Mr. Speaker, I am pleased to rise and speak to the budget. I want to thank my colleague from Saskatchewan for being so gracious in sharing his time with me so I can stand and speak on behalf of the great citizens of the riding of Peterborough, the electric city region, a place where innovation is a big part of our past and our future. This budget is really about innovation.
Immediately after the budget was delivered, I was delighted to read the comments of so many speaking in favour of this economic action plan. Third-party praise was coming in fast and furious for the budget. It must have really disappointed the opposition to hear so many leaders from across the country speaking in such glowing terms of economic action plan 2013.
I thank once again the member for Whitby—Oshawa, the hon. Minister of Finance, who has once again demonstrated that he does not just lead, but he listens, and that is what we see in economic action plan 2013.
I mentioned some of the feedback. I want to particularly note off the top the comments of His Worship Daryl Bennett, mayor of the city of Peterborough, who indicated a couple of things: the indexing of the gas tax and the long-term infrastructure dollars that have been set up to support municipalities, to support infrastructure right across the country in public transit. His Worship Daryl Bennett said specifically that he appreciated not only the indexing of the gas tax fund, but also that we had provided a long-term window for planning, which municipalities need.
He also said something else that was critically important. As a person with experience in business, he spoke about how much he appreciated that our government was fiscally responsible, that our government was headed back to a balanced fiscal situation, back to balanced budgets. The mayor of the city of Peterborough stood four-square behind this economic action plan, and I want to extend my thanks for his input into our federal budgeting process.
I talked a bit about the electric city region of Peterborough. Peterborough was nicknamed the electric city because it was the first city in North America to have electric street lights go on. It is in fact a home of innovation. It is the home of General Electric Canada and Quaker Oats. It is the home of Rolls-Royce, which has invested so much into Canada's nuclear industry. These industries are critical to Canada's financial success. These are manufacturing companies that employ so many Canadians and lead with innovative products.
When I look at Peterborough's past as a manufacturing hub and I look at our entire region, I see the creativity. I see what these companies have created. This budget is exactly the right budget for the times because it will encourage and foster that very kind of innovation, the next step of that innovation, growth in manufacturing. We are seeing that in my region with investments our government has made in the last number of years and we will continue to see it moving forward.
The budget will do a number of things.
My education is in business. I spent a lot of time studying accounting, finance and economics. One of the things I have specifically done over the last couple of years is challenge the Canadian Institute of Chartered Accountants. I have had many meetings with the institute and talked specifically about the issue of depreciation of assets.
This budget will once again extend accelerated capital cost allowances for manufacturers for investment in capital equipment, and this is important. A lot of people at home might wonder why this would matter, what this would mean to them, why this would benefit companies. There has been a big change, certainly since the generally accepted accounting principles, or GAP, was thought up. We looked at depreciation of assets and we said that an asset should be set to depreciate over its useful life. It should depreciate in a straight line, so much depreciation per year, until that asset is written off for tax purposes.
If we are going to improve Canada's productivity, if we are going to lead in innovation, if we are going to be a country that encourages investment in next generation manufacturing, then we can no longer talk about the useful life of an asset. We have to talk about the antiquated life of an asset. This is critically important because a machine can still work fine, it can still produce. I have a laptop computer on my desk which I think is five years old. It still works, but this is not current technology.
If we want to keep up with the best in the world and be as productive as we can possibly be, that is what our manufacturers are faced with. They must have that new equipment. They must be able to write it off in such a way that they can make a business case for making the investment in the first place. The banks will ask them, when they are seeking to borrow dollars, what the payback is on a new machine and what they expect to earn. That is why accelerated capital cost allowance matters. That is why the budget has, once again, made that specific measure of $1.4 billion in tax relief for manufacturers so they can invest and create jobs.
Paschal McCloskey, the owner of McCloskey International, came to me prior to the last election and said that without the measures our government had taken to reduce corporate taxes, to reduce business taxes, there was no way he would have been able to expand his company on the east side of Peterborough, which now employs over 400 people. There was no way he could have expanded the manufacturing facility because he could not compete on price globally. This company ships innovative machines around the world. It could not do it without the tax breaks we put in place.
I note today an article produced by the CBC, fine journalism on behalf of the CBC. It points out a study that has just been completed by the accounting firm PwC, the World Bank and the International Finance Corporation. What did that study find? The best country in the G8 for business taxes is Canada. We have improved from 28th position overall. Out of over 150 nations, we were 28th in 2010. This year we are eighth and we are the best in the G8 by a wide margin.
What are the effective tax rates on business in the G8 nations? In Canada it is 26.9% of profits. In the United Kingdom it is 35.5%. In France it is 65.7%. In the United States it is 46.7%. In Germany it is 46.8%. We have almost a 20% advantage over the United States.
Why does that matter for manufacturers in Canada? Why does that matter for job creators? Why does that matter in terms of attracting international investment?
It matters because in some other ways we have become a bit of a high-cost jurisdiction. Wage rates in Canada tend to be higher than they are in a lot of countries with which we compete. That is why we are putting incentives in, such as accelerated capital costs. That is why we are eliminating import tariffs on manufacturing equipment. We have put these measures in place so our manufacturers can compete globally, keep their costs low so they can continue to create jobs. Each and every manufacturing job created in Canada supports about eight other jobs in the economy. We know how important that is.
I want to talk a bit about a couple of measures, specifically for southern Ontario, that the government has invested into, programs that are in fact delivering big time, with big time dividends for the people of Peterborough, the people of southwestern Ontario, the people of central Ontario and the people of eastern Ontario. These are important investments.
The Federal Economic Development Agency for Southern Ontario will receive five years in renewed funding of $920 million. A five-year commitment for the eastern Ontario development program. That is important funding that has helped small businesses create jobs in my riding.
I talked about the important investments and commitments that the government has made with respect to infrastructure. These are critical investments to move the country forward, to build a stronger economy, a stronger Canada, a stronger Peterborough.
I will stand four-square behind this budget. It is too bad the opposition will not.