Debates of Oct. 24th, 2013

Second Reading

[Mark Adler, Conservative, York Centre, ON]

Mr. Speaker, overall, the federal tax burden is now at its lowest level in half a century. As a result of our government's low-tax plan, in 2013 the average Canadian family now pays $3,200 less in taxes.

Our Conservative government recognizes the vital role small businesses play in the economy and in job creation. That is why we are committed to helping them grow and succeed.

We know that they have been growing. We see the results. Canada is leading the world in job creation with more than one million net new jobs created since the recession. With lower taxes, businesses can now invest in new equipment, hire more workers, and expand their operations.

Tax cuts benefit Canadians, all Canadians, including both Ontario and Quebec's manufacturing sectors. In fact, Suzanne Benoît , president of Aéro Montréal, had this to say:

By actively supporting this...sector with effective and well-designed programs, the Canadian government is helping ensure the industry's long term growth and the creation of high quality jobs for Canadians.

In Ontario, Carlos Paz-Soldan, president and CEO of the Toronto-based Tenet Computer Group, added:

This budget recognizes the strong link between the innovation needs of firms such as mine and the skills and talent of college and polytechnic students across the country.

Richard Paton is president and CEO of the Chemistry Industry Association of Canada. CIAC said that it was:

...pleased by the federal budget's focus on manufacturing, jobs and growth. Funding to encourage innovation and improve the competitiveness of Ontario's manufacturing sector was especially welcomed....

As members can see, specific actions taken by our government have enabled businesses to grow. For example, during the recession, our Conservative government extended and expanded the job-creating hiring credit for small business, which benefits an estimated 560,000 employers; increased and indexed the lifetime capital gains exemption to make investing in small business more rewarded; expanded the accelerated capital cost allowance to further encourage investments in clean energy generation; and more.

During the recession, the opposition voted against these tax relief measures. Why does the opposition continually vote against supporting Canadian businesses? Why do they not support Canadian workers? If the opposition had its way, it would have the government engage in risky spending schemes or would force a $21-billion carbon tax on Canadian consumers or would hike taxes on job creation, thereby stalling economic growth.

These ideas will not work. Indeed, time has proven over and over that the way to support economic growth is by lowering taxes. Simply put, we cannot tax our way to economic prosperity.

Economic action plan 2013 builds on our government's significant action to support small businesses since 2006, which includes reducing the small business tax rate from 12% to 11%, increasing the small business limit to half a million dollars, lowering the federal corporate income tax rate to 15% to help create jobs and economic growth for Canadian families and communities, and eliminating the corporate surtax for all corporations in 2008, which was particularly beneficial to small business corporations, as the surtax represented a larger proportion of the overall payable tax.

This also includes introducing a code of conduct for the credit and debit card industry. Indeed, our government just recently improved the code by expanding it to include mobile payments, a move welcomed by the Canadian Federation of Independent Business, which said it:

...will help make the Code even more relevant and useful to small business owners, and we applaud the government...

Overall, a typical small business now has $28,600 in savings, because of our Conservative government's low tax plan.

Having said that, our government is under no illusions that our work is finished. The global economy remains fragile, with growth in advanced economies slower than expected, and Canada is certainly not immune. That is why Canada's economic action plan actively pursues new trade investment opportunities, particularly with large, dynamic, and fast-growing economies.

Indeed, our government recently completed negotiations on a comprehensive economic and trade agreement with the European Union. This agreement alone has the potential to add more than 80,000 net new jobs in Canada. Do not take my word for it. Let us hear what others have to say.

John Manley, president and CEO of the Canadian Council of Chief Executives, agrees that:

...the [comprehensive and economic trade agreement ] will create jobs, spur investment and promote economic growth.

Unlike the opposition, we understand that the pursuit of free trade is beneficial for Canada's economy. Our government's trade agenda has already made Canada one of the most open and globally engaged economies in the world.

Since 2006, we have reached free trade agreements with nine countries and are negotiating with many more. We have also concluded foreign investment promotion and protection agreements with 16 countries and are currently in active negotiations with many others. Canada has also joined the Trans-Pacific Partnership negotiations and we are actively pursuing new trade and investment opportunities in large, dynamic and fast-growing economies such as China, India and Japan, reflecting our belief that freer and more open trade is a key stimulus for economic global recovery.

Unlike the opposition, we know that by growing international trade and creating additional export opportunities for Canadian businesses, we will improve the standard of living for all Canadians. Free and open trade has long been a powerful engine for Canada's economy. Canadian businesses need to access key export markets in order to take advantage of new opportunities. Economic action plan 2013 builds on these measures through targeted actions that will help our manufacturers and businesses to continue to succeed on the world stage and secure a prosperous future for all Canadians.

Our government is continuing to build on our sound economic position with the implementation of economic action plan 2013. The second budget implementation act would deliver a three-year freeze on employment insurance premium increases. This tax relief would help support Canada's continuing economic recovery and sustained business-led long-term growth. However, again, do not take my word for it, let us hear what others have to say.

Diane Brisebois, president and CEO of the Retail Council of Canada agrees:

This freeze on premiums will mean more money for employers to invest in other important areas such as employment, training and infrastructure...

Furthermore, the employment insurance freeze would enhance Canada's globally competitive business environment. The freeze would help to attract foreign investment in Canada, create jobs for Canadians and foster long-term economic growth. In fact, Dan Kelly, president of the Canadian Federation of Independent Business agrees:

—payroll taxes like EI are particularly challenging for small business...[the] announcement of an EI rate freeze is fantastic news for Canada’s entrepreneurs and their employees. This move will keep hundreds of millions of dollars in the pockets of employers and employees which can only be a positive for the Canadian economy.

Most important, freezing EI rates would have a significant impact on low-income Canadians. Joyce Reynolds, the Canadian Restaurant and Foodservices Association executive vice-president of government affairs, notes:

Payroll costs have a significant impact on overall labour costs. They are a barrier to hiring, particularly for inexperienced workers...We are pleased the government is demonstrating commitment to youth employment by holding the line on these profit-insensitive costs.

Unlike the opposition, our government understands that tax relief is important to Canadian families. I encourage members opposite to vote in favour of this important measure, which would leave more money in the hands of Canadians.

Our government remains firmly committed to supporting Canadian jobs and fostering long-term prosperity for Canadians and their families. Canada's low tax approach continues to be a beacon to other nations around the world in a time of global economic uncertainty. Our efforts have certainly not gone unrecognized. Indeed, KPMG's “Competitive Alternatives” 2012 report concluded that Canada's total business taxes were more than 40% lower than those in the United States and confirmed that Canada had the lowest tax burden on business in the G7. Along with promoting investment in our support for free and open trade, the government continues to support the low tax environment that is required to create jobs and economic growth.

Canada is now one of the top five destinations in the world to start a business. Colleen McMorrow of Ernst & Young remarked:

Canada has emerged as a real leader in fostering an entrepreneurial culture....Canada also offers a supportive tax and regulatory environment for entrepreneurs. All these factors are combining to really promote the growth of entrepreneurs and entrepreneurship from coast to coast.

She concluded by saying, “Canada's government has been highly supportive of entrepreneurs, providing regulatory and tax regimes that have enabled start-ups and growing companies to flourish”.

Clearly, Canada's competitive tax system plays a crucial role in supporting economic growth. These tax reductions would leave more money for the private sector to reinvest in the machinery, equipment, information, technology and other physical capital that would further boost the recent productivity gains we have seen in businesses across Canada. Most important, lower taxes would allow businesses to hire more Canadians and offer higher wages as they extend production and take on the world.

I encourage all members to support Bill C-4.

[Mike Sullivan, NDP, York South—Weston, ON]

Mr. Speaker, I have some questions for my colleague from the riding to the north of me concerning this budget bill which includes not only budgetary items.

The government has included some workers health and safety things that would strip powers from health and safety officers. This was never mentioned in the budget, yet it is in the budget implementation bill. I think if the workers at the Bombardier plant in his riding were facing the same kind of action by the provincial government, they would be pounding on my colleague's door complaining about what the provincial government was doing to them, yet the Conservatives are proposing something similar that was never in the budget. Why it is there?

Why are some of the consumer protection things that the government has touted as being necessary not there? They could have been included.

Why are the Conservatives insistent on making this a time allocation bill when the opposition was prepared to agree on the amount of time it was going to have?

The government prorogued and did not spend a lot of time in the House and yet it wants to hurry this up.

[Mark Adler, Conservative, York Centre, ON]

Mr. Speaker, perhaps the hon. member for York South—Weston was not listening clearly to my speech.

Economic action plan 2013 has received widespread support from the business community, the Canadian Federation of Independent Business, the Canadian Council of Chief Executives as well as a variety of other business organizations that say everything we have done in this budget to create jobs is welcomed, and the proof is in the pudding.

We have created over one million net new jobs since the peak of the recession in 2009 and we continue to create jobs. We are the number one job creator in the G7. We receive praise from a variety of international organizations, from economists, from Forbes magazine. As I indicated in my speech, we are the best place to be doing business. A variety of organizations have said that from the OECD to the IMF.

What is really important is that our government is clearly focused on what matters most to Canadians, and that is jobs, growth and long-term prosperity. With that in mind, we are clearly focused on what matters the most. Like a laser beam, we are focused on the economy.

As such, I would encourage NDP and Liberal members to join us and help us create even more jobs in our great country so they can go back to their constituents at voting time and tell them they helped the Canadian government create jobs and that is what mattered most to them. They could tell their constituents they played a role in all of that.

[Kevin Lamoureux, Liberal, Winnipeg North, MB]

Mr. Speaker, it is important for us to note that when the Prime Minister was in opposition, he was exceptionally critical of the government of the day because there was a 100-page budget implementation bill. Now that he is in the Prime Minister's chair, he has increased the size of it almost tenfold. This bill contains 400 pages. Huge pieces of legislation that are completely and absolutely irrelevant to the passage of the budget are being proposed. That is one issue.

The other issue which is equally important is the fact that the government has brought in time allocation. All of these potential pieces of legislation that should have been stand-alone bills have all been incorporated into the budget bill. The Prime Minister, more than any other prime minister in the history of Canada, then says that his government is going to put a finite amount of time on debate. The government is putting in closure to force this legislation through second reading. That prevents MPs from being able to debate the budget bill and give it due diligence, let alone all of the other things that the Conservatives are trying to bring in through the back door.

How can the member believe, in good faith, that colleagues from all sides of the House can positively contribute to all the required debate to give due diligence to Bill C-4?

[Mark Adler, Conservative, York Centre, ON]

Mr. Speaker, our government remains committed to what matters most to Canadians, which is jobs, growth and long-term prosperity. We have provided a number of supports for job creators in Canada, particularly the small business sector, by extending and expanding the hiring tax credit, as I indicated in my speech, which will help 560,000 employers.

We have just closed negotiations on the CETA, which will give access to Canadian business to half a million new customers in the European market. This is the largest single free trade agreement ever negotiated on the face of the earth.

The agreement is precedent-setting because we now have access to 2.7 million public sector procurement opportunities in Europe, which is completely unprecedented. I would encourage the member from Winnipeg to take the benefits of the CETA to his constituents and the businesses in his riding and encourage them to take advantage of the wonderful economic opportunities that lay ahead in the CETA.

I understand the Liberal Party candidate in the riding of Toronto Centre running for by-election on November 25, Chrystia Freeland, one of the economic advisers to his leader, said, “I say amen to raising taxes”. That shows the difference between our party and the Liberal Party.

[Lois Brown, Conservative, Parliamentary Secretary to the Minister of International Development]

Mr. Speaker, we have come through some very difficult times over the last four or five years. We have seen the world go through a global recession. What we know right now is that although many other countries are struggling with their debt load where it is really out of control, Canada is in the best fiscal position in the G7.

Canada's net debt to GDP ratio was 34.6% in 2012, the lowest among G7 countries. Germany is only second lowest at 57.2%. What we are looking at with this budget is creating more opportunity and more jobs in our economy. With more people who are working, there are going to be more people paying taxes, allowing us to get back to our objective of a balanced budget in 2015.

Since the member in his previous life worked with many companies in Toronto, could he speak more about what these kinds of actions that we are taking will mean to these job creators in our own economy?

[Mark Adler, Conservative, York Centre, ON]

Mr. Speaker, indeed, the member is absolutely right. Our government took very strong action before the recession in lowering public debt by $36 billion, which was significant. That gave us now the manoeuvrability and the cushioning to respond in a positive way during the past recession. We did so in a way that outstripped the economic performance of every other G7 country in the world.

We were able to strategically plan, and we are the only party with a plan. The Liberals and the NDP do not have a plan. The Liberal plan is non-existent and the NDP plan is just to raise taxes, including a $21 billion carbon tax. Our party remains focused on what matters most to Canadians, which is jobs, growth and long-term prosperity.

The proof is clearly seen with one million net new jobs created in the peak of the recession and we have the strongest job creation record of any country around the world. We have received accolades from international organizations, from Canadian business associations and from business leaders. It is Canadian business that creates jobs, not the Canadian government. We can create the conditions that will foster Canadian job growth, and we have done that through our economic action plan. We have a plan; the opposition does not.

[Elizabeth May, Green, Saanich—Gulf Islands, BC]

Mr. Speaker, I attempted to get in on the debate earlier about time allocation on the bill. There were so many things said that were completely false, such as the notion that large budget omnibus bills are any part of the tradition of Parliament. They are offensive to parliamentary democracy.

The largest in all history was the one referred to earlier today by the parliamentary secretary before the current administration and that was in 2005. It was 120 pages long and it was offensive in its day. To have two budget omnibus bills in the year 2013, as we had in 2012, in all cases over 300 pages long is outrageous. To close debate on it so early is a further outrage.

Does my hon. friend not find it troubling that in the last session of Parliament, 38% of all government legislation came bound together in unrelated pieces of legislation for one vote and now these very large, unwieldy and unrelated pieces of legislation are forced into time allocation?

[Mark Adler, Conservative, York Centre, ON]

Mr. Speaker, what I find offensive is that during the 1990s the Liberal government balanced the budget on the backs of Canada's most vulnerable citizens by cutting social services and cutting funding to education and health care. That is the way it balanced the budget.

The way we balance the budget is by lowering taxes and creating the conditions whereby businesses can create jobs in this country, because everybody deserves a job. Is every Canadian employed right now? No, and that is why our job is not finished. We will never say our job is finished until every Canadian who wants to work has a job and has the opportunity to have a job. That is when we can say that our job is done.

I would encourage the opposition to, rather than criticize where there is no criticism warranted, join us in our plan to create jobs and foster economic opportunity and growth in this country of Canada.

[Guy Caron, NDP, Rimouski-Neigette—Témiscouata—Les Basques, QC]

Mr. Speaker, I am pleased to rise in the House to discuss and debate Bill C-4, the second budget implementation bill.

This is yet another omnibus bill, which, at second reading, is again the subject of a time allocation motion. Our debate will therefore be limited, which will also be the case at the Standing Committee on Finance, of which I am a member. Indeed, we will have only two meetings to discuss a bill that is over 300 pages long and that amends a great many pieces of legislation, and not just budget-related legislation or legislation related to the nation's finances.

We strongly object to this way of proceeding, as we have from the beginning of the last session of Parliament, when the government decided to make a habit of this.

I would like to focus my remarks on one aspect in particular of Bill C-4, that is, the elimination of the tax credit for labour-sponsored venture capital funds, which was announced in budget 2013. This is an extremely crucial measure. On the one hand, the government claims that it will save $355 million over five years. On the other hand, it wanted to please private investors and decided to invest $400 million in private venture capital funds. However, the two kinds of funds are very closely related, and I will expand on that in my speech.

This measure constitutes an attack on a tool that is crucial to economic development in Quebec: labour-sponsored venture capital funds. These funds are considered a crucial tool for economic development, not only by those who benefit from them—mainly small and medium-sized businesses—but also by the Quebec business community, which objected immediately and still opposes this measure. These funds play a major role in Quebec. Eliminating this tax credit will hit Quebec particularly hard, which is why I am focusing my remarks on Quebec. In fact, 90% of the investment by labour-sponsored funds is currently in Quebec.

I will focus my remarks on the Fonds de solidarité FTQ in particular since it has been around for more than 30 years. Fondaction CSN is another very active fund in Quebec, but the Fonds de solidarité FTQ has a 30-year history of economic investment. It has benefited corporations in Quebec as well as small and medium-sized businesses. That will be the focus of my remarks.

In the last 10 years alone, the Fonds de solidarité FTQ's investments have created or maintained over half a million jobs in Quebec.

I was saying that this is related to venture capital funds too. That is extremely important. The Fonds de solidarité FTQ is currently investing not only in Quebec companies and in starting up or rescuing companies in jeopardy that have the potential to contribute significantly to Quebec's economy, but it is also investing in private venture capital funds. Currently, the Fonds de solidarité FTQ is investing in 47 different funds. Some are international funds, but they are opening offices in Quebec.

Another dozen or so are Canadian funds, including the Ontario Venture Capital Fund, which was created by the Government of Ontario in the 2000s when the Ontario tax credit was eliminated. Venture capital invested in Ontario's economy had plummeted. Ontario tried to offset that by creating this agency, and the Fonds de solidarité FTQ invested heavily in it. Obviously there are also venture capital funds in Quebec that are invested in Quebec.

There are private venture capital funds, but there are also funds of funds. The largest fund of funds in Canada at present is Teralys Capital with access to $700 million. Some $250 million of that amount was invested by the Fonds de solidarité FTQ. In total, the Fonds de solidarité FTQ has invested over $1 billion in all private venture capital funds combined in Canada.

Consequently, the measure announced in Bill C-4 by the Conservatives affects more than just the ability of labour-sponsored funds, such as the Fonds de solidarité FTQ and Fondaction, to directly invest in small and medium-sized businesses in order to help them start up and grow.

It will have a serious impact on the ability of the Fonds de solidarité and Fondaction to contribute to the success of private equity funds.

This is one of the major reasons why Canada's Venture Capital & Private Equity Association is opposed to this Conservative measure. I will say it again: it opposes this measure.

The government tried to appease them with a $400 million investment, but the association understands the negative impact this measure will have on their activities, namely using venture capital to fund businesses in Canada.

I would like to quote the president of Canada's Venture Capital & Private Equity Association:

Namely, that eliminating the credit could put regional investment at risk, as [labour-sponsored venture capital corporations] are particularly active outside the main centres of economic activity. And, [the second concern is] that these vehicles “play a structural role” in the venture industry, and are frequently co-investors. “By eliminating the federal tax credit, a critical piece of infrastructure may be stripped from the entrepreneurial and venture capital eco-system,”....

Canada's Venture Capital & Private Equity Association understands the havoc and destruction that will ensue as a result of this Conservative government measure, and it is not the only business association to oppose this measure.

The Fédération des chambres de commerce du Québec opposed the government's intention to abolish the tax credit as soon as it was announced in budget 2013.

I would like to share two quotes from Françoise Bertrand, president and CEO of the Fédération des chambres de commerce du Québec.

Before the government's announcement, she was already praising the positive impact of labour-sponsored funds, including the Fonds de solidarité FTQ.

This is what she had to say on March 1, 2013, before the government announced that it was going to abolish the credit:

They understand your business. On innovation, they’re still there. The Fonds has been involved in digital technology. It’s not easy; the banks are not there. The Fonds was really ahead of the game. One thing we should say is the extent of their interest and participation in businesses in the different regions of Quebec. They have been very active in making sure that they have not been missing any opportunity.

When the government announced in budget 2013 that it intended to abolish tax credits for labour-sponsored funds, there was an immediate reaction from the Fédération des chambres du commerce du Québec. Françoise Bertrand said:

These funds are important to the economic development of Quebec, and if the government cuts these tax credits, it will eliminate an important tool for promoting business start-ups.

Were those the only negative reactions? No. Michel Leblanc, the president and CEO of the Board of Trade of Metropolitan Montreal, denounced this measure the day after budget 2013 was tabled:

The contribution of labour-sponsored funds is invaluable for our economy. These funds make long-term investments in small and medium-sized businesses in sectors that tend to be less well served by private funds. What’s remarkable is that their investments are countercyclical, because they maintain a high level of investment during economic slowdowns. Plus, the return on investment for the federal government is amply recouped, whether in terms of tax and quasi-tax revenue or recovery time.

What does that mean? Mr. Leblanc looked at two studies. One was conducted in June 2010 by SECOR Group, which was led by Marcel Côté, who is now a mayoral candidate in Montreal.

SECOR Group analyzed the return on investment of these tax credits for the Quebec and Canadian governments.

SECOR concluded that the tax credits were very positive for both governments. On average, the governments recouped the investment they made by way of this tax credit in less than three years. This means that in less than three years, these governments earn back the revenue they lost.

A second, quite recent study was conducted after the government announced the abolition of the tax credit. This study was carried out by IREC and was revealed by the Board of Trade of Metropolitan Montreal. In Canada, for every dollar of tax credit going to savers who invest in labour-sponsored funds, the government receives in return the equivalent of $1.26 in additional tax revenue. This is a gain.

For Quebec, this measure is even more important, because for every dollar that goes to savers in tax credits, the Quebec government receives $2.05 in tax revenue. Any company with an opportunity to make a similar return would jump on it. With this measure, the Canadian government is killing the goose that lays the golden eggs. Clearly, the Conservative government does not really understand either the impact labour-sponsored funds have on the Québec economy or how they work.

The member for Beauce and Minister of State for Small Business and Tourism, and Agriculture tried to defend the decision announced in budget 2013 by saying that only 11% of the capital in the Fonds de solidarité FTQ is invested as venture capital.

That is not true. In fact, Quebec law requires both funds, the Fondaction CSN and the Fonds de solidarité FTQ, to invest at least 60% of their assets in venture capital, which means in businesses. This is unsecured venture capital. It is risky, because it is low in the creditor pecking order should the investment go bad. That is why they also call it risk capital. Currently, the Fonds de solidarité FTQ invests 67% of its assets.

When he refers to the 11%, the Minister of State for Small Business and Tourism, and Agriculture and member for Beauce is all confusion. This relates to new investment made last year. Obviously, when you invest in a business and it prospers, the FTQ can give up its shares in the business and reinvest elsewhere. There is constant turnover.

The fund’s total investment is 67% of its assets. There are businesses from which the Fonds de solidarité FTQ withdrew its funding in order to invest the 11% elsewhere.

We can therefore see to what extent the Fonds de solidarité FTQ plays a crucial role in Quebec’s economic development. It has existed for 30 years, but in the last 10 years alone, over $6.3 billion has been invested in Quebec businesses, private venture capital funds and funds of funds. Some 2,239 businesses in Quebec and Canada have benefited from this, and 80% of them have fewer than 100 employees. We can therefore see the impact on SMEs.

I suggest that my Conservative colleagues listen carefully, because they are always talking about their interest in promoting SMEs and helping them develop. The Fonds de solidarité FTQ plays a crucial role in the development of SMEs. Today in Quebec, it is estimated that 171,000 jobs have been created or maintained through the efforts of the Fonds de solidarité FTQ.

The tax credit does not go to the Fonds de solidarité FTQ; it goes to the savers who decide to invest in it. It is estimated that the immediate result of this Conservative measure will be the loss of about 20,000 jobs in Quebec alone. The measure will not create jobs; it will destroy jobs that Quebec and, by extension, Canada desperately need at this time. Labour-sponsored funds of this kind, and in particular the Fonds de solidarité FTQ, have also created funds that operate regionally. That is another crucial point.

This has extremely useful spinoffs regionally. In the Quebec City area, 70,000 savers are currently contributing to the fund and receiving the tax credit, which is an incentive to save for them and an economic development lever for the fund.

The fund has invested about $1 billion to date in the Quebec City area. In the last three years alone, this has benefited 400 businesses, and 45,000 jobs have been created or maintained in the area. In my own case, for example, 25 businesses in the Lower St. Lawrence region are receiving support from the Fonds de solidarité FTQ.

Why are these businesses especially concerned? Because the fund invests largely in the regions, where private venture capital and the banks do not dare to go.

Let us think about where we would be now if we had not had help from this fund, given the number of small and medium-sized businesses that need a hand with their economic development, particularly in the regions.

This is where the Conservative government fails to understand the real consequences of its actions. It is my impression that either in the Prime Minister’s Office or in that of the Minister of Finance, they told themselves that this was a labour-sponsored venture capital fund with connections to the union and they could score a big hit by abolishing the tax credit and returning it to the private sector, which will do things better. On the other hand, people in the private venture capital field understand the importance of such funds. They protested against the move. Is the Conservative government listening? No. It is proceeding with the measure.

I would like to talk about these funds from another angle that is extremely interesting: the saver’s angle. Savers currently benefit from a 15% tax credit on their investments in the Fonds de solidarité FTQ or the Fondaction CSN. This is a necessary and crucial incentive. The government tells itself that they will be able to reinvest elsewhere if they want to and that the Fonds de solidarité FTQ is now big enough, with its $9.6 billion in assets.

However, these funds have a specific role to play that private venture capital funds do not. Their particular mission is to invest in higher-risk areas. Their return is therefore much more uncertain. Sometimes—although this was not the case during the last economic recession—they may have a lower return because less than 30% of their assets is invested in the speculative market. Nearly 70% is invested in venture capital.

This is therefore a real deterrent to savings. Now, if savers seek higher returns, they will be much more inclined to turn to private funds such as mutual funds, venture capital funds or something else that will assure them of less uncertain, more stable and higher returns. This is why the tax credit is there in a complementary role.

I do not understand this decision by the Conservative government, which is determined to eliminate the tax credit. The Fonds de solidarité FTQ and the Fondaction CSN are two key drivers in the development of the Quebec economy. They have proven their value and they are needed. The Fédération des chambres de commerce du Québec and the Board of Trade of Metropolitan Montreal recognize the need for these development tools. The Conservative government is jeopardizing all this by eliminating the tax credit.

I would like to know why no one is taking the trouble to study this particular measure, which will have such a significant impact on the Quebec economy. The Conservatives are fond of saying that they work to ensure that they walk the talk. They should therefore conduct an impact study to assess the real effect of this measure, because it will have serious consequences.

I therefore expect to be able to discuss this measure in the Standing Committee on Finance. I hope to have informed questions from my colleagues. They should understand that this goes against the government's plan—and it is a plan, we certainly hear it often enough—for Canada's economic development.

[Pierre-Luc Dusseault, NDP, Sherbrooke, QC]

Mr. Speaker, I would like to thank my colleague from Rimouski-Neigette—Témiscouata—Les Basques for his excellent speech and the expertise he provided on the topic studied by the Standing Committee on Finance. I am sure that in committee he will be able to go head-to-head with the Conservatives and try to improve the bill, even though it is 300 pages long. The bill was introduced this week and a time allocation motion has already been moved. They want to talk about the bill as little as possible in the House.

Does the hon. member feel that the time available to study the bill is sufficient? Will we be able to properly fulfill the parliamentary duties granted us by voters in ridings across the country?

[Guy Caron, NDP, Rimouski-Neigette—Témiscouata—Les Basques, QC]

Mr. Speaker, I would like to thank the member for Sherbrooke for his question. This is going to come up quite often. This bill is massive; it is another omnibus bill that contains many measures. Some measures address fiscal matters, which we are not opposed to. There are many other measures that have nothing to do with our country's fiscal reality.

Why would changes to the way Supreme Court justices are appointed be included in a bill such as this one? It has nothing to do with the budget, yet it has been included in the bill. There are also significant changes to the Canada Occupational Health and Safety Regulations, which are part of the Canada Labour Code. Those should be discussed separately.

A Globe and Mail editorial condemned this way of doing things, which the federal government has used routinely. Moreover, the members of the Standing Committee on Finance will not have the time to analyze this 300-page bill. The committee will meet twice at the end of November to study and analyze Bill C-4. We will not have enough time to analyze it. Such abuses, which we have also seen with other budget implementation bills, have led to catastrophic mistakes that the government has had to subsequently correct. These mistakes could have been prevented had the bills been studied carefully.

[Mike Sullivan, NDP, York South—Weston, ON]

Mr. Speaker, the government does not really understand how labour-sponsored venture funds actually work or it would not be doing what it is doing. These funds are job creators, yet the government, which claims to be a job-creating government, is doing things that will actually kill jobs in Quebec. Perhaps it is because the government has such disdain for labour, or such disdain for Quebec, that it has done this in the budget. In addition, the government has taken other pokes at labour by removing health and safety protections from the labour code, putting all of that on the back of the minister herself.

We see, yet again, a Conservative omnibus bill that goes well beyond what a budget would ever include. It includes things that should never be in a budget.

I wonder if the member would like to comment.

[Guy Caron, NDP, Rimouski-Neigette—Témiscouata—Les Basques, QC]

Mr. Speaker, my colleague is quite right.

I would like to say that I am extremely surprised and disappointed that the government members present in the House are not rising to discuss this matter. This is an economic debate. We are providing economic arguments against this job-killing initiative. The government has not said a word. I am extremely disappointed to not be debating this issue with the members present in the House.

With respect to my colleague's comments about the repercussions, I have this to say. I mentioned, among other things, what this will do to the Canada Occupational Health and Safety Regulations. The definition of workplace risk is being changed, and the minister will be given the discretion to address health and safety issues of employees working for businesses that fall under the Canada Labour Code. The way in which public sector collective agreements will be negotiated will change. The measures are far-reaching, and it is clear that the government does not intend to debate them in a free and engaged manner. This will have major repercussions, not only for Canada's economy and finances, but also for labour relations as we know them today. The government wants to quickly redefine them with an omnibus bill.

[Jonathan Tremblay, NDP, Montmorency—Charlevoix—Haute-Côte-Nord, QC]

Mr. Speaker, the hon. member's speech was very eloquent. He clearly demonstrated that we already have all the figures to show that these forms of investment are good for our economy and our SMEs. They also generate income for the government and diversify our economy.

It is impossible to understand the reasoning behind this decision, considering all those figures, which are clear and publicly available. Yesterday the Fonds de solidarité FTQ and Fondaction CSN met with the government to propose a way to increase investments, both in Quebec and elsewhere. However, the government again refused to reconsider its decision.

What could possibly have made this Conservative government, which has all the figures at its disposal, decide to eliminate this tax credit?

[Guy Caron, NDP, Rimouski-Neigette—Témiscouata—Les Basques, QC]

Mr. Speaker, all I see in this decision is an ideological desire that is in no way rational, but that is still consistent with this government's decisions. Its decisions are not rational, as I have mentioned before. If a government has an opportunity to do something that would bring in even more money in the future, and if it has the opportunity to invest and then recover its investment, it should jump on that opportunity.

Instead, the government is bringing in a measure that will undermine businesses. When a business has over $9 billion in assets, it can be considered a large venture capital company. We are talking about tens—if not hundreds—of thousands of new jobs.

Funds and venture capital companies understand this reality. That is why they offered some alternatives to the government. They are wondering what the problem is, since the government makes money off the money it invests. Is the problem the fact that funds and venture capital companies do not invest enough in Canada? They are prepared to increase their investment limit outside Quebec.

The government will not accept other alternatives suggested by the two funds to ensure that the benefits are more wide-ranging.

All I see here is an ideological and completely irrational measure.

[Linda Duncan, NDP, Edmonton Strathcona, AB]

Mr. Speaker, I would like to thank the member for his thorough and cogent speech on this matter. It is regrettable that we do not have more opportunities like this, given the closure.

The current government says that its top priority is creating jobs and the economy. Conservatives have alluded from time to time to how they think this is a prime opportunity for indigenous Canadians to become involved in the economy. Yet, in this budget, we do not see one single measure to enable that to happen. Time after time, the first nation, Métis and Inuit communities tell us that they need their land claims settled, they need the government to deliver on its commitments on the land claims and they need the government to provide fair and equal funding for education so they can have the skills and knowledge to apply for the jobs that would give them a fair income.

I wonder if the member could speak on how this budget seems to serve the needs and desires of only some, but not all, Canadians.

[Guy Caron, NDP, Rimouski-Neigette—Témiscouata—Les Basques, QC]

Mr. Speaker, this is a government that governs through talking points. It governs with talk but little action. It actually likes to contradict or try to pretend the opposite of what it is actually doing.

The government has shared its intentions a number of times. It has talked about initiatives it has implemented or wants to implement. However, at the end of the day, we hear nothing. Most of what the Minister of Aboriginal Affairs and Northern Development says does not make much sense.

I can say that the Assembly of First Nations and aboriginal groups from across the country see what is going on and they are not impressed. The Idle No More movement did not come out of the blue. It developed in response to the government's ignorance of and inaction on aboriginal issues. This would have been an ideal opportunity to address some major issues.

However, instead of including elements in the budget that deal with education on reserves or that address the various problems affecting aboriginal communities in the country, the government decided to include elements that have absolutely nothing to do with the budget, such as the process for appointing Supreme Court justices.

[Laurie Hawn, Conservative, Edmonton Centre, AB]

Mr. Speaker, I will say at the outset that I am sharing my time with the hon. member for Kitchener—Conestoga.

It is an honour to rise and address the House on budget 2013. I came to Ottawa from Edmonton Centre as part of this Conservative government. Since that time we have been both sound economic managers and prudent investors in all areas of government. We have lowered taxes to the lowest level in more than 50 years. The GST was cut from 7% to 6% to 5%. This has placed more money in the pockets of ordinary Canadians, where it belongs.

We have paid down $37 billion worth of debt between 2006 and 2008. During this time, we also invested in our armed forces, which were in desperate need of equipment and rebuilding after decades of darkness under previous governments.

It was not long, however, before trouble appeared on the horizon. In August 2007, the credit bubble burst. The United States officially went into a recession in January 2008. This was the worst recession to hit the world since the 1930s. Those were troubling times five years ago. However, in the face of trouble our government responded decisively.

On January 27, 2009, the Minister of Finance introduced the first phase of Canada's economic action plan. This budget was a $60 billion shot in the arm to the Canadian economy, including a $12 billion infrastructure investment and $20 billion worth of tax relief. As the Minister of Finance indicated at the time, these measures were targeted, timely and temporary. With an extra six-month extension, the stimulus funding wound down on October 31, 2011, as promised.

I am a Conservative, and I believe in balancing our budgets, lowering taxes, and individual initiative and enterprise. Canadians understand the importance of prudent fiscal management in their household budgets, and they expect the same from the government. I could not agree more. That is why I am pleased that our government has made fiscal prudence a priority.

I would like to speak to three of our government's fiscal priorities today, which budget 2013 keeps us on track to achieve. These priorities are the elimination of the deficit, introduction of balanced budget legislation as promised in the throne speech and paying down the federal debt while fostering a sound economic environment.

When Canada's economic action plan was initially introduced in 2009, we made it clear that deficits were not here to stay and neither was the stimulus. We acted, and deficits have been falling ever since. From a peak of $56 billion in 2009-10, it was reported on October 22 that the federal deficit had fallen to $18.9 billion for the 2012-13 fiscal year, coming in nearly $7 billion below forecast. We made it abundantly clear that the deficit elimination would not be done on the backs of provinces or seniors.

Budget 2013 builds on previous actions, with an additional $500 million in savings in 2013-14, rising to $2.3 billion in 2017-18, for a total of $8.4 billion over the next five years. When this is combined with actions taken since budget 2010, it means our government has announced savings that will reduce the deficit by more than $15 billion in 2014-15 and beyond. This will amount to cumulative savings of more·than $84 billion over the 2010-11 to 2017-18 period. More than 75% of these savings will result from measures to restrain the growth in direct program spending.

Some of these measures to control program spending were developed during the strategic and operating review, of which I was privileged to be a member. This review found savings of $5.2 billion in government operations, savings that will certainly contribute to not only eliminating the deficit but making government leaner and more efficient.

Direct program spending is projected to remain roughly at or below its 2010-11 level over the forecast horizon, 2017-18. However, federal transfers to individuals to provide important income support, such as old age security and employment insurance, and major transfers to other levels of government for social programs and health care will continue to grow over the forecast period.

With the recent Speech from the Throne, our Government again signalled our continuing belief in the importance of sound fiscal management by promising to introduce balanced budget legislation.

Government holds the keys to the federal treasury and with that comes the expectation that those resources will be spent and managed wisely. As we are all aware, these past five years have been anything but ordinary economic times. With sovereign debt crises in the eurozone, the fiscal cliff, sequester and government shutdown in the United States, it is clear that turbulent economic waters remain for the foreseeable future. However, a balanced budget is essential for the long-term financial health of the government and Canada and generates confidence in the Canadian economy.

We have promised to balance the budget by 2015. That promise we will keep, and we will go further. Our Government will enshrine into law its successful and prudent approach.

Our balanced budget legislation will require balanced budgets during normal economic times and concrete timelines for returning to balance in the event of an economic crisis.

I am pleased with this additional commitment to financial responsibility. However, to that end we must balance the budget, and budget 2013 keeps us on track to do so. We have promised to do so without raising tax. To do so we must reduce government spending.

Budget 2013 builds on these efforts to reduce government spending by announcing an additional $1.7 billion in ongoing savings, including examining departmental spending to ensure that government operations are managed as efficiently as possible; reducing travel costs through the use of technology by using remote meeting solutions, such as telepresence and video conferencing; modernizing the production and distribution of government publications by shifting to electronic publishing and making print publications the exception; standardizing government information technology to reduce costs; and by closing tax loopholes and keeping taxes low and competitive in order to give businesses the incentive to create jobs.

Lastly, as part of our commitment to return to balanced budgets by 2015, we must ensure that our economy continues to grow and create jobs. To this end, the Prime Minister announced at the G20 summit in St. Petersburg in September that the Government of Canada is committed to achieving a federal debt to GDP ratio of 25% by 2021. The government will consider advancing the planned targets if economic growth is significantly stronger than anticipated.

Canada currently has the lowest total government debt of any nation in the G7, a number that includes the entire provincial, territorial and local governments, as well the Canada pension plan and Quebec pension plan. In fact, Canada's net debt was less than half the G7 average in 2012, coming in at 34.6% of GDP.

Low debt levels will result in lower taxes for Canadians as less money is required to service the debt. Low debt levels also mean a strong investment climate that supports job creation and economic growth. Job creation and economic growth have been our government's focus since we began to tackle the recession, and that will not change.

That is also why budget 2013 introduced the Canada job grant to provide for retraining of individuals who are looking to retrain and fill some of the numerous vacancies in our economy. The government remains singularly focused on creating an economic climate where businesses of all sizes are able to create jobs and invest in their operations and where we address the issue of people without jobs and jobs without people. Everyone wins.

Budget 2013 also aims to balance the budget by penalizing those who seek to avoid paying taxes. Through budget 2013, we are introducing new administrative monetary penalties and criminal offences to deter the use, possession, sale and development of electronic suppression of sales software designed to falsify records for the purpose of tax evasion.

We are also closing tax loopholes relating to character conversion transactions, synthetic dispositions, leveraged life insurance arrangements and other schemes, to ensure that everyone pays their fair share. If people want the benefit of being a Canadian, that involves paying their share.

To better promote economic growth, we have also extended the hiring credit for small business. It gives small business relief from the employer's share of employment insurance premiums paid in a year. It does this by crediting up to $1,000 on the payroll account based on the increase in an employer's EI premiums paid in one year over those paid in the year before. The simple aim of this measure is to encourage job creation in small businesses, which form the backbone of our economy.

Finally, once the budget is balanced, we will begin paying down debt again. As promised in the Speech from the Throne, we will bring the federal debt to GDP ratio back down to pre-recession levels by 2017. Deficit elimination, balanced budget legislation and paying down the debt are essential cornerstones of a strong and healthy economy.

In closing, please allow me to quote the C.D. Howe Institute and its reaction to budget 2013:

...the 2013 budget should be well received by markets. Budgetary balance is projected based on reasonable assumptions and within the previously announced time frame.

That quote speaks for itself. Budget 2013 has been well received by the markets, and Canada is one of the few nations retaining their AAA credit rating. It was one of the last nations into the recession, it came out of the recession quickly and in the past four years the economy has created over one million net new jobs.

This is great progress, but on this side of the House we are not content with that. We are eager for more. It is clear that the Canadian way of prudent fiscal management comprised of debt repayment, responsible stimulus, timely deficit elimination, balanced budgets in the medium term and returning debt to pre-recession levels is the way to address extraordinary economic times.

It lays the foundation for security and prosperity for years to come, in fact generations to come. I am encouraged to know that the nation my grandson, Tyler, is growing up in is safer, stronger, more prosperous and filled with opportunity.

[Pierre-Luc Dusseault, NDP, Sherbrooke, QC]

Mr. Speaker, I respect my colleague and I am pleased to ask him a question. His speeches are often well balanced and I am sure his answer will be no exception.

Bill C-4 contains various measures. Why did the government choose to include provisions on the Supreme Court, for instance, in the budget implementation bill? Can he explain the link between these provisions and his government's budgetary measures that he boasted about throughout his speech? He boasted about his government's job creation record. We have heard all about that.

Can he make the connection between that and the various provisions that have nothing to do with a budget? Can he explain what prompted his government to make these choices?

[Laurie Hawn, Conservative, Edmonton Centre, AB]

Mr. Speaker, in fact, Canada is an extremely diverse country and there are many things that go into making Canada a strong country.

In terms of the economy, part of that is a very sound legal system, a very sound justice system. Obviously, the pinnacle of that is the Supreme Court of Canada. Therefore, it is very important that we have, at all levels of the justice system, measures and the right kind of people in place to support the Canadian economy and the challenges that come before the Canadian economy, which may in fact also come before the courts.

While it may seem a bit too diverse for my friend, and I understand that, that is one of the reasons behind some of the measures that we have proposed.

[Harold Albrecht, Conservative, Kitchener—Conestoga, ON]

Mr. Speaker, I listened with interest to my colleague's comments about the budget and I was especially intrigued by his comment about budget 2013's provision for the Canada job grant.

One thing I did shortly after budget 2013 was to hold a round table in my community. A round table was held at Conestoga College where industry leaders were bought together who were looking for skilled trades people. Without exception, every person around that table applauded the Canada job grant.

It is unfortunate that many of the provinces are dragging their heels on this at a time when what we are doing now is not working. I cannot understand why they would not look at a model that would create jobs. Employers are eagerly trying to help us with that task. I wonder if my colleague could comment on the kind of support that he has seen in his riding.

[Laurie Hawn, Conservative, Edmonton Centre, AB]

Mr. Speaker, I thank my colleague for his very relevant question.

In Edmonton Centre, Kitchener and probably pretty much every place across the country, employers, especially small businesses, are looking desperately for people with trades skills. There are a lot of university-trained folks, and as good as a B.A. and B.Sc. might be, it does not really equip them to do some of the jobs we need doing. We have a country to build and we need skilled tradespeople. Small business is looking for them everywhere.

One thing the federal government has to do is provide leadership, and that is exactly what we have done in bringing forward the Canada job grant. I think the provinces will get on board one by one when they realize that. I know Alberta is being pressured and I am sure other provinces are being pressured by small businesses, saying, “Let's get on board here”. The federal government is providing leadership. They need to get on board because this is the right thing to do for the Canadian economy, it is the right thing to do for small business, and it is the right thing to do for Canadian workers.

[Jonathan Tremblay, NDP, Montmorency—Charlevoix—Haute-Côte-Nord, QC]

Mr. Speaker, on Tuesday evening a presentation was made on this bill, but in English only. The presentation was made again last night in English and French, after the debate started.

The people making the presentation admitted that they did not consult everyone affected by the measures in this bill.

What does the hon. member think about that?

[Laurie Hawn, Conservative, Edmonton Centre, AB]

Mr. Speaker, I was not privy to that particular conversation, so I cannot make a direct comment on that. The government consults very widely. Invariably, in doing those kinds of consultations, there is always going to be someone who says, “You didn't ask me”. That is a valid comment. The government tries very hard to consult as widely as possible. Part of that is people coming forward to say, “You need to hear from me, too”. It is not just a one-way street; it is a two-way street.

The government makes every effort to consult as widely as possible. Invariably, in an enterprise as big as the Government of Canada, as big as some of the things we are doing, someone is going to feel left out from time to time.