Mr. Speaker, I am pleased to rise on behalf of the NDP to begin the debate on the budget recently tabled by the new Liberal government.
The budget always turns out to be a huge document. We can support some of the measures it contains, because many of the commitments the Liberals made during the election campaign were poached from the NDP's platforms in 2015, 2011, and 2008. Obviously, we can only support those measures.
It also includes other measures, or half-measures, that do not live up to the commitments made during the election campaign or do not meet the needs expressed during and after the election campaign. In that respect, the government should have listened more closely, but it did the opposite. Contrary to what the government members may believe, many aspects of this budget are far from positive.
Let us begin with the good, the positive elements that, for the most part, were taken from our platform. Let us start by talking about income splitting. When the previous Conservative government announced the measure, we immediately pointed out that it was extremely inequitable and would primarily benefit the wealthiest Canadians. In addition, it would decrease women's participation in the workforce. It would effectively be a tax incentive encouraging them to stay at home rather than contribute to society and participate in the workforce. We promised to immediately abolish this measure, and so did the Liberals. This is included here, so we applaud this initiative.
However, some of these measures cause consternation. We support the measures, but the government did not follow through with them to the extent it promised. I am talking about the tax credit for labour-sponsored funds. This has been an ongoing battle ever since the Conservatives announced the phasing out of this tax credit, which is extremely important for labour-sponsored funds, one of the country's biggest sources of venture capital.
This issue is especially important in Quebec, where the FTQ's Fonds de solidarité and the CSN's Fondaction work closely with private venture capital organizations to help businesses that would otherwise be left behind, ignored, or neglected by traditional funding bodies, such as banks. Their work has been recognized. Because of it, Quebec, which is mainly where this happens, ranks third behind Israel and the United States among OECD countries with the highest level of participation in venture capital.
When this tax credit was eliminated in Ontario, there was a significant drop in venture capital investments in Ontario, such that Quebec, which has a smaller population, now has roughly the same level of investment as Ontario when it comes to venture capital.
We promised to keep this tax credit and I personally fought to make it happen. The Liberals then made the same promise, but immediately after being elected, they promised to get rid of the tax credit. As a result, the tax credit is now down to 5%, when it was originally 15%. According to the definition of the word “immediately”, a 15% tax credit should have been in effect during the 2015 fiscal year. However, that 15% credit does not come into effect until 2017. We see that as a step backward. At a time when people were deciding where to put their savings, this created a lot of uncertainty.
Another thing that seems positive to me has to do with recreational and cultural infrastructure. This was an NDP proposal because we could not understand why the infrastructure budgets in the building Canada program did not include projects that not only stir communities into action, but also help stimulate the economies of those very communities.
After completing required upgrades to its waste and water systems and roads, a municipality that made it a priority to improve its citizens' quality of life and strengthen the community through its sports, recreation, and cultural infrastructure could not secure federal government funds because its requests were specifically excluded from the building Canada program.
Municipalities know best what they need and what their priorities are. In our opinion, it makes no sense for the federal government to establish their priorities, as was the case with the former Conservative government.
We support the initiative that will allow municipalities to secure federal funding for sports and cultural infrastructure.
However, there are several other elements to consider. Yes, there are investments for youth, but the amount is half of what was promised during the election campaign.
Yes, there are investments in public transport, and we agree with that. That was also part of our election platform. However, it falls short of what the new Liberal government promised during the election campaign and, again, it could make it difficult for municipalities to meet public transit needs, because a good part of this money is back-ended.
Now, let us get to the bad. I asked the opposition leader about one of the worst broken promises in this Liberal budget: reducing the tax rate on small and medium-sized businesses from 11% to 9%.
Back in 2008, the NDP recognized that SMEs are job creators and an important driver. We realized this and proposed reducing the tax rate from 11% to 9%. Other NDP governments, such as the Alberta government, have gone even further and completely eliminated taxes on SMEs, bringing the rate to 0%.
The Conservatives ignored this policy for a long time, but finally adopted it in their last budget in 2015. We welcomed this measure, although it was one of the rare times we could agree. We welcomed this initiative and were pleased that they had taken the NDP's idea.
This decrease from 11% to 9% was meant to be gradual, and the rate was set at 10.5% for 2015-16. Once the Liberals finally realized that the NDP and the Conservatives were right, they committed to lowering the SME tax rate from 11% to 9%.