Phil McColeman

[Committees of the House, November 16th, 2016]

Six per cent a year. Sit down.

[Committees of the House, November 16th, 2016]

Are you kidding me?

[Committees of the House, November 16th, 2016]

Mr. Speaker, the member is actually drilling down to the fact that perhaps this will be another one of those promises, without any detail, that will come back and haunt the economy.

Let us be very clear. What investors at this level want to do is make as much profit and as much margin as they can on their investments, and they want to reduce risk. We do not know yet, but we are very close to perhaps knowing what investors think. If they can offload the risk to taxpayers by having this bank, yet gain all of the return and profits from these projects, this will be the perfect scenario.

We are watching very closely what the government does in terms of the structure. It has given us no details at all.

While we have a model that is working, what we call P3, the government is deciding to undo that on the speculation that investors will be the ones who will cover both sides of the equation, profit and risk. However, they perhaps will not take the risk, and it will be left to Canadian taxpayers.

[Committees of the House, November 16th, 2016]

Madam Speaker, to answer the question, there is absolutely a key role for the finance committee to play. It is to make sure that governments do not go into deficit without a plan to come out of deficit and without a plan to balance.

At the finance committee, we heard from the finance minister on a number of occasions. When asked this question, all we had was an evasive answer at first, and then no answer thereafter.

What we heard from witness and after witness, including banks and representatives of small and medium-sized businesses, was that they were elected to run a deficit, but when were they going to take it back to balance? The answer is that they have no answer.

[Committees of the House, November 16th, 2016]

Mr. Speaker, I move that the second report of the Standing Committee on Finance, presented on Friday, March 11, be concurred in.

I will be splitting my time, Mr. Speaker.

I stand today to talk about the business of the finance committee and also about where the government is taking our country from a financial, economic point of view, or should I say mismanaging our economy as it stands today. It could be entitled “A trail of broken promises”.

Let me deal with three of the more major broken promises on which the government campaigned, yet today still has broken the solemn promise to Canadians.

The first is on deficits. The government believes it can spend its way to prosperity. This has been tried by other governments. In my province of Ontario, where I was in business for 25 years, I watched consecutive Liberal governments and NDP governments try to spend their way to prosperity, and it ended in disaster. Today, it is a disaster in Ontario, with our province being the most indebted sub-sovereign government in all of North America.

The promise that was made by the government was small deficit spending. Instead, we find out in the fall economic update that the deficit will be $31 billion for this fiscal year. Let me register that with Canadians one more time. The deficit will be $31 billion, not the $10 billion that was promised. Not one job has been created since the Liberals were elected as a result of spending this money. It is a false message that we can spend our way to prosperity. It is a disaster.

The second is lowering taxes for small business. We all campaigned on doing that, all of our parties. However, when we received the budget last spring, something was missing. It was that small business tax reduction.

All of us know the importance of small business. All of us know the statistics, that 80% of good paying, full-time jobs are created by small business. What does this mean to individuals who are planning expansions, or perhaps who are employing 20 people and are on the verge of employing 10 more or five more people? It means companies have to stop and give it a second thought. It means that as the government moves forward with additional taxes on them, mainly the CPP hidden tax increase, a payroll tax, along with what is coming with the carbon tax, they are now looking at their situation a whole lot differently. In fact, they are thinking that maybe they should just stay small, or reduce the size of their operations, or depending on how long the owners will be in the business, perhaps it is not worth the effort anymore. Many businesses are making that decision.

Make no mistake, as a government, we were heading in the right direction. We were telling them about the tax reductions they would be allowed, the credits for new hires, the EI holiday for new hires, things that were incentives to small business. What we have seen are total disincentives since the present government came to power.

Perhaps the one we heard most about from businesses, large, medium and small, at finance committee during our pre-budget consultations and after the budget was when the government would commit to what it said it would do during the election campaign, which was bring us back to balance. In other words, if the Liberals are to deficit spend because they made that promise, they broke that by spending three times as much as they said.

However, when will the Liberals bring the economy back to balance, bring the books back to balance? We have seen, since the Liberals have been in power for over a year now, that there is absolutely no intention to bring things back to balance.

This is a record that is replaying itself. I remember a time in the early years of my own business when governments were spending like drunken sailors, and there was no plan. It had to come to a reckoning, and it came to a reckoning, with the government having to make major cutbacks in provincial health transfers. It was done in an arbitrary way. It was done without consultation. It had to be done, because deficits had grown beyond the country's ability to go any further in terms of debt repayment.

Another issue has resulted since this administration has come into power, and that is that investments are exiting this country right now. The investment community has looked at things it was intending to do to expand, and it is leaving. Let me give the House an example in my riding.

There is a company in my riding that does heavy forging. It forges large pieces that go into oil and gas and hydroelectric installations. I am talking about forgings the length of this room and four feet in diameter. The company is a huge energy user as a result. Let me talk about this company from a couple of fronts.

First of all, this company also has operations in the United States. When it looks at the cost of producing in Canada, it factors in, every month, enormous costs for electricity and gas. The company is located in the heart of southern Ontario. Ontario today has the highest electricity rates in all of North America. What does that mean for this company? It means that the provincial government does not really care how much electricity is costing it. How much would it be to move its operations south of the border, which is going to happen to more and more companies?

Further to that, at the federal government level, a carbon tax is coming into place. The last time there was an analysis of a carbon tax was during the 2008 election. During that election, there was a Liberal proposal on the table to bring in a carbon tax. The owner of this forging company calculated, per employee, how much more cost would be borne by the business as a result of that carbon tax. At that time, the analysis was $9,000 per employee per year. Do the math. It would be 400 good-paying jobs times $9,000 per employee. I do not have the math for what the Liberal government is proposing now, but it is going to be more than $9,000.

The decisions of this company ride on being competitive worldwide. Those 400 jobs could very well move south of the border. Then there are the changes in the landscape with the new administration in the United States. The new administration in the United States has said that it will reduce taxes to the lowest possible level to bring back to the United States industries that have fled and other industries that want to locate there. Many states have already been doing it with tax holidays for companies, property tax holidays, and credits for employees for a period of time. There have been many incentives. Many of them have been resisted by businesses.

As this go forward, the competitive nature of the way companies like this operate will pretty much be the death knell of many of them in Canada. I fear that. I come from a blue collar community that has a heritage of manufacturing, which we have seen go offshore for many years. The ones we have left, we want to keep, because they are good-paying jobs.

Yet the present government has not created one job over the course of the time it has been in power. “Spend, spend, spend” has been its mantra, never with a plan to pay it back.

I urge all members to pay attention to what is going on in—

[Academic All-Canadian Award Winner, November 16th, 2016]

Mr. Speaker, last week, during a ceremony at Rideau Hall, the Governor General recognized eight Academic All-Canadians for their achievements both on and off the field.

One of the athletes recognized was University of British Columbia swimmer and kinesiology student Rebecca Terejko, of Brantford. Rebecca captained the University of British Columbia to another Canada West gold medal last season, winning a total of seven medals at the event herself, before leading the UBC Thunderbirds to a silver medal at the CIS championship.

In the classroom, Rebecca has maintained a grade point average of 4.17. Even more impressive is that Rebecca is the recipient of the Student-Athlete Community Service Award for Canada West for her work providing free swimming lessons to underprivileged children from the east side of Vancouver.

I speak for all of Brantford—Brant when I say congratulations to Rebecca. We are proud of her.

[Budget Implementation Act, 2016, No. 2, November 14th, 2016]

Thank you, Madam Speaker.

Everyone knows that the great percentage of new jobs and well-paying jobs comes from small business expansion and exists at a rate of about 80% of all businesses. To the extent that the government provides them with the tax relief that was planned and promised by the government in the last election—a broken promise—and to the extent that a small business person can plan.... When we were in government, we were going to go forward with it. The Liberals took that policy over and said it would do that and then reneged on it. That takes an opportunity out of the plan by every small business to grow, and possibly in some cases—because as I mentioned in my speech, there is a fine line in small business in terms of success and margin—that business would have to take away any expansion opportunities and with the added costs that the government is throwing on top of that, it gets onerous on small business people. The government is killing many well-paying jobs that could have been created.

[Budget Implementation Act, 2016, No. 2, November 14th, 2016]

The quick answer is yes, and thank you for that question. The reality is that promises were made in the last election by the Liberals, and you just brought up one of them. Everybody knows, and it is spoken—

[Budget Implementation Act, 2016, No. 2, November 14th, 2016]

Madam Speaker, that is not a difficult question to answer. Members of Parliament were brought here for the single purpose of making this country better, for the single purpose of making individual lives better in this country.

When we get into thinking that if somehow through a magical number of common costs or taxation we could somehow redistribute that, life would be better for all Canadians, then we are being misled. Life gets better for individuals when we get out of their lives, when government steps out of the way and lets them make their own decisions as much as possible, and lets them use their God-given talents to follow their dreams in their own way in this society under a free economic system. If the government tells them they have to conform to the standard that everybody shares at an equal level, then it is heading in the wrong direction.

[Budget Implementation Act, 2016, No. 2, November 14th, 2016]

Madam Speaker, it is a pleasure to stand in the House today, after listening to the debate, to underscore a few facts about where this country is heading.

Just a year ago, the Liberals promised they could spend their way to prosperity. If hard-working Canadians trusted them to borrow just a modest sum, they said they could create more jobs and put more money into Canadians' pockets. Canadians are still waiting. By most measures, they are worse off than they were a year ago. The economy is stagnant, despite a big spending budget. The Bank of Canada, the IMF, and the OECD have all downgraded their forecasts for Canada this year and next.

What about the promised jobs? At 7%, the unemployment rate is exactly where it was when the Liberals entered office. Good jobs are in short supply. The vast majority of new jobs created under the Liberals have been part time, which helps explain why weekly earnings for the average worker have not budged. Meanwhile, the cost of living goes up, it is harder for Canadians to afford a new home or a home at all, and new federal rules announced this month mean fewer will be able to get a mortgage.

What do we hear? We hear excuses. The Liberals are full of excuses. The global economy is weaker than they thought. No one would have predicted the Alberta wild fires. Their much-touted infrastructure projects are just around the corner; we will see. It could be said that they are trying to win the triple crown. That is, managing to generate the lowest economic growth, the biggest deficits, and the highest taxes.

I come from a part of the country that is largely heavy manufacturing. It is blue-collar heritage in my community through building farm implements over the years. Having a small business of my own in the community for 25 years, I have watched over the years the transition of jobs in the manufacturing sector leave over the last 30 years or so. Why do these jobs leave? In many cases there are numerous factors, but earlier in the debate today I listened to people saying that taxes are somehow a common cost in society. If we buy the argument that somehow there is a level of common cost, that by the way, we the government will determine what that is, we will not only bleed the manufacturing jobs we have, we will bleed pretty much all the good-paying jobs in the country to other places, such as south of the border. The U.S. is going through a huge transition with a new administration coming. It will be reducing its corporate taxes to the lowest rate possible. It will be providing incentives, as it does today, to attract companies to go over the border. In my part of Canada, which is Ontario, we already see a certain degree of exodus of businesses that rely heavily on energy costs.

Let me give an example. A manufacturer in my community employs approximately 400 people. I recently met with them for the purpose of discussing future expansion in Canada or the U.S., where they have two of their plants in Michigan and one in Ohio. Their decision for the expansion and the possible relocation of the Canadian operation is based on the cost of their business. It is pretty darn simple. If electricity is costing twice what it costs in Michigan or Ohio, or any other jurisdiction for that matter, they are going to ask what is the long term for the cost of electricity. Do we foresee it going down and being competitive?

However, on the taxation level, the common cost that some people have talked about in the House today, such that we have a government that believes the theory that if we all pay our share then everything will be better, if that share is set at a much higher rate than other jurisdictions, then we lose our jobs. We lose those 400 jobs. Frankly, when I looked at the books, which were opened up to me, it is absolutely scary to think that the costs have risen as high as they have for that business.

If a carbon tax comes in at the level the current government has said it will, they have factored it out, per employee, $9,000 a year. The reason is that this is a heavy manufacturing forging plant, which forges huge metal pieces for the oil and gas industry, as well as dam gates and other products like that.

When I talk to business people like this, I ask myself what will happen. Do we have to have special rules and exceptions for them? Do we have to provide some kind of special exemptions for these types of manufacturers in that category?

Once we start going down that road, as some governments have tried, it ends in destruction, because we would be picking winners and losers. We would basically be getting on what some people have called the corporate welfare cycle, saying we know we are charging a lot but we will make it up over here and give exceptions over there. It does not work. It is a false economy.

As I talk about the budget and see what the government of the day is proposing, it brings up enormous concern, not only for the type of heavy, large manufacturers that populate different communities in this country, such as mine, but also for the medium-sized business and the small business person.

If we talk to small business people and ask what major thing is holding them back from growing their business—and many people find themselves in small business at certain points in time—the answer I get, generally speaking, is red tape, which is number one, and taxation levels. Many of the taxation levels are hidden taxes, such as the increase to CPP that the current government is going forward with.

We do not really realize how fine the line is until we are there in the shoes of the business people, the family, the mom and pop shops. We do not realize how fine a line it is for them to operate in terms of their margins. I know that a lot of people from outside the business world, when they look at these businesses, think that they are making all kinds of money. However, the truth is that it is a very fine line on which many of these companies work.

I want to bring up the alternative to this kind of thinking of a level of taxation that is the ideal common cost that everyone needs to pay and point out what we did when we were in government, and I will close on this. During the worst economic downturn since the great recession, Canada had the best job creation and economic growth record among G7 countries. We reduced taxes to their lowest point in 50 years, with a typical family saving almost $7,000 a year, and we balanced budgets.

After running a targeted stimulus program that created maximum benefits and approximately 200,000 jobs, we kept our promise to balance the budget, and we left the Liberals with a surplus. That is the truth of what our record is, and I am thankful today to be standing here—