Mr. Speaker, I will be splitting my time with the member for Okanagan—Coquihalla.
I am grateful for the opportunity to speak on the budget bill today. I have been here since 1993, Mr. Speaker, and maybe you have been here longer. I know that there are certainly a few members who have. This is a very strange twist and turn story for the federal budget of Canada. It is the strangest story that I have seen since I have been here.
In fact, it is hard to tell exactly where the government is coming from. It seems to have two budgets now. The budget that could not be touched on February 23, according to the Minister of Finance, suddenly is open game, depending on what the government needs to stay in power. It is a desperation move that is costing Canadians now and will continue to cost them into the future.
I heard the other day that the Minister of Finance is suddenly talking about productivity, about the lack of Canadian productivity and how far we have slipped. He is a recent convert, I should say, but I welcome him aboard.
This is a subject that we need to deal with. When I was on the finance committee, as well as when I was on the industry committee, we heard many times from a lot of Canadians that this is an area we should be concerned about.
The reason we should be concerned is that it affects our Canadian standard of living. I will outline that a little further as I go through this, but what it means is that real Canadians are hurting every day because the government is not allowing the creative forces, the competition and the natural abilities Canadians have to compete, because of too much taxation and too much regulation.
On June 9 Statistics Canada released a report that says labour productivity in the Canadian business sector edged up by 0.2% during the first three months of 2005 compared with the previous quarter, continuing its anemic performance of the past two years. In the United States, productivity has increased by 0.6%, three times the rate of growth in Canada. That is a consistent story. If we look at 2000-04, we see that Canadian productivity growth came in at 0.9% over those four years. In the United States, it was 3.8%.
What does this mean? For the average family it means that we are enjoying a standard of living that is something like 30% lower than that of our major trading partner and competitor, the United States. That is not good enough.
Per person, that translates into roughly $6,000 Canadian. For an average family of four, that is $24,000 a year. One might ask what that $24,000 per family means if we compare it to a family in the United States. It would mean that the average Canadian family could put a payment of $2,000 a month more on their mortgage. What I am saying is that this simply is not good enough, because the average family of four is lagging behind the United States by $24,000 a year.
This is important because it is costing real people in terms of the standard of living. An article from the National Post of March 30, 2005 states:
Canada should put a premium on policies to improve its fiscal prudence and economic productivity, given the uncertainties surrounding exchange rates, global commodity prices and the continuing process of trade liberalization, the IMF said.
The story goes on. I have an article from the Financial Post of April 11, 2005. A respected University of Ottawa professor, Gilles Paquet, portrays Canada, and in unflattering terms, I might add, depicting it as “a risk-averse nation on the brink of becoming an ageing society”.
What does that mean? We know that our demographics are working against us. There are going to be fewer people working in the future, supporting a greater number of people who are going to be collecting pensions. Therefore, we have to get our standard of living up.
Business groups, chief executives, economists and, more important, David Dodge, the Bank of Canada governor, have sounded warnings regarding Canada's lagging productivity growth. Statistics Canada reported that last year in terms of productivity growth the country posted its worst performance in almost a decade.
I have to say it is not that the government has not had warning. A number of people have been warning the government for years that this is going to cost Canada.
The National Post article goes on to state, quoting Gilles Paquet:
--a failure on the part of the elected officials to underline the importance to Canadians of productivity growth. “Leaders must be educators, persons called upon to reframe the citizen's views of the public realm,” the economist wrote. “Most officials in Canada have been passively recording the results in opinion polls, and have not shouldered their responsibility...alerting citizens to the importance of productivity gains and innovation.”
Jacqueline Thorpe wrote an article on April 28. She quotes Doug Porter, the chief economist for the Bank of Montreal. Talking about the budget of February 23 at that point, I think, he stated:
If this deal is an indication of the type of fiscal decisions Canada will see, then the currency market should instead react to the prospect of a near-term election as positive.
That was when there was a possibility of an election.
Right after the budget was tabled, the National Post asked, “What letter grade would you give the budget?” Porter responded, “We give it a C”. With the revisions, in the NDP-Liberal budget, now he says, “We give it a D”. This is a respected chief economist at the Bank of Montreal giving this government very much a failing grade with regard to its budget and budget fiasco.
Actually there is one more point. We had a gentleman at committee just the other day. I see the parliamentary secretary discussing this with you, Mr. Speaker. It was David Stewart-Patterson from the Canadian Council of Chief Executives. Here is what he said:
--no productivity growth, minimal growth in foreign investment, negative household savings and a manufacturing base that's struggling to stay afloat in a competitive, volatile, high dollar world do not bode well for the future prosperity of Canadian families.
--lower taxes by themselves cannot ensure a prosperous future for Canadians, but if we want our economy to grow and our social programs to improve, we have to work harder at making Canada a place where more talented people want to live and work and where more investors want to create and grow businesses.
This is an important point. Investment is leaving Canada in droves. We have a net outflow of investment these days. Canadians are looking for better places to invest because this government's policies are driving them out of the country.
This is something we have been on for quite some time. I will go back to some of the reports that were done by the finance and industry committees when I was there.
This was the Conservative Party dissenting opinion to the prebudget process on December 14, 2004, in which we are talking about the record of this government not being that good:
A few basic statistics back up our contention that now is the time for major change--that more of the same is not good enough--that Canadians deserve better. First, during the past forty years Canada's GDP per worker has remained little changed compared with that of the United States--it remains stuck at about 85 per cent of the U.S. level.
...“Lest any Canadian thinks that the productivity gap is irrelevant, it more than accounts for the income gap of $6,078 per Canadian.” Surely we can do better--having a family of four with some $24,000 less income to spend than they would have in the United States is nothing to celebrate.
As for investment in productivity capacity, why is investment important? Because it creates jobs. The statement continued:
Throughout the hearings we heard that the productivity investment in Canada is lagging and that a number of key factors are the main culprits. Taxation levels affect the willingness of investors to build new industrial capacity in Canada. If taxation is too high and investment too low, the competitive abilities of Canadians cannot be unleashed. Countries like Australia and Iceland have shown the way and are benefiting from large gains in productivity investment--why can't Canada do the same?
Quite frankly, it is a very good question. It is the policies of this government over the last 12 years and the direction it has been taking that are sending all the wrong signals to Canadians. Cutting the corporate tax cuts that would put us on a more equal footing with the United States is a very bad signal to be sending to all the Canadians who want and need to invest in order to create jobs for Canadians.
Frankly, this government does not deserve to remain in power. The NDP budget is further evidence of its willingness to go to any lengths to cling to power. I think Canadians should put the Liberals out of their misery.