Mr. Speaker, I rise tonight to speak to Motion No. 585. First I would like to thank the member for Saint-Lambert for introducing this motion. I share many of her concerns about the weak state of the Canadian economy.
Too many Canadians are being left out of the economy altogether. There are now more Canadians who have been unemployed for a year or longer. Young Canadians face a very weak job market. There are 160,000 fewer jobs for Canadian youth than there were in 2008, for example.
CIBC economists recently issued a report showing that the quality of jobs in Canada is at a 25-year low. Growth prospects are weak, and the Conservative government lacks a plan for stimulating jobs and growth.
Policies such as income splitting and a massive increase to the TFSA limit do nothing for jobs and growth. It shows that the current Conservative government has abandoned the middle class in favour of the wealthy and has absolutely no plan to create jobs and growth for Canadians.
The Liberals, however, are committed to supporting the middle class and those who are struggling to be part of the middle class.
The motion before us attempts to address these economic concerns. I support some of these measures, however, I have some concerns with others. On balance, we support the motion.
I want to address four main components of the motion, first, the accelerated capital cost allowance for manufacturing. The Liberal Party has been calling for this measure as an incentive for manufacturers to invest in productivity-enhancing machinery. For years, in fact, we have been calling upon the government to extend the tax credit for a significantly longer period of time because we recognize that businesses need more certainty to be able to plan ahead and make the smart investments they ought to, to create jobs and growth.
Second, I want to address the innovation tax credit. The Conservatives have diluted and pulled back and weakened the SR&ED tax credit. Smaller companies that are involved in R and D and commercialization have told us, as have larger manufacturers, that the government's cuts to the SR&ED program have hurt their capacity to create new technologies and grow. We have been critical of the government's actions to dilute and weaken the SR&ED program. While the proposed innovation tax credit is a small measure, it could potentially undo some of the damage rendered by the cuts to the SR&ED tax credit.
I would like to discuss the small business tax cut proposed by the motion, calling for the tax rate for small businesses to be lowered by one point immediately and another point in the future.
Every Liberal, and I would suggest everyone in this House, understands the importance of small business and the importance of supporting the small business sector. Liberals recognize the importance of small business and helping small businesses grow and we favour policies that encourage small businesses to grow and to hire more Canadians.
We proposed, in fact, an EI premium holiday that was targeted to companies that actually hired new employees. Our proposed policy, an EI premium holiday for two years, was endorsed by the Canadian Federation of Independent Business, the Canadian Manufacturers & Exporters and Restaurants Canada. It was a way to correct some of the flaws in the Conservatives' so-called small jobs credit.
The government's tax credit actually created a disincentive to growth for small business and provided, perversely, an incentive for employers to fire workers instead of crossing the $15,000 EI premium threshold.
The Parliamentary Budget Officer calculated that the Conservative gimmick would actually cost $700,000 for every job it created. We recognize the importance of a targeted approach to tax measures based upon evidence. That is what the Auditor General's report actually indicates that the Conservatives have not done their homework to actually identify what measures are working, what could work better, and what types of tax measures have the capacity to create jobs and growth.
This why we have some reservations about an across-the-board cut to the small business rate. We absolutely support cutting taxes on small business, but we believe that it is important that we target tax cuts in areas where we are doing one of two things, or preferably both. One is creating jobs and growth and the other is, of course, to help support middle class families.
Some of this benefit would not flow to actual operating small businesses, but could in fact flow to wealthy professionals who incorporate their small businesses but actually do not have any additional employees. It could support, for instance, small holding companies that simply invest in publicly traded securities and are not active in terms of having employees and the kinds of businesses that we associate with small businesses in our neighbourhoods and communities.
They may actually be operating a business as a tax shelter, for instance. Targeting measures at actual operating small businesses to provide incentives for those small businesses to grow and hire more people is what I would believe that the NDP, Conservatives and Liberals would all agree on. I raise that concern.
Jack Mintz, a tax policy expert at the University of Calgary's school of public policy believes that this tax measure proposed by the NDP and endorsed by the Conservatives, most recently, could be a significant tax benefit to wealthy Canadians. He wrote that, “It's something to make the rich richer”.
There are other economists, including Armine Yalnizyan, an economist with the Canadian Centre for Policy Alternatives, who actually agreed with Mr. Mintz. She said, “It's a little bit weird to say that we are looking at a way of benefiting small businesses when small businesses can also be tax shelters”.
I want to be clear. We support the move to cut the taxes on small businesses, but we think that government and, in fact, all parliamentarians ought to consider ways to target these cuts to operating small businesses that actually will grow and invest more as a result of this and hire more Canadians.
That is something that I am certain my NDP colleagues would agree with, that we ought to define the application of this tax cut in a way that would generate the most growth, the most jobs and the most hiring. That is something that we can look at in the details of implementing the public policy.
We are clearly supportive of cutting taxes on small business, but we believe it is better public policy to target those cuts toward operating small businesses that would grow and hire more Canadians.
Finally, the motion before us calls on the federal government to work with the provinces, territories, and first nations and aboriginal Canadians to ensure that first nations and aboriginal Canadians get the skills they need to enter the workforce and get good jobs. I wholeheartedly endorse this recommendation.
There are 400,000 young aboriginal and first nations Canadians entering the workforce over the next 10 years. If they had the skills required to get a job and to support themselves, that would be a really good news story for the Canadian economy because a young, skilled workforce is a source of economic growth for any economy. The fact is they do not. That reflects a failure of government to invest in young aboriginal first nations Canadians.
We have to close the gap, as an example, between the funding of aboriginal and first nations schools and non-aboriginal, non-first nations schools in the same provinces. We need to ensure that we invest in young aboriginal and first nations Canadians as early as possible to ensure we build an educational foundation for them to develop and then to get the skills they need for work.
A Liberal plan for jobs and growth would prioritize investing in learning and in people, so that they get the skills they need. We feel that nowhere is that need more acute than with aboriginal and first nations Canadians.
We would invest in infrastructure, innovation and in trade relationships. Investing in people and skills, infrastructure, innovation and trade reflect a Liberal plan for jobs and growth. We would also provide support for middle class families and those Canadians who are working so hard to join them.
