Debates of Feb. 5th, 2015

Opposition Motion—Job Creation

[Marc-André Morin, NDP, Laurentides—Labelle, QC]

Mr. Speaker, listening to my colleague reading his notes might reassure the Conservative base. However, as we speak, business leaders are getting ready to launch investment programs. They have some very serious concerns and are wondering what will be in the budget.

It is the same story every year. Everyone waits for the budget to be brought down to see exactly what it contains. This year in particular, the drop in the price of oil and the lower dollar has to be taken into account. There has been some incredible upheaval.

In the member's opinion, what impact does the unknown have on investors and industry leaders? Why are the Conservatives not tabling their budget? Is it because they have no idea of what they are doing or because they do not get it any more? They seem completely lost.

[Andrew Saxton, Conservative, North Vancouver, BC]

Mr. Speaker, my hon. colleague talks about small businesses and asks why we are not helping small business, yet we are helping small business. In fact, we introduced the small business job credit, which NDP members voted against. If they want to help small business, why do they keep voting against all the measures we have created to help businesses in this country?

I will share with members some of the other things we have done to help businesses We have provided $1.4 billion in tax relief for new manufacturing machinery and equipment through the accelerated capital cost allowance. We have improved support for Canada's aerospace industry by investing almost $1 billion in the strategic aerospace and defence initiative to ensure that the needs of the industry continue to be met. We have supported Canada's vibrant shipbuilding industry, which is very important in my riding of north Vancouver, with $35 billion in funding. This will create tens of thousands of jobs over the next 30 years and breathe new life into that industry.

These are just some of the things we have done to help businesses in Canada.

[Scott Armstrong, Conservative, Parliamentary Secretary to the Minister of Employment and Social Development]

Mr. Speaker, it is my pleasure to speak about the important role that Canada's manufacturers and small businesses play in creating jobs and a strong Canadian economy. Comprising 98% of all employer businesses in Canada, small businesses are a significant driver of economic growth. They are an important pillar supporting workers, families, and communities across the country. Our government appreciates the efforts and contributions that businesses, and small businesses in particular, make in Canada.

As a result, we have implemented a wide range of policies and programs on the understanding that when our small businesses succeed, all Canadians succeed. While the NDP is moving toward our policies, we believe that our proposals are much better thought out. Since taking office, the Conservative government has put in place numerous measures that benefit Canadian small and medium-size companies.

For example, the accelerated capital cost allowance for investment in machinery and equipment has been of great benefit to Canada's manufacturers and processors. This has helped them make investments needed to compete at home and abroad. Here I would point out that NDP voted against an extension of this measure in Budget 2013.

On top of that, various incentives in the Canada Revenue Agency have helped improve the provision of information and services to small businesses, while reducing the administrative burden and increasing taxpayer fairness.

Another example of our reductions of red tape is the ongoing funding of $3 million a year to make BizPaL a permanent service for businesses through Budget 2011. BizPaL is an online service that significantly reduces the red tape burden on small business owners by allowing them to quickly and efficiently create a tailored list of permits and licences from all levels of government necessary for them to operate their businesses. It is one-stop shopping for small business. The New Democrats voted against this red-tape reduction measure, then, just as they have today, called for a massive payroll tax hike on all Canadians. This would greatly harm the growth of small business across Canada from coast to coast to coast.

In addition to cutting red tape, our government has helped connect businesses to vital partners to help them innovate in their operations. Our government provided $100 million over five years to help leading business accelerators and incubators across Canada to increase their service offerings for early-stage businesses and entrepreneurs. These investments will help entrepreneurs create new companies and realize the full potential of their innovative ideas through mentorship, specialized training, and business support, and also to support networking with potential customers and investors.

In addition, our government has been increasing the venture capital financing available for innovative companies through the implementation of the venture capital action plan. Since the announcement of this plan in January 2012, the government has invested in four high-performing venture capital funds and established and invested in three large-scale private-sector funds of funds with private sector investors and interested provinces across Canada.

These measures build on so many others that have been introduced by government since 2006, many of which the opposition members have voted against, to assist small businesses to make the investments they need to create good jobs and grow our economy.

Since 2006, the Conservative government has reduced the small business tax rate to 11%. We have increased the amount of income eligible for the lower small business tax rate from $300,000 to $500,000. We have also enhanced the availability and accessibility of the financial support for innovative small and medium-size businesses under the scientific research and experimental development tax incentive program.

We also established the Red Tape Reduction Commission to review the areas of federal regulation most in need of reform, to reduce the cost of compliance for small businesses. We reduced the paperwork burden on businesses by 20% through the paperwork burden reduction initiative.

We increased the lifetime capital gains exemption on qualified small business shares from $500,000 to $800,000. We also indexed this limit to inflation, so the exemption limit has now increased to $813,600 for 2015 as a result.

In addition, we eliminated close to 2,000 tariffs on manufactured inputs, machinery, and equipment. We have provided about $400 million in annual duty savings to businesses across the country. As well, new trade agreements have been established with South Korea and the European Union, which would bring significant benefits and savings to Canadian businesses and open new markets to our exporters.

Creating savings and opportunities for businesses so they can grow and succeed is a critical role for government. We also know that no business can succeed without high calibre employees. From travelling across the country and speaking with entrepreneurs, businessmen, businesswomen, and others who hire and employ people, we know that one of the biggest challenges these employers face is finding qualified and well-trained employees to fit the job profiles they are advertising. This is why our government has introduced numerous training and employment insurance measures to help businesses create good jobs for Canadians.

For example, the small business job credit will deliver significant EI savings to businesses, helping to defray the costs of hiring new workers. The new Canada job grant will better prepare the next generation of Canadians to meet the demands of the evolving labour market, bringing employers into the game so that they have more say and control over what training opportunities are offered, and also the ability to help pay for that training.

It is well known that in these uncertain economic time, the labour market faces uncertain challenges. This is why our government has taken action to ensure that many Canadians have the opportunity to participate in the workforce, given the emerging skills shortage. It is is also why we have focused so intently on and encouraged apprenticeships, particularly in the Red Seal trades, where the need is currently the greatest. Our government introduced the apprenticeship job creation tax credit, which reduces employers' taxes by an amount equal to 10% of the wages paid to apprentices for their first two years of an apprenticeship in a Red Seal trade up to a maximum of $2,000 per apprentice per year. We have also introduced a $1,000 apprenticeship initiative grant for apprentices in each of their first two years of apprenticeship in a Red Seal trade.

The New Democrats voted against both of these job-creating measures, so why would small businesses now believe they are here to support them today?

To build on these measures and further respond to skilled labour shortages, in 2009 we launched the apprenticeship completion grant. Apprentices who complete their certification in any of the Red Seal skilled trades are entitled to receive a taxable grant of $2,000.

In addition to supporting the training and hiring of skilled labour, our government has focused considerable investment on innovation and helping businesses get their products from the farm gate to the market. The new international trade agreements will certainly deliver this benefit.

Our Conservative government has also invested directly in initiatives to help advances in commercial technology, including a $1 billion advancement toward additional knowledge translation; helping discoveries move from laboratories into market applications across the economy; and almost $4 billion in additional support for applied research and business innovation, including the automotive, aerospace, forestry, and clean technology sectors. These measures translate into more innovation, success, jobs, and stronger growth for Canadians.

These are the pillars of Canada's economic action plan and they have delivered for all Canadians. We have among the best job-creation records in the world, with nearly 1.2 million net new jobs created since the pit of the economic recession in July 2009. We have the strongest middle class in the world. Canada is now viewed as one of the best places in the world in which to start and grow a business.

Our government looks forward to building on our record by supporting the dynamic businesses that we have in Canada so they can move forward in a positive direction. Small business owners are the entrepreneurs, innovators, risk takers, and the visionaries who will lead Canada for the next generation. Our government values the contribution of small businesses to the success of the Canadian economy and we will always support and grow this important sector, not just when an election is on the horizon.

[Don Davies, NDP, Vancouver Kingsway, BC]

Mr. Speaker, a couple of weeks ago the leader of the Liberal Party was in London speaking to a group of workers. He was quoted as telling those workers that manufacturing was a 20th century endeavour in the Canadian economy and urged them to look for different things.

I looked up the definition of “manufacturing”, which states that it is “to make, to produce, to build, to construct, to fabricate, to process, engineer and invent”. To me those words sound like the very core of a modern, industrial economy and something that the Canadian economy really needs.

I wonder if my hon. colleague would comment on the Liberal's abdication of the belief that manufacturing is a core part of Canada's economy moving forward. Would he agree with the official opposition New Democrats that manufacturing is indeed a major and important part of the Canadian economy moving forward?

[Scott Armstrong, Conservative, Cumberland—Colchester—Musquodoboit Valley, NS]

Mr. Speaker, I have to say that this is probably the best question I have had from a colleague from the NDP since I was elected in 2009.

Manufacturing is an important economic driver across the country. The Liberal leader said that manufacturing is a factor from the last century and is a thing of the past. He should tell that to the workers in the aerospace industry in IMP Group in my riding, almost 1,200 workers in Cumberland–Colchester–Musquodoboit Valley. Our largest private sector employer depends on manufacturing. There are literally thousands of jobs in my riding alone in just one business based on manufacturing.

They have a robust future. They are signing contracts with companies all over the world to produce aerospace parts for aerospace manufacturing. There are other jobs related to that.

Look at the Irving shipyards in Halifax. There is some $25 billion in shipbuilding. It is going to hire thousands of Nova Scotians. That is manufacturing.

Intertape Polymer Group, in Truro, my hometown, exports to several different countries all over North and South America.

Manufacturing is the heartbeat of small business and medium-sized enterprises across the country. This is where entrepreneurs and innovators live and breathe. For the Liberal Party to say that this is an industry and sector whose time has passed is so backward looking and backward thinking that I cannot see how any Canadian will stand up and support it in the next election.

[Ted Hsu, Liberal, Kingston and the Islands, ON]

Mr. Speaker, I would like to talk about small businesses, and in particular, about creating new small businesses where the jobs involve work that is highly value-added, and as a consequence, highly remunerative, with high wages. These are jobs that make these new small businesses highly competitive. There is a high barrier to entry.

One of the important ways to create these companies is by having early-stage, risky commercialization of game-changing discoveries in Canada. That is the way to create new small businesses where there is a high barrier to entry, thereby making us more competitive vis-à-vis foreign companies.

My concern with the NDP motion today is that I do not think a tax credit will do that. I do not think it will take care of very risky, early-stage commercialization where there is not much cash flow for the first few years.

In Canada, we still do quite a poor job of nurturing that early-stage, risky commercialization. Why are we still doing such a poor job?

[Scott Armstrong, Conservative, Cumberland—Colchester—Musquodoboit Valley, NS]

Mr. Speaker, I disagree with the member across the way. I think the government has taken strong steps to support the commercialization of new products. One of the programs we have in place allows businesses with new products to compete for federal government contracts.

We all know that any time a new product hits the market, one of the first challenges is finding that first big contract. We know that if we have a new product come to market, finding that first customer to buy it gives it a strong reference on the resumé of that product so that it can be sold to other people.

We have a program in place so that new products in Canada can get that first contract from the federal government. With that, they have a federal government reference to sell that to private sector employers. We have lots of programs and incubators to support other private sector people purchasing these new things and supporting our new entrepreneurs and new products.

I would like to go on, but I have run out of time.

[Scott Brison, Liberal, Kings—Hants, NS]

Mr. Speaker, I will be sharing my time today with my colleague and friend, the member for Markham—Unionville.

In these difficult and uncertain times, we have to recognize that first of all, even before the plummeting oil prices, growth in Canada had stalled. We had stagnant growth and a soft jobs market prior to plummeting oil prices. In fact, if we look at the numbers even a year ago, well before falling oil prices, we had 200,000 fewer jobs for young Canadians than before the financial crisis in 2008. Long-term unemployment, people unemployed for over a year, had actually doubled in Canada.

The Economist magazine did an article on the Canadian economy called “Canada’s economy: Maple, resting on laurels”, which said: “The post-crisis glow is fading.” That was written last spring. The Economist was comparing Canada's growth numbers with those of the U.K., Australia. and of course, our neighbour to the south, the U.S.

The reason I am saying that is that it is important to realize that we needed a real plan for jobs and growth prior to plummeting oil prices, and we need a plan even more so today. That is why it is important that the government come forward and present a budget that actually contains a plan to create jobs and growth but also to help the struggling middle-class families in Canada who are having trouble making ends meet, who are falling further behind, who are taking on higher levels of personal debt, and who are concerned about the future of their children and grandchildren.

This brings me to today's motion and its three components: extending the accelerated capital cost allowance for manufacturing, the innovation tax credit, and cutting the small-business income tax rate.

The accelerated capital cost allowance for manufacturing has existed now for about eight years. During the period of time this measure has existed, we have lost 400,000 manufacturing jobs. The proposal being made by the NDP is to extend it by two years. I would argue that this is a status quo measure and that it will not really move the needle in terms of helping manufacturing.

The Canadian Manufacturers & Exporters are calling for five years, which would provide more certainty in terms of manufacturing investment. A two-year extension is not a bold new policy that is really going to move the needle in terms of manufacturing competitiveness.

In terms of the innovation tax credit, the government has diluted and pulled back the SR and ED tax credit. It has made changes that we are told by smaller companies that are involved in research and development and commercialization, and we are told by larger manufacturers as well, that the changes to SR and ED made by the government have been negative for their capacity to research, develop, and commercialize new technologies and to create value.

What the NDP has proposed is a small measure. We would agree that trying to create more incentives to actually encourage and support commercialization is important for creating wealth and prosperity for Canadians and jobs and growth. We are concerned that this is a very small measure. I believe that it is $40 million per year. Again, when I talk to people involved in venture capital, IT, biotech, or cleantech, they do not believe that this is going to make a big difference.

This leads me to the third measure, and that is cutting the small-business income tax rate. The NDP has proposed a two-point cut, which would cost about $1.2 billion per year.

Jack Mintz, director of the University of Calgary's School of Public Policy, opines frequently on tax policy in Canada. This is what it says in an article about the NDP plan.

An NDP plan to give tax relief to small businesses will actually end up giving wealthy Canadians a tax cut. “[It’s] something to make the rich richer,” Jack Mintz....

But Mintz and some fellow economists argue that the tax break will go overwhelmingly to Canadians who need it least and may not result in job growth at all.

“We find that 60 per cent of the small business deduction goes to households with more than $150,000 in income,” Mintz said....

“The worst part [of the NDP plan],” Mintz added, “is that it doesn’t have good economic impacts because small business deductions contribute to a wall of taxation, so if they grow, they lose some of their benefits and get hit with higher taxes…. It tends to keep small businesses smaller.”

What he is saying is that it is a disincentive to growth.

He also refers to the tax vehicles that exist for a lot of wealthier Canadians. Canadian-controlled private corporations, known as CCPCs, are used by high-income Canadians and high-income households as a form of income splitting, with dividend distribution shared between spouses. If people talk to a tax planner, accountant, or private banker, they will say that these are frequently used by people with a lot of money, families with a lot of private wealth.

Mintz says this about the NDP plan: “...it’s also a good income splitting method that the NDP are recommending”.

The coalition that has emerged between the Conservatives and the NDP around income splitting to benefit Canada's wealthiest families is something the Liberals are watching with amazement. I am not going to suggest that discussions about a coalition or anything like that are occurring behind the scenes, and I do not actually think the NDP has intentionally done this. I think this has been poorly researched.

In fact, Armine Yalnizyan, who is with the Canadian Centre for Policy Alternatives, a very progressive think tank, had this to say on CBC when she was asked about the NDP's proposal. She was asked a specific question by the CBC journalist, as follows:

This criticism [by Jack Mintz] of the NDP's proposal sounds bang on to you or totally wrong?

This is what the economist with the Canadian Centre for Policy Alternatives said:

Absolutely bang on. We have got new research in the last year or so that Dr. Mintz is talking about. So you'd think that the NDP would have known about this research. It's a little bit weird to say that we are looking at a way of benefiting small businesses when...[we are benefiting] tax shelters. If you want to do the things that they're saying, [they] could actually target your tax cut to incentivize the growth or only give tax cuts when the behaviour you are looking for takes place....

What she is referring to are direct incentives for businesses that create jobs, that invest to create jobs and hire more people. Again, there is a startling and perhaps troubling trend here of NDP policy looking like Conservative policy.

A few months ago, we were critical, the NDP included, of a Conservative hiring credit that would do nothing to really create jobs. It would be expensive. In fact, we were told by the Parliamentary Budget Officer that it would cost $700,000 for every job created and would not provide an incentive to hire. In fact, it would be a disincentive for hiring and growth. Now the NDP is proposing a policy with a similar disincentive to growth, which would do nothing to actually create jobs, and similar to Conservative income splitting, would disproportionately benefit the wealthy.

If we really want to focus on creating jobs and growth, we should look at the policy proposed by the Liberal Party at that time, which was a hiring credit that would provide a tax benefit to employers who actually hired new workers and expanded their employment. That policy was embraced and supported by the CFIB, the Canadian Manufacturers & Exporters, and Restaurants Canada.

More broadly, the Liberal plan we will be presenting to Canadians and engaging Canadians in will be one that helps the middle class and creates jobs and growth by investing in infrastructure, people, and innovation.

In terms of infrastructure, whether it is a small business, a big business, or a family, 100% of Canadian families and businesses benefit from investments in infrastructure. There has not been a better time in our lifetimes to invest and fix Canada's infrastructure. We have historically low bond yields, soft employment numbers, stagnant economic growth, and an historic opportunity to take the advice of David Dodge, the IMF, Mark Carney, and others and invest in infrastructure.

That is the kind of vision that Canadian small businesses and Canadian middle-class families would benefit from, not a poorly thought out approach from the NDP that would disproportionately benefit the wealthiest Canadians families who need the help the least.

[Ève Péclet, NDP, La Pointe-de-l'Île, QC]

Mr. Speaker, the member tells a great story, and we can always find quotes going both ways. However, will the Liberals support our motion, yes or no? If not, what are their plans? Going to southern Ontario and telling manufacturers that it is long past due and that they should move on? What are their plans and will they support our motion?

[Scott Brison, Liberal, Kings—Hants, NS]

Mr. Speaker, I think I was pretty clear, so the answer is, no, we will not support the motion. To support a motion that will take $1.2 billion out of the federal treasury will not really do much for jobs, growth or help the middle class. It does not seem like good public policy. It sounds like something coming from the Conservatives in terms of income-splitting.

Beyond that, the member is right that we can get quotes from different sources. I have never seen the Canadian Centre for Policy Alternatives, which is considered a progressive think tank, agree with Jack Mintz at the University of Calgary on anything before in my life. They both say that this proposal by the NDP will disproportionately benefit the wealthiest Canadian families through tax shelters and private family corporations. The top one percent is doing very well in Canada and the NDP ought to focus on the middle class like the Liberal Party is doing.

[Alain Giguère, NDP, Marc-Aurèle-Fortin, QC]

Mr. Speaker, my problem with the people in the Liberal Party is that every time they talk about the economy, they, like the Conservatives, paint a picture of a wealthy Canada even though more and more Canadians are turning to food banks and more and more young people are unemployed.

They keep saying that Canada's economic growth is strong, but the vast majority of Canadians are not benefiting from that economic growth.

It would be nice if the Liberal Party MPs told us what they plan to do and how they plan to do it. I am not talking about what they have always done, which is give to the rich.

How will they go about creating wealth for the vast majority of Canadians? Most importantly and to the point, will they do it by increasing the deficit and the middle class tax burden? Who will they tax? Those are the real questions. Will they balance the budget?

[Scott Brison, Liberal, Kings—Hants, NS]

Mr. Speaker, to be honest, I do not understand the question because the Liberal Party is not the party that came up with the idea to help the rich that we are talking about today. That came from the New Democrats, not us.

I do not understand why the member supports the NDP's current policies when those policies seem to favour the rich and families that do not need help from the Government of Canada. It is up to him, not me, to explain the NDP's backward policies here in the House of Commons.

[John McKay, Liberal, Scarborough—Guildwood, ON]

Mr. Speaker, the misquotes being attributed to the leader of the Liberal Party border on urban legend. I would offer the opportunity for the hon. member to correct the nonsense by the Conservative Party, which is to spend and which, in this new coalition, has been picked up by the NDP as well.

[Scott Brison, Liberal, Kings—Hants, NS]

Mr. Speaker, the one thing that really unites this new coalition between the New Democrats and the Conservatives is their fear of the Liberals and the member for Papineau. Based on what we are seeing across the country, they are being reasonable in assessing the situation and having that fear.

Beyond that, they both misrepresent what the Liberal Party and its leader does and says. In fact, the leader of the Liberal Party has stood up strongly for advanced manufacturing and making the kinds of investments in advanced manufacturing that will not only create the jobs of today, but will prepare the Canadian economy and our manufacturing sector to create the jobs of the future. That is what the Liberal Party stands for.

[John McCallum, Liberal, Markham—Unionville, ON]

Mr. Speaker, I am pleased, and even proud, to say that the Liberal Party will vote against this motion. At its heart, it reflects the core incompetence of the New Democratic Party on anything related to economics.

The motion reveals the New Democratic Party's fundamental incompetence when it comes to economic issues.

However, before I say any more about the NDP's economic incompetence, I would like to talk about the government's incompetence. This is important because we are living in uncertain times. In uncertain times, the people want the government to take a clear stance.

It is clear that oil prices have plummeted and economic uncertainty has increased. In such an uncertain climate, people want economic leadership from the government. They want an action plan to reassure Canadians that everything will not be for the worse. What is that plan for the government? It is to delay its budget to April or later. That is the opposite of an action plan to reassure Canadians. It is a sign that the government does not seem to know what to do, so it is punting the budget into the future.

Why? On the one hand, the minister seems to be saying that in these uncertain times we have to wait a few more months to see what will happen to oil prices, as if knowing oil prices in two months would help us know them in 12 months. No one in the world predicted oil prices would go from $100 to $50. I do not think a couple of months from now we will know a huge amount more.

On the other hand, the minister talks as if he does know everything right now. He says with certainty that the Conservatives will balance the budget. He says with certainty that they will deliver their tax cuts. If he knows all that, why delay the budget? If everything is so clear in his head, as he pretends it is, why not do the budget tomorrow and relieve the uncertainty of Canadians.

The other problem is this. Why does he use the hard-earned money of Canadians at a time of potential deficits to give $12 billion over six years in the form of income splitting that will go to a tiny minority, 15%, of households, which is geared toward higher income Canadians? It does nothing for growth and resembles the policy of the NDP, which we are discussing today.

This brings me to my core issue of NDP economic incompetence. In order to set the stage for this hypothesis, let me take a little historical step backward and look at the NDP through history.

The New Democrats like to refer to provincial NDP governments as being competent. To some extent I will grant them that point. If I think of people from the past, like Roy Romanow, Ed Schreyer, Doer, et cetera, they actually ran governments, balanced budgets and showed competent economic leadership in some cases. Some of them were so good they could have been Liberals. One of them became a Liberal.

However, it is a totally different animal when we get to the federal NDP, because it is a party that, thank goodness, has never been the government. The New Democrats are living in a kind of 1950s class warfare mentality where they are debating in Ottawa ideas that were current among the left in the 1950s and 1960s. They have a somewhat other worldly element to them, not only in economics but also wanting to get out of NATO and other silly things.

Now we have a new leader of the NDP who has decided enough of this left wing stuff, that the New Democrats will not do crazy incompetent ancient history lefty stuff, that they will move to the centre and become much more conservative, and do all these nice things for corporations. Therefore, we come to this motion and this plan.

As my colleague has pointed out, I do not think even the current leader of the NDP, who wants to be more conservative, wants to be so conservative to present a policy that economists on the left and the right agree would do nothing for growth. All it would do is give huge benefits to wealthy Canadians. That is what the left wing and right wing economists say. I am an economist. I know economists do not always agree, but when we have a lefty economist and a righty economist saying exactly the same thing, there is probably an element of truth in it.

This misguided NDP policy with which it is trying to burnish its pro-corporate credentials to Canadians has fallen flat on its face because it would do the opposite. It would do nothing to create jobs in small business and other business. It would do everything to favour high-income Canadians in tax shelters.

This speaks to two points about the NDP. The NDP tries to be more mainstream or pro-corporate, but it remains incompetent. It is not proposing anything that would actually help create jobs in the corporate world. It has been deluded by bad research into thinking that this measure, which it proposes to create jobs in the private sector, in fact would not do so. It would simply raise the incomes of the higher-income, most privileged Canadians.

In this respect, as my colleague says, it is as if we are entering into some sort of coalition behaviour between the two other parties that wish to favour the higher-income Canadians. Only the Liberal Party is left as the champion of middle-class Canadians because we will neither do income splitting, which would favour the rich. Nor will we do this stupid NDP tax cut, which would also favour the rich.

There it is on paper. Concrete measures from the Conservatives that favour higher-income Canadians and concrete measures proposed today from the NDP, which really does not understand what it is doing, that favour the rich, unknown to the NDP. In that respect, those two parties are united. The Liberal Party, alone, is fighting for middle-class Canadians. For that reason, we are very happy to oppose this ridiculous NDP motion.

[Michael Chong, Conservative, Wellington—Halton Hills, ON]

Mr. Speaker, the hon. member opposite should know, as a trained economist, whose Ph.D. thesis became a book, entitled Unequal Beginnings: Agriculture and Economic Development in Quebec and Ontario until 1870, that this government has had a very good record on job creation and economic growth.

If we compare a more important statistic of labour market participation among OECD countries, we will see that Canada's numbers are very strong. The most recent numbers from Statistics Canada show that our labour market participation rate is somewhere around 65%. The commiserate number for the United States, from December 2014, is 62.7%. If we compare our labour market participation rates to countries like the United Kingdom and many other western European countries, we are quite a bit higher.

This government has done an excellent job of managing the economy and the member should give some acknowledgement for that. He should know, as a trained economist, that this is the case.

[John McCallum, Liberal, Markham—Unionville, ON]

Mr. Speaker, I do not give much praise to the government, but I do give a lot of praise to the hon. member opposite, not only because of some of the good work he has done in the House, but also because he is one of the few people I have met in the last decades who has actually read my Ph.D. thesis. I thank him for his good taste in that regard.

I would also acknowledge that Canada has done better than Spain and Greece in terms of recovering from the economic crisis.

However, my view would be that it is largely not the government's doing. It is largely because we had oil, when oil prices were higher, that helped and it is largely because our fiscal house was in order, and that is thanks to the actions of the Liberal government. It is also largely because we did not allow our banks to regulate themselves, which is thanks to the decision by the Liberal government not to allow mergers and not to allow banks to deregulate.

If we put all those ingredients together, while it is true we have done better than Greece and Spain, much of the credit for that rests with the previous Liberal governments of both Jean Chrétien and Paul Martin.

[Nathan Cullen, NDP, Skeena—Bulkley Valley, BC]

Mr. Speaker, I can remember a president in the past saying he wanted a “one-armed economist”, because one set of economists would say one thing and another set would give contrary advice. We have, with my friend from the Liberal Party, the great combination in which he offers two perspectives on the same reality in the same speech, many times. Let us break them down a bit.

When anything good happened under a Liberal watch, it was because of what the Liberal Party had done to make that happen. Anything good that happens under anyone else's watch, be it a Conservative or New Democratic government, are other factors. The member also said that if the Liberals offer a business tax cut, then that is a good thing, but if the NDP offers the same tax cut, then that is a loophole for rich people to get off their taxes.

The Liberals did more to allow the wealthiest Canadians to offshore their taxes than any party in political history. They handed out tens of billions of dollars in corporate tax giveaways, without the job creation associated with it whatsoever.

Could the member tell me if the problem is the actual ideas we have put forward to help the manufacturing sector, to help small businesses, to help grow the Canadian economy, or is it simply the source?

My colleague does not like the orange brand that was on the policy paper, because that would show him to be somewhat more partisan than impartial in trying to help the Canadian economy, which is exactly what the NDP leader was doing last week in front of the Economic Club of Canada. He was offering up ideas, ideas that the Liberals think, with a flick of the hair and a smile, are going to get them all the way through the next election.

Canadians need solutions to the challenges that this economy faces.

[John McCallum, Liberal, Markham—Unionville, ON]

Mr. Speaker, my colleague referred to two-handed economists, and I referred to two economists, one from the left—one could even say the far left—and one from the pretty far right. Those are two hands of two different economists of opposite persuasions who totally agree that the NDP policy would do nothing but favour the rich and would not create jobs. Members should not listen to me. They should listen to economists on the left and economists on the right who are in total agreement.

As for parties in government, I actually gave some credit to NDP provincial governments, which from time to time have behaved competently. However, thank goodness we have no evidence of an NDP federal government, because such a thing has never existed and, God willing, never will.

[Isabelle Morin, NDP, Notre-Dame-de-Grâce—Lachine, QC]

Mr. Speaker, I will be sharing my time with the member for Windsor West.

I am rising today to speak to the NDP motion, which proposes a series of practical, targeted and carefully thought-out measures that will lay the foundation for a more solid and sustainable economy. These measures will support the middle class, strengthen the manufacturing industry and help small businesses and manufacturers create jobs.

To that end, we are proposing that the accelerated capital cost allowance be extended by two years; that the small business income tax rate be immediately reduced from 11% to 10%, and then to 9% when finances permit; and that an innovation tax credit be introduced to support investment in machinery, in equipment used for research and development and in property to further innovation and increase productivity.

This last measure will repair the damage caused when the Conservatives cut the tax credit for scientific research and experimental development and will encourage innovation in Canada.

This is an intelligent, innovative and balanced approach to resource management that will get the country back on track. These measures, which were carefully developed by our team, were well received by broad range of stakeholder groups.

I would like to quote a few of them who gave their opinion on this subject. First, 84% of members of the Canadian Federation of Independent Business indicated that a reduction of the small business tax rate would be a very effective measure to maintain or strengthen business performance. The federation believes that any lost tax revenues for the federal government will be more than made up for in the longer term by the benefits of small businesses' contributions to the economy through job creation and the growth of small businesses at the local level.

The tax burden is the most important issue for over 75% of the small businesses that make up the 20,000 members of the CFIB who answered this survey on March 3, 2014.

Canadian Manufacturers and Exporters also supports us. The organization said that the NDP made the manufacturing sector the cornerstone of its economic plan in Ottawa, following the NDP leader's announcement that he wants to reduce taxes for small businesses and support investment in job creation in the manufacturing sector.

After a decade of the Conservative government mismanagement of the economy, middle-class families are working harder than ever but their situation continues to deteriorate. The Conservatives have not built a sustainable and balanced economy. Their policies have caused the loss of more than 400,000 jobs in the manufacturing sector alone.

The Conservatives have reduced taxes by 25% for rich companies since coming to power, yet they have reduced taxes by only 1% for small businesses. Why do they still prefer to grant generous tax benefits to the wealthy few and leave most Canadians behind?

Canadians have had enough. They want a government that is capable of bringing about real and tangible change, a government that truly understands what needs to be done, not one that favours the interests of the wealthy few.

Against a backdrop of growing economic uncertainty, due in large part to the Conservative government's poor management, many Canadian families are being left behind and have difficulty making ends meet. It is becoming increasingly difficult for Canadian households to meet their economic needs, which puts at risk their long-term economic security. Businesses are closing and employees are losing their jobs right across Canada. According to recent data released by Statistics Canada, the Canadian job market closed out the previous year with a total loss of 4,300 jobs in the month of December alone. That is a very difficult situation for many families who found themselves unemployed overnight.

This is the situation in every region of the country. Southwest Montreal is also in the grips of this new reality. In my riding, especially Lachine, the Finnish industrial group Metso will shut down its Lachine plant on February 13, resulting in the layoff of 95 employees still working there. At the beginning of 2014, Metso had 191 employees. The company's reason for the decision was the plummeting number of orders because of the decline in the mining sector. This is the fourth plant to close its doors in the Lachine industrial park since I was elected in 2011. This unfortunate case among so many others perfectly illustrates that the Conservatives' economic policy does not work for employment in Lachine. It does not work for employment in Quebec and it is certainly not working in the rest of Canada.

The Conservatives' strategy aims to make foreign multinationals wealthier, but it does not benefit the majority of middle-class Canadians whose jobs are unstable. The Conservative government's policy focused on natural resource development exposes jobs to the fluctuation of the raw materials market. This policy simply does not work, and in Quebec it does not create jobs—it destroys them.

We need bold action to address this problem. We will work to develop solid economic measures that make job creation a priority. The NDP believes that we need to strengthen the traditional sectors, such as resource extraction and manufacturing, while also taking advantage of new opportunities, innovation and growth to diversify Canada's economy. This plan will help create the next generation of jobs for the middle class.

We will continue to work tirelessly to help Canadian workers. The NDP continues to support small and medium-sized businesses, the real job creators in Canada. Under our strategy, we will reinvest nearly $1.2 billion to help small businesses.

One thing is sure. New Democrats will continue to fight for the middle class, which is and will continue to be a central priority for the party. We are ready to fix the damage done by the Conservatives, and we will not rest until we reverse the dangerous trends that have pressed middle-class families and made their lives more difficult.

As our NDP leader has said, it is without doubt that one of the most important economic assets that Canada has is the middle class, and I could not agree more.

We urge the government to seriously consider these practical and effective suggestions that will have a positive impact on Canada's industrial sector and will kick-start our economy. These measures were designed to support Canada's manufacturing base and to give a strong signal to investors, telling them that they can count on a New Democrat government to help Canada's manufacturing sector successfully transition to a new era.

I would like to add that I have visited a lot of businesses in my riding since I was elected. Two years ago we launched a big campaign focusing on credit cards. We spoke to small-business owners about a variety of topics. These are concrete actions that will help them.

I mentioned the manufacturing sector, which is not doing well in southern Ontario. A number of factories are closing down in Montreal. This is quite alarming, and our government has yet to introduce a budget while telling us everything is fine. Every time we hear from the government, it is as though the figures are perfect and everyone is doing well.

This is not the situation in my riding. In fact, a member of Parliament is primarily a service to the public. Constituents come to meet me to say that they have lost their job and that they are finding it hard to feed their children or to buy them decent clothes. When I go visit the food banks in my riding, I realize that they are being very heavily used. I go on Wednesdays sometimes to give out food and I see hundreds of people coming in for a loaf of bread because they cannot afford to buy it if there is no food bank to help them.

It is high time we diversified our economy. What has been done so far shows it is not working. It is very sad to hear our Liberal and Conservative colleagues say that they will not support this motion, because these are really very concrete measures. They have been examined and they can really make a difference for workers in the manufacturing sector. We have today to convince our friends in the other parties, for the sake of the vitality of our economy and Canada’s economy.

I heard my colleague from Parkdale—High Park earlier today telling us that Canada has always been a prosperous country. People from all over the world used to come to Canada for work because the country was creating good jobs. This is no longer the case. The situation is getting worse and it has been allowed to get worse by the current government, which tells us that everything is fine. It is often said that if we want to change something, the first thing to do is to admit there is a problem and face the facts. Once we are aware of the situation, we can change it.

I hope that this will be the case today, because when I am told all the time that everything is fine, I get the impression that the government really does not know what is going on and what is happening in ridings such as mine, where factories are closing down.

I really hope that we can make progress for the benefit of the Canadian community.

[LaVar Payne, Conservative, Medicine Hat, AB]

Mr. Speaker, I am not sure if our colleague across the way realizes that, since the recession, our government has created more than 1.2 million jobs in this country to help Canadians in difficult times, and we continue to support Canadians in that respect.

With respect to the small business tax cut that New Democrats are talking about, some economists have said this will make rich Canadians richer. It is “something to make the rich richer”, according the Jack Mintz, director of the University of Calgary's School of Public Policy, which he told The Huffington Post. He also said, “We find that 60 per cent of the small business deduction goes to households with more than $150,000...”. This was research previously done on the subject.

My question for my hon. colleague across the way is this. Is she ensuring the rich will get richer?

[Isabelle Morin, NDP, Notre-Dame-de-Grâce—Lachine, QC]

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

That is what I was talking about in my speech—the fact that the member started his question by saying that his party has created lots of jobs. There are currently 1.3 million unemployed workers in Canada. As I said, we lost 4,300 jobs in December alone. In 2014, employment grew by barely 1%. That is the problem I have with this because the Conservatives get up and tell us that everything is fine even though I have numbers like these.

In answer to his question, we all know that every time a big corporation sets up shop in a particular place, that creates a deficit in terms of jobs for all of the smaller businesses that were already there. I know lots of small business owners, and it is not true that these people are making $150,000, $200,000 or $300,000 per year. Lots of people go through hard times while getting their businesses up and running. My partner has a small business. Together, we make over $200,000 per year, but he is only making about $20,000 per year even though his business is four years old. He has created jobs, and every year he creates more jobs. It is hard. It would be nice if he could get a little help.

Lachine is trying to revitalize Notre-Dame street. All the business owners I talk to tell me that it is hard and that they are struggling, but help from the government would go a long way and would create local jobs for people in these sectors.

I heard my colleague's argument, but the gap between rich and poor keeps growing. It certainly was not the NDP who created that gap. It was the previous Conservative and Liberal governments. The NDP's measures are certainly not going to make the rich richer.

[Don Davies, NDP, Vancouver Kingsway, BC]

Mr. Speaker, in 2000, Canada's corporate income tax rate was 30% and the small business income tax rate was 13%. This advantaged small businesses vis-à-vis large corporations and promoted competition in the marketplace.

Large corporations have economies of scale. They have vast resources permitting them to deal with regulatory burdens and they can more efficiently manage their affairs. That 17% income-tax advantage helped the SME industry in our country.

Since that time, the government has cut the large-scale corporate tax rate down to 15% and kept the small business tax rate at 11%. That gap of 17% has now been narrowed to 4%, which makes it much more difficult for small businesses to operate in this country and compete against the large-scale companies.

Examples are Walmart and Costco competing against a small neighbourhood market, or Starbucks versus JJ Bean, or Chapters or Indigo versus, in my city of Vancouver, Duthie Books or Pulpfiction.

In Vancouver Kingsway, small business is really the engine of our economy. Does my colleague have any comment on the importance of giving small businesses an opportunity to keep their taxes low so they can create jobs and continue to be the engine of the Canadian economy?

[Isabelle Morin, NDP, Notre-Dame-de-Grâce—Lachine, QC]

Mr. Speaker, I thank my colleague for the question. Indeed, that is the dichotomy we always see between corporations and small businesses. Small businesses create jobs. When a corporation sets up shop, small business jobs are often impacted. We need to help small businesses.

My colleague provided the numbers for the gap between the corporate tax rate and the small business tax rate. That gap needs to be widened. We really must help small businesses. When large commercial chains come along, they often offer jobs that are not that great. The work environment is a lot more impersonal. As a consumer, I always try to shop in small, individual stores that are more personal, instead of going to major chains.

I really hope that members of the other parties will support this motion because it is important for the Canadian economy. I believe in it and I think this is a good plan for helping Canadians.

[Brian Masse, NDP, Windsor West, ON]

Mr. Speaker, it is a pleasure to rise here today to talk about this motion, which I will read in a moment. It is an important motion because of the economic situation we are facing.

In the retail sector we see a current crisis with the closure of Target, the most recent casualty in the Canadian economy, and others are also talking of liquidating themselves. It is important to mention that Target was allowed into the country under the Investment Canada Act and then bought out Zellers. Not only have we just lost Target, another retail chain, with vacant spaces appearing in shopping centres where they were located, but the reality is that Target supplanted and took over from the last Canadian-owned retail store, Zellers. When Target took over at that time, I remember the distress and concern of the workers at Zellers, because they had to immediately take a pay cut of a couple of dollars or lose their chance to stay on at Target.

I was on the picket line with some of those employees who had been at Zellers, a Canadian employer company, for over 20 years when this American superhero giant came in to compete.

We knew the terms and conditions because we were living on the border in Windsor, Ontario. We would often go over to Target or some place like that. We would see the signs for a minimum wage of $3 an hour or something like that. We knew the type of attitude that was going to come into the Canadian market.

We have not only just lost this retail component today; we have also lost a Canadian component that had a liveable wage at that time for those workers. The government did nothing for those workers at that time. It could have and it should have, but it did not. It allowed them to be crushed.

Today we stand here to talk about a motion made by the member for Parkdale—High Park, which moves:

That the House call on the government to take immediate action to build a balanced economy, support the middle class and encourage manufacturing and small business job creation by: (a) extending the accelerated capital cost allowance by two years; (b) reducing the small business income tax rate from 11% to 10% immediately, and then to 9% when finances permit; and (c) introducing an Innovation Tax Credit to support investment in machinery, equipment and property to further innovation and increase productivity.

I am going to talk about the initiatives that we have proposed as reasonable ways to move our economy forward and make sure that middle-class Canadians can emerge as a stronger force in this country. We have seen that whittled down over the years through a series of attacks.

There has not been proper support for certain industries, especially when other foreign countries have used intervention to steal some of our jobs. We have certainly seen that in the auto sector.

We have also allowed middle-class Canadians to be attacked by gouging, whether it is at the pumps or through fees charged for credit cards, banking, or cellphones. These are a whole series of important things that are necessary to function in a modern society that have been put on the backs of consumers and families alike.

What that has done is put a real squeeze on disposable income. Just today we saw more reports about consumer debt. It is a real issue, and the investment that is necessary is available to the government and to those individuals who could help.

The first item in the motion is about extending the accelerated capital cost allowance by two years. I have a little history with this.

I was reminded by my friend from Edmonton—Leduc about the work that we did in the industry committee before this place became so hyperpartisan that we could not agree on anything. There was a working relationship in the industry committee at that time.

Ironically, the work was done by several parties. We came up with a series of recommendations that we could all agree upon for the most part, and we worked on the ones we could not agree on to make sure that they would be at least palatable to all of us. One significant recommendation was the capital cost reduction allowance so that the manufacturing and resource sectors could write off of equipment at a quicker pace to encourage investment.

That is important because Canada has become, for the most part, a branch plant economic system. The head offices have often moved outside of this country. Very few have moved back here and very few have stayed. At the time when we produced that report and made recommendations that were tabled in the House of Commons, there were Canadian giants that were still in the field, such as Nortel. Gone.