Debates of May 28th, 2008

Finance—Main Estimates 2008-09

[Jean-Yves Laforest, Bloc, Saint-Maurice—Champlain, QC]

Mr. Chair, last fall, after the Bloc Québécois repeatedly asked the government to provide more support for the manufacturing sector—particularly in Quebec where the large majority of Canada's manufacturing jobs have been lost—the Minister of Finance and the Prime Minister announced a $1 billion trust to benefit the communities that lost jobs.

This $1 billion trust was announced for a period of three years. Many people thought this would be sufficient. But in Quebec, there was still a significant outcry; in fact, almost everyone was in agreement that the amount was still not sufficient given the number of jobs lost in recent years. We then realized—the numbers were subsequently revealed to us at the Standing Committee on Finance—that the government had allocated this amount on a per capita basis.

This was completely unfair not only because the amount was insufficient, but mostly because of how it was allocated. If this amount had been allocated based on manufacturing jobs lost, it would have been much more advantageous and profitable for Quebec. Allocating it on a per capita basis meant that Quebec received $2,275 for each job lost and Alberta received $20,000 for each job lost. This is inexplicable. Quebec has been shortchanged, as have all of the people who lost their jobs.

[Jim Flaherty, Conservative, Whitby—Oshawa, ON]

Mr. Chair, I dare say that job losses in the challenged sectors of the economy, manufacturing, the auto sector and forestry, cover most regions of this country. Most Canadians would think it fair that the allocation of the community trust be on a per capita basis.

This is something that a number of the provinces argued for very strenuously with respect to transfers before we accomplished the fiscal balance that we did in 2007 by moving to those per capita transfers. Some of the smaller provinces, particularly with respect to post-secondary education, are concerned that this per capita transfer perhaps disadvantages them. I am sure that the hon. member will want to reflect on that.

Having said that, the support for manufacturing is very strong: $9 billion in tax relief by 2012-13; $1.3 billion in additional funding beginning this fiscal year to the provinces for post-secondary education and labour market training to create a more highly skilled workforce; more than $1.5 billion over three years to support Canada's leadership in science and technology; action to streamline the regulatory system; a 20%, at least, reduction in that paper burden by November of this year; and $33 billion for infrastructure with P3s to be levered to fund infrastructure from the federal level at the highest level since the second world war.

[The Deputy Chair, Conservative, Royal Galipeau]

I am about to give the floor to the member for Outremont, who is here for the first time in a committee of the whole. He has 15 minutes, and I would like to know how he intends to use his 15 minutes. A statement? Questions and answers? How would the member like to use his time?

[Thomas Mulcair, NDP, Outremont, QC]

Mr. Chair, I thank you for your concern. I plan on proceeding with questions and answers, since from what I gather from the rules, the answer should not go over the time allotted for the question.

[The Deputy Chair, Conservative, Royal Galipeau]

You now have the floor for 15 minutes.

[Thomas Mulcair, NDP, Outremont, QC]

Mr. Chair, first of all, I would like to thank the Minister of Finance for giving us this opportunity to talk with him. To his surprise, unlike the official opposition, I plan on questioning him about financial matters.

Could the Minister of Finance tell us how many jobs have been lost in the manufacturing sector in Canada since January 2006, when his Conservative government took power?

[Jim Flaherty, Conservative, Whitby—Oshawa, ON]

Mr. Chair, we have had some job losses in the manufacturing sector but, as I have indicated, they have been made up by job gains in other sectors of the economy, which is why the net gain is a positive one with respect to our job situation in Canada, not only in Canada overall but in the regions of Canada, including Quebec.

[Thomas Mulcair, NDP, Outremont, QC]

Mr. Chair, I would be very surprised to find out that neither the minister nor those he works with, including the most senior federal finance officials, had access to these numbers, but I will tell him anyway. Since this government came to power in January 2006, over 300,000 manufacturing sector jobs have been lost, 116,000 of those in Quebec alone.

The minister is right in saying that the total number of jobs has gone up. Manufacturing jobs allow workers to earn a good living to support their families. These jobs have been around for generations and most of them come with retirement benefits.

That is important not only for workers, but for future generations. Sustainable development is not just about the environment. It is also about society and the economy. Socially, we are transferring this responsibility to future generations.

If the minister bothered to check, he would find that most of the replacement jobs are in construction, a very unstable sector where the slightest hiccup in the economy can put an end to these new jobs.

[Jim Flaherty, Conservative, Whitby—Oshawa, ON]

Mr. Chair, the member opposite seems to promote an allegation that is without a factual basis, which is that the jobs that are being created are not good jobs.

He should look at the article in The Globe and Mail of February this year written by Derek DeCloet, which states:

Those were not McJobs, either: 143,000 of them were in finance or real estate; 323,000 in education or health care; 228,000 in construction; 58,000 in natural resources. ...[these jobs] shouldn't be derided; they're the reason Canada is a wealthier country today than it has ever been.

If we add up those numbers, it is 752,000 net new jobs over that period of time.

In response to the previous question from the hon. member, I have the statistic that he was seeking, although it is not the exact period of time. From November 2002 to March 2008, the overall growth in all industries was over 1.6 million jobs, but in manufacturing the number was of course negative 362,900.

It is obvious, I think, to most people, looking at the Canadian economy, and in fact the economy in most western industrialized countries, that we are going through a period of adjustment in some industries. There is an adjustment in forestry and in manufacturing certainly.

[Thomas Mulcair, NDP, Outremont, QC]

Mr. Chair, earlier, the Minister of Finance said that, in his opinion, this has to be looked at in the long term—that is the expression he used. He even quoted the great economic strategist, Wayne Gretzky, by saying we have to skate to where the puck is going, not to where it has been. That is all well and good, but we would like to know if the minister has an idea of what we should do during the transition.

He spoke earlier about a rather minimal amount allocated by his government. He even had the gall to mention POWA, even though that program no longer exists. He should know that, and so should his closest colleagues. As the Bloc Québécois so aptly pointed out, no programs have been implemented for people over 55. This is tragic for people who are losing their jobs in the manufacturing sector.

Last week, I visited the Golden Brand factory in Montreal where 550 jobs will soon be lost. Yet that factory is making money. Incidentally, it produces clothing for Moores, which has decided to move all its clothing manufacturing to China, even though it was turning a profit here in Canada. Take note: people should stop buying clothes at Moores.

The real question is this: what should the people do, those aged 57, 60 or 62 who have been working someplace for 30 years, if no older worker adjustment program is implemented to help meet their needs until they can take early retirement?

[Jim Flaherty, Conservative, Whitby—Oshawa, ON]

Mr. Chair, the issue the member opposite raises with respect to older workers is one that was raised with me by the Bloc a couple of years ago when we were doing our budget consultations. Quite frankly, I thought the point that was made by the previous finance critic for the Bloc was a point that was well taken and we did move forward with the older workers program, which we have extended and augmented. This is designed specifically for members between the ages of 55 and 62, precisely what the hon. member describes as being necessary.

Do we have a plan? Yes, we do. Do we use the plan as a prism to decide what we will do in terms of fiscal and tax policy, a knowledge advantage, an entrepreneurial advantage and an infrastructure advantage? Yes, we do. It is called Advantage Canada and I commend it to the member opposite. It is a good read. We have been following it and implementing it as we move forward in our budgeting cycles. It is, as I say, the prism through which we view proposals with respect to various issues.

I compliment the member for Outremont on his view of government and government's role with respect to business. I share his view as he expressed it in 2002.

He spoke about a government whose members insist on appearing to be businesspeople, but do not let the free market determine which businesses will survive and which will not.

I agree with him. It is not for government to substitute its opinion for business. I am sure the member for Outremont agrees with what he said in 2002.

[Thomas Mulcair, NDP, Outremont, QC]

Mr. Chair, I very much agree with what the Minister of Finance just said, especially since the NDP has long subscribed to this idea. At the time, we talked about corporate welfare bums, and we are still opposed to the concept.

Now, I have a question for the Minister of Finance about fairness. Earlier, he spoke about his vision of a balanced economy. We think that the economy we have built since the second world war is balanced, because of its primary sectors, such as the forestry and mining industries, its secondary sector, for example the manufacturing industry, and its solid financial services sector, and so on. All of that is part of a balanced economy.

Canada is a very big country. It is the second-largest country in the world in terms of area. But our population is very small—just 35 million. We need a balanced economy.

The Conservative government has ignored the work done by previous generations to build a balanced economy a mari usque ad mare. The Conservatives are in the process of sacrificing it on the altar of the oil sands of Alberta. It will be up to the public to decide in the next election.

Let us talk about the justice of its vision by comparing what corporations and individuals must pay. I would refer him in particular to Table 5.4 in the budget and ask him to explain the vision behind the Conservative's decision.

Here is the decision. The new fiscal year just began on April 1. So the beginning of last month marked the start of the 2008-09 fiscal year. Over the course of two full fiscal years, personal taxes are slated to rise from $112 billion to $125 billion, which is a 12% increase. Let me say that again: a 12% increase in personal taxes. As for corporate taxes, they will decrease from $42 billion to $36 billion, a drop of 14%. Let us take a look at the government's pie: personal taxes will increase by 12%, but corporate taxes will drop by 14%.

What is the minister's vision of social justice, given that he was born in a place where there are many manufacturers and working people, in Lachine, Quebec? Where has his social vision gone, now that he occupies this position?

[Jim Flaherty, Conservative, Whitby—Oshawa, ON]

Mr. Chair, what the member opposite fails to mention, which I am sure he forgot for the moment, is the 2% reduction in GST that applies to all Canadians whether they pay income tax or not. Every time they buy something in this country, as of January 1 this year there is a full two percentage points off, which has had a very desirable effect with respect to inflation.

It has also made it easier to purchase larger ticket items in Canada, particularly automobiles. The experts in the automotive sector have talked about that GST reduction, as well as the revaluation of prices, as being a significant impetus to the very strong car sales we have had in Canada, unlike the United States, in the first three months of this year.

More people are earning more money in Canada. We have a progressive tax system of course. We have four categories of taxation, as I am sure the member knows, and we get more people moving into higher taxation levels which will affect personal income tax.

The reduction of the business tax is entirely intentional. We made that clear in the announcement of the economic statement on October 30, 2007, that we have chosen a certain path.

We have chosen to brand Canada as a low business tax jurisdiction. We have chosen to move to a targeted 25% provincial-federal tax rate by 2012. We are doing our part at the federal level, moving to 15% by 2012. Alberta is already at 10%. British Columbia is going in that direction and we expect that Manitoba will also. The former premier of New Brunswick, Mr. McKenna, spoke recently in Halifax and urged all of the Atlantic provinces to go in that direction. Quebec has made some movement in that direction. As the member knows, I have been gently encouraging the Premier of Ontario to go in that direction as well.

I look forward to having further discussions with the other ministers of finance in Canada tomorrow and the next day in Montreal where one of the things we will talk about of course is how we brand Canada to attract foreign investment and to attract reinvestment in Canada and more high quality jobs for Canadians as we go forward.

[The Deputy Chair, Conservative, Royal Galipeau]

The member for Outremont has the floor.

There are two minutes remaining: one minute for the question and one minute for the answer.

[Thomas Mulcair, NDP, Outremont, QC]

Mr. Chair, you will have noticed that when asked about his vision for the future, the minister spoke about the past for three minutes and stated that in his budget he had done this, they had done this and they had done that. Earlier, he talked about having a long-term vision and quoted Wayne Gretzky, who said that you have to move forward. However, he did not say one thing about the future.

What we have in Canada, even today, is what remains of a fairly balanced economy built over the generations. They are destroying this balanced economy, which was painstakingly built over the course of our history, by pursuing the unsustainable development of the tar sands. They are throwing the economy out of balance.

What is the minister's vision for the next generation? When his children and grandchildren are working, will anything be left or will everything have gone up in smoke because of the tar sands?

[Jim Flaherty, Conservative, Whitby—Oshawa, ON]

Mr. Chair, if I have grandchildren, my children at home have not told me something, but I am sure I do not.

I take the member's question seriously. What is the vision for our country? We know what the vision of the official opposition is: carbon taxes, increasing the tax burden on poor Canadians and Canadians on fixed incomes.

This is the vision. It is called Advantage Canada. When we became the Government of Canada it became clear that the previous government did not have an economic plan so we created the economic plan. Here it is and it is designed to create a competitive advantage for Canada going forward, just as has been done in countries from Ireland to Singapore to the United Kingdom for Canada, a tax advantage.

Canada's tax advantage will reduce taxes for all Canadians and establish the lowest tax rate on new business investment in the G-7.

A knowledge advantage: Canada's knowledge advantage will create the best educated, most skilled and most flexible workforce in the world.

An entrepreneurial advantage: Reducing red tape and creating a more competitive business environment.

All of these advantages work together to create a--

[The Deputy Chair, Conservative, Royal Galipeau]

The hon. member for Lévis--Bellechasse.

[Steven Blaney, Conservative, Lévis—Bellechasse, QC]

Mr. Chair, I am pleased to join my parliamentary colleagues this evening to participate in the work of the committee of the whole on the Canadian government's main estimates.

This evening, it is not the main estimates we should be talking about. Since the Conservative government has been here in Ottawa, we could talk about the main investments in the economy and in Canadian taxpayers. There is investment in agriculture, investment for pork producers and dairy producers, investment in the environment, in budget 2008 in particular, to create a carbon exchange to make our country a world leader in fighting climate change. There is also investment in education, but especially for future generations by reducing the debt. That is the real sustainable development our Minister of Finance is creating for our country.

Thanks to the remarkable work of my colleague, the hon. Minister of Finance, the hon. member for Whitby—Oshawa, the Canadian economy is improving and growing and taxpayers are finally seeing their taxes go down instead of up. This is true both for individuals and businesses.

The results of all this are clear. Over the past 12 months alone, we have seen the creation of over 300,000 jobs. Since we came to power, 750,000 jobs have been created, 80% of them full time. These are jobs for people across the country. This contrasts with and is diametrically opposed to what our colleagues opposite want to see. Their problem is that they think government money is their money. On this side of the House, we think that government money belongs to taxpayers and should go back to them.

My question for my colleague, the Minister of Finance, is a simple one. How has he managed to stimulate the economy and reduce the tax burden on companies and taxpayers?

I would like to revisit one important element. The official opposition has come up with a proposal that worries me. The price of gas is higher than ever before. It is as high as $1.50 in some places. This is a big problem for people in my riding who commute to work.

My riding is far from urban centres. To move manufactured goods, we need a healthy economy, we need lower transportation costs, and we need the government to make sure that transportation costs do not go up. Now the official opposition wants to tax carbon and increase the cost of raw materials and the cost of transportation, even though these costs are already extremely high.

That worries me. I would like to know what the minister plans to do to protect us from these rising costs, these huge increases that will take a heavy toll on the Canadian economy. We know that these tax grabs affect not just businesses but people with low incomes, society's most vulnerable members and seniors. That is inconceivable in the current context, where even though we have an economy running at full throttle, we are also facing certain challenges.

The Liberal leader's own MPs think his plan is a bad one.

The Toronto Star reported:

Liberal MPs say one of their chief concerns is the bruising impact that higher energy taxes would have on the pocketbooks of middle-class and low- income Canadians already grappling with skyrocketing gas prices.

That was well put. Even the New Democrats recognize that it would harm businesses, families and people with low incomes. But there is one thing. Those two parties voted against—

[Some hon. members]

Oh, oh!

[The Deputy Chair, Conservative, Royal Galipeau]

Order, please. I regret that I must interrupt the debate, but things were at the point where I could not hear the member who had the floor. I would like to ask all of the members to settle down, wait their turn and wait until they have been recognized. We will respect the rules. Meanwhile, it is important that we be able to hear the member who has the floor.

Has the hon. member for Lévis—Bellechasse finished?

[Steven Blaney, Conservative, Lévis—Bellechasse, QC]

Absolutely not, Mr. Chair, quite the opposite.

[The Deputy Chair, Conservative, Royal Galipeau]

You have the floor.

[Steven Blaney, Conservative, Lévis—Bellechasse, QC]

Mr. Chair, I wanted my colleagues to react. However, some facts remain. We lowered taxes and the economy is actually performing quite well. I would just like to point out that, in Quebec, more than 150,000 jobs have been created since the minister was appointed.

We must also acknowledge that it is due to our long-term vision for the Canadian economy, which applies to every budget. There is another important element: the current corporate tax rate is one of the most competitive among the G-7 countries.

Our minister is doing remarkable work to ensure that our manufacturing sector is at the leading edge. For example, we have Exceldor in Saint-Anselme, Prévost Car in Sainte-Claire and Rotobec in Sainte-Justine, which benefit from tax breaks put in place by our government. In addition, we also reduced the GST.

I could go on at length. Even organizations such as the United Way in Toronto acknowledge that this budget helps the most disadvantaged over the welfare wall. Our budget covers a broad spectrum but it focuses on several sectors in order to better position the Canadian economy.

My questions are for the minister. How will he continue this development? Furthermore, why does he believe it was so important to keep the promises about tax cuts, which he knows stimulate the Canadian economy?

[Jim Flaherty, Conservative, Whitby—Oshawa, ON]

Mr. Chair, certainly, we are going to continue on with the “Advantage Canada” plan and our plan to implement that plan. In each budget, in each economic statement, as we go forward, we have made terrific progress on implementing “Advantage Canada” on the tax side, on the fiscal side, on the knowledge side, and with infrastructure and advantaging entrepreneurs in Canada. So, that is our plan, and we will continue to do that.

We know that the plan of members opposite in the Liberal Party is to go back to what they like to do; that is, increase taxes and increase spending. By now it looks like something like $70 billion because they voted for a $10 billion per annum bill here this afternoon.

Where are they going to get this $70 billion? They are going to get it, they are telling us, through something called a carbon tax. They are going to increase taxes on gasoline and home heating fuel. They are going to drive up the cost of manufacturing in Canada. They are going to hurt some of the most vulnerable people in this country who live on fixed incomes. It will also lead to higher shipping costs. As I say, it will be more difficult for many.

However, do not take my word for it. Let us see what some Liberals say about it. Liberal strategist Warren Kinsella, we know about him, says:

Forget about the fact that it is unfair to people on fixed incomes (like the elderly) and the poor (who have to heat their homes and buy food, too), and is therefore profoundly un-Liberal.

What does the Liberal member for Vaughan say? He says:

It [carbon tax] is certainly not an option for me.

What do we hear from Gerard Kennedy? He is a Liberal, I think, now. He says:

I think a carbon tax is the clumsiest of the options that we've got so far,--

What does Bill Graham say? He is a long time member of the Liberal Party. He says:

Certainly when we were in government we clearly did not advocate that as a way to deal with global warming.

That is what Liberals say about this idea: this meanspirited, punitive idea where the Liberals want to impose on Canadians higher gasoline taxes and higher taxes on home heating fuel.

We go exactly in the other direction. We reduce taxes of all kinds in Canada. We let the economy breathe. We reduce business taxes. We reduce excise taxes, which apply to many goods in this country. And of course, we kept our pledge to reduce the GST by two full percentage points. We keep our promises. We are getting the job done.

[Steven Blaney, Conservative, Lévis—Bellechasse, QC]

Mr. Chair, I have another question for my hon. colleague and I would like to hear his comments.

The Canadian Bankers Association spoke about tax reductions in the order of $200 billion. That is historic. We have never had tax cuts of this magnitude in this country. We are talking about $140 billion in personal income taxes and $60 billion in tax cuts for manufacturers.

The Canadian Bankers Association stated that these tax cuts will not go unnoticed in global markets and that they will position Canada as a place to invest, do business, live and work and that this measure will benefit all Canadians.

I would like to know if this vision of economic prosperity is in keeping with the minister's vision and the Advantage Canada plan?