Debates of March 31st, 2008

Opposition Motion--The Economy

[Bryon Wilfert, Liberal, Richmond Hill, ON]

Disbelief, Mr. Speaker. In fact, some people thought he had moved from the province of Ontario. Some might wish that he had moved out of the province of Ontario, but they could not believe that a member of the government, never mind the finance minister, from the province of Ontario would suggest that this is the last place to invest.

I cannot understand why, particularly with closure of plants and especially with the situation as it is, the finance minister is pointing the finger at the provincial government.

We should be working collaboratively. Regardless of whether or not we always agree, we need to work constructively on infrastructure, on the auto sector and on the forestry sector.

Clearly, my constituents were quite surprised. They thought maybe he had moved. Some wished that he had, as I say, because they do not understand how it is good public policy to bash one's own province and to advise against investing.

I would suggest that some of my colleagues, when standing in front of empty, closed plants, should point out and say that for the finance minister of Canada to not want anyone to invest here does not make any sense.

That is a rhetorical question that I have asked in the House. I do not understand the strategy. I do not understand the end game in that kind of approach to say to people that they should not invest in their own province.

[Rick Dykstra, Conservative, St. Catharines, ON]

Mr. Speaker, at the outset I want to note that I will be sharing my time with the member for Simcoe North who is obviously working extremely hard on behalf of his constituents and is one of the brightest and best of the new members we have here in the House of Commons. I am proud to be sharing my time with him.

I find it interesting, listening to the speech and responses to questions from the member for Richmond Hill, when he speaks about accountability, finance and his concerns around the province of Ontario and about the financial affairs of the country, when in fact today he stood in his place along with his Liberal colleagues and could not have cheered more loudly to welcome the member for Toronto Centre, the former premier of the province of Ontario.

The very issue we are talking about today he brought in year after year after year the highest deficits that the province of Ontario faced in its history. So the member stood today and gave a speech and tried to lecture members on this side. There are a few members on his side of the House, including the former finance minister of the Liberal Party, who can listen a little bit to the words of encouragement he was giving because they certainly apply most emphatically to the former NDP premier of the province of Ontario.

We have in front of us a motion moved by the member for Markham—Unionville which talks about working with the province of Ontario. I did a bit of research on that and I want to bring a few things to light.

Ingenuity and an industrious mindset allowed the province of Ontario to remain the engine of the Canadian economy. Ontario is a land of opportunity with a promise of prosperity so alluring that it has drawn, and continues to draw, people from every corner of our globe.

The province's vitality is not defined by its politicians, whether provincial, federal or municipal, but by the determination of its residents to build an ever more prosperous community. It is a community that includes global leaders in science, technology, research, development, manufacturing and processing, culture and finance. Quite frankly, the list goes on.

Those leaders are backed by the most hard-working, innovative and creative workforce in the industrialized world. Make no mistake, this government and this finance minister have absolute confidence in Ontario's ability to succeed, not just here in our country but in the world. But we cannot ignore the reality that Ontario's economy faces challenges.

The global economic volatility threatens to install Canada's economic engine. Ontario has been severely challenged by a weakening U.S. economy, soaring energy prices, increased competition from emerging markets like China and India, and a strong Canadian dollar. Its situation stands in sharp contrast to a Canadian economy which has remained largely healthy.

In the midst of the second longest period of economic expansion in Canadian history, Ontario's share of the national nominal GDP has dropped from 41.4% in 2002 to 38.6% in 2006. Nationally, business investment has been on the rise for more than a decade and Ontario has fallen below the national average.

The national unemployment rate is at its lowest in 33 years, but for the first time ever in 2007 Ontario's unemployment rate rose above the national average. Private sector economists have echoed these concerns noting that the Ontario standard of living may fall below the Canadian average and make it a have not province.

Jack Mintz has stated, “Ontario is facing a major challenge...its per-capita GDP has already tracked down to be close to the national average”. Don Drummond warns that Ontario's falling GDP growth “does suggest that it is getting closer to being an equalization recipient”.

While factors outside the control of governments are significant contributors to Ontario's woes, there are partial solutions available to them.

For instance, our government is cutting business taxes deeper and faster than ever before. We are reducing corporate taxes to 15% by 2012. We have eliminated the federal capital tax. We are eliminating the corporate surtax in this fiscal year, 2008. We are providing targeted tax relief to the manufacturing sector through an accelerate writeoff for new equipment, not 8 or 10 or 15 years, but 2 or 3 years. We are providing provincial incentives to eliminate its capital tax.

As a result of our actions, Canada's corporate taxes will soon be among the lowest of the major industrialized economies.

We believe these tax reductions will provide long term, broad based support for employers. We believe this support will attract investment, create jobs and make Canadian businesses more competitive. We have called on our provinces to follow that lead. As the Canadian Council of Chief Executives recently declared:

The federal government clearly has done everything it can to reduce tax rates within the boundaries of prudent fiscal management. The next major steps in forging a more competitive corporate tax system must come at the provincial level.

In that spirit, the federal government has been working with the provinces to brand Canada as a low-tax jurisdiction to help attract investment and jobs. We are happy to report that some provinces are responding.

We have applauded governments of all political stripes, whether they be in Manitoba, British Columbia, Quebec, Saskatchewan or New Brunswick, for their recent efforts to lower taxes. We have called on Ontario, and we will continue to call on Ontario, to follow in that path. That low-tax message must be heard there more than anywhere.

As the Ontario government's own task force on competitiveness, productivity and economic progress has found, Ontario has the highest taxation on new business investment among developed economies. If no action is taken by 2012, Ontario's marginal effective tax rate will be over 30%, one of the highest in country and well above Quebec's rate of under 19%. That high tax burden is putting additional pressures on Ontario businesses as they try to compete with businesses in provinces and in other countries.

If the member for Markham—Unionville doubts such claims as mere partisan rhetoric, I will quote verbatim from a report released by the Royal Bank of Canada earlier this year. I remind the House that the member once served as that institution's chief economist.

The RBC report stated:

Despite laudable recent initiatives by the federal government to reduce the overall rate, our corporate taxes remain high relative to other Organization for Economic Cooperation and Development (OECD) countries. This is particularly true in Ontario and newer industries (like communications and other services) relative to more traditional ones (forestry and manufacturing)....

Ontario will continue to pay the price for prohibitively high tax rates, whether it is in the form of an ongoing reduction in living standards or weaker performance in manufacturing relative to other provinces such as Quebec or a declining investment trend in the province itself....

More aggressive action is needed on reducing statutory rates to continue to move the overall tax burden down--particularly in Ontario.

The federal government has appealed to Ontario's government to take action. We ask that it begin by reducing the provincial business income tax rate with a goal of meeting a combined 25% business tax rate in this country by 2012.

We would like and we ask Ontario to make a commitment to fully eliminate capital taxes for businesses in each and every sector. We have asked Ontario to take steps toward harmonizing its retail sales tax with the ever-lowering GST or, at the very least, transitioning Ontario's retail sales tax into a value added tax.

We applaud the Ontario government's elimination of capital taxes for business. There is no question that when the province makes a right move we are going to acknowledge it and congratulate the province on it, but we simply encourage further action. By lowering the province's high business taxes, we believe Ontario's economy will be strengthened to the benefit of its businesses, its individuals and, most important, its families.

This would be especially helpful for Ontario's hard-hit manufacturing sector. As indicated by a recent survey of Ontario manufacturers conducted by the provincial Chamber of Commerce, “(R)educing corporate income taxes was identified as the most effective measure the Ontario government can undertake to improve the competitiveness of manufacturers”.

There is no question about it. The province I represent and the city that I am elected to represent, St. Catharines, both know the feeling of needing to move forward and make sure that manufacturers and industries in our community have a chance to move forward.

I simply ask that the Liberal Party of Canada join with us in recognizing that this issue is about strengthening Ontario's economy and, by extension, our Canadian economy.

It is all about the future of individuals and families who call Ontario home, a future that even the Liberal leader knows would be made brighter and more prosperous through lower business taxation.

[Paul Szabo, Liberal, Mississauga South, ON]

Mr. Speaker, if there is one rule that I have probably heard more often than not in this place, it is that for every complex problem there is a simple solution, and it is wrong.

Cutting taxes, the linear move of just cutting taxes, is not going to address the problem we have in Ontario. That is a fact. Ontario has lost 100,000 jobs since January 2006 and another 20,000 in the current year. In addition to that, there have been sales drops in manufacturing, one in the year 2007 of 3.4%. These are the lowest levels in three years.

It seems to me that there are things that are going to be necessary. Tax cuts do not help companies that do not make a profit, which is taxable income on which they have to pay taxes.

This is something that takes a little bit longer, but in terms of addressing the real problem, it seems to me that there has to be some spending in the areas of labour, employment, immigration, and retraining and education services, to help people cope with the fact that they are losing their jobs. The businesses providing those jobs continue to struggle.

Tax cuts do not mean anything to businesses that do not pay taxes. When is the member going to realize that we need a real strategy to address the seriousness of the situation in Ontario?

[Rick Dykstra, Conservative, St. Catharines, ON]

Mr. Speaker, I am intrigued by the member opposite. I certainly appreciate his comments. I am not sure if there was a question in there at the end, but I certainly would like to respond to his thoughts or comments.

First, he and his party certainly stood and supported the budget. In fact, if they felt that this was not the type of budget or aggressive action that was necessary, then he and his colleagues would have stood in this House and voted against this budget. I find it interesting that on the one hand he speaks against what we are doing but on the other is quite prepared to stand up and support it when it comes time to vote, or certainly to not vote at all.

Second, I know there is some trouble in the Liberal Party right now, and I understand they have had some difficulties in Quebec. There are issues around the rest of the country, but specifically in Quebec over the last few days. Perhaps it is difficult for some of the members opposite to listen to their leader, but in fact their leader not just suggested this but recommended it, and he did not just recommend it but said that it would be in their party platform in the next election, and it is that in fact corporate taxes need to be reduced more aggressively than the approach we have taken.

When the member stands in this place today and says the only thing necessary is not to cut taxes, I suggest that he take issue with his leader. There are a few Liberals in this country who are taking issue with the leader of the Liberal Party right now, so I will leave that for them to decide.

However, there is more. It starts with the community development trust. I will be happy to respond to that in the next question.

[Dennis Bevington, NDP, Western Arctic, NT]

Mr. Speaker, the previous question from the member from the Liberal party took me aback, because of course the Liberals did support the budget, but when I look at the evidence I see that in October the Liberal leader actually was pushing for a very low corporate tax rate. I think the Conservatives responded in kind. The two parties can coexist on that basis quite well.

However, the hon. member brought up one point in his speech, which is that I think it might be more germane for the federal government to look at energy costs. Those are really important right now in Ontario and have a significant impact on the future of investment in Ontario.

When the government will not examine the nature of our natural gas supply in this country and when it will not examine the nature of the oil supply not only in this country but worldwide, how can we offer assurances to Canadian businesses and to investors that could be investing in Ontario that there will be a reasonable supply of energy for the future, that the energy will be available, and that we have a national energy strategy for Canadians first that will deliver this over the next decade?

[Rick Dykstra, Conservative, St. Catharines, ON]

Mr. Speaker, I certainly will make no apologies with respect to this government's commitment to energy and the delivery of that energy in this country over the next number of years.

The member is not from Ontario, so I understand that the question may not necessarily be about Ontario, but let me bring him back to the motion of the day, which is about the impact on the state of affairs here in our province. When it comes to energy, quite frankly, the province of Ontario is going to benefit significantly from this budget. To support nuclear energy and maintain nuclear safety, $300 million will be invested in the province.

[Bruce Stanton, Conservative, Simcoe North, ON]

Mr. Speaker, I am pleased to have the opportunity to speak to today's rather unusual motion. I say it is unusual because there is no doubt about this government's confidence in the vitality of Ontario's economy. In fact, when we speak of Ontario's economy, its sheer size and weight make it actually the greatest and most significant contributor to the Canadian economy. Its economic success is synonymous with Canada's economic success.

Our government demonstrates that confidence in Ontario by our actions and our commitments. I am pleased to take a moment here today to highlight some of the measures our government has taken to help ensure the economic vitality of Ontario.

These include the historic changes we undertook in budget 2007 to restore fiscal balance in the Canadian federation and measures that responded positively to Ontario's longstanding demands, demands that I must say the previous Liberal government was adamantly against and actually fought strongly against.

It is odd, and in fact I think it is quite hypocritical, that the member for Markham—Unionville would have the audacity to lecture this Conservative government and this Minister of Finance on relations with the province of Ontario. Apparently the member and his Liberal Party colleagues have collective memory problems.

For example, has he completely forgotten that only a few years ago he and the federal Liberal government engaged in an attack on the Liberal premier of Ontario, Dalton McGuinty, going as far as to suggest that Premier McGuinty was a threat to national unity because of his and his government's campaign to have the fiscal balance addressed?

Let us go back in time to one speech in particular, a speech the member for Markham—Unionville gave at the Toronto Board of Trade in April 2005. In that speech, the member, then a member of the Liberal cabinet and the federal minister for the GTA at the time, launched an all-out assault on the McGuinty government and his own provincial cousins, accusing them of using an “analytically deficient” campaign which threatened to put “the essence of Canada at risk” and was “dangerous for Canada”. He added “that it would only serve to give comfort to Quebec's separatists”.

Based on this past experience and the remarks of the member, one can seriously question the appropriateness of his lecturing our government on how to maintain cordial relations with the McGuinty government in Ontario. I would add that the reaction to the member's over the top remarks was unequivocal.

A Toronto Star editorial, for instance, lambasted the member for insulting all Ontarians and alleging that the premier, through his work to seek fairer treatment, in fact was intensifying the self-inflicted damage the federal Liberals had done in Quebec with the sponsorship scandal. Responding for Ontario's Liberal government, Dwight Duncan, Ontario's current finance minister, was so outraged that he publicly demanded that the member apologize.

Of course, one should not be surprised that the member would take such a position that insulted so many Ontarians, because in government, just as in opposition, the Liberal Party has consistently and vigorously denied that the fiscal imbalance has ever existed, ignoring the valid concerns of provinces like Ontario.

No, after nearly a decade of federal Liberal inaction and apparent delusion, it was our Conservative government that took decisive and concrete action to recognize and acknowledge that there was a fiscal imbalance. We demonstrated that through a comprehensive $39 billion plan unveiled in budget 2007, which put federal support for provinces and territories on a long term, predictable and principle based footing for the future.

We returned equalization to a principled, formula based program based on the recommendations of the O'Brien expert panel.

We made changes that addressed Ontario's deep concerns, including moving to equal per capita support through the Canada social transfer and, in the future, equal per capita cash in other major transfers for infrastructure, job training and health care.

Another important change that responded to Ontario's concerns was the inclusion of a provision to ensure that payments to provinces, those becoming wealthier than those provinces not receiving equalization, should be capped, a concept often referred to as the fiscal capacity cap.

As a result of restoring fiscal balance, Ontario will receive $13.9 billion in fiscal 2008-09. That is an increase of $1.4 billion from last year and almost $2.7 billion since 2005-06. These transfers include $8.6 billion through the Canada health transfer and $4.1 billion through the Canada social transfer.

Ontario's government, understandably, was quite content with this government's actions to address their long-standing grievances regarding fairness in intergovernmental relations. Indeed, many members of the Liberal provincial government were quite open and generous with their praise.

The then Ontario finance minister heralded the measures, noting “I think we've made some significant progress, particularly on the issue of fairness in the wonderful world of fiscal federalism”.

The then Ontario intergovernmental affairs minister also praised it as “real progress”, adding that she was heartened to see that “the federal government has committed to delivering transfers on a per capita basis in the future, with immediate fairness in the Canada social transfer and many other federal transfers”.

Premier McGuinty, who called the action “real progress for Ontarians”, also expressed his appreciation for the respect our Conservative federal government had shown toward the province's concerns. I quote verbatim from a televised interview on CBC Newsworld. He said, “We've made a lot of progress, I would argue, on behalf of all Canadians to try to get beyond an endless series of one-offs and restore some basis of principle to transfers from the federal government to all the provinces and territories. The Prime Minister said that he was now, for the first time in a long time, and I support him fully in this regard, he was going to introduce a principles based approach to dealing with federal transport. No more one-offs and I support that”.

Contrast that spirit of cooperation between our Conservative government and the provincial Liberal government with the rather dismissive response that came from the previous Liberal federal government, most notably the member for Markham—Unionville.

What is even more egregious is that the Liberal Party of Canada not only voted against budget 2007 and its measures to address Ontario's concerns, but it shockingly fought it every step of the way, with not one Liberal member of Parliament joining our Conservative government to stand up for Ontario. Make no mistake, Ontarians noticed.

Permit me to quote from an Ottawa Sun editorial from that time, which said:

—while the Conservative government...is defending Ontario, where do Ontario Liberal MPs stand?....What are Liberal MPs doing now that [the Liberal leader is] ignoring, again, the rights of Ontario taxpayers? Or do they agree with Ontario Finance Minister Greg Sorbara, when he says it's not fair because some of those provinces already invest per-capita more money than Ontario in sectors like education and health?

Unfortunately, the answer to both these questions was they did nothing. They did not agree with their provincial Liberal cousins. Worse still, Ontario Liberal MPs then stood in the House and voted no to the measures that enhanced the well-being of and contributed to the future prosperity of Ontarians.

On what basis does that member opposite and his Liberal colleagues in Ontario challenge the manner that we in fact work cooperatively with Ontario? No, we have nothing to learn from that member.

We have charted a new course, a course of open federalism that recognizes the strength and contribution of each region of our great country, one that is anchored in a desire to make Canada an even stronger federation. By forging ahead with our vision of open federalism, we remain focused on building Canada's future prosperity.

Canada today is a country that is confident and prudent, idealistic and practical. History has proven over and over again that a balanced approach to fiscal policy, based on low taxes, lowering the debt burden and disciplined spending, creates the sturdiest foundation for a strong and successful economy.

This is the course we will pursue for Ontario and for all Canadians.

[Louise Thibault, Independent, Rimouski-Neigette—Témiscouata—Les Basques, QC]

Mr. Speaker, throughout the member's speech, I was expecting to hear “open federalism”, and he finally concluded with “open federalism”. I therefore want to ask him a very direct fundamental question.

Initially, when the Prime Minister took power with a minority government, he said he wanted to respect the provinces' jurisdictions.

I will take the example of Ontario. I can only imagine what would happen if Quebec were involved. My question is this: why do the Minister of Finance and the Conservative government feel free to interfere in the jurisdictions and affairs of a provincial government?

Have they—the Prime Minister included—forgotten that when they were talking about their wonderful open federalism, it meant not shoving things down the throat of a province that does not agree with their ideas? They should not claim, as the previous speaker did, that this is simply a way of encouraging the province. The speech by the Minister of Finance was not encouraging. They are trying to tell a provincial government how it should act.

What gives a federal authority the right to interfere in a provincial jurisdiction?

[Bruce Stanton, Conservative, Simcoe North, ON]

Mr. Speaker, nothing could be further from the truth. In fact, the government has pursued a course that entirely respects the jurisdictions of the provinces and territories. That is exactly what more predictable, dependable transfers are all about, putting them on a principled based approach and making sure that provinces and territorial governments have the resources they need to make the decisions within their jurisdictions. In fact, the government has taken a completely different track than what we have seen historically when the federal government did intervene on issues that were within provincial jurisdiction.

This is an important principle that we will continue to make up. The approach we have taken, as was provided under the fiscal balance arrangements in budget 2007, speaks exactly to that very principle.

[Judy Sgro, Liberal, York West, ON]

Mr. Speaker, I have a comment for my very hon. hard-working colleague over there. On the issue you raised when you opened up your discussions about what an odd motion to be discussing, I would agree with you. I think it is odd that we are talking about the issues of Ontario and—

[The Acting Speaker, Conservative, Andrew Scheer]

Order, please. I remind the hon. member to address remarks through the Chair, not directly to other members.

[Judy Sgro, Liberal, York West, ON]

Mr. Speaker, the whole issue of a minister of finance being the subject of an opposition motion today clearly shows that those of us from Ontario have some very serious concerns about what we consider to be interfering in telling other provinces what to do.

Does the hon. member think it is appropriate for the Minister of Finance to go to Quebec or to Alberta and give them direction and comment if he disagrees with their future policies?

[Bruce Stanton, Conservative, Simcoe North, ON]

Mr. Speaker, I thank my friend from York West for her tremendous work in this place and on a committee wherein I had a chance to serve with her when she was the chair. It was a great indoctrination into the House.

These are important considerations. The plight of all Ontarians, the opportunities and potential that our province has to enable job creation, to enable greater investment are at the core of our government and our finance minister's approach to try to encourage Ontario in the right direction.

I think it is completely appropriate to make public comment about the kind of issues faced not just by our country but our various provinces and territories and to sight as an example those provinces that are steering the right course, like Alberta, Quebec, New Brunswick and Saskatchewan, all of those that are striving for a lower tax regime to attract more investment. Not withstanding the political commentary that has ensued from this, the principle is that we do the very best we can to encourage the right decisions in the province of Ontario so all Ontarians can benefit.

[Judy Sgro, Liberal, York West, ON]

Mr. Speaker, I am pleased to be back, as I imagine all of our colleagues are, in the House to continue the very important work we are doing. I am especially interested today because we can get to comment on something that I think is quite atrocious. We have the Minister of Finance lecturing other provinces, especially the province of Ontario, which is, always has been and needs to continue to be the engine for growth in Canada

If we go back over the last 30 to 40 years and if Ontario finds itself in difficulty, the first thing we know we are into a recession. Therefore, it is very important we discuss these issues, but the core of this is not to have our current Minister of Finance bashing the province of Ontario. It is a duly elected government. It will make its decisions and does not need to be lectured by anyone else, especially by the federal Minister of Finance. Therefore, I am thrilled to participate in the debate this afternoon.

For anyone who is not sure of what we are debating today, I will read the motion. It states:

That this House has confidence in the economic vitality of the province of Ontario and calls upon the Government of Canada to work cooperatively with the governments of all provinces and territories to assure that the prosperity and well-being of Canadians is maintained and enhanced.

The fact that Canada is made up of 10 provinces and that we all work together in a cooperative manner is an extremely important part of Canada's past and Canada's future. The motion was put forward by my Liberal colleague and finance critic, the member for Markham—Unionville. I would like to recognize my colleague for all of the exceptional work and dedication he has put into doing his job as finance critic. He works tirelessly to hold the minority Conservative government to account and is steadfast in trying to defend Ontario against the“king of downloaders”, who we have as a member of the government.

I congratulate my colleague, the member for Markham—Unionville, for his continued good work on behalf of his constituents and all Canadians.

However, the key question we are debating today is just what do the Conservatives have against Ontario because more and more that is what it feels like. For much of our history, as I said earlier, Ontario has been Canada's true economic engine. Our strength is drawn from every part of our great province, whose economy has promised so many jobs to increase our prosperity, to build our province and to contribute to make Canada the best that it can be.

However, we are suffering under a federal Minister of Finance, who left Ontario with a $5.6 billion deficit and left us all with the understanding going into that election campaign that we had a balanced house in order. It was a big shock to all of us to find out, after all the sacrifices that had been made over that period of time and the assumptions that we had a balanced budget, that we had a $5.6 billion deficit after enduring many of the cuts we had to go through. As usual, a responsible Liberal government was elected and had to go in and cope with the deficit.

The same minister has repeatedly criticized the Ontario Liberal government for the province's investment climate. He publicly claimed that the province's corporate tax rate made it the last place in Canada to invest and came forward with a ridiculous list of expectations for the budget of the Ontario government.

That does huge damage when it is circulated around the world, through the Canadian press and so on, that Ontario is not in good economic terms and no one would want to invest there. It is exactly the opposite of what I would expect the Minister of Finance to do. His repeated attacks against Ontario are irresponsible and downright appalling.

It is his job, as I mentioned earlier, to increase and bolster confidence in Canada's economy, not to undermine the investment climate of Canada's biggest province. If he wanted to be minister of finance for Ontario, then he should have ran in Ontario for that job.

Perhaps he is still suffering from his own part in the common sense revolution. Our current Minister of Finance, current Minister of Health and current Minister of the Environment were all at the cabinet table while Ontario suffered as part of the Mike Harris regime. Now they are trying to have a repeat performance here at the federal level.

The welfare of Ontario's economy is too important to be used as a political punching bag so that everyone who does not like Ontario can try to settle old scores with former provincial opponents. The finance minister must immediately stop undermining the Ontario government and start taking action to boost Ontario's productivity.

Members on all sides of the House do not want to see Canada go into a recession. It is imperative that whenever there is an opportunity for us to work together, we should talk about how wonderful Ontario is and boost it and promote investment.

At a time when Ontario is suffering from a manufacturing sector slowdown, the Minister of Finance has decided it is a good time to attack our provincial economy. In a speech in Toronto, the Minister of Finance said that Ontario is the last place in which one should make a new business investment in Canada. He is an Ontario member, at least until the next election, and then we will see whether or not his community still feels that way.

I find it simply disgraceful that the Minister of Finance would talk about any province that way. His job is to encourage investment, not to discourage it. That kind of talk from the federal Minister of Finance, no less, hurts efforts to attract investments, the kind of investments that lead to more and better paying jobs that make Canada that much richer.

There is of course irony in all of this since in his 2007 budget speech the finance minister said it was the end of the long, tiring, unproductive era of bickering between provincial and federal governments. Clearly that promise has gone out the window. Unfortunately, not only are his Conservative colleagues doing nothing to correct his behaviour, but there are many more examples of Conservative MPs undermining their own provinces.

On November 14, 2007, the Conservative government introduced Bill C-22, a bill to address the number of elected representatives assigned to each province to reflect population growth. The democratic goal of the Canadian electoral system as set out in the Canada Elections Act is embodied by the principle of one elector, one vote. However, Bill C-22 allocates only 10 new seats to Ontario, when a formula which properly distributes seats according to population growth would give Ontario at least 20 additional seats in the House of Commons. While our Liberal caucus spoke out against this clear attack on our province, we have not heard a single complaint from our Conservative colleagues from Ontario.

Conservative members of Parliament from Ontario have done nothing while their government has acted against the interests of the very people they represent. No doubt they must be finding it very difficult to have to cope with themselves, and for that they have my deepest sympathy, but I do hope they are standing up and fighting for Ontario at least behind closed doors, since they do not seem able to do it up front.

Premier McGuinty defended Ontario and objected to Bill C-22 and its distortion of democratic principles. In response, the government House leader, an Ontario Conservative, called Premier McGuinty the small man of Confederation. Insults do not encourage cooperation. This grudge against Ontario somehow must be contagious.

On November 20, 2007 the Federation of Canadian Municipalities released its report outlining the $123 billion infrastructure deficit facing Canada's cities and communities. This deficit represents the investment needed to upgrade and repair Canada's roads, transit and water systems. In response, the finance minister said that his government was not in the pothole business, and called municipal governments whiners for bringing attention to the pressing needs hurting their communities and their residents.

A Liberal government clearly would work with the provinces and municipal governments, as we did before, with a spirit of cooperation that the Conservatives just refuse to comprehend. In fact the Liberal opposition recognizes that urban communities play a very vital role in Canadian society. The federal government has ignored urban communities from the day the Conservatives took office. We will work to change that through our urban communities caucus.

A strong contingent of Liberal MPs and senators are determined to put Canada's cities back on the national agenda. The federal government needs to work with our provinces and cities to improve living conditions and lay down the foundation for a strong Canadian economy. Canada's competitiveness in the global economy is rooted in the strength of our cities, a factor the government continues to ignore.

On March 11 the Liberal urban caucus met with the hon. Jim Watson, Ontario's Minister of Municipal Affairs and Housing. We talked about a variety of things, but most important, how we can continue to build our great country, because it takes partnership and cooperation. It takes long term planning and long term commitments. One-offs do not work.

The Liberal urban caucus remembers very clearly that the Minister of Finance and his buddy, Mike Harris, were the kings of downloaders and we are not going to let them do that to Canada, never mind Ontario. We remember when they turned their backs on so many programs in Ontario, in particular, social housing.

My constituents know very well that downloading from the provincial level will cause property taxes to rise because someone has to pay for the services being delivered at the municipal level. If the federal government does not step up to the plate for housing, transit and infrastructure, property taxes are going to have to go up because those are vital services that have to be maintained.

Under the minority Conservative government, no agreements have been established that are really and truly going to build Canada. We continue to see the seeds of the politics of division, pitting one province against another, Ontario being the scapegoat for Confederation. Clearly, this is not acceptable.

It could be much different. A Liberal government would work cooperatively with the provinces. We would support a balanced approach that includes competitive taxes and investment in people and innovation to strengthen the manufacturing sector, including creating a $1 billion advance manufacturing prosperity fund to support major investments in innovation and jobs, and improving the science, research and experimental development tax credit to support research and development in the manufacturing sector. We would support investment in infrastructure in Ontario communities and continue to invest versus all of the tax cuts that we continue to hear about.

In fact, in 2005 the Liberal government committed to the gas tax transfer, transferring $5 billion over five years to Canadian municipalities for infrastructure investment.

In February 2008 the Liberal leader committed to making this transfer permanent, as well as allocating any unanticipated surplus that exceeded a $3 billion contingency fund toward the infrastructure deficit that is currently facing Canada. Rest assured, we would definitely ensure that any legislation would uphold the principles of democracy and that Ontario would be allocated its rightful share of seats in the House of Commons.

This is an important motion. It talks about cooperation and the need for Ontario to do well so that we can continue in our quest for a strong Canada. That results through 10 strong provinces and territories, which is imperative if we really want our country to do well.

As a result of this opposition motion, certainly I would like to see the minister pull back from his bashing of Ontario, apologize to the people of Ontario for his shortsightedness, make a commitment to work with the province of Ontario and all of us, put the issues that matter most to our provinces up front and make sure the investment needed is clearly there.

I hope that as a result of today's motion, tomorrow morning there will be a new era of civility around here with the Minister of Finance, an apology to the province of Ontario and that we move forward on trying to make sure that Ontario is the best that it can be.

[Rodger Cuzner, Liberal, Cape Breton—Canso, NS]

Mr. Speaker, in the context of what my colleague was sharing with the House, I certainly agree with her. I do not disagree with tax cuts. I stand with the government that tax cuts are important, but they cannot be the only weapon that we use against this enemy of job loss and downturn in the economy. It is like trying to play a round of golf with only one club in one's bag.

Targeted investments in research and development are very worthy and important. Obviously that same view was not shared by the current government.

When we look at the recent announcement of the $17 million investment by the provincial government and the challenge that is being put forward by Ford, does my colleague believe that the current government is motivated to make that type of investment so that employees can have a brighter future in a sustainable industry and that something positive can come out of all this bad news in Ontario right now? What is her hope for the government to act on this?

[Judy Sgro, Liberal, York West, ON]

Mr. Speaker, on the whole issue of investment in the auto industry, we know that thousands of jobs are created as a result of a successful auto industry. Canada, and Ontario in particular, is well positioned when it comes to the auto industry. In the whole realm of things, taking $17 million of the $60 million in the GST cut and matching Ontario's commitment is not a huge amount of money.

We all want to see tax cuts, but the reality is that someone has to pay for the different services that are required.

Just to give an example of what we are talking about when we are talking about priorities in investing, whether or not it is the $17 million in the auto sector, when the current finance minister was the finance minister in the Mike Harris government, in the 2001-02 fiscal year he cut $603 million from hospital care. A hospital in my riding was forced to close because it did not have the funds to carry through. Schools were closed. All of this happened because corporate taxes were being cut so that there would be more money to invest in other things.

There was $154 million cut from social assistance. There was $309 million cut from post-secondary education. There was $583 million cut from housing. That was simply in a one year budget in the province of Ontario.

All of us want tax cuts, but there has to be a certain amount of money there to provide the services that are required for our country. When we are reinvesting those dollars into things like the auto industry or post-secondary education to make sure that our kids are getting a good education, all of those are investments in the people of Ontario or the people of Canada.

[Louise Thibault, Independent, Rimouski-Neigette—Témiscouata—Les Basques, QC]

Mr. Speaker, I really wonder why the Conservative government's Minister of Finance is so concerned about provincial tax policies. I said earlier and I repeat: this gives me little encouragement about what will happen in the future.

The government would be much further ahead to take care of its own files. Consider, for example, issues concerning seniors, like poverty and retroactivity on the guaranteed income supplement. We could also consider the forestry sector in Quebec, especially in my region, which really needs help. The federal government has failed to take action on so many other issues.

I would like to know if my colleague shares my opinion, that is, if she thinks the government should stay in its own kitchen and cook its own meals, instead of not just eyeing up, but actually taking over its neighbour's kitchen.

[Judy Sgro, Liberal, York West, ON]

Mr. Speaker, we often hear that the three levels of government are supposed to do the very best job they can within the realm of their responsibilities. I agree with my colleague's comments regarding criticizing other ministers of finance in other provinces. If the current Minister of Finance wants to become leader of the Conservative Party in Ontario, then he should step down, go there and take over that job. However, for him to stand here and rather than concentrate on how we can make Ontario stronger and better, to bash Ontario and try to take out investment is totally uncalled for. He should be ashamed of what he has already done.

[Peter Stoffer, NDP, Sackville—Eastern Shore, NS]

Mr. Speaker, we in Nova Scotia know what it is like to have a federal Conservative government come after us really hard and deliberately mislead us on many issues, the Atlantic accord being one.

The hon. member from the Toronto area is absolutely correct. The finance minister is wrong in what he is doing. The government is wrong-headed on many of its policies. However, she and members of the Liberal Party have an opportunity to do what most Canadians do not have the opportunity to do. The Liberals can actually do something about it. When the next confidence motion comes before this House, because she is absolutely correct in what she says, she and members of her party have to stand behind that rhetoric and dialogue and show some mettle and say to the Canadian people, “We can no longer accept the direction of this government”. Will she stand up and vote non-confidence in the government at the next opportunity?

[Judy Sgro, Liberal, York West, ON]

Mr. Speaker, those folks over there should be careful because they might get what they wish for.

One of the issues that we need to pay attention to is that we are in a minority government. We were elected to try to make the government work and to try to work together in a cooperative manner. We have gone over and above every effort possible to make it work.

I have many seniors in my riding and many disabled people with whom I talk all the time. They would love to have some money invested in programs. I would much rather see the $500 million or so that it will cost for the next election turned around and invested in the people in our provinces. I am doing my best, as are my colleagues, to try to keep the government's feet to the fire to the extent that we can.

I do not want an election right now because I do not think the people of Canada want one. That is what I hear when I am out there. They do not like the guys on the other side of the House but they also do not want an election today. We are doing our best to do our job to try to make this minority government work and we will continue to do so as long as we can. Maybe it is only another day or two, who knows?

[Peter Stoffer, NDP, Sackville—Eastern Shore, NS]

Mr. Speaker, the only reason the Conservatives get to govern like they do is because in their hip pockets they have the Liberal Party.

There is no so-called real Her Majesty's official opposition because if the government were going to work, it would work in the manner that she so inclines, where we help people and veterans and everyone else in this country, where we help the environment, where we help the education system.

The reality is that many things are happening in this country, and only because the government's policies, in our personal view, are wrong, and she has admitted that the government is wrong on many of these issues.

Whether it costs $350 million for an election today, next month or next year, it will still cost $350 million, not the half a billion that she says. Will she stand in the House and, on behalf of her people, say that the government is wrong, the Conservatives are wrong, and have the election at the earliest possible time so that not her, not me, not the government but the Canadian people can decide who is right or who is wrong?

[Judy Sgro, Liberal, York West, ON]

Mr. Speaker, it is interesting to hear the hon. member complain because in effect it was his party that brought the previous Liberal government down. If it were not for that, we would already have the early childhood care program, the early learning program and a whole lot of issues would have been dealt with.

The NDP members keep complaining that they want more money invested. We were doing all of that but because they were not content to wait another couple of months, they decided that they would defeat the government. They got what they got and we will do what we need to do at the appropriate time and when we are ready.

[Paul Crête, Bloc, Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC]

Mr. Speaker, I would like to reread the motion we are debating here today. Basically, it is rather general in nature:

That this House has confidence in the economic vitality of the province of Ontario and calls upon the Government of Canada to work cooperatively with the governments of all provinces and territories to assure that the prosperity and well-being of Canadians is maintained and enhanced.

This really is just wishful thinking. I would have much preferred that by this time, an election would have been called, considering the disastrous budget presented by the Conservatives. The public could then have passed judgment on this government, which, instead of building prosperity with employers, employees and leaders, decided simply to play the non-intervention rule. They do nothing. They let the free market reign, and if that causes certain communities to fall apart, particularly in the forestry sector and in single industry towns, that is not a problem; it is how the market works.

That is the Conservatives' rule and, ultimately, the entire right-wing American model, which states that the government has no responsibility when it comes to the economy. It must simply leave the market alone and collect the surplus. They tell themselves that, in any case, this allows businesses to employ workers who cost less and, therefore, to find people who will work for lower pay.

And that is the choice that the Conservative government has made. Obviously, if the Liberals had stood in the House to vote against the budget, we would be in an election and citizens would be able to judge the government.

Today, the Liberal motion gives us an opportunity to explore the situation and to tell the public just how badly the Conservative government has shirked its responsibilities. It decided that it did not want to build prosperity and that it would leave things to the economic stakeholders. Consumerism has been encouraged as the solution to everything. But when the GST is reduced by 1%, this money is put in peoples' pockets and they are all encouraged to buy products made in China, we are not lending any credibility to our economy. Wages have gone down. Now people work in warehouses instead of factories, and they are paid $8 an hour instead of $15. The net result is an increase in the gap between the rich and the poor. This is what the Conservatives have achieved.

However, a few weeks ago on November 13, the member for Trois-Rivières, on behalf of the Bloc Québécois, presented the following substantial motion:

—immediately establish a series of measures to help the manufacturing and forestry sectors hard hit by the rising dollar and increased competition from new players in the field of low-cost mass production, specifically including a program to support businesses that wish to update their production facilities, a series of investments and tax measures to support research and development in the industry, the re-establishment of an economic diversification program for forestry regions similar to the one that the Conservatives abolished, a review of the trade laws to better protect our companies against unfair competition, and better financial support of workers affected by the crisis in the manufacturing sector.

This was a substantial motion. The government could have chosen to take action and use the surpluses of the current fiscal year—today, March 31, is effectively the last day of the fiscal year—for that purpose. Nonetheless, the federal government did not want to use a considerable amount of the $10 billion surplus accumulated over the past year. These surpluses are not the result of the government's action, but come from the surplus in taxes paid by Quebec and Canadian taxpayers to the federal government. At the beginning of the year, the government knowingly set objectives too low, which is how it ended up with a $10 billion surplus.

But now, entire communities are telling us—whether in the Standing Committee on Finance or the Standing Committee on Industry, Science and Technology or in various other sectors—that they are at the end of their rope. People from the manufacturing sector, entrepreneurs, manufacturers and exporters, labour unions, and the mayors of the communities involved have come to the Standing Committee on Finance to tell us, together and collectively, that the federal government has to go back to the drawing board.

We passed a motion to that effect in the Standing Committee on Finance. We forwarded it to the Conservative government. Last week, the Bloc Québécois suggested that an immediate payment of $7 billion out of the $10 billion surplus be made to the trust fund in order to stimulate our economy and allow a number of regions in Quebec, Ontario and other provinces to boost their economies.

The current strategy of allowing market forces to prevail has a very negative impact on settlement patterns and the development of rural communities. For this reason, the current government's practice is unacceptable. The Liberal motion at least allows us to focus on these aspects once again.

For example, the manufacturing sector is vital to Quebec. It represents 536,000 jobs with total wages of $22 billion, accounting for 17% of employment in 2005, almost 21% of earned income—almost three times as significant as in Alberta—and 90% of Quebec's international exports. Manufacturing deliveries represent 59% of Quebec's gross domestic product. That makes it a very important component of our economy.

We have seen that, in this regard, the federal government has decided to not intervene and to play the ostrich by putting its head in the sand—or rather in the oil sands—and stating that Canada's economy is generally doing well. In fact, we are selling a lot of energy abroad. However, we are no longer creating jobs in the manufacturing sector. Things are not so bad; we can continue on our merry way.

However, we are coming to realize that the systematic deconstruction of the manufacturing sectors will not be reversible if the Conservative government continues in this direction. That is why elections should have been called. I would have liked to have seen the Conservative candidates meet the voters, the factory workers, and explain to them that they preferred to allocate $10 billion of the surplus to the debt rather than using at least half, or $7 billion, to stimulate the economy.

In my riding, the forestry sector is the lifeblood of some communities. There are some very solid, strong companies that made it through the first wave of closures and believed they could survive. Today, entire communities are grappling with closures for three, four or five months of the year. People are beginning to wonder if, in the end, they will have enough employment insurance benefits, if they will have a cheque that will be enough to make ends meet and support their family.

People aged 56, 58 or 60, who cannot easily retrain for another job and who are doing their best in that respect, are watching the federal government use $10 billion from the surplus to reduce the debt. Yet, a program to help older workers, until they reach the age of 65 and become eligible for their retirement pension, would have cost $75 million, that is $75 million for one year, compared to $10 billion taken from the surplus to reduce the debt.

How can this situation be explained, other than by saying that it reflects a blind implementation of the American right wing theory? In other words, if someone is rich, it is because he deserves to be rich, it is because he developed his potential. On the other hand, if someone is not wealthy, it is because he did not work hard enough and does not do things properly. The growing gap between the rich and the poor will serve our society, and this is how things should be.

If the Conservatives continue this practice—and surely they must know this—they will never get the majority government that they want, because right now they are scaring Quebeckers and Canadians, who do not at all want this kind of right wing government, a government that has decided the state no longer has a role to play. The state no longer even has the responsibility to help generate prosperity. That responsibility is left to the market. However, as we can see, it is not working. The interests of the market and of multinational corporations are not the same as those of communities.

When we decide to go ahead in the energy sector without assessing the environmental impact, we are not helping our society, quite the contrary. And when we decide to ignore a whole sector of the economy—such as the manufacturing and forestry sectors, which are falling apart—and when, as a government, we are not doing anything about it, we are not assuming our responsibility to create conditions that will promote prosperity. That is what people will tell the Conservatives if, some day, an election is called based on these elements.

The Bloc Québécois has been warning for the past 18 months that an economic downturn was on the horizon. Let us use the tools available to us. Let us take the surplus available and make sure that the money is spent in the right places. The International Monetary Fund is telling all developed economies the same thing: ensure that money is invested in infrastructure programs; ensure that the money invested can be used for structuring activities. But just stop putting all the money toward paying down the debt.

We could have the best debt-to-GDP ratio if the GDP starts to decline as it might well do before long. If the Conservative government continues along the same course, what is happening in the United States right now will happen in Canada, and we will end up with a better ratio because of paying down the debt, the reason, however, being that the gross domestic product is lower. It would be totally absurd to get to that.

Such positions are not taken just to ensure that our manufacturing and forestry industries function, or to receive praise, as we have, from Canadian Manufacturers and Exporters, or because the Forest Products Association of Canada said that the Canadian government should go back to the drawing board, but because, at the end of the day, jobs are at stake, and families rely on these jobs.

I had the opportunity last week to see the major problems already being created in the United States by the financial situation there. Families are no longer able to hold on to their houses. Loans were made based on a financial system that was left largely unregulated. The President of the United States would have us believe that control can be regained by giving a mandate to the Fed, the central bank of the U.S.A. That does not work.

Yes, our economy is stable overall and there is strong demand domestically. However, that will not be enough to counter the fact that, because of what is going on south of the border, we will be exporting less to the United States. This is apparent in all sectors where people sell products to the United States: construction, furniture manufacturing and forest product processing. In all other sectors, there are serious problems because Americans are buying less.

What should be done about this? There should be more investment in the manufacturing sector, in the forestry sector and in businesses to help them boost their productivity. The goal is not to subsidize companies' activities, but to give them a tax structure that allows them to develop products while remaining competitive. That will not happen by itself. That has not happened anywhere in the world. All successful employers have received a little help from the state to start up and move forward.

Here, the current Conservative government has a tendency to throw the baby out with the bathwater. That is what happened with Technology Partnerships Canada, a program that the Liberals may have abused when it came to certain companies. Overall, however, it was a program that helped businesses create jobs. In my riding, Premier Tech, a company that provides 300 jobs in the region, employs a lot of people—technicians and researchers. Early on, the program financed new product development twice. Those were not subsidies; they were partnerships. Today, money is flowing back to the federal government thanks to that program.

Everyone thought the Conservative government should go forward with initiatives like that so that the system could keep working, but the government got stuck in its ideological approach, calling for minimal intervention and expecting the market to sort everything out. With that kind of ideology, when things start going downhill, they go downhill fast. We are now seeing the results of that in the United States. Unfortunately, that is the kind of turmoil we are now facing.

The people who came to speak to the Standing Committee on Finance were not just representing unions or the unemployed. They were industrialists from the manufacturing and forestry sectors. They were people who told us that if we did not do something, our jobs would end up being exported. Ultimately, if Canada's energy market were to decline, and we saw some ups and downs a few weeks ago, it would be an economic disaster.

Of course, then the Conservative government could have more of a reaction, because of its close ties to the oil industry. It had no reaction for the sectors currently affected, which are primarily in Quebec and Ontario. Furthermore, it is rather strange that a Minister of Finance would speak not just one, two or three times, but five to ten times to systematically destabilize Ontario's provincial government, when it would have been much better to work together.

The same thing happened with the Government of Quebec. The federal budget was brought down, and that night the Minister of Finance said, and this was repeated in the papers the following morning, that there was not enough money to give our industry a chance.

And so when it came time for the Quebec budget, measures were put in place. But imagine the things that could have been done if the federal government had used $7 billion from the surplus to kickstart the economy instead of using $10 billion to pay down the debt. And if it was not interested in doing this through federal programs, all it had to do was transfer the money to the provinces so that they could improve their programs and help their manufacturing and forestry industries.

There is no society that will not have manufactured goods. It is not a possibility. By the same token, we will continue to use forest products. However, we must develop new products and prove that we are open to being green by making quality products that respect the environment. Canadians want a sustainable approach from the government, but they have yet to see that from the Conservative government.

It is sad that we still find ourselves with a minority government. Logically, the Liberal Party should have voted against the government so that the public could make a decision about these matters. If that had been the case, we would be in the middle or at the end of an election campaign right now, and we would know what the public wanted.

The public wants the government to work on building prosperity, and not to simply look at how the economy is running without getting involved, without taking responsibility, without laying the necessary foundations to bring this about. It is essential that the Government of Canada understand that it needs to get away from the framework defined by the American right. We can see where this taking Americans. We need to learn from this and find a different approach.

That is what the opposition parties regularly say in this House. That is the point of the Liberal motion today, which says that we must recognize our ability to be prosperous, but we must also work together to achieve these results, which is not currently the case.

I also personally believe that this is a perfect example of the fact that year after year, Quebec always has to knock on the federal government's door to recover part of the taxes it pays. I hope that Quebeckers realize that sovereignty would be a much better economic and cultural development tool.

We will support the motion today, because we think that the government needs to hear the alarms sounding over here.

[The Acting Speaker, Conservative, Andrew Scheer]

Order. It is my duty pursuant to Standing Order 38 to inform the House that the questions to be raised tonight at the time of adjournment are as follows: the hon. member for Hamilton Mountain, Seniors; the hon. member for Gaspésie—Îles-de-la-Madeleine, Fisheries and Oceans; the hon. member for Madawaska—Restigouche, Ethics.

[Paul Szabo, Liberal, Mississauga South, ON]

Mr. Speaker, I often heard the Conservatives in opposition say that a dollar in the hands of a taxpayer is better than a dollar in the hands of the government. Therefore, it is a strategy of let us cut taxes. But it does say one other thing and that is that the Conservatives seem to deny that the government has a role to play in the lives of people when things go wrong.

The member has given some examples. Certainly in Ontario with 100,000 jobs lost in the manufacturing sector in 2007 and a further 20,000 last February, and a 3.4% drop in its sales levels, we have companies which are not making taxable income. Tax cuts are not going to help these companies.

We should be investing in labour, retraining, education, EI benefits, a number of the aspects I know the member agrees with. So when companies are faced with situations which are unexpected such as the high U.S. dollar, crude oil at record levels and job losses which are hurting Canadian families, the Government of Canada and the Parliament of Canada has a role to play.

I wonder if the member would like to comment on how a linear solution like cutting taxes just does not help the people of Canada.