Charlie Penson

[Atlantic Canada, May 8th, 2000]

Mr. Speaker, of course the minister forgot to mention that there was a 1997 election to win in the process.

This is not about creating jobs. In fact, the Clarenville sportsplex killed lots of jobs. And it is not like the Liberals believed in ACOA. They tried to stop its very creation. Even the minister responsible for Shakespearian responses cannot hide the fact that he himself condemned ACOA when in opposition.

Why can the Liberals not resist the siren song of patronage at election time?

[Atlantic Canada, May 8th, 2000]

Mr. Speaker, first it was the Tories and now it is the Liberals. Nothing has really changed.

The government House leader, the heritage minister, the minister of public works and the Deputy Prime Minister all voted against the creation of ACOA. Even the minister who is now responsible for that program mocked it when he was in opposition. Yet after seven years in government, they are still writing ACOA cheques.

The minister claims that the program no longer hands out grants, just non-repayable loans. In fact, ACOA handed out 123 grants totalling more than $12 million in the past three years alone. Maybe the minister can explain why taxpayers' money goes to job killing projects.

[Voice Mail Service, May 8th, 2000]

Madam Speaker, I rise today to speak on Motion No. M-361 that was just outlined before us by the member for Vancouver East.

The member would like the CRTC to establish regulations that would require telephone companies to provide voice mail services to low income and homeless Canadians. My understanding is that voice mail service is something like an add-on, like power windows on a car. Basic telephone services is quite a different matter.

I understand that the motion was inspired by a very worthwhile project in the member's Vancouver East riding. The Downtown Eastside Residents Association project to provide a secure voice mail service for $40 a year is an innovative program. By facilitating communication for low income residents and the homeless, I have no doubt the Vancouver project has increased their opportunities for employment as well as their access to community and medical services. It is a good idea.

Unfortunately, Motion No. M-361 is another example of the NDP's deep fondness for centralization and regulation as the answer to every problem. The Canadian Alliance on the other hand believes that the market is the best place to respond to the needs of individuals for telephone service, not top down government intervention from Ottawa.

If there is a need—and I understand in this case the member certainly demonstrated that in her riding—to expand this type of service in other communities, the Vancouver project can be a model for other communities wishing to assist the homeless and low income residents in their area. However, community groups, municipal governments and in some cases provincial governments are much closer to the people and are best positioned to tackle these local issues, such as telecommunication services for low income and homeless Canadians.

I think she gave a good example of how the group in her riding served a need that was out there. I think there are many methods to address this concern. I would suggest that the one in her riding of Vancouver East that was serviced by the Downtown Eastside Residents Association is the best vehicle for this service.

In my opinion, the real failing of Motion M-361 is that it is not clear why another federal regulation governing the telecommunications industry is necessary for communities to launch similar projects. It can be done now. Therefore, I think that is the better approach. This motion flies in the face of the current trend in the telecommunications industry which is to move toward less regulation and more competition and I would endorse that.

In 1998 the CRTC's publication “Vision” stated that the agency hoped to reinvent itself and rely more on market forces to permit fair and sustainable competition and to move from detailed regulation to broad parameters. That certainly is something we in the Canadian Alliance support. From that perspective Motion M-361 would be a step backward.

With respect to the CRTC, I would love to debate the effectiveness and the necessity for much of the CRTC's mandate. I certainly would not fall for the blunt regulatory tool of CRTC intervention in this case, as in Motion M-361, for that purpose. The Canadian Alliance would like to review the mandate of the CRTC to see greater accountability and responsiveness in the CRTC.

Much of the CRTC's mandate is out of date and new developments in technology have made the CRTC irrelevant in many respects. My colleague, who is the deputy industry critic from Calgary Centre and who is our spokesman in this area, has pointed out on many occasions that the CRTC's bureaucratic pace makes it ill-suited to effectively respond to the needs of the fast moving telecommunications industry.

The Canadian Alliance would like to take this opportunity to call for a larger debate on the role of this agency into the 21st century in Canada rather than remaining stuck in the old mindset that more government regulation will solve every problem. I suggest that community organizations are also great vehicles, much closer to the people which can provide service that government may not be able to provide with the same flexibility. Therefore, I am not in support of this motion.

[Points Of Order, May 5th, 2000]

Mr. Speaker, during question period, the Minister of Industry suggested that it was the first time I had asked a question of him since becoming the industry critic for our party. Hansard will show that is not true, and I—

[Industry, May 5th, 2000]

Mr. Speaker, SpaceBridge Networks Corporation, a high tech firm created by industry giants Newbridge and COM DEV International, received a $2 million grant from Industry Canada.

However, a SpaceBridge executive admitted in the Globe and Mail that the real purpose of the government's TPC grant was not so much to fund R and D, but to allow the company to start up without diluting its shareholder equity.

Why does the minister think that taxpayer money should be used as a substitute for the normal practice of raising venture capital in the private sector?

[Budget Implementation Act, 2000, May 4th, 2000]

Mr. Speaker, I am happy today to rise to debate the budget implementation act, Bill C-32. In my capacity as industry critic I am quite concerned about the lack of progress on tax reduction. I want to refer to the study we commissioned in the industry committee and our dissenting opinion, which I will refer to with regard to taxes and the ways in which we could become more competitive in Canada.

In November of last year the Standing Committee on Industry undertook a study on productivity. The study was initiated in response to concerns expressed by many prominent economists and business leaders who warned of the alarming productivity gap developing between Canada and our major trading partner, the United States, and in particular the gap which developed over the past decade.

These leaders confirmed through statistical evidence what Canadians instinctively already knew. Our standard of living had fallen over the past 30 years and the rate of decline had accelerated during the 1990s. Currently Canadians earn $9,000 less per capita than their American counterparts and that disparity continues to grow.

Productivity is the measure of efficiency in which people, capital, resources and ideas are combined in the economy, which show up basically as our standard of living. From the 1950s to the mid-1970s we had a tremendously high rate of growth in productivity, approaching 4% per annum in terms of labour productivity and 2% per annum in terms of multi-factor productivity. Since 1973, however, Canada's growth in productivity has hovered around the 1% level.

What does that really mean? The picture becomes much clearer when we contrast the Canadian experience with that of our G-7 partners. At the end of the second world war Canada and the United States were by far the most productive countries in the world, but the levels of European countries and Japan have converged with those of North America. This of course was inevitable as the European and Japanese economies recovered from the second world war.

However, the data is clear and unequivocal. The United States remains the most productive country in the world, but Canada no longer holds second place. That is a concern. Canada is the only country in the G-7 that has not closed the gap relative to the United States in terms of productivity. In 1976 Canada was second in terms of productivity among the G-7 countries, but 20 years later, by 1997, Canada was fifth. Other countries are now much closer to the U.S. and have overtaken Canada. Italy and France are respectively the second and third most productive countries in the world. Germany, despite the reunification of the west with the east, is now the fourth most productive economy in the world.

After hearing from dozens of witnesses the standing committee tabled its 182 page report on productivity and innovation in the House of Commons on April 11. The report did a good job in providing a 30 year history of Canada's decline and documenting our current situation, but it failed to identify the underlying reasons for Canada's productivity decline. I say that it is a failing in the report. That failure is a significant weakness in the report and it prompted the Canadian Alliance members of the committee to offer a dissenting opinion.

I believe that if we fail to understand or choose to ignore the fundamental reasons for this decline it will impair our ability to offer constructive solutions. The issues related to Canada's productivity and weakened competitiveness are complex, to say the least. Many factors, including external shocks to a country's economy, can cause disruption. However, some countries, such as the United States, are better able to adapt and restructure their economies. The restructuring that took place in the U.S. in the 1980s enabled the Americans to lead the world in growth for much of the 1990s, and that continues to the present. Canada, however, did not enjoy that same level of growth.

For almost a century the Canadian and U.S. business cycles and economies were synchronised and could be charted with no divergence between the two. Between 1900 and 1980 Canada never experienced a recession without a corresponding recession in the United States. However, it is no small coincidence that Canada's business cycle began diverging from that of the United States in the late 1960s after the Canadian federal government expanded rapidly and became more interventionist. The role played by public policy in Canada during this period is a significant factor which needs to be examined.

I suggest that a fundamental shift in government policy in the 1960s and 1970s created the conditions that led to Canada's decline in productivity and currency devaluation.

Over the years major social programs were introduced and the federal government expanded through successive Liberal and Conservative administrations. Changes made to the unemployment insurance program, as an example, moved it away from the concept of an insurance program to that of a social program function. The result was an increase in Canadian unemployment rates, several points higher than those in the United States.

Meanwhile, federal program spending continued to grow every year, which had to be financed by tax increases and deficit budgets. The accumulated deficits created a federal debt of over $575 billion. Currently one-third of each tax dollar taxpayers send to Ottawa is required to pay the interest on our national debt.

Looking over the past 30 years, the Conference Board of Canada told the committee that the Canadian way—Canada's traditional economic and social programs established largely in the 1960s—is unsustainable. The Liberal response to this crisis is very weak.

The committee report claims that the latest federal budget is the answer to Canada's problems of productivity. While it did propose some tentative steps to improve our productivity, the budget is too little, too late, to resolve the problems caused by 30 years of misguided public policy.

Canada currently finds itself in a very competitive tax environment worldwide and it is becoming more competitive all the time. As such, the overdue tax cuts in budget 2000 are welcome, but their value is hampered by long phase-in periods and other half measures. For example, the corporate tax rate is not scheduled to decrease until 2001 and then by only 1%, from 28% to 27%. The planned seven point reduction will not be fully achieved until 2005.

As the United States, France and Germany continue to reduce taxes and increase their productivity levels, Canada will continue to fall behind. Canada currently holds the unenviable position of having the highest personal tax rates as a percentage of GDP of all the G-7 countries. Canadian tax rates in the manufacturing and service sectors are becoming the highest in the G-7, as rates in those countries continue to decline. Moreover, the $86 billion in new government spending announced on budget day clearly demonstrates that the priority of the federal government is to continue to increase its program spending, which is exactly the wrong thing to do.

The government claims to have taken decisive action in paying down the national debt, but its current commitment of $3 billion annually pales in comparison with the $13 billion handed out in the form of grants and contributions each year. Even at $3 billion a year, it will take 191 years to retire the debt. Meanwhile, half a percentage rise in interest rates would increase charges to the national debt by $5 billion annually. We know that interest rates are starting to rise.

Investors take small comfort from the tepid measures found in the federal budget. In fact, bold measures are needed to restore confidence in the Canadian economy. I agree with leading Canadian economist, Pierre Fortin, when he advised that the best answer for Canada's declining standard of living is to cut taxes and pay down debt.

Investor confidence is a very important factor as companies seek profit and increased productivity in this globally competitive environment. Unfortunately, the signals generated by government policies over the past 30 years have not instilled the confidence required to increase that investment necessary to improve our productivity and standard of living. As a result, the percentage of foreign direct investment coming into Canada has steadily declined over the past several years. Even Canadians are increasingly looking beyond our borders for better opportunities for investment.

From 1988 to 1998 foreign direct investment flowing out of Canada rose more than six times. Meanwhile, incoming foreign direct investment rose only two and a half times. In fact, by 1997 Canada had become a net exporter of foreign direct investment.

Among other things, Canada's productivity decline and government policy have led to the Canadian dollar becoming very weak and some companies are relying on it to remain competitive. It is a poor way to try to get ourselves out of this problem.

As Jim Frank from the Conference Board of Canada said:

Surely to goodness...If 68 cents was a good idea, why don't we try 50 cents? Depreciating our currency will not serve us well....At some point there is a relationship between the cost of stuff we import and consume and our currency—

I want to sum up by saying that Canada is the second largest country in the world. It has a vital pool of human and natural resources. We have untapped potential for growth, but we need the proper environment to nurture that prosperity. I am confident that Canada can regain that prosperity and competitiveness; however, it will take strong leadership by government to do that. Our solution 17 on tax reform is a way to show confidence and we intend to introduce a confident budget when elected in the House of Commons to form the government.

[Committees Of The House, April 11th, 2000]

Mr. Speaker, I welcome the opportunity to comment on the standing committee's report on productivity and innovation.

I suggest that the committee did a good job in providing a 30 year history of the decline in productivity and documenting our current situation in terms of our productivity fall. However it failed to identify the underlying reasons for Canada's deteriorating productivity.

The official opposition believes that the role played by public policy during this period is a significant factor that needed to be examined. We suggest that the fundamental shift in government policy in the late 1960s and 1970s created the conditions that led to Canada's decline in productivity and therefore we offered a dissenting opinion to that effect.

[Biotec Canada, April 10th, 2000]

Mr. Speaker, that is simply not the case. It pays member dues to that organization.

We are not talking about a normal relationship between a lobby group and a government department. We are talking about Industry Canada belonging to this lobby group and paying its membership dues, $6,500 the year before last and $1,000 last year.

Why is the government allowing this to continue?

[Biotec Canada, April 10th, 2000]

Mr. Speaker, my question is for the minister that looks after lobbyists.

It was reported today that Industry Canada is paying dues to Biotec Canada. This a lobby group that works to influence government policy on biotechnology. The government can always find new ways to spend taxpayers' money. Now we find that Industry Canada is paying a group to lobby guess who, Industry Canada.

Why is the minister allowing this to happen and when did he become a registered lobbyist?

[Petitions, April 7th, 2000]

Mr. Speaker, I have three petitions to present, which call upon parliament to withdraw Bill C-23, to affirm the opposite sex definition of marriage in legislation, and to ensure that marriage is recognized as a unique institution.

The petition is signed by a total of 204 constituents of Peace River.