Mr. Speaker, I rise today to speak to the economy and our government's economic action plan.
The current state and future direction of the Canadian economy is of great interest and concern to all Canadians. The Canadian economy has weathered the financial storm, avoided recession and prevented job losses on the level we have seen in our neighbour to the south. The strength and stability of the Canadian economy speaks for itself. Its fortitude is a reflection of the industrious spirit of Canadian commerce and the integrity of Canadian values.
I am proud of the hard work and the commitment this government has made to foster strong, sustainable, long-term economic growth and the creation of high-quality, value-added jobs for Canadians. The Minister of Finance assured Canadians that our government is striking the right balance between returning to balanced budgets over the medium term, and continuing to invest in the key drivers of economic growth and job creation.
Today I would like to remind the House of this government's commitment to creating jobs, growth and long-term prosperity. We are achieving these goals through new programs; increasing funding for research and development; negotiating new trade deals with other governments as well as continuing to work with our neighbour and largest trading partner, the United States; introducing new immigration policy, attracting qualified and capable newcomers; investing in small and medium-sized businesses; and lowering corporate tax rates to encourage development in existing companies and attract responsible foreign investment. All of these strategies aim to promote sustainable growth in the medium and long term. These are the economic priorities of this governments, which I want to further explain and expand on today.
An economy's growth potential is measured by the innovation and development of its industries. Without new ideas and new markets, an economy will struggle and stagnate. In Canada, we are proud to have industries, businesses and entrepreneurs that are forward thinking and focused on expanding into new and emerging markets.
Research and development plays a crucial role in the success or failure of new programs and products. That is why this government has optimized federal spending on research and development to stimulate innovation and create economic opportunities in Canada. This government contributed $29.9 billion in funding to support R and D last year, an increase of 2% on the year before. Following the recommendations of the Jenkins report, this government invested $1.1 billion to directly support R and D, and $500 million for venture capital.
Our government's economic action plan is committed to the success of Canadian entrepreneurs, innovators and world-class researchers. Following the recommendations outlined in the report “Innovation Canada: A Call to Action”, our government implemented strategies to help innovative businesses grow into larger, globally competitive companies.
One of these key strategies is to shift resources from indirect support through the scientific research and experimental development tax incentive program, or SR and ED, to direct forms of support, including the industrial research assistance program. This program will receive an additional $110 million per year, doubling support for small and medium-sized businesses and creating high-value jobs. The industrial research assistance program is a cornerstone of Canada's innovation system and is regarded worldwide as one of the best programs of its kind.
Canada remains a world leader in R and D. We are one of the top ten countries in the world for R and D investment, contributing 1.8% of GDP. Our government recognizes the important role research and development plays in the success of entrepreneurs, innovative businesses and world-class researchers. We are determined to see their continued success in the years to come.
In keeping with our government's economic action plan for investment, we are also focused on reducing the impediments to growth. It is no secret that red tape restricts economic growth and erodes public trust. That is why we are committed to removing bureaucratic obstacles to businesses' efforts to create jobs and growth. Fulfilling a budget 2010 pledge, our government established the Red Tape Reduction Commission, which I proudly took part in. The commission was tasked with formulating recommendations to reduce irritants to businesses that affect productivity, competitiveness and innovation.
An example of this was the implementation of the one-for-one rule. This rule stipulates that every time the government adopts a new rule, it must eliminate an existing one. This balanced approach to business regulation has received wide support from small and medium-sized businesses across the country. We are committed to delivering better regulations that reduce obstacles, lower costs and promote growth for Canadian businesses.
While small and medium-sized businesses form the backbone of the Canadian economy, corporations are equal contributors to creating jobs, growth and long-term prosperity in Canada. Our government's economic action plan has introduced broad-based tax reductions that promote investment and growth across the Canadian economy.
We are delivering more than $60 billion of tax relief to job-creating businesses through a six-year fiscal plan. To better support business investment and improve productivity, this government has reduced the federal general corporate income tax rate to 15% on January 1, 2012, from 22% in 2007. Reducing corporate taxes and removing obstacles for foreign investment will spur the Canadian economy forward.
These improvements are already producing results. Lower general corporate taxes have increased the rate of return on investment and reduced costs, providing businesses with stronger incentives to invest and hire in Canada. Canada leads the G7 with the lowest overall tax rate on new business investment. Our proven policies have been recognized by Forbes magazine. In 2011, Forbes magazine featured “The Best Countries for Business”, and Canada is the number one jurisdiction for conducting business among 134 countries studied. This article is high praise. Keeping taxes low and providing the right incentives for Canadian businesses is a cornerstone of this government's long-term plan for jobs, growth and prosperity.
International trade and foreign investment continue to be high priorities. If Canada is to continue to grow and prosper, we need strong, reliable trade partners, partners who will invest in Canadian industry while encouraging Canadian investment in their own. These are the partnerships this government has forged and will continue to build on. We are pursuing the most ambitious trade expansion plan in Canadian history.
We are committed to creating the right conditions for Canadian businesses to compete internationally and in new emerging markets. Canada's foreign investment promotion and protection agreement, FIPA, with China will provide stronger protection for Canadians investing in China and facilitate the creation of jobs and economic growth here at home. This is exactly the trade partnership Canadian businesses and venture capitalists need to grow and expand. This treaty is designed to protect Canadian investors in China through stable, predictable rules and protection against discriminatory and arbitrary practices. Despite the baseless claims made by members of the opposition parties, this treaty does produce a net benefit to Canadian industry. This government's pro-trade plan is opening new doors for Canadian businesses and provides important benefits for Canadian investors.
In addition to forging new partnerships, this government is sitting down with old friends in the European Union to establish a new trade agreement. The Canada-Europe comprehensive and economic trade agreement promises to be a co-operative and valuable partnership. The agreement mirrors NAFTA, but is considerably more ambitious and more lucrative. In a recent study produced by a joint Canada-EU trade committee, it was found that a new agreement could boost Canada's GDP by $12 billion annually and increase bilateral trade by 20%. To put that into perspective for the House and for Canadians, that is equivalent to creating almost 80,000 new jobs or adding $1,000 dollars to the average Canadian family's income.
Trade agreements aim at creating jobs in high-growth industries such as resource development, agriculture production, high-tech manufacturing and global finance. These are important markets with high growth potential. Their success will have a direct impact on the infrastructure, development and success of communities across this country. The beauty of CETA is that it will enhance trade alliances and corporate partnerships in markets throughout the provinces and territories. We all stand to profit from this treaty. The negotiations with the European Union are the most transparent and collaborative trade negotiations ever undergone in Canada. All levels of government recognize the economic benefits this agreement would bring to all regions in Canada. The EU holds tremendous opportunity for Canadian workers and businesses. The EU market includes 500 million people and annual economic activity of over $17 trillion. The European Union is Canada's second-largest trade and investment partner, behind only the United States. Canadians' prosperity and standard of living depend on these trade agreements, and this government is committed to seeing all of them realized.
There are other things I wanted to talk to, but I see I am running low on time, so I will move toward the end of my presentation.
We believe that the federal skilled worker program aims to better recognize younger immigrants with Canadian work experience and better language skills. That is something we want to examine. Another major section of the Canadian immigration system to be improved is the pan-Canadian framework for the assessment and recognition of foreign qualifications. This is a system that is important as we move forward as well, as we attract new people to help with the jobs we are going to continue to have.
I just want to summarize by saying this government's economic action plan and vision are clear. We are committing to fostering strong, sustainable, long-term economic growth and the creation of high-quality, value-added jobs for Canadians.
Canadians have placed their trust and financial interests in the hands of our government, and we are dedicated to delivering on all their expectations. Strong, fiscally responsible governance, focused on creating jobs, growth and long-term prosperity—that is the Conservative vision. That will produce results. That is what we have, and it is in the best interests of all Canadians.