Mr. Speaker, Liberals or Conservatives; they are all the same. Well before the current recession struck, on the Conservative government's watch and supported every step of the way by the Liberal Party, Canada made a series of monumental mistakes that are now leading us to the brink.
I remember a famous speech by the last Liberal leader but one to the Empire Club in Toronto. The Liberals were in opposition, an unusual position for a party that considers itself to be the natural governing party. The then Liberal leader was telling the Empire Club of Toronto that the Conservative Minister of Finance should cut corporate taxes even faster. That is all it took for the Conservative Minister of Finance to rise and say that he would reduce corporate taxes even faster than he had ever dared, at the urgent request of the official so-called opposition.
In their fifth year in power, the Conservatives now have clearly indicated in yesterday's throne speech that they will continue in the same vein. They will reduce corporate taxes, thereby destabilizing the well-balanced economy we have built in this vast country since World War II.
One need only look at the figures on page 255 of last year's budget to see that, in the end, it will be upwards of $350 billion. In fact for fiscal 2014-15, tax room of $358 billion will have been removed from the Canadian economy because of this monumental mistake of making massive cuts to corporate taxes. The figure for this year is $219,798 billion. Therefore, more than $200 billion has been removed.
How did we get here? Why is it important today? To listen to the government, the entire budget exercise focuses on creating jobs and stabilizing the economy because Canada is the victim of a global crisis. Nothing is further from the truth. Of course, there is a global crisis; but, before the crisis hit in the fall of 2008, Canada had already made decisions that devastated the manufacturing sector and inflicted the most damage on central Canada, namely Ontario and Quebec, by demolishing the forestry sector.
Hundreds of thousands of manufacturing jobs had already been eliminated before the crisis hit. To put today's economy into context, only 10% of the labour force remains in the manufacturing sector. That is one Canadian worker out of ten.
Current unemployment numbers are still extremely high, but the official numbers do not even take into account the fact that, for one thing, many people have stopped looking for work, and for another, contrary to the Conservatives' promises, the federal government is off-loading onto the provinces the financial burden of hundreds of thousands of people who will now be collecting welfare. So even though they are at pains to avoid saying they are cutting provincial transfers, there are other ways to transfer responsibilities and costs to the provinces. All they have to do is transfer responsibility for people who, through no fault of their own, are out of a job.
That is what Kevin Page, the Parliamentary Budget Officer, calls “the government's choices”. It is about time they stopped blaming everything on the global crisis. The Conservatives made the choice to gut the manufacturing and forestry sectors in favour of the oil industry and the banks.
Why those two sectors? Easy. The government says that it is cutting corporate taxes. But a company that is not making a profit, whether because it is losing money or is just breaking even, does not pay tax. That is a fact.
Therefore, when the government cuts corporate taxes, only the richest companies benefit. Alberta's EnCana got cheques for hundreds of millions of dollars without even asking for it, all because of corporate tax cuts. Canadian banks got hundreds of millions of dollars without lifting a finger.
In the meantime, failure to account for the environmental costs of the tar sands made it look as if impressive amounts of U.S. cash were coming into the Canadian economy because companies were exporting bulk quantities of raw product, just as we used to create wealth by exporting logs, but those numbers were inflated.
Today, we are making the same mistake with western oil by failing to internalize the costs. As a result, the loonie has risen to its highest level in 35 years, making life even harder for manufacturing and forestry exporters. The higher the dollar, the harder it is for people in other countries, particularly in the United States, our principal trading partner, to buy the things we produce.
Why focus so much on the oil sector? In economics, that is called Dutch disease, a phenomenon that arose in the Netherlands after the war. Following the discovery of major gas and oil deposits, the guilder, which was the monetary unit of the Netherlands before the Euro, appreciated quickly. Some saw that as a good thing, since the currency was gaining value. As a result, however, the national manufacturing sector was totally destroyed. All of a sudden, because of the high guilder, neighbouring countries could no longer afford to buy what the Netherlands produced. That country's manufacturing sector was destroyed for lack of finding a way to deal with this real wealth, as desirable as it may be if it is handled properly.
Canada is currently experiencing the same phenomenon because the Conservatives do not believe that the government has a positive role to play as an economic driving force here, at home. The basic rules of sustainable development, such as the internalization of costs as well as the polluter-payer and user-payer concepts, are being disregarded, as our raw resources continue to be exported en masse to the United States without first being processed, having value added, and being refined in this country.
As Louis-Gilles Francoeur, from Le Devoir so aptly demonstrated recently, with the Alberta Clipper, Southern Cross, Keystone and two other pipelines already in place, we are seeing our gross production of tar sands go directly to the United States. Under the combined effect of this and NAFTA's so-called proportionality clause, Canada is losing all control over its energy future and natural resources, because once the flow has started, it cannot be stopped.
An independent external study shows that, through the Keystone project alone, 690,000 barrels of crude oil are currently being exported to the United States every day, and the same project has caused 18,000 jobs to be exported as well. This means that jobs are being created in the United States, not in Canada.
Madam Speaker, as someone from British Columbia, you might recall the days when logs from the beautiful trees that grow in your province were exported in bulk, without any processing or value added, to be turned into value-added products in the United States, and then shipped back to Canada. The same thing happened in Quebec. Now, at least, we are starting to process products at home, because it has become clear that, if we want to remain in control of these wonderful resources, we cannot hand them over to others to add value to them and then send them back to us. We really had, in this poor country of ours, a very, very colonial, subservient mentality with respect to such natural resources.
However, since the second world war, Canada has been creating a balanced economy with a strong resource sector: our mines and our forestry sector. We are beginning to insist that the value be added right here. We have programs to provide assistance and create modern infrastructures, but the Conservatives simply do not believe in them. They do not believe that the government has a role to play in that regard. Their theory is that the free market always produces the best results.
Based on the Conservatives' theory, supported every step of the way by the Liberals who think the same way, the free market should be left alone. And those, like us, who believe that a sound industrial policy applied throughout this vast land can produce greater wealth and more jobs are making a mistake because we are picking winners.
They say, “You are picking winners”.
The problem is that the Conservatives picked their winners. By sheer coincidence, the winner comes from the same province as the Prime Minister. By sheer coincidence, the winner is the oil sector, and it is no coincidence that the Conservatives' winners are currently destabilizing the balanced economy we have been building in this country for the past 60 years.
Sustainable development has some basic principles, and it is easy to understand the principle of internalizing costs if we take the model of something people use every day. If we explain to people that when they buy new tires for their car, $3 or $4 is added to the price of each tire to dispose of it at the end of its life cycle; everyone understands that. The individual who drives the car and uses the tires should pay for that, rather than his neighbour who takes the subway or the bus, or walks or rides his bike to work. Everyone agrees that, yes, the product itself should contain the overall price.
Picture a guy who says that his province is getting filthy rich because it can make widgets. The going rate on the international market for similar widgets is $100, but this guy's widgets sell for $90 apiece, so they are a very hot item all over the world. If we were to visit the province's widget factory, we would probably see a well-run operation. But if we were to take a peek out the back door and see that all of the factory's waste was just getting dumped in the river, we would tell the factory owners that even though they may be very proud to be making money off their widgets, something is not right because they are dumping waste in the river and leaving a huge mess for future generations. What to do? The factory should pay to clean up the site. The price of the widgets should reflect their true cost, including the environmental cost. And the factory should dispose of waste properly.
Put it like that, and everyone understands. So why is it that when it comes to the tar sands, nobody seems to understand how monumentally irresponsible it is to future generations to leave behind the longest dams in the world and pretend that North America's worst pollution problem does not even exist? This is like a kid who covers his eyes to make everything disappear, who believes that what he cannot see does not exist.
That is the problem with the tar sands. It is all well and good to have a resource that can produce wealth and create jobs, but we have to exploit that resource properly in accordance with sustainable development principles. That is the massive mistake we are making in Canada right now by putting all of our eggs in the tar sands basket.
We have every reason to believe that things will only get worse. Anyone who has read any George Orwell can understand what the Conservatives are really saying. On page 9 of the printed version of yesterday's Speech from the Throne, there is a sentence that will go down in history, a sentence that twists the meaning of words in both French and English. I will read it in both languages to demonstrate that it is just as unbelievable in Shakespeare's tongue as in Molière's. Here it is.
To support responsible development of Canada's energy and mineral resources, our Government will untangle the daunting maze of regulations that needlessly complicates project approvals, replacing it with simpler, clearer processes that offer improved environmental protection and greater certainty [not to future generations, not to wildlife] to industry.
We need only read that to understand what they are talking about: the Mackenzie Valley pipeline.
When the report came out, it had over 130 very strict conditions. When I learned that it had been approved, I was a bit disappointed and surprised. But when I looked at the list of conditions, I realized that this report was really comprehensive. If the pipeline could be built under these conditions, all the better.
But Esso Imperial Oil rejected the report right off the bat, since it required wildlife areas to be protected. Unbelievable. The point of this is to allow Esso Imperial Oil to do what it wants, because the government thinks the regulations are much too complicated for the industry.
We are not out of the woods yet with the Conservatives. We need to watch out.
What Canadians need to realize is that every time the Conservatives do something like this, their buddies in the Liberal Party were complicit too. That must never be forgotten.