Mr. Speaker, it is a pleasure to speak to the motion, a little earlier than anticipated but never too early.
This is another example of the Conservatives not having a plan to govern. We see this budget not as a plan for Canadians, nothing to aspire to, as the title would say, but as an interim document, a regroupment of sound bytes bringing us to an election.
The Minister of Finance had no intention of putting in place this elimination of the deductibility of interest for foreign investments. He did not know how to do it. He had no interest. It was a quick sound byte. It was tax fairness. He knew there would be some opposition to it and he would talk about tax fairness. In 20 seconds he can explain his side very well. However, now he has had months and all we hear are reversals where he is saying, no, not the elimination of interest necessarily but the double deduction of interest. Next week it will be something else.
I understand that on Monday he will be making a statement on this. I hope somebody is writing this one for him. I hope he has talked to people within the department. I hope he has talked to experts. I hope he is talking to the business community. I hope he is looking at what is happening in the international community, what we are competing against, what the people who are providing jobs must face day in and day out in that global business environment, and that he comes out with something that has a bit of logic.
We have seen a lot of this. We have seen during the campaign and the years before the campaign in my riding where they said that they would fix the problem of the Port of Digby. During the campaign, finally, we got the arbitrator's report on the Port of Digby. An arbitrator had been called in after serious allegations had been made by a member of the Conservative Party, questions that deserved to be looked at, I agree 100%, when the member from Colchester raised them, but the arbitrator came out and said that it was not the operators of the port who made the mistake, but that it was the federal government in the transfer.
It is true that the Liberals were in power at the time of that transfer. It was a mistake made by Transport Canada. It was previous to my being elected but it was a mistake by our government.
Now the Conservatives have the power. They have made the promise that they would fix it. Is has been 16 months and we have seen no action. The same lines are being furnished by that department.
Then we look at income trusts. They made the promise during the campaign that it would not tax income trusts. What happens? The first thing they do is tax income trusts: $25 billion to $35 billion of savings, primarily of seniors, lost, which is an unimaginably huge amount.
However, also important is the question of the hollowing out of Canada's corporate assets. These entities do not cease to exist. The ownership changes hands. If there is no vehicle to have that ownership within Canada, the ownership ends up in other countries, which is what we are seeing. We are seeing these valuable resources go to other countries.
There were problems with the income trusts in the way in which they were going but rather than surgically looking at the problems and fixing them, kapow, they dropped a nuclear bomb and wiped out the whole thing, except for real estate, which some of his friends must have understood because he agreed that it was a good vehicle for real estate investments and left the REITs, but they took out the other ones.
When the governor of the bank was before committee he said that there was a problem with income trusts and a problem with governance but that for certain investments, for certain sectors it was the proper investment. Energy was named as one of them.
I would like to advise the Chair that I will be sharing my time with the member for Scarborough Centre.
That was a fiasco with income trusts. Then we come to this famous question where we look at interest deductibily.
I will give an example of a company that is in manufacturing in Canada, that is in the transformation of products, raw materials, to manufactured goods. Let us look, for example, at the aluminum sector. To produce aluminum there needs to be energy and raw materials. One of them is bauxite. Sometimes, as a corporation competing on the market with international corporations, subsidiaries in other countries have to be bought. Mining operations have to be opened to get the bauxite. The way to do that is to borrow money, either domestically or internationally, and that has a cost, operate those facilities, and get the product, guarantee the resources, and guarantee to be able to continue to operate.
If the Minister of Finance's budget had put this in place, and the member just mentioned it, Canadian companies would no longer be competitive. No longer could companies compete with Spanish companies, American companies and European companies. They would be out of that market.
What is the only choice then? Sell the head office to a country where they can use that interest deductibility. There is no choice whatsoever.
I will give another example of the hollowing out. In military purchasing the Conservatives decided that to speed things up and give their chosen contractors all the work, that they would go with original equipment manufacturers, not only for the equipment, not only for the planes for example or the helicopters, but also for the in service support.
That in service support is very important because that is where Canadian companies have potential. That is where we can build. That is where we can develop and that is where we can compete.
I pay particular attention to I.M.P. out of Halifax, a home grown company. An immigrant came to our country and saw the potential, contracts with the military to work on Auroras, helicopters, Sea Kings, and 50% of his work is with the Canadian military. That gives him the capacity to compete internationally.
Out of Halifax and Quebec there are about 5,000 employees competing and selling in over seven or eight countries. He is providing about 5,000 jobs. There are a lot of people that I know who are retired military technicians. They go on to very gainful employment working for that company, creating value within Canada, competing with multinationals.
Now what is the situation? We have the contract, we hear, that Boeing is going to spend dollar for dollar on this contract in Canada. What the minister does not tell us is that Boeing gets to choose who it uses.
Imagine if I am a contractor and all of a sudden I have to go and beg rather than compete for my work with somebody who already has all the government work. He is guaranteed it. I have to go and beg for a little slice of that.
I would imagine that if that contractor is bidding against me in international markets that he is going to tell me that if I am going to get that work then do not bid against him on the international market. If I bid then I will be squeezed out of the Canadian market.
What is the result of that? Compound that with the ITAR rules that tells this employer who he can hire, what information he can have, and what data he can have. Then what happens to this company? There is no choice but to sell outside of Canada, to sell to another company. This is another example of hollowing out our Canadian assets.
I am not one of those economic nationalists who will say that we have to have all sorts of rules to make sure that nobody can compete to own Canadian companies. I believe that, given the right set of circumstances and a level playing field, our Canadian companies can compete in the world. We can buyout in other nations. We can compete with everybody.
But if we look at income trusts and if we look at OEM and ISS, and if we look now at interest deductibility, we are tilting the playing field away from Canadian companies. We are removing their competitiveness and all of a sudden they have no choice but to sell.
How can we ask these Canadian companies and shareholders within Canadian companies, to risk all the capital, the pensions, the future pensions of these shareholders who are the workers in our communities, and to risk everything to compete in a market where they are disadvantaged? I certainly hope that on Monday when the Minister of Finance does another flip-flop that he falls on the proper side this time.