FinanceBusiness of SupplyGovernment Orders

12:35 p.m.

Conservative

Chris Warkentin Conservative Peace River, AB

Mr. Speaker, I would like to ask the member across the way if she agrees with the Ontario finance minister. I know that there has been some discussion about income trusts for some time. Obviously the finance minister made an effort to ensure tax fairness.

I will just read what Greg Sorbara, who is currently the Liberal Ontario finance minister, said in a letter he wrote to the committee:

“I'd like the committee to know in principle that the Government of Ontario supports the federal government's efforts to ensure fairer taxation through changes to the tax treatment of income trusts. We believe that these changes will protect the federal and provincial revenues from significant tax leakage. Ontario supports federal transition rules as they appear to be flexible enough to allow trusts to proceed with reasonable growth while ensuring that there is no unfair advantage over the transition period. It's an example of sometimes, when you're in government, you just have to do what you think is right”.

I wonder if the member across would agree with her provincial Liberal counterpart or if in fact she would disagree?

Opposition Motion--FinanceBusiness of SupplyGovernment Orders

12:35 p.m.

Liberal

Yasmin Ratansi Liberal Don Valley East, ON

Mr. Speaker, it just amazes me how very uninformed the Conservatives seem to be on economic matters.

When they make a promise to constituents, to Canadians, that they will not tax income trusts, and then they break that promise, there is no trust left of the Conservatives by Canadians. Seniors have lost money. It is seniors we are talking about. Where is the social justice? That is incompetence to the hilt.

Then we go and hobble our very own homegrown Canadian businesses that create jobs by not allowing interest deductibility. What are we trying to do?

I have been to the Fraser Institute and seen that they would like to have private enterprise and private everything. Where are we going to go as Canadians if we do not have economic security or economic independence?

I would like to say to the member opposite that the National Post, which is a friend of the Conservatives, talks about the flip-flop of the Minister of Finance, who is really not very competent. An article by Diane Francis, who is a real good friend of the Conservatives, talks about how the whole cabinet lacks economic astuteness. Cabinet ministers do not know globalization. They do not understand it. They are hobbling along because they do not know economics.

Opposition Motion--FinanceBusiness of SupplyGovernment Orders

12:35 p.m.

Liberal

John Cannis Liberal Scarborough Centre, ON

Mr. Speaker, during the election the Conservatives made a promise that they would not touch income trusts, as it was initially being proposed before the election. Now the Conservatives are trying to spin this promise that they went back on that they do not want to hurt the seniors and their incomes, but they want to address the corporation side of things.

I have a lot of seniors in my riding and in the emails and communiqués that I have received, it has impacted their way of life for the future. We have to keep in mind that these seniors today are not income generators and cannot work a couple of hours of overtime to offset it. They depend on a certain income to at least maintain the lifestyle that they dreamed of and now it is being taken away. Could the member please elaborate on the seniors aspect? The Conservatives are trying to misrepresent it again.

Opposition Motion--FinanceBusiness of SupplyGovernment Orders

12:35 p.m.

Liberal

Yasmin Ratansi Liberal Don Valley East, ON

Mr. Speaker, I have a lot of seniors in my riding who have written to me and who have stated that they trusted the Conservative government when it made a promise that it would never tax income trusts.

They invested their money in income trusts, and suddenly, lo and behold, on October 31, we got this 31% tax and seniors lost their savings. The market took a dip. We have lost $35 billion in total. How are the seniors ever going to recover it?

I would like to bring something to the attention of the House. The NDP has always claimed to be the party of social justice, but it has worked against seniors, against Kelowna, against Kyoto, and against everything, and it has lost--

Opposition Motion--FinanceBusiness of SupplyGovernment Orders

12:40 p.m.

Conservative

The Acting Speaker Conservative Andrew Scheer

Resuming debate, the hon. member for Kings--Hants.

Opposition Motion--FinanceBusiness of SupplyGovernment Orders

12:40 p.m.

Liberal

Scott Brison Liberal Kings—Hants, NS

Mr. Speaker, I am pleased to rise today on this debate, but I am saddened by the nature of this debate. The Conservative government has inherited the best fiscal situation, the best economic environment, of any incoming government in the history of Canada. Even though it was a great economic environment and a great way to start based on the Liberal record of strong economic management, we cannot rest on any laurels. We live in a hyper-competitive, global environment where companies and countries are either moving ahead or they are falling behind. We cannot simply sit still.

A smart country, like a smart company, makes good decisions based on what is best to address the challenges and opportunities of the next 10, 20, 30 years, the next century. We have a government that instead of focusing on the challenges and opportunities of the next century is too focused on this week's polls. It is making decisions based on short terms, based on what is popular right now at the expense of the long term competitiveness of our Canadian economy, Canadian companies, Canadian investors, and ultimately Canadian workers.

We do not have smart decision making coming from the government and the sad thing is that we have Conservative economic incompetence propped up by NDP economic ignorance. This is a toxic combination for the long term competitiveness of Canadians and for the long term job security of Canadian workers.

I would like to refer briefly to the recent commentary by Diane Francis, the National Post columnist. She said:

Canada's biggest competitive disadvantage is our poor governance model, politically and policy-wise.

When referring to the Conservative government's handling of some of these issues, she added:

I dread to imagine what the discussion around the federal cabinet table was last fall concerning measures such as income trusts or interest deductibility restrictions. Did anyone bring up the potential, unintended consequences? Was a huge menu, and range of varied options the topic of lively, heated and lengthy discussion? Were the nuances of capital market reactions, or taxation matters, debated? Was the obvious alternative of cutting taxes on dividends instead of trashing income trust promises a subject of great discussion? Were the studies, commissioned by the previous government, and its many other solutions, reviewed carefully over days and nights by all cabinet members so they could deliberate in an authoritative fashion? Or was talk just about how to finesse the treachery to seniors and Alberta about a promise broken?

It is clear that the government made the wrong decisions in both cases. Conservatives have imperilled the competitiveness of Canadian companies. They have hurt Canadian economic sovereignty and have exposed Canadian equities to unparalleled levels of foreign takeover activities.

I really do believe and have tremendous faith in the ability for Canadian companies to compete and succeed globally. We have global success stories that are based here in Canada. In fact, there are companies like Onex and Magna that are building and continue to build global success stories based here in Canada. But the fact is that the Government of Canada ought to partner with these success stories and be a partner in progress as these companies move forward.

In today's global environment, economically, a company is either acquiring or is being acquired. A company is either growing or is getting smaller. It cannot sit still. We represent a fairly small percentage of the global economy here in Canada. We represent about 1.5% of global capital markets as an example of that, so because of the challenges and opportunities of globalization and the pressures of it, Canadian companies cannot grow exclusively within Canada. For Canadian companies to grow, it requires acquisitions outside of the country. Other governments in other parts of the world understand this.

The fact is in countries like Japan, the United States, Britain, countries in Europe, basically every country in the industrialized world, if a company invests in another country or purchases a company in another country, the company can write off the interest on that investment against domestic earnings. That is a tax practice that is global. That is a tax practice that is well accepted and is part of the competitiveness of those companies in those countries.

It is unspeakably naive and economically ignorant to believe that we are not hurting Canadian companies by exposing them to the competition from around the globe and at the same time imposing on them a tax measure that companies in other countries do not face.

If we are really interested in owning the economic levers here in Canada, if we are really interested in our economic sovereignty, why would we expose our Canadian companies to the fierce global competition that exists now, and at the same time tie their hands behind their backs by imposing on them a tax that no other industrialized country imposes on their domestic industries? It is wrong-headed.

The fact that the Conservative government has to depend on the support of the economically ignorant NDP on this speaks to this. I knew that the Conservative government was not progressive socially, but with this measure it is not even conservative economically.

The fact is that the Conservatives have talked over the years about reducing corporate taxes. I want to clarify. I really believe in reducing income tax, personal and corporate. The hon. member has mentioned that this is a government that actually cut the GST, a consumption tax, to raise income tax.

The Prime Minister calls himself an economist. If economists were a licensed body, he would have lost his licence over that one, because there is no economic body in the world that would endorse increasing an income tax to help compensate for the decrease of a consumption tax. It was bad economic policy. It was bad for competitiveness. It is consistent, though, with the government on a number of decisions that it is making, including hurting Canadian competitiveness with this latest tax measure, eliminating the interest deductibility on foreign investments.

As I was saying, the Conservatives have spoken over the years about the importance of reducing corporate taxes, but I want to explain to them that what we are supposed to do is reduce corporate tax rates, not to reduce corporate profits and not to reduce the actual base. Their measures will reduce the corporate tax base. In fact, perhaps over time they will not reduce corporate taxes by eliminating corporations from Canada. The Conservatives will, with the support of the NDP, drive those head office jobs out of Canada, drive those Canadian international success stories like Alcan and BCE out of Canada.

They will create the opportunities for firms on Wall Street and international takeover firms to acquire the key components of the Canadian economy. Not only will what they do hurt Canadian economic sovereignty, it will kill jobs and our ability to actually build our economic capacity and to chart an independent direction as a country in the future. If you do not own your economic levers in a country, you really do not control the future destiny of your country.

Since the government's decision on income trusts, we have seen a flurry of takeovers of the energy trust sector. That has hurt our economic sovereignty. A key industry in Canada is energy. We are seeing as a result of the interest deductibility decision an increase in the rate of foreign takeovers and bids here in Canada, the latest discussions around Alcan, and the Bell Canada discussion. That is a government that threatens to take the Canada out of Bell Canada.

On another issue, the industry minister has said on Wall Street recently that he is interested in eliminating the foreign ownership restrictions on Canadian Telco. The government is not only weakening Canadian corporate interests and exposing them to takeover interests, but it is actually putting in place tax and regulatory measures that will lead to the hollowing out of Canadian corporate assets and the end of Canadian economic sovereignty.

Opposition Motion--FinanceBusiness of SupplyGovernment Orders

12:50 p.m.

Liberal

John Cannis Liberal Scarborough Centre, ON

Mr. Speaker, while listening to the member a thought which came to mind was that under the Mulroney government there was a sellout of Canada, but under the new Conservative government that has been accelerated.

I enjoyed very much how the member for Kings—Hants put it, in using third party, not necessarily endorsement, but qualifiers when referring to Diane Francis. It reminded me of what two Conservative premiers, Premier Williams of Newfoundland and Labrador and Premier Rodney MacDonald of Nova Scotia said in terms of reneging.

I want the member to explain the competitiveness aspect. Yesterday in the House of Commons the Minister of Finance was asked a question on this issue. His response was that they want to create a level playing field.

Would the member please elaborate on that a little more? From what I have heard and read in following the story, I cannot see it creating a level playing field. It seems to me that there are rules for others outside Canada and a policy being proposed that in essence is going to weaken Canadian companies. Could the member please clarify that? I do not see a level playing field as the Minister of Finance is saying.

Opposition Motion--FinanceBusiness of SupplyGovernment Orders

12:50 p.m.

Liberal

Scott Brison Liberal Kings—Hants, NS

Mr. Speaker, I appreciate the question from the hon. member. It is an important one.

The fact is we have never seen as competitive an economic environment globally as that which exists right now. What the government has in fact done by eliminating the interest deductibility for foreign investments is actually tilt the balance toward foreign competitors to help them take over Canadian companies, as we handcuff the Canadian companies and reduce their capacity to build competitiveness and to take over firms in other countries.

The Liberal Party as part of this motion is proposing tax reform, bringing together tax experts, people such as Jack Mintz and Roger Martin from the U of T. We propose bringing together the kinds of people who can help us shape the best possible tax policy to build a richer, fairer and greener Canada, to make Canadian companies global success stories, to help create the kind of environment for Canadian companies to be leaders in what will be the fastest growing area of the 21st century economy, and that is clean energy.

We have to bring the three Es together, the economy, energy and the environment and to make Canada a global clean energy superpower, with the kinds of tax policies that enable Canada and Canadian companies to grow, to invest, to diversify and to build head office competence and jobs here in Canada. That is what it is all about. That is the kind of policy that can build long term economic success for all Canadians.

When the Conservatives talk about levelling the playing field, what they are doing is levelling corporate Canada. They are levelling Canadian competitiveness completely.

Opposition Motion--FinanceBusiness of SupplyGovernment Orders

12:50 p.m.

Conservative

Dean Del Mastro Conservative Peterborough, ON

Mr. Speaker, the motion we are debating today is a sign of how much the official opposition has lost touch with Canadians and how misguided the Liberals' approach to the economy really is.

While the Liberals dithered and defended tax loopholes, double-dipping and shifting the tax burden from the large corporations to working families, in just 13 short months we have made courageous decisions that are in the best interests of all Canadians. In the last two budgets and last November's economic update, this government has introduced a host of innovative, comprehensive initiatives for businesses that significantly enhance their capability to meet the demands of evolving global markets.

The Liberals have voted against and opposed measures embraced by business and recognized by experts. I would like to take a few minutes to highlight a few important examples of the measures the Liberals have opposed, specifically our comprehensive package to reduce corporate taxes and enhance competitiveness of businesses across this country.

As the Minister of Finance has noted on many occasions, our economic fundamentals are solid. We are experiencing the second longest period of economic expansion in Canadian history. Core inflation remains within our set range of one to three per cent. Our unemployment rate is at its lowest in at least 30 years, perhaps 40, with more Canadians working than ever before. We are on the best fiscal footing of any country in the G-7. In fact we are the only member of the G-7 with ongoing budget surpluses and falling debt burden.

Mr. Speaker, I would also like to note that I am sharing my time with the member for Oshawa.

This government believes strongly that Canadian businesses and entrepreneurs are the engine of our economy helping make all of Canada strong.

The official opposition is grasping at straws, trying to find doom and gloom amid all of Canada's great prosperity that we currently see. If the Liberals were really committed to an examination of tax abuses, why did they not act when they were in power? Why did they not listen to the advice they asked for?

It was hard for the Leader of the Opposition to set priorities when in power, and he is showing the same flaws in his latest musings on the economy. Advantage Canada, Canada's new government's plan, created five advantages to help set out a clear priority for a strong Canada, and the reaction was positive.

On Advantage Canada, the Canadian Chamber of Commerce said that the finance minister has recognized the importance of productivity to the long term health of our economy, business growth and Canadians' standard of living. It said that Advantage Canada “is a great road map. It's got all the elements of things we need to do”.

Budget 2007 provides a clear series of measures to secure the aforementioned advantages. It demonstrates this government's commitment to a comprehensive approach to building a strong Canada.

For example, our commitment to achieve an entrepreneurial advantage includes a plan to support our two million small businesses. They work hard. They create jobs. They make Canada work. The last thing they need is excessive government red tape and needless regulation to slow them down, the kind of red tape that the former Liberal government left in place.

The Canadian Federation of Independent Business said about our plan:

[Advantage Canada's] focus is certainly the key issues that our members say [the government] should be focused on, whether it's debt, taxes, a skilled workforce or the whole red-tape and paper burden.

For example, we are reducing the number of annual tax filings and remittances for more than 350,000 small businesses in Canada. For some smaller businesses, the number of tax filings and remittances could drop from 34 to as few as 10, a 70% decrease.

We are also strengthening Canadian businesses through building a tax advantage. This will allow us to attract and retain business investment. We are helping small businesses succeed to spur innovation and growth that will lead to more jobs and higher wages for all Canadian workers.

Budget 2007 introduced new measures that will lower Canada's tax rate on new business investment. This will encourage investment and job creation, and help Canadian businesses to compete on the world stage.

In addition, we are assisting manufacturing and processing businesses by making the major investments needed to meet the rising global competition by providing a temporary accelerated write-off of capital investments in machinery and equipment.

This government is decisively addressing the issue of helping employers meet immediate skill shortages. For example, budget 2007 proposes a series of improvements to the temporary foreign worker program designed to reduce processing delays and more effectively respond to regional labour and skill shortages. New measures include expanding the online application system, maintaining lists of occupations where there are known shortages of workers and processing work permits more rapidly. This will ensure that the process of hiring skilled foreign workers for not only large but also small and medium sized enterprises is easier, faster and less costly for employers.

On a larger scale, budget 2007 provides a number of measures that will help Canadian businesses invest, compete and win in the global marketplace.

Canada, historically, has benefited from vibrant, competitive capital markets. With the mobility of talent, capital and ever intensifying global competition, developing leading edge principles and rules to govern our capital markets is key to creating and sustaining the Canadian advantage.

In budget 2007, Canada's new government put forward a plan for creating a Canadian advantage in global capital markets. It focuses on four key building blocks: First, enhancing regulatory efficiency through a new approach to securities regulation based more on principles and tailored to the unique makeup of Canada's capital markets; second, strengthening market integrity by pursuing the highest standards of governance and by enforcing our laws more vigorously; third, creating greater opportunity for businesses and investors by pursuing free trade in securities with the United States and the other G-7 countries; and fourth, improving investor information by introducing a new principles based disclosure regime for bank investment products with complex features.

Another important initiative to support businesses is our global commerce strategy to ensure that Canadian businesses can fully participate in global market opportunities. In addition, Canada and the United States have agreed in principle to update the Canada-U.S. tax treaty to facilitate cross-border investment and commerce.

Canada is strong because our businesses, large and small, are strong. For example, just yesterday Statistics Canada noted that direct Canadian investment abroad hit $523 billion, a gain of $63.7 billion over just last year, or a 13.8% increase over 2005. That was the fastest percentage increase since the technology boom of 2000.

It is clear that this government is unquestionably committed to helping our businesses compete and succeed.

The official opposition has voted against every one of these measures designed to create a global advantage for Canadian businesses. It did not get the job done when in power, which is why its current rhetoric rings hollow.

With the implementation of budget 2007, we will have generated a significant enhanced capacity for our economy to succeed for the benefit of all Canadians.

Opposition Motion--FinanceBusiness of SupplyGovernment Orders

1 p.m.

Liberal

John Cannis Liberal Scarborough Centre, ON

Mr. Speaker, the Mulroney Conservatives did not get the job done to sell out Canada and this new, so-called reformed, Conservative government will get the job done.

I have a couple of questions for the member. First, let me clarify that we on this side are not portraying doom and gloom. On the contrary, what we are saying is that a policy that exists internationally should not be taken away because it would create a uncompetitive edge for Canadian companies.

The member for Peterborough said, “13 months ago we made a courageous decision”. I want to remind the hon. member that just over 13 months the Conservatives did make a courageous decision, a decision I agree with, that it would not touch income trusts for the sake of seniors and the companies. By this courageous decision, I guess he meant that they had to renege on that decision.

I and all other members in this chamber have received e-mails, letters and phone calls from seniors. What is he going to say to seniors on the incomes lost and the lifestyles they planned that have now been taken away from them?

Opposition Motion--FinanceBusiness of SupplyGovernment Orders

1 p.m.

Conservative

Dean Del Mastro Conservative Peterborough, ON

Mr. Speaker, there are so many inaccuracies in the member's statement that I do not know where to begin.

I will start with the one he noted on the past PC government that ruled Canada from 1984 to 1993. He might be interested to hear that McGill University actually pointed out that that government had the strongest economic performance record in more than half a century, much stronger than his government's performance, which benefited from the decisions made by that Conservative government, which were difficult at the time.

This government has also made very difficult decisions predicated on tax fairness for all Canadians. The Liberals may not want tax fairness. They want to stand up for their buddies on Bay Street, the big money influence, who they do not think should pay any tax.

I have a lot of middle class Canadians in my riding of Peterborough who pay a lot of tax and they want tax fairness. The Liberal Party should support it. I am disappointed that the member does not.

Opposition Motion--FinanceBusiness of SupplyGovernment Orders

1:05 p.m.

NDP

Denise Savoie NDP Victoria, BC

Mr. Speaker, it is interesting to listen to my colleague's intervention as he makes his party out to be the apostles of productivity.

I wonder what he would have to say to all the employers in my region who have thousands of employees waiting for days in passport lines because the Conservatives, after over a year of being in the House as the government, have taken very little action until recently, but are still refusing to open more passport offices in rural areas or introduce measures that would allow the extension of passports so people would not need to renew so often. I see line-ups daily going right around the block for thousands of people who tell me that they have had to take days off.

Opposition Motion--FinanceBusiness of SupplyGovernment Orders

1:05 p.m.

Conservative

Dean Del Mastro Conservative Peterborough, ON

Mr. Speaker, however off topic the member's question may be, I will answer it because I think it is a good one.

I actually think that underlines more failures of the previous government. The western hemisphere travel initiative is not new. The previous government was asleep at the switch. It did nothing. Our government has increased the ability to process passports by over 20%. We have extended the hours at passport offices right across Canada and we have added new features so that members of Parliament can have direct access to work on problems.

I would like to get back to the issue at hand, which is tax fairness. I know the NDP members support tax fairness. In fact, the finance critic for the NDP has taken a lot of hits from associations like CAITI, an association that is putting a lot of money into the Liberal Party to bring forward motions like this which are absolute nonsense. CAITI and the Liberal Party may not support tax fairness but Canada's new government absolutely does, and I am proud to stand with it.

Opposition Motion--FinanceBusiness of SupplyGovernment Orders

1:05 p.m.

Liberal

Alan Tonks Liberal York South—Weston, ON

Mr. Speaker, my colleague across indicated in his speech quite an understanding of the global markets and the conditions he cited, the accelerated capital tax write-off for machinery, which will be very important in the global economy. He talked about global capital markets and he cited four areas where the government is taking an initiative.

However, he also cited that $523 billion abroad in Canadian capital investments in fact is the higher order of capital investment through Canadian investors. Does that not give him cause to reflect, with that degree of integration of capital movement through other markets than the United States markets, that this may be an ill-conceived strategy? Is the government sure that it has the research and back-up to prove that this will not be ill-conceived?

Opposition Motion--FinanceBusiness of SupplyGovernment Orders

1:05 p.m.

Conservative

Dean Del Mastro Conservative Peterborough, ON

Mr. Speaker, the hon. member has made a very good point. If we are going to bring in tax fairness we need to be very careful in what we are doing. The Minister of Finance has been very clear. He said that what this will come down upon is the issue of double-dipping.

A case was brought forward at the finance committee the other day where the CRA pointed out a specific example of a Canadian firm that borrowed $200 million from a tax haven of at 10%. The firm deducted the $20 million expense but it loaned the money through another tax haven to another subsidiary that also deducted the exact same tax savings in the United States.

That is what we need to put an end to. We are not opposed to interest deductibility for investment abroad. We want to encourage Canadian companies to grow and be globally competitive. We also want to bring taxes down broadly but in order to do that double-dipping must stop.

I know the hon. member, if he understands the problem, which I am sure he does, supports us on that. Double-dipping must end.