Mr. Speaker, I move that the first report of the Standing Committee on Finance, presented on Thursday, November 29, 2007, be concurred in.
It is with great pleasure that I rise today to ask that the House concur in this first report of the Standing Committee on Finance, as it relates directly to the decision that has just been made. The government had decided to establish a trust whose implementation would have been dependent on the passage of the budget. Following representations arising from a consensus in Quebec and led by the Bloc Québécois, the government agreed to no longer tie to the passage of the budget the motion for the establishment of the trust in question. That is a good move, and we are pleased about it.
However, much remains to be done to provide the forestry and manufacturing sectors with adequate support. That is what prompted, in November, the Bloc Québécois to have a motion passed at the Standing Committee on Finance. This motion was included in the committee's first report, which reads as follows:
||—the Standing Committee on Finance recommends that the government promptly introduce the tax measures in the unanimous report of February 2007 entitled Manufacturing: Moving Forward — Rising to the Challenge, and that the adoption of this motion be reported to the House at the earliest opportunity.
Now that we have succeeded in getting the government to make funding available for the trust as soon as possible—legislation was passed—the government has to agree to make the money available from this year's surplus. While $1 billion will go to the trust, another $10 billion will go to paying off the debt, even though Canada's debt-to-GDP ratio is currently the best among G-8 countries. The problem is that Canada is not doing enough to deal with the crises in the forestry and manufacturing sectors. That is the context in which the report of the Standing Committee on Finance was produced.
Remember that there was no opposition to this report. When the report calling for the implementation of the tax measures in the Standing Committee on Industry, Science and Technology’s report on manufacturing was adopted, the Conservative members of the committee were not opposed. The vote was unanimous, without any opposition. All the other parties supported the Bloc motion because there obviously really was a crisis in manufacturing as a result of the increase in the value of the dollar and competition with the rest of the planet due to globalization. Something concrete had to be done.
Why does this matter so much? Manufacturing is a crucial sector in Quebec. It accounts for 536,000 jobs and $22 billion in wages and salaries. It provided 17% of all jobs in 2005 and nearly 21% of earned income, nearly three times as much as in Alberta. In addition, 90% of Quebec’s international exports come from manufacturing. Manufacturing shipments make up 59% of GDP. Even more important, ultimately, are the thousands of jobs that depend on it. The crisis in manufacturing is therefore extremely serious.
Some 78,000 manufacturing jobs have been lost in Quebec just since the Conservatives came to power. Since April 2005, 21,000 jobs have been lost in the forest industry alone, including allied industries and services such as transportation and forest equipment. That is half the Canadian total.
But now they are planning to spread the assistance all across Canada, with every province benefiting. This clearly does not reflect the reality. The fact of the matter is that Quebec and Ontario are most affected by the crisis in manufacturing and forestry, and the allocations should take this fact into account.
Today we are asking Parliament to approve the report of the Standing Committee on Finance, which asks the government to implement the tax measures in the report on manufacturing. The tax recommendations can be implemented very quickly. We saw it today. Two weeks ago, the government was saying that we would definitely have to wait until the budget, everything would be decided in the budget, and we would have to vote in favour of it if we wanted these measures brought forward.
The government knew, though, that it could introduce a bill and have it voted on, just as the government did last fall at the time of its economic statement. There was a consensus a little while ago and they changed their budget approach to the $1 billion. Now we are asking the government to continue in the same vein, heed the unanimous recommendations of the Standing Committee on Industry, Science and Technology, and of the Standing Committee on Finance and proceed with the tax recommendations in the report.
Here is the first recommendation:
|| That the Government of Canada modify its capital cost allowance for machinery and equipment used in manufacturing and processing and equipment associated with information, energy and environmental technologies to a two-year write-off (i.e., 50% using the straight-line depreciation method) for a period of five years. This measure would be renewable for further five-year periods upon due diligence review by a parliamentary committee.
In the last budget, the Conservative government took a tentative step in the right direction and granted this tax advantage for two years. Representatives of businesses in the manufacturing sector, particularly the pharmaceutical sector, told us that a two-year time frame was not enough to convince their parent companies to invest in Quebec and Canada, even though that is what we would like to see.
We hope that the Standing Committee on Finance's first recommendation, which was unopposed in committee, will be heeded here and that the House will adopt the report at the end of this debate, which was initiated by the Bloc. Everyone hopes that the government will extend that period to five years, as recommended by the committee. Support for this is unanimous. The Canadian Manufacturers and Exporters, including the organization's Quebec wing, the federation of chambers of commerce and everyone else wants accelerated capital cost allowance to be extended for five years.
In the last budget, the federal government decided to lower business tax rates, which was good for businesses that are making a profit. However, the measure did nothing at all to make things better for those that are not making a profit. The government says that it does not have the means to implement such a measure, yet all it had to do was keep the tax rates where they were. At any rate, given the current surplus, there should be no problem bringing in a measure like this.
The second recommendation of the Standing Committee on Industry, Science and Technology, which is supported by the Standing Committee on Finance, would affect taxation. It reads as follows:
|| That the Government of Canada raise the capital cost allowance rate for rolling stock, locomotives and inter-modal equipment to 30% using the declining-balance depreciation method.
Clearly, this recommendation is inspired by the same logic as the first one. In addition, it has important environmental aspects. Rail is a very clean and environmentally friendly mode of transportation. It reduces greenhouse gas emissions and is a more economical and sustainable way to transport goods and people. It is easy to understand why the Standing Committee on Finance sees this as an opportunity to kill two birds with one stone.
I was on the Standing Committee on Industry, Science and Technology when it unanimously adopted the 22 recommendations. I became the finance critic and had these tax recommendations adopted by the Standing Committee on Finance because the unanimous report of the House called for what Quebeckers and Canadians want: economic action by this government, an economic policy to replace the current laissez-faire approach. That is why the committee would like to see this recommendation implemented.
The third tax recommendation by the Standing Committee on Industry, Science and Technology, supported by the Standing Committee on Finance, reads as follows:
|| That the Government of Canada improve the Scientific Research and Experimental Development (SR&ED) Tax Incentive Program to make it more accessible and relevant to Canadian businesses. The government should consider making the following changes:
|| 1. make the investment tax credits fully refundable;
Businesses, which are promoting research and development today and are competing for contracts, must have refundable tax credits so that they can make the necessary investments in research and development. If they do not make a profit, they are unable to fund their research and development. We have to put an end to this vicious circle and ensure that Canada can move forward by supporting our businesses. That would help them land contracts. I am not talking about subsidies; I am talking about creating a fiscal framework that would enable companies to compete and take their place on the market.
The government should also consider the following changes:
|| 2. exclude investment tax credits from the calculation of the tax base;
|| 3. provide an allowance for international collaborative research and development;
In the current wave of globalization, this last change would facilitate partnerships with interested companies in the U.S., Europe and all the other countries in the world. It would also restore Quebec and Canada to their former positions as leaders in research and development. Currently, R&D is lagging somewhat here.
The government should also consider the following change:
|| 4. expand the investment tax credits to cover the costs of patenting, prototyping, product testing, and other pre-commercialization activities.
It became clear that our businesses needed a boost, an advantage, in order to spark their interest in research and development. It was with this in mind that the measure was included in the report prepared by the Standing Committee on Finance.
All of these measures came from the recommendations made by the Standing Committee on Industry, Natural Resources, Science and Technology. Before the budget, the Bloc Québécois estimated the needs in the area of $4.5 billion. I would remind the House that this year, if no action is taken, a few minutes ago, a billion dollars was allocated to the trust. That money will be available immediately, thanks to the efforts of the Bloc Québécois to be the voice of the consensus in Quebec on this.
There is still $10 billion left, which will be paid against the debt, even though it is not needed at this time. Canada's debt-to-GDP ratio is one of the best of all G-7 countries. What is less positive is that we are not helping our businesses enough to be competitive. From that perspective, one would think that, with the $10 billion surplus, the federal government could, in order to restore its reputation as a fair government, help seniors with the guaranteed income supplement in the amount of $3 billion. We would like $4.5 billion to be allocated for immediate economic renewal measures. A payment of $1 billion was just passed, for communities affected by the forestry crisis. Additional money is also needed to help our businesses. We just saw some measures put forward for this year's budget. This could mean some $1.5 billion and $500 million for Technology Partnerships Canada. That program already exists and has helped businesses create new products.
We have a fantastic example in Rivière-du-Loup. Premier Tech is a company that has benefited from assistance measures. It has partnered with the federal government on two occasions and the amounts received definitely led to the creation of hundreds of jobs. This program was abolished by the Conservatives. They established a new program that helps only the aviation industry. This sector needs assistance and we see that it works. However, the fund should be reactivated to help other sectors that are creating new products. We believe that an amount in the order of $500 million could be allocated for this year.
Therefore $1.5 billion is required for equipment upgrades, $500 million for Technology Partnerships Canada and $1.5 billion for assistance to workers affected by this crisis. We feel that these amounts are reasonable and are options the government should choose in the coming days and weeks.
Why table this motion today? Because we realized that, by hammering away with solid arguments, we could manage to move the government. We have made it take action on the trust. We will now work on having it allocate a portion of the current year's surplus right now, soon, in the days to come, so that we can move on helping the manufacturing and forestry industries that are currently in the grip of a serious crisis.
Last fall, the , with his rose-coloured glasses, told us that everything was going well. We laid the figures on the table, we showed him that although jobs were being created in the energy sector, the manufacturing and forestry industries were not doing well. We told him all over again, we laid the arguments on the table, we provided statistics, we obtained strong support throughout Quebec and across Canada and, finally, the government agreed to create a one billion dollar fund, with the rather petty approach of tying it to the budget. We continued to fight for the immediate release of the money.
Last fall, the Bloc Québécois made public some proposals that are also found in the unanimous report of the Standing Committee on Finance we are debating this morning in this House. That is what needs to happen next. This needs to happen. The government needs to accept the proposals of the Standing Committee on Finance, and of the Standing Committee on Industry, Natural Resources, Science and Technology. They are proposals by the Bloc Québécois, which worked out the numbers and put them on the table last fall.
As far as the higher dollar is concerned and the parity we have seen for the past few months, we still have not felt its impact in terms of job creation. The negative impact will be felt in the coming months. We know that the U.S. economy is experiencing a major slowdown, and may be heading into a recession. We have the means to intervene, but the federal government is acting like a homeowner who is obsessing over putting all his money into paying down his mortgage as quickly as possible without spending the bare minimum to maintain his house and improve it.
I gave that example to the representative from the Coalition pour le renouvellement des infrastructures du Québec, the mayor of Laval, who said it is not just a matter of fixing up the back deck; the foundation is in disrepair.
Part of the investment the Bloc would like to see can be done by injecting money into infrastructure in the next budget. The gas tax rebate for municipalities needs to be stepped up. Instead of a slow 1¢ or 2¢ increase until 2010, in the 2008 budget, there needs to be a 5¢ increase. That would put $1 billion back into the economy that could be spent on improving infrastructure.
There is concern among the public and the financial sector. We see it in all the newspapers. They say that companies would like the federal government to be innovative and ensure that new tax cuts are targeted, through refundable tax credits, for example. The Bloc Québécois is speaking on behalf of employers, workers and all those who are having a very difficult time dealing with the current crisis. This is not just a matter of principle.
In Donnacona in Mauricie and in Shawinigan and Cabano, where I went during the prebudget consultations, in the eastern regions of Quebec, people told us that it was urgent that the federal government live up to its responsibilities, that it use a significant portion of this year’s surplus to restart the economy, and that it do so, not in the form of subsidies, but rather a positive tax base.
Of the $10.3 billion surplus remaining after $1 billion is allocated to the trust, they are prepared to allocate $3 billion to the debt. That still leaves $7 billion that can be committed in the days to come. This morning we saw that we are entitled to do it, we can do it, and it is legal. The only thing missing is the political will, and that is what we want. We want the federal government to come around to putting this forward. As it did in the case of the trust, we hope that it will also recognize the merit of the Bloc’s arguments and the arguments presented in this House.
I hope that we will have massive support by all parties in this House for approving the report. There would be nothing better than a report approved unanimously by this House to tell the federal government that these measures have to be put in place as soon as possible, that we have to use our share of the available surplus and that the next budget also has to go in the same direction. These are the two actions that we must continue to put forward.
Before we came to this House, the Bloc Québécois committed itself to using every parliamentary tool to achieve these results. Last week, a major offensive was undertaken in five different committees, and today we are continuing, by using another tool: the fact that the report of the Standing Committee on Finance can be approved. We are returning to the fray in question period now that Parliament has resumed.
The people of Quebec and Canada, and many communities, expected this billion dollars for the trust to be available now. We have won this victory. Those people also expect that a significant portion of the surplus for the current year will be reinvested in the economy so that we can deal with the manufacturing and forestry crises, the slowdown in the American economy and the rise in the value of the dollar. It is our responsibility, as parliamentarians, to move forward on this.
I hope that the Bloc will receive all parties’ support in this House in voting for this motion. We would point out, and I will conclude on this point, that support in the Standing Committee on Finance was unanimous. The Liberals and New Democrats voted for this motion, while the Conservatives abstained. I hope that we will find the same kind of unanimity and that the Conservative Party, which has started to budge in response to our arguments, will move forward. This is important for the economy, for jobs, for families and for communities in Quebec and Canada.
Mr. Speaker, I also thank the hon. member for for providing me with the opportunity to talk about what this government is doing to help the manufacturing sector. I also want to say that the finance committee is trying to work through these issues with all parties. I certainly appreciate the member's efforts in that regard.
I want to mention a few facts about our economy because, quite frankly, our economic fundamentals are exceptional. We are experiencing the second longest period of economic growth in the history of our country. Core inflation has remained within our set range of 1% to 3%. Our unemployment rate is the lowest in more than 30 years and there are more Canadians participating in the workforce than ever in the history of Canada.
We are reducing debt and we are on the best financial footing of any country in the G-7. We are the only country of the G-7 with ongoing budget surpluses, plus a falling debt burden.
Nevertheless, we must remain prepared for the challenges that confront us, including a significant rise in the Canadian dollar and its impact on the manufacturing sector, increased competition from emerging economic giants, such as China and India, and a shortage of skilled workers and an aging population.
As the world changes, Canadians need to work together to make Canada even more prosperous and strong, which is why our government developed Advantage Canada, a strategic, long term economic plan designed to improve our country's economic prosperity both today and in the future. This plan sets Canada on a path toward achieving five key advantages that will strengthen our nation and show a modern, ambitious and dynamic Canada to the rest of the world.
First, the plan will create a tax advantage for Canada by reducing taxes for all Canadians and establishing the lowest tax rate on new business investment in the G-7.
Second, a fiscal advantage will eliminate Canada's total government net debt in less than a generation and will create a strong foundation on which to build sustainable prosperity.
Canada's entrepreneurial edge will reduce unnecessary regulation and red tape and lower taxes to unblock business investment. By building a more competitive business environment, consumers will receive goods at lower prices and Canadian businesses will be better equipped for global success.
The Advantage Canada plan will also create a knowledge advantage by developing the best educated, most skilled and most flexible workforce in the world.
The fifth part of the plan focuses on an infrastructure advantage in order to create modern, world-class infrastructure to ensure the seamless flow of people, goods and services across our roads and bridges, through our ports, our gateways and via our very important public transit systems. Each component of the Advantage Canada plan will benefit the manufacturing sector.
Today's motion asks the government to introduce tax measures to support Canadian manufacturing. Recently, the was in Quebec City as part of the government's prebudget consultations to hear about the challenges facing the manufacturing sector. The finance committee went to Montreal to listen to manufacturers about the types of steps that we need to take to enhance the manufacturing sector in our provinces, territories and throughout the country.
Although it has been a difficult period for many, manufacturers in Canada have been resilient. In the face of adversity, they have acquired more and better technology and equipment. They have improved productivity, have become more diversified and have broadened their reach in this highly competitive, global marketplace. Manufacturers are responding to this difficult situation and so are we.
The government is lifting the tax burden by lowering taxes of every description, including a historic reduction in business taxes.
Canada's strong economic and fiscal foundation has provided the government an opportunity that few other countries have: to put in place historic, broad based tax reductions that will strengthen our economy from one end of the country to the other.
I am talking about the comprehensive tax reduction action that this government has taken since coming into office. Many of the tax reduction initiatives brought forward by our government are broad based, while others will provide direct strategic tax relief to the manufacturing sector.
The capital cost allowance system determines how much of the capital cost of an asset a firm may deduct each and every year. The rates are generally set so that the deductions for capital costs are spread over the useful life of the asset. This ensures the accurate measurement of income for tax purposes and promotes neutrality with respect to investment decisions. Where a capital cost allowance rate is too low to reflect an asset's useful life, an increase to that rate can reduce the tax burden on investment and increase the efficiency of the tax system.
As part of the government's continuing review of capital cost allowance rates and to further the Canadian tax advantage, budget 2007 contained a number of changes to capital cost allowance rates to better reflect the useful life of assets. For example, budget 2007 increased the capital cost allowance rate for buildings used for manufacturing or processing to 10% from 4%. This change will better reflect the useful life of the buildings in the sector because, as we know, in the manufacturing business buildings tend to need repair and rework based on the fact that they are used sometimes on a 24-hour basis. Those repairs should be reflected, quite frankly, in the ability of the company to make and earn a profit.
This year's budget also increased the capital cost allowance rate for other non-residential buildings to 6% from 4%. Furthermore, the budget increased the capital cost allowance rate for computers, an important asset for the manufacturing sector to 55% from 45%.
In addition to those rate changes, to better reflect the useful life of assets in recognition of the economic challenges facing the manufacturing and processing sector, budget 2007 introduced a new temporary investment incentive for manufacturing and processing businesses.
For investment in eligible machinery and equipment, until the end of the 2008 year, businesses engaging in manufacturing or processing will be eligible to claim an accelerated capital cost allowance at a rate of 50% on a straight line basis. This rate will allow these investments to be written off in a two-year period on average after taking into account the half year rule which treats assets as if they had been purchased in the middle of the year.
Taken together, those measures will provide a much more favourable climate for manufacturing and processing businesses to accelerate or increase their investment in buildings, in machinery and in equipment. What is more, those measures will assist the manufacturing sector in restructuring to meet the challenges they are currently facing.
Ours is not a government that rests on its laurels. Even after the budget of 2007, we knew we had more work to do for individual Canadians, for families and, in particular, for businesses across the country, which is why in the economic and fiscal update we are reducing the general corporate income tax rate to 15% by 2012. This broad based tax reduction will improve the investment environment for every sector of the economy, including the manufacturing sector.
Tax reductions announced by this government, the majority of them broad based, will result in $8.2 billion in tax relief for manufacturers and processors. This includes tax reductions totalling $2.6 billion over this and the next five years in the recent economic statement of October 30, 2007, and $5.6 billion for measures announced in the last two federal budgets and the tax fairness package.
However, It is not only the federal government that can provide tax relief to Canadian businesses. Provinces also have an important role in improving Canada's business tax competitiveness.
To encourage further provincial action, budget 2007 put in place a financial incentive to facilitate the elimination of provincial capital taxes and indicated the government's willingness to work with the provinces to complete the sales tax harmonization initiative. Canadians are already reaping the rewards of the first of these measures.
Since the announcement of the measure to encourage provinces to eliminate their capital taxes as soon as possible, both Quebec and Ontario have acted to qualify for the incentive and Manitoba has also announced its intention to do so.
Canada now has a solid, statutory, corporate rate advantage over our partners in the United States and this advantage will continue to grow year after year through 2012.
In addition, as a result of this government's actions, Canada will meet the Advantage Canada goal of establishing the lowest overall tax rate on new business investment by 2011.
As I said at the outset, I am glad the hon. member's motion provided me with the opportunity to tell the House what action this government has taken to assist our manufacturing sector.
Mr. Speaker, I will be splitting my time with the member for .
Here we are, 364 days after the industry committee tabled its report in the House with 22 separate recommendations, all put forward by the manufacturing sector itself, and what action have we seen from the government? Actually, we have seen it implement one-half of one of the 22 recommendations.
Industries told committee members that the government should modify the capital cost allowance to allow for a direct two year writeoff of machinery and equipment and that this should be made available to them for five years. The members of the committee, understanding the planning horizon that many of these industries need to make large capital acquisitions, recommended this sensible approach to the government.
The , though, thought he knew better than industry. He felt that his years as a lawyer and a politician had taught him more about the needs of manufacturers than manufacturers themselves. As a result, he only provided this benefit for two years instead of the five that the manufacturers had requested. Let us look at the results of this brilliant insight by the .
In January 2007, the Conference Board of Canada's business confidence survey indicated that 56% of business leaders thought it was a good time to undertake investment expenditures. Just last week, that is, a year after the fruits of the labour of the should have become evident, it released its winter 2008 business confidence survey and only 46% of business leaders felt the way they had last year. On top of that, business confidence has hit a nine year low in this country. That is lower than it was in the aftermath of 9/11 and lower than it was at the time of the SARS difficulties, hardly a vote of confidence in the economic policies of the .
That brings us to today. As I mentioned, it is one year less a day since my colleagues in the industry committee tabled this fine report. For 364 days now, the government has let the report sit on a shelf collecting dust while it runs around the country telling Canadians that everything is just fine. However, a quick look at Statistics Canada's monthly employment surveys will tell a very different story from the rosy picture the government is trying to paint.
Since this report was tabled, 135,000 manufacturing jobs have simply vanished, gone up in smoke. That is a big number and it is important because each one of those 135,000 jobs represents a Canadian who is a breadwinner for his or her family, people who have to make mortgage payments, buy groceries and make sure their kids get to hockey practice.
Back in November, the Liberal members of the finance committee secured a series of meetings to hear from representatives of sectors like tourism, forestry, retail and manufacturing. These meetings actually led the member for to table the motion that we are debating today.
During the course of those meetings, Jim Stanford, chief economist of the Canadian Auto Workers, told the committee that unless the government began to get engaged, the manufacturing sector could easily lose 300,000 more jobs in the next two to four years, but the government has shown no sign whatsoever that it will engage on this subject of such importance to all Canadians.
I believe this neglect of the manufacturing sector and this neglect of the unanimous industry report by the government illustrates the two fundamental differences between Conservatives and Liberals when it comes to economic policy. Let me list those two differences.
First, Liberals are the party of fiscal prudence and Conservatives are not. Second, Liberals believe in an active but prudent approach to economic policies and Conservatives believe in a combination of laissez-faire and “I don't care”. Let me go through each of those two positions.
In terms of fiscal prudence, any objective observer of history, north and south of the border, will have noticed that Conservatives and republicans are the parties that run big fat deficits. Look at Ronald Reagan in the 1980s. Look at George W. Bush today. Look at Brian Mulroney, who left, in 1993, a $42 billion deficit for the Liberals to clean up. Look at the former premier of Ontario, Ernie Eves, along with his three colleagues who are currently members of this cabinet, who ran an election in the year 2003 on a balanced budget they said. Except when Dalton McGuinty got in, he called in the auditors and, lo and behold, there was a big, ugly, fat $5.8 billion Conservative deficit for Dalton McGuinty to clean up. These are historical facts. I might add that Bill Clinton, a democrat, ran uninterrupted surpluses.
So, the general moral of the story is that Conservatives and republicans ran big, huge deficits, and leave that mess for succeeding Liberal and democratic governments to clean up.
My second point is that Liberals are fiscally prudent. Conservatives are not. Liberals believe in an active but fiscally prudent government. We would not sit by wearing our laissez-faire spectacles or our “I don't care” attitude and simply watch as hundreds of thousands of manufacturing jobs go down the drain. We would take an active approach. The proof of that is that our leader, , has recently announced two--
Some hon. members: Oh, oh!
Mr. Speaker, it is with pleasure that I rise today to speak on this motion at a critically important time for Canada in the global economy.
We live in a time of unprecedented rapidity of change, a hyper-competitive global economy where a country or a company is either moving forward or is falling behind. We cannot sit still.
The week before last, I was at the world economic forum in Davos, Switzerland, surrounded by political and business leaders from around the world, people who represented some of the fastest growing economies and companies in the world. The focus at Davos was on issues like science, research and development, the importance of science to competitiveness, and the issue of climate change and the greening of the global economy.
In fact, European Business magazine's issue that particular week was “Profit from a changing climate”, which said that greening one's economy can in fact create jobs, opportunity and prosperity, and that we are heading toward a global carbon-constrained economy. In that kind of environment, as a price is put on carbon by multilateral government organizations and individual governments, we will see that environmental laggers will become economic laggers.
The focus was on competitiveness in a cleaner, greener environment. Here in Canada we have a government that has not focused on competitiveness, has not focused on environmental stewardship, and in fact has focused only on short term politics as opposed to building competitiveness. Its tax measures have been more focused on buying votes than on building a richer, fairer or greener Canada.
It was also announced at the world economic forum, in its most recent study, that Canada has slipped in terms of our global competitiveness this year to number 13 in the world.
This is a time when countries like Ireland, the Netherlands, Sweden, Finland, Australia and New Zealand have reformed their tax systems to be more competitive, to attract capital, to grow their economies, and to build higher wage jobs and greater prosperity for their citizens.
In Canada, we have not had significant tax reform in fact since 1971 with the Carter commission under the Chrétien government and the government of the member for . We saw the biggest personal tax cut in Canadian history, but we really need overall tax competitiveness.
Instead, this government has chosen to cut consumption taxes with the GST. It was repeated by economists around the world that in fact it makes more sense, instead of cutting the GST and that $14 billion per year that it takes out of revenue, to cut personal income taxes, for instance, focusing on low and middle income Canadians.
With $14 billion a year, we could raise the basic personal exemption, the threshold at which Canadians start to pay taxes, to about $20,000. That would take millions of low income Canadians off the tax rolls altogether. It would be fairer. It would also provide tax relief to all Canadians at every income level, particularly favouring low and middle income Canadians. It would build a more competitive tax system because economists are united around the world that if we are going to cut taxes for competitiveness, to create jobs and prosperity and for better fairness and equity, it is better to cut income taxes than consumption taxes.
The government has taken a different approach. It is the government and has the right to do that. I just believe that there are fairer and more competitive approaches to tax reform.
Furthermore, beyond that, there has been some discussion this morning on competitiveness and manufacturing. I serve on the industry committee and the recommendations presented by the industry committee a year ago could make a huge difference. As my colleague from has said, the government has chosen to only respect and follow one-half of one recommendation.
Today in The Globe and Mail, there is an article entitled “Business pushes for new tax relief, Finance Minister under pressure to offer new subsidies but slowing economy eroding federal coffers”.
Why is the government seeing the federal coffers decline? It is not only the slowing of the economy. It is the fact that we have the biggest spending government in Canadian history. It is a government that has not only chosen to increase spending like a drunken sailor. At the same time it is cutting a consumption tax instead of focusing on business taxes, personal income taxes and competitiveness.
Furthermore, the article says that companies pitch Ottawa on scientific innovation. Our leader has presented making the SR and ED program refundable, such that all companies can benefit, through the tax system, from sound investments in research, development and commercialization, because science matters.
When we speak of science, it is important that at the very top decision making levels of government, governments in today's economy understand the importance of science. I was particularly dismayed when the not only fired the national science adviser to the Prime Minister, but completely eliminated the position. There is only one other jurisdiction in the world this year that has demoted and reduced the role of the national science adviser, and that is the Bush administration.
The national science adviser provided to the the kind of sound advice, whether it was on climate change, or stem cell research, or reproductive technology, or the green economy or on innovative new areas such as cleantech. I believe cleantech will be the fastest growing area of the global economy. We are seeing venture capital firms, such as Kleiner Perkins and others, which were behind the Internet revolution, now investing massively in this area. This is an area where Canada could excel.
David Rubenstein from the Carlyle Group, speaking at a venture capital conference in Quebec City a few months ago, and who was also at the Davos conference two weeks ago, said to me personally, “Canada has the potential to be a global leader in clean energy and cleantech”.
To that end and further, in today's Report on Business is an article “Energy players in carbon capture drive”. Currently a group of energy leaders and businesses in Alberta is focused and prepared to make massive investments in a CO2 sequestration project. It says that the federal and provincial government plans to back its development are still at a preliminary stage.
Business is ready to act. Business is looking for sound signals and strong investment alongside of business to leverage on government and business investment to make the kinds of investments that can not only reduce Canada's carbon footprint, but can also make Canada a leader in clean energy. This is another area on which the government has not focused. We know its interest in climate change is perfunctory at best. We also understand the government has no real interest in long term competitiveness. It is more focused on short term, vote buying schemes.
It is critically important for Canadians, whether they are in the manufacturing sector, the forestry sector or agriculture, to see a government with a plan. Our Liberal leader recently spoke in Hamilton to launch a Liberal industrial strategy around manufacturing, including the $1 billion advanced manufacturing prosperity fund, the AMP program. Our leader spoke of partnering and leveraging with private sector capital to create the kinds of high wage jobs that could make Canada more competitive, to stand shoulder to shoulder with Canada's manufacturing sector, not to abandon them with the laissez-faire “I don't care approach” of the Conservative government, but to stand with them and to help their businesses become more competitive. We need to reform our SR and ED program to ensure Canadian businesses have the capacity and the incentive to investment in cutting edge research and development that can create the kinds of discoveries which lead to greater competitiveness.
Furthermore, the previous Liberal government made a significant investment in the forestry sector, a $1.5 billion focused forestry fund that the Conservative government eliminated in one of its first acts as a government. The $1.5 billion, which was introduced two years ago by a Liberal government, focused on helping forestry communities diversify and succeed. The government replaced it with a less generous $1 billion program, less focused. The Conservative program was focused on all industries, not only the forestry industry.
The government is offering too little, too late, without vision, without focus and without an absolute plan to help bring Canada forward.
The Liberal Party and the Liberal leader are offering Canadians a plan to build a richer, fairer, greener Canada to be more competitive to create the kind of sustainable wealth that Canadians deserve and also to ensure that Canada plays its role as a responsible environmental citizen of the world. This is the kind of plan Canadians deserve and this is the kind of responsibility parliamentarians have to present those kinds of plans, to debate them and to earn their support among Canadians.
Mr. Speaker, I appreciate the opportunity this morning to talk to this very critical and crucial issue, particularly as it concerns the working men, women and families of this country in small town Canada, where their economies and lives are so dependent on one major industry and how today in our world, in this Canada of great wealth, many of them find themselves hanging on by their fingernails.
Some towns are actually making plans to wind down. People and families made investments in their homes, cottages, camps and small businesses based on the understanding that if they got up in the morning to go to work and worked hard, and if the company they worked for acted in the best interests of everybody concerned, they would have jobs, and jobs for a long time to come, only to realize in the last couple of years that this in fact is not the case any more. The rules have changed and, what is most important in the discussion we are having today, governments have turned their backs on them.
We have to look at this question in the context of what has been happening to the resource based economy of this country over the last 10 to 15 years. It has been ignored. The investments that used to be there to make sure of those industries, which have supported the larger economy of Canada over the years so ably and so well, are no longer available.
The financial institutions and government agencies put in place over the years to be there in just such circumstances now have found a new suitor, a new attraction, in the evolving and very exciting virtual economy, the e-commerce economy, the IT economy that began to flow out there and gave people a return on investment almost immediately.
What we were looking for in small town Canada and particularly in northern Ontario was an opportunity to restructure in these new circumstances, but alas, the money was not there. Now we find ourselves at the last hour with a government that has finally woken up to the fact that it needs to act, however modestly, and act immediately.
We also need to speak about this issue in the context of the priorities of not only this government but previous governments over the last 10 or 15 years as well. At a time when this country was generating some significant wealth, and some would say great wealth, rather than investing in the kind of infrastructure and change that would give small town Canada a chance in the global economy, it was decided that it was more important to deliver corporate tax breaks to friends and benefactors of government. Not just this government did that. This goes back 10 or 15 years to the previous government as well.
That is what was done. Instead of using the significant money that government was generating over those years through the healthy tax system and tax base to reposition ourselves, to put in place those vehicles that small towns and resource based companies needed if they were to have a future and be able to make decisions that were positive and constructive in the long haul, that is what was done.
We needed those investments made instead of having the priority that obviously was out there, and still continues to be out there, which is that money that is so desperately needed, particularly in smaller communities and resource based sectors of our country like those of northern Ontario, has been put into corporate tax breaks that will never ever have any positive impact on the areas of the country that we are speaking about here today. I represent and speak about those very areas as the FedNor critic for the New Democratic Party caucus.
We also need to look at this issue from the perspective of the very human impact that this is having on communities. In my own region of northern Ontario, I know this, and I know it when I speak to people such as our members from British Columbia, who represent large tracts of rural British Columbia, and our members from New Brunswick, particularly the northern part of New Brunswick, who also speak on behalf of small towns that are dependent for their very lives on the resource sector. I know that this is having some very major and personal impacts on men and women, families, relationships and communities.
I spoke before the Standing Committee on Finance as it entertained a motion by the Bloc to flow some of the excessive surplus in the government's EI account. The Bloc suggested that perhaps some money might be freed up in these difficult and dire circumstances to help older workers, for example, who have to deal with the impact of this reality.
I shared with the committee the names of some towns in northern Ontario that have been impacted so that we could put a face on this issue in a more meaningful way. These towns now are desperate for any assistance they can get and very clearly are looking to the federal government because it is the vehicle with access to the most money in our system of doing business on behalf of the public and the public good.
I mentioned companies such as Tembec in Smooth Rock Falls, where 230 people have lost their jobs. Also, 65 people have lost their jobs at Tembec in Kapuskasing. In Opasatika, Excel eliminated 78 jobs. Tembec in Timmins eliminated 100 jobs. Columbia Forest Products in Hearst eliminated 76 jobs. Domtar in Chapleau cut 67 jobs. Cascades in Thunder Bay cut 500 jobs. Bowater in Thunder Bay cut 257 jobs. These jobs represent men and women who get up every morning, go to work and work hard, come back home and try to put food on the table and pay the rent for their families in their northern Ontario communities.
Another 100 jobs at Bowater were cut and it just announced the elimination of another 512 jobs. Smurfit Stone Consolidated in Kenora, a community I visited just a week or so ago, eliminated 350 jobs. At Devlin Timber in Kenora, 45 jobs are gone. Again in Kenora, at Weyerhaeuser 41 jobs are gone. Norampac in Redrock cut 300 jobs. Patricia Logging in Dryden cut 35 jobs. At Weyerhaeuser and Domtar in Dryden, 510 jobs were lost.
Uniboard in New Liskeard lost 55 jobs. Bowater Woodland in Ignace lost 25 jobs. At ForestCare, in Wawa, the town I was brought up in, 63 jobs are gone. Weyerhaeuser in Sturgeon Falls cut 125 jobs. Domtar in Espanola-Nairn Centre cut 250 jobs. Domtar in Cornwall cut 910 jobs. Domtar in Ottawa cut 185 jobs. Domtar in White River cut 236 jobs. Interlake Paper in St. Catharines lost 45 jobs. Sturgeon Timber in Dorion cut 70 jobs. Longlac Wood Industries in Longlac cut 350 jobs. Columbia Forest Products in Rutherglen lost 63 jobs.
Those numbers add up to over 5,200 jobs in the last few months. All of these jobs are just gone. As I said before, these are jobs that represent men, women and families across this province, and particularly in northern Ontario, people who have children and communities, people who are hanging on by their fingernails. They are desperate in regard to what they could and should be doing. They are looking for help. They are looking for some assistance during these difficult times.
Anecdotal stories are being told in some parts of northern Ontario about some of our richer neighbours, particularly those to the south, who are now coming into these areas and looking to buy summer homes or cottages. They are using credit cards to pick up homes that were purchased as major investments by these northern Ontario families over the years as they thought they could bring up their families and retire there. They also had hoped to be able to turn over their homes to their families so that they could take advantage of it as well.
Today, there are men, women and families, across northern Ontario in particular, having to walk away not only from their jobs but from the major investments they have made in their homes, their cottages and camps and, in some instances, small businesses. That is the situation.
We have very tough circumstances where the resource sector is concerned, particularly the forestry sector at this time. We have a government that seems more interested in rolling out tax breaks for those who do not need them, who already have enough, thanks very much, at a time when it should be investing in infrastructure and coming to the aid of some of these communities that we at this end of the House all speak about so directly, personally and passionately.
This is also being done in the context of a previous Liberal government that entertained a forestry coalition lobby, so the Liberals cannot say they did not know about this. In fact, the Conservative caucus of the day, which is now government, was lobbied at the same time. The NDP also was lobbied by a forestry coalition from northern Ontario. It told us three years ago that this was coming, that the impacts were already being felt, the government needed to come to the table and there needed to be a summit of some sort, a gathering of folks to sit down and figure out where we would go next in these very challenging and trying circumstances.
I believe the coalition was asking for something like $2.5 billion over a three year period in order to afford the investments that its members felt they needed to make in new technology, in re-situating themselves and restructuring plants and in dealing with employment issues in their towns.
What did coalition members get from the then Liberal government? At the end of the day, they got a deathbed promise of $1.5 billion, but once the Conservative government got into power, we discovered that was not rooted in any note to treasury. In fact, there really was no money dedicated. It was just a promise on paper that was delivered knowing there was an election coming, just so the Liberals could speak about it in the parts of this country where it would be important.
That was playing politics with the lives of men, women and communities in a most despicable way. There was no commitment. There was no real effort. There was no work done to make sure that even the last deathbed commitment the Liberals made would have to be honoured by whatever government was in power after the election.
Then what did we get? We got a government that finally woke up to the fact that there may be a problem in our forestry sector. Just after Christmas as we were returning to this place, the government said it was willing to roll out $1 billion to these communities, these companies and this sector, but it was going to be tied to whether the opposition parties would support the government and pass the budget, which will come down later this winter or in early spring.
We in the NDP saw it as a form of blackmail, with the government saying that it would do this but we had to pass its budget. We must understand that none of us know what else is in the budget. There again could be billions more in corporate tax breaks, which we know is not in the best interests of communities, particularly these communities, in this country. At the end of the day we might not be able to support the budget, even though we understand that this $1 billion, aside from the fact it is not near enough, might go a ways in dealing with at least some of the issues and challenges that folks are facing.
After hearing about the $1 billion and how it was tied to the budget, the government heard those of us who stood in the House over the last couple of weeks asking it to deliver it, to get it out there and to not hold it back. We said that the money was needed yesterday. We said that it needed to get it out today so that communities could have some hope. Members of the Bloc also asked for it and we appreciated the support.
The government finally capitulated and made the announcement yesterday, which is why we are standing here today as a caucus saying that we will support this even though we know, and anybody in the forestry sector looking at the tremendous challenge that is now in front of us know, that some three, four or five years later after they raised the flag for the government initially, that it will not be enough.
The Communications, Energy and Paperworkers Union had the following to say after the announcement of the $1 billion:
|| Today’s announcement doesn’t even put a stitch in the wound of an industry that is bleeding jobs. “We need a national strategy for forestry that will help workers, industry and communities rejuvenate the sector through creation of value-added jobs from the resource,” he adds. “Clearly governments should invest in the development of new and innovative products”.
It goes on to say:
|| “We need a national summit of all stakeholders in the industry,” ... noting that he is already in discussions with some company presidents on this and other renewal initiatives.
The leaders with whom I met, in northwestern Ontario particularly, are in agreement with the need for a summit and a national forestry strategy to be put in place and the kind of money necessary then to be put on the table to support the plan going forward.
CEP goes on to say:
|| We have asked repeatedly for meetings with politicians of all stripes — we even went to their house -- the House of Commons -- and invited them to come and talk to our forestry symposium a year ago. But our calls for a thoughtful approach to the crisis have been largely ignored.
It goes on to say:
|| Among the specific measures that CEP has called for are joint union, management and government task forces on the future of mills.
|| CEP is also looking at calling the companies back to the bargaining table a year earlier than scheduled in response to the crisis in the forest sector.
All of the people engaged, the workers, the community leaders, the unions and even some of the company owners have been telling us and the government for quite some time that something substantial needs to be done if we are to salvage this sector of our economy that has been so important. It has been the bedrock of the Canadian economy for many years. They are saying, as the New Democratic caucus believes, that forestry will continue to be a bedrock for the Canadian economy going forward, particularly if it is managed properly in a sustainable fashion and using all the intelligence and new technology that is available and bring that forward to the equation.
I would like to tell the folks who are listening, particularly those who are living in some of these very damaged and troubled small communities, that they should not let anyone tell them that it cannot be done because it has been done before. I remember, and I shared this with the finance committee yesterday, being in government in Ontario in the early 1990s when a huge recession hit. Resource based companies across northern Ontario were asking for help from the government of that day. The governments came to the table, not only the provincial government, of which I was part, but the federal government as well. It was a federal government of a Conservative stripe as well as federal government of the Liberal stripe because in 1993 there was a change. Those governments came to the table and participated in a way that saw many companies that were on the ropes and in bankruptcy, revive and, in fact, still operating today and some of them are very healthy.
In my own community there was Sault Ste. Marie, Algoma Steel, St. Marys Paper and the ACR that the government, unions, financiers and owners of the companies made commitments.
I was at a retirement party on Saturday night in Sudbury for Shelley Martel, who was the minister of northern development and mines at the time in the Ontario government of the NDP. She spoke very passionately, knowledgeably and eloquently at that particular point in time about the work that went on in northern Ontario to save so many really important companies and industrial enterprises in that part of the country.
I say to my colleagues in the House today that it can be done again. The $1 billion is important and we should get it out there, but it is not enough. More needs to be done.
Mr. Speaker, first I want to thank my colleague from for moving concurrence in this committee report. His timing could not be any better since the government asked the unanimous consent of the House this morning to pass a bill aimed at creating a trust that will be available to the provinces—and to Quebec—whose manufacturing and forestry industries are in trouble.
All the opposition parties gave their consent because this is a small step toward a real strategy to help the manufacturing and forestry industries. No one in this House, except for the Conservatives, and that includes the , the and the , can imagine that this will be enough. Let us not be mistaken about that.
This motion brought forward by my colleague from will allow us today, in the minutes following the adoption, by unanimous consent, of the bill creating the trust, to set things straight for those who may not have a good grasp of the situation.
The report in which my colleague moved concurrence clearly shows the willingness of opposition parties—and hopefully the government will adopt the same attitude—to be extremely precise with regard to a number of solutions and proposals that would really help the manufacturing and forestry industries.
The motion passed on November 28 by the Standing Committee on Finance states, and I quote:
||—the Standing Committee on Finance recommends that the government promptly introduce the tax measures in the unanimous report of February 2007 entitled Manufacturing: Moving Forward — Rising to the Challenge, and that the adoption of this motion be reported to the House at the earliest opportunity.
Today seems to me to be the first and the perfect opportunity to do so since Parliament has reconvened. I will say again that it puts into context the bill passed this morning to establish a trust which will provide $1 billion over three years to all the provinces, including Quebec.
Let me also repeat that the Conservative plan had three flaws, and by “plan” I mean the beginnings of one made public in January. The first flaw is the 's attempt to blackmail the sectors, regions, communities and workers affected by the crisis in the manufacturing and forestry sectors, and parliamentarians as well, for partisan purposes.
Aggressively pounding his fist on the table, the declared that, if the opposition parties wanted the plan, as rudimentary as it was, they would first have to swallow the bitter pill of the upcoming Conservative budget. Given that Conservative budgets may contain all sorts of things that are difficult to digest and which can sometimes be extremely harmful to the economic and social health of Canada and Quebec, no one gave in to his blackmail. None of the opposition parties in this House has given the Conservative government, the Prime Minister or the a blank cheque by agreeing to support the budget because it represents the beginnings of an aid package for the manufacturing sector. This kind of blackmail was in fact denounced in all the regions of Quebec, as I assume it was in all regions of Canada as well.
In view of the consensus in Quebec and under pressure from the Bloc Québécois and labour, the backtracked. Even the Ontario government was behind us on that. Premier McGuinty described the blackmail as nonsense, saying that it was inappropriate at a time when tens of thousands of individuals and their families are going through extremely tough times.
There are two other problems with the Conservative plan that have yet to be solved. The government must be very aware of the fact that even though there was unanimous consent of the House to pass the bill that creates the trust, we will remain vigilant and we will not stop applying pressure. The motion brought forward by my colleague from today is totally in this spirit, as was the one from the member for that was debated yesterday during private members business. That motion proposed a strong, detailed, effective and realistic assistance plan for the forestry industry.
The finance committee report before us today mirrors some of the proposals made by the Standing Committee on Industry, Science and Technology. A number of solutions are available to the government. Motions are currently being considered in five parliamentary committees and all of these motions offer solutions to the problem.
The government must understand that now that this trust that will provide $1 billion over three years has been created, it must immediately announce further measures, which it can afford to do. I will remind the House that, in his budget statement, the announced surpluses for March 31. We are not talking months or years here, but a few weeks.
These projections will be achieved, or close to it. In the budget statement, the announced surpluses totalling $11.6 billion. The government is now putting $1 billion in the trust for community assistance—I do not remember the exact name of that trust. This leaves $10.6 billion that could be used to make the plan a whole lot better.
As members know, we proposed to use these $4.5 billion for various initiatives. I will get back to this later on in my speech. So, there will still be money left to pay off the debt, to help the elderly, and to make necessary investments for the environment. That money is available and we do not want it to be fully applied against the debt.
Let us not forget that, as we are speaking, Canada has the lowest debt load among G-7 countries. Some huge efforts were made over the past 10 years. It is now time to look after those to whom the Quebec society, the Canadian society, the federal government and all politicians are indebted, namely the people and the communities—often one industry towns—whose jobs and future are threatened by business closures. We must help the unemployed, who were hit extremely hard by the budget cuts made in the nineties.
As a society, whether it is the Canadian or Quebec society, we are indebted to these people, and the time has come to use the government's anticipated $10.6 billion surpluses to pay off that debt. We know full well that, in the end, there will still be about $3 billion left to put against the debt. It would be totally illogical from an economic point of view, irresponsible from a financial point of view, and inhuman from a social point of view to use all of these $10.6 billion to pay off the debt.
As I mentioned, the motion before us proposes measures that can be implemented immediately. There is no need to wait for the budget. The money is there and we know that it will be available. Over the next few days, the , the and the are going to announce new measures to help the manufacturing and forestry sectors. So, we must not wait, because everyone, in every region of Quebec and, I suppose, of Canada, feels that what the Conservative government and the Prime Minister announced in January is insufficient.
So we do not need to wait and see whether it actually will be insufficient, as the said yesterday. Everyone can see that it is. He himself opened the door to the fact that this first step, this draft plan for aid to the manufacturing and forestry sectors, was insufficient and that more money was needed in the budget. We cannot wait for the budget. First, we do not know when the budget will happen. There has been no indication in that regard from the or the government. Every day, every week that goes by brings new human tragedies, new closings and new layoffs. So if we do not want to find ourselves in an even more catastrophic situation, we have to act now.
As I said, the second flaw in the Conservative plan, after the government engaged in this political blackmail, is the fact, and this is still true, that the amounts announced are plainly not enough. It should be at least as much as $4.5 billion from this year’s surplus. As I said, $1 billion has been allocated to create this trust and that leaves at least $3.5 billion to be invested. As I said, that leaves money for other priorities, such as retroactive payment of the guaranteed income supplement for people who failed to apply because they were not informed, and also investments for the environment.
Obviously, we want to see new announcements by the government in the budget to supplement what will be done. We are very aware of the fact that in the next fiscal year the surplus could be a little lower than $11.6 billion and that it will probably be more like $8 billion. It would therefore be wise, in fiscal terms, to use the latitude there is now to invest in the recovery of the manufacturing and forestry sectors.
There is still a third flaw in the Conservative plan: the per capita allocation formula we have been told about. This makes no sense. When we had the mad cow crisis, there was no per capita fund announced. Instead, there was a response to the particular needs of western Canada and Alberta, regions that were more affected than others or than Quebec. Quebec would obviously have liked to have more for its producers, but preference was given to the regions and provinces where the problem was concentrated.
In this case, although manufacturing is essentially located in Quebec and Ontario, it has been announced that funding will be on a per capita basis and not according to needs. That means that Alberta will receive more money per person than Quebec. And yet we know that the manufacturing sector is three times larger in Quebec than in Alberta. This makes no sense. Prince Edward Island will receive three times more than Quebec. This is completely unfair and illogical on the part of the Conservatives. The situation must be remedied.
As I said, in Quebec, the manufacturing sector accounts for about 17% of jobs and 21% of income from employment, and that is nearly three times higher than in Alberta. This sector is currently in trouble. They know, as I do, that a majority of the job losses that have occurred in the last two years in the manufacturing sector were in Quebec. They know, as I do, that 93% of the job losses throughout the entire Canadian manufacturing industry occurred in Ontario and Quebec. However, those two provinces would receive aid on a per capita basis.
Obviously, since Ontario has a somewhat higher population than the other provinces and Quebec, it will receive a considerable amount of money that will still be insufficient. We must not forget that there is a major crisis in the automobile industry, and it will only get worse. But proportionately, Quebec is currently experiencing more serious difficulties. A number of our sectors, such as the forestry sector, are vulnerable because of trade disputes and decisions over which they have no control bequeathed to us by American protectionist lobbies.
So, this allocation formula is completely unfair. I am happy to see that there is perhaps a glimmer of intelligence and foresight. Are the Conservatives seeing the light at the end of the tunnel? Perhaps they were on the road to Damascus like St. Paul. Who knows. But in the bill creating the trust, there is no mention of how the money will be allocated, which, I hope, gives the government an opportunity to put things right after the 's disastrous and unfair announcements. The $1 billion should be allocated based on need. Since Quebec is experiencing more difficulties, it should receive at least half of the money. As I said, half of the job losses have been in Quebec.
In addition to the $3.5 billion that we would like to see added to the aid package, we would like the distribution of those funds to be based on need so that we do not end up in a bizarre situation that sees Alberta, with its overheated economy, receive money to deal with the economic crisis. That would make no sense at all. That has to change, just as things had to change when the made the act to create the trust and distribute the $1 billion that was allocated over three years conditional on support for the budget.
We hope that the Conservative will change his mind about this unfair distribution, just as he did in that particular case of political blackmail. I am pleased to see that the Bloc Québécois' pressure has produced results. I would like to quote the , the member for , who said the following in Le Quotidien this morning:
|| It seems that nothing can be done about the Bloc Québécois' refusal to support the next budget. We had to find another solution to help workers who need help right now to get through the forestry crisis. The Prime Minister's proposed notice of motion would give $217 million to Quebec.
I would like to point out that $217 million over three years is about $70 million per year and about $35 million for each sector, forestry and manufacturing. As the said, nobody is going to be sitting down to a steak dinner. Instead, people will be handed a bowl of stale peanuts to snack on. Even so, in the remarks I just quoted, theMinister of the Economic Development Agency of Canada for the Regions of Quebec recognizes that the Bloc Québécois' firm stance persuaded the government to think things over and realize that there would be a price to pay politically and electorally. Thank goodness this is a minority government. To avoid paying the price, they realized that they had to separate the aid program, the creation of the trust, from the budget. As the Minister of the Economic Development Agency of Canada for the Regions of Quebec said, the only reason the government decided to act was that the Bloc Québécois refused to back down.
In today's edition of Le Devoir, February 5, 2008, the same minister said:
|| I asked the Bloc Québécois if they were going to support the budget or not and their silence clearly demonstrated that they had no intention of supporting the budget. Thus, under the circumstances, we must act responsibly. That is why we are going to introduce the bill, just to be sure.
That said, once again, we see the determination of the Bloc Québécois at the root of this particular matter. We cannot take all the credit, but this is a perfect example of how the Bloc Québécois serves the people of Quebec.
I must say that the is entirely mistaken. Our decision to support or oppose the upcoming budget will be determined by what is in the budget. We have no ideological prejudices, unlike the Conservatives. We asked for a number of things, including measures to help the manufacturing sector.
If they appear in the budget, our party has no problem voting in favour of the budget, as we did last year hon. members will recall. I was the Bloc Québécois finance critic at the time. I had made it clear that we wanted to see a financial solution to the fiscal imbalance. This did not resolve the fiscal imbalance and the members opposite should not, as usual, make the mistake of thinking that it did. We were looking for a financial solution of $3.9 billion for the third year. In the budget, there was $3.3 billion for the third year. The Bloc Québécois felt very comfortable voting in favour of the budget, as a first step toward a final settlement of the fiscal imbalance. This would require a withdrawal of the federal spending power in Quebec's areas of jurisdiction and would also require negotiations for the transfer of tax room used by the federal government to Quebec and the provinces that want it, for instance.
As proposed by the Séguin commission, our proposal involves transferring the GST to Quebec. That transfer should be orderly, coordinated and disciplined, unlike the government's approach of reducing the GST by one percentage point a year and telling the provinces to move into the room created. That is not what we are talking about. We mean a real, coordinated transfer of the GST.
Naturally, it is going to take some income tax points to ensure that Quebec will have the tax room required to assume its responsibilities. In exchange, Quebec is prepared to relinquish funding from the federal government for health, post-secondary education and social programs. Equalization payments will not be touched. That is in the Constitution and is another matter. They represent an unconditional transfer, which is what Quebec wants.
Although the was right when he said that the Bloc Québécois forced the government to take action, he is wrong to believe that we will vote against the budget. If the budget contained measures affecting, for example, refundable tax credits to help companies that do research and development but that do not turn a profit, or if it announced that the accelerated capital cost allowance, which is now over two years, was extended to five years, we would support these measures. All these measures are found in the report of the Standing Committee on Finance, which accepted the recommendations already made by the Standing Committee on Industry, Science and Technology.
As we can see, the solutions are known and the money is there given forecast surpluses. We will be able to include other measures in the budget. The only missing component is the political will of the Conservatives and of the . Let us hope that pressure from Quebec society, the consensus in Quebec, will force this government to take action in the interests of Quebec, the manufacturing and forestry industries and the workers in those industries.
Mr. Speaker, I would like to say that I will be splitting my time with the hon. member for .
First of all, the motion introduced this morning by the Bloc Québécois picks up on the motion adopted by the Standing Committee on Finance and carries on the attempt to deal with the difficulties that the forestry and manufacturing industries are currently experiencing, especially in Quebec.
The Standing Committee on Industry, Science and Technology adopted a series of extremely pertinent, logical measures to assist in particular the manufacturing and forestry industries, especially in Quebec. The Standing Committee on Finance re-examined this very detailed plan and picked out some extremely attractive and important tax measures the government should definitely consider. This motion was adopted unanimously by the Standing Committee on Finance. It is imperative, therefore, if we want to continue down the same logical path, for all parliamentarians to pass it unanimously so that we send a very clear message to manufacturers and the people working in these sectors, as well as all working people in Quebec who deal with these major problems every day.
The recommendations of the finance committee are taken up in today’s motion and focus on capital cost allowances to help companies modernize their equipment in order to remain competitive. Some sectors were specifically targeted, such as energy, information, information technology, the environment and rail transportation. These are all interconnected. When we speak about public transit, we are also speaking about the importance of the environment and about ensuring that companies in these sectors remain competitive with companies elsewhere in the world.
The other major aspect has to do with increasing investment in research and development. Many companies in Quebec do a lot of R and D but do not compete on a level playing field. The government must take action to help these companies become more competitive. The free market clearly favours companies that are doing well at the present time, but this does not mean that companies going through a rough patch should be left to their own devices. The government must take action, especially in Quebec, in view of the importance of the manufacturing sector. Many jobs are being lost, and it is essential to give this sector a boost by means of the measures mentioned in the motion, especially credits for R and D and the modernization of equipment.
The manufacturing industry is in sad shape in Canada, but especially in Quebec, because Quebec and Ontario are the two places the crisis is hitting the hardest. The manufacturing sector in Quebec is vital, accounting for 536,000 jobs and $22 billion in salaries. That is nearly three times more than in Alberta. Yet the measure the government has proposed will give as much money to Alberta as to Quebec. This is completely absurd.
Manufactured goods account for 59% of Quebec's GDP, which shows just how important manufacturing is to Quebec. In many cases, these services support industry, research and development. The collapse of the manufacturing sector is hurting Quebec's whole economy, and it desperately needs a helping hand.
The forest industry in Quebec cannot be abandoned. Here again, the government must set aside its economic laissez-faire philosophy, which holds that only the strongest companies will or should survive. Entire communities in Quebec depend on the manufacturing industry and especially on the forestry industry.
Quebec is inhabited because of the forestry industry. Throughout Quebec, forest resources have been developed in an organized way for hundreds of years. It is important to support the communities whose economies and labour markets are centred around these industries. Quebec is going through a tough time right now, but that will not always be the case. Companies need help to modernize their equipment and compete better against foreign companies so that they can turn a profit.
Moreover, the plant closures and job losses have a social dimension. The people who are affected are truly in dire straits. We can all imagine what families throughout Quebec are going through. We must look ahead. We must help companies modernize, diversify and make it through this crisis.
In Quebec, 230 towns and cities depend heavily on the forestry industry, and 160 depend on it exclusively. We cannot just sit back and see what happens and say how nice for those that managed to survive. We need a strong assistance program that can offer much more than the $1 billion proposed, only $216 million of which will go to Quebec. The next budget must include additional amounts. Two hundred and sixteen million dollars over three years for the whole of Quebec's manufacturing and forestry sectors does not make sense. For example, the Trois-Rivières region needs an investment of about $300 million just to reopen one plant.
It is as the member for that I am making a speech on the impact of the manufacturing sector crisis. My riding includes the city of Shawinigan. I raised this matter in the House when the Belgo plant shutdown was announced last fall. I would like to explain how tragic that can be for a city like that. The city's best industrial years were behind it, and it was completely abandoned by successive governments. The town has become utterly depressed. One pulp and paper mill is about to close, and another of the same company's mills is in danger of closing. AbitibiBowater announced that the other mill in that city is on life support.
It is hard to imagine how a city of 50,000 can make it through the closure of two mills within months of each other. The government simply must intervene with effective measures to ensure the survival of the company, especially since it has the means to do so.
The government has taken measures that, once again, send very bad signals to the economy of the Shawinigan region. Last fall, the government closed a Canada Revenue Agency office there and moved it to centralize services in Ottawa. As a result, 20 jobs were cut in Shawinigan alone.
The government must have a much broader vision for supporting communities. All of its actions should aim to save jobs and focus on people's ability to take charge of their own lives and develop their skills.
In short, the Conservatives' $1 billion trust will obviously send a message.
The main message is that the government is able to take money from the $11.6 billion surplus—
Mr. Speaker, I am going to point out that I am happy to speak at this point in the debate on the motion by my colleague from . This is a timely motion, even though it was presented at the Standing Committee on Finance on November 28, 2007. That shows how the Bloc Québécois had already been involved for many months in trying to get the government to take initiatives to help these two sectors: forestry and manufacturing. I would even say many years, since this is the kind of thing we were already doing when the previous government was in power.
What makes this motion even more relevant today is that it gives us an opportunity to do something about the measure taken in relation to the $1 billion trust. Other colleagues have in fact told us that this $1 billion is too little. In fact, $1 billion is not enough to meet the crisis. It is allocated unfairly and means that the two sectors concerned are not really being supported to a level that meets the problem they are having. When we look at the $228 million in Quebec for two sectors, we see that we are getting $114 million per sector over three years. That means an average of $36 million per year. When we look at the extent of the crisis in both those sectors, that is too little.
I will illustrate my point by saying that in Quebec we are talking about 536,000 jobs and $22 billion in wages, 17% of all jobs in 2005 and nearly 21% of income from employment; that is three times more than in Alberta. In recent years, and particularly the last three years, 88,000 jobs have been lost in forestry and the sawmills. There are 230 towns and villages that depend mainly on the forestry industry and 160 towns and villages that depend exclusively on the forestry industry: nearly one half of the forestry-based communities in Canada. The forestry industry is central to how the land has been settled in Quebec. This is worth pointing out.
The manufacturing crisis, I would point out, is very serious; it looks like this: 78,000 manufacturing jobs have been lost in Quebec since the Conservatives came to power. It is as if our friends from Quebec, who were strutting around just now, had not seen this. As well, 21,000 jobs have been lost in the forestry industry alone, including related service industries like transportation and forestry equipment. That is half of the total job losses in Canada since April 2005. The statistics end in the summer of 2007, however, but there are situations that have worsened in a number of municipalities and my colleague, the member for , illustrated this clearly a moment ago.
The Conservative government is arguing that it has reduced taxes to help these industries. But when companies are not making any money and people are not working, tax reductions are useless. Where they are useful is in industries that are booming, such as the oil industry. My colleagues who were strutting around do not seem to realize that the oil companies will save $2.8 billion in taxes over the next three years.
They will save $2.8 billion over three years. That means $922 million in 2008 alone. That is what this government has done: it has taken steps to support the sectors of the economy that are working well, but it has done nothing to support industries in difficulty. That is the Conservative doctrine: support the oil industry and the war industry.
Some hon. members: Oh, oh!
Mr. Yves Lessard: Mr. Speaker, they are still making a racket, as you can see.
Their doctrine is to support the war industry. The member for can tell us later, and his colleague, whose name I forget, because he does not speak very often, and when he does, he does not make much of an impression—
Some hon. members: Oh, oh!
Mr. Yves Lessard: Mr. Speaker, it is the war industry. Last year, the members opposite who are carrying on committed $17.5 billion in a single week, without any debate in this House, the week after the House of Commons adjourned. Since then, the total has climbed to $23 billion to finance the war industry. We are in favour of updating military equipment, but at a reasonable pace, in light of the support the rest of the manufacturing sector needs.
Some hon. members: Oh, oh!
Mr. Yves Lessard: Mr. Speaker, I would ask you to call to order our two Quebec colleagues, the member for and the other member, whose riding I have forgotten because he does not often speak. I did not interrupt his speech earlier. It is quite inappropriate and that is just about all that they want and can do.
An hon. member: What did you accomplish in 17 years?
Mr. Yves Lessard: Let us return to worker assistance.
An hon. member: What did you do in 17 years. Talk about your record.
Mr. Yves Lessard: There is something odd here. They say that we do nothing here. The , a member from the Saguenay—Lac-Saint-Jean region, said, just yesterday, that it was the Bloc's fault for forcing them to separate the $1 billion trust from the budget.
Instead he should have praised the Bloc, because it was the Bloc Québécois who made them realize just how little help these people were receiving. That illustrates how we move things along every week and every day that we spend in this House.
Some hon. members: Oh, oh!
Mr. Yves Lessard: Mr. Speaker, our Conservative colleagues are showing a very poor attitude today by interrupting me with insults and outrageous comments.
I would point out that employment insurance—
Some hon. members: Oh, oh!
Mr. Yves Lessard: Sir, if you are drunk, please leave.
Some hon. members: Oh, oh!
Mr. Yves Lessard: Mr. Speaker, they are behaving like drunkards. This makes no sense and I would ask you to call them to order.
An appropriate measure with respect to employment insurance would be to ensure that the surplus accumulated by employment insurance over the past year, that is, $1.444 billion, be retained, put into a separate fund and used to support workers, particularly older workers. Thus, $60 billion would go to older workers to establish the POWA.
Let me say to the hon. member for that the POWA could help the workers from Saint-Émile who lost their jobs in the shoe industry. I would like to see him, instead of clowning around, rise in this House and assure us that the POWA will be established. That is what the workers of Saint-Émile in his riding, Charlesbourg—Haute-Saint-Charles, are asking for. Yet he cannot do that. All Conservative members from Quebec should be able to do so, since all ridings have been affected.
Every time there are massive layoffs, at least 20% of the workers affected are over 55 years old. Establishing a support program for older workers would help workers in all regions.
Since I am getting a signal that my time is up, I will close by affirming that it is very important that the motion moved by my hon. colleague from be unanimously adopted.