moved:
That, in the opinion of the House, the government should recognize the important role Canadian small businesses play in creating employment in their communities by lowering the small business income tax rate in order to encourage job creation.
Madam Speaker, I will be sharing my time today with the member for Beauport—Limoilou.
I welcome the opportunity to speak to this important NDP motion, to reduce the income taxes of millions of small businesses across Canada.
This is the first time that I am giving a speech in the House since the election, so before I speak to our motion, I would be remiss if I did not thank some of the many people who helped me to represent my constituents in this place again.
I would like to thank many people from mayors to businesspeople, seniors, students, teachers, nurses, families, and all the ones who came out to my town hall meetings, who met me over coffee, and who spoke with me at their doorstep. Without their input and their support, I would not be here to work for them.
I want to express my thanks to my campaign team, led by a very talented and experienced Chris Mockler, and the hundreds of tireless volunteers who gave so much of their time and energy to make democracy work.
I also owe a debt to my dedicated office staff, in both Ottawa and Thunder Bay—Superior North, whose tireless work helped thousands of constituents over the past several years. That has made a real difference in those people's lives.
As everyone knows in this House, many of our families have to make real sacrifices in order to allow us as MPs to represent our constituents here. So deep thanks go to my wife, Margaret, and my son, Michael, for their understanding and support over the years.
Most of all, I would like to let the constituents of my big, beautiful riding of Thunder Bay—Superior North know that it is a huge honour for me to represent them once again here in this place. All of them, no matter how they voted. I accept that honour with humility, and I will do my very best to serve them faithfully.
Today's motion is about recognizing how vital small businesses are to communities across our country of Canada. It is about how they play an important role in creating jobs for millions for people. It is about supporting them to grow and to generate more employment by cutting their small business income taxes, so they can reinvest in their businesses to help them to grow and reinvest right here in Canada and right in their own communities, in our own communities.
Small and medium-sized businesses already employ 56% of all workers in Canada. That is close to eight million Canadians. Small businesses are very resilient when times get tough. They do not downsize their workforce as much in recessions.
For example, in the five quarters of the recent downturn, the private sector lost close to half a million jobs. Of those, large firms let go about 6% of their payroll employment, while small businesses lost only about 2%. One reason is they cannot just shut down a branch plant in Canada and retrench in their home country. This is their home country.
So it makes sense to support more nimble small businesses if we want to encourage sustainable employment growth. It also makes sense from a community investment perspective. The funds that small businesses save in taxes are largely invested, saved, and consumed locally because small businesses spend locally. They do not ship their jobs or profits overseas because they are based right here in our communities.
Eighty per cent of small businesses earn less than $100,000 a year. Their profits do no go toward padding CEO bonuses or being invested outside of Canada. In fact, a report to be released next month by the Canadian Federation of Independent Businesses will show that successful small businesses that grew during the last recession prefer reinvesting any windfall in their businesses and in hiring more Canadians.
Members will know that New Democrats are no strangers to supporting small businesses. The NDP government in Manitoba has cut small business income taxes in that province, reducing it over time when it was affordable to do so. Last year, they dropped the tax rate to zero, eliminating small business income taxes completely.
During the federal election, my party had a platform that called for a reduction in small business taxes. We also called for a job creation tax credit that would give up to $4,500 to businesses for each new employee.
However, in the government's recent budget there is no tax reduction for small businesses. In fact, this budget was a huge missed opportunity to support small businesses here in Canada. I have noticed that many members on the other side of the House have been crowing about a hiring tax credit in the budget. If we look at this credit closely, we will see that small businesses will be no further ahead with it than before. It is a temporary measure that will only exist for one year. All it does is defray the increases in EI premiums that businesses have to pay, starting this year.
The government is hiking EI premiums for everyone and then introducing a small credit to delay this payroll tax hike for a year. It is crowing about this like it is some great help for small businesses. As a small-business owner myself with a payroll to meet, I know that giving with one hand and taking with another really is not any help at all. However, far worse, these increased employment insurance premiums will make it more expensive to hire people after this year. It is especially outrageous considering the premium hike is so unnecessary.
The government still owes the $57 billion it raided from the EI fund. That is money that workers and employers have already paid and now they are being told to pay it twice. This payroll tax increase is expected to result in a $15 billion surplus in the EI fund over the next five years. Therefore, is this really necessary?
Until now, the government has been focused on helping its friends in the banking and oil company industries to reap record profits through blanket tax handouts that make our large corporate tax rate less than half of that in the United States of America. There is still $1.4 billion in tax subsidies going to the oil and gas sector every year, when it obviously does not need it.
Further, blanket tax handouts without conditions for investment do not help create jobs here in Canada. They might generate fat CEO bonuses or investment outside of Canada, but there is simply no evidence that they generate employment here. Instead of spending billions on ineffective policies, we need to be more selective in how we use our precious taxpayer dollars. We need more targeted investments that will result in real job creation.
The government must start supporting small businesses with more than gimmicks that camouflage tax increases. A tax cut for the local retailer down the street, the mom and pop store on the corner, or the start-up in the garage next door will help those small businesses re-invest in their communities and our communities, and create local employment.
New Democrats are trying to change the direction the government has been taking. We are trying to lead it to the light about how important small businesses are to our economy, now and in the future, and we are trying to get more value for taxpayers' money than wasting it on ineffective, across-the-board tax handouts without criteria for success.
I appeal to all the parties in this House to support today's New Democrat motion to cut small-business taxes here in Canada.