Mr. Speaker, it is an honour to rise today to speak to the prebudget consultation report of the Standing Committee on Finance.
I want to begin by thanking the literally thousands of Canadians who presented or attended prebudget consultations held both here in Ottawa and right across the country.
Writing a budget is obviously about making choices. Every day, average Canadians make choices about what they can and cannot afford. The Government of Canada is no different. The demand for funding is virtually infinite, but the resources of government are not.
I believe that Canadians pay too much in taxes. I believe that these high taxes are seriously impacting on Canada's overall competitiveness in a very negative way. In this regard, several of the presentations made to the committee stood out for me. I would like to take some time to share those presentations with the House.
With respect to productivity, Roger Martin, dean of the Rotman School of Management, spoke to the failings of the previous government in addressing competitiveness through its budgetary planning. He pointed out, in fact, that in 1998 Canada stood sixth in the international ranking of competitiveness. In 2001, we stood at 11. Today, we have fallen to 16. Over the years, we have drifted down in the rankings as countries such as Norway and Japan have stepped up their competitiveness.
These words came back to me when the finance minister appeared before the committee and presented the fiscal update entitled “Advantage Canada”. I was encouraged to hear of the five Canadian advantages that the plan specifically outlined. I will share them with the House.
To begin with, the finance minister spoke of a tax advantage. This is important. Canada's tax advantage will reduce taxes for all Canadians and establish the lowest tax rate on new business investment in the G-7. We have to attract investment. We have all heard of manufacturing jobs that are potentially leaving Canada and going elsewhere. This government wants to stem that flow. We want to encourage new investment and build industry and business.
The second point that he spoke of was the fiscal advantage. Canada's fiscal advantage will eliminate Canada's total government net debt in less than a generation, creating a strong foundation on which to build sustainable prosperity.
I note that today the International Monetary Fund has specifically commended the finance minister for his commitment and the commitment of this government. I would like to read for members a bit of what the IMF said in its statement:
The International Monetary Fund endorsed Canada's strategy to use surplus revenue to become the first Group of Seven nation whose outstanding debt doesn't exceed its assets.
This speaks to the government's determination and the incredible accomplishment that it has promised. We have not just talked about it; we promised it to Canadians by 2021. The statement goes on:
The Canadian fiscal strategy “appropriately highlights the joint role of public pension plans and provincial-territorial governments in achieving a sustainable fiscal position”....
Canada would join countries including Australia, Norway and Finland that have eliminated their net debt, based on figures from the Organization for Economic Cooperation and Development.
I believe I just mentioned some of those nations when I was speaking about nations that have improved their productivity. That speaks to the importance of eliminating the net debt.
The third point was about the entrepreneurial advantage:
Canada's Entrepreneurial Advantage will reduce unnecessary regulation and red tape and lower taxes to unlock business investment.
We heard about this time and time again. Groups like the Canadian Federation of Independent Business came forward and said that government simply must get out of the way. We can do better, they said, and we can employ more and pay more and grow if government would take away the reins that are holding us back and reduce the red tape.
This type of announcement was welcomed by businesses. I know that it was welcomed by my own chamber of commerce in Peterborough, and I understand that the chambers of commerce in St. Catharines, Burlington and right across this country have said that this is exactly what we need.
The fourth point spoke to a knowledge advantage. When we are talking about a knowledge advantage, we are talking about creating the best educated and most skilled workforce in the world, a flexible workforce that can move and that can address the needs of a growing, expanding economy.
Canada is an emerging world economic superpower. We are an energy superpower. We need the workforce that will address that. That is what the knowledge advantage speaks to. I was delighted with this. There are items that as a group in the committee we do not always agree on, but if there was one thing that we did agree on, it was that we need to invest in education.
I see that my colleague, the member for Dartmouth—Cole Harbour, is here, and I know that this is one thing that we agree on: a dedicated transfer for post-secondary education. We feel it is incredibly important to take this out of the social transfer, to tag that money and to give it to the provinces so they understand that this money is for post-secondary education.
We want to improve access. We want to improve affordability. We want to improve the overall quality of education. Not only is it important that people can get in to be schooled, but they also have to get a quality education.
The other thing we need to address is skilled trades. When we speak of post-secondary education, we mean education in all its forms, not just what we get at college and university but the type of education that one would get after high school, because we need to encourage more skilled trades in this country. We have a terrible deficit and the knowledge advantage is incredibly important in moving Canada forward.
Last is the infrastructure advantage. Canada's infrastructure advantage will create modern, world class infrastructure to ensure the seamless flow of people, goods and services across our roads and bridges, through our ports and gateways and via our public transit.
Once again, we know that Canada has changed a great deal over the last number of years. When we speak about public transit and the need for public transit, we are talking about being good to the environment. We are talking about being responsible in regard to the amount of traffic. We are talking about improving the flow of goods.
The Pacific gateway, for example, an enormous undertaking of this government, will really open up that Asia Pacific market and allow for economic growth for Canada. It is part of the infrastructure improvements that we are undertaking.
Advantage Canada is focused on four core principles. I would like to review those with the House as well.
One principle is focusing government. Government should be focused on what it does best. That is exactly what this government intends to do. We are going to be responsible in how we spend, effective in our operations and our results, and accountable to taxpayers.
Often we hear from the opposition that we are being very narrow. There is a big difference between being narrow, quite frankly, and being focused. One should not confuse the two. Focus will help us accomplish our objectives. It has nothing to do with being narrow. I think Canadians understand and appreciate that.
The second point is on creating new opportunities and choices for people. Under that heading, it speaks to government's creation of incentives for people to excel right here at home in Canada. We will reduce taxes and invest in education, training and transition to work on opportunities so that Canadians can achieve their potential.
We often hear of a welfare wall in Canada. We want to help people get over that welfare wall. We want to reduce the gap that has expanded between rich and poor and we want to provide more opportunity. We want everybody to be able to dream and to envision themselves getting further ahead. That is so incredibly important to this government.
We want to invest for sustainable growth. Under this heading, we are talking about government investing in and seeking partnerships, both with the provinces and the private sector, in so-called P3 strategic investments. These types of P3 investments can help us to be very efficient. We are not just going to go with only P3 investments for growth, but we are going to look at them, and where it makes sense, that is the way we will go.
In Peterborough a number of issues I believe are absolutely critical for my riding, and they would be P3 investments. I speak of passenger rail service for Peterborough and improving the rail line that connects Peterborough to the GTA. I speak of Highway 407, a highway currently also called the ETR or express toll route. When that highway goes through to Highway 115, it will dramatically improve Peterborough's opportunity, indeed, our entire region's opportunity for economic expansion. These are both P3 operations.
The other thing I was quite excited about was the announcement with respect to the Windsor border that was in “Advantage Canada”. As we know, the Detroit-Windsor crossing is the busiest crossing between Canada and the United States. Nothing has been done on that file for a long time, even though there has been demand for some 40 years to improve that border crossing. “Advantage Canada” made a commitment to improve that crossing by 2012 and that will be a tremendous benefit not only to the Windsor area but to all of southwestern and central Ontario and to Canada's overall gross domestic product as well.
We also talked about freeing business to grow and succeed. This is what I alluded to when I talked about removing the reins from business. We need to create an atmosphere. Government does not necessarily have to create the economy. What we have to do is create an atmosphere where that economy can flourish. That is what we mean when we talk about freeing business to grow and succeed.
I think we can all agree that “Advantage Canada” is a focused plan that will specifically help our nation re-establish itself as a world leader in competitiveness. This will help us attract foreign investment, new industry and provide good paying meaningful employment for Canadians and improve the overall quality of life for Canadians.
I will to refer a couple of specific examples in the report that was put together by the finance committee. It is important to recognize that the Government of Canada has made significant strides already toward improving Canada's overall productivity in our first budget, budget 2006. We announced a number of tax cuts, removed $655,000 low income Canadians from the federal tax roll entirely with the announcements and reduced the GST by one percentage point.
I will to share with the House what Peter Woolford of the Retail Council of Canada had to say about reducing the GST. He specifically stated:
—that one policy move by the government did more than twice as much for Canadians' real disposable incomes than they'd been able to do for themselves over the last 15 years, and more than was done for themselves in a strong economy in 2005. This was a very powerful tool for increasing the incomes of Canadians.
It sounds like the government is on the right track.
Further, one of the hon. opposition members spoke yesterday about how he did not understand why there was a GST cut. I suppose he would have to be clear with the House as to whether he would recommend a GST increase. That would be very bad for the economy, household incomes and the ability of people to purchase goods. I am speaking of working families. We on this side of the House talk a lot about helping working families and low income Canadians. We feel this was a tremendous tool that helped us do that.
There were a number of items in the prebudget consultation with which we had a problem, specifically items that spoke about rolling back some of the advances that the Government of Canada made in budget 2006. We need to ask these questions. Would the opposition would cancel the fitness tax credit or the transit pass tax credit? Would it roll back the $1,000 Canada employment credit? These questions have not been answered.
Some of the recommendations in the report call for billions of dollars in additional spending and there is no plan for how we would afford that. That brings me to responsible spending.
We know that in the last five years total spending grew by an average of 8.2% annually under the previous government. In fact, in 2004-05, the growth in spending was actually 14.4%, which is about seven times inflation, as we all know. It is certainly not something that can be maintained over the long term. This is why we speak about focusing government, focusing the spending of government and being very responsible with taxpayer dollars. This will help us reduce the overall tax burden for all Canadians.
I will share with the House what Yves Morency, the vice-president of Caisse Desjardins, said to the finance committee on October 25. He said:
The message we want to send is that you should continue in this direction. That will improve productivity, which will enhance the wealth of businesses, individuals and the government, because tax revenues will increase.
He said that cutting taxes would increase overall government revenues, and that is important. We need to understand the tax reductions and tax revenues for the government are not necessarily linked. Economics teaches us that.
He further went on to say:
—we encourage you to continue along this path. You mustn't stop; you must go even further in order to achieve the competitiveness levels of our main neighbours...
Of course he is speaking of the United States. He is speaking of the Asia-Pacific Rim. These are nations that we now actively compete with on a day to day basis.
In reducing the tax burden, we see in “Advantage Canada” a very good linkage that will link paying down Canada's debt, or our mortgage, with reductions in income taxes. Canadians have said that they like the idea of paying off the debt, but what it is in it for them? How does that benefit them?
Canada's new government specifically came out and itemized for people how it would benefit them. The $700 million that we have saved in interest this year, by paying off $13.2 billion of debt, will go to Canadians in income tax savings and we will continue to do that each and every year. By 2010, it will amount to $1.4 billion, almost $6 billion in income tax savings by 2010. That is an achievement. Canadians are going to see why paying down debt is going to help them.
David Dodge spoke to the finance committee on the importance of paying off debt. He said that it was extraordinarily important that, in periods when revenues are a little stronger than anticipated, we use the opportunity to pay down debt. He said that was how it was supposed to work. He did not say to come up with a frivolous spending program. He did not say to grow government spending by 14.4% in a single year. He said to pay the debt down. That will help us be competitive. That will help us reduce people's taxes.
When we talk about fiscal balance, our government recognizes that there was a fiscal imbalance, and we are moving toward fiscal balance. That will be in budget 2007. If we address the fiscal imbalance, we recognize that we will have a more competitive economic union, and that is important.
We talk about creating equal opportunities for Canadians. I want to speak to a very specific group of Canadians that is struggling, and that is the farmers. Farmers in Canada have suffered from 10 years of poor agricultural leadership and planning. They are in a difficult position. Canada's new government is working on that. Budget 2007 specifically sets out additional funding, more commitment by the Government of Canada and long term assistance for farmers. We will get that funding to the farm gate because that is where it needs to go.
In conclusion, Canada's new government is on the right track in positioning Canada for a tremendously bright future.
