Mr. Speaker, I would like to say that I am pleased to rise in this House, but of course, like for many of my colleagues on this side of the House, it is not altogether a pleasure to do so. What detracts from it is the fact that we feel that Bill C-45, the second budget implementation bill, is headed in the wrong direction.
The government's approach and that of the official opposition, the NDP, are undeniably completely different. The main difference is that the approach taken by the Conservatives ensures that Canada's economy will not achieve its potential and that economic uncertainty will continue, whereas our approach would maximize and optimize our current resources.
Let us look at what the government has done since coming to power. One of its first decisions was to take two percentage points off the GST. A one-point decrease means $5 billion less in government coffers. It then continued to cut the corporate tax rate. Indeed, the government lowered it from 19% in 2009 to 15%, where it stands at the moment. Every percentage point costs the Canadian treasury about $2 billion. The two measures combined represent an average of $7 billion in foregone revenue per year.
We must remember that when the Conservative government came to power in 2006, it inherited a budget surplus. Even before the recession, that surplus had been wiped out and, of course, things got worse with the measures in the economic action plan, an economic stimulus plan. From a $13 billion surplus, we immediately plunged into a deficit. And we are still there. We must remember that despite the Conservatives' reputation for being good managers of public affairs—a reputation I have never understood—if we disregard the year and a half after they came to power, when they rapidly made the surplus disappear, the last balanced budget under a Conservative government in Canada occurred back in 1912, under Robert Borden.
Bill C-45 truly reflects the Conservative ideology at its worst. The Conservative ideology denies that the federal government can play a constructive role in the development of our society. The Conservative government will not hesitate to say no to a federal investment of one dollar, even if that federal investment could result in economic growth equivalent to $10 where it is invested. Similarly, this government will not hesitate to make an economic cut of one dollar, even though it may cause $10 in losses.
I know this. I see it in my riding. I see it in my region, where the government has imposed huge cuts on institutions like the Maurice Lamontagne Institute and on investments through Canada Economic Development. This has major repercussions. Rimouski is Quebec's centre of marine technology. It has taken 30 years of hard work to find this region a specific niche. Rimouski is one of the three leading centres of ocean science, along with Halifax and Vancouver. This government is making it hard for the region with these cuts, which not only make no sense scientifically, but will weaken the region's economic potential.
This government rejects the very concept of one day attaining a balanced budget. I base that on a statement made by the Minister of State for Small Business and Tourism on May 2, in reply to a question from one of his Conservative colleagues. He said that the government was going to continue cutting taxes after it has balanced the budget.
The government's objective is not good governance, public governance, or managing public funds for the common good; its ideological position is to diminish the size of the state—the government—and diminish the good the government can do for the general public.
The government's economic policies are also haphazard. It is putting all its eggs in one basket: natural resources. Does anyone know where the government wants to take Canada, economically, in 15, 20 or 25 years? What are the niches in which Canada can excel? We have no idea. At present, the government is relying solely on the free market, which prevents forecasting or envisioning the long-term economy.
Here is one example: we are now in the 21st century and we are operating with 20th century infrastructure. The Conservative government has not taken any steps to endow Canada with proper 21st century infrastructure.
Emerging nations are doing it. Canada is just standing by and waiting until it is no longer competitive on the world market. Bill C-45 and the 2012 budget are indicative of this lack of vision.
Other people will speak sooner or later during the report stage about some of Bill C-45's major problems, particularly the best-known one, the repeal of the Navigable Waters Protection Act.
I would like to point out two elements that clearly demonstrate this lack of vision. The government is very fond of appearances, but in the end, it will not produce results. These two examples concern scientific research and experimental development, and also the hiring tax credit for small business, which the hon. member mentioned earlier.
The NDP is in favour of this tax credit. It was in our election platform in 2011, but the government will not mention that. We even proposed a small business hiring tax credit of $4,200, which is more than the Conservative one, and an additional $1,000 if the employee was still there after a year.
At the moment, the government is proposing a $1,000 tax credit, for which 536,000 businesses are eligible. That is what we heard in the Standing Committee on Finance. But let us look at the absurdity of this situation. Last year, that tax credit already existed. Some 530,000 businesses took advantage of it. That suggests that 530,000 new workers were hired last year, but that is not the case.
In committee, witnesses were repeatedly asked whether a business could hire an employee for a few months and claim the tax credit. They said that it was possible.
Although the tax credit is a good idea based on a positive principle, and we support the principle without supporting the way it is applied, this clearly shows that this measure is not encouraging the creation of permanent jobs. The NDP's proposal, on the other hand, which would add a credit for retention after a year, would encourage the creation and retention of the jobs created by the government.
Then there is scientific research and experimental development. The government plans to reduce credits to large companies from 20% to 15%, which amounts to a 25% decrease. This proposal has been decried by the business community, particularly the Canadian Manufacturers & Exporters. The government argues that the overall decrease in incentives for R&D would be $500 million, but the CME argues that the losses could be $633 million.
In addition, some argue that capital expenditures should be removed from calculations for tax credit purposes. The first suggestion was in the Jenkins report, but the second was not. The government made this up; it is not based on a recommendation from the report. We heard a very persuasive argument in the committee about how some industries in the natural resources sector and in manufacturing need to be able to include capital expenses in R&D tax credit calculations. Such industries often need to establish pilot projects—model factories, in effect—to implement the research they have already done. By eliminating that option, this measure puts some industries that really need it at a disadvantage.
Many witnesses were also worried about the government's new ability to choose winners, which would make it possible for the government to choose successful grant applicants.
Claims to the effect that Canada outperformed all the other countries are truly exaggerated. Canada did better in some ways. However, I do not believe that the Conservative government can take credit for that. Canada has survived the recession so well mainly because of the monetary policies of the Governor of the Bank of Canada, and in particular his determination to immediately lower the interest rate at the first signs of the recession, when the government was still denying that there was a problem on the horizon.
To conclude, in 2015, Canadians and Quebeckers will be able to look back on the tenor of the debates in the House and have their say about whether circumstances are better than they were before the start of the Conservative government reign. The answer will be no.