James Rajotte

[An Act to Authorize the Minister of Finance to Make Certain Payments, May 16th, 2005]

That's not what you said.

[An Act to Authorize the Minister of Finance to Make Certain Payments, May 16th, 2005]

Madam Speaker, I want to inform my colleague that in the last election the Conservative Party was on record, and he can check with the Ford Motor Company, as supporting that. I think he knows that and he should be clear about that.

In relation to the auto sector, through its excellent CAPC report, it has put forward many suggestions of what the government could do from a public policy point of view to improve and enhance the auto sector in Canada. It has talked about eliminating the capital tax which has been delayed because of this deal with the NDP. It has talked about changing the depreciation rates, something that the Canadian Manufacturers & Exporters has talked about and is sorely disappointed that they are not in the budget. It has talked about action on the border, something that the government has talked about since 1993, but has not yet delivered on.

Probably the number one impediment to locating new auto assembly plants in Canada is action on the border, so we have security of trade between Canada and the United States. I would like the member to address that.

Why has the government failed to act on these major public policy initiatives that have been called for not only by the Conservative Party but by the Canadian Manufacturers & Exporters and in the CAPC report, agreed to by all those who work in the auto sector, whether it is auto companies like Ford, GM or DaimlerChrysler, or the Japanese or people such as Buzz Hargrove and the CAW. They all agreed with this report. Why has the government not acted upon it?

[An Act to Authorize the Minister of Finance to Make Certain Payments, May 16th, 2005]

Mr. Speaker, I want to follow up on the theme of the first question, which is that the government keeps saying over and over again that if the budget is not passed all these spending commitments are in trouble, something that was actually refuted by the mayor of Edmonton right after the signing this weekend.

I want to ask the parliamentary secretary about one specific thing. In November of 2003, the then minister of human resources said that the government would actually put at least $6 million toward library materials for the blind across this country. The government committed to it in the next budget.

The Liberals have now put it in budget 2005 and again it is the same refrain: that if the budget is not passed and if somehow this Parliament does not keep going, that will endanger the spending. The fact is that so many of these spending commitments were made years ago and they should have been acted upon years ago.

I would like the parliamentary secretary to answer why that commitment of November 2003 was not acted upon way back when. It has not even been up for discussion.

Why does the government keep saying that all these spending commitments will be endangered? It has had years to implement them and failed to do so. The fact is that it is more the government's responsibility than Parliament's to keep it going, with the Liberals making promises on commitments they made years ago.

[An Act to Authorize the Minister of Finance to Make Certain Payments, May 13th, 2005]

Mr. Speaker, the parliamentary secretary says that I have not read the bill. I have read the bill and it took me all of about two minutes because Bill C-48 is two pages. Boy, it was quite a bill. We are talking about $4.6 billion in spending and the bill is a page and a half long. That is pathetic. That is no way to govern this nation in a fiscally responsible way.

The member asked about the commitments in this budget. Why were they not in the first budget? Why were they not discussed at the finance committee in prebudget hearings?

He asked what the Conservative's position is on the environment. Look at the Liberal's position on Kyoto. In the budget introduced on February 23 there was $5 billion for Kyoto. A month later, no, we actually need $10 billion for Kyoto even though emissions have gone up under this government. That is no Kyoto plan.

The member asked what we would do. We would actually take some initiatives, invest in technology and work with industries like the auto industry. Here is a couple of ideas. Why--

[An Act to Authorize the Minister of Finance to Make Certain Payments, May 13th, 2005]

Mr. Speaker, the Liberals have been going across the country saying that if these two budget bills are not passed right away the Atlantic accord will not be fulfilled. Those members know the Senate just passed the last budget bill. That kind of nonsense is not helpful to political debate.

Our leader just stood up and asked for the Atlantic accord to be passed. This is something our leader promised those people in the last election. The Prime Minister was made to feel guilty and was forced, kicking and screaming, to actually fulfill the promise.

The reality is that they want to put this in a budget where different parties cannot accept different things. They do not want to fulfill their promise to the people of Newfoundland and Labrador and Nova Scotia. If they were serious about implementing parts of this budget, they would do the smart thing and do what would work with all parties. They would do as we suggested in the first place and break the budget bill into parts which different parties could actually support.

The Atlantic Accord could be put in a different bill where we and, I think, the NDP would support it. We have called for funding for cities. The member for Port Moody has called for this for years and has introduced motions in the House with respect to this. If the Liberals had reintroduced that right after the last election our party, the Bloc and, I am pretty sure, the NDP would have supported it. The government knows this full well and it is playing politics with the budget to an unseen extent, which is unfortunate.

I want to set the record straight. Some people have said that the Conservatives changed their position on the budget so the Liberals had to make a deal with the NDP. The truth is that we had agreed. We even abstained on the main motion on the budget to allow the budget to go forward. We agreed on the original budget implementation bill to allow it to go to committee as long the CIPA amendments were withdrawn. We were going to act responsibly and vote for the things that we supported and oppose the things that we felt were wrong. Suddenly the government flip-flopped and did something unprecedented in Canadian history. The finance minister was completely submerged by the Prime Minister and the Prime Minister ripped up his own budget.

If the Prime Minister were finance minister, what would he have done if Jean Chrétien had done the same thing to him? This Prime Minister was going to resign because advertising contracts were not going to Earnscliffe. Imagine if Jean Chrétien had actually ripped up his budget and signed on the back of a napkin with the leader of the NDP.

In my view, the government has no intention of fulfilling its promises to the NDP. I encourage members of the NDP to actually look at the budget implementation bills. The corporate tax cuts have not been removed and will not be removed. There are so many hedges in the bill that the spending promises that are supposedly in it will not in fact be implemented.

I will get back to the member's original question regarding the spending announcements in the bill. The budget will be passed possibly a year from now in the Senate depending on how fast it goes through the bill. The government should be honest with Canadians and tell them that it has no intention of fulfilling any of the commitments it is making across the country.

[An Act to Authorize the Minister of Finance to Make Certain Payments, May 10th, 2005]

Mr. Speaker, it would be helpful to review some of the policies, especially the monetary policies, which were the result of a lot of the work that people like John Crow did. The number of exports that went up in Canada over the last 15 years has been dramatic, particularly to the largest consumer nation in the world, the United States. Therefore, perhaps I should credit the government for implementing the United States-Canada free trade agreement and NAFTA agreement. However, the Liberals did not do that. They promised to reverse that. Then they got into office and relied on a Conservative government initiative to balance the books. They know that is how they did it.

[An Act to Authorize the Minister of Finance to Make Certain Payments, May 10th, 2005]

Mr. Speaker, the Minister of Labour is being ridiculous right now. The suggestion is that average Canadians could take $5,000 of their own money, pay the tax up front, put that away in a nest egg on a year to year basis and allow it to grow so that they could actually have it when they retired. He compares that to the George Bush plan. In fact it is a Conservative plan that allows Canadians to provide for their own retirements. The plans that the Liberals have are not sufficient enough to provide for people's retirements when they do retire.

There is also something they could actually make changes on. With respect to the changes the Liberals proposed to the RRSP, people tell me that the biggest problem is that the Liberals may have made it more flexible and that is great, but people need more flexibility so they can have money at the end of the year to put away. They want their tax burdens lowered so they can actually put the money into a plan.

Let us also look at investment tax credit regimes. One of the biggest problems facing this country is that we invest in companies through R and D. Here I will be fair and credit the former industry minister, John Manley. He showed a lot of leadership with things such as the Canada Foundation for Innovation, the Canada research chairs and investments through the research councils. I will give credit where credit is due. However, one of the big challenges that companies face is they rely on this R and D and they get to a certain level. One example is Iogen Corporation here in Ottawa. Then they have a period where they need access to capital in order to grow to where they can become a fair sized manufacturer or whatever. They need that access to capital.

The government has proposed certain things, technology partnerships Canada and other programs. We are hearing from company after company that this is not the way to do it. Companies such as Ballard in British Columbia would like flow-through shares. They have proposed it so that the investor would be allowed to write off that loss, direct money into companies such as Ballard, so that we do not have an American company coming up here and saying, “Ballard has this wonderful technology. The Canadian government has invested money in R and D. We are going to scoop it up and take it down to the United States”.

Iogen right here in the city of Ottawa is producing ethanol. It is an excellent plant. It is concerned about moving to Iowa because it has become productive and is at the point where it needs access to a sufficient amount of capital so it can stay here in Canada, and that is not happening. We need to look at the whole issue of commercialization and look at allowing these companies to access a big amount of capital, which is not available through a program like technology partnerships Canada. It just does not work that way.

I would also like the government to look seriously at our venture capital policies. The reality is we need not only to increase the size of venture capital in Canada but also to increase the managerial expertise at seeing these young start-up companies that do need venture capital and ensuring that it gets to them, so that the money gets to the companies that need it.

What has really gone out the window as well with this budget plan is any sort of debt repayment plan. We would think the government would actually come forward with an updated fiscal statement for the next two years to five years as to what the budget is rolling out. The government has made so many announcements over the past few months I think it has actually lost track of the amount of money that it has promised. What we are asking is that it present an updated fiscal plan. A lot of the outside economists, whether it is the C.D. Howe Institute or people like Don Drummond, have said it is incumbent upon the government to do that.

I would like to talk about the whole Kyoto process. There was $5 billion allocated in the budget. Then the Minister of the Environment three weeks later, or even later than that said, “Oops, sorry, I was off by $5 billion” and said he thought they would have to put in $10 billion. The government has allocated about $2 billion to Kyoto and emissions have actually gone up. Here is $2 billion to increase emissions so the Liberals are going to spend $10 billion and hopefully decrease emissions.

The reality is there are ways to reduce emissions of all types, the CO

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emissions, that can be done by investing in technology, by allowing companies to invest in technology. One way would be to reduce the capital cost allowance as was recommended by the Canadian Manufacturers & Exporters. This should be done on a broad based level. The member said it was done in the budget. It was not done in the budget. It was done only for a certain number of specific cases. It was not done on a broad based level as was suggested by the Canadian Manufacturers & Exporters. This would allow companies to invest in the new technology that we desperately need.

What this comes down to in the budget is a different vision. It is a different vision of Canada. It is one which says we cannot just allocate endless spending without knowing where it is going. We have to have a prudent fiscal approach to the way we treat taxpayer dollars. I think the difference comes down to that.

It is interesting in question period to hear the government respond to questions. It is always, “Our money is going here. Our money is going there”. It is not the government's money. The fact is it is taxpayers' money. It is taxpayers' money that is held in trust to be spent on the priorities that they want it spent on. That is one thing the Liberals and NDP members will never understand. It is taxpayers' money that should be held in trust to be spent on their priorities.

With the size of the surpluses we have had, it is time to give individual Canadians, average Canadians, a substantive tax break so that they can keep some of the life energy that they pour into their work. It is time to allow them to keep some of their own money for their own priorities, for their own families and their own needs.

[An Act to Authorize the Minister of Finance to Make Certain Payments, May 10th, 2005]

What has he done? Frankly, he has demolished his own reputation with the business communities, small and large, across this country. He is committing to spending five to ten years down the road when he used to commit to two year budgetary projections. He is signing deals at midnight in his office, going from premier to premier across the country. It is just an ad hoc budgetary process that is frankly embarrassing.

I want to touch upon two reasons in particular why we should oppose this budget. First, this new budget does nothing whatsoever to address our competitiveness, our productivity gap with the United States and other emerging nations like Brazil, India and China. It does nothing to help our companies or our industries. Second, it does nothing to address what Don Drummond pointed out in his report months ago, which was the fact that the disposable income of average Canadians has not gone up over a 15 year period.

These two very serious things need to be addressed. I will address the competitiveness issue first. The Canadian Manufacturers & Exporters, the Canadian Council of Chief Executives, the Canadian Federation of Independent Business and small businesses have all talked about the need to improve our competitiveness.

What could the government have done to do that? It could have done things in terms of addressing capital depreciation rates. I thought the government was going to do that. The Parliamentary Secretary to the Minister of Finance knows that the Liberals did not do this in this budget.

The capital depreciation rates are 20 years in Canada and they are eight years in the United States. It is a very abstract thing, but it allows companies to write off their equipment faster. It makes companies more efficient and more productive so that they are better able to compete in a global economy. Also, it allows them to turn over their equipment at a quicker pace which is better for the environment, which should fulfill the goal of this nation in terms of being more environmentally friendly. That is one thing the Liberals could have done.

The second is to actually implement the capital tax reductions. I see members across gawping at this. This has actually been suggested and recommended by finance committee report after finance committee report, apparently agreed to by Liberals and Conservatives alike. This should have been done a long time ago. Instead it is delayed and the ad hoc deal is done with the leader of the NDP.

We have waited years for the government to act on its own External Advisory Committee on Smart Regulation so industries such as the auto industry can actually compete on an international level across the border. They need this type of regulatory change, regulatory harmonization to ensure that they can compete as well as they do.

There are issues such as the infrastructure challenges. Look at how many billions of dollars of trade go across the Windsor border each year. Government members keep saying they are addressing that. The Liberals have been in power since 1993. The back-up is still as bad, in fact it is even worse than it ever was. Members such as the member for Windsor West and the member from Essex have brought this up. This should have been addressed in this budget. Infrastructure needs should have been addressed. In fact it is not being addressed in the budget and the members across the way know that.

Let me address the issue of disposable income. I want to quote the Toronto-Dominion report that was done by Don Drummond whom members of the House know. He is a very well-respected economist. He worked for the finance department under the Prime Minister when he was the finance minister. He found that for the past 15 years average Canadians received little or no increase in their take home pay.

On page 2 of his report he said, “The inflation adjusted GDP after tax incomes on a per worker basis real GDP per worker rose by 22% while real after tax incomes per worker squeaked out a cumulative 3.6% gain over the entire 15 year period. That is completely unacceptable and needs to be addressed”.

Members across the way may not understand this but average Canadians work very hard and pour their life energy into their work. The fact is that 15 years later, the Liberal government having been in office since 1993, the average take home pay of teachers and nurses and so on has not increased, and the government stands proudly and does not think that is a shame. It is a shame that for average people in this country their take home pay has not increased in 15 years. The government should admit that and take steps to address it. It should start to reduce its surpluses and actually leave more money in people's hands.

The other issue that needs to be addressed is the whole issue of actually creating jobs and creating wealth. Government members love to talk about redistributing wealth because it is all they can do. They do not actually reward the people who, through their risk and entrepreneurship, actually create jobs in this country.

A C.D. Howe Institute report found that corporate taxes were actually destructive to the long term growth of Canada and that productivity needed to be addressed. We can read the headlines, in fact productivity between us and our major trading partners has increased. Recently I met with members of the forestry sector. They talked about the nations that stepped ahead of us in terms of the competitiveness index. They are all Nordic nations: Iceland, Switzerland, Norway and Ireland. They have stepped ahead of us because they have invested in human capital prudently but they have also reduced their tax rates. They have also realized that it does not pay in the long term to punish those who create the jobs, who create the wealth. The wealth has to be created in the first place if it is going to be redistributed.

The fact is that individuals and businesses alike have suffered under the government's inability to address these major economic issues such as high personal and corporate income tax rates. Individuals and corporations have been struggling under the Liberal government.

I want to look again at personal income tax rates of average Canadians. Again I want to refer to the Don Drummond report which I encourage members opposite to actually read. He says:

The tax burden on individuals must also be reduced. The top marginal federal-provincial personal income tax rate is over 45% which is nearly equivalent to sending half of a worker's income to the government, not to mention that it kicks in at relatively modest income levels--

At this point I want to make the point that one of the problems in Canada is that our marginal tax rates kick in at a level that is much too low. We tax Canadians at a level that is too low. The marginal tax rates should be pushed up so that lower or middle income Canadians who are struggling to make a living have the ability to improve their own lives and improve the lives of their families before they have a bigger tax clawback.

I want to further quote from Don Drummond's report:

And, more modest income levels get hit with a combination of taxes and clawbacks in benefit payments that can raise the effective marginal tax rate to 80%. It simply does not create sufficient incentives to work, save and invest.

That is very well said. The fact is we need to reduce personal income taxes. We would hope that the government would actually do that. Canadians should be able to put something away, for instance pay $5,000, pay the tax up front in a prepaid tax plan, put it away and let it grow into a nest egg for them.

[An Act to Authorize the Minister of Finance to Make Certain Payments, May 10th, 2005]

Mr. Speaker, I found the speech by my colleague across the way very interesting. Frankly, I find it just astonishing that the government members are actually justifying this budgetary process, this ad hoc budgetary process that has been put together. We have the budget introduced on February 23, full of all of their priorities, and we have the budgetary implementation bill, Bill C-43.

I would remind members of this House, because now they are criticizing the Conservative Party for not being a responsible opposition, that on the initial budget we abstained as a caucus because we felt that we should allow the budget to go through and then review the items item by item. In fact, even on Bill C-43 we had agreed that the budget implementation bill should go to committee. We asked that the CEPA amendments be removed. Our understanding was that the government was going to remove the CEPA amendments and allow it to go to committee and we would deal with it there.

There, hopefully, we would have taken on things like the Atlantic accord and we would have been able to implement them right away. On issues or items where we disagree, we could have disagreed. That is the way a responsible opposition party works.

What happened is that then the Prime Minister got together with the leader of the NDP, and now here we have the budget bill, here we have Bill C-43 and here we have $4.6 billion in spending on two sheets of paper. That is $4.6 billion in spending, with the finance minister completely reversing his earlier position, something unprecedented in the history of this country. It is so unprecedented that I would like to quote the finance minister's warning back to him. This is from the Saskatoon StarPhoenix . The finance minister himself stated:

You can't go on stripping away piece by piece by piece of the budget....

You can't, after the fact, begin to cherry pick: “We'll throw that out and we'll put that in, we'll stir this around and mix it all up again”. That's not the way you maintain a coherent fiscal framework.

If you engage in that exercise, it is an absolute, sure formula for the creation of a deficit.

The finance minister and the Prime Minister did exactly what the finance minister said he was not going to do on this. Somehow the Liberal members are standing up and justifying this in the face of what their own finance minister said. The fact is that the finance minister, after this embarrassment of a budgetary process, should have to step down.

I would also caution the NDP members, because they signed this agreement. The leader of the NDP signed this agreement with the Prime Minister. Today our leader asked about the corporate tax cuts that are supposed to be removed. I would like to ask the members of the NDP to watch very carefully the responses from the finance minister and the Prime Minister about how “in the future” they are going to be removed.

I would also like the NDP members to be sure about any of these supposed spending increases they have asked for in this coalition. I do not think they are going to get them, because the finance minister has put in a hedge that it will not fall below a certain number before these spending increases take effect. Frankly, the NDP should talk to the members of the Liberal Party and talk to the finance minister and get it on paper, because I do not think that commitment is worth what it is written on.

Beyond the whole ad hoc process here, here is what this has done. Frankly, as finance minister, the Prime Minister, and I will even admit this, actually had somewhat of a reputation in the business community as someone who seemed to be a prudent fiscal planner. He had two year rolling projections.

[Airports, May 6th, 2005]

Mr. Speaker, the reality is they have had years to deal with this. The recent federal budget completely ignored airports across the country by not providing any relief from their exorbitant rents.

For example, the Edmonton airport next year will see its rent soar by 447% to $18 million. These rents are simply taxes on an industry that is struggling to regain its footing and taxes on travellers.

Why have the finance minister and transport minister not acted to help this industry relieve its tax burden and help Canadian travellers by reducing the taxes?