Debates of May 25th, 2015

Finance—Main Estimates 2015-16

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

Mr. Chair, it is not that difficult to answer questions.

Once again in reference to the GM shares, could the minister tell us what financial assistance the Government of Canada provided to GM in exchange for the 73.4 million shares it subsequently held?

[Joe Oliver, Conservative, Eglinton—Lawrence, ON]

Mr. Chair, the government has recovered $6.4 billion of the $7.2 billion support it provided to GM through a combination of loan repayments and related interest payment share sales and redemptions and dividend payments.

We have saved 52,000 jobs and protected the automobile sector. We are in fact, in budget 2015, providing another $100 million for the automotive supply sector for support for an innovation program.

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

Mr. Chair, once again I am asking a simple question. I would like to know when government decided to financially help General Motors back in 2009 and got 73 million shares in exchange. I would like to know what the investment was in GM to ensure that the 73 million would go to the government?

[Joe Oliver, Conservative, Eglinton—Lawrence, ON]

Mr. Chair, I do not know if the member opposite is listening. I just provided him with details. Does he want me to repeat what I just said?

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

Mr. Chair, I did not get an answer, but I will move on because it seems that tonight it is very hard to get answers from the minister.

I want to ask the Minister of Finance whether he believes that Canada's fiscal risks have diminished by two-thirds since last year.

[Joe Oliver, Conservative, Eglinton—Lawrence, ON]

Mr. Chair, there is one fiscal risk that has diminished significantly and that relates to the price of oil. The price of oil was at a high of about $108 to $110. Oil fell to $44 and it is around $60 or so now. That precipitous decline, which had an impact across the country and cost the federal treasury many billions of dollars, has of course been reduced. That is a significant point.

I think I know where the member opposite is going and I will deal with his next question.

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

Mr. Chair, he talks about just one risk, but at the end of the day, for at least the past 15 years, the federal government has had a $3 billion contingency fund for emergencies. The price of oil is just one risk. There are many risks, and the government had a contingency fund.

Why reduce the contingency fund from $3 billion to just $1 billion for the coming years?

[Joe Oliver, Conservative, Eglinton—Lawrence, ON]

Mr. Chair, the amount of the contingency fund is updated in every budget in order to take into account the risks to the economic outlook. Since last fall's update, the downside risks for which the contingency fund was established have materialized to a great extent. We also have a surplus, and last year we had a deficit. With the surplus and the contingency fund, we have enough money for contingencies.

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

Mr. Chair, let us be clear. It took $2 billion plus the $1.8 billion from the employment insurance operating account to balance the budget this year. That is the only reason the government went in that direction.

In 2014-15, the hon. member will remember that small businesses were given an employment insurance premium holiday, which cost the government approximately $550 million.

I would like to know how many jobs were created as a result of that EI holiday.

[Joe Oliver, Conservative, Eglinton—Lawrence, ON]

Mr. Chair, we are proud to have advanced $550 million to small businesses. Reducing costs for businesses through measures such as the small business job credit encourages those business to hire workers and promotes economic growth. It should also allow small business owners to save money over the next two years. Small businesses can use that money to more easily absorb the cost of hiring new workers.

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

Mr. Chair, the government decided to give businesses an EI holiday of over half a billion dollars. It claimed that this was a job creation measure.

Now that the program is complete, how many jobs were created as a result of that measure?

[Joe Oliver, Conservative, Eglinton—Lawrence, ON]

Mr. Chair, we conduct in-depth analyses of every program, but we do not calculate how many jobs each program creates.

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

Mr. Chair, speaking of in-depth analyses, the minister defended the measure as one that had been subject to an in-depth analysis by the Canadian Federation of Independent Business and not by the Department of Finance.

I will ask my question again: now that the program has come to an end, did the Department of Finance conduct an analysis that included results showing how many jobs were created through this program?

The minister just said that the Department of Finance was responsible for analyzing the programs. I would like an answer.

[Joe Oliver, Conservative, Eglinton—Lawrence, ON]

Mr. Chair, the Canadian Federation of Independent Business estimates that the credits will lead to the creation of 25,000 person years of employment in the coming years. The Canadian Federation of Independent Business published a detailed explanation of its methodology online.

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

Mr. Chair, the Parliamentary Budget Officer said that the $550 billion would create just 800 jobs. We are talking about jobs created and not person-hours.

Did the Department of Finance conduct analyses of the expected number of jobs created and did it conduct analyses of the number of jobs created through this program?

[Joe Oliver, Conservative, Eglinton—Lawrence, ON]

Mr. Chair, the program is under way and it is ongoing. We do not have the figures right now. We can do the calculations once the program is over.

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

Mr. Chair, I get that the program is ongoing, but the Department of Finance should at least follow up on how job creation funds distributed to small businesses are being used.

Did the Department of Finance analyze how many jobs the measure was expected to create, and is it currently analyzing the number of jobs created by this measure?

[Joe Oliver, Conservative, Eglinton—Lawrence, ON]

As I said, Mr. Chair, we did, of course, a complete detailed analysis of the program, as we do with all programs, but we did not do that in respect of employment. It is not normally done, nor has it been done in the past. However, this is an obvious benefit, which the CFIB supports, for 780,000 small businesses, a benefit which would permit them to grow and create employment. It is good for the economy, it is good for employment, and it is fair to small businesses.

[Dave Van Kesteren, Conservative, Chatham-Kent—Essex, ON]

Mr. Chair, a solid middle class is the foundation of Canada's economy. Our government has consistently recognized that our country can only be as strong as its middle class. Fortunately, Canada's middle class has been steadfast in an uncertain world. They have seen increases of about 30% in their take-home incomes since 1976. The share of Canadians living in low-income families is now at its lowest level over the past three decades.

A recent Statistics Canada study has revealed that since our government has taken office, the middle class has flourished significantly:

The median net worth of Canadian family units was $243,800 in 2012, up 44.5% from 2005 and almost 80% more than the 1999 median of $137,000, adjusted for inflation.

Another study, this one from the New York Times, has indicated that Canada's middle class is better off financially than that of the U.S.:

After-tax middle-class incomes in Canada—substantially behind in 2000—now appear to be higher than in the United States.

Furthermore, since 2006, Canadian families in all major income groups have seen increases of about 10% or more in their take-home incomes. However, in an economic context, as well, Canada is doing well and continues to improve, which sets a positive environment for the middle class.

Our country continues to move forward in the face of a fragile external environment and profound global economic uncertainty. In fact, Canada has achieved one of the best economic performances among G7 countries after the recovery. Real gross domestic product has increased more in Canada than in any other G7 country since the end of the recession. It goes to show that Canada's economic action plan is working.

At a time when other countries' financial systems were brought to the brink of bankruptcy, Canada's banks remained the soundest in the world. When other countries increased taxes, Canada kept its taxes low. In fact, the overall federal tax burden is the lowest it has been in over 50 years.

One of the easiest and best ways to help the middle class is to let them keep more of their money not in government coffers, not in wasteful bureaucratic programs, but directly with them in their own pockets. It is why our government has been so committed to cutting taxes for all Canadians, but especially for the middle class.

Indeed, since 2006, Canadians have benefited from significant, broad-based tax cuts introduced by our Conservative government. These tax reductions have given individuals and families the flexibility to make choices that are right for them and have helped build a solid foundation for future economic growth, more jobs, and higher living standards for Canadians.

In total, our government has introduced over 180 tax relief measures since 2006, reducing taxes in every way the Government of Canada collects them. Canadians of all income levels are benefiting from tax relief, with low- and middle-income Canadians receiving proportionately greater relief.

Some of the key actions we have taken to reduce taxes for all Canadians include the following: reducing the lowest personal income tax rate and increasing the basic personal amount; cutting the GST from 7% to 5%; introducing pension income-splitting; establishing tax credits to support low-income workers, public transit users, first-time homebuyers, and families caring for disabled relatives; and providing additional support for families with children through the children's arts and fitness tax credit and enhancements to the registered education savings plan and the adoption expense tax credit.

Our government has introduced even more measures to go even further to help families make ends meet.

For example, we are implementing the family tax cut, which would allow a higher-income spouse to effectively transfer up to $50,000 of taxable income to a spouse in a lower tax bracket. We are increasing the universal child care benefit for children under six and are expanding it to children aged six through 17; as of January 1, 2015, parents are eligible for a benefit of $160 per month for each child under the age of six and for $60 per month for children aged six through 17. We are also introducing the child care expense deduction dollar limits by $1,000, and for those parents who put their children into sports, we have doubled the children's fitness tax credit to $1,000 and made it refundable.

Our government has also established the tax-free savings account, which is the most significant advance in the tax treatment of personal savings since the RRSP. This year, in order to help Canadians save even more of their hard-earned money, economic action plan 2015 proposes to increase the TFSA annual contribution limit to $10,000.

As a result of our government's actions, a typical two-earner family of four would receive tax relief and increased benefits of up to $6,600 in 2015. This represents real, concrete savings for the middle class.

These important measures are just a handful of examples illustrating how our government has responded to the needs of Canadian families and helped Canadians keep more of their hard-earned money.

However, the opposition members think very differently. They believe that taxing Canadians more will in fact bring long-term prosperity. We will not raise taxes on Canadians. They believe that it is not fair when our actions benefit every single Canadian family. We believe that is completely counterintuitive. When we are benefiting every Canadian family, that is the exact definition of fairness.

The opposition members believe that plans of high debt and high deficits have no bearing on the everyday Canadian. We reject this idea, which would raise the cost of living in Canada, saddle families with higher taxes, and burden future generations with these reckless schemes. There is a clear divide between our Conservative government and the opposition, which does not seem to understand just how devastating tax hikes and reckless spending would be, not only to the Canadian economy but more so to the middle class.

Perhaps one of the most significant ways to ensure the prosperity of Canadians is to keep Canada's books in order and bring the budget to balance, as I mentioned. When the great recession hit us, we responded quickly and effectively with a historic stimulus program, and we emerged from the recession faster and stronger than virtually any other major advanced economy. When the crisis passed, we promised Canadians that we would balance the budget. We delivered on that promise, but we did not do it by raising taxes or cutting transfers for education and health care. We focused on controlling operating expenses for federal departments, identifying efficiencies to make government operations leaner.

A balanced budget will preserve Canada's low-tax plan and allow for further tax reductions, fostering growth and the creation of jobs for the benefit of all Canadians.

Balanced budgets play a significant role in helping the middle class. By taking the time to make smart fiscal and economic decisions under the leadership of our Prime Minister, we are ensuring that the choices we make today will not hurt the futures of our children and grandchildren. I know that is what many Canadian families are concerned about, and let us make no mistake: high debt and high deficits now will saddle future generations with an even greater burden.

This government understands the importance of middle-class Canadians and their future, and as our actions have shown, we listened and worked diligently to ensure that Canada's middle class is among the richest in the developed world. Needless to say, we will continue this trend and look for more ways to help the middle class thrive and contribute to the Canadian economy.

I have a question for the finance minister. On that note, I wonder if he could elaborate on how the government is helping to create jobs for the middle class.

[Joe Oliver, Conservative, Eglinton—Lawrence, ON]

Mr. Chair, I thank the member for Chatham-Kent—Essex for his question and for his great service to his constituency.

Our government's top priority has always been to create jobs and growth. As a result of our actions, over 1.2 million more Canadians are working now than at the end of the recession in June 2009. This represents one of the strongest job creation records in the G7 over this period. The majority of these net new jobs have been full-time positions in high wage, private sector industries.

When it comes to jobs, our government understands that small businesses are the lifeblood of the economy. They account for 99% of all businesses in Canada and employ half of the working men and women in the Canadian private sector.

Our government believes that small businesses should spend their time growing their businesses, creating jobs and hiring Canadians, not choking on high taxes and red tape. That is why we have repeatedly cut taxes significantly for small businesses and their owners.

Building on our record, budget 2015 proposes to reduce the small business tax rate to 9% by 2019, the largest tax rate cut for small businesses in more than 25 years. When the proposed reduction in the small business tax rate takes effect in 2019, combined with previous actions taken by our government, the amount of federal corporate income tax paid by a small business with $500,000 of taxable income would be 46% lower than in 2006. This means an annual tax reduction of up to $38,600. That money could be reinvested in the business to create new jobs for Canadians. These changes, among others, would help enhance the ability of small businesses across Canada to retain their earnings, to grow their businesses and create jobs.

However, we are also building on our efforts to connect Canadians with the areas that need help. Increasingly, a number of jobs are going unfilled due to a lack of people with the matching skills. That is why we have enhanced labour market information for Canadians, which would efficiently help match Canadian workers with available jobs, reforming the skills training program and encouraging journey persons to start or expand their own business.

These are but a few of the ways we are creating new jobs and filling demands that the private sector is yearning for.

Furthermore, economic action plan 2015 would bring tax relief to manufacturers. We believe that manufacturing will continue to play a major role in Canada's economic success. For our government, the words “made in Canada” continue to fuel pride, not to mention jobs.

That said, we must give manufacturers the tools they need to create the products and the jobs of the future. That is why we are announcing a 10-year tax incentive to encourage investment in machinery and equipment used in manufacturing and processing. When Canadian companies invest in state-of-the-art equipment and structures, they increase their productivity and competitiveness.

I see that my time is nearly up. I could continue for hours on why job creation is our government's main focus. However, as long as there are middle-class Canadians looking for work, our job is not yet done.

Economic action plan 2015 is the next part of our long-term plan to ensure we get Canadians back to work and continue Canada's economic growth and prosperity.

[Pierre Dionne Labelle, NDP, Rivière-du-Nord, QC]

Mr. Chair, I would like to ask the minister the following question: of the five most popular destinations for Canadian direct investment abroad, how many are tax havens, to his knowledge?

[Joe Oliver, Conservative, Eglinton—Lawrence, ON]

Mr. Chair, we have major policies to address the problem of tax system fairness, to ensure that everyone pays their fair share of taxes, to keep taxes low for Canadian businesses and families and to help maintain public confidence in the tax system. That is why our government is committed to strengthening tax compliance and closing tax loopholes that enable some businesses and individuals to avoid paying their fair share.

[Pierre Dionne Labelle, NDP, Rivière-du-Nord, QC]

Mr. Chair, I will be sharing my time with the member for Victoria.

Out of the five largest destinations for Canadian direct investment abroad, there are three tax havens. How much money did Canadians invest in those offshore tax havens last year?

[Joe Oliver, Conservative, Eglinton—Lawrence, ON]

Mr. Chair, our economic action plan takes steps in two areas when it comes to closing tax loopholes: it increases funding for Canada Revenue Agency programs that target the underground economy, offshore non-compliance and aggressive tax avoidance by large complex entities; and it also proposes a number of measures to improve the fairness and integrity of the tax system.

[Pierre Dionne Labelle, NDP, Rivière-du-Nord, QC]

Mr. Chair, how is it possible that three out of five destinations for Canadian investment abroad are tax havens? Some people estimate the tax losses to be as high as $7.8 billion a year. Are we losing $7.8 billion a year in uncollected taxes because of Canadian investments in tax havens?