Mr. Speaker, as many have done before me in this new Parliament, I would first of all like to welcome all members and express my gratitude to my constituents for providing me the honour to serve them for another term. We all know that this is a job that carries great responsibilities and I am very honoured to be able to stand in this House and represent the great people of the riding of Macleod.
I must once again remind all hon. members that I will argue with any member of this House that the riding of Macleod is one of the most beautiful ridings in this entire country. I am sure I have excited others to debate that, but we do have some of the most beautiful country. During the election campaign in the fall, I had the opportunity to travel around and visit most communities. We have about 25 different communities in that riding. I visited with a tremendous number of people and viewed some incredible scenery. I would invite all hon. colleagues to visit the beautiful riding of Macleod.
I could not have accomplished this task without many volunteers, those who worked tirelessly, hours and hours on the phones, driving, door knocking, answering calls, answering questions, connecting constituents with me so I could talk with them on a one to one basis. Those volunteers are what make democracy work in this country and I give a great thank you to those people.
Also I do need to acknowledge the patience and understanding of my good wife, Sandy. It is only because of her support that I can be here to serve the constituents of Macleod. I thank her for her support. I also appreciate the support of my family, which actually got larger this summer. My son got married and now we have two new grandchildren. We now have a full family with a complement of four grandchildren, and of that we are very proud. I just wanted to share that with you, Mr. Speaker, because I know how important children are to you.
Let me continue with my speech now that we have recognized why we are here and how we all got here.
I am pleased to highlight the economic and fiscal statement that gave Canadians a clear update of the economic and fiscal situation. I might pause here for a moment to remind hon. members that this was not a budget. The budget will be coming early in 2009. The budget is where we lay out the projected incomes and projected expenditures for this government.
It seems to me that the opposition parties got their hopes high that there was going to be some spending that they could criticize, but there was not; in fact, we did not set that expectation. We said that we would bring Canadians up to date on where the economy is now, and we did that.
Here in Canada and around the world these are difficult times that require difficult choices. Our Conservative government has responded to this challenge by taking decisive action to restrain spending, to protect Canada's hard-won fiscal advantage and to reinforce the stability of our financial system.
Today I would like to briefly review some of the statement's key measures and how they will help this country weather the period of global economic uncertainty. Let me begin by looking back for a moment.
Long before many countries responded to the deepening financial crisis, Canada acted early and decisively. No one could ever have predicted the rapid decline in world markets in the last several weeks. The scale is stunning in both its depth and breadth, and nowhere is that more evident than in the carnage we see among global financial institutions.
The jaw-dropping list of such institutions acquired, bailed out, converted, failed or nationalized in September and October alone demonstrates that. This list includes but is not limited to Fannie Mae, Freddie Mac, UBS, Lehman Brothers, the Royal Bank of Scotland, American International, Merrill Lynch, Morgan Stanley, Wachovia, Goldman Sachs, Washington Mutual, Fortis, a once very impressive list, but a troubling list now.
Our government was well aware that difficult times may be ahead when the finance minister presented the 2007 economic statement. At that time we made choices to help put Canada in a stronger economic position, choices to lower the tax burden on Canadian families and on businesses in a significant way with pre-emptive and aggressive cuts from business, personal and consumption taxes, nearly $60 billion worth.
BMO economist Doug Porter noted earlier this year that the 2007 economic statement was “brilliantly timed. Just as the economy was running into serious heavy weather...we had some serious fiscal stimulant”. As the University of Toronto's Institute for Policy Analysis observed, “Helping offset the weakness in Canada will be 'fortuitous' injection of stimulus from the tax cuts...announced in the” 2007 economic statement.
Clearly, we took decisive action long before other countries did. Indeed we saw the U.K. just this week take the action that we took last year, in reducing its consumption tax, the U.K. equivalent of the GST, which is the value added tax. Just this week the U.K. dropped the VAT by 1.5%. I note that the U.K. only dropped it temporarily, whereas we dropped 2% in our GST over a two year period permanently.
Why did the U.K. follow our lead? Listen to the words of the Chancellor of the Exchequer in the U.K. just a few days ago when he announced these measures:
[W]e...need to take action to put money into the economy immediately.... [T]he best and fairest approach is a measure which will help everyone. To deliver a much-needed extra injection of spending into the economy right now. I therefore propose to cut VAT [the value added tax].... It will make goods and services cheaper and, by encouraging spending, will help stimulate growth.
For the opposition members who have opposed, mocked and derided our GST cut, I ask them to reflect on those words. However, while our pre-emptive actions gave us an early advantage, these measures did not insulate us completely from the rest of the world. Unfortunately for all of us, global conditions have continued to deteriorate.
That is why, for example, we have had to take further extraordinary steps in the financial sector to respond to a global credit crunch that originated outside our border, yet which threatened to engulf us if we failed to act. And act we did. We acted to maintain the availability of longer term credit with the purchase of mortgage pools through Canada Mortgage and Housing Corporation. This innovative measure is allowing Canadian financial institutions to continue lending to consumers, to homebuyers and businesses at an affordable cost.
We also created the Canadian Lenders Assurance Facility. This offers insurance on a temporary basis on wholesale term borrowing by Canadian financial institutions. This backstop offered on a commercial basis, at no cost to taxpayers I might add, ensures that our financial institutions are not at a competitive disadvantage internationally.
Our recent measures have received widespread praise. As the Globe and Mail declared:
[U]nlike most jurisdictions, Canada is ensuring liquidity in financial services without taxpayers footing the bill.... [This] helps restore trust. It also encourages competition in financial services.... [I]t keeps Canadian financial institutions competitive with [their] global peers.... It doesn't involve billions of dollars in bailout money. It's just smart policy.
We have also increased the borrowing authority of Export Development Canada and the Business Development Bank of Canada to provide more lending choices for Canadian businesses. We announced new rules for government guaranteed mortgages this summer to prevent a U.S.-style housing bubble. These rules are in place today.
Faced with threats outside our borders, we answered with leadership from within. The result is ours is among the best fiscal positions of the G-7 countries. This fact is underlined by an OECD report released this week which showed that while global growth will be lower in the coming year, Canada will lead the way in the recovery with the strongest growth among G-7 countries in 2010.
Unfortunately, Canada is clearly not immune to the ongoing financial crisis nor to the weakening in the economy of the United States and elsewhere. That brings me to the economic and fiscal statement. Its measures build on a strong foundation of this government’s action over the last year and point the way to the additional activities we will take shortly.
Allow me to cite a few examples of its key initiatives, which focus on maintaining strong fiscal and financial management. The government is firmly committed to managing spending responsibly. For example, the economic and fiscal statement includes a commitment to eliminate the taxpayer subsidy for politicians and their parties. Political parties receive a generous amount of funding support from taxpayers, from reimbursements on election spending to tax credits to those who donate. We should not have our hands out for more, especially when times are tough.
As the Canadian Taxpayers Federation has pointed out, “We're in tough economic times, so this is exactly the place to start tightening the belt”. Indeed, if we are to ask for frugal expenditure management of public money, we must lead by example. The member for Markham—Unionville said just this week, “I do think that ordinary Canadians are having a difficult time, so I think we should set an example and tighten our belts. I personally favour that, and I suspect most of my colleagues would, too”. We thank the hon. member for Markham—Unionville for reflecting early on that this is a good move.
My hon. colleagues should put the money where their mouths are and support this measure. In absence of that, it is clear the opposition has just been sweeping empty rhetoric about, showing little understanding of the plight of Canadians.
We are also pledging to ensure sustainable federal public sector wage rates and to modernize the pay equity regime. The government is committed to ensuring effective management of taxpayers’ dollars and is taking concrete action to keep spending growth on a sustainable track. As part of the new expenditure management system, the government is continuing strategic reviews of departmental spending. In the statement, we have recorded an estimated amount of savings from the round of reviews that is currently under way.
I would like now to consider some of the statement’s provisions that address transfers to the provinces. The government is committed to ensuring the continued growth of federal transfers in a way that is fiscally responsible and yet sensitive to the volatile global economic environment. The equalization program will be adjusted within the principle-based structure set out in budget 2007 by putting it on a growth path that is in line with the growth of the economy. Major transfers will continue to grow. The Canada health transfer will grow at 6% a year and the Canada social transfer will grow at 3% a year.
Across Canada, manufacturers and their employees have faced significant challenges in recent years. These challenges have been amplified by the turbulence in the financial markets.
Make no mistake, the government will continue to implement its plan, “Advantage Canada”, particularly, our commitment to building a competitive advantage for Canadian businesses, including those in the manufacturing sector, and securing the prosperity of Canadians.
To that end the government will provide a total of $700 million in additional capital to Export Development Canada and the Business Development Bank of Canada to expand their credit capacity by up to $3 billion, and to enable the introduction of new products to better serve the needs of Canadian businesses during a period of constrained credit availability.
In addition, going forward the government will continue to look at additional fiscal stimulus measures that would contribute to a more viable and competitive manufacturing sector. Canadian manufacturers and exporters heralded these announcements as, and I quote:
--good measures...The government recognizes that liquidity is a major concern for manufacturers and exporters in every sector across Canada.
Our Conservative government is also creating a competitive tax environment through broad-based tax reductions that support job creation, support growth, and support investment in all sectors of the economy, including manufacturing and processing.
In addition, tariffs on imported machinery and equipment would be eliminated as soon as possible in order to encourage capital investment and increase efficiency in our manufacturing sector.
The government's actions in support of manufacturing will also benefit the automotive sector and in particular the automotive parts industry. For example, the government has committed to provide additional funding for the automotive innovation fund to support investments in the long-term viability of the automotive sector.
We are also open to the possibility of providing further assistance to the automotive sector. The situation is fast moving. The Minister of Industry is engaged in discussions with the automotive companies and is monitoring developments in the United States.
Seniors are understandably concerned about the impact of the sharp decline in markets on their retirement savings and in particular, their registered retirement income funds. We have listened and we have supported them in the past. We have supported seniors by raising the age limit for converting a registered retirement savings plan to a RRIF from the age of 69 to 71, which by the way, the House will recall from that particular vote that the Liberals and the NDP voted against that.
We are doing so again by addressing their concerns about the drop in the market value of their assets and their worries that their assets and RRIFs must be sold to meet withdrawal requirements.
In yesterday's statement, the finance minister also proposed a one time change that would allow RRIF holders to reduce their required minimum withdrawal by 25% this tax year. That would mean that individuals otherwise required to withdraw $10,000 from their RRIF in 2008 would see that required withdrawal reduced to $7,500.
Let me now turn to consider the statement's measures to accelerate infrastructure spending.
In budget 2007 the government announced a seven year, $33 billion plan to boost Canada's public infrastructure. As a result, the amount of federal funding available to provinces, territories and municipalities for infrastructure projects is forecast to hit a record of $6 billion in 2009-10, double what was spent in 2007-08.
We need to accelerate this activity. This would provide a significant stimulus to the economy and improve infrastructure that is vital to improving our long-term economic performance.
We are working with the provinces and the territories to expedite infrastructure projects, and accelerate the uptake of federal funding as well as addressing regulatory and administrative barriers that slow down project implementation.
While the government has already taken major actions to strengthen and preserve the competitiveness of Canada's world-leading financial sector, this statement takes further measures, measures such as supporting the financial system in extraordinary circumstances, providing solvency funding relief for federally-regulated private pension plans, and enhancing credit availability through crown agencies for Canadian businesses affected by the global credit crisis.
In addition, the government will consult with provinces and Canadians to develop responses to short-term economic issues while continuing to implement its long-term economic plan. The immediate priorities are to accelerate infrastructure projects, improve opportunities for workers and sectors affected by current economic conditions, strengthen our world-leading financial system in line with our G-20 commitments, and improve the competitiveness of the Canadian economy.
Since the earliest days of the global liquidity crunch, the government has taken important steps to strengthen the position of Canada's financial system, which is ranked among the soundest in the world. Our Conservative government stands ready to take whatever further action is necessary to protect the stability of the Canadian financial system.
Accordingly, we are proposing that the Minister of Finance be granted additional flexibility to support financial institutions and the financial system in any extraordinary circumstances. The proposed powers will include additional options for resolving difficulties in financial institutions should they arise.
The proposed powers are a continuation of the responsible leadership that the government has exercised to ensure that Canada's strong financial system is not put at a competitive disadvantage by developments in other countries. They are precautionary and intended as standby authorities that will bring Canada's regulatory tool kit in line with international best practices.
The proposals are also in line with Canada's commitment to implement the G-7 and G-20 plans of action to stabilize financial markets and restore the flow of credit. The current global market crisis underlines the necessity of having a first rate financial sector regulatory framework, which includes a common securities regulator for Canada.
Our current system of 13 regulators is far too cumbersome and unwieldy to provide the decisive, quick response that is often necessary. Indeed, in the words of a recent Montreal Gazette editorial:
The recent convulsions in financial markets...signal, more than ever, that sophisticated understanding of markets and their practices...are utterly essential...At a time when the world's main governments and institutions can't keep up with global markets, it's ludicrous that Canada speaks with 13 voices.
The benefits of a common securities regulator will include greater efficiency, stronger enforcement and clearer accountability.
I see that my time is up. I had so many more positive things to say about the statement, but I appreciate that there are many other members on both sides of the House who want to stand and support this statement.
