Mr. Speaker, I will be sharing my time with the member for Saint-Bruno—Saint-Hubert.
I rise today on this Liberal Party opposition day to speak to the motion calling on the federal government to significantly increase funding for research and development.
As a progressive political party, we are obviously in favour of this motion, because we believe that research and development can help create the jobs of tomorrow and, of course, contribute to economic prosperity.
Because of globalization, Quebec, like many other nations, is faced with growing challenges not only from our traditional competitors, but also from emerging economies. But to prosper, we have to spend more and more on research and development to improve productivity.
We also have to invest as much as our competitors in research and development, or else rapidly close the gap between our spending and our main competitors'.
What is the status of federal support for research and development?
In a nutshell, the federal government is not a reliable partner for Quebec—and I will prove it—and things have gotten worse since the Conservative Party of Canada came to power.
The federal government invests far less in research and development than the other OECD member countries—we have the statistics to prove it—and Ottawa's share of research funding in Canada is steadily decreasing.
In fact, Canada spends less than 2% of its GDP on research and development, which puts it in 13th place among OECD countries, which generally spend 2.26% of their GDP on R and D. That is a big difference.
This is especially disappointing since the federal share of R and D funding has declined steadily over the past 30 years.
Whereas in 1971 the federal government accounted for 40% of total research and development spending in Canada, the figure was only 18.7% in 2003. The government has slashed research and development spending in spite of the demands of globalization.
By the way, members will have noticed that this previous decline took place under the Liberal Party.
Not only does the federal government not invest enough in research and development, but Quebec gets less than its fair share of federal R and D funding.
As is the case for many files of this nature, although Quebec accounts for 29% of all of Canada's spending on research and development, it receives only 24% of federal funding—once again, Quebec loses out within this federal system—compared to the 48.3% that Ontario receives.
The only area in which Quebec receives an adequate share of federal funding is that of business research, although much of that support is in the form of tax credits that are accessible to everyone, so Ottawa has no say as to the geographic distribution of that assistance. That is not right.
As for research done directly by the federal government, when the government itself decides where the money will be spent, Quebec receives only 19.4% while Ontario receives 58.3% of spending. There is a remarkable discrepancy there.
Yet the Quebec economy relies on the high-tech sector, like the aerospace industry and the pharmaceutical industry, much more than the Canadian economy does. That is why the Government of Quebec attaches much more importance to supporting research activities than the federal government does. However, as I have already indicated, the federal government is not contributing as much as it could be. Thus, with research and development spending totalling 2.73% of its GDP, Quebec is making a much greater effort than the federal government, which invests less than 2% of its GDP.
Although funding was already insufficient under the Liberals and Quebec was at a disadvantage compared to Ontario, with the Conservatives in power, the situation has only gotten worse. For instance, in the fall of 2006, the Conservative government eliminated the main federal support program for industrial research, called technology partnerships Canada, a program that was very important to the Quebec industrial sector, and it did so at a time when our manufacturing sector is shrinking.
A few months later, it announced an aerospace research support program. In reality, it was just the announcement of some semblance of a program, Technology Partnerships Canada, from which it had itself slashed a third of the budget and excluded all industrial sectors except aerospace. While Quebec is a world class leader in that field, it cannot count on the support of the Conservative government.
For several years now we have been calling upon the government to establish an aerospace policy that would ensure businesses of reliable and predictable support and thus allow them to plan developmental projects. Yet the feds have always refused to do anything. In the meantime, other cutting edge industries—pharmaceuticals, biotechnology, environmental— solidly entrenched in Quebec have also been left to fend for themselves by the Conservative government.
That is why the Bloc Québécois is calling upon the federal government to cancel the cuts imposed on the Technology Partnerships Canada program, on support to the development of the aerospace industry, and to restore that program's availability to all cutting edge sectors that the Conservatives have left without any support. In addition to support for our cutting edge industries, our manufacturing sector also needs support. For example, in my own riding the furniture manufacturing industry plays an important role.
In this period of major economic downturn, businesses including those in traditional sectors such as furniture manufacturing, should be looking at innovations now in preparation for the coming recovery—innovations involving new technologies in order to improve productivity and be competitive with the industries in Asia. If the Quebec furniture industry wants to make any progress in this increasingly difficult context, it must act promptly to invest in new manufacturing techniques. By investing in research and development, the furniture industry will be better able to integrate new technologies in order to achieve lower production costs as soon as possible and with an eye to customer specifications and demands. The ability is there, but support is needed.
In order to achieve these objectives for the furniture sector and all the rest of the manufacturing sector, federal government support must be obtained for research and development. The federal government must improve tax support for research and development, for instance by increasing tax deductions for research and development as well as the types of expenses that are eligible. The Bloc also proposes making the research and development tax credit a refundable one, so that companies can benefit from it even if they are still in the development stage and not yet making any profit. It is convinced that these few measures could be extremely beneficial to the furniture industry in Quebec.
In reality, in this area as in several others, we realize once again that it is best to count on ourselves rather than Ottawa, a partner that is not very dependable.