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House of Commons Hansard #17 of the 40th Parliament, 3rd Session. (The original version is on Parliament's site.) The word of the day was documents.

Topics

Canada-Colombia Free Trade Agreement Implementation ActGovernment Orders

5:05 p.m.

Bloc

Jean Dorion Bloc Longueuil—Pierre-Boucher, QC

Mr. Speaker, I would like to thank my eloquent colleague from Elmwood—Transcona. I would like to ask him a question inspired by a press release from a coalition of Quebec organizations made up of the Comité pour les droits humains en Amérique latine, the Quebec Network on Continental Integration, the Conseil central du Montréal métropolitain CSN, the United Steelworkers, the Project Accompaniment and Solidarity Colombia, and Development and Peace, a Catholic organization.

These organizations commented on a recent report by the United Nations and Amnesty International about the escalating violence against indigenous and Afro-Colombian communities, including murder and forcible displacement from communal lands to open them to agro-industrial activities and natural resource extraction.

The report also mentions that corruption and fraud are widespread among Colombian authorities. It states that currently, more than 60 members of congress have been charged or convicted or are under investigation for connections with paramilitary groups.

My question is this: Why should we believe that the Colombian government will enforce human rights, the free trade agreement and the investor protection provisions respectfully?

Canada-Colombia Free Trade Agreement Implementation ActGovernment Orders

5:10 p.m.

NDP

Jim Maloway NDP Elmwood—Transcona, MB

Mr. Speaker, the member is absolutely right. This is not just made up. It has been documented that the president and his family have been implicated in corruption and there have been charges. Why would the Liberals want to hop into bed to support a government like that?

The Uribe government is basically up for re-election right now. The president himself cannot run because he has finished two terms. The member for Kings—Hants says that the system works because the court decided that he could not run for the third term. The reality is that he simply got one of his henchmen in as his substitute. He has a replacement president that he supports.

The fact is that the Americans do not want to touch this. They are staying away. The Belgians and the Norwegians are staying away. Nobody wants to make the step, nobody except our government and the geniuses on the other side who are running the Liberal Party.

Canada-Colombia Free Trade Agreement Implementation ActGovernment Orders

5:10 p.m.

Liberal

Scott Simms Liberal Bonavista—Gander—Grand Falls—Windsor, NL

Mr. Speaker, on behalf of the collection of geniuses, otherwise known as the Mensa group over here, I would like to compliment the hon. member on his speech.

I do not want to raise some of the contentious issues that he raised but I do want to raise some of the points that he made about trade. Let us bear down on what is fundamental in a free trade agreement. It is to bring a nation in all aspects of labour and human rights on a course for economic opportunity and wealth.

He proposes that this particular situation does not fare well and, therefore, needs to be called off. However, many people here, and many experts would agree, and some from the country of Colombia are basically stating that this will bring them out of levels of poverty we have not seen before. They are saying that it will help them get above what they were before and will allow them to create a situation whereby the standards in their country will improve.

Is that not an example of fair trade to be pursued by this particular agreement?

Canada-Colombia Free Trade Agreement Implementation ActGovernment Orders

5:10 p.m.

NDP

Jim Maloway NDP Elmwood—Transcona, MB

Mr. Speaker, the Liberals were on the right track in the beginning when, in 2008, the House of Commons Standing Committee on International Trade recommended that a human rights impact assessment be undertaken. That is all the committee was going to do and the Liberals supported that. That is all we are saying.

If there is an independent review being done and there are no abuses over there, as the member seems to suggest, then why are they afraid of the study? Why will they not let a human rights impact study be undertaken?

Nobody is saying that there will not be a trade agreement with Colombia in the future. We are just saying not now. We want Colombia to clean up the human rights abuses and let us have an independent body that says it is so.

I think, by all means, the United States, Canada and other countries will put them back on the list. However, there are a lot of other countries out there that are more worthy of a fair trade agreement right now than Colombia.

Canada-Colombia Free Trade Agreement Implementation ActGovernment Orders

5:15 p.m.

NDP

Libby Davies NDP Vancouver East, BC

Mr. Speaker, I like the idea that the bill is getting so much debate. I know the government is now hopping mad because it thinks it has had too much debate. These agreements are often dry and clinical because they are conceived by bureaucrats and put together in wordy documents. The fact that it is here in the House and that parliamentarians in Canada are fighting this bill in solidarity with the people of Colombia is something pretty important.

The member made some very good comments differentiating between free trade and fair trade. I think more and more people in Canada want to be proactive on the notion of fair trade and that we cannot separate trade from other issues of human rights, labour rights, environmental rights, social rights and social justice. Gone are the days when these trade agreements can just be rammed through as the government thinks it can do.

I would like the member to elaborate on the fact that we now live in a different world where people are much more proactive about these agreements and are saying that they will not go through.

Canada-Colombia Free Trade Agreement Implementation ActGovernment Orders

5:15 p.m.

NDP

Jim Maloway NDP Elmwood—Transcona, MB

Mr. Speaker, I wish we could somehow teach this concept in the school system or have a way of getting the point across to Canadians because I know that Canadians watching the debates yesterday and today, by and large, would probably be well educated now in the bad human rights record of Colombia, but they might not be up to date about what constitutes a fair agreement.

I think people have an open mind and are willing to learn about this but it is a hard concept to explain in a media that is not receptive to the idea in the first place because we are always all about earning money. If it does not make top dollar, then it does not make top spot in the discussion.

Canada-Colombia Free Trade Agreement Implementation ActGovernment Orders

5:15 p.m.

Bloc

Guy André Bloc Berthier—Maskinongé, QC

Mr. Speaker, the government keeps telling us that this free trade agreement contains side agreements on labour and the environment that are not part of the agreement itself. Apparently, these side agreements state that failure to comply with government standards or respect human rights can result in fines of up to $15 million per year.

Once the maximum penalty has been reached, no further penalties can be imposed under the agreement. Companies will be able to flout environmental standards without risking their investments. The government will have no problem getting away with human rights violations. Fifteen million dollars is a drop in the bucket to mining companies that make billions of dollars in profits.

I would like my colleague to comment on that.

Canada-Colombia Free Trade Agreement Implementation ActGovernment Orders

5:15 p.m.

NDP

Jim Maloway NDP Elmwood—Transcona, MB

Mr. Speaker, our critic has called that provision “kill a trade unionist, pay a fine” because that is basically what it is. The government has said that if people are killed then it will put money into this fund but only up to $15 million no matter how many people are killed. That is the wrong answer because the government should clean up the whole issue of human rights abuses in Colombia before it starts to promote and push an agreement like this.

Canada-Colombia Free Trade Agreement Implementation ActGovernment Orders

5:15 p.m.

Bloc

Meili Faille Bloc Vaudreuil—Soulanges, QC

Mr. Speaker, I am speaking in the House of Commons today to denounce Bill C-2, the implementation of the Canada-Colombia free trade agreement. There are many reasons why I disagree with this bill as it has been introduced by the Conservative government.

My colleague from Berthier—Maskinongé made some good points about human rights and spoke about the ineffectiveness of parallel agreements. In my speech I will touch on these issues as well.

For Quebeckers and the citizens of Vaudreuil-Soulanges, certain arguments have come to the forefront of this debate: environmental protection, respect for workers' rights and respect for the most fundamental human rights of the Colombian people.

I would like to explain why I am worried that Bill C-2 will pass. The Canadian government's main motivation is not trade. It is looking to make life easier for the Canadian investors, particularly in mining, who will invest in Colombia. The desire to protect Canadian investments abroad is legitimate. However, it seems obvious to me that this must not be done at the expense of the fundamental rights of Colombians.

I am worried that this agreement would be detrimental to the development of the people of Colombia. We must understand that increased trade should not be the government's only motivation. An agreement such as this must also contain provisions that allow us to establish a position of strength and, through negotiations, to work toward both implementing social measures that would benefit Colombians and establishing rules that respect the environment and laws that improve the living conditions of workers.

Judging by all the investment protection agreements Canada has signed over the years, the one that would bind Canada and Colombia seems ill conceived. All these agreements contain clauses that enable foreign investors to sue the local government if it takes measures that reduce the return on their investment.

To be more specific, we feel that these provisions could be harmful for a country where labour laws, environmental laws and respect for the people are uncertain at best. While attempting to protect our investments, the Canadian government is putting itself in a situation where it could increase the risk of delaying social and environmental progress in a country in great need of such progress.

I would like to point out that my colleague from Longueuil—Pierre-Boucher referred to some of the organizations that have reported on the situation in Colombia. I thank him for doing that. Colombia's human rights record is one of the worst in the world and certainly in Latin America.

The government of Colombia has the right to adopt, and should adopt, legislation to protect its environment and improve the quality of life of its people. We must determine whether it has the means to implement such measures and the means to fulfill its ambitions.

Yes, this regulation could cause companies that have invested in that country to lose some profits. We need to have some protection against nationalization without compensation, I do admit, but we also must include some provisions that will allow Canada to put pressure on the Colombian authorities.

The Bloc Québécois cannot support the implementation of the Canada-Colombia free trade agreement, as it stands.

Under no circumstances should the Canadian government swap its ability to pressure the Colombian government to respect human rights and protect the environment for guaranteed profits from investments by Canadian companies abroad.

I would point out that ratification of the U.S.-Colombia free trade agreement is also being delayed, particularly because they are trying to clear up concerns over human rights abuses. It is a matter of justice.

I consulted a number of people in my riding of Vaudreuil-Soulanges. I cannot support the bill in its current form until Colombia brings in stricter legislation to protect minimum labour standards and the union movement, as well as stricter legislation to protect the environment.

The advantage of establishing a trade agreement with a country lies in the ability to develop a partnership with it. When economic barriers are reduced, trade between the two countries can increase. That is what one would hope to achieve with an agreement between Canada and Colombia. The likelihood of that happening in the near future is pretty low, though, considering the means being used.

When we look at the figures for imports and exports between Canada and Colombia, we can see that, not surprisingly, the vast majority of Canadian investments are in the excavating industry, specifically in mining. In 2007, imports in that sector accounted for nearly 31% of all imports from Colombia. In dollar figures, this represents almost $138 million. Canada buys only primary commodities from Colombia. We import $155 million worth of coffee, $72 million worth of bananas and $62 million worth of cut flowers. Adding agricultural and agri-food products brings the total to $387 million. Foreign direct investment in Canada is approximately $1 million, while Canadian investment in Colombia is approximately $1 billion.

Here are the aggregate trade data. In 2008, Canadian imports were rising and totalled $644 million, as were Canadian exports, which totalled $704 million. The pace of growth is quite varied, just as we predicted during the debate in the last session. In Quebec, imports amounted to $88 million. That is a 0.5% decrease from 2007. Quebec imports into Colombia represented about 14% of Canada's total imports. Exports amounted to $120 million in 2008 and accounted for about 17% of Canadian exports to Colombia. Quebec exports increased by a little less than 2% between 2007 and 2008.

Canada has other trading partners in Latin America and the Caribbean that rank higher than Colombia. In recent years, trade between Canada and the other Latin American countries has increased considerably, which has meant a smaller share of trade with Colombia than with other countries in the region.

Foreign direct investment (FDI) in Colombia is growing exponentially. To create a predictable environment and ensure that foreign investors will not be dispossessed of their property or have it nationalized without compensation, countries conclude treaties protecting investment. That is standard procedure and the Bloc Québécois is in favour of this kind of treaty.

The Free Trade Agreement between Canada and the United States had a chapter on protecting investment—chapter 16—and was the first agreement in the world to include a dispute settlement mechanism which both countries could use. The FTA worked very well. No cases of discriminatory measures against foreign investors were reported and none were taken to the arbitration panel. During the five years the FTA was in effect, the value of Canadian investments in the United States increased by 41%.

However, things went downhill with chapter 11 of NAFTA. By virtue of chapter 11 on investment, foreign investors can go directly to international courts, bypassing the filter of the public good that governments would apply. The concept of expropriation is so broad that any legislation that might have the effect of reducing an investor’s profits can be interpreted as expropriation and give rise to a lawsuit. In addition, the amount of the suit is not limited to the amount of the investment and includes all potential future profits. It is completely abusive.

This chapter has been decried by everyone. As soon as legislation, for example to protect the environment, is passed and reduces a foreign investor’s profits, the government is exposed to astronomical lawsuits. Over the years, Ottawa signed several bilateral agreements that basically copied chapter 11 of NAFTA. There was so much criticism, however, that the Liberals stopped signing these kinds of agreements. It is very hard to understand their about-face in this regard, and I hope they will review their position and vote against the present agreement.

Under the Conservatives, Ottawa returned to its old ways and negotiated many such agreements. In the case of Colombia, the Conservative government has ceded to multinationals the task of determining the common good.

The Bloc Québécois opposes the bill to implement the free trade agreement with Colombia because it contains clauses copied wholesale from chapter 11 of NAFTA. The Bloc wants the government to return to the previous approach used in treaties, which did not amount to a charter for the multinationals at the expense of the common good.

The displacement of communities is a serious problem in Colombia. There are several reasons for this human disaster, including internal conflicts within the government, paramilitary groups and guerrillas.

The arrival of extractive industries is also a major reason for forced migration.

Canada-Colombia Free Trade Agreement Implementation ActGovernment Orders

5:25 p.m.

Conservative

The Acting Speaker Conservative Barry Devolin

The House will now proceed to the consideration of private members' business as listed on today's order paper.

The House proceeded to the consideration of Bill C-288, An Act to amend the Income Tax Act (tax credit for new graduates working in designated regions), as reported (with amendment) from the committee.

Income Tax ActPrivate Members' Business

5:30 p.m.

Conservative

The Acting Speaker Conservative Barry Devolin

There being no motions at report stage, the House will now proceed without debate to the putting of the question on the motion to concur in the bill at report stage.

Income Tax ActPrivate Members' Business

5:30 p.m.

Bloc

Johanne Deschamps Bloc Laurentides—Labelle, QC

moved that the bill be concurred in at report stage.

Income Tax ActPrivate Members' Business

5:30 p.m.

Conservative

The Acting Speaker Conservative Barry Devolin

Is it the pleasure of the House to adopt the motion?

Income Tax ActPrivate Members' Business

5:30 p.m.

Some hon. members

Agreed.

On division.

Income Tax ActPrivate Members' Business

5:30 p.m.

Conservative

The Acting Speaker Conservative Barry Devolin

I declare the motion carried.

(Motion agreed to)

When shall the bill be read the third time? By leave, now?

Income Tax ActPrivate Members' Business

5:30 p.m.

Some hon. members

Agreed.

Income Tax ActPrivate Members' Business

5:30 p.m.

Bloc

Johanne Deschamps Bloc Laurentides—Labelle, QC

moved that the bill be read a third time and passed.

Mr. Speaker, again we are gathered to debate Bill C-288, to give every new graduate who settles in a designated region a tax credit. This bodes well, because it means the bill has passed committee stage.

In 2007, my colleague the hon. member for Chicoutimi—Le Fjord introduced a similar bill, namely Bill C-207. It received support from a majority of the members in the House at all stages and even got as far as the Senate. I promise my colleague, young people and the regions of Quebec to have the same determination to get this bill passed.

To put this into context, the purpose of Bill C-288 is to give a tax credit to every new graduate who settles in a designated region. Since being introduced in the House, this bill has come a long way and has received a great deal of support.

Bill C-288 is supported by a variety of groups and generations throughout Quebec: the Fédération étudiante collégiale du Québec, or FECQ, and the Fédération étudiante universitaire du Québec, or FEUQ, which represent 40,000 and 125,000 students respectively in Quebec; the FADOQ network, which has 255,000 members, and the Fédération québécoise des municipalités, which represents 972 municipalities. They have all given their full support to the bill. What is more, the bill is supported by a number of RCMs, chambers of commerce and youth employment centres.

In addition to this sizeable support, last November the hon. member for Chicoutimi—Le Fjord and I delivered 3,000 postcards in support of Bill C-288 to the office of the hon. member for Roberval—Lac-Saint-Jean. Contrary to what some people have suggested, these postcards were indeed signed by people who are affected by the bill.

Before going any further, I would like to thank two colleagues: the hon. member for Honoré-Mercier and the hon. member for Churchill who have been behind Bill C-288 from the beginning.

I would also like to thank the representatives of the Fédération étudiante universitaire du Québec who came to show their strong support for Bill C-288 by testifying before the Standing Committee on Finance. I greatly value their support because, in a way, this bill is designed for the thousands of students and graduates who will move out of large urban centres to go live and work in the regions.

The main purpose of this bill is to attract young graduates to the regions in order to help solve two main problems: the exodus of young people and the serious shortage of skilled labour. It is important to encourage young graduates to settle in the regions, where they will start their professional careers, and to recruit skilled labour for the benefit of the regions.

The exodus of young people is becoming increasingly problematic in terms of the economic vitality of areas that are far from large centres. These areas need young graduates in order to develop and to enhance their ability to innovate. Obviously, giving recent graduates who settle in regions a tax credit of $3,000 per year—up to a three-year maximum of $8,000—would help revive local economies and meet labour needs.

The exodus of young people has a negative impact, both socially and economically, on any region. It speeds up population aging and reduces the average education level of the people left behind, which undermines the region's ability to innovate. The more remote regions are losing the most residents. In many cases, they depend on one type of industry; these are called single-industry regions.

Gone are the days when resource regions could prosper based solely on extracting natural resources for primary processing elsewhere. In order to grow, the regions will have to look to technology and develop their processing industry more.

Quebec was hard hit by the forestry crisis. Since 2005, Quebec has lost 26,000 jobs in the forestry industry alone, that is, the industry and related services, such as transportation and logging equipment. This represents 50% of Canada's total loss.

Since the Conservatives came to power, about a third of all forestry jobs have disappeared. Some regions have been decimated. Since the summer of 2004, my region, the Upper Laurentians, which has been hardest hit by the crisis, has lost 58% of all forestry jobs in Quebec.

Of the 17 forestry companies in my riding, 14 have been forced to close their doors. Heavy machinery operators, engineers, technicians and truckers have borne the brunt of these job losses. Those with higher levels of education, special skills and expertise, such as engineers, have been forced to leave our beautiful region to find work in their fields.

The Government of Quebec realized that to promote regional economic diversification, it would have to develop new business opportunities in other fields.

This is a major hindrance to the development of secondary industry and high-tech. In all of the studies that have been done, many companies have said they would only be able to stay in their region if they did not grow very much. So long as businesses stay small, they can take care of professional and technical work themselves. If they grow, they have to hire skilled workers. Difficulty finding such workers in the regions might force companies to relocate to urban centres, where they are more likely to find qualified workers.

Bill C-288 proposes a beneficial tax measure for all young eligible graduates in Quebec and Canada. Quebec is not the only province experiencing a youth exodus. Across Canada, economic activity has gradually moved from more rural regions to larger centres. Some provinces—Quebec, Saskatchewan, Nova Scotia, New Brunswick and Manitoba—have introduced a graduate tax credit. The Quebec government introduced its credit in 2003, then amended it, so that it now resembles the tax credit proposed in Bill C-288, which I am talking about today.

The Conservatives tried to derail the debate on this bill by grossly inflating the cost of the program. In his November 24 report, the Parliamentary Budget Officer assessed the proposal according to a number of different scenarios. I would like to clarify some of the data so that members can focus on the essence of the bill.

First, the regions designated in this bill will be determined by the Minister of Finance, after consulting with the provinces involved. Second, the regions will not be designated based on the number of people who would be affected; they will be based on the needs identified in these regions far from Canada's major cities. I should point out that the bill excludes metropolitan regions with more than 200,000 residents. Third, the bill must focus on resource regions and regions with low rates of urbanization that are struggling with long-term unemployment rates, an indicator of poor employment prospects.

Finally, we used economic and health regions as geographic criteria. We then used the long-term unemployment rate to determine the regions where job prospects are more difficult—4.7% and up in 2006. From these regions, we considered only the regions that had over 12% of their population living in rural areas.

In total, we identified 34 health regions that met these criteria, representing 8.24% of the Canadian population. According to the estimates of the Parliamentary Budget Officer, such a measure would cost around $230 million per year, rather than the $600 million claimed by the Conservatives.

Of course, other regions could be added during the discussions between the federal government and the provincial governments, but these regions will have to meet the requirements of the bill, and have a high long-term unemployment rate, combined with a low rate of urbanization or a low population density.

Adding a few regions that meet the above criteria would not substantially increase the cost of the bill.

We still want the support of Liberal and NDP members for this Bloc Québécois initiative. We hope that Conservative members will put aside their partisan ideology and act in the interests of young graduates and the regions.

I believe that many young people who are about to complete their post-secondary education or professional training are waiting for this bill to pass. A number of my colleagues have probably had exploratory visits from young graduates. These young people are in contact with community stakeholders, the decision-makers, and are in a position to determine the regions' needs and to tell us what kind of labour force is needed in our regions to develop secondary and tertiary processing.

The bill creates many expectations. It provides an incentive for attracting youth back to the regions. However, young people who are interested in returning are also interested in the quality of life they may find there. A young person who moves to the region may start a family. Families add vitality to a region.

As I stated earlier, this time I hope that the Conservative members, especially those from Quebec—in particular the members for Pontiac, Roberval—Lac-Saint-Jean and Jonquière—Alma—as well as the independent member from Portneuf—Jacques-Cartier will understand that they must put their regions' interests ahead of their party's interests in order to support all regions of Quebec and their young people.

Income Tax ActPrivate Members' Business

5:40 p.m.

Conservative

Mike Wallace Conservative Burlington, ON

Mr. Speaker, I am on the finance committee that reviewed the bill that is before us and I take some exception to the characterization that this is partisan. I really want to encourage our colleagues from the other parties to really look at this.

My question for the sponsor of the bill is, how does she consider the bill fair? Does she not believe in fairness in the tax system, where we compare students who happen to be from an area that has over 200,000 people to those students who are from areas that do not have 200,000 people? How is the Canadian tax system fair when we give a tax bonus to students beginning their careers just because they are from a larger urban centre than those who are not?

Income Tax ActPrivate Members' Business

March 25th, 2010 / 5:45 p.m.

Bloc

Johanne Deschamps Bloc Laurentides—Labelle, QC

Mr. Speaker, I see we are facing extremely different points of view. I do not understand. We are not talking about unfairness. Bill C-288 is designed specifically to encourage young people—who usually have to go to urban centres for training or study purposes—to return to the regions if they wish.

The regions of Quebec are at a crossroads. Indeed, several regions have been hit hard by the forestry crisis. I said in my speech that several regions still depend on a single industry, and I used my region as an example, because that is the case there. If we want to develop secondary and tertiary processing, we need to have a skilled labour force. In order to have a skilled labour force, young people must return to the regions. But young people who go to urban centres develop a network of friends and might be tempted to stay in those urban centres instead of returning home, knowing they will not find work there.

This is an incentive. This does not affect other options, other credits that young people can benefit from. This is an additional measure, nothing more, but one that will encourage young people to return to the regions.

Income Tax ActPrivate Members' Business

5:45 p.m.

NDP

Carol Hughes NDP Algoma—Manitoulin—Kapuskasing, ON

Mr. Speaker, I would like to thank my colleague for her speech and for having introduced this bill, which is now in its third reading.

In my riding of Algoma—Manitoulin—Kapuskasing, there are many rural communities. The fact that many of the youth decide to move to larger cities poses a huge problem. By studying this bill closely and supporting it, we can ensure that our communities will survive and we can offer more opportunities to youth.

This bill is not about equality, as the Conservative member said. It aims to fix a problem that rural areas are facing.

I would like to ask my colleague to speak more about the youth who need to stay in or come back to their communities.

Income Tax ActPrivate Members' Business

5:45 p.m.

Bloc

Johanne Deschamps Bloc Laurentides—Labelle, QC

Mr. Speaker, I thank my NDP colleague. I told her that I was very pleased to hear where she lives. I have family members, the Deschamps, living in Kapuskasing. I should not be saying my name, but I wanted to say hello to them.

I imagine that the economic development of her region is important to my colleague. In fact, we are not reinventing the wheel. A number of provinces have this type of incentive or tax credit, and many young people take advantage of it.

It is quite normal for a worker who pays provincial and federal taxes to benefit from such a credit. It is not unusual to return a portion of the taxes they pay to taxpayers.

Income Tax ActPrivate Members' Business

5:45 p.m.

Macleod Alberta

Conservative

Ted Menzies ConservativeParliamentary Secretary to the Minister of Finance

Mr. Speaker, let me start by acknowledging my friend and colleague across the way, the member for Laurentides—Labelle. I have the greatest respect for this individual, and I am sure her original intent was very appropriate. We are all concerned about education and getting our young people to work.

Unfortunately, this bill misses the mark drastically. I stand once again to plead with this House to recognize the many problems and tremendous cost of this proposal and suggest that we must defeat it.

Let us be clear. This proposal is very bad policy. It would grant preferential and unfair tax treatment by way of a special tax credit to a chosen few graduates. These graduates would need to reside in an ill-defined and allegedly economically depressed designated region and take up vague, qualifying employment for a limited period.

Let me put in a very quick example. Just this afternoon we have done a little research on this and we find that within the parameters, even with this vague amendment, Fort McMurray qualifies as an economically depressed region.

I am sure the member for Fort McMurray—Athabasca would stand and vociferously argue that, simply because Fort McMurray's population is 65,000 people. I am sure members know the wage structure in that community. Truck drivers bring home over $100,000 a year. Somehow this is not making sense. That is why we need to defeat this bill at this stage.

For the record, our Conservative members at finance committee fought to have a thorough study of this flawed proposal. We suggested we should wait and hear from the witnesses at committee to help identify the countless deficiencies in this. Unfortunately the opposition did not agree.

As a result, with only two short hearings and some minor tinkering, a Bloc-NDP-Liberal coalition, and where have we heard that before, of committee members adopted this approximately $0.5-billion proposal. However, in that brief hearing we did get the opportunity to have the Parliamentary Budget Officer appear before the committee.

Conservative members of the committee had requested in advance that the Parliamentary Budget Officer cost this proposal. That is one of his mandates. We were happy to see him step forward and do that.

In his report, the Parliamentary Budget Officer confirmed what we as the government have been saying along, that this is a costly proposal. Let me quote directly from the Parliamentary Budget Officer's report:

Overall, assuming no behavioural change on the part of graduates and based on the foregoing assumptions, these ranges suggest that at full phase-in the program could have a cost estimate of between over one hundred million to approximately six hundred million per annum.

Let me repeat, $600 million per year. Over the course of 10 years alone, that would be a cost of about $6 billion. All that and “assuming no behavioural change on the part of graduates”.

That is a $6-billion proposal that could very likely be even more expensive than what we are actually debating here today. The alleged merits of the proposal aside, which are certainly in doubt, I ask through you, Mr. Speaker, how the Bloc member and her party might be thinking that we would pay this $6 billion. What programs would they eliminate? Would they cut transfers to provinces? What taxes would they raise? Or would they pay for it at all?

Unfortunately we have no answers to these questions because we did not have time to pursue it properly at committee.

I will share with my colleagues in the House who had questions as well and who suggested the finance committee ask more questions of the Parliamentary Budget Officer. Let us read from the report released this past November:

Given the sensitivity of the tax credit's estimated cost to the size and number of the designated regions, Committee members may wish to further refine this proposal to set policy boundaries around key cost drivers.

Unfortunately, as I indicated earlier, that did not happen. If the Bloc-NDP-Liberal coalition on the finance committee had looked a little more closely at this flawed proposal, it would have understood why it raised so many concerns.

First, this proposal would basically provide preferential and unfair tax treatment to literally any recent post-secondary graduate working in a designated region. This would happen regardless of whether there were a surplus or a shortage of workers with that skill.

The proposal makes weak assurances that a graduate's work should somewhat relate to their training, but does not specify on what basis this would be determined. For example, any graduate could claim that his or her employment made use of the general problem-solving skills acquired at school.

Second, the list of designated regions expressly referenced in this proposal has not been updated or revised in close to three decades. Even with the minor tinkering I had mentioned, that would mean the entire province of Saskatchewan would be one of these designated regions, excluding Regina and Saskatoon of course. It would be classified as an economically depressed and designated region. I know one member of our committee, the member for Saskatoon—Rosetown—Biggar, would be quite offended by that. In fact I believe she was. This would be comical if it were not carrying a $6 billion cost.

I am at a loss as to how anyone would imply that Saskatchewan is currently a depressed region. In February 2010 Saskatchewan had an unemployment rate of 4.3%, nearly half the current national average of 8.2%. What is more, according to CIBC World Markets, Saskatchewan will lead other Canadian provinces in economic growth this year, well ahead of Canada's overall projected growth.

CIBC economist Warren Lovely said:

Oil, potash, agriculture and uranium sectors are again in demand, with ongoing development paving the way for production increases. Expect Saskatchewan to lead all provinces in 2010...

Yet this Bloc proposal would characterize Saskatchewan as largely having limited employment opportunities. It would give those workers in booming Saskatchewan a preferential tax treatment. How is that fair? Why would we provide preferential tax treatment for select new graduates but nothing for others?

For example, a new graduate working in Saskatchewan in a designated region and earning around $33,700 would not pay a penny of federal tax for three years. Alternatively, a new graduate working outside these ill-defined designated regions, everywhere from Winnipeg, Halifax, Windsor, Toronto, Montreal, Calgary and more, would pay nearly $3,000 per year in federal income tax. Again this is a deeply flawed and poorly thought out proposal.

Third, there is no guarantee that new graduates attracted to a designated region would remain there once their eligibility for the credit expired. It would encourage young workers to make employment decisions based on temporary, preferential and unfair tax treatment, rather than seek their best opportunities for employment, in other words, where their skills best meet the demand.

On the other hand, a large number of new graduates who are currently choosing to freely work in designated regions without this special tax credit would be provided preferential tax treatment for little or no compelling reason.

Clearly the problems with this proposal are critical. The cost is astronomical, as high as $6 billion in the first 10 years alone, and as the Parliamentary Budget Officer noted, that is assuming no behavioural change on the part of graduates.

Income Tax ActPrivate Members' Business

5:55 p.m.

Liberal

Massimo Pacetti Liberal Saint-Léonard—Saint-Michel, QC

Mr. Speaker, I rise in the House today to debate Bill C-288, An Act to amend the Income Tax Act (tax credit for new graduates working in designated regions).

As the vice-chair of the Standing Committee on Finance for several years now, I want to point out that our committee has studied this bill many times. The committee has been through numerous consultations and amendments other than those mentioned by the parliamentary secretary, and I believe we have achieved a state of near-perfection.

Though this bill is somewhat imperfect, that is the case with most private members' bills in this place. It is no fault of anyone's, but with the private members' bills that are brought forward, there will be some imperfections because of the limited resources we have as individual members of Parliament. We are not the government. We do not have the bureaucracy behind us, so some of the bills are limited in terms of detail. We have to try to work those details out. That is the reason we send these bills to committee.

However I feel the bill does address a crucial area of the Canadian economy that the Conservative government has chosen to ignore.

The parliamentary secretary spoke about what happened in committee. The government could have taken steps to propose better legislation. It could have tabled legislation using all the resources of the government to address this issue. It could have tabled a more complete bill, a bill that would have considered the needs of regions, that would have tied regional development, along with job creation, innovation, which we have been talking about, and green technologies, to consider the needs of students and their employment futures.

Instead the government decided to shut down Parliament and go on vacation for a couple of months and came back with nothing more than a vision to change the national anthem.

Given the failure of the Conservatives to work for all Canadians, I think at this point Bill C-288 is the best option we have on the table.

To ensure a prosperous national economy, wealth must come not only from big cities. We need a broad range of skills and professions in all regions of our great country. As the member for a Montreal Island riding, I am acutely aware of the challenges facing people who live in the regions. I want to talk about the labour shortage, the high cost of transportation, the lack of public transit and other huge challenges for those who live in the regions.

Those are just some of the reasons I support this bill.

The failure of the government to propose long-term solutions to strengthen the economies of our smaller regions has led to entire communities being left behind. The costs associated with regional economic failure are too great to completely catalogue in the short time permitted for me today.

Of course these include the stagnation of economic development and growth in smaller communities, the breakup of communities as the most capable of the young people migrate elsewhere, the departure of industries as the local talent pool dries up, and increased burdens on the EI system as unemployment in the region increases.

These students sometimes not only move away from the regions into the cities but they also move away from the cities to other places and to other countries.

Bill C-288 introduces a tax credit for young graduates who settle in one of the geographic regions listed in the Regional Development Incentives Act to take up work in their field.

The tax credit can be anywhere from $200 to $750, which is a substantial amount to students who have recently completed their studies and earned their degrees and are ready to work. I do not think this measure will bankrupt the government. That kind of money will not hinder economic growth. In fact, these graduates can work in the regions and create still more jobs.

Even if they want to return to their hometowns, many new graduates cannot because they have student loans and simply cannot work for the typically lower salaries offered in the regions.

This bill would encourage many Canadians to return to their home regions after completing their studies. It would enable new graduates to benefit from a tax credit equal to 40% of their salary, up to $8,000. That is one of the things we asked for when the bill was referred to the committee.

The Bloc proposed an $8,000 tax credit. I proposed that that amount be spread over three years, in order to prevent students from returning for just one year to take advantage of the tax credit and then moving somewhere else.

The committee decided to introduce an initial amendment to spread the $8,000 over three years: for example, $3,000 the first year, $3,000 the second year and $2,000 the third year. That way, young people will stay for 12, 24 or 36 months or longer after they get their first job.

This would provide young graduates who want to ply their trades back home an adequate financial reason to do so, and at minimal cost. The provincial government in Quebec has already instituted a measure similar to the one proposed in Bill C-288 and it has been quite successful so far.

While the bill has much potential, we also talked about costs. We have had all kinds of costs and that is why the Liberals introduced an amendment that would be applicable to communities of 200,000 and less. We had a cost of $600 million and I think the Bloc came up with $160 million. We are comfortable with $160 million, so we in the Liberal Party are ready to support that.

Liberal members of the Standing Committee on Finance proposed an amendment that was approved by the member who had originally introduced the bill. That amendment ensures that the bill targets rural regions in particular, by excluding students who move to cities with a population of more than 200,000. Thus, the bill will achieve its goal, while ensuring that the cost of implementing it will be relatively low.

This amendment would ensure that the tax credit is extended only to those students who choose to settle in truly small communities, not as the member opposite, the parliamentary secretary, just suggested. Thus it helps the bill better achieve its stated goal while minimizing the costs associated with implementing the bill.

In committee we try to improve some of these bills, but the Conservatives did not help or make any suggestions when in fact we did try to work out regions or areas where this bill would be applicable. Hopefully, places like Fort McMurray would not be one of those areas, but if there was all of a sudden—

Income Tax ActPrivate Members' Business

6:05 p.m.

Liberal

Alan Tonks Liberal York South—Weston, ON

A downturn.