Ted Menzies

[Budget Implementation Act, 2008--Bill C-50, April 17th, 2008]

Mr. Speaker, it is unfortunate that the circumstances of today have shortened my response to this motion from the hon. member.

On behalf of the Government of Canada and the Prime Minister, I rise to oppose this motion introduced by the hon. member for Trinity—Spadina. I would also encourage all hon. members to vote against this motion to divide Bill C-50 into pieces.

There are more than 900,000 people in the queue waiting to come to Canada. If we do not do something about that staggering number now, it will balloon to close to 1.5 million in just four years.

Canada is a destination of choice for potential immigrants from all over the globe. There are millions around the world who would like to come here and who would qualify to come here. They cannot all come here, though, and that is why we need to manage immigration: to make it a system that is fair to prospective immigrants, fair to their families and fair to Canada.

I was proud on March 14 when our government introduced its budget and proposed amendments to the Immigration and Refugee Protection Act, the IRPA. I am proud that this government is taking positive steps to improve Canada's immigration system.

Let me address why the government has proposed amendments to the IRPA through provisions to implement the budget. Several precedents already exist in which previous governments have used budget bills to make changes to several pieces of legislation and not just to the Income Tax Act. What we are doing is not unprecedented.

As well, like any bill, the budget implementation act is a public document. It will be reviewed by the Standing Committee on Finance and the proposed amendments must be approved by Parliament and receive royal assent before becoming law.

The proposed changes are being sought in a transparent manner. As the House well knows, immigration is a key factor for the Canadian economy and figures prominently in this government's “Advantage Canada” priorities.

Finally, we should consider that the IRPA was passed in 2002, one of the few times, I might add, where major changes to the immigration system were made through wholesale changes to the act and also brought forward through the House of Commons and not done solely through cabinet.

The consultations and parliamentary debate that took place may have allowed for such discussion, but during the time of these discussions, over one million people applied to come to Canada in order to get in under the old rules. This is the genesis of the backlog that we have today, which is why a lengthy public debate on this matter might not help the problem that we are aiming to address. This is not to say that we are opposed to public debate about these proposals, as our efforts here today demonstrate.

I would like to expand on why these measures are important to Canada. I see my time is up, but I want to emphasize the fact that we will not be supporting this motion.

[Income Tax Act, April 15th, 2008]

Mr. Speaker, I would like to sum up by once again recognizing the hon. member for his private member's bill. We are looking forward to getting this bill to committee. We will be able to study it, understand its real financial ramifications, and we look forward to that.

[Income Tax Act, April 15th, 2008]

Mr. Speaker, some of the suggestions that I was referring to were simply reiterating what has been said. I would like to continue, if I can, and I will try to bring more relevance to it. There are other Liberals I would like to quote, Mr. Speaker, but having been chastised by you, perhaps I will leave some of those quotes to another day. I am sure they will be raised as reminders.

I am proud to belong to a Conservative government that does not support the pro GST stance of raising the GST. We also do not care for the tax and spend philosophy. Indeed, that is why our Conservative government has slashed the tax bill for Canadian families and businesses by nearly $200 billion since forming government just two short years ago.

In budget 2008, moreover, we introduced the new landmark tax-free savings account, TFSA. This has a lot of Canadians very excited, regardless of political affiliation. Indeed, even the well-respected and non-partisan C.D. Howe Institute has called it:

--the most significant advance in Canada's tax treatment of personal savings since the registered retirement savings plan.... TFSAs will become a mainstay on the Canadian financial landscape, providing new savings options and flexibility for people of all ages and incomes.

Indeed, the TFSA will be a new tax efficient savings vehicle that provides an additional way to meet the challenges of home ownership, allowing Canadians to put more money aside, an additional $5,000 every year, and watch their investments grow tax free to use for whatever purpose they wish, including the purchase of a new home.

While TFSA contributions will not be deductible, there will be no tax on investment income earned in the plan or on withdrawals. These new savings accounts will give Canadians full flexibility in terms of how they use their savings and how quickly they replenish them.

Take, for example, a young woman who begins to save $100 a month in her TFSA as she starts working.

[Income Tax Act, April 15th, 2008]

Mr. Speaker, I appreciate the opportunity to speak to Bill C-520, introduced by my Conservative colleague, the member for Delta—Richmond East.

Before I continue, the member has long been recognized as a strong advocate on behalf of his constituents, effectively bringing their concerns to Ottawa since his initial election back in 1993, a stellar record. We applaud the member for Delta—Richmond East for his longevity and his ongoing contributions to Parliament.

We now turn to his latest initiative, a private member's bill that proposes an expansion of the home buyers' plan through amendments to the Income Tax Act.

For those unfamiliar with the home buyers' plan, this program allows a first-time home buyer to withdraw up to $20,000 from an RRSP tax-free to purchase or build a home, as long as the amount is repaid within a specified timeframe of the plan in equal amounts over 15 years. No tax is paid on the amount withdrawn.

The plan's intended objective has been to make home ownership easier for the first-time buyers, while still encouraging long term retirement savings. Since its introduction in 1992, it has helped approximately 1.6 million Canadians to purchase their first homes.

Bill C-520 would modify the plan by increasing the maximum amount a first-time home buyer would be permitted to withdraw from an RRSP tax-free to $25,000 per individual.

We all recognize that the Canadian housing market is extremely robust, especially in British Columbia and the rest of western Canada. Indeed, the number of new homes started in Canada was at the second highest level in nearly two decades in 2007. That trend is expected to continue into 2008. More relevant to the discussion on Bill C-520 is that since 2002, the average selling price of an existing home has risen by almost 10% annually.

I believe all parliamentarians would agree that encouraging a robust, free market economy, including the acquisition of private property, is a basic tenet for a healthy democracy. As the revered economist, F.A. Hayek, asserted “private property is the most important guaranty of freedom”.

The most important piece of private property for the most number of Canadians is a home. Additionally, for most, buying a home will be the single largest investment Canadians will make throughout their lives. For these and other reasons, encouraging widespread private ownership is a goal that we should all share. Make no mistake, the Conservative government has introduced noteworthy measures to ensure home ownership is more affordable for more and more Canadian families.

First and foremost, we did something the previous Liberal government refused to do. We cut the GST, reducing it down to 5%. This one measure alone is having a major positive impact for those who have purchased or will purchase newly built homes. The Canadian Home Builders' Association heralded the GST cut as “great news for both home buyers and owners”. The Canadian Real Estate Association cheered the lowering of GST as “savings to new home buyers”, adding it would also “help Canadians pay for their home renovations”.

Indeed, our GST cut will translate into more than $1 billion in annual savings for the housing sector, returning money back where it belongs into the pockets of Canadians. For instance, an individual or family looking to buying a new $250,000 home will now save $3,200 because of our GST cut.

A lot of Canadians, especially new home owners, are very happy with the GST reduction because it is making a big, positive difference in their lives, people like the newlywed couple building a house in the riding of Fredericton, or that young professional woman who just bought a condominium in the riding of North Vancouver, or that family of new Canadians purchasing their first home in the riding of Oakville.

Unfortunately, each and every one of those individuals and families is currently represented by a Liberal MP in the House, an MP who is not really happy that those people are happy as the Liberals are strongly opposed to our GST cut. What is worse, all of the Liberal MPs support a Liberal leader who keeps saying he might raise the GST.

In effect, Liberal MPs want to go to those new homeowners, that newlywed couple, that single professional woman, that family of new Canadians, and reach right back into their pockets, grab the money that they saved through our GST cut and funnel their money back to Ottawa to pay for the boondoggles and scandals that would inevitably result from another Liberal government.

To those Liberals who say to Canadians that the Liberals would never raise the GST, I ask them to explain the words of their own leader who, when asked if he would raise personal taxes like the GST, said, “We will consider that”. I would ask them to explain why the Liberal finance critic, the member for Markham—Unionville, when asked specifically if the Liberals would raise the GST, revealed, “It's an option. All I can say is that it is consistent with“--the Liberal--“approach”.

What has Canadians nervous, especially present and future new homebuyers, is the current Liberal leader and Liberal Party who subscribe to a tax and spend philosophy, including advocating for a huge hike in the GST. Even some--

[Securities industry, April 11th, 2008]

Mr. Speaker, I will repeat that this finance minister is absolutely respecting provincial jurisdiction, including that of Quebec, most importantly, but we do need to remember that we need to protect investors across the country.

We heard from many investors, including those from Quebec, who raised concerns that exist in regard to our system right now. That is of primary importance to us: protecting Canadians.

[Securities industry, April 11th, 2008]

Absolutely, Mr. Speaker, this government will respect provincial jurisdiction. That is where securities regulation is at this point, but we heard loud and clear at finance committee yesterday of the problems facing those who are involved in the asset backed commercial paper. We do not have a system that protects our investors all across the country.

That is why the finance minister is looking seriously at this, but provincial jurisdiction will be respected.

[April 9th, 2008]

Mr. Speaker, once again, our Conservative government has demonstrated its support for the automotive sector and the workers in this important industry.

Just a moment ago I outlined what we had done to support the industry. I will add to that impressive list with what we are doing for workers that find themselves negatively impacted by the global economic volatility in certain sectors, such as the auto sector.

These folks are facing these difficult times and it is through our initiatives, like the $1 billion community development trust, that we have provided as assistance to those people. Through this trust, we are providing the province of Ontario with over $350 million. I will quote directly from the province's recent budget. It said:

—support improved productivity and competitiveness, technology development, and training in agriculture, forestry and manufacturing (including the auto-parts sector). Initiatives will include new skills training centres—

[April 9th, 2008]

Mr. Speaker, I object to the suggestion of the member for Kitchener Centre that Conservatives do not care about Canadians. We do.

I thank her for this opportunity to speak to our Conservative government's strong economic leadership, leadership that was acknowledged and applauded just today in the IMF's World Economic Outlook.

For the benefit of members who have not had the opportunity to read that document yet, I would like to highlight one comment in particular. It says:

A package of tax cuts has provided a timely fiscal stimulus...the [Canadian] government’s structural policy agenda should help increase competitiveness and productivity growth to underpin longer-term prospects.

This Conservative government is taking concrete measures to ensure the long term economic competitiveness of Canada's manufacturing sector, especially our automotive sector. We recognize, and I would hope the member opposite would agree, that our automotive sector is a global leader that supplies high quality jobs in many communities across Canada, most notably in the Province of Ontario.

The actions we have undertaken to support the auto sector range from $400 million to improve an access road, to the new Windsor-Detroit border crossing, to significant tax relief by 2012-13 that will total over $1 billion.

As the Canadian Manufacturers & Exporters has declared, following the sweeping tax reductions we announced in our 2007 fall economic statement:

Canada is going to have a very attractive tax environment to retain and attract business investment. ...this keeps us in the game of international investment.

We have built on that tax relief in budget 2008 with numerous measures, such as a $250 million automotive innovation fund that will support strategic, large scale research and development projects by automotive and parts manufacturers in developing greener, more fuel efficient vehicles.

We have also taken action that will be of special benefit to the automotive sector through an enhancement to Export Development Canada's export guarantee program, increasing the guaranteed coverage from 75% to 90%. Additionally, $34 million per year has been provided in budget 2008 for new research through the Natural Sciences and Engineering Research Council, targeted to the needs of key industries such as the auto sector. We are also providing key funding support to the development of environmentally friendly E85 fuelling infrastructure that will help promote the commercialization of E85 fuels.

As I have outlined some of the measures we took in budget 2008 to support the auto sector, I believe it would be instructive to hear what the sector's reaction to our budget has been.

I will quote then from David Paterson, vice-president of corporate and environmental affairs for General Motors of Canada. Here is what he said of budget 2008:

Directionally it's very, very positive... they've [the Conservative government] really shown they're listening and they're moving forward.

[Questions on the Order Paper, April 7th, 2008]

Mr. Speaker, I ask that all questions be allowed to stand.

[Income Tax Act, April 7th, 2008]

It is wonderful to be back here and hear the accolades coming from the other side so early in the morning. It is nice to see that they are up and atom.

I do welcome this opportunity to continue the debate on private member's Bill C-207, on which, by the way, we heard the witnesses who appeared and we debated at the finance committee, so we do actually understand what is in this legislation.

This bill is sponsored by the hon. member for Chicoutimi—Le Fjord. As the hon. members are aware, it proposes an income tax credit for new graduates taking employment in certain regions. The credit would be equal to 40% of earnings from the first 52 weeks of qualifying employment, to a maximum credit of $8,000.

Qualifying employment would be employment in a designated region and employment duties would need to be related to the graduate's education. A designated region for purposes of the credit is an area defined in section 3 of the Regional Development Incentives Act.

While I can appreciate the intent of this proposal to a certain degree, I have to make it very clear that I consider there to be a number of significant practical problems associated with this bill, issues that should be of concern to members of this House and which should preclude them from supporting it.

One of my first concerns is that there appears to be no coherent rationale or specific identifiable necessity underpinning the proposed tax credit. In other words, the hon. member for Chicoutimi—Le Fjord has not demonstrated that there is in fact a shortage of skilled workers in the designated regions targeted by this bill.

Is there any evidence, for example, that employers in these regions cannot find the skilled workers they need, even if they offer competitive compensation and working conditions? Even if there is, why then would the measure only target new graduates and not all qualified skilled workers relocating to these designated regions? Why propose a credit available to all recent graduates, regardless of occupation? Above all, what is the rationale for providing significant federal government support to entice recent graduates to work in certain regions instead of others?

The designated regions that the bill references are drawn from a list that has not been updated in over two decades and which simply does not account for economic changes that have taken place in the interim. The credit proposed in this bill would also introduce very serious inequalities in the tax system between recent graduates and those who graduated earlier, and inequities between new graduates who work in different regions.

Finally, the credit would incur a substantial fiscal cost to taxpayers in terms of forgone revenue for a tax measure that may ultimately not result in any new jobs for any new graduates anywhere in the country. This is simply not consistent with the government's approach of dedicating federal resources to where they will have the greatest positive economic impact.

If anything, this bill would, if passed, divert fiscal resources away from programs that actually do support regional economic development and that do foster the kinds of economic conditions under which all regions of Canada can grow and prosper.

This bill would only provide tax relief with respect to a new graduate's first 52 weeks of qualified employment. This raises a fairly obvious question in my mind. If the proposed credit were actually needed to encourage new graduates to work in designated regions, what would happen after the initial 52 weeks when the credit is no longer available? Moreover, why not provide incentives to other skilled workers who are not new graduates, if the member's concern is truly skills shortages in these regions?

All of these issues raise significant questions about whether this bill would yield long term benefits to the intended target regions and whether it would even have an impact in the short term beyond reducing taxes for certain groups of workers.

The bill is inadequate in meeting its intended objectives in a range of areas. It, for example, does not even make any attempt to target skill sets that are in short supply in a designated region or which could assist in its development.

I would like to take a moment to return to the concerns I outlined at the outset with respect to the bill's definition of “designated region”.

As we all know by now, the credit is only provided to new graduates who take up work in a designated region, a term taken from the Regional Development Incentives Act. The term refers to a region in which, to quote the act, “existing opportunities for productive employment in the region are exceptionally inadequate”.

As I said, the list of regions specified in the act has not been updated in over 20 years. This list simply does not reflect the current economic reality of Canada's regions. I might add, as an example, 20 years ago the oil sands projects were very much in their infancy, and that is one of the highest demand regions for skilled labour that we have in this country now.

Let us take a couple of glaring cases in point.

I will draw hon. members attention specifically to the fact that the provinces of Saskatchewan and Manitoba are included on this list in their entirety, yet both provinces have recently displayed unemployment rates that are below the national average. If anything, Saskatchewan is one of the country's recent economic success stories with its economy booming as a result of the ongoing development of its extensive energy reserves.

That being the case, and given the significant economic challenges being faced elsewhere in the country, it would be inappropriate to dedicate limited federal resources to ensuring new graduates in these provinces pay up to $8,000 less in federal income tax than those not working in regions designated as having inadequate opportunities for productive employment 20 years ago.

Clearly, Bill C-207 would lead to some unfair and almost surreal regional de facto subsidies if it were adopted.

The bizarre inequities introduced by this bill would not only occur between regions but also between individuals or groups of graduates. For example, graduates who finish their respective programs roughly concurrently but who live and work in different regions could face completely different income tax burdens in their first year of employment. At the same time, two graduates working in the same job and region but whose graduation dates are a year apart would also face that $8,000 gap in their respective tax burdens.

Canadians simply cannot and should not be expected to support a program that introduces such inequitable outcomes into our tax system.

What is more, the tax credit proposed under Bill C-207 is also incredibly expensive. Estimates suggest that it could represent up to $600 million in forgone revenue each year to the federal government. As I have suggested, these are funds that would no longer be available to other priorities for which there is a great deal of public support.

In the real world, the conditions that Bill C-207 is trying to address would not be solved through temporary and arbitrary tax benefits like those proposed.

For these reasons, I am unable to support this private member's bill and would encourage hon. members to simply reject it, so that the significant financial resources that it entails can be more effectively dedicated to meeting the priorities of Canadians.