Mr. Speaker, the jobs and economic growth act, which implements many key measures from budget 2010, is a key component of Canada's economic action plan. As members likely know, Canada's economic action plan represents our Conservative government's aggressive response to the global economic storm. It is a plan that is helping to protect and boost our economy.
More importantly, it is a plan that is working. Last week, for instance, Statistics Canada announced that Canada's economy grew 6.1% in the first quarter of 2010. This not only represented the strongest quarterly rate of economic growth in a decade but also the strongest first-quarter economic growth among all G7 countries. Benoit Durocher, an economist with Desjardins, said:
It’s one more indication of the vitality of the Canadian economic recovery....The measures to stimulate the economy are bearing fruit.
Even better, both the IMF and the OECD predict that Canada will lead the G7 in growth through this year and next year. Additionally, Statistics Canada also reported last week that 24,700 net new jobs were created in May, which was the fifth straight month of job gains. This also represents the eighth month of job gains in the past 10 months. Overall, since July of last year, Canada has created almost 310,000 net new jobs.
Canada's economic growth and continued job creation is proof that Canada's economic action plan is indeed working. With numbers like these, it is not surprising that Canada's economy has been singled out for praise and envy way beyond our own borders. In fact, in a speech in Calgary, former U.S. President Bill Clinton recently said:
I want to compliment Canada; you didn't get burned as bad as everybody else did because you had a more disciplined environment....You have a pretty successful private economy here....
Jim Cramer, a popular financial commentator in the United States on CNBC, recently called Canada “perhaps the world's most stable financial system”. The influential magazine The Economist recently called Canada “an economic star”, further noting that:
....Americans may cast envious glances across their northern border. Despite its umbilical links with America, Canada’s economy suffered only a mild recession and is now well into a solid recovery...[Canada's] economy is set to perform better than that of any other rich country this year.
What is more, the OECD itself also recently singled out our economy for praise, exclaiming:
....Canada looks good—it shines, actually....Canada could even be considered a safe haven.
While it is encouraging to see Canada's economy on the right track, a testament to our government's strong economic leadership, the larger global recovery remains fragile. That is why the economy must remain paramount for Parliament, and that is why we need to fully implement Canada's economic action plan.
We must stay on the right track for Canadian families by following Canada's economic action plan both to ensure a strong recovery, and equally important, to support the coordinated global efforts that are under way. We have to stay the course. We must pass the jobs and economic growth act.
The jobs and economic growth act will build on Canada's economic advantage with its measured and ambitious proposed initiatives to, for example, eliminate tariffs on all manufacturing inputs and machinery and equipment; to eliminate the need for tax reporting, under section 116 of the Income Tax Act, for many investments by narrowing the definition of taxable Canadian property; to implement important changes to strengthen federally regulated private pension plans; to implement the one-time transfer protection payments to provinces; and to enforce the code of conduct for the credit and debit card industry through regulatory power, if necessary. Further, it would enable credit unions to incorporate federally, not just provincially; would stimulate the mining industry by extending the mineral exploration tax credit; would implement an enhanced stamping regime for tobacco products to deter contraband; and would ensure fairness for Canadian taxpayers by closing tax loopholes. There is much more.
During my time today, I would like to highlight three of the aforementioned initiatives. Specifically, I am going to speak to the proposed implementation of the one-time transfer protection payment to provinces, the proposed power to enforce a code of conduct for the credit and debit card industry through regulatory power if necessary, and the proposal to enable credit unions to incorporate federally.
First, the jobs and economic growth act includes important support for provinces and territories across our country, support that underlines our strong and ongoing commitment to them. This support also demonstrates our commitment to not repeat the mistakes of the past, when transfer payments to the provinces and territories were dramatically cut in the 1990s under the previous government. As the Federation of Canadian Municipalities recently pointed out:
Canadians can't afford to relive the nineties...when federal...budget deficits were shifted on to their property tax bills, or paid for with cuts to local services.
That is why we have made a commitment to the provinces and territories that they can count on our support and our ongoing support. Total transfers to provinces and territories will increase by $2.4 billion in this fiscal year, bringing total federal support to $54.4 billion, the highest level in our history.
Equalization payments to provinces for 2010-11 will total $14.4 billion. In fact, the Canada health transfer will grow to $25.4 billion, and the Canada social transfer for 2010-11 will reach $11.2 billion.
Our government has restored fiscal balance through long-term and fair transfer support to provinces and territories with total transfers increasing by over 30% since we formed government. This unprecedented and growing federal transfer support will help to provide the services and programs for our hospitals and our schools that Canadians rely on.
In addition to that significant federal support, budget 2010 also confirmed that our government will provide one-time payments to protect those provinces that may have faced a decline in the total transfers in 2010-11. This will ensure that all provinces receive at least as much support through major transfers this year as they did last year. This is in recognition of the short-term economic challenges facing provinces as we emerge from this global recession.
Accordingly, the jobs and economic growth act authorizes over $500 million in 2010-11 transfer-protection payments to affected provinces. Specifically, they are to Nova Scotia, at $250 million; to New Brunswick, at $80 million; to Newfoundland and Labrador, at $8.4 million; to Prince Edward Island, at $3.3 million; to Manitoba, at $175 million; and to Saskatchewan, at $7.3 million.
I note that these vital transfer payments cannot be made until the jobs and economic growth act receives royal assent. The over $500 million in transfer-protection payments, our ongoing government support, and our commitment to maintain support for provinces and territories has been well received throughout this country.
Listen to the Canadian Medical Association, which has welcomed our ongoing commitment, noting that:
Canada's doctors are pleased to see that the federal government isn't planning to balance the budget on the backs of Canadian patients. As we saw with the cuts to health care in the 1990s, the supposed cure ended up being much worse than the disease.
Listen to the presidents of 13 leading Canadian universities, including the University of Ottawa's president, Allan Rock, who wrote in an open letter to major Canadian newspapers right across the country:
The maintenance of federal transfers to provinces in Budget 2010 is...critically important.
Listen to the provincial governments themselves, like the NDP finance minister of Manitoba, who announced that she was pleased to see the commitment to maintain transfers, remarking:
[T]hey are going to keep the level of payments to the province at the level they committed to....[T]hat was good news for us.
A second aspect in the jobs and economic growth act that I want to highlight are the provisions that would allow the government to enforce a code of conduct for the credit and debit card industry, with the authority to regulate the market conduct of the credit and debit card networks, if required.
Recently, concerns about the practices of card issuers garnered considerable attention and concern in numerous respects, including everything from business practices to marketplace structure. That is why in November 2009, we released for public consultation a proposed code of conduct for the credit and debit card industry in Canada.
The initial proposed code was based on ongoing discussions with small businesses, retail merchants, and consumer associations across our country. During the 60-day comment period, all Canadians were invited to submit their views on how best to monitor compliance with the proposed code.
This past May, after carefully reviewing the tremendous feedback resulting from our public consultations, our government announced a finalized code of conduct. Under the code, small businesses and other merchants will be provided with clear information regarding fees and rates. They will be given advance notice of any new fees and increases. They will be able to cancel contracts, without penalty, should fees rise or should new fees be introduced. They will be given new tools to promote competition, and in particular, they will have the freedom to accept credit payments from a particular network without the obligation to accept debit payments, and vice versa.
I note that the reaction to the code of conduct has been overwhelmingly positive. The Retail Council of Canada heralded it as “a solid victory for merchants across the country and a major step toward addressing imbalances in the Canadian payments system”.
The Canadian Council of Grocery Distributors applauded it as an important win for both merchants and customers. It said:
[T]he Government of Canada deserve[s] a great deal of credit for taking critical steps towards developing a Canadian payments system that is competitive, fair and provides clarity for both merchants and customers.
The Canadian Federation of Independent Business added:
The Code...will help increase transparency and restore fairness to small businesses and consumers in their credit and debit card transactions....A finalized Code constitutes an important step and is timely as we enter the summer season that is so vital to so many businesses, especially coming out of a recession....These developments will create a better future for merchants and help ensure a fair and transparent credit and debit card market instead of just letting large industry players call all the shots.
A Vancouver Sun editorial also cheered and said:
[W]e were pleased to see the code of conduct for credit and debit cards....[It] is an important step toward allowing merchants to have some control over costs and to maintaining a relatively low-cost cashless purchasing alternative that benefits consumers and retailers alike while still allowing for competition between providers....This should be an important change in the retail landscape...
The jobs and economic growth act will help ensure the success of the code of conduct for credit and debit card industries through legislative provisions for monitoring compliance and regulating the industry, if necessary. Specifically, it will enact the payment card networks act, which will give the government the power to regulate the market conduct of the credit and debit card networks and their participants, if and when necessary. It will also expand the mandate of the Financial Consumer Agency of Canada to supervise payment card network operators. It will include monitoring their compliance with the code of conduct and any regulations introduced under the new payment card networks act.
For this reason, it is vital that the jobs and economic growth act be passed as soon as possible.
A final and third aspect of the jobs and economic growth act I would like to spotlight is a proposal to enable credit unions to incorporate federally. Canada has a fine tradition of community-based credit unions, and many Canadians have decided to use credit unions for the majority of their financial needs.
That is why our Conservative government is proposing to create a federal legislative framework for credit unions to promote the continued growth and competitiveness of the sector to enhance its financial stability. Allowing credit unions to grow and be competitive on a national scale will broaden choices for consumers and approved services for existing members.
For that reason, the jobs and economic growth act will provide existing credit unions and those desiring to establish new credit unions the option of conducting the business of a credit union and serving their members and communities under a federal charter.
I note that organizations such as Credit Union Central of Canada have long called for this legislation.
A recent report by Moody's Investors Service emphasized the importance of this provision, as it will “lead to credit unions having a stronger national presence”.
Tracy Redies, chief executive of B.C.'s Coast Capital Savings, one of Canada's largest credit unions, has even called it historic legislation that “will lead to enhanced competition. It will provide potentially a true national alternative to the big five Canadian banks”.
In my speech today, while I have spotlighted but a few select key items in the jobs and economic growth act, it is very clear that through this legislation our Conservative government is continuing to show the economic leadership that Canadians expect and deserve.
As the jobs and economic growth act implements key measures of Canada's economic action plan, which are vital to secure a sustained economic recovery, it would be entirely irresponsible not to complete the plan's implementation. We must finish the important work that we started in 2009-10. To do otherwise would only serve to endanger our fragile recovery.
Given that, I ask all members in the House to give this key legislation the support it deserves.