Mr. Speaker, I am very pleased to rise to speak to this very important issue, especially after the hon. member for Victoria. He is relatively new to the House, but he gives a really good impression when he talks about financial matters, particularly regarding the Conservative government's hypocrisy when it comes to fiscal matters.
That is why we are standing up here today and why we are having this opposition day. We want to talk about the Conservative government's hypocrisy when it comes to fiscal matters, particularly regarding its statements on finances, which do nothing to enhance its credibility—quite the contrary.
I am sure everyone remembers the now-famous phrase spoken by George Bush Sr. in the 1990s, just before he became the President of the United States. He had just won the Republican nomination and said the following simple phrase: “Read my lips: no new taxes.”
The Conservative government, the Minister of Finance and the Minister of State for Finance had their own George Bush moment here in the House. At least they saved themselves the embarrassment of saying “read my lips”.
However, just this past February, at the Economic Club of Canada, the Minister of Finance said that there would be no new taxes in this budget. The day after the budget was presented, the Minister of State for Finance said that Canadians would not find any new taxes in it. We went over it very carefully, and there they are, clearly set out in annex 2 of budget 2013 tabled by the Conservatives.
We clearly see an $8 billion increase in taxes over the next five years. We can debate the validity of some of these measures, but that is not what the Conservative government wants to do. It wants to deny the fact that it plans to increase taxes for Canadians to the tune of $8 billion over the next five years.
There are so many tax hikes that I cannot address them all. However, I would like to mention four in particular. My colleague clearly described how approximately 72 countries will no longer benefit from the general preferential tariff, which applies to the customs tariffs paid by various countries. This measure applied to 72 countries, most of which are developing countries. Over 1,200 products from these 72 countries will no longer benefit from this tariff, which means that the government will be taking between $1.5 billion and $1.7 billion more from the pockets of Canadian taxpayers over the next five years.
The Conservatives presented two arguments. First, they said that they are removing from the list countries that should no longer be there, such as China, South Korea and Taiwan—countries that have now reached a point where they are more developed. In such cases, the measure might be justified.
However, the government is also removing from the list countries that it now considers to be fully developed, such as Kazakhstan, the Dominican Republic, Cuba and Venezuela. The Conservative government is justifying the removal of these countries from the list by saying that they are now fully developed and that they no longer need the general preferential tariff.
Yet, the general preferential tariff helps these developing countries, which need markets in order to export their products and further promote their economic growth. The only way the government can justify this measure is on the pretext that the GPT was a form of foreign aid for these countries. That is an interesting rationale.
If Canada wants to develop these new markets, it must work with countries that have the means to purchase our goods. In order to do that, we have to help these countries to improve their economy, particularly through these tariffs.
What is more, it is not just these countries that pay the price. Canadian consumers are also victims. I would like to talk about a few of the examples mentioned by the hon. member for Victoria. Take bicycles and tricycles. Right now, 50% of the bicycles sold in Canada come from these 72 countries. The government is proposing a 4.5% increase in taxes or duty on imports. This represents a tax hike of over $6 million, which will come from consumers' pockets.
Take baby strollers for example. Ninety percent of Canada's baby stroller market is supplied by these 72 countries. It will therefore be difficult for us to avoid these taxes on imports.
That is the equivalent of taking an extra $1 million or so out of consumers' pockets. Plastic school equipment fares no better in a market where 61% of it is imported. That tax hike equals $1.3 million.
Ninety per cent of wigs typically used by cancer patients undergoing treatment are imported. The wigs never used to be subject to a tariff, but the proposed increase is equal to about 15.5% of their price. That will rob Canadians of $4.6 million. It does not end there, though. Prices of 1,200 products are going to increase significantly.
Before I move on, I would like to mention, as my colleague did, the dedication of Mike Moffatt, who is an assistant professor and part of the Business, Economics and Public Policy group at the Richard Ivey School of Business at the University of Western Ontario.
This budget contains more than just import taxes, however. It also contains tax hikes because it eliminates tax credits that are crucial to economic development. As I mentioned during debate on the budget, the Conservative government will gradually eliminate the tax credit for labour-sponsored venture capital corporations.
If the Conservative government claims that creating tax credits for sports, the arts and so on is a tax cut, then believe me, eliminating a tax credit is a tax hike for Canadians. This tax hike is worth $355 million over five years, and it will be particularly detrimental to economic development in Quebec, where approximately 90% of these tax credits were claimed. That is an extremely important point, because labour-sponsored funds have been a model in Quebec and an extremely useful tool for economic development. These funds were created in the 1980s, during a time of financial hardship, when venture capital did not really exist in Canada. That is when the Fonds de solidarité FTQ was created. In the past 30 years, the Fonds de solidarité FTQ has invested $10 billion in the Quebec economy. In recent years, the Fonds de solidarité FTQ has created or maintained 500,000 jobs.
This tax credit exists because it fulfills a specific need that other venture capital firms—specifically private-sector ones—do not, and because it makes it possible to invest in companies that are starting up or struggling. This explains why the return is lower with these funds, but that does not prevent small investors from contributing to the funds to save for retirement—since these are a type of RRSP—and also to help develop the local economy.
In my region, the Lower St. Lawrence, the Fonds de solidarité FTQ assists 25 different businesses that have received absolutely nothing from private funds. On the one hand, the Conservatives are getting rid of this $355 million in tax credits, and on the other hand, they want to give another $400 million for private equity funds. This is absolutely ridiculous, and even Canada's Venture Capital and Private Equity Association, which represents private funds, is opposed to the elimination of the tax credit for labour-sponsored funds.
The Conservatives have messed up, since this 15% tax credit is not going to the Fonds de solidarité or the CSN's Fondaction, as some may have believed. Small investors—the people who reinvest and who can benefit from this tax credit—are the ones who are being cheated here.
With this measure, the Conservatives will not only damage a tool that is essential to Quebec's economic development, but they will also discourage people from saving, which is extremely important, especially in Quebec. Of course, the other provinces are being encouraged to step up and create this type of fund. These funds invest in different businesses, and they also invest heavily in private venture capital firms.
I will talk about two other measures quickly, since my time is running out. First I want to talk about the $205 million tax increase over five years, because an additional credit for credit unions is being eliminated.
Once again, the government is going after credit unions with specific mandates to invest in small rural municipalities. It is making it hard for them to compete with the banks. This represents another tax hike for business.
Second, we can debate the elimination of the tax credit for dividends that specifically affects SMEs and owners of SMEs that are not publicly owned or publicly traded. This represents a significant tax hike. We are talking about a tax grab of $2.34 billion over five—