House of Commons Hansard #100 of the 39th Parliament, 2nd Session. (The original version is on Parliament's site.) The word of the day was chair.
Omar Alghabra Liberal Mississauga—Erindale, ON
Mr. Chair, he is the Minister of Finance and the Department of the Environment says that by 2018 they are putting a price--
Finance—Main Estimates 2008-09Business of SupplyGovernment Orders
Some hon. members
Oh, oh!
The Assistant Deputy Chair Conservative Andrew Scheer
Order, please. That is unnecessary.
The hon. member for Mississauga—Erindale.
Omar Alghabra Liberal Mississauga—Erindale, ON
Mr. Chair, I know why they are scared. I know why they do not want me to ask this question. Their document says that by 2018 their price on carbon will be $65 a tonne. Does he agree with that or—
Jim Flaherty Conservative Whitby—Oshawa, ON
Mr. Chair, I was wondering what this has to do with the Department of Finance estimates. I find it rather difficult to follow that through. Opposition members said that they wanted to ask questions about estimates.
Rick Dykstra Conservative St. Catharines, ON
Mr. Chair, I certainly have enjoyed the evening so far.
I thought it was time to thank all my colleagues, all the minister's colleagues, for being here this evening for this debate. In particular, I want to mention that I serve on the finance committee with the minister, the member for Whitby—Oshawa, the parliamentary secretary, the member for Macleod, the member for Peterborough and the member for Burlington, who are all here this evening. They do a phenomenal job as members of the finance committee and they deserve credit for the work that they do.
Rick Dykstra Conservative St. Catharines, ON
I will have the member know that these are my own notes. The member for Malpeque needs to know I write my own notes because that is critical to the story this evening. These may be estimates, but these are my notes.
It gives me great pleasure today to discuss the government's main estimates. I want to focus on an issue that is of great importance to the citizens of my province, the manufacturing sector. It is important to remind Canadians, as the United Steelworkers did, that the manufacturing crisis did not start when the Conservatives took office. The Liberals had 12 years to deal with this stuff and they did nothing. Unlike the Liberals, this Conservative government has taken decisive action over the last two years to help the manufacturing sector.
Ontario's automotive sector has been affected by the slowing global economy. The sector remains the largest manufacturing industry in the country and has a proven global reputation for quality and productivity, helping Canada rank as one of the top vehicle-producing countries in the world. I am proud to say that includes my home town of St. Catharines.
To maintain its leadership and competitive advantage, Canada's automotive sector is moving to become more innovative and adapt to new environmental standards. This requires a highly skilled workforce and increased investment in research and innovation to develop new process technologies and vehicles that are more fuel efficient and environmentally sustainable.
To help the automotive sector, the Conservative government has committed over $1.6 billion to measures that will help the automotive industry successfully meet these challenges. These include $1 billion in tax relief for the auto sector by 2012-13 and $250 million, a quarter of a billion dollar investment, over five years, through a new automotive innovation fund, to support large-scale research and development projects to develop innovative and more fuel efficient vehicles. It also includes $400 million as a contribution toward the access road to the new Windsor-Detroit border crossing.
In includes an enhancement to Export Development Canada's existing export guarantee program that will increase coverage, benefiting particularly those businesses in the automotive sector. Specifically, EDC will increase its guarantee coverage under the export guarantee program from 75% to 90% for loans up to $500,000. This will assist small and medium sized manufacturers in fulfilling export contracts. EDC is also working to enhance its financing and insurance products in support of the automotive and manufacturing sector.
We fulfilled our promise to cut the GST, and we have reduced it by two full points, making cars more affordable. In fact, last month, car sales rose yet again, the fifth increase in six months.
However, the Liberals want to undo these positive steps by not only increasing the GST, but also imposing, as the minister has clearly stated, a gouging gas tax that will make purchasing a car more expensive and devastate the auto sector in our province.
The list of what the government has done for the auto sector does not end here. Let us talk a little about research and development.
Maintaining Canada's competitive advantage also requires investment in research and development. Canada continues to be a world leader in funding post-secondary research, ranking second in the OECD and first in the G-7.
To maintain Canada's premier position, budget 2008 builds on this investment. When I say premier, I am not talking about the two former premiers from the Liberal Party who sit across the way.
I am talking about a budget that talks about investment to continue to support world class research and researchers at our universities, including $34 million per year to the Natural Sciences and Engineering Research Council for collaborative research that directly contributes to the knowledge and innovation needs of Canada's automotive, manufacturing, forestry and fishing industries.
The government also recognizes that increasing business investments in research and development will be crucial for our long term competitiveness. Budget 2008 enhances support for business investments with improvements to the scientific research and experimental development tax, which we at finance committee call SR&ED. This new incentive and new program to support research and development investment in the automotive industry is something to be spoken about.
This government realizes that investing in the future means investing in knowledge, it means investing in science, and it means investing in innovation.
I want to speak a bit about the capital cost allowance. It was not introduced in 2008. In fact, it was introduced in 2007, but the minister extended the program. We are providing further assistance for Canada's manufacturing and processing sector by extending the accelerated capital cost allowance treatment for investment in machinery and equipment for three years. Specifically, the 50% straight line accelerated capital cost allowance treatment will apply for one additional year and the accelerated treatment will then be provided on a declining basis over a two year period.
I have to congratulate the member for Burlington who chairs the steel caucus. He is doing an excellent job. Representatives from the steel industry across this country sat down and met with us tonight and credited a number of things. The one thing that stood out this evening for us when they spoke was the fact that the accelerated capital cost allowance is telling its employees of the future that they are wanted, they are needed, and they are accepted in every manufacturing company in this country.
In addition, we are supporting small and medium sized businesses by improving the scientific research and experimental development tax incentive program and easing the tax compliance burden by reducing the record keeping requirements for automotive expense deductions and taxable benefits. In other words, we are going to make sure we reduce the red tape.
Let me speak for a couple of moments about the community development trust.
While Canada's economic fundamentals remain solid, the government recognizes that there are some workers and communities that face challenges in adjusting to changes in the international economy. That is why in January 2008 the government announced up to $1 billion for the community development trust to support those experiencing hardship due to international economic volatility. The 2008 budget built on this initiative by providing an additional $90 million to extend to 2012 the targeted initiative for older workers to help older workers stay in the workforce.
A one billion dollar investment, $350 million in the province of Ontario, was an investment made by the federal government. As much as we would like the provinces and the territories to give the federal government credit for making this investment, we realize that those dollars are transferred to them to allow them to make decisions according to what they believe to be in the best interests of the businesses in their provinces and territories. We are not asking for credit. We did not ask the provinces to go out and state that we were the ones who provided that community investment fund.
It takes a lot of guts and it takes a lot of nerve for the Prime Minister and the Minister of Finance to allocate $1 billion for community reinvestment across this country with the full understanding that they and this government would not receive credit for it, not because we wanted the credit but because it was the right thing to do at the right time, in the right place, in this country.
Now, finally, Canada's economic fundamentals are solved and that is good news for all sectors and for all Canadians. We have paid down debt. We have reduced taxes paid by families and individuals. We have also cut corporate taxes.
In fact, let me take a moment to outline that we have taken steps federally by lowering business taxes to 15% by 2012. This will encourage investment, promote competitiveness, and most importantly, increase productivity. We certainly hope that other jurisdictions with large manufacturing sectors will follow suit and lower their corporate taxes. We can only lead by example; we cannot dictate.
The member for Markham—Unionville agrees with the significant steps that this Conservative government has taken. Some may be surprised to hear that, but he does. He said that corporate tax cuts are one of the best strategies to attract investment.
Let me ask the finance minister or the parliamentary secretary in the time remaining to speak about the many positive measures that we have advanced for the manufacturing, auto and forestry sectors.
Finance—Main Estimates 2008-09Business of SupplyGovernment Orders
Macleod Alberta
Conservative
Ted Menzies ConservativeParliamentary Secretary to the Minister of Finance
Mr. Chair, I thank the hon. member who plays a very pivotal role in the finance committee. The member for St. Catharines is much younger than me, Mr. Chair, I am sure that is obvious when you look at him. We expect him to be here for many years. He has done a wonderful job representing his constituents and representing all Canadians on the finance committee.
He was one of the very few who was actually able to travel all across the country during our prebudget consultation. The rest of us were caught up in other issues, but the hon. member travelled across the country and heard from all Canadians. We had a discussion at committee today about how many of those recommendations we heard during our prebudget consultations; 22 of the 37 recommendations, if I have the figures right, were actually implemented in the budget.
The entire budget may not be implemented if the NDP has its way. The NDP tried to hold this up at committee. Fortunately, we had the support of the Liberals because they recognized all of the important pieces in this budget, important to all Canadians. The Liberals helped us. The Bloc was there working with us. It understood the benefits that Canadians will see from this.
Let me share some of these benefits that we do hope and pray that the Liberals will continue support. If the NDP continues to play its silly games, it will hold up incredibly positive initiatives for Canadians if we do not get this through the House and through the Senate before summer. Let me talk about some of them.
The tax-free savings account, TFSA, is scheduled to come into play January 1. Canadians for the first time will be able to save tax-free, capital gains free. That is the first time since RRSPs were implemented. It is not to replace RRSPs, but to supplement savings for Canadians. Also, we are looking at $500 million to help improve public transit; $400 million to help recruit new front line police officers; and nearly $250 million for carbon capture and storage, both in Saskatchewan and Nova Scotia. Mr. Chair, you would appreciate and know a lot about the one in Saskatchewan. There is also $160 million to support geonomics and biomedical research. We need to raise the alarm bell that these need--
The Assistant Deputy Chair Conservative Andrew Scheer
Resuming debate, the hon. member for Montmagny—L'Islet—Kamouraska—Rivière-du-Loup.
Paul Crête Bloc Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC
Mr. Chair, I listened to my Conservative colleague speaking about the work the Conservative members have done in committee. That has helped me answer a question. I always wondered why there were no Conservative members from Quebec on the Standing Committee on Finance.
I discovered the reason this afternoon when the budgets were crammed down our throats for the creation of a Canada-wide securities commission. The Conservatives' desire to centralize, with the support of the Liberals, led to the voting of supply.
Obviously, if there had been Conservative members from Quebec on the committee, they would have been so uncomfortable that they would have been unable—I hope—to vote with the Conservatives, and would have contradicted their own regime.
I remind members that if a Conservative member from Quebec ever wants to join the Standing Committee on Finance, he or she will be very welcome. For the time being, we do not have one. They felt it was not important enough. I will take note of this result.
The second thing I want to say to the parliamentary secretary is that we worked together on the Standing Committee on Finance when—
Paul Crête Bloc Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC
Mr. Chair, I let the member speak. I call this a point of order.
The Assistant Deputy Chair Conservative Andrew Scheer
The hon. member makes a good point. There are only about 10 minutes left. It is very difficult for the Chair to hear the questions, so if hon. members could just allow the hon. member to finish asking his question then the minister will have a chance to respond.
Paul Crête Bloc Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC
Mr. Chair, I would like to add that we did not cooperate with the government this afternoon because we were against the time limits and against what they wanted to do with Bill C-50 regarding employment insurance. However, the theft and diversion of $54 billion by the Conservative government and the Liberal government before it has been confirmed.
All that aside, I have a question. The Conservative government, which had a $10 billion surplus at the end of last year, saw the Government of Quebec introduce a program for the manufacturing sector. How could the Conservative government then turn around and allocate just $1 billion for a trust for all of Canada but put $10 billion toward the debt, thereby abandoning Quebec, Ontario and the provinces that are having a lot more difficulty making ends meet? They do not have the financial means since the fiscal imbalance has not been completely resolved.
Why did the Conservative government make such an egotistical decision, as though it were a corporation rather than a government, to allocate 100% of the surplus to the debt, while leaving manufacturing businesses in their difficult situations? Thousands of jobs and many communities have disappeared, families can no longer make ends meet, and tonight, he is telling us that the only way to help older workers is to retrain them so that they can find new jobs even though many of them cannot find new jobs.
Are the Conservative government and the Minister of Finance ready to make a commitment, to change their attitude and to move forward with more appropriate measures to support the manufacturing sector and help older workers? Are they ready to find a way to make Conservative members from Quebec contribute and help solve the financial situation? Could that be why he does not understand Quebec? I do not know.
Jim Flaherty Conservative Whitby—Oshawa, ON
Mr. Chair, I certainly understand that the employment rate in Quebec is strong, that the rate of employment is about the best it has been in a generation. I understand also that we have brought in funding to assist one-industry towns facing major economic slowdowns. That is through the $1 billion community development trust.
I understand that we have made historic pre-emptive corporate business tax reductions for industry that run out every year up to 2012. It is less of a burden for them. I understand further we have done the very substantial accelerated capital cost allowance at a cost of billions of dollars, but it is very important to encourage technological innovation in these industries.
I know the member is well intentioned, but if his intention is to have a vibrant industry, a sustainable industry over time, I suggest that he consider what is being done as the way to go. It is the way to go because it makes it possible for these industries to retool and become more innovative. It makes them competitive in a world market. It makes them more productive and at the end of the day that is what makes them sustainable and that is where the sustainable long term jobs will be.
It is important, it seems to me, that we look at the longer term, but in the shorter term of course because some workers are displaced, particularly older workers between the ages of 55 and 62, we have the targeted initiative for those older workers to assist them to adjust at a time in their lives where no doubt it is more difficult to adjust.
For those who can retrain, who can obtain other skills, and there are lots of jobs available which is the good news, we have to ensure they can obtain those skills and that is why we are investing the largest amount ever of any government in skills training in Canada.
Paul Crête Bloc Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC
Mr. Chair, Mr. Trahan of the Canadian Manufacturers and Exporters of Quebec appeared before the Standing Committee on Finance this week. He is not a separatist or a Bloc member, but rather someone who represents small- and medium-sized manufacturing businesses in Quebec. He gave the federal budget a failing grade when it comes to the manufacturing sector. He fully understands that tax cuts do nothing to help businesses that are not making any profit and are struggling to survive.
What is needed—and this was repeated and indicated in the unanimous report of the Standing Committee on Industry, Science and Technology—are refundable tax credits to allow those businesses to be productive. That is what the people of Beauce and Chaudière-Appalaches wanted. A number of members here represent those ridings. There was a minister from Beauce, although he is once again a backbencher. There are members from Chaudière-Appalaches and other parts of Quebec. How is it that they could not convince the government to do something and implement such measures?
We never said we were against tax cuts, but other measures were needed to help businesses that are going through a rough period at this time. How is it that the minister, who read the unanimous report of the Standing Committee on Industry, Science and Technology last fall, did not see that he had the financial means to act and that it was important to do so? Is that not why Quebeckers are judging this Conservative budget so harshly? This budget does not meet the needs of Quebec.
Jim Flaherty Conservative Whitby—Oshawa, ON
Mr. Chair, I am not sure exactly what the hon. member is advocating. If he is advocating a series of short term band-aid solutions where a government throws money at a problem and it has no long term effect, that is not the policy of this government. When it has been done by other governments it has been a colossal waste of taxpayers' money.
There is change in the economy. This is to be expected. We should not resist change in the economy. We should recognize that change in the economy is normal.
Yes, sometimes people suffer because they lose their jobs when an economy is shifting around. We see this in forestry now. It is not just Quebec. It is Alberta, British Columbia, Ontario and New Brunswick. The forestry sector itself told us in our prebudget consultations, and I am sure they would say the same thing to the hon. member, “We have to retool. We have to become more technologically sophisticated, otherwise we are just not competitive in the world. We need to be competitive to be sustainable. Do not give us band-aid solutions. Give us long term, sustainable tax planning that we can rely on, so that we can become more innovative over time”.
This is the future of that type of industry in this country. At the same time, let us welcome the fact that Bombardier is looking to hire 700 more people and that companies in the financial services sector like Morgan Stanley in Montreal are looking to do the same thing.
Paul Crête Bloc Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC
Mr. Chair, Quebec exports by 25 sectors of activity increased in 5 sectors and decreased in 20 over the past three months compared to the same period in 2007.
I will use the example given by the minister. There can be no better example than the forestry sector. The Canadian Forestry Association told the committee that refundable tax credits are necessary. Band-aid solutions or subsidies are not the answer. There should be refundable tax credits for businesses. Furthermore, the Technology Partnerships Canada program should be reinstated as it facilitates the development of new products in the regions of Quebec and Canada.
That was a unanimous recommendation of the Standing Committee on Industry, Science and Technology, which was chaired by the member for Edmonton—Leduc. All members of this House supported this recommendation.
The Conservative government hid behind its ideology. It did not want to provide this opportunity to manufacturers that do not make a profit. The Conservative government will have to bear the responsibility for the loss of thousands of jobs. Looking further down the road, those who have devoted their lives to their families will find themselves on social assistance in their final years because of this government.
Jim Flaherty Conservative Whitby—Oshawa, ON
Mr. Chair, in my previous answer, I was referring to the comments of Avrim Lazar, the head of the Forest Products Association of Canada. Here is what he said:
We don't want subsidies; we don't want bailouts...long experience will tell everybody it simply doesn't work that way..... So no bail-outs, no subsidies. But there is stuff you can do that's positive and constructive.... The [Conservative] government has done many, many positive things in the past, and we're looking forward to many, many positive things in the future.
What have we done? We have provided over $1 billion in tax relief to the forestry industry by 2012-13. There is the $1 billion community development trust. As the member knows, that money is for workers and for communities directly affected. There is $160 million for the targeted initiative for older workers. There is $200 million with respect to the mountain pine beetle infestation in B.C. and Alberta, so far. There is $127.5 million for the forest industry long term competitiveness support. There is $25 million for the forest communities program to assist 11 forest based communities make informed decisions on the forest land base. We secured the return of over $5 billion in duty deposits to Canadian producers by implementing the softwood lumber agreement in October 2006. A lot has been done.
If the member is advocating one time band-aid bailouts, that is not the policy of this government; that is not the way to go.
The Assistant Deputy Chair Conservative Andrew Scheer
It being 11:45 p.m., pursuant to Standing Order 81(4), all votes are deemed reported. The committee will rise and I will now leave the chair.
The Acting Speaker Conservative Andrew Scheer
This House stands adjourned until tomorrow at 10 a.m., pursuant to Standing Order 24(1).
(The House adjourned at 11:46 p.m.)
