That, in the opinion of the House, the government should recognize the important role Canadian small businesses play in creating employment in their communities by lowering the small business income tax rate in order to encourage job creation.
He said: Madam Speaker, I will be sharing my time today with the member for .
I welcome the opportunity to speak to this important NDP motion, to reduce the income taxes of millions of small businesses across Canada.
This is the first time that I am giving a speech in the House since the election, so before I speak to our motion, I would be remiss if I did not thank some of the many people who helped me to represent my constituents in this place again.
I would like to thank many people from mayors to businesspeople, seniors, students, teachers, nurses, families, and all the ones who came out to my town hall meetings, who met me over coffee, and who spoke with me at their doorstep. Without their input and their support, I would not be here to work for them.
I want to express my thanks to my campaign team, led by a very talented and experienced Chris Mockler, and the hundreds of tireless volunteers who gave so much of their time and energy to make democracy work.
I also owe a debt to my dedicated office staff, in both Ottawa and Thunder Bay—Superior North, whose tireless work helped thousands of constituents over the past several years. That has made a real difference in those people's lives.
As everyone knows in this House, many of our families have to make real sacrifices in order to allow us as MPs to represent our constituents here. So deep thanks go to my wife, Margaret, and my son, Michael, for their understanding and support over the years.
Most of all, I would like to let the constituents of my big, beautiful riding of Thunder Bay—Superior North know that it is a huge honour for me to represent them once again here in this place. All of them, no matter how they voted. I accept that honour with humility, and I will do my very best to serve them faithfully.
Today's motion is about recognizing how vital small businesses are to communities across our country of Canada. It is about how they play an important role in creating jobs for millions for people. It is about supporting them to grow and to generate more employment by cutting their small business income taxes, so they can reinvest in their businesses to help them to grow and reinvest right here in Canada and right in their own communities, in our own communities.
Small and medium-sized businesses already employ 56% of all workers in Canada. That is close to eight million Canadians. Small businesses are very resilient when times get tough. They do not downsize their workforce as much in recessions.
For example, in the five quarters of the recent downturn, the private sector lost close to half a million jobs. Of those, large firms let go about 6% of their payroll employment, while small businesses lost only about 2%. One reason is they cannot just shut down a branch plant in Canada and retrench in their home country. This is their home country.
So it makes sense to support more nimble small businesses if we want to encourage sustainable employment growth. It also makes sense from a community investment perspective. The funds that small businesses save in taxes are largely invested, saved, and consumed locally because small businesses spend locally. They do not ship their jobs or profits overseas because they are based right here in our communities.
Eighty per cent of small businesses earn less than $100,000 a year. Their profits do no go toward padding CEO bonuses or being invested outside of Canada. In fact, a report to be released next month by the Canadian Federation of Independent Businesses will show that successful small businesses that grew during the last recession prefer reinvesting any windfall in their businesses and in hiring more Canadians.
Members will know that New Democrats are no strangers to supporting small businesses. The NDP government in Manitoba has cut small business income taxes in that province, reducing it over time when it was affordable to do so. Last year, they dropped the tax rate to zero, eliminating small business income taxes completely.
During the federal election, my party had a platform that called for a reduction in small business taxes. We also called for a job creation tax credit that would give up to $4,500 to businesses for each new employee.
However, in the government's recent budget there is no tax reduction for small businesses. In fact, this budget was a huge missed opportunity to support small businesses here in Canada. I have noticed that many members on the other side of the House have been crowing about a hiring tax credit in the budget. If we look at this credit closely, we will see that small businesses will be no further ahead with it than before. It is a temporary measure that will only exist for one year. All it does is defray the increases in EI premiums that businesses have to pay, starting this year.
The government is hiking EI premiums for everyone and then introducing a small credit to delay this payroll tax hike for a year. It is crowing about this like it is some great help for small businesses. As a small-business owner myself with a payroll to meet, I know that giving with one hand and taking with another really is not any help at all. However, far worse, these increased employment insurance premiums will make it more expensive to hire people after this year. It is especially outrageous considering the premium hike is so unnecessary.
The government still owes the $57 billion it raided from the EI fund. That is money that workers and employers have already paid and now they are being told to pay it twice. This payroll tax increase is expected to result in a $15 billion surplus in the EI fund over the next five years. Therefore, is this really necessary?
Until now, the government has been focused on helping its friends in the banking and oil company industries to reap record profits through blanket tax handouts that make our large corporate tax rate less than half of that in the United States of America. There is still $1.4 billion in tax subsidies going to the oil and gas sector every year, when it obviously does not need it.
Further, blanket tax handouts without conditions for investment do not help create jobs here in Canada. They might generate fat CEO bonuses or investment outside of Canada, but there is simply no evidence that they generate employment here. Instead of spending billions on ineffective policies, we need to be more selective in how we use our precious taxpayer dollars. We need more targeted investments that will result in real job creation.
The government must start supporting small businesses with more than gimmicks that camouflage tax increases. A tax cut for the local retailer down the street, the mom and pop store on the corner, or the start-up in the garage next door will help those small businesses re-invest in their communities and our communities, and create local employment.
New Democrats are trying to change the direction the government has been taking. We are trying to lead it to the light about how important small businesses are to our economy, now and in the future, and we are trying to get more value for taxpayers' money than wasting it on ineffective, across-the-board tax handouts without criteria for success.
I appeal to all the parties in this House to support today's New Democrat motion to cut small-business taxes here in Canada.
:
Madam Speaker, I am pleased to speak in favour of my colleague's motion today. First, I would like to thank my constituents in Beauport—Limoilou for their support on May 2. I am proud to represent them in this House and I am well aware of the responsibility that I have been given.
I would also like to pay tribute to my leader, because this victory in Beauport—Limoilou was also his victory. Since our first meeting in Cap-Rouge, in the summer of 2005, I have had the pleasure of working with my friend to build a better future for our families. We have compared our visions of society and agree on the Canada we want. I sincerely appreciate the privilege of having his attention to present my ideas for moving our society forward.
My leader has placed a great deal of trust in me by offering me the position of official opposition critic for small business and tourism. I am honoured and will honour that trust.
Small businesses are the foundation of our local economies. They are part of our everyday lives. The owners of these businesses are our neighbours, our loved ones. They employ our family members, friends and fellow citizens.
Our entrepreneurs have the same concerns as our workers. They want a place in society; they want to earn an honest living and be able to pass something worthwhile on to their descendants, a legacy that makes them proud.
To reach that goal, our entrepreneurs need optimal, competitive conditions. They must be able to rely on strong social programs when it comes to health care and pensions so that they and their employees are protected from twists of fate. They must be on a level playing field with larger competitors, foreign competitors who benefit from cheap labour and a lack of basic services in health care, education and public safety, which Canadians enjoy.
We need to ensure that they have the means to develop and offer their clients, all of us, the best product and the best service.
Our entrepreneurs are the people like the baker whom I buy my bread from, just steps away from my house in Limoilou. Or my three barbers, whom I have been going to for years and who know me by name; the owner of the restaurant on the corner where I go to eat because my workload forces me to grab something and I get service with a smile; or the independent owner of the convenience store where I go to buy beer and other treats, who takes the time to say hello and chat about my life.
And I have not even mentioned the pharmacist, the independent gas station owner, or the cleaner on the corner who takes care of my everyday needs. None of these honest business owners, none of these entrepreneurs, benefit from the very generous tax measures that this government is doling out to the big banks and oil companies, whose profits are mind-boggling.
It gets worse. In an article in the Globe and Mail on April 6, journalist Karen Howlett demonstrated that the massive tax cuts for big business did not prevent a significant drop in investment in machinery and equipment. In reality, these businesses built up $83 billion in additional reserves, money that has been sitting outside our country since 2008, the start of the recession.
In the meantime, family businesses and workers are suffering because of the economic slowdown. They are constrained by financial decisions that do not concern them. In the past few years, we have come to understand that the financial economy has been given disproportionate weight compared to the real economy, that of our industries, services, agricultural production and households.
This disproportion is seen in part in the recent sudden downslide in the S&P/TSX index, which has fallen by 10% since the beginning of 2011.
Everyone is paying the price right now, because the performance requirements of companies listed on the stock exchange are disproportionate to their real and tangible activities. Even when they are profitable, companies listed on the stock exchange have to “restructure”, in other words, make sweeping layoffs of their employees, the lifeblood of a company, with no good reason. Publicly traded companies have to record huge profits and pay large dividends to their shareholders. I am not talking about the obscene bonuses paid to senior executives, which goes against all performance logic and against the needs of the very company involved.
What will this government do? It will feed the tyrannical performance monster I just described at all costs by making massive tax cuts that will do nothing for the family businesses that are part of our daily lives.
The Conservative government is contributing to the economic instability that is hurting us all right now. The Toronto Stock Exchange will look even more like a roller coaster with the measures contained in this budget. There will be more grief because of the fluctuating markets and the fluctuating prices of gas and daily essentials, and we will see more job losses in many regions in Canada.
We have a job creation plan that was rolled out during the last election campaign. We want to reduce the tax rate on a company's first $500,000 of net income from 11% to 9%, which would make a huge difference to millions of small business owners and their employees. This measure would give family businesses more room to manoeuvre, which would in turn ensure their survival and continued development.
In addition, we are proposing a job creation tax credit of up to $4,500, a measure that could create 200,000 jobs. Our entrepreneurs would benefit from a reduction in Canada pension plan and employment insurance premiums for new hires, a great help in these difficult times for many sectors of economic activity, with the exception of oil development and banking, of course.
How does this government intend to create jobs? Through massive tax cuts that will not create jobs in big businesses, but will lead to greater economic instability that will hurt all Canadians. This government boasts that it has created 540,000 jobs since July 2009, mostly temporary and part-time jobs. During that same period, the Canadian population increased by 700,000 to 800,000. It would have been shameful had fewer jobs been created, given that a large number of quality jobs have been lost and businesses have closed since 2008.
This government could do much more by agreeing to implement a real job creation plan, one that would support family businesses that are part of our daily lives, a plan that would create 200,000 stable, good-quality jobs for Canadians.
We need this plan.
:
Madam Speaker, I would like to thank you for the opportunity to speak to the motion moved by my NDP colleagues concerning the taxation of small businesses in Canada.
Everyone knows that I come from a region that promotes entrepreneurship. I am very proud to represent the people of Beauce. Beauce is a haven for SMEs. At one time, the people there were called the Japanese of Quebec because they are entrepreneurs who do not wait for government help to create wealth. They are resourceful and independent and like to take calculated risks.
I feel very comfortable voting in favour of the motion before us today because it reflects the position of our government as well. As I was saying earlier, over the last few years, our government has always supported small businesses and small business owners, since we know that they create wealth and drive the economy. A big, intrusive government will not create wealth, as the NDP likes to say during election campaigns and even here in the House, always proposing state involvement in response to a problem in society, either through regulations on individuals or businesses or an increase in their costs. We promote economic freedom and entrepreneurship. That is what creates jobs.
That is the best recipe. If we look at the past, we can see that that is the only recipe that has produced results. Canada came out better than all the G7 countries during the latest global economic crisis, which, I must point out, originated in the United States. Canada did not create this global crisis. It originated in the United States with the subprime mortgage crisis, as members will recall. This snowballed and affected Canada, Europe and many other countries in the world. Canada was the last to enter this economic crisis and the first to emerge. Why? Because we have adopted policies that enable creators of wealth to do what they do best, which is to create wealth.
I can say that the economic indicators are positive today, but they are also uncertain. There is a problem in Europe, with the debt of various European countries that favoured socialist measures, government measures, requiring heavy government spending. In the end, it hurt the creation of wealth in their countries. We see that the global recovery is tentative. We must continue to reduce business taxes, create wealth and ensure that there is greater freedom. When I speak of freedom, I am referring to individual and economic freedom. Politicians do not create jobs. I would like to repeat that because sometimes the people here believe that we create jobs. We depend on entrepreneurs. They pay our salaries and we should remember that. The real creators of wealth are the people who work day and night, who work continually to ensure that their families have the necessary comforts of life. They are big business owners as well as small business owners.
I do not like the fact that my opposition colleagues make a distinction between small and big business. The NDP's economic policy contains contradictions. This afternoon, the NDP is promoting tax cuts for small business, but it is also promoting tax hikes for big business. If the economic logic applies to the creation of wealth by small business, then the same economic logic should apply to big business. There is a blatant contradiction in what the NDP is saying, and I invite my colleagues to examine other countries' economic policies for creating wealth. That is what ensures that countries do better.
With our emergence from the economic crisis and through the efforts of all Canadians, 368,000 jobs were created in 2010. Canada has one of the best results of all the G7 countries. However, we must continue to promote entrepreneurship. For that reason we created and put in place various measures in this budget, including an important measure to balance the budget and thus ensure that Canadians live within their means and that entrepreneurs can continue to create wealth.
But I would like to take a few minutes to explain corporate income tax. I think that many people here probably do not realize that taxing a company means taxing individuals and Canadians. A business is simply a collection of contracts. Businesses enter into contracts with their clients and their managers, as well as employment contracts with their employees, as the NDP members well know, since they like to defend only the one side. Thus, a business is a fiscal invention. It is a cluster of contracts that have been negotiated with employers, clients and investors.
For the business owner, taxes add to the cost of wealth creation. When a small business or large corporation is taxed, that puts an additional burden on the company, and this prevents it from creating wealth and the necessary jobs. What is important to understand is that this burden is always passed on to individuals, because the business, in a capitalist system, must be profitable. Profitability is a good thing, and I am not afraid to say that businesses should make as much profit as they can, because that profit can be reinvested in wage increases for their employees, in equipment to increase productivity and in the creation of new products. Profit is a good thing in a capitalist system, and I do not understand how the people in the NDP can be against the profits made by a small or large business owner.
When a business is taxed, this imposes an additional cost on the business owner and that cost must be passed on to real individuals. Ordinary people are the ones who pay the price. The cost is passed on to consumers, because it increases the retail price of the product, and this becomes a sort of consumption tax. So when a business is taxed, this becomes a consumption tax when the business passes the cost on to the consumer. The business can also pass it on to investors, the owners of the business, and then it becomes a tax on capital, and at the end of the day, it is the business owner, the investor, who pays the tax. The business can also pass it on to the workers, whom the NDP claims to defend. Workers are also taxed when a business is taxed. This cost is passed on to the workers, who then get a lower wage increase and therefore have less wealth.
Depending on the competitive environment the company works in, it will transfer this cost one of those three ways and at the end of the day, Canadians will pay this tax. There is therefore no distinction between corporate tax and individual tax. It is a false distinction. Everyday Canadians are the ones who pay taxes. Corporations do not pay taxes. They transfer them to consumers. We are all consumers. They transfer them to workers. We are all workers. They transfer them to investors. We are all investors through the shares we hold in our pension funds.
We are the ones who always pay taxes. When the NDP wants to increase corporate taxes, it does not tell Canadians it wants to indirectly increase individual taxes. Taxing corporations indirectly taxes individuals, and that is why we have to continue down this path. That is the mandate the Canadian public gave us. We campaigned on cutting corporate taxes from 16.5% to 15%. The NDP argued in favour of increasing corporate taxes to 19%. It argued against the workers it claims to defend, consumers and small business owners.
It is worrisome to see the NDP's economic logic. It worries me to see the opposition MPs have such a biased economic logic and no understanding of basic economics. Everything I was just talking about is taught in first-year university courses. That is what economics is all about.
The economy is individuals. When we seek to control the economy, we seek to control the actions of individuals. That is why our party advocates for personal freedom. We believe that individuals, people, the public, Canadians know better than we do what is good for them. We believe that they should be able to keep their money in their pockets since they are the ones who will create wealth.
Have members ever seen a scandal in a company that creates wealth? Scandals stem from big-spending governments. If we look at the history of Canada, the Liberals bequeathed us a long list of scandals by wanting to regulate everything and spend freely.
I think that we need to have confidence in entrepreneurs. They are the ones who create wealth. That is why I and all of my colleagues feel very comfortable today standing up for entrepreneurs because, when all is said and done, we are standing up for Canadians.
I also said that taxing businesses means taxing individuals, but it also means putting an additional burden on our businesses because entrepreneurs become tax collectors for the government. While they are collecting taxes to jump through all the administrative hoops imposed on them by the bureaucracy, they are not doing what they should be doing, and that is making their dreams come true, creating wealth and working for themselves. By being self-centred and working for themselves, they are working for society because they are creating wealth and hiring individuals. When we tax businesses, we undermine their creative freedom. We restrict their freedom by asking them to be agents of the state.
I would prefer if entrepreneurs could be true entrepreneurs and focus on what they do best—creating wealth for themselves—because, in the end, this also creates wealth for all of society. The western world's economic and political history has shown that more wealth is generated in the countries with the most economic freedom.
I am pleased to see that my speech has struck my opponents in the NDP, but I do not think I am surprising them. If they can at least think about economic theory tonight, then that will be something. I encourage them to read Bastiat or Hayek and learn about this. Hayek received the Nobel Prize in economic sciences, as members are aware. His peers nominated Hayek for this award. I would like my colleagues to read Hayek and to also read our budget.
Our government's budget was written by the best finance minister in the G7. We must remember that because of our and , Canada is the best country in the world. Canada is a great country because it believes in individuals and it has a very good budget. A number of measures in this budget are pro-business, and therefore pro-individual and pro-Canadian.
Mr. Yvon Godin: And pro-worker.
Hon. Maxime Bernier: And pro-worker, as my colleague just mentioned. He is right, and he understands the economic logic that applies: we reduce corporate taxes and employees can receive larger wage increases, since we have taken that burden from the entrepreneur.
I was also talking about red tape. I am pleased to announce to opposition members that we have reduced the red tape that the federal bureaucracy imposes on business owners by 20%. That is a start. We can and must do better, but we have reduced it by 20%. That is why I serve on the Red Tape Reduction Commission with my colleagues. We will continue our hearings across Canada, listening to wealth creators and Canadians, to continue to reduce red tape so that they can focus on what they do best: creating wealth.
I urge my colleagues to have a close look at the report of the Red Tape Reduction Commission in November. They will see that we will have some good ideas. They will be the ideas of Canadians. These should be reflected in upcoming budgets, because we are focused on creating wealth in Canada. We must continue to create wealth.
We have done well on this front and we need to keep on. We will continue to reduce the administrative burden imposed on these entrepreneurs because, as I said earlier, they must continue to create wealth. It is not the government that creates wealth. We leave that up to entrepreneurs, and they know how to do it better than we do.
I have a few minutes left to say that I am both pleased and surprised today. I am pleased to see that the NDP is starting to show some concern for entrepreneurs. It is a good first step, and that is why we will encourage them to keep moving in the same direction. However, I am a bit disappointed that they saw the light after they voted against the budget. Still, I am confident that in 2012, with the next budget, they will stay on this new path and will continue to promote entrepreneurs to ensure the creation of wealth in Canada. They will have an opportunity to redeem themselves. At least it is a good start that gives us a glimmer of hope in terms of understanding the NDP's economic logic.
The Liberals have never understood economic logic, but I can see that my NDP colleagues are on the right track. I invite them to read Hayek and Bastiat. They are interesting books that truly reflect reality. It is encouraging. I am very pleased to be here today and speak because I also come from Beauce, a region known for entrepreneurship. I will tell the people of Beauce that, while taking part in a debate here in the House, I saw a glimmer of hope that Mr. Layton's NDP was beginning to understand entrepreneurs. I will take great pleasure in announcing that to the people of Beauce. But still—
:
Madam Speaker, colleagues will have to clap a little louder because I am far away from the Speaker and she has to be able to hear it. I will be splitting my time today with the member for .
It is with great pleasure today that I rise to speak to this motion presented by the member for , that, in the opinion of the House, the government should recognize the important role Canadian small businesses play in creating employment in their communities by lowering the small business income tax rate in order to encourage job creation.
First, I want to commend the member for his recognition of the important role that the small business community plays in Canada. I started my first small business when I was 19 years old, as a university student. I was in the business of renting compact refrigerators to university students. I made more money in the last year of my undergraduate degree in finance than I did in my first year as a member of Parliament, which shows that, for Canadians, cold beer is more important than good representation.
I come from a multi-generational family of small business people and so I understand the importance of it.
It is really important for this motion to be here because it enables us to talk about the importance of priorities. I think the government has made some decisions that reflect the wrong priorities to create a sustainable economy, an economy where we not only protect and create the jobs of today but, more importantly, we create the jobs of tomorrow.
In terms of the government's set of priorities, last January the government actually increased taxes on small businesses by increasing the EI premiums. At a time when we have unemployment rates in Canada that are stubbornly high, at a time when we have seen hundreds of thousands of full-time jobs lost and replaced by part-time work, at a time, in my part of Nova Scotia where in the counties of Hants County, Kings County and Annapolis County we have lost 11,000 full-time jobs since September 2008, when we have seen the unemployment rate go from 5% to 12%, we need to be focused on the kinds of tax reform measures that can actually create jobs today and create the jobs of tomorrow. I think that is where the government misses it.
The reality is the further corporate tax cut that the government proposed, and has since implemented, will only benefit the top 5% of Canadian companies. It will not benefit small businesses. I know government has done a very effective job of, in some ways, convincing or fooling the small-business community to make it believe it would benefit from this. However, I would remind the House that only 5% of Canadian businesses will actually benefit from further corporate tax cuts.
We in the Liberal Party do not have some ideological aversion to cutting corporate taxes. In fact, when we were in government, we cut corporate taxes, but we did it when we were in surplus, at a time when we had surplus budgets which enabled us to cut corporate taxes and still balance the budgets, invest in health care and education transfers to the provinces, and invest in research, development and technology, and the jobs of tomorrow.
It is important to look at these priorities because today, at a time when we are in deficit, these choices are even more important. It is important also right now because the Conservatives inherited a $13 billion surplus. They spent their way through that surplus and put Canada into deficit even before the economic downturn. They increased spending in their first three budgets by 18%, three times the rate of inflation. Their record of waste and mismanagement includes: increasing government advertising by 300%; increasing ministerial office budgets by 14% last year; we all know of the G20 billion-dollar boondoggle, including the fake lakes and now the RCMP are investigating; and the first act of the government after the election was to expand its cabinet.
Therefore, the Conservatives are not even leading by example. They are not setting an example to Canadians. In fact, they are telling Canadians to tighten their belts and yet they will not control their own spending.
In terms of broader economic policy, we need a credible plan to eliminate the deficit and smart government policies to help create the jobs in the economy of tomorrow. It is important to recognize that while the macro numbers are very good in Canada, if we look at the overall numbers for the Canadian economy alone, they mask some real challenges in many of our regions.
We have what is commonly referred to as the Dutch disease in Canada. The commodity boom that is fueling the growth in many sectors, such as oil, gas, natural resources, minerals, the extractive sectors in Canada, is driving our dollar higher. As that occurs, it is crowding out many manufacturing and value-added jobs.
We are very fortunate to have the natural resource wealth we have in Canada, the mineral and oil and gas wealth, but at the same time we must recognize the increase in commodity prices. I think most people believe that the secular trend for commodities is going to go up over the next 5 or 10 years, and perhaps longer, as the growth for commodities continues to grow, and as India, China and other emerging economies demand those commodities. We must recognize that there is a real impact on other sectors of high commodity prices and the high Canadian dollar as a result of that.
Therefore, we need to have smart tax policy to help create jobs in the small-business sector and in other sectors tomorrow, particularly, the green economy and the areas of research and development and commercialization. In fact, it is time we have meaningful tax reform in Canada. We have not had tax reform in Canada since 1971 with the Carter Commission, which, among other things, eliminated an inheritance tax and brought in a capital gains tax.
Our tax reform should be based on prosperity and evidence, not on politics and ideology. My quarrel with the Conservative government's tax policies is that so often, in fact without exception, its tax policies are based on either politics or ideology. Cutting the GST is an example when it took office. I have no doubt that cutting the GST is popular, but from an economic perspective it was probably the dumbest tax move it could have made in terms of doing nothing for productivity and prosperity.
Conservatives were more interested in buying votes than building productivity or prosperity. They did nothing to create jobs. I acknowledge it was politically popular, but we need to be focused on jobs and opportunity of the future when we are dealing with a high deficit and the need to reform taxes, not just politics and ideology.
It is notable that one of the things we should consider in terms of tax reform is what we do with the capital gains tax. The capital gains tax in Canada locks up capital and forces investors to make decisions based on tax reasons and not on legitimate economic or investment reasoning. The Conservatives promised in their 2006 platform to eliminate the capital gains tax for individuals on the sale of assets when the proceeds are reinvested within six months. The Conservatives have never followed-through on that promise.
However, cutting the capital gains tax or eliminating the capital gains tax would actually unleash a lot of capital, which would enable more money to be reinvested in small business, venture capital, early-stage technology investments, and potentially create a lot of jobs and economic activity. In fact, I would posit one of the smartest tax moves one could make is reforming the capital gains tax to encourage more investment in Canada.
In terms of greening the economy, the eco-energy retrofit tax credit, that the previous Liberal government established, made a lot of sense, encouraging Canadians to renovate and green their homes with that tax credit. The Conservatives eliminated that tax credit and then brought it back on the eve of an election, but only for one year.
To explain how these kinds of tax tinkerings can affect real jobs, I will refer to a company in my riding. Sustainable Housing, which had grown to about 50 employees under the previous government's tax credit that enabled the company to make long-term plans, hire people, have 50 people conduct energy audits, help people renovate their homes and help them design new energy systems, whether it is geothermal or new heat pumps or new hyper-efficient furnaces or solar panels or insulation or new windows or doors. They were helping people assess or audit their homes to determine what to do to cut their energy consumption. The company had about 50 employees. When the Conservatives got rid of that program, it went down to about 20 employees.
Now that the Conservatives have promised to bring back the program for one year, those companies are not quite sure what to do because companies cannot make long-term investment decisions based on one-year election promises. I would urge the Conservatives to think about that and to consider extending those kinds of programs for a longer period of time.
The benefits of tax measures that help homeowners and companies as well to become more eco-efficient and energy efficient would last long into the future. The reality is that if there had been more of a focus within the stimulus packages on measures that would help companies and families invest in energy efficiency, those benefits would last decades longer--
:
Madam Speaker, I am pleased to join the debate on the motion put forward by the member for .
Small businesses are the bedrock of the Canadian economy. The people who lead them and work in them are the lifeblood of Canadian society. That is why the Liberal Party has traditionally supported any efforts to help small businesses grow stronger.
One part of that mix is lower taxes. Lowering the burden for small business should always be a goal whenever it is affordable. It was under the Liberal government of Paul Martin, when the government was running record surpluses, that the government passed some of the biggest corporate and personal tax reductions in Canadian history. The Liberals believe in keeping taxes as low as is practical while providing high-quality public services and ensuring the sustainability of our society.
Before I give further thoughts on this particular motion, I want to highlight what small business means to Canada.
There are over one million small businesses in Canada. As defined by Industry Canada, those are businesses having fewer than 100 employees. In fact, 98% of all businesses are small businesses and they employ nearly half of the people in the country's private sector. Canada is a trading nation and 87% of our exporters are small businesses responsible for $84 billion in exports.
Small business is a hugely important source of employment. Many women who wish to have the flexibility to parent and work at the same time choose entrepreneurship to support that objective. In fact, 46% of small businesses have some degree of female ownership.
Small business is a major creator of wealth and a source of employment for new Canadians. It offers new arrivals to the country an avenue to contribute to the growth of their community and the well-being of their own families.
The driver of our economy is small business. Over a 10 year period, nearly 80% of our net job growth came from small business, with large firms shrinking the net number of jobs over that period. That is one of the reasons these tax cuts to large corporations are so egregious. Those funds are being directed at the very organizations that are net job losers at the expense of providing tax cuts to small companies that are the job creators.
Small businesses are flexible and nimble and they can recover more quickly from a difficult period, like the recession that we have just experienced. They hold on to their employees longer and they pick them up more quickly afterward. They can innovate more easily and, when given the right support, they can grow by leaps and bounds.
There are a number of things that small businesses need, not just a lower tax rate. They also need a government that makes it easier for them to do business, one that invests in research and development and makes it easier for innovative firms to commercialize their products. The Conservative government has fallen flat in all of these areas.
The government fell flat when it comes to taxes, something it really likes to thump their chests about, but it turns out that it really did not help small business at all.
One of the first things the Conservative government did when it came into office was to raise personal income taxes. Given that many small businesses are run either as sole proprietorships or partnerships where business income is taxed at the personal rate, the government actually raised taxes on small business owners.
Although much has been made of the corporate tax cuts included in the previous and current budget, these cuts only help the largest and most profitable corporations. As I said, these are the ones that are seeing net job losses.
The government has chosen big business over small business during a time of record deficits and when it was already slashing programs and eliminating thousands of public service jobs from people who spend money in the small business sector.
On the issue of affordability, the government thinks that money grows on trees, not produced by hard-working Canadians and small businesses. A government can only deliver low taxes if it spends wisely. Unfortunately, the Conservative government has proven to do just the opposite.
The Auditor General and now the RCMP have called into question $50 million in misappropriated border infrastructure funds that the member for used in his own riding.
We have seen a government pleading with the public service to find efficiencies, while simultaneously increasing spending of ministers and perks in their own ministerial offices and increasing government advertising by 215%.
All told, government spending rose by 40% during the 's first four years. These decisions have meant that small businesses are left without real support and taxes have been kept high.
An area where the government could have helped small business was by supporting research and development, but it cut research budgets for the granting councils. The National Research Council, which supports small business in its R and D efforts through the industrial research assistance program, is being cut a huge 20%. Therefore, where is the vision? Where is the plan that fosters equal opportunity and prosperity for all Canadians? Where is the vision for green technology, innovation, sustainability leadership and the green jobs on which we know the future will be built.
The Conservative government appears to be only governing for the short term and is ignoring the kinds of strategies and investment in innovation that are needed for Canadians to maintain their standard of living.
I do not want to ignore the NDP record with regard to business, because that also has been a reason that there has been lack of support for small business. The government fails to understand the needs of modern business. I am sure the NDP and my hon. colleague from have the best of intentions in bringing this motion forward, but they represent a party that is fundamentally anti-business.
It is important for members of the House to understand that the NDP has, at its core and is guided by, an ethos that stands opposed to the very nature of the marketplace. I will read from the NDP constitutional preamble, the very principles the party maintained at its recent convention. It states, “the production of goods and services shall be directed to meeting the social and individual needs of people within a sustainable environment and economy”. That is good as far as it goes. It continues on to say, “and not to the making of a profit”.
I wonder if members of the NDP can explain how small businesses can contribute to job creation and economic growth if it believes that profit is a dirty word. Without profit, businesses cannot reinvest and grow, cannot hire new employees, cannot innovate and cannot contribute to the development of sustainable technology and business practices. They simply would not exist. To deny that the basic necessity of a business, which is to earn money and profits, is revealing a fundamental lack of understanding of business.
I hope my colleague from will not complain when I quote him when he said, “The NDP doesn't know a stock from a sock”.
While I served as environment minister in British Columbia, I co-founded a company that incorporated sustainable principles into our business model, focusing on reforestation and ecological renewal. However, we could not have done so, we could not have grown and expanded this company without capital and that capital was the reinvestment of profit.
Thinking that profit is a bad thing discredits the New Democrats among small business owners and proves them not capable of providing the type of leadership that the small business community so desperately needs.
The Liberal Party supports efforts to lower the tax burden on small businesses, but such efforts must be part of a larger strategy that validates the importance of small business and their profitability and that supports research, provides tools and mechanisms for companies to grow their operations and focuses on key factors, not a scattershot approach.
The Conservative government's record on small business is abysmal and, unfortunately, the NDP does not think small business should be allowed to make a profit. The one option is too hot and one is too cold. It is clear why small business needs a Liberal option that is just right for the people who are at the heart of small business and a long-term vision for their success.
:
Madam Speaker, I would like to take this opportunity to congratulate you on your appointment. I would also like to inform you that I will share my time with the hon. member for .
I would like to thank all of my constituents in Marc-Aurèle-Fortin for giving me the privilege and honour of representing them here in the House. I would also like to thank all those who helped me throughout the election campaign: my many friends and particularly my family, including my sister Marianne and my niece Stéphanie.
I rise today in support of this resolution in favour of small businesses. I support it because, historically, the CCF and the NDP have always been in favour of small business. We must remember that, historically, the founding members of the CCF were farmers, people who ran their small agricultural businesses, people who worked in transport, in construction, who had small businesses. These people got together in 1933 for their first big battle: creating the Canadian Wheat Board. They succeeded in 1935. Throughout the economic recession, they understood that uniting their small businesses could help create large Canadian institutions. These small businesses continued to prosper and now, these same small businesses create the majority of jobs. They also represent 30% of our exports.
Small businesses in Canada are firmly committed to innovation. Quite often, these small businesses are the creation of young university grads who, upon getting their university degree, set up small laboratories, innovative companies. They create companies that they hope will become successful. They hope that they will grow and will create jobs.
Clearly, we must support small businesses. That is why the NDP resolutely decided to show its complete trust in them, as demonstrated in our platform. The NDP would like the government to give a $4,500 tax credit for each job created. A $4,500 tax credit could be a lifeline for a small business. Not only would this allow it to create jobs, but it could even help the company survive. Indeed, we must not kid ourselves; the first few months for any SME can be excruciating and difficult. However, SMEs create jobs. They create real wealth, not speculation. That is not something that can disappear in just a few days, at the speed of an email. That is what happened in the U.S., a country that is big on deregulation, big on perfect and free enterprise, a country that systematically favours large institutions. At this time, the U.S. government has had to go heavily into debt in order to save institutions that may not have deserved to be saved. A $4,500 tax credit for each job created in an SME could go a long way.
We will also support scientific research and experimental development. The government had the opportunity to increase funding for small businesses. It did not do so. Yet we all know that innovation in biotechnology, electronics and all the areas that represent Canada's economic future takes research and development funding. The government missed a good opportunity to support this segment of the economy.
They are also lowering taxes. At present, small businesses are taxed at 11%. That rate could have been lowered to 9%. Lowering taxes in a sector that creates jobs is important.
We have to support job creation and lower taxes for industries that agree to create jobs. Unfortunately, after 12 years of programs from Paul Martin and the current finance minister, we have not seen the major beneficiaries of the tax cuts pass on the slightest benefit to the Canadian public by creating massive numbers of jobs. Twelve years is a relatively long time over which to evaluate a program. This program of systematic corporate tax cuts has clearly not worked, while, despite all the challenges they face, small businesses are creating jobs.
We also generally see in SMEs all the problems that come from the absence of a pension plan. They are too small to qualify for the major private pension plans. The NDP is in favour of revitalizing the Canada pension plan by increasing the pension benefit from 25% to 50% in order to guarantee Canadian workers 50% of their salary as a pension regardless of where they work.
The Canada pension plan was tailor-made for SME employees who do not have access to major pension plans. The NDP has continued working for small business. We believe that SMEs are the future. Entrepreneurs are focusing more and more on the social economy, the environmental economy, the knowledge economy, and they are increasingly running their businesses as co-operatives. They are following in the footsteps of those who created the CCF and the NDP.
This motion simply acknowledges the fact that Canada's economy and job creation are actively supported by SMEs. Without this economic activity, the recession would have hit much harder. We would have suffered a much higher unemployment rate. As in the United States, we would have suffered from the social exclusion of the poorest people. SMEs, firmly focused on the social economy, work to care for and support the poorest in our country who have reached an age where they need active support to stay in their homes. Yes, this social economy will continue to grow. It would be nice to see the government actively supporting it.
The knowledge economy will continue to grow at the speed with which students graduate from university, trained and ready to apply their knowledge to wealth creation and not speculation. This SME economy is firmly focused on job co-operatives, social housing co-operatives, and fishery development co-operatives. Co-operatives can be created in any sector. This economy is based on the idea that wealth creation should belong to those who create wealth, not those who invent it through speculation.
We are strongly opposed to all of the economic activities proposed by the Government of Canada, which aim only to support big businesses and which do nothing for Canada.
:
Madam Speaker, I would like to begin by thanking my colleague from for crafting this opposition day motion, as well as for his excellent work in supporting small business. This motion is very important and indicative of long-standing NDP policy in the area of support for small business.
I want to reiterate the motion, which states:
That, in the opinion of the House, the government should recognize the important role Canadian small businesses play in creating employment in their communities by lowering the small business income tax rate in order to encourage job creation.
Small business plays a huge and vital role in our communities. Small- and medium-size businesses employ about 56% of all Canadian working people. That is a huge number. About eight million Canadians work for small- and medium-size businesses and small business makes up almost 98% of all Canadian enterprises. It is a huge segment of our economy.
There are 2.3 million small businesses in Canada and about half of Canadian GDP is generated by small and medium business. We are talking about a huge and important sector of our economy.
I would also point out that about one-third of all self-employed persons in Canada are women and they have ownership stakes in about 45% of small and medium business. This number is growing.
I would like to talk for a minute about the small businesses in my riding of Parkdale—High Park. It is a fairly well established, older community in the west end of Toronto and is one of the most desirable communities in the city because of the presence of small businesses. It is a community with older, tree-lined streets where people do not have drive to big box stores but can walk to their neighbourhood grocers, the Home Hardware store on Roncesvalles, clothing stores, shoe shops, restaurants and all of the services that are provided by small businesses in the community. I believe that the quality of life is increased immeasurably in my community because of small businesses.
The people who own these businesses work incredibly hard. Many of them live in the neighbourhood. Some of them live above their stores, others live in the neighbourhood and they have a stake in the community. Yes, their business is there, but, as I say, many of them live there and their kids go to the school.
They are tremendously engaged in the community and they express that engagement not only by the services and goods they provide through their businesses but by sponsoring sports teams, raising funds for community initiatives like creating the Wabash Community Recreation Centre or the Parkdale Activity Recreation Centre.
They are very active in neighbourhood business improvement associations. These associations were actually pioneered in Bloor West Village thanks to Alex Ling, who was a visionary in this area. The BIAs have championed the beautification of the business areas and neighbourhoods but also how to attract investment in the community, how to draw people into the neighbourhood.
Therefore, small businesses do not just serve the people who live in the neighbourhood, but attract people from all over the community. They are huge sponsors of festivals, such as the Ukrainian and Polish festivals. They are incredibly important to the lifeblood of the community.
We have moved this motion because, unfortunately, both the Conservative government and the Liberals have been supporting tax cuts across the board without any job creation measures attached. The current tax cut that is going forward, which both the Conservatives and the Liberals voted for, has no job creation measure attached to it, whereas this motion speaks to cutting small business taxes.
We know that small businesses are not going to ship jobs out of the country, but that they employ people in our neighbourhoods. In fact, they provide good jobs, they train people, they innovate and they are creative businesses in our communities. Whether in boom periods or recessions, they try as much as possible to maintain the stability of their employment in their businesses. They will do their darndest not to lay people off, even when they are really struggling as businesses. We have certainly seen many small businesses struggling in our cities and neighbourhoods.
Reducing small business taxes from 11% to 9% is a way of providing an incentive for small businesses to take on more staff to grow their businesses. We also propose a tax credit to offset some of the costs of hiring new people, a credit of up to $4,500, including a job retention measure.
These tax cuts are concrete measures tied to job creation. We believe they would create over 200,000 new jobs. That is why we believe this proposal is so important and significant.
We are talking about sustainable job creation because we know that when small businesses expand and take on staff, they tend to retain their staff. We have seen the good quality jobs they create right in our own neighbourhoods. We have seen their resiliency in good times and bad, and we seen the community investment these small businesses provide right in our own communities, because they roll their money right back into the community. They expand their business locally and create jobs locally. The people they employ, for the most part, live right in our neighbourhood. When they get employed, they spend their money in the neighbourhood and pay taxes. This is good for everyone.
In summary, our motion speaks to the important role in the Canadian economy played by small businesses. We want to help small businesses play that important role. We want to see them grow and thrive, create jobs and invest in our communities. We believe a tax cut for small business would encourage them to hire more staff. Our tax credit would, in fact, tie strings to the hiring. That makes much more sense.
Unfortunately, the party opposite has tied a very short-term credit to EI increases, which are completely unnecessary. We are going to have a $17 billion EI surplus over the next five years, on top of the $57 billion that has already been rolled into paying down the deficit. I would like to discount that approach and say how strongly I support this motion, because it is the right measure for small business in Canada.
:
Mr. Speaker, I would like to inform you that I will be sharing my time with the member for , the great parliamentary secretary who works with us.
It is with great pleasure that I rise to support a call for tax cuts from the socialist NDP, as unbelievable as that may be. Unlike the tax-and-spend NDP opposition, we truly believe Canadian families and businesses should not pay higher taxes.
Our Conservative government has been a strong supporter of lower taxes and has clearly demonstrated this since taking office in 2006.
We understand that lower taxes make our economy stronger and create good, long-term jobs for today and tomorrow. That is why we are delivering historic tax relief and cutting taxes in every way that government collects them, from personal taxes to consumption taxes, to business and excise taxes, and others.
Since 2006, in fact, we have had an outstanding record of cutting over 120 taxes. We reduced the GST. We increased the amount Canadians earn tax free. We introduced pension income splitting. We introduced important tax credits like the Canada employment credit, the working income tax benefit, the child tax credit and much more. We have reduced the overall tax burden to its lowest level in more than 50 years, including by removing over one million low-income Canadians from the tax roll. We have built on our legacy of tax relief by reducing taxes on savings via our the landmark tax-free savings account, the most important personal savings vehicle since the RRSP.
Overall, the total savings for a typical family are over $3,000, leaving more money in Canadian families' pockets, where it is most needed and where it belongs.
Tax freedom day, the day Canadians start working for themselves after paying off all their taxes to all levels of government, has come earlier and earlier under this government. In 2005, under the tax-and-spend Liberals, tax freedom day was on June 26. However, after more than 120 tax reductions by our government, including the reduction in the GST from 7% to 5% and the introduction of the tax-free savings account and pension income splitting, the savings for a typical family are over $3,000 a year. As a result, tax freedom day now comes on June 6 this year, more than two weeks or some 20 days earlier.
Our Conservative government's clear and positive record of allowing Canadians to keep much more of their own hard-earned money is great news and one of our proudest achievements.
Our record also includes giving Canadian job-creating businesses more freedom to create jobs and make further investments by improving their tax competitiveness. That includes by reducing business taxes, eliminating the federal capital tax, providing tax relief to our manufacturing sectors, and more and more and more.
We also recognize the vital role that small business plays in the economy and job creation. That is why, since 2006, we have also lowered their tax bill to help them succeed, such as by reducing the small business tax rate from 12% to 11%, increasing the amount of income eligible for the lower small business tax rate from $300,000 to $500,000, and increasing the lifetime capital gains exemption for small businesses from $500,000 to $750,000.
Building on our record, we are doing more to help small businesses. For instance, in the next phase of Canada's economic action plan, a plan that every person in this Parliament should support, we announced the new hiring credit that will encourage some 525,000 small Canadian businesses to hire new employees with a one-year EI break.
The Canadian Federation of Independent Business has welcomed it:
CFIB is extremely pleased to see its top budget priority--an EI Hiring Credit for Small Business--announced in the 2011 budget....this credit will be a major help to small firms in growing their workforce.
While our Conservative government has a strong and proven record of lowering taxes for Canadian families, seniors and businesses, especially small businesses, the NDP's record is dramatically different.
The socialist NDP and the NDP members of Parliament have a proven record of pushing a high-tax agenda by voting no again and again in the House of Commons to our Conservative government's initiatives to lower the tax burden. The NDP voted against reducing the GST. The NDP voted against pension income splitting. The NDP voted against reducing the small business tax rate. The NDP voted against the small business hiring credit. The NDP voted against our tax relief for families and businesses each and every time.
Even more troubling, the socialist NDP has repeatedly protested and mocked our efforts to leave more money with everyday Canadian families and businesses.
What is more, public statements by the socialist NDP leader and members of Parliament clearly underline their fundamental belief that Canadian families and businesses should be forced to send more of their hard-earned money to government.
Here are just a few examples:
The NDP leader has declared, “Tax cuts that have no basis in terms of moving the economy forward, such as the GST proposal...are not the wise choice now”.
The NDP member for bemoaned, “The Prime Minister is picking up the [tax fighter] mantle...The Conservatives are intent on taking us in the wrong direction”. Imagine, tax cuts in the wrong direction. Who would figure?
The NDP MP for complained, “The Conservatives have a single-minded obsession with tax cuts that is not shared by the majority of Canadians...all they’ve delivered are tax cuts”.
The election on May 2 actually proved something totally different from that thought. It makes one wonder.
Even worse, while our government is promoting positive economic policies that would give businesses more freedom to grow and create even more Canadian jobs, the NDP has been promoting negative job-killing economic policies.
In a telling moment, even the NDP member for , the sponsor of today's motion, sheepishly and stunningly admitted publicly, “There are elements in our party that have not been adequately concerned about the health and growth of businesses”.
Specifically, they are targeting job-creating businesses with massive business tax hikes along with massive EI and CPP premium increases.
First, as businesses try to rebuild and recover from the recession, the NDP wants to slap a huge $10 billion a year tax hike on them, something that would hit small businesses very hard. A $10 billion a year NDP tax hike would mean losing good Canadian jobs and jeopardizing the financial security of hard-working Canadians.
Small businesses know that Canadians cannot afford that. They know they cannot afford higher taxes and cannot afford the job-killing policies of the NDP.
Despite what the NDP says, small businesses strongly stated their objections with the NDP's tax hike plan during the recent election campaign. Here is what Catherine Swift of the Canadian Federation of Independent Business said, “--an awful lot of medium-sized companies that will also be affected by the tax hike”. She added that cutting corporate tax rates will help small-business, small firms and that they are very supportive of continuing the reduction in corporate income tax.
Second, small businesses are extremely concerned with the NDP plan to hike EI and CPP premiums. As we all know, the NDP is a strong supporter of a 45-day work year, something that would drastically increase EI premiums by a whopping 35%, and other legislation to dramatically expand EI as demonstrated last fall.
Here is what the CFIB said at the time:
To have Liberal, NDP and Bloc MPs all support a private members' bill to dramatically increase the generosity of EI benefits is troubling to say the least. This bill would drastically increase EI rates as people would qualify for incredibly generous benefits after only nine weeks of full-time work. [This would] make it harder for businesses to hire skilled workers...It's totally irresponsible--
Even worse, the NDP wants to dramatically increase CPP premiums by doubling them. Again listen to what the CFIB had to say about that, “NDP talk of doubling CPP benefits would mean increased premiums and a heavy hit on small business payroll costs”.
While our Conservative government is focused on keeping taxes low and helping create jobs, the socialist NDP wants to raise taxes and kill jobs despite today's platitudes.
People in my constituency have seen NDP policies at work. We have seen our kids move away. We have seen jobs go to Alberta. It is amazing that after four years the province of Saskatchewan, with a population of one million people, all of a sudden announced today that the population is at 1,054,000 just because the proper polices were in place for taxation, just for allowing businesses to grow, just for allowing businesses to expand, and just by saying it is open for business. Saskatchewan has seen what the NDP can do. It has also seen what can happen when proper polices are put in place, and the population growth has definitely proven that.
:
Mr. Speaker, I am certainly glad to have the opportunity to stand here today and speak to the motion regarding small business taxation and our Conservative government's strong economic record, especially in this area.
Since forming government in 2006, we have focused on lowering taxes for families; seniors; businesses, especially small businesses; and everyday Canadians. However, before I continue, let me be clear. Our record of aggressive tax relief for Canadians did not come easily.
As we all know, we had a minority government. We had to fight the socialist NDP every step of the way. The NDP has opposed and voted against every one of our budgets from 2006 to 2011. It has proudly voted against all 120 of our tax cuts and it has repeatedly criticized our tax cutting measures.
My colleagues quoted this earlier, but I think it does bear repeating because it was very important and it speaks to the perspective, when the NDP MP for said:
--it is important for us to look at the policies the government has implemented since it has been in power, and in particular the Conservatives' absolute obsession with their ideology around the importance of tax cuts to move economic development forward in this country.
Our record speaks for itself as the best recovery from the global economic recession. We are standing in a great position. We have 560,000 new jobs created in this country. It is a fantastic record showing that our tax cuts and our economic action plan are working.
When it comes to taxes, the NDP record is clear. It will vote for high taxes time and again. From voting against cuts to the GST, not once but twice, to voting against tax cuts for small businesses, the NDP high tax agenda is in sharp contrast to our Conservative government's record, a record that I would like to share with the House, especially for the new members who may be unaware of some of the really important measures and again some of the measures that their party actually voted against.
However, before I highlight the examples of our strong action to lower taxes since 2006, I would like to inform the House that we are supporting the motion for one simple reason: we do support lower taxes for Canadians.
In terms of our record, we have shown a great tax track record. We have cut taxes in every way government collects them: personal, consumption, business, excise, and more. We have cut over 120 taxes since 2006 all total, leaving $3,000 more in the pockets of families where it belongs. We have removed one million low-income Canadians completely from the tax rolls. We have lowered the GST not once, but twice, 7% to 6% to 5%. We have introduced tax credits like the child's art tax credit, the children's fitness tax credit, family caregiver tax credit, volunteer firefighter tax credit, Canada employment tax credit, the working income tax benefit, and the child tax credit and many more.
We have not only lowered taxes in every way the government collects them, we have also introduced the tax free savings account to encourage Canadians to save more. Overall, we have reduced the tax burden on Canadians to the lowest level in nearly 50 years.
While we have been leaving more of Canadians' hard-earned money in their pockets, we have also given business more freedom to grow, especially small business. As we all know, small business is the backbone of our economy. Their entrepreneurialism fosters the growth in jobs that so many Canadians depend on for their livelihood. We all recognize the commitment, dedication, and sacrifice that each small business owner has made each and every single day. That is why our government declared 2011 the year of the entrepreneur.
The Conservative government's commitment and dedication to small businesses is demonstrated through the tax relief we have provided them since 2006 to encourage their growth, success and prosperity. The record is as impressive as it is long.
Among the highlights, we have reduced the small business tax rate from 12% to 11%. We have also increased the amount of income eligible for the lower small business tax rate, from $300,000 to $400,000 to $500,000. That has been a hugely important measure for those small businesses who would have jumped into that 16%, 17%, 18% bracket. They can use it to grow their businesses even better. We have increased the lifetime capital gains for small businesses from $500,000 to $750,000, the first increase since 1988.
However, our Conservative government recognizes there is always more to do to assist small businesses and encourage growth. That is why in the next phase of Canada's economic action plan we announced a number of new measures that support small business, such as the temporary hiring credit for small business to encourage more growth in the sector. This will encourage some 525,000 Canadian small businesses to hire new employees with a one-year EI break and one that has been welcomed by small business and others in Canada.
In the words of the Toronto Board of Trade:
SMEs are the engines of job growth...Spurring productivity and employment growth among SMEs, as this Budget does, should help Canada’s economic recovery.
We are also making it easier for small business to work with the tax system which can be overwhelming and extremely frustrating.
Specifically, the next phase of Canada's economic action plan includes important steps to improve the provision of information, enhance service, reduce administrative burden and increase taxpayer fairness for businesses dealing with the Canada Revenue Agency. One example, and I am really pleased as the parliamentary secretary for national revenue, is we have now ensured that businesses get written electronic answers to their written queries. This was warmly welcomed by small business in Canada.
In the words of Catherine Swift of Canada Federation of Independent Business:
Requiring CRA to provide written interpretation on tax inquiries when requested through CRA's online window will bring a significant improvement in transparency and accountability....In this Year of the Entrepreneur, the government took several important steps to help small businesses spend less time focusing on red tape and spend more time creating jobs and growing their firms.
As a member of the red tape commission, I have seen many positive steps there.
We have announced $3 million in annual ongoing support to make BizPaL permanent.
Just yesterday we voted on Bill in which we committed $20 million to support the Canadian Youth Business Foundation's activities to ensure that young entrepreneurs had the support and resources to make their dreams of becoming a business owner possible through mentorship, learning resources and start-up financing. Again, I want to point out that this important measure was actually voted against by the opposition.
There is really so much to say in terms of the many things that we have done to support small business. I will leave it here and look forward to some questions.
:
Mr. Speaker, first, I would like to thank the people of Chicoutimi—Le Fjord for choosing me as their federal member of Parliament on May 2. It is a great honour. Since my constituents want change, both in the riding and in Ottawa, they will not regret voting for the NDP, the party of workers and families.
The motion we are proposing today is more than necessary. Not only are small businesses key to the Canadian economy, they are also a pillar of the local and regional economy; more specifically, they are the future of Saguenay—Lac-Saint-Jean's economy. Year after year, we have been losing more and more people from my region, particularly young people who leave the Saguenay—Lac-Saint-Jean region to go and make a life elsewhere, in large centres like Quebec City and Montreal. For example, our last regional migration report indicated that 396 people had left the area. All these people decided to move because they were unable to find work in their field in the region or because wages are higher in big cities.
I cannot blame them for wanting to improve their living conditions and earn more money. However, it is unacceptable that, in 2011, young people cannot establish a career in the Saguenay—Lac-Saint-Jean region, have a family and live there happily until they retire. That is why, from the first day of my election campaign, I chose the economic diversification of the region as one of my top three priorities. This is achieved through the creation and expansion of small and medium-sized businesses.
In my riding of Chicoutimi—Le Fjord, many SMEs are locally based and contribute to the economic development of the region. Take, for example, Cycles Devinci, a company that manufactures high-end bicycles using various aluminum products. Among other things, this company manufactures the famous BIXI bikes that allow city dwellers all over the world to benefit from an excellent self-service bicycle rental system.
There is also Coderr-02, a social economy enterprise in Alma that works in various sectors: waste material management, development and, soon, tourism. They also offer placements for people not participating in the workforce. There is also the Fromagerie Boivin, a family-run business in La Baie, which has been making Canadian cheddar since 1939 and recently won a contract with Kraft to produce Amooza cheese. According to Fromagerie Boivin, this new partnership will create 25 to 30 new jobs in the area. That is something to be proud of as a regional SME.
All of these businesses are invaluable and the government should provide them with the means to ensure their growth. Businesses must be created, and this is important because they not only create jobs but they also renew the national and regional industrial structure. Entrepreneurship also curbs poverty and provides social opportunities. According to the Quebec entrepreneurship strategy, funding is often a deciding factor when it comes to starting up and developing a new business. Without these resources, SMEs such as Trimoz, a business in Alma that is implementing a recruitment concept that is unique to Canada; Eckinox Média, which specializes in graphics and media solutions; and Coopérative de solidarité V.E.R.T.E., a new SME in Saguenay that runs two inns, and offers outdoor adventure packages and adventure tourism in Saguenay—Lac-Saint-Jean, would not be able to develop and become competitive.
There must be tax cuts for small businesses to encourage the creation of long-term jobs. To have strong SMEs creating wealth and jobs in our regions, it is of the utmost importance to support SMEs in the start-up and development phases. The first five years are the toughest for these small businesses and entrepreneurs who have the courage to start a business in order to improve the economic prosperity of their communities.
If the government is serious about wanting to encourage entrepreneurs to create wealth and jobs, it has to fully support the assistance measures offered to new businesses. That includes technical assistance, venture capital, micro-credit, etc. It is imperative to offer fertile ground, here, in the regions, to allow our SMEs to be born, to grow and to prosper. This implies collective sharing of the risk involved in innovation. We all know the expression “nothing ventured, nothing gained”. Let us not forget that, in a context of market globalization, Canadian small businesses are facing major challenges. They have to remain competitive in a market where they frequently have to compete with much larger players throughout the world.
Although small businesses are the biggest job creators in the Canadian market—we cannot say that enough—they are the victims of fiscal injustice and unfair competition. Small and medium sized enterprises support the so-called mass market. That is why we must support them in order to ensure stability within the Canadian economy.
Given that 72% of the exporting businesses in Canada have less than 50 employees and produce a third of all exports, it is more than necessary to take immediate action to support these businesses. For once, could we simply give them resources without trying to take them back with the other hand?
The Conservatives are prepared to cut corporate taxes yet again. The Conservatives feel sorry for the major oil companies and think they deserve to be subsidized to the tune of $2 billion a year. But when the NDP calls on the government to give small and medium-sized businesses room to manoeuvre by cutting their taxes by a measly 2%, the government says no. Again, SMEs create half the new jobs in Canada.
This same government that claims to want to stimulate economic growth and job creation is suddenly no longer able to provide tax support to these companies that could hire a new employee at the end of the year because of their lower tax rate.
Why is the government abandoning the SMEs that are fighting to save every dollar to make small businesses profitable, increase their sales and hire more people from their community?
SMEs in Saguenay—Lac-Saint-Jean need help. We know that, unlike large corporations, small businesses reinvest their profits in the local economy. Does the Conservative government not agree that this reinvestment in the local economy is what will enable us to strengthen Canada's fragile economic recovery?
Small- and medium-sized businesses are also known for creating lasting jobs because, during an economic slowdown, they are more likely to hold onto their employees. SME owners have humane values and principles. They are not obsessed by profit at any cost. They know that if they fire an employee, that family will go without an income and its financial situation will worsen. That family might even live in their neighbourhood. These entrepreneurs make sacrifices for the well-being of their community, and the least the government could do is support them.
When I look at the economic measures in the Conservative budget, I am disappointed. As a citizen, I am disappointed that the government does not have its priorities straight. I am disappointed because I can picture myself as a business owner who must be wondering why his own government refuses to give him the help he needs to support his business. As a parliamentarian, I am disappointed that the Conservative budget left out an excellent proposal put forth by the NDP to reduce taxes for SMEs by 2%.
From an environmental standpoint, the Conservatives are widely considered a complete disappointment, but never would I have expected them to be so out of touch with reality when it comes to economic diversification and support for SMEs. When is this government going to support small businesses? When will it really support the businesses that create jobs?
The problem we have now is with the redistribution of tax revenues. All too often, they are lining the pockets of the largest corporations, which, we can all agree, do not need them as much in order to prosper. That is why it is so crucial to lower taxes for small businesses in order to spur growth and job creation in the business sector. The government absolutely must recognize the role of small businesses in the Canadian economy, and it needs to act now.