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House of Commons Hansard #114 of the 41st Parliament, 2nd Session. (The original version is on Parliament's site.) The word of the day was businesses.

Topics

Opposition Motion—Employment InsuranceBusiness of SupplyGovernment Orders

3:10 p.m.

Liberal

Kevin Lamoureux Liberal Winnipeg North, MB

Mr. Speaker, we need to recognize that there are hundreds of thousands of small businesses all across our great land. There is absolutely no doubt whatsoever in my mind, and in the minds of many individuals, including academics, that the government's position on the small business job credit is somewhat perverse, in the sense that in certain situations there would certainly be job losses. This is not something that just the Liberal Party is saying; even outside sources are saying it.

It is silly for us to jump to the conclusion that it would not be a problem. It would be, and the government, the Minister of Finance, and the Prime Minister in particular should recognize that their program is flawed. There is a flaw in there. Even by the government's own admission, it is talking about maybe 25,000 jobs; we are talking about in excess of 100,000 more jobs than the 25,000 that it is hoping to achieve.

The Liberal proposal is a better idea, and it does not cost a dime more than what the Conservatives are proposing.

Opposition Motion—Employment InsuranceBusiness of SupplyGovernment Orders

3:10 p.m.

Conservative

Dick Harris Conservative Cariboo—Prince George, BC

Mr. Speaker, I am going to be splitting my time with my learned colleague from Elmwood—Transcona.

I am pleased to address this motion raised by my Liberal colleague across the way. I want to focus my time on the subject of tax relief and other support for small businesses. I do so because long before our government introduced the small business job credit, we continually acted to leave more money in the pockets of our nation's businesses and with the Canadians who work for them.

As the member opposite is aware, our government has introduced 180 tax relief measures to keep our economy strong and growing. We have been committed to using Canadians' tax dollars in the most prudent and effective way possible. Let us talk about broad-based tax relief for a moment.

This responsible and disciplined use of taxpayers' hard-earned dollars is expected to get us back to a balanced budget in 2015. That is a remarkable achievement, given what we were confronted with just a few short years ago. Perhaps the only person in Canada who would disagree with that would be the leader of the Liberal Party. He criticized our action to balance the budget because, according to him, a balanced budget happens all by itself. That is some business sense.

Thankfully, our government understands the importance of sound economic management. As most members know, when disaster struck the world economy, we took immediate and precise action. In the middle of the world's worst global recession since the Great Depression, we introduced the economic action plan to protect Canadian business and protect Canadian jobs. In fact, even before the global crisis, our government was focused directly on the economic fundamentals, in particular on paying down debt and delivering broad-based tax relief to Canadian job creators and families alike.

As a result of our low-tax plan, the average family of four is saving about $3,400 a year in taxes in the year 2014. We also cut the GST from 7% to 5%. We introduced the tax-free savings account to allow Canadians to save, tax-free. Since then, more than 10 million Canadians have opened a tax-free savings account. We have cut taxes in every way that the government collects them: personal taxes, consumption taxes, excise taxes, and business taxes.

I want to focus on small business tax relief now.

Allow me to highlight a key driver of growth in our economy: Canada's small businesses.

Let us be clear. The small business job credit is fantastic news for the small businesses right across this country. Our small business job credit will lower EI payroll taxes by 15% and save small businesses over $550 million. In addition, we have made certain that beginning in 2017, premiums will be set according to a seven-year break-even rate, ensuring that premiums are no higher ever than they need to be.

Unfortunately, the Liberal Party's EI proposal, which is full of bad math and encourages business to lay off workers, again demonstrates that the Liberal leader has yet to understand small business.

However, let me quote someone who does understand small business. Jay Myers, from the Canadian Manufacturers & Exporters, said, “The Small Business Job Credit will help a powerhouse — the thousands of small businesses — of the Canadian economy become more competitive”. He makes a good point.

On important matters such as these, I would kindly encourage the members of the Liberal Party to listen to experienced business professionals rather than their less experienced leader.

Small businesses are an absolutely vital component of job creation, and we are committed to supporting them. That is why we introduced the small business job credit in the first place, but it is just the latest step in a long line of actions by our government.

Indeed, support for small business has been and continues to be a critical pillar of our economic action plan. We reduced the small-business tax rate to 11% and increased the amount of income eligible for this lower rate to $500,000 from $300,000. As a result, we have lowered the tax bill for small businesses with $500,000 of taxable income by over $28,000. That is a 34% decrease in their taxes, and they appreciate it.

We also increased the lifetime capital gains exemption to $800,000 in 2014 and indexed the new limit to inflation going forward. By doing so, we are increasing the potential rewards of investing in small business and making it easier for owners of small businesses to transfer their family business to their next generation.

Our government has also reduced the red tape burden for small and medium-sized businesses to help them navigate the tax system. They now face fewer regulations, and the cost of red tape has been reduced by nearly $20 million annually.

We have also committed to enshrining a one-for-one rule into law. For every new regulation added that imposes a burden on businesses, one must be eliminated. It is one for one.

Though we have lowered taxes, they still continue to absorb dollars that would otherwise be used by business owners to seize opportunities for growth and create jobs. Accordingly, and as indicated in our economic action plan 2014, further tax relief for small businesses will be a priority for our government following the return to balanced budgets in 2015.

These steps are just a few of the many ways our Conservative government has demonstrated its commitment to the Canadian economy and to small business in particular. The result of that commitment is clear. I think everyone in the House will agree—even those across the way, should they choose to admit it—that the results we have obtained are somewhat remarkable.

Few countries in the world have emerged from the global economic crisis as strong and as resilient as Canada, led by our Conservative government. Indeed, the Canadian economy continues to be envied all around the world. After eight consecutive years of making the right economic choices, Canada remains strong and will be stronger going forward. As the small business job credit makes clear, we are not done yet.

Small and medium-sized businesses are crucial to Canada's long-term prosperity. Canadians depend on the jobs that they create and the services they provide. Our government supports these businesses and Canadians by keeping taxes low and cutting red tape. Indeed, we have received international recognition for our world-class business tax system. Together with our government's commitment to return to a balanced budget in 2015, these measures will further strengthen Canada's business climate and economy.

By laying a solid foundation for jobs and growth through tax relief, our government is helping to ensure that our country is well positioned to face future challenges and that all Canadians have the opportunity to fully participate and share in a strong and prosperous Canada.

Opposition Motion—Employment InsuranceBusiness of SupplyGovernment Orders

3:20 p.m.

Liberal

Kevin Lamoureux Liberal Winnipeg North, MB

Mr. Speaker, I am sure the hon. member has heard what the Conservative government is proposing and has a fairly decent understanding of some of the drawbacks to that program. It is expected at best to generate between 25,000 and 30,000 potential jobs, and that is at best.

On the other hand, the Liberal proposal that we are debating here today would be much more universal in its application. We have heard numbers describing potentially in excess of 150,000 jobs that could be created.

I wonder if the member could comment on why the government would not be in favour of a reform or a change to its program that would allow for greater opportunity and prosperity for our country.

Opposition Motion—Employment InsuranceBusiness of SupplyGovernment Orders

3:20 p.m.

Conservative

Dick Harris Conservative Cariboo—Prince George, BC

Mr. Speaker, unlike the Liberals, who have come up with some pretty outlandish schemes to say they support business, we have a small business jobs plan that was created with the help of small business organizations. We have received great support from them. We have heard great comments that this is what small business was looking for.

We have proved that when a government can lower taxes to small business, it creates more jobs and benefits the economy. We do not have to take any lessons from the Liberal Party to understand what to do to help small business.

Opposition Motion—Employment InsuranceBusiness of SupplyGovernment Orders

3:20 p.m.

NDP

Nathan Cullen NDP Skeena—Bulkley Valley, BC

Mr. Speaker, a good government always takes lessons, to try to achieve the best results for Canadians.

I have a question for my friend across the way. The Conservatives came out with this EI raiding plan. They are going to raid the EI fund again, which Canadians have seen, a fund that workers and employers pay into, not the government, to use it for their scheme, which gives a $200 incentive to hire somebody and a $2,200 incentive to fire somebody. If that is the Conservatives' math on how to create jobs, that is interesting.

Then the Liberals popped up with the motion we have today, which they cost out at $225 million—follow the math here—but if the plan actually does what the Liberals hope it does and creates the number of jobs they claim, it would actually end up costing $1.5 billion. We have seen this before. Math is difficult, and we know we have to go through it very slowly.

Here is my question for my friend. There was a proposal in the last election to create a small business hiring tax credit. We made this in conjunction, as he says, with the small business community, which very much liked it, and it tied tax relief to the creation of a job. I know that may be a radical proposal for some in this place, but New Democrats believe that in order to get something, one should give something, and the giving is the creating of that job, which we all want.

This was something the Conservatives picked up, adopted, and put into budgets for two consecutive years, and the Canadian Federation of Independent Business loved the idea. Small businesses loved the idea. I imagine those in the member's riding of Cariboo—Prince George did as well.

Why, for heaven's sake, would the government take a program that works and creates jobs, particularly jobs for younger Canadians, with the implicit connection to this tax break and, instead, cut it? It killed the program entirely and then created a program that dips into the EI fund yet again after billions have been raided to create a program that does not have any link at all to creating jobs, which is going to cost some hundreds of millions of dollars to the taxpayer.

Why, for heaven's sake, would the government take a program that works, kill it, and instead, replace it with a program that, at best, is a wish and a prayer to create the kind of economy we want?

Opposition Motion—Employment InsuranceBusiness of SupplyGovernment Orders

3:25 p.m.

Conservative

Dick Harris Conservative Cariboo—Prince George, BC

Mr. Speaker, in some 20 years that I have been in the House, I have heard one message from small businesses all across this country, and that is that they consider the EI premiums a payroll tax. We promised them at every step that we would seek ways to reduce that payroll tax, the EI premiums, and we have done that.

We have received high praise from coast to coast to coast from small business owners thanking us and saying we have looked after their thresholds for business tax, we have lowered their business rate to 11% from 15%, and we have raised the capital gains threshold, and they thank us for the stable economy that we have been able to keep through this recession, when other nations were suffering in pretty desperate times.

They are thanking us for this latest move. We have reduced payroll taxes and we have given them a plan to lower their payroll taxes. That is what they have been looking for, and there are going to be new jobs as a result.

Opposition Motion—Employment InsuranceBusiness of SupplyGovernment Orders

3:25 p.m.

Conservative

Lawrence Toet Conservative Elmwood—Transcona, MB

Mr. Speaker, I appreciate the opportunity to outline how our Conservative government is putting more money in the hands of our job creators, the small business entrepreneurs who drive our economy.

Sadly, this motion we are debating today clearly illustrates the Liberals complete misunderstanding of how economies grow and prosper in the real world.

The motion would suggest somehow that lower payroll costs and taxes for small businesses would result in job losses. The reality is entirely the opposite. Small business owners are focused on growing their business and look further down the line than the narrow-sighted approach of which the Liberals accuse them. They will not damage their long-term growth for the sake of a few hundred dollars in the short term.

The reality is that lower payroll taxes actually create jobs. They empower Canadian entrepreneurs, leaving more of their own hard-earned money for them to invest and grow their businesses, supporting the families and communities that depend on them.

Our government's recent small business job credit is just the latest in a range of measures that would cut costs and support small businesses in creating jobs and growth.

The small business job credit would effectively cut EI payroll taxes by 15% and save small businesses over $550 million. Also, in keeping with our efforts to minimize the paper burden and cut red tape for small businesses, this credit would require no new paperwork. The Canada Revenue Agency would automatically determine eligibility and calculate the amount of the credit. Indeed, the small business job credit is good news for small business and good news for jobs and growth.

However, the Liberals need not take my word for it. They can hear this, should they choose to listen, from the people who would know best: small businesses themselves.

Dan Kelly, President of the Canadian Federation of Independent Business, has concluded that:

...the credit will make it...easier for small employers to hire that...extra worker, increase employee wages or...pay for workplace training....

He concludes that:

Across Canada, we estimate the $550-million left in the hands of small businesses will lead to 25,000 person years of employment....

He adds that:

...it couldn't come at a better time. ...CFIB's most recent Business Barometer found that the economy is trending up, and more small businesses are looking to expand than shrink. Measures like this give reassurance to job creators, which can make the difference when deciding whether to hire....

Perhaps most important, Mr. Kelly also had words for those espousing the sort of ridiculous claim at the core of today's opposition motion. He has stated, and I quote:

Some suggested companies will lay off staff or hold off hiring to stay under the threshold to receive the credit. I've got news for them: small business owners don't have time to research the eligibility requirements, then carefully manage their payroll to receive a few hundred dollars over two years.

Unlike the Liberals, we understand small business owners are focused and busy with creating jobs and the growth of their businesses. They discredit these entrepreneurs by making allegations that they will spend time trying to game the tax system for the short term at the expense of their own future ability to grow.

We have more confidence in their long-term planning. We believe they want to grow their businesses the Canadian way, through hard word and innovation; and moreover, we appreciate the contribution they make to the Canadian economy. Small businesses employ half of the working men and women in Canada's private sector. They account for a third of our country's GDP. Small businesses drive our prosperity and give back to the community, which is why the small business job credit is just the latest of our government's effective actions to support their efforts.

We have cut their red tape. We implemented the one-for-one rule: for every new regulation imposed by government, a regulation must be removed. By the end of 2013, that rule had reduced the administrative burden by $20 million.

Then we cut their taxes. We cut the small business tax rate to 11%, and increased the amount of income eligible for this lower rate. Together, these changes are providing small businesses with an estimated $2.2 billion in tax relief in 2014 alone.

Last year, we froze EI premiums for three years, providing total savings of $660 million in 2014 alone, and we instituted the seven-year break-even rate, starting in 2017 to ensure that any surplus in the EI account will be used for EI expenses.

With these and other measures introduced by our Conservative government, Canada is a more attractive place to invest and do business. In fact, Canada leapt from sixth to second place in Bloomberg's ranking of the most attractive destinations for business. According to KPMG, Canada's total business tax costs are the lowest in the G7, and 47% lower than those in the United States.

However, we will not be satisfied with this success. We live in difficult economic times and cannot be complacent.

This job credit represents yet more action by our government to lower taxes for all Canadians. An average family of four now pays $3,400 less in taxes as a result of actions taken since our government took office.

Under our government, the amount of income tax paid by small businesses with $500,000 of taxable income has declined by over 34%. That is a tax saving of over $28,000 that can be reinvested in the business to create jobs. Let us not kid ourselves. Small businesses will reinvest in their growth and in their employees as they are able to. These measures will support them in being able to do this.

Once we return to balanced budgets next year, our top priority will be to lower taxes for Canadians even more. We will do so on the understanding that lower taxes and payroll costs support jobs and growth. I will, therefore, in conclusion, encourage the hon. members to support us in our efforts and to reject today's motion.

Opposition Motion—Employment InsuranceBusiness of SupplyGovernment Orders

3:30 p.m.

Liberal

Kevin Lamoureux Liberal Winnipeg North, MB

Mr. Speaker, the program the Liberal Party is suggesting here today would in fact assist a great number of Canadians from all over our great nation in having an opportunity to gain employment. What we are doing is suggesting that there be a break for those companies and small businesses that hire a new member of staff. It is much more universal in its application than what the Conservatives have proposed through their program.

Our program has the potential to see in excess of 150,000 Canadians employed. I wonder if my friend and colleague might want to provide some comment regarding that fact. Our plan versus the government's plan is the same amount of money and the same sort of financial commitment, yet our plan would have the potential to generate literally six times as many jobs here in Canada.

Opposition Motion—Employment InsuranceBusiness of SupplyGovernment Orders

3:30 p.m.

Conservative

Lawrence Toet Conservative Elmwood—Transcona, MB

Mr. Speaker, the thing is that the math does not work in the Liberal plan, for starters. The Liberals claim that it would be at the same cost, yet anybody who has done the math realizes that it is much higher than the costs they are bringing forward and trying to claim they will bring forward.

The other question that rises from their proposal is with regard to their cynical outlook. I do not share their cynical outlook on entrepreneurs and employers: that they would let people go in order to stay under a certain threshold. In their plan, they would actually open it up to everybody, but to be as cynical as they are, why would employers not let people go and then rehire them in a month in order to get this credit? That is what they believe employers would do, so why would they bring forward a plan that would open it up to everybody across the board to do this?

It seems really strange. They think they have this great plan. They have a cynical outlook on employers and entrepreneurs, yet their plan would open it up to much more abuse than anything we have put forward at this point in time. I find their whole idea and strategy and their questioning today very strange.

Opposition Motion—Employment InsuranceBusiness of SupplyGovernment Orders

3:35 p.m.

NDP

Hélène LeBlanc NDP LaSalle—Émard, QC

Mr. Speaker, I listened with great interest to the speeches of the Conservative members, especially when they were talking about their so-called commitment to small businesses. As the critic for co-operatives, I would like to remind the Conservatives that co-operatives are businesses too. I wonder what the Conservatives have against this type of business, because they are always creating obstacles for co-operatives.

Given that the government is praising small businesses and that co-operatives are small businesses, why is the Conservative government always standing in the way of the development and growth of co-operatives?

Opposition Motion—Employment InsuranceBusiness of SupplyGovernment Orders

3:35 p.m.

Conservative

Lawrence Toet Conservative Elmwood—Transcona, MB

Mr. Speaker, it again comes back to looking at this as an opportunity for growth for Canadian small businesses to grow, to grow our economy, and to help them create jobs and opportunities for Canadians across this country. We know that over 50% of jobs in Canada are created by these entrepreneurs and we are here to support them. We are here to support them going forward and to make sure we continue to create the jobs and opportunities for Canadians that need to be created.

I ask my hon. colleague why she would be opposed to a measure that creates jobs and opportunities for Canadians. We need to look at this in light of the proposal that has been brought forward. The Liberals have a very simple motion today that looks at entrepreneurs and employers in a very cynical manner, and I do not share that viewpoint.

I am a small businessman myself and I also know many small businessmen and businesswomen across this country. I know for a fact they would never look at this as a way they could work through the tax system to try to make a few hundred dollars that is going to cost the future growth and development of their businesses. That is a complete myth the Liberals are trying to perpetuate and I find it shameful.

Opposition Motion—Employment InsuranceBusiness of SupplyGovernment Orders

3:35 p.m.

Liberal

Judy Sgro Liberal York West, ON

Mr. Speaker, I am very pleased to have an opportunity to add my comments to this important debate today. I will be splitting my time with the member for Random—Burin—St. George's, who will follow me shortly.

I rise today as the representative for York West, what I call the best riding in Canada, but I guess we all try to say that. I certainly believe it and we have the best constituents around. However, inasmuch as my riding is a wonderful place to live, work and play, like many communities, York West has been hard by the recession and the subsequent global economic slowdown.

People are asking for help and unfortunately the current government has again turned its back on my riding and others. On September 11, the government announced its so-called plan to create jobs, a plan that does not even begin for several months. Then after my constituents and others wait until January 2015 for help, they will be handed a strategy that has no hope of creating any jobs. Quite the contrary, the Conservatives' small business job credit has been panned by most economists. In fact, credible economists have called this plan exactly the opposite, a disincentive for companies to grow.

In contrast, the Liberal counter-proposal would reward companies that are growing and creating new jobs for my constituents and for workers across Canada. That is the choice: a government that keeps looking backward and trying the same failed and tired plans over and over again, or a Liberal plan that is forward thinking and very practical.

Time and time again the government has proven an ingrained ineptitude when it comes to financial management. The Prime Minister fancies himself an economist, but his ideas, which are growing more and more outlandish, are constantly out of step with industry, labour and the financial community. I now understand why the Conservatives spent $1 billion, taxpayer dollars, on advertising to boast about their so-called fiscal plan, because it takes $1 billion to create an ad campaign that tries to weave the words “Conservative” and “success” into a single commercial, but it certainly is not supported by facts.

For eight years, the Prime Minister has been telling Canadians, with a wink, to trust him. He says his plan will put a chicken in every pot, but after all this time, Canada's employment numbers still trail our major trading partners. Over the past year, Canada has experienced very little job growth. From August 2013 to August 2014, the entire country created a net 81,000 new jobs with only a fraction of those being full-time. Sadly a part-time job serving coffee, flipping burgers, or mending clothes is often not enough to raise a family. These jobs are important but they rarely offer pension security, growth opportunity or wages over and above the poverty line.

In contrast to Canada's dismal job creation performance, the U.K. created 775,000 jobs over the last 12 months and the United States created 2.2 million. This means that the percentage growth in total employment in the U.K. was up 2.6%. The U.S. was up 1.5% and unfortunately Canada was up a bleak 0.5%. The Prime Minister may like to crow about this record, but Canadians know that a flimsy crow is certainly not a chicken in every pot.

The government has dumped hundreds of millions of dollars on boardroom tables throughout Canada and then justifies that giveaway by promising that the payoff would protect Canadian jobs. As we watched last week the Stelco meltdown killing hundreds of good manufacturing jobs, Canadians are growing weary of empty Conservative promises. The Minister of Finance wonders why Canadians are carrying more household debt than ever before. This is why. The Minister of Finance wonders why Canadians are carrying more credit card debt than ever before. This is why.

People are not putting new yachts, cars and summer homes on their credit cards. People are not extending their lines of credit to finance new capital ventures or exotic vacations. People are accumulating debt to pay for food, rent, daycare, education, medicine and other essentials of life. The fact the government would see all of this and still table a strategy like this EI plan clearly shows that Conservatives are out of touch.

Of course, I understand why the need for intelligent policy would vex this particular Prime Minister and his front bench, so let me frame it another way. The Liberals have a real solution, an EI premium exemption for new jobs created in 2015 and 2016. This represents a benefit of up to $1,279.15 for each newly created job. For the same price as the Conservative scheme, our proposed EI premium exemption could help create over 175,000 new jobs.

We must create the right conditions for jobs and growth that benefit the middle class. In effect, we want success around the kitchen tables, not just the boardroom tables. This requires investments in infrastructure, training, innovation, and expanding trade, as well as competitive tax breaks.

Under the Conservative scheme, only businesses with EI payroll taxes below $15,000 get any money back, a move that creates a perverse incentive for businesses to fire workers in order to get below the $15,000 threshold. In fact, Conservatives are proposing that the maximum benefit for a company that pays just under $15,000 in EI premiums would be $2,234; however, a company that pays one dollar more would receive nothing at all.

Economists, save for the one across the way, have pointed out that this could result in companies holding back on pay increases, reducing hours, or in the worst-case scenario, laying employees off. As strange and as confounding as this may seem, the Conservative scheme to create jobs offers up to $2,200 for firing a worker and only $190 for hiring a worker. I suppose this reverse logic will be covered in the next round of commercials and ads the government will be commissioning at taxpayer expense, but I hope so because when presented with these numbers and when given the actual facts, Canadians will make their own determination. I know my constituents will see through this deception.

The NDP have spoken very critically today of the motion, but I fear that their opposition stems from partisanship rather than the facts. First, let us look at the NDP costing of our proposal. The NDP claims that our plan would create at least a million but probably closer to 1.5 million net new jobs next year. That is great, but given that there are 1.3 million unemployed Canadians, that would be quite a feat.

However, if it did create 1.5 million new jobs, the income tax generated alone by those new employees would more than pay for the cost of the credit. Just to be clear, on the one hand, the NDP is arguing that under our Canadian plan for the workers, Canadian businesses and governments would all be big winners, but on the other hand, it says it cannot support it.

Second, the NDP's last platform had this commitment. It specifically promised to establish a job creation tax credit that would have provided funding on a per-hire basis. Specifically, it promised to give employers a one-year rebate on CPP contributions for each new hire. According, though, to the NDP rhetoric today, it is accusing Jack Layton of having wanted to raid the CPP for his pet projects. Imagine.

Instead of trying to sow divisions in the House, I think the NDP should really take a second look at the motion and reconsider it. Possibly its members did not fully understand it.

In 2008, the Prime Minister said the recession and the global economic slowdown would never happen. When Liberals disagreed, Conservatives accused us of fearmongering. Starting in 2009, the Prime Minister raided the cupboard and spent nearly $100 billion on gazebos and other stimulus measures to end the recession that he said would never happen. When Liberals disagreed, again, Conservatives accused us of not being up to the task. Today, we are faced by another fly-by-night Conservative plan to fix an economy that they said was not broken, and again, they are dismissing Liberal objections out of hand.

For eight years, we have been listening to a Prime Minister with a legacy of being wrong on issues involving the nation's finances. Perhaps it is time for a fresh arm. Perhaps it is time to take a look at the Liberal plan, a plan that would create the right conditions for jobs and growth for Canadians and for Canada.

Opposition Motion—Employment InsuranceBusiness of SupplyGovernment Orders

3:45 p.m.

Conservative

Stella Ambler Conservative Mississauga South, ON

Mr. Speaker, I would like to ask the member for York West about the concept of a disincentive. She mentioned in her speech that certain economists have called the Conservative plan for reducing EI premiums a disincentive.

I wonder if the member is aware that we are not the ones dismissing Liberal suggestions out of hand. It is actually very respected organizations, folks who know a little something about the economy. The Canadian Federal of Independent Business is dismissing Liberal ideas out of hand when they say that small businesses in Canada should be thrilled with this announcement. They told us time and time again that payroll taxes like EI are the biggest disincentive to hiring, so any relief the government can provide will encourage them to hire more Canadians.

The member also mentioned that the Minister of Finance is “inept”. I believe that is the word she used. It is surprising that she would call someone inept on the economy when he has an MBA from Harvard, as opposed to the Liberal leader, who thinks that budgets balance themselves.

Maybe the member could tell us which economists like her idea.

Opposition Motion—Employment InsuranceBusiness of SupplyGovernment Orders

3:50 p.m.

Liberal

Judy Sgro Liberal York West, ON

Mr. Speaker, I want to thank my colleague for her question. It is nice to see her on her feet today.

Mike Moffatt, Jack Mintz, and an organization I have worked a lot with, and which the Conservatives constantly point out when it comes to small businesses, the CFIB, are all flagging the issue that this is not a good plan. The Liberal plan is far more effective and provides far more opportunities.

The member can look at Maclean's magazine, or a variety of magazines. One quote in relation to the Conservatives' plan is this: “For firms that are just under the threshold, hiring a new worker would mean crossing the line and losing the tax credit entirely”.

If the member went through the Gazette and the Journal, she would see that there are a variety of quotes from different economists and professionals who clearly point out that the Conservative plan being put forward is flawed.

Why do we not just put partisanship away? I believe we all have one goal here, and that is job growth and job creation. Why do we not just adopt the Liberal plan unanimously and move Canada forward together?

Opposition Motion—Employment InsuranceBusiness of SupplyGovernment Orders

3:50 p.m.

NDP

Ève Péclet NDP La Pointe-de-l'Île, QC

Mr. Speaker, I would like to thank my colleague for her speech.

It is great, because it seems that the Liberals finally decided to come up with a new plan. I think everyone here is familiar with the Liberal plan in recent years. The plan was basically to use the EI money to pay off their debts. My colleague's speech may have been filled with figures, but she forgot to mention one thing: what they are going to do with the $57 billion that the Liberal governments stole from workers.

Perhaps we would not need to adopt this sort of measure had the Liberal governments honoured their commitments and not stolen $57 billion from the EI fund.

My question is simple: will the Liberals finally decide to protect the EI fund by passing the NDP's Bill C-605, which specifically seeks to prevent the government from dipping into the EI fund?

Opposition Motion—Employment InsuranceBusiness of SupplyGovernment Orders

3:50 p.m.

Liberal

Judy Sgro Liberal York West, ON

Mr. Speaker, I have to say that I think the reason NDP members are resisting supporting our motion is that they are probably jealous, because we put this forward on our opposition day rather than their having shown some leadership and having done it.

As I said earlier, in the interest, which we all share, of job creation and moving Canada forward, everyone should just put partisanship aside. Let us just vote unanimously for this motion and show Canadians that we put them first at least once in a while.

Opposition Motion—Employment InsuranceBusiness of SupplyGovernment Orders

3:50 p.m.

Liberal

Judy Foote Liberal Random—Burin—St. George's, NL

Mr. Speaker, I stand today to speak in support of our opposition day motion. I want to repeat it for those who may be listening in. It states:

That, in the opinion of the House, the Employment Insurance...plan announced by the government on September 11, 2014, and which will begin on January 1, 2015, will not create jobs and growth but will instead provide a financial incentive for employers to lay off workers; and therefore, the House urges the government to re-direct those resources by providing employers an EI premium exemption on newly-created jobs in 2015 and 2016.

This is yet another example of a hopelessly misguided Conservative policy. The Conservatives' small business job credit is so flawed that it actually discourages job creation and economic growth. Quite simply, the Conservative proposal is bad for employers, bad for workers, and bad for the Canadian economy.

The Conservatives' EI credit plan encourages businesses to stay small and punishes them if they grow and are successful. Under the Conservative scheme, only businesses with EI payroll taxes below $15,000 get any money back. Moreover, despite being billed as a job credit, there is no requirement that companies actually hire new workers to qualify. That in itself is mind-boggling.

The Conservative proposal lowers the EI rate of a business from $2.63 to $2.24 per $100 of salary paid for any employer paying less than the threshold, with no requirement for job creation. Regardless of whether a small business hires new workers, remains the same size, or even fires workers, so long as they remain below the $15,000 threshold, they qualify. This creates a perverse incentive for businesses to fire workers to get below the $15,000 threshold.

Mike Moffatt, professor of economics at the lvey School of Business, expressed his concerns about the effect of this policy on wages, stating:

...it is clear that firms under the $15,000 EI threshold have a big incentive to keep wage increases to a minimum so they do not lose their tax credits. Conversely, firms that are just over the $15,000 EI threshold have an incentive to cut the pay of their staff in order to gain the tax credit.

Wages are not the only thing in danger under this plan. In fact, the Conservative scheme offers up to $2,234.04 for firing a worker and only up to $190.52 for hiring a worker. This approach sets a dangerous precedent, especially in provinces like Newfoundland and Labrador, where over 5,000 Newfoundlanders and Labradorians who had a job this time last year are now out of work.

My constituents in Random—Burin—St. George's and their fellow Newfoundlanders and Labradorians face unemployment rates well above the national average. On the Avalon Peninsula, unemployment is 8%. In Notre Dame-Central-Bonavista, the rate is 16.4%, and in the South Coast—Burin Peninsula region, the unemployment rate is 17.3%.

More and more of my constituents are telling me that they are struggling to make ends meet, and many of my constituents have had to look for work elsewhere. What we need in Newfoundland and Labrador, and in other parts of our country, are more jobs, not fewer. The current government must do more to help create jobs instead of helping to drive high unemployment.

For young workers, job creation is even more important. The situation faced by youth across Newfoundland and Labrador is even more troubling. Unemployment among youth ages 20 to 24 is 15.3%, which is higher than the average in Newfoundland and Labrador and higher than it is for their peers across the country. More and more young people graduating from college and university programs have high debt loads and absolutely no guarantee of finding jobs. They are forced to move back home with their parents, and in many cases, their parents, some of whom are also having trouble making ends meet, try to assume the debt load and living costs of their children, which jeopardizes the future for all involved.

The best way to combat youth unemployment and to help create secure financial futures for all is with new jobs. There is nowhere more important where this will come up than in Newfoundland and Labrador, where there is such a high unemployment rate and a need for steady employment. At a time when youth unemployment is high and many students and recent graduates are struggling to find jobs or co-op placements, the government is continuing to compound the problem through its actions.

Instead of providing incentives for businesses to eliminate jobs, Liberals believe in providing businesses with incentives to create jobs. We have a solution: an EI premium exemption for new jobs created in 2015 and 2016. This would represent a benefit of up to $1,279.15 for each newly created job. That is an incentive. That is an encouragement to a business. The Liberal plan would represent a benefit of up to $1,279.15 for every new person hired by a company, which, for the same price as the proposed EI premium exemption, could produce over 175,000 new jobs.

This is a plan we know works. Under a previous Liberal government, similar incentives were offered through the new hires program as part of budgets 1997 and 1998. That program, unlike the current Conservative plan, provided an incentive to create jobs rather than an incentive to eliminate them, and experts agree. Today Professor Moffatt concluded in his latest piece:

The New Hires Program provides a great framework for a new Small Business Job Credit. I hope the government will take [the Liberals'] suggestion seriously and correct the flaws in their current proposal.

I too hope that the government will realize its error and admit that there is another way of making sure that we respond to the needs of Canadians and the need for employment, especially among our young people. I hope the government listens to the experts and votes in favour of the motion before us today.

What Canadians from coast to coast to coast need the government to do is encourage job creation and growth, not stagnation. Businesses should be encouraged to create more jobs, whether the company pays $14,999 or $15,001 in EI payroll taxes.

What is more, small businesses agree. Just this afternoon, the Canadian Federation of Independent Business, which government members quote all the time, endorsed the proposed EI holiday for job creators, saying that it had, and I quote, “Lots of job potential”. It is also important to note that EI is a fund paid into by employees and employers, not the government.

According to a report from the Office of the Superintendent of Financial Institutions Canada, in 2015 the government is expected to collect $3.5 billion more in employment insurance premiums than needed. Even with the estimated $225-million proposed tax credit, it still means the Conservative government will be taking in $3.25 billion more than necessary.

What this serves to do is to create the illusion of a larger surplus going into 2015, and we know that. We know what is happening with the cuts that are taking place under the government in terms of trying to create a surplus so it can do things leading up to the next election. As my colleague, the hon. member for Kings—Hants has said:

They're padding their books on the backs of workers and employers to fund a pre-election spending spree. At a time when employment numbers are soft and growth has stalled, it’s irresponsible for the Conservatives to maintain high job-killing payroll taxes just to fund their pre-election budget.

Canadians believe, and rightly so, that the government has a responsibility to not only create the right conditions for economic growth but to also ensure that growth is sustainable. We need to create the right conditions for jobs and growth to benefit all Canadians. What we have here is a tale of two policies: a Liberal proposal designed to create stable, long-term job creation and to spur economic growth, and a Conservative policy that creates incentives to fire workers and that discourages growth.

Opposition Motion—Employment InsuranceBusiness of SupplyGovernment Orders

4 p.m.

NDP

Djaouida Sellah NDP Saint-Bruno—Saint-Hubert, QC

Mr. Speaker, I listened carefully to my Liberal colleague's speech. I would like things to be clear in the house. Her party plundered $57 billion from the employment insurance fund, which is funded by employer and employee contributions. The Conservatives legitimized this practice in order to balance their budget.

Once again the Liberal Party does not seem to be embarrassed, and it is presenting a misguided plan. The employment insurance fund ran a deficit for a number of years because the Liberal government siphoned off $57 billion. Why is it acceptable to have annual surpluses when 63% of unemployed workers are not receiving benefits?

Opposition Motion—Employment InsuranceBusiness of SupplyGovernment Orders

4 p.m.

Liberal

Judy Foote Liberal Random—Burin—St. George's, NL

Mr. Speaker, I, too, would like for things to be clear here. I am not sure why the NDP is choosing not to be supportive of the Liberal plan. In fact, under the NDP platform for 2011, the New Democrats wanted to establish a job creation tax credit. They said:

We will introduce a Job Creation Tax Credit that will provide up to $4,500 per new hire:

Employers will receive a one-year rebate on the employer contributions for the Canada Pension Plan and Employment Insurance premiums for each new employee hired...

Here we are with a motion that keeps in mind the needs of Canadians, doing what we need to do to ensure that there are jobs for Canadians, using the same amount of money that the Conservative plan is proposing to put in place and doing much more in terms of the number of jobs that would be created.

I am seeking clarification, too, from the member who asked the question. How can the New Democrats, on the one hand, in the 2011 platform cite a program that is similar to the one that we have put forward now, but find fault with this motion today?

Opposition Motion—Employment InsuranceBusiness of SupplyGovernment Orders

4:05 p.m.

Liberal

Wayne Easter Liberal Malpeque, PE

Mr. Speaker, my colleague should not be surprised by the NDP's position. It is now talking about early learning and child care. It is the party most responsible for killing the program that we had in place in the 1995 budget. It was actually implemented.

My colleague talked about employment insurance and the situation of workers in Newfoundland and Labrador. We are certainly facing the same thing in Prince Edward Island, with the loss of the five-week pilot program and the 50% clawback on the dollar.

I will give an example of what happened in my riding.

I had a potato producer who was paying $16 an hour to an employee that had been with him for 17 years. The 50¢ clawback on the dollar really means that the employee only gets about $6 an hour for that day and a half a week that he works every year from November to April. He is no longer there for the farmer in the seasonal industry in the summertime.

Is that the situation in Newfoundland and Labrador and in the member's riding? Have the changes that the government has made to employment insurance become a disincentive to work and taken a lot of money out of people's pockets?

Opposition Motion—Employment InsuranceBusiness of SupplyGovernment Orders

4:05 p.m.

Liberal

Judy Foote Liberal Random—Burin—St. George's, NL

Mr. Speaker, my colleague is absolutely right. We are hearing that. Anyone who will be honest, open and upfront will have to admit that this is what they are facing in all of their ridings in terms of representation of people who are being hit hard by the new changes to the EI program.

Opposition Motion—Employment InsuranceBusiness of SupplyGovernment Orders

4:05 p.m.

NDP

Robert Chisholm NDP Dartmouth—Cole Harbour, NS

Mr. Speaker, I will be splitting my time with the member for Parkdale—High Park.

There is nothing more clear than this debate right here, right now. The Liberals have introduced a motion about how to further use the money of workers and employers, just the same way the Conservatives have done.

The Liberals were on their feet a second ago talking about how this was all about creating jobs and surely the NDP was in favour of that. Yes, we are, but out of general revenues that every taxpayer pays into. I know the Liberals do not understand this, nor do the Conservatives, but this fund is for unemployed workers. It is for paying benefits and for supporting people through training and education.

In the 1990s and the early 2000s, the Liberals absconded with $54 billion of worker and employer money and put it into general revenues, so I can understand they are a little confused now. They want to continue to do what they have done forever. Not only did they do that, but they cut away at the eligibility requirements for EI. The Conservatives kept doing the same thing to the point now where not only have the two parties taken off with $57 billion worth of worker and employer money, but now only 36.8% of people who are unemployed are eligible. Sixty-seven per cent of unemployed Canadians get denied. The fund is not there for them.

What is the answer? The Conservatives' answer is to cut premiums. Do they want to cut them for employers and for workers? No, just for employers. They continue to run a surplus now. It is estimated to be another $3.5 billion. Have they thought about the fact that the people who are unemployed and their families in Atlantic Canada, or downtown Toronto, or throughout the country, need the support because they are unemployed through no fault of their own. They do not think of that. They think about how they can make political hay out of the fact that they have allowed the surplus to accumulate. That is what they are doing.

What have the Liberals done? What have the MPs from Prince Edward Island done? Have they said not to touch that money, that it is for workers and employers, that this is money they have paid into EI to ensure that when people are unemployed they have some support? Have they said that Prince Edward Island has a high level of unemployment in their seasonal industries and those people deserve some support? No.

It is the same thing with the Liberal MPs in Nova Scotia and across the country. They think they can do better than what the Conservatives have done. The Conservatives are estimating to take $550 million out of the EI fund as a result of a scheme they have come up with.

The Liberals, with their proposal, have suggested it is only going to be $275 million. However, they screwed that up too. They messed up with their calculations. No one is surprised by that whatsoever. What is it going to cost? What did they forget to do? They based their calculation on net employment rather than gross employment. What is the difference? It is $1.2 billion. The members over here suggest that it will take $1.5 billion more out of the EI fund, and the Liberals ask why we would not support that.

In 2011, the NDP came up with the small business hiring tax credit proposal. In other words, if small businesses could prove that they created new jobs, then they would get a tax credit. They would get money back from that straight-up.

The people of Canada thought this was a good idea. Businesses thought this was a good idea. The Conservatives decided to take it on and they introduced it, but they only kept it going for two years. I do not understand why they did that.

I would suggest that the Conservatives have been under some fire, so instead of messing around with their supposed balanced budget as a result of cutting millions of dollars out of services to Canadians, including seniors, scientists, people on disability and veterans, they decided to come up with a new tax credit.

Where are they getting the money from? They are digging into the pockets of working people. It is unfair. There are no links whatsoever to job creation. They are just hoping. They are going to sprinkle a bit of dust and hope that some jobs will pop out of that. There is no linkage whatsoever.

Not only is that the case, but the government is increasingly shifting the responsibility for paying for this. It is not the responsibility of employers or other businesses. The responsibility falls on working people who pay into the EI fund. How can that be fair in this day and age?

If the government were committed to the idea of providing a tax credit to businesses for creating jobs, and it should be committed because it saw that the idea worked, then it should come forward with that kind of proposal. We would support it. We came up with the idea in the first place. We thought it was a good idea when the government brought it in before. We thought it was a bad idea when it took it away. This is the wrong way to go.

This would not help the unemployed. What kind of money are talking about in terms of those 37% of unemployed Canadians who do get employment insurance benefits? We are talking about an average payout of $395 a week under EI. Under the Conservative government, not only is the number of people who are receiving that money going down, but that amount is increasingly going down.

The seasonal industries in Atlantic Canada play an important role in our economy. What makes me so upset is that the Conservatives have brought about changes to eligibility requirements that have affected communities throughout Atlantic Canada. My colleagues from Atlantic Canada and Quebec talked about this problem. Members of the Liberal Party spoke to their constituents and others in Atlantic Canada about this problem.

We now have an opportunity to speak clearly about the fact that what the government has done is wrong. It does not deal with the EI fund. It does not deal with criteria or eligibility. It does not deal with the amount that unemployed workers receive. Nor does it deal with the problems that small businesses and seasonal industries are experiencing as a result of people not being there and the need for training. The government does not deal with any of that whatsoever.

With this proposal, the Liberals are trying to out conservative the Conservative Party. They are trying to take the bad math out of it. They are abandoning unemployed workers in our country, and that is shameful. I will spend some time talking about this to people from one end of the country to the other.

Opposition Motion—Employment InsuranceBusiness of SupplyGovernment Orders

4:15 p.m.

Liberal

Kevin Lamoureux Liberal Winnipeg North, MB

Mr. Speaker, I get the sense that when this motion comes to a vote, a number of NDP members of Parliament should be somewhat embarrassed.

Let us put it very simply so that all members get an appreciation of what was said back in 2011. This was when Jack Layton was the leader of the New Democratic Party. Just so that members are aware, this is what was said:

Employers will receive a one-year rebate on the employer contributions for the Canada Pension Plan and Employment Insurance premiums for each new employee hired...

This is a different New Democratic Party that we are hearing today. It is not the Jack Layton party of 2011. I challenge the member to be straightforward and tell us what has changed since 2011, other than the leadership, to cause the New Democrats not to support a good idea that would generate tens of thousands of jobs from coast to coast to coast in Canada.

We know that this is a job-creation proposal that is before us today. At one time, the New Democrats used to support this idea. What has changed?

Opposition Motion—Employment InsuranceBusiness of SupplyGovernment Orders

4:20 p.m.

NDP

The Deputy Speaker NDP Joe Comartin

This may be an opportune time to remind all members of the House that questions are supposed to be about a minute long, no longer, and they consistently have been running a minute and a half to two minutes.

The hon. member for Dartmouth—Cole Harbour.

Opposition Motion—Employment InsuranceBusiness of SupplyGovernment Orders

4:20 p.m.

NDP

Robert Chisholm NDP Dartmouth—Cole Harbour, NS

Mr. Speaker, I appreciate the question. I appreciate that the member for Winnipeg North is himself in a situation in which his party continues to change with the prevailing winds. That is like the Liberal Party. The Liberals campaign on the left and they govern on the right. They always have and they always will. Therefore, they never really know what they stand for, because it changes at any given time.

What the NDP stands for is supporting working people in this country. It stands for supporting small business people. It stands for making sure that the EI fund is used for what it is supposed to be used for, which is providing employment insurance benefits, ensuring that workers are there when they are needed by employers, and ensuring that people are supported between their employment opportunities. That is what the New Democratic Party stands for and always will stand for.