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.