Debates of Sept. 29th, 2011

Opposition Motion--Canadian Economy

[Shelly Glover, Conservative, Parliamentary Secretary to the Minister of Finance]

Mr. Speaker, I thank my colleague across the way for all that he has done in the House as a collaborative member. I make note of this because we had a very good relationship when the member was vice-chair of the finance committee. In fact, I miss our work together. It was enjoyable and very satisfying work.

I want to bring to his attention today that my parliamentary secretary assistant, Sarah Pendlebury, is moving on and taking on a new adventure at Frontier College. I wanted to let him know, because we are talking about the economy and finance, that a valued member of our team is leaving and I want to give him the opportunity to respond to that, knowing that he had such a good relationship with all of us.

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

Mr. Speaker, I think that is the easiest question I have ever had and I cannot answer it. I thank the parliamentary secretary for her compliments. She is doing a great job and it as a result I think also of her assistants. It is unfortunate that one of her assistants is leaving. Hopefully, she will be replacing that assistant and not adding somebody else to the unemployment line. I am encouraging her to perhaps hire two or three and, hopefully, one of them will be a Quebecker.

I thank the member once again for her good words. I hope to be back on the finance committee sooner than later.

[Hélène LeBlanc, NDP, LaSalle—Émard, QC]

Mr. Speaker, I would also like to thank the hon. member for the speech he just gave. Since I myself am also a member for the Montreal region, I would like to know what solutions he proposes to stimulate job creation in his riding in eastern Montreal in particular, as well as across the island of Montreal.

What sectors would he promote? What solutions does he propose to stimulate job creation?

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

Mr. Speaker, in Montreal, there are no fences separating the ridings. Someone may live in one riding and work or go to school in another.

I said that we must invest in education and work with the Government of Quebec. In my riding, the La TOHU organization offers jobs only to people who live in Saint-Michel. From time to time, the people from the organization ask for assistance from Service Canada, not because they need help to provide jobs, but because they are providing services to get young people off the streets. That is one example.

For every dollar they receive from Service Canada, for every dollar invested by the Government of Canada, they can raise $4, $5 or even up to $10. But this summer, the government cut its programs, not by 10% or 20%, but by 100%. It was very hard for them.

That is one of the ways in which the Government of Canada could work with young people who live in Montreal.

[The Acting Speaker, Conservative, Barry Devolin]

It is my duty, pursuant to Standing Order 38, to inform the House that the questions to be raised tonight at the time of adjournment are as follows: the hon. member for Cardigan, Canada Revenue Agency; the hon. member for Sudbury, The Economy; the hon. member for Bonavista—Gander—Grand Falls—Windsor, Search and Rescue.

Resuming debate, the hon. member for Markham—Unionville.

[John McCallum, Liberal, Markham—Unionville, ON]

Mr. Speaker, it was not so long ago that I was talking about NDP economic policy. I used to use words like, “neanderthal”, “crazy” and “far left”, but I will confess that in the last little while, perhaps since the leadership of Jack Layton, its policies have become somewhat less neanderthal, somewhat less crazy, somewhat less far left and perhaps a little less crass.

I hope that my NDP colleagues will take those comments as a compliment, because that is how they were intended.

However, when I turn from the NDP to the Conservatives, I am afraid I will be a little harsher.

Perhaps before I do that, I should mention that the NDP motion makes a lot of sense and that the Liberals are happy to support it today.

As for the Conservatives, this triumphalist talk about the economic action plan, as if it has created every one of these 600,000 jobs, which is what the Minister of Finance said today in question period, “...the economic action plan which resulted in 600,000 jobs”.

Conservative parties usually have the motto “governments don't create jobs, the private sector creates jobs”. Here the Conservatives have put it on its head and claim responsibility that they have created every job. Does that mean that the Conservatives think that Canada's natural resources, the oil and metals in the ground that have helped our recovery, were created by the Conservative Party of Canada?

Do they think that the Conservative Party was behind Mr. Chrétien's measures in the 1990s?

Do the Conservatives think that Mr. Chrétien balanced the books and reduced the debt because of them? Do they think that Mr. Chrétien refused to deregulate banks and refused to allow bank mergers because of them, when they in fact were urging deregulation, which led to huge problems in the U.S. and the U.K?

[James Rajotte, Conservative, Edmonton—Leduc, AB]

There are good mergers and bad mergers.

[John McCallum, Liberal, Markham—Unionville, ON]

It is crazy to be witness to Conservative Party members saying that the private sector, history and natural resources have absolutely nothing to do with the recovery, but that every job is due to them.

I will get more to the point in today's situation. The budget was introduced in February of this year. We should think back to those long six month and how things have changed. It is now almost October, and even if the economic action plan in that budget of February 2011 was the right thing to do at that time, although I do not accept that, but even if it were, the whole world has changed in the last six months. Therefore, what was right in February 2011, is not right today in late September 2011. We should think back to February of this year. What was happening? The stock market was going up nicely. Now it has tanked by close to 20%.

Everybody thought the U.S. economy was proceeding fine in those days, but now we see what has happened to the U.S. Every indicator points to bad news. We have dysfunctional politics south of the border. We have the crazy situation about the debt limit and the incapacity in the United States to act politically. Therefore, what was one thing in February is totally different and far worse, both economically and politically, today.

Let us look at Europe. Nobody was talking about the eurozone ending. Nobody was talking about Greece defaulting. Nobody was talking about European banks defaulting. However, that is exactly what they are talking about now. It seems that the European leaders cannot get their act together, cannot agree on what to do, so we have a real possibility of a really dangerous situation, both in Europe and in the United States.

I will quote from an article in The Economist that came out just today. It is entitled “Be Afraid”. It states:

But governments are not just failing to act; they are exacerbating the mess.

My point is that if the government does not adopt something like what the NDP motion calls for, it will be not just failing to act, but exacerbating the mess.

I will proceed further to talk about three people and institutions that agree with what I have just said, and they can hardly be regarded as raving socialists.

First, the IMF went into countries, forced them to cut spending and were really mean to the small countries, et cetera. It is fiscal conservative. What does the IMF say? The new head of the IMF, Christine Lagarde, recently, in her opening speech to the annual meeting, said that what governments today should do is that they should have a medium term plan to balance the books and pay down debt, but, in the short run, they should take action to support jobs and the economy.

She is the head of the IMF. The government should do what she said. We certainly have the room. We should take action to support jobs and the economy in the short run, while having a plan to balance the books in the longer run.

We also have Sherry Cooper, the chief economist at Bank of Montreal. I used to be the chief economist at the Royal Bank and the golden rule for chief economists is to never ever criticize the federal government or the boss will get mad. Maybe her boss is mad at her but she spoke truth to power and said what was right. She said that the actions of the government were like the actions of Herbert Hoover during the Great Depression. We do not raise taxes or cut spending when times are super tough. That is what Herbert Hoover did and it caused the Great Depression. That is what the government seems to be poised on doing, unless it follows the advice that it is receiving today.

I will talk about The Economist. Everybody would agree that The Economist is a small “c” conservative magazine. It is not raving socialist. It is fiscally very conservative most of the time. It understands that times are different, times are tough, times are extremely dangerous, so it has been urging for a number of weeks now the same thing as the head of the IMF and the same thing as Sherry Cooper.

They are saying that, during these difficult and dangerous economic times, it is not the time for governments to cut. It is the time for governments to support the economy. They are complaining that the problem we have is not just that governments are failing to act but that they are exacerbating the mess.

I would conclude that these are unusual times and they are dangerous times from an economic point of view. I am not saying that the government's plan back in February was appropriate but it can make a case that it was. However, even if it were appropriate in February, it is not appropriate in September. Additional actions need to be taken unless the government wants to be part of the mess rather than part of the solution.

[Glenn Thibeault, NDP, Sudbury, ON]

Mr. Speaker, I thank the hon. member for his speech and for his acknowledgement at the beginning.

The important thing to recognize from that is that we need to work together as parliamentarians. We have talked about that on this side of the House, that we would like to work with our colleagues on all sides to ensure we are working for families.

I would like to hear the member's comments relating to the Department of Finance noting that infrastructure investment has more than five times the economic impact of corporate income tax cuts. It published this fact in the appendix of its budget in 2009. I would like to hear the member's comments relating to that statistic.

[John McCallum, Liberal, Markham—Unionville, ON]

Mr. Speaker, this may not be true in the longer term. What we are advocating is more infrastructure. I agree with the member that this provides significant bang for the buck.

At the time of the election campaign, we wanted the corporate tax rate to be frozen at 18% for some time. It then went back down to 16.5% and our position became to put it back to 18%. We think that would have been competitive. Other things that we had in our platform were of higher priority.

I acknowledge that the election is over. I acknowledge that the Conservatives have a majority and there is not much likelihood that they will take what both of our parties advocated, in different ways, although the NDP's was more extreme than ours. That they will raise the corporate tax rate, whether to 18% or to something higher, I think is extraordinarily unlikely. I am not really making that a big part of the debate.

[Chris Alexander, Conservative, Parliamentary Secretary to the Minister of National Defence]

Mr. Speaker, most of the adjectives that the member for Markham—Unionville used at the beginning of his speech to describe NDP economic policy should apply to the position he has taken today. He has misrepresented the views of the IMF. He has misrepresented a leader published in today's The Economist, which makes it very clear that the fear and the danger are still coming from the lack of a clear, credible plan put forward by the countries forming the eurozone.

Will the member not admit that the policies prescribed by the opposition motion, if implemented in Canada, are not those recommended by the IMF, they are not those recommended by this leader via The Economist, and they are not those that Canadians want us to be embracing? This is a debt crisis, as Prime Minister Cameron said in this House, and the only way to overcome it is to keep spending under control while stimulating growth and the creation of jobs, as our government has been doing very successfully for years now and even more successfully this year.

[John McCallum, Liberal, Markham—Unionville, ON]

Mr. Speaker, while the hon. gentleman might know a thing or two about Afghanistan, he clearly knows nothing about economics, because what he just said is absolute nonsense. He sounds like the Tea Party person.

I read the speech by the head of the IMF very carefully. She clearly said exactly what I said. She said that in the short run we must focus on jobs and the economy and that in the medium run we must focus on balancing the books and paying down debt. She said that those who had room, and I do not think Greece has room but Canada does, should take short-run action to support jobs and the economy. What he said on that is nonsense.

I have just read two recent articles today from The Economist and they say precisely what I said. I said that the political leaders could not get their act together. I said that it was a political issue and that to solve the eurozone they needed political action, which is what The Economist said.

However, The Economist has also set out in at least two articles that what we need also, in areas where there is room, for certain countries including Canada, is that they should take short-run action. That is the truth and I do not agree with anything that he said.

[Glenn Thibeault, NDP, Sudbury, ON]

Mr. Speaker, I will be splitting my time with the member for Beauport—Limoilou.

I am very pleased to stand in the House today to speak to the very important motion put forward by the hard-working member for Parkdale—High Park.

Although my Conservative colleagues continue to boast about Canada's economic recovery, more and more I am hearing stories from members of my community of Sudbury that times remain tough and that high-quality, well-paying jobs just are not there in the numbers that they used to be.

Under the Conservative's stewardship of the economy, far too many of these family supporting jobs have been lost and Canadian households are increasingly feeling the squeeze of crippling household debt. Meanwhile, global economic instability and stagnation threatens already meagre economic growth in Canada.

I will focus on the issue of Canada's infrastructure deficit and how strategic investment by the federal government can have a real impact on stimulating both short-term and long-term economic growth.

Whether it is the Champlain Bridge linking Montreal with the South Shore or crumbling roads and sewage systems in my riding of Sudbury, it is clear that Canada is in desperate need of a major nationwide infrastructure-building project.

In Laval, Quebec, in 2006, we saw first-hand what can happen when we allow infrastructure to deteriorate beyond the point of repair. Five people were killed, including a young child, when a highway overpass collapsed. Just last month, we also witnessed issues related to falling debris on a Montreal highway, leading to its closure and ultimately resulting in additional traffic congestion and additional delays for commuters and businesses.

Is the government prepared to wait until we see a major bridge collapse, like the one in Minnesota in 2007, to take action?

This seems to be an extremely opportune time for the government to invest in a national infrastructure project. Interest rates remain at an historic low, making public infrastructure investment less expensive than it would have been in the past. Why is the government not undertaking such an initiative now while money is cheap and Canadians desperately need jobs? After all, the Department of Finance itself has noted that infrastructure investment has more than five times the economic impact of corporate income tax cuts. In fact, it published this fact in the appendix of budget 2009.

Why, then, is the Conservative government pursuing an economic avenue that neglects infrastructure and focuses, instead, on giving corporate handouts to Bay Street executives in the form of corporate tax cuts? Why not strategically focus on infrastructure investment, something that would produce jobs in all regions of the country immediately?

I am also very curious as to how the Conservatives propose strategic review will affect employees in the public sector.

In my riding of Sudbury, the Canada Revenue Agency is a major presence and is truly one of the vital employers in our region. Staffing cuts at this CRA facility would have large-scale negative effects on the greater community and the economic spinoffs associated with the CRA facility are numerous in my community of Sudbury.

Sudbury's economy is still recovering from the year long strike at Vale. I fear that should layoffs occur at the CRA Sudbury site, they will have extremely negative consequences for small businesses that rely on these public sector employees to maintain their bottom line.

I have similarly grave concerns over staffing levels at the Sudbury Service Canada office, which is another important employer in the riding that provides vital services to the members of my community.

I, therefore, urge the Minister of Finance to immediately reconsider all actions that reduce the public sector contribution to the economy. The government should be taking a more flexible approach than it has been. Myself and many hard-working Canadians believe that the government should, therefore, reconsider its planned spending cuts, in light of global economic instability.

More and more often I am hearing from seniors who are unable to stretch their pension cheques to meet the inflationary increase in the cost of living. This is because the real value of the Canadian pension plan--the CPP, as most of us call it--is not keeping up with the cost of living, and many individuals who have invested in other pensions are seeing their value slip away as pension funds lose money in stock markets or try to change payout rules to shift the risk onto their shoulders.

People who have paid into the CPP and have saved up for their retirement for all of their working lives are now finding that the rules of the game were always secretly stacked against them. The only way to ensure that all Canadians are adequately supported in their retirement is a phased-in increase in the CPP.

Previously, the Conservatives indicated that they may be open to this option, but they have since turned their backs on this proposal. Despite the finance minister's refusal to seriously consider this option, the proposal has a large amount of support, including support from a previous chief actuary of the CPP. Moreover, the CEO of the CPP Investment Board has said that the administrative costs of increasing the CPP would be lower than the private plan the Minister of Finance has proposed.

We must now act to ensure that Canadian seniors are able to live without financial hardship. We cannot simply close our eyes to the issue, because it will only get worse as the next generation of Canadians begins to retire, increasing the percentage of Canadians receiving CPP.

In conclusion, New Democrats are not talking about spending but investment: investment in targeted incentives for real job creators; investments in critical public infrastructure, such as roads, bridges, public transit and broadband Internet; and investing in the training of workers for the 21st century global economy.

New Democrats know that now is the time to make strategic investments to promote economic growth and attack the jobs deficit. Now is the time to put partisanship aside and work together on pragmatic, practical policy solutions that encourage job creation, economic productivity and the kind of investment that builds expertise in the Canadian workforce.

I challenge those on the other side of the House to work together with New Democrats to meet the expectations of Canadians struggling to make ends meet during tough economic times by reaching across the aisle to develop concrete long-term economic solutions that will be beneficial to hardworking Canadians.

[Steven Fletcher, Conservative, Minister of State (Transport)]

Mr. Speaker, the member for Sudbury was talking about infrastructure. The federal government has invested $33 billion in the building Canada fund and $2 billion in the gas tax fund to municipalities. We have made historic investments in infrastructure, yet his party votes against all these measures.

The member talks about the economy. He is from Sudbury, yet his party brought forward legislation in the last Parliament, Bill C-301 and Bill C-311, that would essentially shut down the mining industry in Canada.

If the member is serious about stimulating the economy, would he please support this government's initiatives, rather than voting against them? Would his party please stop bringing forward legislation or policies that would shut down the Canadian economy, particularly the very important mining sector?

[Glenn Thibeault, NDP, Sudbury, ON]

Mr. Speaker, I was able to hear a good portion of the question from my hon. colleague the minister. If I do not answer it all, it is because I did not hear the first part of it.

The minister mentioned Bill C-311 as having been introduced by the New Democrats. For clarification, that was not in the last Parliament. It was introduced by the Liberal Party, so not all of us were involved with that.

In relation to what is happening right now, the minister talked about what was in the past. What we are talking about is now, and organizations like the BMO and the IMF are saying that right now is not the time for austerity budgets. What we have coming forward from the Conservative government is an austerity budget. We are going to be seeing cutting and slashing of programs when what we should be doing is investing in infrastructure and creating jobs to ensure that Canadians are working. That is what we on this side of the House are proposing.

[Kevin Lamoureux, Liberal, Winnipeg North, MB]

Mr. Speaker, I want to pose a question on an important issue as I try to understand the NDP position on the whole idea of job creation.

We in the Liberal Party have made that our issue coming into this, saying, “Jobs, jobs, jobs.” We hear that in terms of what the New Democrats are equally concerned about, yet there is a major policy decision with regard to the buy America provisions that were brought in.

Could the member give a clear-cut answer with respect to whether the NDP supports the buy America provisions that were introduced in the United States recently, or does the NDP believe those provisions are detrimental to the Canadian economy and that the government should fight to oppose them?

[Glenn Thibeault, NDP, Sudbury, ON]

Mr. Speaker, we recognize that Canada is a trading nation. I think it is very important to recognize that.

When we say that, we always hear from the opposite side about free trade. What we always talk about is fair trade. We would like to see fair trade agreements.

When we talk about the buy America procurement policies that are coming forward, we want to ensure that anything that is coming forward does not affect or hurt workers. We need to ensure, as we are all saying on this side of the House, that it relates to jobs, jobs, jobs.

We need to ensure that any trade policy is fair and that we are protecting workers' rights.

[Bruce Hyer, NDP, Thunder Bay—Superior North, ON]

Mr. Speaker, to a significant degree small businesses are the backbone of Canada.

We have huge tax cuts for large corporations--greater than any other country in the G8, as the Minister of Finance has bragged. However, a lot of that money is going to exorbitant CEO salaries and is being reinvested in the United States, whereas small business tax cuts would stimulate our economy and stay locally invested.

I wonder if the member might like to add to that and comment on what we should be doing for small business.

[Glenn Thibeault, NDP, Sudbury, ON]

Mr. Speaker, I would like to thank my hon. colleague for the question and for all his work relating to small businesses in the last Parliament and in this Parliament as well.

The question is bang on. What we should be looking at doing is supporting small and medium-sized businesses across the country. There are large corporate tax breaks for the large banks and the oil companies that are making billions and billions in profits, while the small mom-and-pop shops in our local communities are struggling to make ends meet.

We need to flip that. We need to ensure that our small businesses are getting the support they need. That is something we talked about during the last election and it is something we will continue to push for on this side of the House.

[Raymond Côté, NDP, Beauport—Limoilou, QC]

Mr. Speaker, it is an honour for me to speak in the House to support the motion from the hon. member for Parkdale—High Park. This motion is particularly important in this economic context, which is so difficult, dangerous and worrying for Canadians. Our fellow Canadians are overburdened with debt and are stuck in low-paying, precarious jobs that have limited prospects for the future. Unlike the rosy world this government repeatedly talks about, the reality is far different for most people. Prospects for the future are bleak for all of us. Here are some powerful examples.

The Conference Board of Canada says that the gap between the rich and the poor in this country has been widening for the past 15 years. And it is widening at a faster pace than it did in the United States over the same period, which threatens the fundamental Canadian values of justice and equality in our society.

In addition, Charles Sirois, chair of the CIBC board, and Stephen Jarislowsky, a major Montreal investor, are worried about how dependent the Canadian economy is on the development and export of our natural resources. These two men, who have decades of expertise in global economic issues, believe that our economy—with its lack of diversity—cannot handle the challenges we face from emerging countries.

In the wake of major American investor Warren Buffett's statement, highly respected businessman Jean Coutu also expressed his belief that there is a completely incomprehensible fiscal imbalance and, as a result, he pays too little in taxes as compared to the Canadian public. He is therefore calling on the government to make the tax system fairer and more equitable so that he can do his part.

Contrary to this government, the NDP is advocating an economic approach that has worked for a long time. For a long time, the state has had a key economic role to play; to deny this is to turn a blind eye to the truth. Historically, we can see that periods that were the most economically successful in the long term achieved that success through major state intervention. When the state sets a strong and clear common goal of development, with rules of good governance and fairness on the markets, growth is impressive and sustainable.

The thirty glorious years provide an excellent example of economic measures to adopt when the economy is going downhill. Let us remember that, during that period, taxpayers' dollars were used to rebuild Europe, develop infrastructure, strengthen companies in North America and implement universal social programs that, for a long time, guaranteed a solid education system, health benefits that were accessible to everyone and the opportunity for most to retire with dignity.

All this is threatened by the economic approach of this government, which is irrationally obsessed with its weight, to the detriment of overall economic health. To paraphrase the great economist John Kenneth Galbraith, if it were only money at stake, we would not necessarily have much to worry about, but the plight of the millions of people who will suffer as a result of the action taken by this government is a matter of very great concern. It must be the main focus of our concern. In other words, we see that there are two conflicting visions of the economy in this House: that of the government, where finance takes precedence over the individual, and that of the NDP, where the individual is the centre of the economy. This could boil down to a simple ideological debate but, even then, the inescapable reality supports the NDP's approach.

First of all, one of the founding fathers of economics, Adam Smith, after making a harsh observation about the reality of his time, condemned that reality by advocating a moral approach to economic issues, an approach that took human needs into account. But unfortunately, Adam Smith was taken hostage by a simplistic economic vision endorsed by the Chicago school, which underhandedly did away with Mr. Smith's conclusions, maintaining only the observation and establishing it as dogma.

This sectarian approach has been very costly for many countries, especially in Latin America. Consider the example of Argentina, which went through a many lean years after applying measures similar to those proposed by this government. In addition, many Conservative governments in Canada have gone down paths similar to the one this government is taking, with disappointing and sometimes even disastrous results. To refresh everyone's memories, consider the following examples: the budgetary and economic trials and tribulations of the Diefenbaker government led to his defeat in 1962, when the public deficit had ballooned after a series of tax cuts—what a surprise—and after the value of the Canadian dollar dropped considerably compared to the American dollar; the Mulroney government ended a nine-year reign with an abysmal deficit of $42 billion as the ugly result; some 20 years ago, the Grant Devine government in Saskatchewan left the province's finances in ruins. After that, an NDP government led by Roy Romanow took over and in the early 1990s, despite the burden it inherited, it accomplished the amazing feat of achieving the first balanced budget of any government in Canada, whether provincial or federal.

The damage to the Conservatives' reputation at that time and later was so great that they had to reinvent themselves under another name, the Saskatchewan Party.

But the best example is the Ontario government of Mike Harris, which dismantled social programs and Ontario Hydro to the ongoing and costly detriment of the province's taxpayers. If we heed the debates raging in the current Ontario election campaign, the Harris legacy is still strong. The question is: do we want that kind of legacy?

In another part of the world, in Denmark, where a social democratic government was recently elected after 10 years of a depressing coalition of the right obsessed with austerity and border security, the new left-leaning prime minister is going to invest more than $3 billion in her country's small, rich and egalitarian economy.

Despite the fact that it has few natural resources, and personal income taxes of up to 60% as well as a 25% sales tax, Denmark's per capita GDP is comparable to that of Canada. What is even more interesting is that employment rates for all age brackets are invariably higher in Denmark than in Canada. Denmark invests heavily in education, research and development, and in its workforce, whereas Canada relies too heavily on the abundance of its natural resources as justification for a laissez-faire attitude that puts us at the mercy of economic ups and downs.

According to the Conference Board of Canada, the government must adopt an economic approach that concentrates on specialization, that is the processing of goods, in order to control a larger portion of what is called the distribution chain. In short, our country exports too many raw resources for processing abroad. We recently came to an astounding realization: employment in manufacturing, which was previously significant, is rapidly decreasing. This realization only reinforces the NDP position: Canada's competitiveness requires the diversification of activities and strategic support for sectors that create employment in order to ensure that the Canadian economy is not governed solely by the “invisible hand” of the market.

[Hélène LeBlanc, NDP, LaSalle—Émard, QC]

Mr. Speaker, I want to thank my NDP colleague for providing us with a very interesting and informative overview of other models.

Canada's situation is often compared to the situation in the U.S., but there are some very clear differences between the two countries. We are always inclined to want to imitate the U.S. model, even though it is not in line with Canadian values.

The hon. member touched on the issue of the growing gap between the wealth of a few and the impoverishment of many in Canada. I would like him to elaborate on that point and explain the societal cost of this growing gap between the rich and the poor.

[Raymond Côté, NDP, Beauport—Limoilou, QC]

Mr. Speaker, I want to thank my colleague for her question.

I do not have enough time to sum up all the consequences major disparities have on a society. To take the U.S. example, in comparison with other more egalitarian societies in the world, many problems of all kinds are related to the low standard of living and low incomes, including health problems and problems entering the workforce. The larger the gap gets, the more we see the middle class disappear. It is a problem that is only going to get worse. It is currently not being addressed, even though it should be a priority for the future.

[David Sweet, Conservative, Ancaster—Dundas—Flamborough—Westdale, ON]

Mr. Speaker, the NDP and this government are far apart on a lot of issues, but maybe no other issue as greatly as taxes.

In 2006 we promised the Canadian people that we would reduce the GST. We reduced the GST from 7% to 6%, and then to 5%, fulfilling our promise. However, the NDP actually voted against that reduction. Not only did it vote against it, but it said it was proud of the fact that it stood against it. Recently, the finance critic said, “Cuts to the GST...They take us in the wrong direction. I am very proud that our caucus stood opposed to that direction”.

I would like to ask the member this. Does he still take the position that New Democrats are proud that they stood against a tax reduction for ordinary Canadians to give them some relief?

[Raymond Côté, NDP, Beauport—Limoilou, QC]

Mr. Speaker, I thank my colleague for asking that question, because reducing the GST and corporate taxes at the same time was a serious problem. It is taking us down the same path as the Diefenbaker and Mulroney governments and, to borrow an American example, the government of President Ronald Reagan.

We must remember that taxes are a way to gather the means to achieve certain goals. Obviously, some people do not believe in that.

By reducing taxes, the government lost out on a huge amount of tax income. Now the government has an enormous amount of catching up to do and I believe that this is a questionable way to justify cuts that would not be justifiable under other circumstances. It will lead to the loss of services and it will hurt ordinary people, not to mention the other long-term consequences for our economy.

[James Rajotte, Conservative, Edmonton—Leduc, AB]

Mr. Speaker, it is a real pleasure to take part in this debate today. I have been listening to a lot of it this afternoon and it has been quite an interesting discussion between two sides of the House.

In defence of my colleagues in the NDP, it was interesting to hear the member for Markham—Unionville saying that the NDP had changed its position and had come to his side. In fact, the NDP has consistently held its view, but the Liberals have completely changed their position. The member for Markham—Unionville used to be in favour of lowering taxes as a way to stimulate jobs and create investments. Therefore, I think we should say that the NDP has been consistent and the Liberals have changed. The NDP may not be consistently right, in my point of view, but it has been consistent and I appreciate that.

As we all know, this is a time of global economic turbulence. We are following the markets every day and, certainly in Europe, nations are in severe trouble because of their debt situations. There are countries like Greece that have taken on unsustainable levels of debt and are having a very difficult time dealing with it. We see the situation in the United States, which has not experienced the level of job creation that we have here in Canada, unfortunately, and it is obviously causing some real hardship for the world economy as well.

We understand that, the finance minister understands that, and so does the Prime Minister. That is why the finance minister has been very active with his counterparts across the globe in terms of finance ministers and central bank governors. He and the Governor of the Bank of Canada, Mark Carney, were recently in Washington for IMF, World Bank and OECD meetings.

It has been necessary to respond to this global challenging time, especially to the global recession in 2008-09. There was a concerted response from OECD countries from the G20 both in terms of monetary policy and fiscal stimulus. That is certainly one reason why we argue that the situation here in Canada has been relatively better than the situation in most industrialized countries.

To look at promoting job growth and job creation, which is what this motion talks about, we argue that we have a very strong record in that sense. We have created approximately 600,000 jobs. I should not say “we”. The private sector has created 600,000 jobs since July 2009. In fact, if we look at the past year, there has been extraordinary job creation growth, especially in terms of full-time employment. There has been some very good numbers in terms of job creation.

The member opposite was saying that it is not the government that creates jobs. However, it is the government that puts in place the policies that enable job creation to occur. It was the government, in November 2007, that introduced a long-term plan to reduce taxes for small and medium-sized businesses that enabled job creation to go forward. Actually, it was pressing in terms of timing because it enabled some measures to take place before we were hit by the fiscal crisis in 2008.

We are very much focused on the economy. We are very much focused on growth. We are also focused on the prudent management of taxpayers' dollars.

It is interesting to hear the opposition talk about being in a period of austerity now; we were in a period of stimulus and now we are in a period of austerity. I would encourage them to reread the budget that was passed in June of this year. There are increases in this budget: 6% per annum to 2014 and beyond for health care; 3% per year for education and social assistance; research and development, which was praised by the Association of Universities and Colleges of Canada; clean energy research; and things like neurological research. There are some strategic investments going forward and there are many other measures that I will touch upon as well, especially with respect to small businesses.

We understand that small businesses generate a lot of the growth in this country. We understand that they are the primary employers of people in this country and that is exactly why we have put in place certain policies. I would like to emphasize these policies, such as: reducing the small business tax rate from 12% to 11%; and raising the amount of business income eligible for that rate from $300,000 to $400,000 to $500,000.

We did that for small businesses to enable them to create more jobs. It enables them to keep more of their own revenues and to invest more for themselves, their business and their employees. As small businesses grow, they will also benefit from the reduction in the general corporate income tax rate, which will be 15% in 2012.

There has been a lot of talk in the chamber about how these tax reductions only benefit certain types of companies, and we hear banks and oil companies mentioned all the time.

It is important to note that if a business has an income above $500,000, that business will pay the higher federal corporate tax rate right now of 16.5%. A business with an income of $600,000 is not a massive enterprise in Canada.

People need to understand it is not just about reducing tax rates for certain industries, whether it is oil and gas or the financial sector; it is about reducing it for every single business in this country that has business income above that $500,000 rate. I would hope all members would recognize that that includes a lot of small- and medium-size enterprises that we all admit are the primary generators of jobs in this country. That needs to be recognized.

In terms of lowering business taxes, as I mentioned, the economic update in the fall of 2007, which basically laid out this five year plan for reducing taxes, was to ensure that we were competitive on a global basis.

I would encourage members to go to the OECD website and look at the general corporate tax rates of certain countries. Countries like Chile, Sweden, and the Netherlands, countries that we are competing with, have tax rates very similar to ours. If we combine our federal tax rate of 16.5% generally with a provincial rate of about 10%, that totals 26.5%. We hope it will be 25% combined in January 2012. This makes us very competitive with a lot of these countries. Members should go to the OECD site to see where Canada fits in that.

A lot of people across the aisle will say that the Americans have higher taxes on businesses than we do. Yes, they do, but in our view that is the wrong approach. They have a lot more loopholes and they have a higher overall tax rate. What we are doing as a government is lowering the overall rate but aggressively going after some of the loopholes, which I think some members on the other side of the aisle do support. If we want more jobs, if we want higher wages, if we want this business tax advantage, then we have to follow this approach.

I did refer to the OECD in terms of where we fit in, but I would like to quote the OECD. It recently declared that Canada's corporate income tax reductions “should lower the cost of capital and buttress investment intentions. These advances...drive productivity gains and enhance employment prospects.” The fact is that the OECD has recognized what Canada has done and continues to do.

I would like to return to what I was saying about what was in the budget that we passed in June.

The first thing I would like to talk about is the hiring credit for small business. It is a hiring credit of up to $1,000 against an employer's increase in 2011 for EI premiums over those paid in 2010. This is a very important point. I suspect frankly that there are members on the other side of the House who support this initiative. It was brought forward by some very responsible groups, like the Canadian Federation of Independent Business, in terms of what we can do to assist these small businesses.

This temporary hiring credit for small business will be available to approximately 525,000 employers whose total EI premiums were at or below $10,000 in 2010, which will reduce their 2011 payroll costs by about $165 million. This is very important. I would challenge members on the other side to indicate whether or not they support this initiative, and if not, why not. If they do support it, then they should consider supporting the economic action plan that we are putting forward.

We have also taken a lot of action in terms of small business through business financing programs. I would like to highlight some of those initiatives.

The Canada small business financing program supports about $1 billion in loans to approximately 7,500 small businesses each year to either help them get started or to expand. Our government increased the maximum loan amount under this program from $250,000 to $500,000, of which up to $350,000 can be used for equipment and leasehold improvements. This is part of our economic action plan.

This is important as well, because one of the main points small businesses will make is the challenge they face in terms of access and capital. They have raised it with all of us as their members of Parliament. They will often go to a financial institution and have a tough time either accessing capital or accessing it at a cost they can afford in order to expand their business or hire more people. This obviously helps those small businesses address that problem directly.

We are doing more especially for small- and medium-size businesses. We are cutting red tape.

As of 2009, we have eliminated almost 80,000 red tape requirements for small- and medium-size businesses. To build on that, earlier this year we launched the Red Tape Reduction Commission to find even more ways to reduce the burden of federal regulatory requirements on Canadian enterprises.

In the next phase of the economic action plan, we have also included a number of additional initiatives, including support to make our BizPaL initiative permanent. This initiative enables businesses to go online to complete all their requirements. This online service significantly reduces the red tape burden on small business owners by allowing them to quickly and efficiently access the necessary permits and licences from all levels of government to operate their specific businesses.

Finally in this area, we committed that the Canada Revenue Agency will consult with the business community and key stakeholders to identify opportunities to further improve its services and reduce the administrative burden while respecting the overall integrity of the tax system.

With all of these initiatives recognizing the importance of small business within the Canadian economy, it is no wonder that the president of the CFIB, Catherine Swift, has said:

In this Year of the Entrepreneur, we give credit to the government for continuing to work to balance its books while finding important, low-cost ways to help small firms grow the economy. With measures focusing on reducing red tape, the introduction of an Employment Insurance (EI) tax credit and better transparency and accountability at Canada Revenue Agency (CRA), government took some important steps to enhance job creation and recognize the economic contributions of small businesses in Canada

Our government has done this because we believe the best way to build a more competitive economy is to create a business environment that allows the large and small private sector businesses and employers who employ the vast majority of Canadians to succeed and to expand, not stand in the way of their success with high taxes and needless red tape. It is working and we should continue down that road.

The IMF was mentioned by my friend across the way earlier. I would like to quote the IMF as well:

Canada is actually matching up quite well on a relative basis....[T]he recession was not too deep, they haven't had a financial crisis to the extent that the US has had or the Europeans are having it. And so all in all Canada is actually doing quite well.

We continue to encourage the spark of entrepreneurial creativity in Canada with a number of important initiatives which we target at small business entrepreneurship. Another example is we provided the Canadian Youth Business Foundation with support, giving young entrepreneurs access to business loans and mentoring services as they start up and operate new businesses. That mentoring aspect is very important. There is an initiative in Alberta called Productivity Alberta which is about people with a lot of experience, particularly in the manufacturing sector, mentoring some younger people in the manufacturing sector. That mentoring of the next generation of business leaders is as important as or even more important than access to financing.

In terms of the Canadian Youth Business Foundation, this is on top of the federal small business internship program that each year helps about 400 students across Canada gain valuable experience and helps entrepreneurs adopt competitive e-business practices. This was obviously well received. The Canadian Youth Business Foundation said this:

This contribution will allow CYBF to continue to support the ideas, the innovation and the entrepreneurial spirit of Canada's youth, ultimately creating jobs and strengthening our economy.

In this same spirit, the government is also providing $15 million on an annual basis to support the Canada business network. This provides essential information to help business owners start up and grow their businesses, all available through a national website, a national toll-free telephone line, and 13 regional service centres.

In terms of some EI measures that are directly targeted toward job creators, especially toward smaller businesses, our plan that we announced in March and then in June, which was passed, is going to provide $420 million to renew two special EI measures for a year. First, the working while on claim measure will allow EI claimants to earn additional money while receiving income support. This will be renewed until August 2012. Second, the best 14 weeks measure allows claimants in 25 regions of higher unemployment to have their EI benefits calculated based on the highest 14 weeks of earnings over the year preceding a claim. This will be renewed until June 2012.

There obviously is a number of initiatives that are designed to help especially people in some very challenging areas. We have certain regions which are experiencing very high economic activity and certain regions which are not. We are very cognizant of that fact and we are responding to it.

As an aside, at some of the round tables I have been doing with some of the small businesses in my area, when I ask what the greatest challenge is, many will say that their biggest challenge is access to people, finding enough people who will work in their enterprises. It goes across all sizes of business.

There was an individual in my office recently. He is my age. He is a very young CEO. He said that he could hire 75 people for his service business today, but he simply could not find them. Perry at the Denham Inn in Leduc said that he needs about six people. He put out the notice, received replies from 38 people who had an interest, but all 38 people turned him down. He looked at me and asked what he should do because he needs people. This is one of our challenges going forward. Even as we have a relatively high unemployment rate, there are going to be businesses that increasingly find it a challenge to find people, whether it is skilled or unskilled labour.

I also want to highlight the initiative that dealt with rural physicians. It was in the budget and it was mentioned in the last election campaign as well. Starting in 2012-13, practising family physicians will be eligible for federal Canada student loan forgiveness of up to $8,000 per year to a maximum of $40,000. Nurse practitioners and nurses will be eligible for federal Canada student loan forgiveness of up to $4,000 per year to a maximum of $20,000.

By getting doctors and nurses into our rural communities, and my riding certainly has a rural part, we are helping all Canadians access essential health care services no matter where they live in this country.

Another aspect of our program that I would like to highlight is the whole trading agenda. It is interesting. An economist from a bank was talking about the response to the Great Depression, Herbert Hoover and all of this. I find it quite farcical, frankly. If we look at what the response was in the 1930s, it was one of raising tariffs, shutting down trade, and raising taxes.

What our government has been doing, especially two budgets ago, is eliminating tariffs. We are now eliminating tariffs especially as inputs for the manufacturing sector. The other thing we are doing is embarking on a very aggressive trade agenda. We realize that we have to diversify our trade. We are obviously very closely linked to the United States, with 85% or so of our trade linked to the United States. We need to expand and diversify our markets. That is why the Prime Minister did his southern tour this summer, to really work on those markets to expand and diversify our trade opportunities. Countries like Colombia and Brazil are prime opportunities for us.

It is interesting, even when asking companies in my riding how they are doing on their exports, a lot of them will say that in terms of their U.S. exports, they are down about 25% or 30%, but their exports to Brazil have taken almost all of that up. If we focus on diversifying trade, we are obviously going to be helping many of these companies.

I want to talk about our response on the innovation side. Again, I would return to the rhetoric. Many opposition members are saying that we are now in an austerity period. We are not in an austerity period. We are still in a fiscal period of stimulus where we are strategically investing.

One of the areas we are investing in is research and development and innovation. We obviously did that through programs like the knowledge infrastructure program in terms of actual infrastructure at universities and colleges across the country. We are also investing in people through the three federal research granting councils which received increased funding. We are addressing things like the indirect cost of research, which universities and colleges have raised with us for years.

I would like to quote the Association of Universities and Colleges of Canada:

The Association of Universities and Colleges of Canada strongly welcomes the Government of Canada’s continued support for university research and international engagement as announced in Budget 2011.

“We're pleased with the strengthened investment in university research and innovation in this budget”.... “This support will increase Canada's capacity for discovery and innovation, and enhance the university learning experience for all students.”

“This budget represents tremendous progress for the university sector: more funding for the research councils, promotion of international educational marketing, additional support for students, and a range of measures to foster innovation and research.

The president of the University of Alberta, of which I am an alma mater, praised it in terms of our response on the innovation and research agenda.

In closing, I want to emphasize it is a time of global economic uncertainty, but the government is on the right path in terms of continuing to strategically invest while continuing to respect taxpayer dollars and moving towards a position where we can balance our budget by 2014-15.