Mr. Speaker, today we are continuing the debate on Bill C-207, a bill proposing a tax credit for new graduates working in certain designated regions.
While one can recognize the aim of such a measure and the desire to foster economic development in forming that measure, the proposal in Bill C-207 is saddled with a number of fundamental flaws.
The chief flaw of Bill C-207 is that while it encourages recent graduates to remain or relocate in designated regions, it does nothing to generate new employment in those regions. As a result, it could be argued that the proposed credit would primarily benefit individuals working in such regions regardless of the presence or absence of the tax credit. In that light, such a measure would clearly not be an effective avenue for this purpose.
This also speaks to a larger problem with Bill C-207. The bill proposes to address the issue of economic development in essentially a temporary or fragmented manner. Properly fostering economic development involves a multi-faceted approach responsive to local needs and creating strategic partnerships between businesses and public institutions, the community and other stakeholders.
Canada's national economy is highly diversified across different economic regions with varied needs in terms of workers' skills. The skill sets needed to work in the offshore oil industry in Newfoundland differ significantly from those needed to work in the high tech sector in Waterloo. As well, at any point in time each of these sectors will experience business cycles and economic adjustment.
Economic adjustment is constantly taking place and is a sign of a healthy and flexible economy. Most economically successful adjustments happen naturally and without intervention from government.
Governments, domestic and international, have been moving away from subsidies. Instead they have been focusing support toward fostering high valued added economic activity through education, innovation and infrastructure.
Canada's new government promotes innovation, research and development and post-secondary education through a variety of programs that benefit directly and indirectly students pursuing post-secondary education. For instance, as confirmed in budget 2007, federal investment in granting councils and the Canada Foundation for Innovation, among others, will total $1.4 billion this year.
We also support an assortment of economic development programs totalling $1.2 billion through the regional development agencies, like the Economic Development Agency of Canada for the Regions of Quebec.
The regional development agencies work in partnership with stakeholders to tailor their specific programs to meet the economic development needs of their local communities. These programs include support for small to medium size enterprises which can benefit recent graduates.
The Atlantic Canada Opportunities Agency, ACOA, has a program that provides an excellent illustration of this approach. The export internship for trade graduates initiative provides training and employment opportunities to international trade specialists graduating from colleges and universities in Atlantic Canada.
Small and medium size enterprises receive help to acquire the expertise they need to successfully develop and implement an international marketing plan. Eligible companies work with ACOA and post-secondary institutions to select qualified graduates with training in international business. Together the employer and the intern develop and implement a strategic export plan for that company. At the conclusion of the internship, the employer can apply through ACOA for assistance to retain the graduate's services for up to three additional years.
The Economic Development Agency of Canada for the Regions of Quebec offers other examples of how Canada's new government supports similar programs that involve a multi-faceted approach to regional development. The innovation, development, entrepreneurship and access program for small to medium enterprises is a financial assistance program that fosters the growth of small and medium size enterprises in Quebec, helping these businesses become more competitive in the world markets in activities ranging from product development to marketing plans.
Also, the community economic diversification initiative - vitality, CEDI-vitality, is an initiative designed to support communities in seven regions and 21 Quebec regional county municipalities with slower economic growth. The initiative helps foster economic development by supporting the diversification of the economic base of these communities to create sustainable long term jobs, jobs that will stem, or even prevent, the exodus of youth from these regions.
Small and medium size enterprises, business groups and industry associations can all apply under vitality for assistance in the development of strategies and action plans, capital projects for enterprise startup and business expansion, and marketing of new products and services. The program also assists with the establishment of entrepreneurship support organizations, projects aimed at enhancing cooperation between knowledge institutions, such as universities and colleges, and the business community.
In 2006-07 total government support of these programs will total over $380 million.
These are the types of regional development measures that define a multi-faceted approach. They are forward looking in promoting export markets in an increasingly globalized economy. They involve key stakeholders, employers and post-secondary institutions to help create new opportunities for new graduates, and they work.
Bill C-207 proposes a tax credit nowhere near as well targeted. It proposes a tax credit that would do nothing to foster economic development conducive to job growth. It would do nothing to create the opportunities vital for the retention of those new graduates. Yet the proposed credit would cost up to $600 million annually. I submit that this would be an inefficient use of public funds.
Canada's new government takes seriously the challenge of ensuring Canada is equipped for an increasingly competitive global market. We are all working for all regions of Canada. All young people need to be given the opportunity to acquire the skills and training so that Canada can have a knowledge advantage with the best educated, most skilled and most flexible workforce in the world.
Canadian businesses need to operate in an environment that encourages investment and innovation. When Canada succeeds, we all succeed.
Bill C-207 proposes to use a tax credit to encourage young people to stay in a particular region. Yet it does not help create the type of employment opportunities that would provide an incentive for a young person to stay there. It ignores the varied nature of Canada's economy and that economic adjustment is an ongoing reality of a healthy, dynamic, diversified economy.
The Government of Canada supports regional economic development and devotes significant resources to programs that are responsive to local needs, employ strategic partnerships with other stakeholders and are multi-faceted in their approach.
This Conservative government is working to improve the standard of living and quality of life for all Canadians. This government is working to make Canada a world leader for today and for future generations.
Bill C-207 does nothing like that. Instead, it proposes to spend up to $600 million on a tax credit that would not help create a single additional job.
For these reasons, I am unable to support this legislation. I hope that my colleagues, after taking full account of the larger picture, will decline to support this bill.