Thank you, Mr. Chairman.
My opening remarks should be about 10 minutes. I hope they're not more than that.
I will keep my remarks brief so that there will be enough time for questions.
First of all, I would like to thank the chair and the members of the committee for recognizing the seriousness of the recession that is presently gripping every country's economy at the same time.
I am confident that all members understand the importance of expediting the passage of the important measures in Bill , the first budget 2009 implementation bill, to stimulate and protect our economy. As we all recognize, in order for these measures to be most effective, they must be implemented in a timely manner. That is why we need parliamentarians to pass this bill without delay.
Last year, I note, the first budget bill took approximately three months, or more than one hundred days, to receive royal assent. We do not have that kind of luxury this year.
We will be going through a very difficult year, a year in which we will see a slowing of the economy, both in Canada and around the world, a drop in exports and more and more job losses.
Mr. Chairman, to delay our economic action plan for partisan or abstract debates would be reckless. We owe it to those Canadians who will be hardest hit by this difficult period to rise above politics as usual and act as quickly as possible.
To those who would engage in lengthy debates about our economic action plan, I remind them now that during December and January we held the most comprehensive pre-budget consultations in history, which were open to all parliamentarians. We asked for input then, input that helped to shape our plan. That time has now passed. It is now time for Parliament to act. I am heartened that the majority of this committee has understood that and has understood why we must expedite this bill, led by their able chair, the member for Edmonton—Leduc.
As I mentioned, the recession is hitting every country in the world simultaneously. It did not start in Canada.
As the Governor of the Bank of Canada said to this committee earlier this month, “The reality is that the financial crisis and subsequent recession originated beyond our borders and the necessary triggers for a sustainable recovery must be found there as well.” We need to acknowledge that reality. As an open exporting country, our prosperity is tied to a healthy, open global economy.
A recovery in the global economy, especially in the United States, will be a strong prerequisite for sustained economic growth in Canada. That's why we are taking a leading role in international forums to help facilitate that. We have been especially prominent on the regulatory leadership file. Canada is co-chairing a G20 group, known as Working Group 1, that is developing a blueprint to enhance regulation of financial services and improved transparency to help avoid another global banking crisis. That group and the others will be preparing their work for the G20 leaders meeting in London on April 2.
Recently I attended a meeting of the G7 finance ministers in Rome. In my discussions, two things quickly became evident. First of all, Canada has become a model for the world to follow in combatting the current global economic crisis, both in how we have managed our finances and how we have kept our financial system strong.
In the words of President Obama last week, “...in the midst of this enormous economic crisis, I think Canada has shown itself to be a pretty good manager of the financial system in the economy in ways that we haven't always been here in the United States. And I think that's important for us to take note of.”
Second, like other countries, we must immediately take measures that will fulfill Canada's international commitment, meaning that we must implement the economic recovery plan as quickly as possible.
For Canada, the first stage of that process is to pass this bill and allow the government to put Canada's Economic Action Plan into effect quickly.
But our expectations must be realistic. The plan in itself will not be able to protect every job or to solve every problem in the global economy. As I said, the recession did not start in Canada. Concerted international efforts will be needed to stamp it out.
What our plan will do is take real action to protect those hardest hit by the current recession, while helping create and maintain jobs. Briefly, let me outline a few select measures from our economic action plan being legislated in , measures vital to stimulating Canada's economy, and measures that should be passed quickly.
First of all, implements various tax relief measures outlined in the recent budget. This represents important tax relief that will help stimulate the economy and also remove 265,000 low-income Canadians from the tax rolls completely.
Among the tax measures are these: raising the age credit amount by $1,000 to help seniors; increasing the amount that can be withdrawn under the home buyers' plan to $25,000 to help first-time home buyers; an extension of the temporary mineral exploration tax credit; raising the threshold from $400,000 to $500,000 to allow more job-creating businesses to qualify for the reduced 11% small business tax rate; increasing the basic personal amount that all Canadians can earn before paying federal income taxes; and allowing Canadians to keep more of their money before being subject to higher tax rates by increasing the two lowest personal income tax brackets.
I note that the Canadian Taxpayers Federation heralded many of these moves as important broad-based measures that will allow individuals and families to make the decisions that are necessary for them during these uncertain times.
also helps Canadians hardest hit by the recession by extending all regular EI benefit entitlements by five extra weeks, increasing the maximum benefit duration from 45 weeks to 50 weeks for two years.
I emphasize that this sorely needed assistance cannot be provided before Parliament allows the bill to receive royal assent.
also takes action to help improve access to financing and strengthens our financial system. We all recognize the impact the current economic downturn is having on access to credit.
To combat the recession, our plan contains a number of measures designed to ease access to credit for Canadians and for Canadian businesses. Many of those measures are in set out in Bill .
The bill also allows EDC and BDC to extend additional financing to Canadian businesses, which is vitally important.
In addition, it also increases the maximum amount for loans made by the Canada Small Business Financing Program.
These and several other measures explain why organizations like the Alliance des manufacturiers et exportateurs du Québec have praised the merits of our plan. They want it to be put into effect quickly. I quote:
|| Budget 2009... includes a number of positive measures designed to help our businesses in this time of crisis. It is imperative that these measures be put into effect as quickly as possible.
Bill also authorizes nearly $6 billion for initiatives ranging from infrastructure to community adjustment, housing, and health care. This includes nearly $4 billion in investments to pave roads, improve our universities and colleges, fix sewers, and repair bridges. These are investments that would have been required regardless, but they will help create jobs now by being brought forward. As the Federation of Canadian Municipalities recently stated:
||“Quality infrastructure will help Canada compete for talent and investment in the global economy.”
||With all orders of government working around the same table, with the same goal, [budget 2009] will create tens of thousands of jobs, boost our flagging economy, and deliver value to Canadians for generations to come.
Our plan also includes over $1 billion in investments for social and low-income housing, seniors' housing, housing for persons with disabilities, and first nations' housing.
These represent only a few highlights of the vital measures included in Bill .
Also included are initiatives to help transition toward a Canadian securities regulator with willing provinces and territories, to modernize the Investment Canada Act to encourage new investments and the jobs that new investments will produce, to protect consumers from anti-competitive and unscrupulous business practices by adding new provisions to the Competition Act, and more.
Colleagues, I can see that at 524 pages, this is a detailed and lengthy bill. We could, as parliamentarians, spend months engaging in debate, some of it abstract or philosophical, and sometimes partisan, I'm sure, about the measures within this large bill, but as I mentioned earlier, we do not have that luxury. The consequences of delay for Canadians are too high. Bill contains the right measures that we need to implement right now in order to help Canadian families now and to help our overall economy weather the current economic storm.
We must pass this bill as soon as we can.
At this point, I invite the committee to ask questions.
Thank you for the courtesy of permitting me to deliver that opening statement, Chairman. I look forward to the questions of the members of the committee.
Thank you for coming today, Minister.
As you may have heard, we got a little flak from some of our opposition colleagues by saying that we would work to get this bill through at lightning speed by parliamentary standards. I agree with you that we are faced with a crisis and that urgency is crucial. But I have three questions, and if I may, I'd put my three questions all at once, which in part underlines the urgency.
First, you mentioned EDC and BDC. As I understand it, there's something on the order of $8 billion committed in the budget. Given that the credit situation is getting more and more serious, according to reports, and given the disturbing news that I have heard from representatives of the business community that BDC does not share my sense of urgency and it may take some months before they even decide how to proceed, I would like you to be able to commit to Canadians that BDC and EDC will act with urgency.
I don't know the exact commitment that can be made, but if the number is $8 billion, is it reasonable that all of that $8 billion get out the door within twelve months? We would like to have some indication of your degree of urgency on this, especially in light of indications of a less than urgent attitude on the part of some of those institutions.
To my second question, yes, we want to get everything in this budget that has to do with stimulating the economy through as fast as possible. There are many items in the bill that have nothing to do with stimulating the economy and may be contentious. Will the government entertain any amendments that are not to do with getting money out the door, or do you consider every word and item in the bill to be set in stone and a matter of confidence?
My third and final question is what I tried to raise in question period, which had to do with the tradition since Confederation that the government goes to Parliament with a borrowing authority bill when it seeks to borrow money to finance a deficit. For the first time in Confederation, it appears that this is not the government's intention, which, I would contend, trivializes the enormous debt that is being placed on our children and grandchildren. Will the government seek authority from Parliament to borrow, as has been the tradition since Confederation, or will the government simply do this by order in council?
It's because they are issues dealing with compensation in the public sector.
Listen, we are in the midst of a very serious recession. Thousands of Canadians are going to lose their jobs. I hope you don't think it's reasonable, because I don't think it's reasonable, for public sector workers not to be cognizant of the fact that fellow Canadians in the private sector, thousands of them, are losing their jobs. What we're asking people in the public sector to do, including you and me, is to limit our pay increases to 1.5% over the course of the next few years.
On the pay equity side, we're saying let's have a system that works, that functions properly, that doesn't take 15 years to resolve a pay equity dispute, to learn from the provinces that have successfully dealt with this issue, to get pay equity to the labour negotiation table in collective bargaining, which is where it belongs. You know the way it's been played has been that it isn't dealt with at the table, and then it's taken off to some tribunal after that, causing incredible delay and disservice to the women and men of Canada—because not all the pay equity claims are one way. So that's why it's being done. It's good public policy, and it's important.
On the Navigable Waters Protection Act, when I met with the province and the territories, they were very concerned about the fact that infrastructure spending in this country—and we work in partnership with the provinces and the territories—is ineffective and delayed, at a time of serious recession and with people losing their jobs, because of duplications of environmental assessments. So we're sorting that out in cooperation with the provinces and the territories, getting away from a system right now, quite frankly, where the Northumberland Strait is treated the same as some little creek that's almost dried up. So we're getting more realistic, in cooperation with the provinces and the territories, to create jobs for Canadians. I think that's a good thing.
Mr. Chairman, I'm going to simply say this. I asked about pay equity and I got an answer that included a reference to what was dismissively called “some tribunal”. These are rights. They can't be negotiated away. They can't be legislated away.
The other thing is that this government has had this ideological bent for a long time. This will be challenged in the courts because it's completely illegal, so any reference to saving time by creating this new thing is completely false. With regard to what was done in the provinces that have made this work, this government, in this legislation, is bringing in, with the culpable complicity of the Liberals, a new bar of 70%, whereas Quebec, Ontario, and New Brunswick, to give but those three examples, had set the bar at 60%. The federal government's general rule before was a 55% presence of women.
You have made it mathematically impossible for anybody to get pay equity, and it's a right, and you're going to lose. This is going to be defeated, but it will take that time. As for the dismissive reference to “some tribunal”, I think that shows a total lack of respect for our institutions.
But let's move on. The time is limited.
I would like to understand how the government reversed itself on the principle of not allowing companies to basically put money twice through tax havens. Sheila Fraser, the Auditor General, has come up against this. You've come back and you've reversed yourself on it. Hundreds of millions of dollars are involved. Those are not my figures, but Sheila Fraser's figures. Why is the government reversing itself on this? At a conference I attended in Paris in January, there was agreement on all sides, whether it was from President Sarkozy or Angela Merkel, who was also there, on this reference to the fact that money can transit so easily through these fiscal havens, these tax havens, and that it's one of the biggest problems we have to face.
This government seems to be rowing against the current on this one, and I'd simply like to understand why they're leaving hundreds of millions of dollars on the table.
I'm sure I could probably provide the opposition member with several hundred examples simply from my own riding, from the municipalities that I talk to. I'd certainly be willing to sit down and give him direct anecdotal evidence of such, and I know most members around this table are probably experiencing something similar.
However, Minister, there isn't anybody who doesn't recognize that we're in a global economic malaise and that it's certainly going to require a concentrated global response and, quite frankly, an unprecedented level of cooperation, both internationally and domestically. As you have mentioned, Canada has been participating in the various regulatory bodies, and certainly you personally, as our finance minister, have been, whether it's the G7 or the G20. Through budget 2009 and this bill, you've intimated that we have met and will meet our international stimulus commitment. We've actually exceeded, I understand, the suggested stimulus levels of the IMF.
What I think most people recognize, and what I'm more familiar with, of course, as a member in this country, is that we need a coordinated approach domestically--I work with my provincial colleagues on a routine daily basis--so we must have the provinces join in as part of the solution. In regard to your discussions with our provincial counterparts, how confident are you that they are willing to step up to the plate and help provide a coordinated stimulus effort?
Good afternoon, Mr. Minister. We are pleased to see you. We are asking ourselves a lot of questions about the budget you have brought to us.
Earlier, you mentioned the need for urgent action. Of course it is important to act quickly to kick-start our economy. But you will recall that, last fall, you preferred to plunge us into an election, and then to prorogue the House. So here we are at the beginning of 2009 with the same problem for which urgent action is required.
Perhaps we could have acted quickly, except, as someone mentioned previously, the budget implementation bill contains some major legislation that we need to think about, like pay equity, the Navigable Waters Protection Act, and the entire principle of collective bargaining. We are not necessarily experts in all these matters, and they deserve to be studied by other standing committees.
I previously sat on the Transport Committee, and, starting in February 2008, I was part of a process of study on the Navigable Waters Protection Act. In June 2008, we reached the point where we were ready to make recommendations for a bill. Now here you are with a budget implementation bill that you are asking us to pass quickly. At very least, it should have been studied at a joint committee, with the Transport Committee, the people who have looked at this whole matter, to see if what you have proposed in your bill is any good.
Anyway, I will forget all that; it is very problematic and you are not going to be able to solve it today.
I could ask you a number of questions, but I will just ask about securities. In your budget implementation bill, you propose a Canada-wide commission even though the matter is in provincial jurisdiction. You say that you have received a legal opinion on the scope of your proposal. I have asked your officials to send me a copy of that opinion. Could you make a note of it and have it sent?
I would like to ask another question, this time about the treatment of Hydro-Québec. There was no answer a while ago, though there was an answer about Hydro One. Electricity distribution, such as Hydro One is involved in, has been considered business income and so is not included in the calculation of assets. Hydro-Québec is considered as two divisions, one dealing in transmission and distribution, just like Hydro One. That division could also be considered not part of the assets, but as business income.
You were asked this question before and we did not get a reply. Why does Hydro-Québec not get the same treatment, which would result in $250 million more in equalization payments for the people of Quebec?
Minister, thank you very much for your comments today and your description of the economic situation facing our country.
As you mentioned, is a very lengthy bill of over 500 pages, and it includes many positive initiatives. We obviously spend most of our time as parliamentarians focusing on those initiatives with the biggest dollar amounts, the major infrastructure announcements. But I've noted that there are a number of other very important changes for people that are really quite worthy and deserve to be recognized. One in particular is the extension of the deadline for registered disability saving plan contributions. I know that in my riding, as I campaigned in the last election, I encountered many people who have children with disabilities or other family members who do, and this is something that's very important to our society.
RDSPs, as we know, are the new savings vehicle that our government has introduced to help parents and others set aside future funds to financially support children with severe disabilities. It's an important program with important changes that I'd like you to comment on, but I'd also like to underline how important this program really is by quoting someone who will actually benefit from the proposals that have been introduced.
Here is what Laura Mackenrot, a young woman from Vancouver who happens to be blind and is a strong disability advocate, had to say: “This is just going to be absolutely incredible for the disabled community nation-wide. This is really going to help improve people with disabilities, their lives and their quality of life. The rest of the world, the disabled communities of the world, are watching. They're watching Canada, so we're literally making history right now, and I'm very happy to be a part of it.”
I wonder, Minister, if you could comment on that.
Thank you, Mr. Chairman.
Thank you, Minister, for appearing before the committee. It's always a pleasure.
Just quickly, I'm a little troubled by Mr. Kramp's question regarding the tax-free savings account. I've had a little different feedback on what's been going on. I've been talking to a few people who are actually having a hard time putting money into RRSPs—it's RRSP season. In fact, there are a few people withdrawing money from RRSPs.
So I don't see how you can determine that it's been a huge success. The numbers are not in. I spoke to a few people in the banking sector. They said they've thrown huge amounts of money at it in terms of advertising, and it hasn't brought in any new business. People are turned off by the fact that they just can't make ends meet, never mind trying to put a couple of bucks together to open an account.
We had your officials here last week. Much to our committee's surprise, the Finance officials threw out $15 million in advertising to promote this tax-free savings account. The first instalment at the CRA is $19 million just to set up the infrastructure for a program that probably is going to generate nothing. I'm not sure what the return is going to be from an account like this. Even if people were to put $5,000 away, at a 1% return, I don't see what the return is going to be for the Government of Canada. If I were to give almost $50 million to taxpayers, I think they could probably find more use for it than what the government has done with it today.
So if there's a failure with the tax-free savings account.... I look at how it was supposed to generate a stimulus and to increase savings, but then you turned around and said, no, it's not supposed to increase savings, but it is more of a stimulus. And now I look at this package again, which is supposed to generate a stimulus. But if we look at all the little tax deductions here and there.... Again, I'm an accountant by profession and I'm talking to friends and constituents. They're not seeing any difference in their paycheques. Some of them are losing their paycheques. For somebody earning $30,000, it's $33.
Wouldn't it just have been easier to say, we're going to give the people who need the money $200 or $300—pick an amount—and actually stimulate the economy as we have to? I say this because with some of these personal tax deductions, even if people are entitled to get them and have jobs until the end of the year and file their 2009 income tax returns, they will only be refunded by April 2010. So even the direct stimulus part of the budget is not going to generate a direct stimulus.
Perhaps you could comment on this. And then I have a couple of other quick questions.