House of Commons Hansard #27 of the 41st Parliament, 1st Session. (The original version is on Parliament's site.) The word of the day was tax.

Topics

Keeping Canada's Economy and Jobs Growing ActGovernment Orders

3:40 p.m.

NDP

Pierre Dionne Labelle NDP Rivière-du-Nord, QC

Mr. Speaker, I listened carefully to the speech by my Conservative colleague.

At no point did he mention the debt levels of Canadian families, which are among the highest in the OECD. I would like to hear what my colleague has to say about this.

Are there any measures planned to help families increase their purchasing power? I know that there is talk of a toll bridge, but these measures will not really help people increase their purchasing power.

Keeping Canada's Economy and Jobs Growing ActGovernment Orders

3:40 p.m.

Conservative

Ted Menzies Conservative Macleod, AB

Mr. Speaker, I appreciate that the hon. member was not here for budgets 2010, 2009, 2008 and many budgets cumulatively since 2006, every one of which his party opposed, but we actually reduced taxes for a Canadian family of four by over $3,000. That means every family of four has $3,000 more to spend on what it wants. Whether families spend it on their children or their children's education is their choice. We have taken away the prerogative of their having to send it to Ottawa because we think it is better taken care of in the pockets of Canadian families.

Keeping Canada's Economy and Jobs Growing ActGovernment Orders

3:45 p.m.

Liberal

John McCallum Liberal Markham—Unionville, ON

Mr. Speaker, the tax credits that are contained in the budget are non-refundable. That means that the benefit of the tax credit is subtracted from the income tax a person pays. However, a person with a low income who pays little or no income tax would get absolutely no benefit. This means the government has deliberately excluded low income Canadians from any benefit contained within those tax credits. Therefore, in the case of the children's arts tax credit, children of low income households need not apply. They will not get anything. As well, low income volunteer firefighters would get nothing at all.

Regarding the family caregiver tax credit, people who have low incomes or who quit their jobs to stay home to look after someone who is sick and therefore no longer have an income would again receive nothing.

It is unconscionable that Canadians with the lowest income are deliberately excluded from these benefits. I know the minister is a decent fellow, coming from the Progressive Conservative wing of his party. I cannot understand how he could possibly support these tax credits which benefit all Canadians except those with the lowest incomes and the most vulnerable.

Keeping Canada's Economy and Jobs Growing ActGovernment Orders

October 5th, 2011 / 3:45 p.m.

Conservative

Ted Menzies Conservative Macleod, AB

Mr. Speaker, I appreciate the accolades from the member opposite. He and I sat on the finance committee and discussed many important issues, including many of the most recent budgets.

In fact, since 2006 when we formed the government we have taken nearly a million Canadians off the tax roll. We have reduced taxes for that many Canadians. We want to help and want to support every Canadian. We have done that. We have reduced their cost of living.

We know that the NDP wants to raise taxes by $10 billion. I am not sure what the hon. member's party is suggesting we should do.

We believe it is very important to leave hard-earned money in the pockets of Canadians. We have reduced taxes for all Canadians so that they will have an opportunity to participate in these programs we are supporting.

Keeping Canada's Economy and Jobs Growing ActGovernment Orders

3:45 p.m.

NDP

Peggy Nash NDP Parkdale—High Park, ON

Mr. Speaker, the hon. member opposite made one statement that is a little perplexing.

He talked about the New Democratic Party wanting to raise taxes by $10 billion. Given that we have absolutely no proposals to raise taxes by $10 billion, can the hon. member explain where this figure comes from?

Keeping Canada's Economy and Jobs Growing ActGovernment Orders

3:45 p.m.

Conservative

Ted Menzies Conservative Macleod, AB

Mr. Speaker, the number comes from a cumulative effect. In the last Parliament the NDP was supporting raising taxes on businesses for EI. I think the term that was used was “a 45-day work year”, which would cost a lot of money. That would hurt businesses. It would be a tax on Canadians.

The NDP wants to tax the oil sands in my province. I take it personally when the NDP attacks the producer of clean energy in my province of Alberta that generates incredible wealth that is spread across this country. The NDP wanted to put a tax on that. The NDP wanted an iPod tax.

I do not think it is $10 billion. It is probably higher. I stopped at $10 billion, but I can go further.

Keeping Canada's Economy and Jobs Growing ActGovernment Orders

3:50 p.m.

Conservative

Mark Warawa Conservative Langley, BC

Mr. Speaker, it is good to be reminded of good things as well as the low tax programs of the government.

Has the member ever seen a time when the NDP or the Liberal Party have not wanted to have tax increases?

If we look at the GST, when a Liberal member said that we should do something for the people who are struggling with their finances our government promised to lower the GST from 7% to 6% to 5%.

I would ask the member about the history of the NDP. Did the NDP support it? Did the Liberals support it? Has there ever been a tax they did not want to increase?

Keeping Canada's Economy and Jobs Growing ActGovernment Orders

3:50 p.m.

Conservative

Ted Menzies Conservative Macleod, AB

Mr. Speaker, the short answer is that I do not think the NDP has ever met a tax it would not like to raise. We have some contradictory taxes. The NDP voted not once but twice in the House against lowering the GST for Canadians, which was a very popular measure.

Then in Nova Scotia the NDP increased the GST by 2%. In B.C. the NDP was opposed to the GST. Then it applauded our settling the negotiation with Quebec on the HST.

I rest my case. The NDP loves every tax it can raise.

Keeping Canada's Economy and Jobs Growing ActGovernment Orders

3:50 p.m.

Liberal

John McCallum Liberal Markham—Unionville, ON

Mr. Speaker, as the minister said, it is true that BMO economist Douglas Porter said nice things about the government.

However, he neglected to say that Douglas Porter's boss, Sherry Cooper, the chief economist at BMO, blasted the government, likening it to Herbert Hoover who put contractionary measures in place during the Depression and made the Depression worse. Sherry Cooper says that the government should not make cuts and should not increase EI premiums at this time.

The government is planning a 5.6% increase in employment insurance premiums starting in January of next year. This is a job destroying tax coming in at a time when we are concerned about the risk of a recession and when the global economy is in great turmoil.

How does the minister justify raising employment insurance premiums by 5.6% at this time?

Keeping Canada's Economy and Jobs Growing ActGovernment Orders

3:50 p.m.

Conservative

Ted Menzies Conservative Macleod, AB

Mr. Speaker, I can quite easily justify a marginal increase in the cost of EI because we decided not to pick the pockets of labour as was done under the previous Liberal government, of which my colleague was a member.

The old adage “When we got there the cupboard was bare” is appropriate for the EI fund. The Liberals managed to take $60 billion out of the contributions of businesses and employees and squander it on their own political nest egg. That is why we have to get a handle on EI premiums.

Keeping Canada's Economy and Jobs Growing ActGovernment Orders

3:50 p.m.

NDP

Peggy Nash NDP Parkdale—High Park, ON

Mr. Speaker, I would like to add a bit of reality to this debate following on the hon. member opposite.

Let me begin with a recent report published in Toronto, Canada's largest city. It is a report called “Vital Signs”. It documents the transformation that is taking place in many Canadian cities but especially in Canada's largest city.

The report talks about a dramatic reduction in quality of life which could affect almost half the population of the city over the next 10 to 15 years. It does offer some good news. It claims that the quality of life for Torontonians is improving when it comes to the environment. Toronto is a healthier city. Its crime rates are lower than ever before, which is significant. However, it indicates that there are huge challenges which range from affordable housing to public transit.

I want to share a significant point with the members opposite: the gap between the rich and the poor in Toronto and in many other cities is growing. As well, skilled immigrants are twice as likely to face unemployment than workers born in Canada and when skilled immigrants are hired they usually receive about half the annual salary of other workers. During the period of growth from 1998 to 2007, one-third of the income growth across Canada went to 1% of the wealthiest Canadians, those averaging incomes of more than $400,000 a year. The country is becoming increasingly divided and that is what is playing out in our largest city.

Child poverty rates have increased by more than 40% in one year. As a result of the lack of investment in urban transit and transit infrastructure, lower income residents in Toronto live in what is being called transit deserts. They spend an hour a day on average trying to get from one part of the city to another and spend a greater portion of their income trying to get there.

Canadians need governments for affordable housing, transit, social connections, to get to jobs and for opportunities. Journalist Royson James reported that just when they need it most, our civic institutions and governments are looking to withdraw from the field. In other words, governments are withdrawing money. I use that as an introduction to my remarks.

In spite of the member opposite's glowing report on Bill C-13, this legislation represents what I assume are the government's best efforts to cope with Canada's current economic dilemma, but it is a disturbingly inadequate effort. I want to enter a few facts into this argument.

The government likes to pretend that we are in a recovery, but as this report indicates, two million Canadians would work if there were jobs available for them. The report makes it clear that talk of recovery not only is misleading but is dishonest when it comes to these Canadians who are unemployed or underemployed.

We have a continuing recession in the jobs market. Unemployment is far above what it was in the last recession. Job creation is well below what is needed just to maintain a steady employment. The government claims to have created 600,000 net new jobs, and it keeps repeating that number, but the facts clearly indicate otherwise.

We have seen the addition of barely 200,000 new jobs since before the recession in May 2008, but the labour force has grown by 450,000 since then. Therefore, we are short a quarter of a million jobs just to keep employment steady. This is nothing to brag about, but the government, instead, misleads Canadians rather than have an honest, open debate about where we need to go and how we put plans in place to get people back to work.

It is a fact that the job market is currently more fragile than it was before the October 2008 crisis. The unemployment rate has risen to 7.3%, while the number of part-time workers and the number of workers looking for full-time employment have increased very rapidly.

Quality, full-time jobs that allow families to make a living are very hard to find in many regions of the country.

Moreover, the actual unemployment rate, which includes discouraged workers who have left the labour force and part-time workers who would like to be working full-time, was 11.1% in July 2011, a very significant increase over the July 2009 rate of 9.4%.

Youth employment really is a disaster in this country. It really is quite shocking. The fact is that at the high point in May 2008 before the recession, 2.6 million Canadians between the ages of 15 and 24 had jobs, the participation rate was about 67.6% and the official unemployment rate about 11.9%. However, in August 2011, there were only 2.4 million 15 to 24-year-olds employed, the participation rate had fallen three percentage points and unemployment was at 14%.

This means there are almost 127,000 fewer jobs for 15 to 24-year-olds, 127,000 fewer jobs than before the recession. If we take the lower participation rate into account, in other words, a lot of people have just stopped looking, we would recognize that there are about 134,000 fewer jobs at the same participation rate.

Another fact is that the true measure of the jobs deficit for young people compared to May 2008 is about 260,000 jobs that were missing. Of course, another 85,000 young people have joined the labour force since May 2008, so there are even more young people looking for work. There are no net new jobs here, contrary to what the government says, just a gaping hole for young people to fall into and an enormous short and long-term loss to the economy.

The IMF recently predicted that Canada's unemployment rate will rise this year and in 2012 because our economy is growing far more slowly than anticipated.

In reality, real GDP growth of 2.5% annually is needed just to maintain the status quo, and growth has been much weaker since the start of the great recession.

It is a fact that economists everywhere have lowered their forecasts with regard to Canada's economic growth. Scotiabank economists have stated that we are facing a very real possibility that the Canadian economy could be the first to fall into a recession.

The BMO deputy chief economist has noted that even if Canada and the U.S. are able to avoid another recession, Ottawa will not achieve the rate of economic growth projected in the budget.

The budget was based on growth projections that are no longer realistic.

Another claim that the Minister of Finance and the Prime Minister tend to make is that the economic fundamentals of the Canadian economy are great. Let us examine that.

An economy depends on four key economic drivers for growth: private business spending and investment, consumer spending, exports, and the public sector.

The government has pinned all of its hopes on the private sector, spending billions of public revenues on rolling back corporate taxes. The result: very little investment, very little job creation. In fact, Canadian corporations are sitting on $500 billion in cash rather than spend or invest it. Of that, $120 billion has come from the government's no strings attached corporate tax cuts. That is $120 billion.

It is a fact that the combined federal and Ontario corporate tax rates were slashed from 45% in 1999 to 30% in 2010. That is a drop of 15%. Over the same period, investment in machinery and equipment fell from just over 8% to just over 5% of the province's gross domestic product. Therefore, a measure designed to increase investment and productivity in machinery failed. In fact, investment fell even though taxes were cut and we were shovelling over $100 billion back into corporate profits.

So much for the claim that corporate income tax giveaways boost business investment and job creation. Worse still, the government's response, illogical as it seems, it to just stay the course and waste more money on further tax cuts. Brilliant.

Instead of patting itself on the back because we are doing relatively better than some very sick economies, the government must put in place policies that encourage private sector investment in our economy here at home over the long-term. This budget is full of temporary half measures when long-term strategic action is needed.

We all know what happened to the second economic driver, consumer spending. There is a growing inequality in the distribution of income in this country, and I just cited one study. This is an inequality the government does not seem to worry or care about, but it means that Canadians have had to borrow to spend on essentials, and borrow they have. Canadians have never been more indebted; an average household owes 150% of its income.

We cannot count on overstrapped consumers to get us out of this mess. Consumer spending is tapped out. That is not the solution.

This summer the IMF published a study on inequality. It found that the more equitably incomes are distributed, the longer and more stable are periods of economic growth. The more equality, the longer the periods of economic growth. Even so, this budget does nothing to address inequality in Canada.

As for exports, the third driver, the IMF projects that Canada's balance of payments, deficit, as a percentage of GDP is on its way to becoming one of the worst among advanced economies; worse than that of the U.S. and soon to be worse than Italy or Spain.

The IMF predicts that our current account deficit will reach almost 4% of GDP in 2012. That is a major negative on our economy. However, we would never hear the government mention this piece of bad news.

With business, consumers and exports on the sidelines as drivers of economic growth, that leaves only the public sector. Once again, the government is doing the illogical thing in pursuing austerity, cutting back public services and missing the opportunity of a lifetime to invest in Canada and Canadians.

The Minister of Finance is accusing my party of recommending spending—according to him, that is why the European economies are bordering on ruin—without taking into account the role that private sector financial institutions, which are overenthusiastic, played in the impoverishment of our larger trading partners.

However, although the Minister of Finance must be aware of it, he does not seem to understand the difference between investments and expenditures. The NDP is not talking about expenditures; it is talking about investments in targeted sectors to promote job creation and in infrastructure, including roads, bridges, public transit and high-speed Internet. We are talking about investing to train our workers so that they are productive in the new economy, investing in housing, and investing in our children's education.

I attended a meeting recently where a former deputy minister of finance called for a division on the government's books to help overcome the failure to distinguish between investments, investments that create assets and lead to significant returns in the economy, productivity, employment, competitiveness and the public purse, the difference between these investments and spending on things like the government's beloved gazebos and fake lakes that are of little economic value.

The fact is that the Toronto Board of Trade emphasizes that a strong infrastructure foundation is a top priority in ensuring economic competitiveness now and in the future.

In fact, the OECD has concluded that Toronto's lack of transportation infrastructure is the leading drag on the region's global competitiveness. Yet, the bill contains no new investments in infrastructure. It is really shocking.

The Conservatives often like to compare the government to a business, as though that were a good thing. However, rare is the business that would cast aside the opportunities available to the government, such as the availability of a qualified workforce, a desperate need for infrastructure across the country, infrastructure that would earn a generous return on investment, and capital available at a rate that is at an almost record low. In similar circumstances, any self-respecting business person would invest extensively, but not this government. The Conservatives do not know how to recognize a good deal.

What we get are missed opportunities to build a world competitive economy with infrastructure second to none to attract new capital investment and to give our homegrown industries a permanent advantage over our competitors, and public policies that would only make the recession and the labour market more severe.

The Conservatives call themselves economic managers. It is a cruel joke.

Here is a bill that they claim would address the problems our economy faces. It would fall so far short of what is needed, it is really embarrassing.

Mr. Flaherty admitted yesterday the Conservatives would maintain their do-nothing approach to the economy. The New--

Keeping Canada's Economy and Jobs Growing ActGovernment Orders

4:10 p.m.

Conservative

The Acting Speaker Conservative Bruce Stanton

Order, please. In fact, there are still two minutes remaining for the hon. member. I just remind her that the mention of other hon. members by name is not permitted in the House.

The hon. member for Parkdale—High Park.

Keeping Canada's Economy and Jobs Growing ActGovernment Orders

4:10 p.m.

NDP

Peggy Nash NDP Parkdale—High Park, ON

Thank you, Mr. Speaker. Let me correct what I said.

The minister admitted yesterday that the Conservatives will maintain their do-nothing approach to the economy. I am happy to repeat that line, but I am sad that is the approach of the government.

The New Democrat motion calling for immediate action on jobs passed unanimously. Even the government recognized the need for action. That is leadership on the economy, what we have proposed.

The minister's continued inaction shows the opposite: a lack of leadership. Sadly, the Conservatives are out of touch with the needs of so many Canadians, a growing number of Canadians who are falling further behind. Canadian families want action on job creation now, decent jobs that will help them pay their bills, not tax cuts, not tax giveaways that a lot of Canadians cannot even get access to.

Sadly, the budget just does not cut it.

We have a better proposal. We are happy to work with the government to really create jobs and investment for all Canadians.

Keeping Canada's Economy and Jobs Growing ActGovernment Orders

4:10 p.m.

NDP

Malcolm Allen NDP Welland, ON

Mr. Speaker, let me thank the hon. member for Parkdale—High Park for her impassioned speech and laying out for this House what really needs to get done when it comes time to help those who are really vulnerable in our communities.

I remind this House that Henniges Automotive, which used to be General Tire & Rubber Company, then became GDX, just closed in my riding of Welland on Saturday and threw the last 300 workers out of work. There were over 1,500 workers there at one point, not that long ago. Now they are all gone.

However, one of the things that has happened in our region that is of a positive note is the introduction of inter-regional transit; in other words, municipalities in the Niagara region will now have transit for the first time in a very long time. In fact, we would have to go back to my mother-in-law's day, rest her soul, which was many years ago, when they actually had a train system that went between communities.

I would ask my hon. colleague what she thinks the government should be doing when it comes to transit in this country, which seems to be always at the tail end of things, whether it be downtown Toronto and now my region of Niagara, where we are finally going to have an inter-regional transit, where people in Port Colborne, which has one of the highest rates of unemployment in the province, who are seeking employment need to get to my good friend the Minister of Justice's Niagara Falls riding to get a job, but who do not have a way to get there because they cannot afford a car now. Finally, they might have regional transit.

I would ask my hon. colleague to comment on what we need to do for transit.

Keeping Canada's Economy and Jobs Growing ActGovernment Orders

4:10 p.m.

NDP

Peggy Nash NDP Parkdale—High Park, ON

Mr. Speaker, in my earlier remarks, I spoke about transit deserts in the city of Toronto, huge regions where mainly people of very modest and increasingly low incomes are living, many of whom are newcomers to Canada.

However, even the rest of our transit system is falling decades behind and there are many smaller communities that have no public transit whatsoever for people to get to and from work. What the government needs to do is invest in our economy and in people by investing in public transit. That is not an expenditure. It is not a spending measure. It is an investment that helps grow our economy and helps Canadians from coast to coast.

Keeping Canada's Economy and Jobs Growing ActGovernment Orders

4:15 p.m.

NDP

Pierre Dionne Labelle NDP Rivière-du-Nord, QC

Mr. Speaker, I would like to commend the hon. member for the memorable presentation she made about Canada's situation. I know that the other side of the House has the impression that everything is going well. I would like to ask the hon. member a question. Reports by the OECD and the International Monetary Fund say that everything is going well. So, how do we explain the fact that the number of people going to food banks has not stopped increasing since the Conservatives took office? I do not understand.

Keeping Canada's Economy and Jobs Growing ActGovernment Orders

4:15 p.m.

NDP

Peggy Nash NDP Parkdale—High Park, ON

Mr. Speaker, I would like to thank the hon. member for his question. It is truly unfortunate to see the increasing number of people who are relying on food banks, particularly children. It is truly terrible. This problem is not one that is unique to big cities; it is a nationwide problem. I have the impression that the government is turning a blind eye to this problem. The Conservatives do not see that most people really do not have enough money to put food on the table and that children, in particular, are going hungry. That is the economic reality of our country. We must take action. We must have an action plan to put people to work.

Keeping Canada's Economy and Jobs Growing ActGovernment Orders

4:15 p.m.

Conservative

Stella Ambler Conservative Mississauga South, ON

Mr. Speaker, I heard the member opposite talk about jobs for young Canadians. What does she think about the almost 600,000 jobs that have been created in Canada by the efforts of this government and our concentration on economic growth and creating jobs, and the importance we place on that?

Does the member opposite not understand that some of those 600,000 jobs, in fact probably many of them, 80% of which are full-time, are going to young people and that when jobs are created for all Canadians through economic strength, jobs are created for young people as well?

Keeping Canada's Economy and Jobs Growing ActGovernment Orders

4:15 p.m.

NDP

Peggy Nash NDP Parkdale—High Park, ON

Mr. Speaker, perhaps my colleague opposite did not hear my entire presentation. In my presentation, I challenged the figures that the government has been publicizing because, clearly, those figures do not reflect the real story.

We have a loss of more than 250,000 jobs just to keep up with the proportion of jobs we had in this country before the recession. I am happy to explain further. I did go into it quite clearly in my remarks and I think the testament to it is that the unemployment rate for young Canadians is twice that of the rest of the population. Therefore, clearly, we need to do much more.

Keeping Canada's Economy and Jobs Growing ActGovernment Orders

4:15 p.m.

NDP

Linda Duncan NDP Edmonton Strathcona, AB

Mr. Speaker, I thank the member for her comments about the difference between expenditure and investment. Nowhere is this more important than when we consider the need for investment in aboriginal infrastructure.

I tabled a bill in the House today to get the federal government to have a national strategy and work with other parties, including the provinces, territories and first nations governments, to improve literacy. The OECD and a number of right-wing think tanks have been stating that the declining rate of literacy in this country is a major factor. Statistics show that the highest rate of illiteracy is among aboriginal communities and part of that factor is the lack of decent housing, the lack of safe drinking water and the lack of support to schools. In many cases, they do not even have schools.

I wonder if the member could speak to the matter of the need for investment in our first nations communities to ensure they can participate more fully in our economy.

Keeping Canada's Economy and Jobs Growing ActGovernment Orders

4:20 p.m.

NDP

Peggy Nash NDP Parkdale—High Park, ON

Mr. Speaker, yesterday, we talked about suicide prevention. We heard eloquent speeches about the need for young people to have hope for the future. It is difficult to have hope if people live in extreme poverty, they cannot get proper educations, they do not have running water and they do not see any prospects for a better life. That is what hope is all about. It is up to us to invest in all communities so that young people believe that each and every one of them has a better future.

Keeping Canada's Economy and Jobs Growing ActGovernment Orders

4:20 p.m.

Conservative

Robert Sopuck Conservative Dauphin—Swan River—Marquette, MB

Mr. Speaker, a couple of years ago, I had the honour to work in the oil sands in Alberta and live at an oil sands camp with many workers. I got to know many of them personally. What I learned from my time in the oil sands is what an incredible job creator the oil sands industry is for this entire country, not only providing direct jobs but many indirect jobs right across the country in manufacturing, sales, marketing and so on. The number of jobs and the value to the Canadian economy is almost incalculable. In fact, I would go as far as to say that the oil sands as an industry is almost carrying the entire country.

Given the economic track record of the oil sands, why is the hon. member's party trying to kill the oil sands?

Keeping Canada's Economy and Jobs Growing ActGovernment Orders

4:20 p.m.

NDP

Peggy Nash NDP Parkdale—High Park, ON

Mr. Speaker, one of the major challenges in the province of Alberta is that the industry now wants to ship out raw bitumen unprocessed across the entire continent and create refining jobs in the Gulf of Mexico. I would ask why the government would want to ship all these jobs out.

Even more important, why would we not invest money, with the same kind of support, funding and investment, in renewable energy, energy that would create a sustainable economy, grow our economy and help us compete with the rest of the world in a low carbon society?

Keeping Canada's Economy and Jobs Growing ActGovernment Orders

4:20 p.m.

Conservative

The Acting Speaker Conservative Bruce Stanton

Before resuming debate, it is my duty, pursuant to Standing Order 38, to inform the House that the question to be raised tonight at the time of adjournment is as follows: the hon. member for Vancouver Quadra, Employment.

Resuming debate. The hon. member for Markham—Unionville.

Keeping Canada's Economy and Jobs Growing ActGovernment Orders

4:20 p.m.

Liberal

John McCallum Liberal Markham—Unionville, ON

Mr. Speaker, I would like to split my speech into two parts.

First, there are certain elements of this bill that we do not agree with, but I would also like to say that this budget is no longer adequate, it is no longer sufficient. What was perhaps sufficient 10 months ago is no longer sufficient because of the global economic crisis. As John Maynard Keynes said, “When the facts change, I change my mind. What do you do, sir?” What he said makes sense. When the facts change, a rational response would be to change the action plan. And the facts have changed dramatically, as I will explain in a few minutes.

On the first aspect of things, there are five elements of the bill that we take some exception to. The first is the same issue that I mentioned in my question to the minister, that is to say that the tax credits are all non-refundable. What that means is that the benefits from these tax credits are specifically not given to lower income Canadians. Therefore, we have a tax credit for art, but if people are low income Canadians they cannot get any money for that.

We have a tax credit for home caregivers. If they have low incomes or they quit their jobs and do not have an income to look after an aging parent, they do not get any money. The same applies to low income volunteer firefighters.

We on this side of the House feel that it is unconscionable to have benefits where that explicitly and deliberately excluded those who need it the most, those with the lowest income, those who are most vulnerable. For that reason alone, the Liberal Party will vote against the bill. There are other things we do not like, but that is so unconscionable and so unacceptable that that alone is sufficient reason to oppose the bill.

The second point has to do with softwood lumber. The budget bill would increase export duties on softwood lumber in both Ontario and in Quebec. It would damage this industry. The government, in negotiating an agreement with the United States, actually gave a billion dollars to our forestry competitors, perhaps thinking that that would solve the problem. However, it did not solve the problem. The U.S. has come back and has won a legal decision. Therefore, it seems that this is yet another example of the Conservatives making Canadian forestry producers pay for their mismanagement of the softwood lumber file.

The third point is the hiring credit for small businesses. The government has grossly exaggerated the importance of this. First, it gives with one hand and takes back with another. The thousand dollars is taxable. It never told us that. Also, the size of the business has to be so small that 600,000 small businesses will not qualify. This is a trivial little thing. It is not a bad thing, it is just tiny, and it is dwarfed by the increase of 5.6% in employment insurance premiums, which the government will be imposing as of January 1 of next year.

A fourth point, and the second to last one, is the gas tax transfer. As was previously stated, it would l be made permanent at $2 billion but it is not indexed. I spoke with many mayors on this subject and if it is not indexed, with population growth and inflation, the real value of the money will go down steadily over time. I think it would have been much better if the government had indexed the fund to inflation or to GDP growth, or something of that nature.

Finally, there is the phasing out of the voting subsidies. We do acknowledge that the Conservatives ran the election with this as a part of their platform and they won, so we are not making a fight about them introducing it. However, I do think it is important to remember the history of this. The former prime minister, Jean Chrétien, removed the ability of large corporations to give money and, in return, he instituted this public subsidy. This is a system that I think is practised in much of the western world, so I do not think there is anything wrong with it. All I would suggest is that, in light of the removal of the subsidy, the government might give some consideration to increasing the maximum amount that individuals are allowed to contribute.

Those are five reasons.

Those are five reasons why we take some exception to this bill. But there is also the fact that the world has changed.

I ask members to think back 10 months to when this budget was presented. What was the state of the Canadian and the world economy? The stock market was going up nicely. It has now slumped to a bear market. Nobody was thinking about a European banking crisis. Nobody was thinking about Greece defaulting on its debt. Things seemed to be going quite fine in Europe.

Now we have this huge crisis in Europe, a crisis involving the risk of default in a number of countries as well as risk to major European banks.

The U.S. was recovering nicely, as I recall, 10 months ago, and now the U.S. economy has clearly stalled. Now we have seen the dysfunctional politics in the U.S. Congress over the debt ceiling issue. We may have a half-decent plan from President Obama, but the chances of the politicians south of the border agreeing to do anything seem remote. Our Canadian economy actually had negative growth in the second quarter, and, with all of these events around the world, it is at risk of stalling as well.

For these reasons, it makes eminently good sense to change policy when the circumstances change. That is what Keynes said, as I quoted earlier.

Let me quote from three people or institutions that are normally fiscally conservative but that agree with what I just said.

First of all, let us hear the new head of the IMF. Her central proposal to countries was to focus on balancing the books and reducing debt in the medium run, but in the short run to take measures to support jobs and the economy. That is the IMF talking--the IMF, which traditionally has a slash-and-burn attitude to countries in fiscal difficulties.

The second example is from Sherry Cooper, chief economist of the Bank of Montreal. Chief economists are normally fairly fiscally conservative. She blasted the government for taking action to cut the economy at a time of global crisis and economic weakness. She likened the government to Herbert Hoover, who in the 1930s made the Depression even more depressed by taking fiscally austere measures.

The third example is The Economist magazine, a bastion of the free market and fiscal prudence. It said something similar to the IMF, that countries should take actions in the short term to support the economy and jobs while dealing with the balanced budget with a credible medium-term plan.

These three—the IMF, the chief economist of the Bank of Montreal and The Economist—are normally fiscally conservative. But they all agree that now is not the right time for budget cuts and increases in employment insurance premiums. I think this government should be listening.

What I am saying is that now is not the time to go forward with these increases in employment insurance that the government is proposing to take. A 5.6% increase in employment insurance is not an appropriate policy at a time like this. These are job-killing tax hikes. Yes, at some moment in the future we may have to increase employment insurance premiums, but now is not the time.

Similarly, the government is proposing $4 billion of cuts through its strategic review.

We are not opposed in principle to finding savings in government. We did that. I was the chair of something we called the expenditure review committee in 2005. We found $11 billion of savings in government, but those were good economic times. We did not find savings of $11 billion at a time when the economy was very weak and at a time when the world was in economic crisis.

Timing is everything. I am saying that now is not the time to increase employment insurance premiums. Now is not the time to proceed with this $4 billion per year of cuts.

I might say, while on the subject of the strategic review and the cuts, that I think the government is making a fundamental mistake because it is not applying what I would call a regional lens. Canada has one of the most centralized bureaucracies in the western world, with a huge concentration in the national capital region. I know from experience that cuts of jobs in the regions are sometimes even more damaging, both in terms of the jobs and in terms of the services provided, than cuts in the national capital region.

I know as well that if the system here in Ottawa has to do cuts, it prefers to cut in the regions and not in Ottawa. I will give one example. I was recently in Prince Edward Island, which was about to lose 60 jobs in an employment insurance processing operation run by Services Canada. This was devastating not only to the small community, which would lose 60 jobs, but also to those applying for employment insurance, because no longer would they have real people nearby to whom they could speak. They would have to call some 1-800 number, and I was told many would have to wait for literally hours on the phone before anyone answered.

It is okay to do expenditure review to improve the efficiency of government. It is a good thing to do, but only under certain conditions.

First, we do not do it when the economy is super weak and already at risk of going into recession, as is the case today.

Second, when we do it, we do it sensitively. We apply a regional lens and we do not make cuts that hurt the most vulnerable in our society, which is what the Conservatives have tended to do.

To conclude, there are a number of reasons why we take exception to this bill. The Liberals will be voting against it.

The world has changed dramatically since the budget was introduced, and what was appropriate six months ago is no longer appropriate because of the economic crisis.