Mr. Speaker, it is with pleasure today to speak to the motion put forward by the member for Markham—Unionville. I am always inspired by his erudite words on economic issues. It makes a big difference for our party to have him leading us on economic policy but it also informs the thinking of the House. I am certain that if the Conservatives opposite listened closely, they could learn a great deal from members on this side about economic mantra in general.
The history of tax policy goes back quite a bit. In 1678, Jean-Baptiste Colbert, minister of finance to Louis XIV of France, said, “The art of taxation consists in so plucking the goose as to obtain the largest possible amount of feathers with the smallest possible amount of hissing”.
I would hope that over the last 400 years or so we have actually evolved from that and we can actually see tax policy for what it really is in the modern world: an opportunity, through reforming our tax system, to create economic growth, prosperity and a richer, fairer, cleaner and greener Canada.
There is a tremendous opportunity for governments in a large surplus position to actually reform the tax system to attract capital, to attract talent and to make Canada a global leader in what will be the fastest growing area of the global economy, that of clean energy and environmental technology.
I would like to discuss our capacity and our responsibility to reform our tax system in order to create a more open, richer and fairer economy.
The fact is there are many prescriptives that are being provided to the government by economists within Canada and outside of Canada as to what ought to be done with the taxes. We have not had meaningful tax reform in Canada since 1971 with the Carter commission. Since then, in fact the Canadian economy and the global economy have changed remarkably.
We need to reform our tax system. We need to lower taxes on investment and capital. In the old days capital was not as mobile as it is today. In the old days the tax system was used to redistribute income. Today it redistributes capital.
The fact is a country like Canada during an age of free trade and freer trade cannot afford to have higher capital taxes, higher taxes on investment and ultimately on productivity, and higher corporate taxes than our trading partners. Other countries have reformed their tax systems.
The hon. member mentioned Ireland. Ireland, New Zealand, Australia, Sweden, Finland, Denmark, and the Netherlands have all reformed their tax system to create more economic growth and prosperity. The reason I mention some of the Scandinavian examples is for my friends in the New Democratic Party to recognize that in fact progressive social policy can coexist with innovative, forward thinking economic policy. It is not a zero sum game. It is not: if we cut corporate taxes somehow we are going to hurt education.
In fact, it is to the contrary. If we reform the corporate tax system and reform taxes on investment, we create more economic growth, attract more capital, build greater productivity so that we can invest in social programs that can help to have a fairer and more just society.
For my friends in the Conservative Party, I would like to speak to the importance of social investment. The OECD is one of the greatest organizations in the world on economic policy. It advises on economic, fiscal and broad based social policy. One of the prescriptives that it recommended in its 2006 report on Canada included improving the overall business environment by reducing taxes on corporate investment, fostering innovation, and ensuring fiscal arrangements are efficient, but it also put in its economic recommendations for Canada that it should tackle disadvantage and strengthen social development. It pointed specifically to the importance of early learning and child care not simply as a social policy but as an economic policy. This is what the OECD had to say:
Moving toward free early education for all three and four year-olds may also pay social and economic dividends in the longer run. This could be complemented by more affordable access to child care, especially for lower-wage working parents.
Therefore, as much as the NDP members do not recognize the importance of forward thinking economic policy to create a more just society, the Conservatives do not recognize the importance of a more just society and better social programs to create a more vigorous economy. This leaves one party, the Liberal Party, that actually understands that we need good social investment to have a competitive economy and we need a competitive economy to be able to afford good social investment.
That was the Liberal record in the 20th century but today the world has actually changed to the point that we recognize the need for environmental stewardship as a core mantra for public policy here in Canada and around the world.
A few months ago I attended a conference in Dalian, China. The World Economic Forum held for the first time in its 36 year history a summer Davos conference this year in China. At that conference the sessions included venture capital investment in clean tech, the growth of biofuels as an investment opportunity, and how to compete and succeed in a global carbon constrained economy.
If one just looked at the topics and did not know the nature of the conference, one would think one was at a Greenpeace or a Sierra Club conference, but no, these were the top CEOs from around the world, of the biggest companies in the world, gathering to talk about why investments in clean technology were going to lead to greater profits for their companies.
Many of these CEOs were not necessarily that progressive a few years ago on environmental policy. They have come to the conclusion that whether or not one believes in the science of climate change, whether or not one supports Kyoto, a CEO has a vested interest, but also a pecuniary responsibility to the shareholders, to prepare his or her company for what is becoming a globally carbon constrained economy.
Around the world, countries are individually, bilaterally and multilaterally putting a price on carbon because they recognize the importance of addressing the environmental mistakes of the past. As that occurs, environmental laggards will become economic laggards.
Canada has a huge capacity to compete and succeed in a globally carbon constrained economy if we put the right public policy measures in now. We need to not only reform our tax system to be more competitive in the short term, but in the long term we need to green our tax system. That means more than simply putting a price on carbon. That means putting in place incentives for consumers to invest in green technologies, to buy green technologies, and to basically make Canada not only a greener country but also more competitive.
One of the questions we should be asking ourselves is what tax reform, what economic reform, what policies should we be implementing as a country now to become a global leader in what will be the fastest growing area of the 21st century economy: the area of green tech, clean tech and environmental technologies.
Business leaders globally are ahead of governments on this and they are particularly ahead of this current government. I knew this government was not socially progressive. When I look at its budgets, I see it is not even economically conservative but, beyond that, the fact that it does not really take seriously environmental issues is actually creating an economic risk for Canada as other countries embrace environmental stewardship not only as a moral imperative but also as an economic opportunity.
Countries like Denmark are growing in fact because of past environmental responsibility and foresight to put in place the measures required to reduce carbon consumption, to reduce the environmental externalities of their economy. Today it is more competitive as a result of that foresight.
I would urge the Conservatives to recognize that in fact environmental responsibility brings with it economic opportunity. I would urge the NDP to recognize that in fact environmental responsibility can create the economic opportunity but that corporate profits are not necessarily a bad thing. We need the market engaged and we need the private sector engaged. Government cannot do it alone. We need all members of Canadian society, through the tax system, to play a role and build a richer, fairer and greener Canada.
Liberals believe in making the long term decisions that are in the interests of Canadians and reducing personal and business income taxes. The Conservative government cut the GST to raise income taxes, particularly on the poorest of Canadians. We need to cut taxes particularly for low income Canadians. We need to reduce marginal income taxes and we need to help all Canadians, particularly middle class and low income Canadians, to have the opportunity to compete and succeed, which they deserve, and to see the benefits for their hard work.
The Conservative government is the only government in the world that is cutting consumption taxes to raise income taxes. It is wrong. It is going in the wrong direction. It is trying to buy votes and that is at the long term economic--
