Debates of June 6th, 2016

Budget Implementation Act, 2016, No. 1

[Anthony Housefather, Liberal, Mount Royal, QC]

Mr. Speaker, I had started my speech by talking about the Canada child benefit, because I believe it is probably one of the most innovative and important elements of this budget.

The Canada child benefit directs money to those who need it the most. Couples or singles who are raising children, earning under $30,000 in income per year, will get $6,400 tax-free for children below the age of six, and $5,400 tax-free for children between six and 18.

What I saw during the election campaign in parts of my riding were many families who were struggling to decide how to use the small amount of money they had, struggling to decide between feeding kids and putting them in after-school sports. I know that this measure will really help many children in Canada come out of poverty.

[Tom Kmiec, Conservative, Calgary Shepard, AB]

Mr. Speaker, on the children's benefits program, since the member was talking about how great the program will be, maybe he could tell us why in the budget's annex 1, on page 240, which the budget implementation act is supposed to make law and implement, the children's benefit, in total numbers, actually starts going down as of 2017-18. It goes down every single year into the future, to 2020-21.

I would ask the member if his government intends to cut it back, cut it down, shred the program in the future, because that is what the numbers are showing. It actually shows the numbers going down year after year in the very Liberal budget that is promoting this children's benefit program.

What is the truth here?

[Anthony Housefather, Liberal, Mount Royal, QC]

Mr. Speaker, on the Canada child benefit in terms of amount, I do not believe there is any intention that I have seen in this budget to change the actual amounts that families would be yielded under the benefit. I would have to review the document for the future years in terms of how the member is calculating it, but I do not believe there is an intention to decrease the actual amounts received per child in future subsequent years.

[Daniel Blaikie, NDP, Elmwood—Transcona, MB]

Mr. Speaker, I heard the member at the end of his speech refer to veterans and what is in the budget for veterans. However, I am mystified, because presumably some of the money to be spent in that budget is now going to be spent on lawyers taking veterans back to court, arguing the very same case that the Harper Conservatives were so roundly and rightly criticized for. I wonder why the member's government is bringing veterans back to court, which will have it spend dollars in—

[The Assistant Deputy Speaker, Anthony Rota]

I am sorry, but we have a point of order.

[Garnett Genuis, Conservative, Sherwood Park—Fort Saskatchewan, AB]

Mr. Speaker, it is just that the member should not reference the name of a member of the House.

[The Assistant Deputy Speaker, Anthony Rota]

I am sorry. I missed that.

I think the hon. member knows that, as he is shaking his head. I take it he apologizes for that.

[Daniel Blaikie, NDP, Elmwood—Transcona, MB]

My apologies for that, Mr. Speaker. It is the previous government that I am referring to, and I am keen to hear the member's answer.

[Anthony Housefather, Liberal, Mount Royal, QC]

Mr. Speaker, I do not believe that the amount he is referring to, whatever the court costs are, relate to money that would be spent in Bill C-15 or under the budget itself. I know that the hon. member will join me in saying that since I personally do not have the knowledge of this particular case before the court, I would hardly be in the right to talk about it now.

[John Brassard, Conservative, Barrie—Innisfil, ON]

Mr. Speaker, it is a privilege to rise today to speak to Bill C-15, the budget implementation act.

I have spoken to many of my constituents with respect to the budget, and to say there is some concern among my constituents of Barrie—Innisfil is an understatement.

I spent nine years on city council in Barrie dealing with various budgets. I was a member of the finance committee.

Budgets are typically forward-looking documents. When I look at this document, and when my constituents who I have spoken to about the budget look at the document, there is one underlying theme that comes up regularly: Who is going to pay for this? To use the Liberal narrative, quite frankly the people who are going to pay for this are the middle class and anyone working hard to join the middle class.

One only has to look at the situation here in Ontario, my home province, to see some of the parallels to the mindset of unbridled spending that the current federal Liberal government has embarked on. They are very similar situations. It should not come as a surprise to anyone that they are very similar situations, because the very people who were running the premier's office in Ontario are now involved in the Prime Minister's Office. The mindset of debt and deficit spending is very evident not just in the budget but in some of the policies we have seen come from the Liberal government.

I would remind Canadians that the Ontario government is the largest sub-sovereign borrower on the planet. It is not second, not third, but the largest sub-sovereign borrower on the planet. The payment on the debt currently in Ontario is third only to health and education. It is an example of unbridled spending and debt that can occur. What we are seeing, quite frankly, is a 2.0 version happening federally that has happened in Ontario. The difference really is that there is just a bigger piggy bank for the Liberals to draw from. Add to that the green program, the unmitigated disaster and the costs associated with that. It is really something we are all going to be looking for. As I said earlier, budgets being forward-looking documents, the question for most Canadians is who is going to pay for this.

When we look at some of the promises the Liberal government made, it promised a small $10-billion deficit. We now know that this year that it is going to be $30 billion. We are looking at $150 billion as we move forward. We also heard about, for example, the revenue neutral tax breaks. We now know that those tax breaks are going to cost Canadian taxpayers $1.7 billion this year and $8.9 billion over the next six years. In fact, we are going to see taxes rise to the tune of $1.3 billion this year and $2.4 billion next year.

When the Liberals talk about the middle class and taxes, when they throw out the talking points and talk in platitudes about the middle class and how they are the party of the middle class, I would suggest, as I have before in the House, that what we are actually seeing is effectively middle-class tax fraud. What the Liberals are imposing on the middle class is tax fraud. It is a shell game.

I have said this before, and I will say it again, to make my point. What the Liberals give, the Liberals take back. We only have to look at the budget to figure that out. The fitness tax credit that most Canadians have used, to the tune $1.19 billion since 2006, is gone. The arts and fitness tax credit Canadians have benefited from, to the tune of $118 million or $119 million, is gone. Income splitting for families like mine, a typical middle-class family, is gone. TFSAs are gone as an option for saving. What the Liberals give, the Liberals take away.

On the issue of the OAS, and I think this is critical to discuss at this point, one of the reasons the OAS age limit was reduced from 67 to 65 was a matter of cost and sustainability.

In 2011, almost $38 billion more would have been spent to sustain the OAS. It would be $108 billion by 2020, and by 2030 it would cost almost $266 billion to sustain. In 2012, the Conservative government chose, in keeping with OECD recommendations, to increase eligibility from 65 to 67. It did this because this measure alone would have an estimated annual spending increase of $11 billion. Again, someone has to pay for that. Baby boomers, those born between 1946 and 1964, represented the largest age cohort in history. They retired. The cost of the OAS program was scheduled to balloon, as I said, to $38 billion in 2011.

When the OAS system was originally designed and implemented, the average life expectancy was much shorter. Today the average Canadian life expectancy is 85-plus. Seniors starting to receive the benefit at 65 will live 20 years more, greatly increasing the costs for working taxpayers.

According to Statistics Canada, the most recent projections estimate that more than one in four Canadians will be over 65 by 2036. When OAS was introduced in the 1960s, the ratio of active workers to pensioners was 7:1. Today, however, it is 2.5:1. That is not enough to support the massive cost to Canadians.

The finance minister himself wrote a book advocating later retirements. In The Real Retirement, he wrote:

If we were to retire three years later than we now do, any concerns about having adequate retirement income would practically vanish. It would also alleviate any shortages in the workforce due to the aging of the population.

Again, we have a finance minister who on one hand understands this but on the other hand, as finance minister, reverses his position. It begs the question: would the Liberals and the Liberal Party run their households the way they are running the country?

There were also some other issues with respect to the small business tax cut. On the issue of infrastructure, and I spoke about this before, while money sits to be handed out, people sit, as jobs cannot be filled unless projects begin, and projects cannot begin until the funding has been received.

The government can now, today, get this money out in a fair and equitable manner. We have seen members of the Liberal Party out and about in their communities making funding announcements.

One of the things the Liberal Party ran on was fair and equitable infrastructure investment in the country. Granted, it has made significant investments, but there is one way we can get that money out the door quickly, one way we can get the money out that is equitable. In fact, Mayor Nenshi, this past weekend, at FCM, spoke about the issue of the gas tax being a way to get that money out the door.

If the Liberal government wanted to, rather than delay, and already we are starting to see delays in the construction season due to the fact that the money is not going out the door, it could use the gas tax revenue. There is an existing formula in place.

I know that in my city, the city of Barrie, we receive $8 million a year in gas tax funding. The criteria is already set. The accountability system is already set for that gas tax money. In fact two weeks ago when I was in Vancouver, I met with the president of FCM. I met with the president of LUMCO in my role as urban affairs critic. Universally, every single one of them has suggested that the gas tax is the proper source for ensuring that infrastructure money is put out the door in a fair and equitable manner.

This budget, as I said earlier, is a shell game. I have statistics. I can show third party assessments of this budget and how it does not benefit wholly the middle class. I would suggest, finally, that the ones who benefit the most from the Liberal budget are in fact parliamentarians with respect to tax reductions. I think the same thing that holds in Ontario will hold true three and a half years from now. My constituents are looking at this, and I know that others across the country who voted Liberal did not vote for this.

[Kevin Lamoureux, Liberal, Parliamentary Secretary to the Leader of the Government in the House of Commons]

Mr. Speaker, during the summer, we talked about giving the middle class a tax break. This legislation is what it is all about. Our teachers, factory workers, bus drivers, and others would be given a substantial tax break.

For the first time in a long time, what I am seeing is Conservatives lining up to vote against these tax breaks. How would the member explain to more than nine million Canadians that the Conservative Party is actually voting against tax breaks for our middle class?

[John Brassard, Conservative, Barrie—Innisfil, ON]

Mr. Speaker, to answer that question one would have to look at just who would benefit as the middle class. I know that the Liberals have used the narrative of the middle class to be the party of the middle class.

The fact is that Canadians know that the Conservative Party is the party of the middle class. We actually saw the lowest tax regimen in this country for middle-class Canadians in more than a generation. If members do not believe me, they can look at what Mr. David Macdonald, a senior economist at the Canadian Centre for Policy Alternatives, said when talking specifically about tax breaks and tax cuts. He said that there are 1.6 million families in this country who are earning $48,000 to $62,000 who would benefit from the middle-class tax cut by $51.

This is what I said earlier about this tax fraud, this narrative the Liberals are using that lower-income Canadians would benefit the most from this. They would not, in fact. Do members know who would benefit from it? The member for Winnipeg North would benefit, because his family would see a tax decrease of $813 as a result of the Liberals' measures.

How does the member explain to his constituents that he is actually getting a bigger tax break than those who are earning $48,000 a year?

[Erin Weir, NDP, Regina—Lewvan, SK]

Mr. Speaker, I would just like to pick up on this discussion about the so-called middle-class tax cut. I would ask the member for Barrie—Innisfil to speak to the fact that this measure would actually only apply to incomes over $45,000 per year, and it would not even provide the maximum benefit until one reaches an income of $90,000 per year. I wonder if perhaps the member for Barrie—Innisfil could help us understand how the Liberal Party defines the middle class in Canada.

[John Brassard, Conservative, Barrie—Innisfil, ON]

That is a great question from my hon. colleague, because I am not sure that the Liberal Party really understands how to define the middle class, unless of course it defines it as the upper middle class being the one that would benefit the most from this.

I want to continue, and I am glad that hon. member talked about this. When we talk about tax reductions, when we look at families earning $62,000 to $78,000, we see that they would actually see a benefit of $117. Granted, $117 is a benefit, but to espouse the virtues of the tax cut the way the Liberals are is a false narrative. The Liberals are actually not telling the truth to most Canadians about what their middle-class tax cut would do, not to mention the fact, as well, that there would be a deficit created, as a result of this, of $1.7 billion this year and $8.9 billion over the next six years. That does not take into account the fact that the Liberals ran on a platform that this would be revenue neutral.

It would be $124,000 to $166,521 in tax benefits. Again, the members on the opposite side know full well that they would be the ones to benefit. Every member of this House, wrongly, would gain the most as a result of this tax decrease, to the tune, on average, of $813. This false narrative that somehow the middle class would benefit from this tax break is something most Canadians are starting to come to grips with, this shell game, this middle-class tax fraud the Liberals are perpetuating on Canadians.

[Francesco Sorbara, Liberal, Vaughan—Woodbridge, ON]

Mr. Speaker, I am pleased to speak this afternoon to Bill C-15, budget implementation act, 2016. I would like to focus my comments today on one particular area that is of great interest to me and that our government is dedicated to enhancing and that will lead to a stronger economic growth profile for our country, the field of innovation.

When I think of innovation, I look at my riding and in the city of Vaughan there are literally thousands of innovative companies. One that comes to mind is Mircom Group of Companies, a company that has been in existence for many years and whose owners are good family friends. The Mircom Group of Companies is the largest independent designer, manufacturer, and distributor of intelligent building solutions. It competes against U.S. giants like General Electric, Tyco, and Johnson Controls employing literally hundreds of Canadians. Over half of its products are exported outside of Canada to more than 95 countries. Mircom employs a highly skilled workforce, including scientists and engineers. It hires the best from Canadian universities.

This company is one example of a Canadian success story and it is an innovator. I would also like to add that I am proud to say that another company in my riding Vision Plastics, part of the Vision Group of Companies investing $150 million in Vaughan, will be employing literally 300 to 400 Canadians and is set to open this coming fall. I will have more to say on that in the months ahead.

Bill C-15 is a part of the legislative framework our government is attempting to put in place to encourage companies like this to start, to grow, to remain in Canada, and to succeed. That is what makes me happy about what our government is doing. In terms of its commitment to innovation, we are going in the right direction, a direction that will lead to better jobs, better benefits, a strong and growing economy, and a strengthened middle class.

What do we mean when we use the word “innovation”? Certainly it means different things to different people. I just cited an example of what innovation means in my community, but in the broader context, our government is daring to dream of doing something smarter, faster, and better to improve the status quo, to improve the quality of life in whatever way is possible.

Fundamentally we are trying to find solutions to the big problems, to the big issues that challenge us. That means social innovation, embracing the premise that a clean environment and a strong economy go hand in hand. It means understanding that some of our most important infrastructure is not only roads and bridges, but is also digital infrastructure in the context of a knowledge economy. It means moving beyond individual interests to see the collective opportunities.

Technology is fundamentally transforming the way Canadians access information, pay for goods and services, interact with each other, and build communities. At the same time, technology has now reached a new level. It is more than just communications. Technology has become a transformative tool in addressing global challenges like climate change and poverty. Where industrial progress once came at a cost to the environment, nowadays technology has emerged as our greatest tool in clean growth and healthy growth, and prosperous societies.

Our government has defined a new vision in 2016, a vision to build Canada as a centre of global innovation, renowned for its science and technology, creative and entrepreneurial citizens, and globally competitive companies offering high quality products and services, much like the Mircom Group of Companies. We are well positioned for this. We have world-leading research institutions, creative and innovative entrepreneurs such as the Mircom Group of Companies, businesses, and commercial organizations that can transform breakthroughs in the laboratory into products that enhance the lives of millions. That is the lives of millions of Canadians and also the lives of people around this earth that we inhabit.

Canada's innovative society already creates jobs for the middle class, enhances homegrown talent, and helps companies expand beyond our borders. However, we can and we will do much more. What is now an emerging economic opportunity will become the foundation of a modern 21st century Canada. We will transform our economy from one that depends on a few resources to one whose resources are as infinite as our diversity, creativity, and talent.

Through 2016 and 2017, we will define a bold new plan, the innovation agenda. Bill C-15 is a part of that blueprint to get to the innovation agenda. This will be a plan for change. It will define clear outcomes and pinpoint milestones toward achieving them. It will be a cross-government effort, drawing on Canadian and international experts in clean technology, health sciences, advanced manufacturing, digital technology, resource development, and much more.

It is important for us to be leaders in this field. We all hear that word, ecosystem. The ecosystem is important. In prior periods there may have been an auto plant where suppliers would co-exist in the surrounding area. However, today that has changed. Today with an ecosystem, we may have many small companies operating in clusters throughout the world and we need to be at the forefront of that. We need to be a part of that. That is what is going to create a strong and growing economy and strengthen our middle class.

To help us realize this vision, budget 2016 proposes several interim measures to promote research and accelerate business growth. It would focus new federal support for science on world-class discovery research, maintain funding for the commercialization of promising scientific discoveries, begin to orient federal business support toward those firms with ambitions to grow, and build a better evidence base to identify gaps, evaluate performance, and inform future decisions.

The rules are changing around us. In the old bricks and mortar economy, a bigger factory meant not just more output in wealth but more jobs. That is not the case in the new digital economy. We need to enable and support this change. We also need to ensure that we do so mindfully and in a way that does not stifle innovation.

The innovation leaders are the future and must be equipped with the skills they will need to succeed. Post-secondary and other research institutions are the front-line agents in fostering science and research excellence. They help train the Canadian workforce of tomorrow today. They help train my young daughters. They also help to create the knowledge base necessary for the private sector and policy-makers who are looking to build a thriving and clean economy. To ensure that these facilities continue to support our researchers and innovators, budget 2016 would invest up to $2 billion over three years in a new post-secondary institutions strategic investment fund.

If investing in the spaces that enhance our innovative potential is the first step, the second step is most certainly investing in Canadian researchers themselves, particularly those on the cusp of new discoveries. In Canada, this funding typically flows from federal granting councils, which include the Canadian Institutes of Health Research, the Natural Sciences and Engineering Research Council, and the Social Sciences and Humanities Research Council. These councils already receive $2.8 billion annually to support research and training of highly qualified people at universities and colleges across the country. This year and going forward, I am proud to state that our government would provide an additional $95 million to support discovery research, the highest amount of new annual funding in over a decade.

To ensure that federal support for research, including through the granting councils, is strategic and effective, we will undertake a comprehensive review of federal support for fundamental science. We want to be sure that we are providing the right support to the right leaders and that fields of research reflect shared Canadian priorities.

Our government will also continue to support Canada's strength in genomics, the study of the entire genetic code that is fuelling innovations across a number of sectors. We would provide $237.2 million over the next four years to support the pan-Canadian activities of genomics.

Well before genomics, Canadians carved out a special expertise in stem cell research. It started over 50 years ago when two of Canada's own doctors proved their very existence. Since that time, stem cell research has evolved into one of the world's greatest promises, with significant implications for medical treatments, commercial products, and public policy. We would provide up to $12 million over two years in support of the stem cell network so it could continue to provide bridges that connect researchers and professionals through training and outreach activities.

To conclude, in the 21st century global economy, Canada needs to be innovative to be a leader. We need to be leaders. Our businesses need to be fostered and encouraged. We need to embrace the world of science, technology, engineering, and math. We need to diversify our economy to enable growth and prosperity throughout the country. We need to turn the page on the last 10 years.

In addition to these goals, I believe that Canada has a strong foundation to build upon. We have one of the best educated populations in the world. We have one of the highest university investments in research and development. We have one of the world's best investment climates. We are a leading edge of global trade.

Let us be proud of Canada.

[Garnett Genuis, Conservative, Sherwood Park—Fort Saskatchewan, AB]

Mr. Speaker, what my constituents and I have significant concerns about in the budget is the elimination of the small business hiring credit. It is hard for me to understand why the government would eliminate a measure specifically aimed at helping small businesses hire more people. Also of concern is the movement away from the election commitment made by the Liberal Party, as well as all parties in this place in fact, to follow up with the commitment to lower small business taxes. Small businesses will effectively experience a tax increase.

Specifically, on the elimination of that hiring credit, in light of the things he said in his speech, and good intentions no doubt, I wonder if the member could explain these policies.

[Francesco Sorbara, Liberal, Vaughan—Woodbridge, ON]

Mr. Speaker, I would like to add a few comments specifically with respect to small business.

First, in the foreseeable future there will be EI reductions for small businesses. Therefore, small businesses will benefit from employment insurance reductions on their premiums. That can be a great thing for small businesses.

Second, we understand that small businesses are the backbone of the economy. We would like them to scale up and grow. However, we also need to have a healthy middle class and a strong demand for small businesses to prosper. That is what our budget aims to do. It aims to grow the economy by providing middle-class tax cuts, which now currently benefit nine million Canadians. We will be introducing the child Canada benefit, which will benefit nine out of 10 families. They will spend their money, and will spend their money at small businesses to help them grow and prosper as well.

[Erin Weir, NDP, Regina—Lewvan, SK]

Mr. Speaker, the member for Vaughan—Woodbridge spoke about the role of post-secondary education in the innovation economy. The main way in which the federal government supports post-secondary education is through the Canada social transfer to provinces, which helps to fund universities. I was struck by the fact that the Canada social transfer in budget 2016 is exactly the same going forward as what was projected in budget 2015. Therefore, we are not seeing any increase in funding for post-secondary education from the new government.

I wonder if the member for Vaughan—Woodbridge could explain that and give us some sense of when the government might actually provide a higher level of federal funding for our universities and colleges.

[Francesco Sorbara, Liberal, Vaughan—Woodbridge, ON]

Mr. Speaker, what I will say is that we have made a large commitment to post-secondary institutions. We have made a commitment to individuals who are enrolling at post-secondary institutions. If we look at the Canada student loan grants and debt repayment schedules that we have put in place in the budget in Bill C-15, we see literally a multi-billion dollar investment into our universities, and our students per se, so that when students exit university and begin working they will have a time frame to accumulate some capital before they need to repay their student loans. Therefore, on the one hand we are helping in terms of investing in infrastructure in universities and on the other hand we are also helping with students enrolling in universities, particularly middle and low-income students who need that assistance when going to university so that they are not burdened by such a high debt burden when they exit university.

[Tom Kmiec, Conservative, Calgary Shepard, AB]

Mr. Speaker, I would like to thank the member for Vaughan—Woodbridge for his interventions so far. I do a lot of work with him on the Kurdish file. Therefore, I know that he is learned and studies up on issues like this. However, I cannot believe that he would support a budget that will spend over $100 billion. In this budget alone it will be $29.6 billion, 80% of which is just program spending. It is just spending on programs. That will be passed on to the next generation. This is telling them that they will have to pay the bill for the wants of today, not the needs of today. How can he support such a bad budget where the vast majority of the spending is not spent on infrastructure or assets, rather it is bad program spending? How can he answer that? How can he support this budget?

[Francesco Sorbara, Liberal, Vaughan—Woodbridge, ON]

Mr. Speaker, my colleague and I do some good work on the Kurdish file, and I am pleased to work with him on that.

What I will say is that I defer to what others have commented about infrastructure investments, whether it is the former federal reserve chairman Ben Bernanke or the current Bank of Canada governor Stephen Poloz, which is that key investments in infrastructure, which is what this budget undertakes, are an enabler for long-term growth and maintain our standard of living. Therefore, our budget, part and parcel of which represents our platform, and Bill C-15, which is the blueprint, is one of the large first measures to implement our infrastructure program, which will help grow our economy and strengthen our middle class.

[Garnett Genuis, Conservative, Sherwood Park—Fort Saskatchewan, AB]

Mr. Speaker, I appreciate the opportunity to join this important debate on the government's budgetary policy. I will be focusing my remarks on certain areas that I have not had a chance to discuss yet in previous speeches on the government's budgetary policy.

There is an evidence sense of unreality to the discussion coming from government members on this. We hear a lot about what the budget aims to do. The budget aims to do this and it aims to do that. Our complaint is not with the intentions of the budget. Our complaint is with the provisions in the budget. There are many cases in which there is this obvious dissonance between high-minded claims about what the budget aims to do and the substance of the provision. We just heard a good example of that. A member talked about small business in his riding and the important work it did, but then supported a budget that would raise taxes on small business and eliminate the hiring credit for small business. There is this evident dissonance here.

I had an opportunity to question the finance minister in committee of the whole last week. I asked three times, consecutively, if he believed that the government should eventually balance the budget at some point in the future. We did not get an answer to that question.

When the finance minister, who should know better, cannot even answer a direct question about whether it is important for a country to balance its budget at some point in the future, then we have a real problem with the seriousness of the plan. It is not a problem with intentions necessarily, but it is a problem with the seriousness of this so-called fiscal plan.

I want to talk about three specific things today. I want to talk about where economic growth really comes from. I want to talk about the impact of the budget on families. I want to speak about the impact of the budget on indigenous Canadians, specifically in the context of indigenous education.

We hear a lot about economic growth, and this comes back to the good intentions here. We hear the word “growth” used over and over again. Like so many of the words the government uses, especially in the context of budgetary policy, we have not ever heard it clearly defined. We do not hear the Liberals explain what they mean by growth and what exactly they plan to achieving in growth.

Economic growth is produced when there is an increase in the ability of society to provide for itself, when society grows in its economic means to provide for itself in terms of its wants and its need. Therefore, it is very closely linked to the concept of economic productivity, productivity being the rate of output given the input.

We often talk for example about labour productivity. As labour productivity increases, the amount of output that can be produced in a given hour of labour increases. That is really what creates economic growth. Economic growth is about finding ways of more productively using our time and our resources to produce more things that we can use to satisfy our wants and our needs. Fundamentally, foundationally it is about growth in productivity.

When the government thinks about trying to encourage economic growth, it should focus on productivity. The current government talks as if all that is required to increase growth is more government spending. Looking around the world, it is easy to see how there is no linear relationship at all between government spending and economic growth. Some countries do much better than others that have much lower levels of public spending. That is not to say the government does not have a role in identifying areas where productivity growth can occur, but it certainly is not in any sense linear.

From my perspective, there are a number of different things that facilitate increases in productivity, which is important for economic growth. One would be a more educated workforce, specifically though a workforce equipped with job-ready skills, and a marketplace that is well-equipped to commercialize knowledge that is produced.

That was why in 2007 our government came forward with a science and technology strategy that looked at ways of more effectively encouraging commercialization of knowledge. It was why we put an emphasis on encouraging the trades as well, because of the needed to have a workforce that was equipped with job-ready skills. That was important for productivity and economic growth.

Efficient transportation infrastructure is obviously an important part of that as well, both in education and infrastructure. These are areas where government spending can play a positive role. What is disappointing about the budget is the total abuse of the word “infrastructure”. The government redefines infrastructure to mean almost everything.

The minister confirmed in our discussion in committee of the whole that he believed child care was a form of infrastructure. Well, it is certainly not in the sense that economists traditionally define it. Transportation infrastructure obviously has a positive impact on productivity when it is well placed, well designed, and when it helps people get to and from work more quickly.

Productivity growth requires an economic system that provides significant returns on business innovation. Business innovation creates improvements in productivity, and therefore we need a system that creates incentives for that business innovation, things like relatively low business tax rates and benefits accruing to companies that choose to hire more people. That is why this budget would negatively impact productivity by effectively increasing the tax on small business by eliminating the hiring credit. These types of measures are not good for economic growth.

Economic growth requires a stable and predictable economic environment as well. People will invest in an economy that they have a reasonable expectation will do well over the long term. When we have extended periods of large budget deficits and we have the government going into deficit with no plan to get out of it when we are not in the midst of a recession, that clearly damages confidence and reduces the reason for investments in things that produce productivity growth.

We hear a lot about growth from the government, but we do not actually hear any discussion of those foundational constituent parts of growth, things like how we increase the productivity of our economy and how we increase the productivity of labour. These are things that the government should be thinking about in a more serious way, but the Liberals repeat this mantra that more government spending is somehow, absent of any clear connection or specificity in investment, going to lead to economic growth. That is a major concern I have with the plan of the Liberals.

I want to speak as well about the impact of the budget on families.

I believe in a simple principle with regard to family taxation. If two families are earning the same amount of money, then they should pay the same amount of tax. It would seem arbitrary and unreasonable, and therefore unfair, that we would have two families each earning the same family income but happen to pay different amounts of tax, simply by virtue of which people in the family are earning the income. That is why we brought in income splitting. It was an important tax cut, but it was also a measure to ensure tax fairness.

However, the government does not seem to agree with this principle of tax fairness. The Liberals would eliminate income splitting, having the effect of raising taxes on many families, but also now ensuring a system of unequal taxation where we have families that are earning the same income, yet paying different amounts of taxes, simply because of how they decide to divide child care responsibilities. Our view has always been that it should be up to families to make their own child care choices, and families should not face some kind of direct or indirect fiscal penalty because of the financial choices they make.

Of course, the Liberal changes would also remove universality of child care benefits. We think that is a problem. We think a universal taxable benefit made good sense. Of course, a taxable benefit is inherently more progressive because the more money one makes, the more tax one pays on it. It had that built-in progressivity to it, but it was still designed to ensure that everyone had something to benefit from.

I want to speak briefly about the impact of the budget on indigenous Canadians. This budget would spend a significant amount of new money, but it does not come with the kinds of measures that are necessary to ensure the success of those investments, especially as it pertains to education.

We have a core problem when it comes to education in aboriginal communities. Unlike in every province across the country, on-reserve first nations education does not have legislated educational standards and a legislated mandate for core curriculum. It does not require that schools award a recognized provincial diploma. That is a problem. It is a problem when we do not have those structures in place to ensure that there can be a seamless transition between a school on a reserve and a school off a reserve. These are the kinds of measures, the kind of collaborative structuring of the system, improvements to accountability, that would make a real concrete different. We think those kinds of changes should, and could, be accompanied by increased investment. However, the government has put in new money but does not actually have an effective plan to improve the system at all.

Those are a number of reasons, and there are many more I could list, why I am very concerned about this budget, and I will be opposing it.

[Kyle Peterson, Liberal, Newmarket—Aurora, ON]

Mr. Speaker, I took some pleasure in listening to what I call the hon. member's litany of unfounded grievances with the budget. However, I have a specific question for my friend.

He no doubt is aware that the former finance minister of the previous government, the late Jim Flaherty, was adamantly opposed to income splitting. Part of the foundation for that opposition was that a consequence of income splitting would show an inordinate amount of women staying at home and not entering or staying in the workplace. Is that the policy the member wants to see achieved by having a robust income splitting regime?

[Garnett Genuis, Conservative, Sherwood Park—Fort Saskatchewan, AB]

Mr. Speaker, I think to some extent the member would put words in the former finance minister's mouth, although to the extent that we may disagree on aspects of this.

On the question of people staying home or not, the tax system should be neutral with respect to the choices people make about child care. I do not think it should penalize people who make one kind of child care choice over another. Some parents may decide that a certain kind of child care arrangement is better for their family, whether that is a person at home, be it mom or dad; whether that is grandparents; whether that is institutional child care; or whether that is some kind of child care sharing arrangement with neighbours or friends.

What I see in my community is actually the increasing flexibility and variability of child care relationships. We increasingly see people working from home, and working different hours. We are not in that sort of narrow nine-to-five model for many people. Increasingly there is flexibility there. There is a lot of change and variability in child care.

From a state perspective, we should not go to families and say that we think this is what we want them to do with respect to child care. We should leave the decisions to the people who we think are the most important child care experts, mom and dad.

[Erin Weir, NDP, Regina—Lewvan, SK]

Mr. Speaker, the hon. member for Sherwood Park—Fort Saskatchewan is a fellow alumnus of the Canadian University Society for Intercollegiate Debate, and he clearly understands the importance of defining his terms. I note that he began by defining economic growth in terms of the economy's capacity to produce output. Of course, by that definition, we can only look at the supply side, and productivity is the only factor that matters to economic growth.

We are all in support of more productivity, but I wonder if the House would accept that economic growth is actually about the total amount of output, which depends not only on productive capacity, but also on the demand for output. I wonder if the member for Sherwood Park—Fort Saskatchewan would acknowledge that in the current context of unemployed workers and unemployed resources, it is actually possible to increase economic growth by increasing demand through measures such as government spending.