The House resumed consideration of the motion.
Mr. Speaker, the motion we are debating here today is very important.
The NDP plans to lower the small business tax rate from 11% to 9% in order to better support this sector of our economy, which is responsible for creating nearly half of all new jobs in Canada. We will begin with an immediate decrease from 11% to 10%, which will inject nearly $600 million into Canada's small businesses. We will then further lower the tax rate to 9%, as we indicated during our last campaign, as soon as the financial situation allows. Once that measure is fully implemented, taxes for small businesses will be reduced by nearly 20%. That is significant.
I would like to quote Martine Hébert, senior vice-president of the Canadian Federation of Independent Business:
Cutting the small business tax rate by nearly 20% will provide a big boot to business owners across the country and will help them create jobs.
Small businesses account for nearly 40% of Canada’s GDP and employ more than 7.7 million Canadians. They account for 78% of the new private sector jobs created over the last decade. Although small businesses are the engine of job creation in this country, rather than help them, the Conservative government has chosen to offer tens of billions of dollars to the most profitable corporations. Since 2006, the Conservatives have lowered the tax rate on big corporations from 22% to 15%, but they have reduced the tax rate on small businesses by only 1%, when they are the real job creators.
I have met with many business owners in my Quebec City constituency. I am also a member of three chambers of commerce. These business owners are unanimous: reducing taxes on small businesses will give them the leeway they need to hire and expand their business. A survey I did of companies in Quebec City revealed that our plan to reinvest nearly $1.2 billion in small businesses was the right one to help the business owners in my region. That is why we are calling on the House to give our motion firm support and immediately take measures to stimulate job creation and economic growth. The NDP has a plan and New Democrats are moving forward with concrete measures.
We want to reduce the small business tax rate from 11% to 9%, extend the accelerated capital cost allowance and introduce an innovation tax credit to support the manufacturing sector, which is an important sector for Quebec and Ontario. These measures can be introduced immediately. They will support the economic core of my region and show investors that a New Democratic government will usher in a new era of stability for small businesses.
It is important to take the pulse of small businesses right now as an indicator of the country's economic situation. This is from an article I was reading about all of the austerity measures that have been implemented:
Business and consumer confidence is probably the best indicator of how they perceive their economic and political context, and government decisions are part of that context.
Nobody needs a Ph.D. in economics to see that, when families are worried about the future, as they are now, when they buy less, and when companies do not make plans to invest or hire people, the economic outlook for the short and medium terms is anything but encouraging.
When I see this Conservative government investing absolutely everything in oil, it is a problem. We can see that. They are not coming up with a budget. Here we are in February, with March approaching, and they will evidently not have a budget before April. They are incapable of saying whether the deficit will drop to zero and they do not know how they are going to plan things.
Why? It is because they put all their eggs in one basket. That is beyond me, because we all have a mother who told us not to put all our eggs in one basket. However, that is exactly what is happening right now. They forgot to diversify our economy. Now that they are stuck, they can get out by investing in small and medium-sized businesses and in diversity.
In Quebec City, investing in our small businesses and diversifying our economy is precisely what we did when the cold wind hit during the recession of 2008-09. That is how we created a situation where everybody won.
Mr. Speaker, I will be sharing my time with the .
It gives me great pleasure to rise to speak on behalf of the people of Renfrew—Nipissing—Pembroke. The people in my riding of eastern Ontario, like all Canadians, have benefited from the careful, balanced approach our national Conservative government has taken when it comes to running an economy in a modern first-world nation.
Canada is recognized as a world leader in the way we prudently manage our economy for the benefit of all our citizens. There is no on-the-job training for such an important task as managing a G7 economy. Now is not the time to be experimenting with extremist policies derived from some discredited ideology that has proven to be a failure.
There is some question who will end up being the official opposition after the next election, the Socialist International or the socialist light, which sits as the third party in this place. For the benefit of Canadians following this debate, the terms are interchangeable, as are their policies.
Bob Rae was as comfortable piling on the debt in Ontario as NDP premier as he was as the leader of today's third party in this place. Today's supply day motion, as put forth by the opposition, uses a number of terms and phrases that in the mind of a socialist means something very different from what the average middle-income Canadian family understands these terms to mean.
For example, the way this motion uses the term “productivity” ignores the role of human capital and more specifically wages. The fact that the opposition continually calls for an increase in the minimum wage, as if an increase would have no effect on productivity or small business viability, demonstrates the disconnect between the whole approach of our Conservative government, which has taken to managing our economy, as opposed to the ideological left-wing approach we see from the opposition when it had been given the chance to bankrupt an economy the way it has in Ontario.
The same can be said about taxes. Members should make no doubt about it. There is no difference between the opposition in Ottawa and the Ontario Liberal Party in Toronto, which has turned my province of Ontario into a have-not province.
It was a short easy stroll for , the NDP MP for Sudbury, to walk into the embracing arms of the Toronto Liberal Party, the party of the gas plants, eHealth, Ornge and electricity rates, to name a few scandals, the same walk Bob Rae took in reverse. Ottawa has become a refuge for individuals who can copy the same policies that turned Ontario from being the economic engine of Canada into a have-not province. These individuals have attached themselves to the green leader of the third party.
The leader of the third party counts as his principal adviser the unseen author of this spectacular failure average Canadians are stuck with paying, known as the greed energy and greed economy act. This is the showpiece of economic policy of the left in Canada, as it features a carbon tax.
In Ontario, the other name for that carbon tax is the global adjustment and it is on every consumer's electricity bill. Canadians need look no further than the economic mess in Ontario to know where Canada will end up if opposition gets—
Mr. Speaker, the NDP members have said that we should look to their record provincially, which is what I am doing, to see what they would do federally.
The NDP in Ontario are on record as supporting the Green Energy Act. What has to be unusual is that the counts as his special adviser the former leader of the Ontario NDP, Howard Hampton, the guy who had to answer for the mess Bob Rae left behind.
I invite Canadians to read his comments in the provincial Hansard, vilifying the corruption of a few Liberal Party insiders receiving contracts for hundreds of millions of dollars for industrial wind turbines. Those hundreds of millions of dollars now add up to billions.
If Ontarians want to know why their electricity bill is so high, just read Howard's comments. It is too bad his party became forgetful so quickly and supported the Green Energy Act.
To get a true sense of the economic wasteland that would happen nationally if the opposition had its way, I will quote the volunteer non-profit Canadian organization, Working Canadians, which said, “Socialism in its various guises has never worked to the benefit of average, middle-class people”. Take the Liberal government of Kathleen Wynne as a real-time case in point.
A number of recent developments in the province have focused the mind on how the current Ontario government’s policies are hurting, not helping, average Ontarians. The Wynne government professes to be the saviour, like the NDP here, of the lower and middle-class. All factual evidence suggests otherwise. As last month’s report by Ontario’s auditor general, Bonnie Lysyk, pointed out in stark terms, “all efforts of Ontarians to contain their rapidly increasing hydro bills by doing their laundry in the middle of the night are for naught”. Anyone who was paying attention to their hydro bill would have already known this.
Recent hydro bills that show for the exact same number of kilowatts hour, the rate is 8% higher, 4 times higher than the rate of inflation, and that is because of the carbon tax.
Informed analysts know that the main driver of hydro costs in Ontario is the “Green Energy” policy, an approach that is being abandoned elsewhere around the world as evidence showed it had negligible environmental benefit. The exodus of manufacturers from Ontario is in part driven by uncompetitively high hydro costs.
Yet Ontario has just claimed that it will be there to help those provinces that have been bailing out Ontario’s failed economy for some time by miraculously becoming a hotbed of economic strength. Over the past decade, Ontario government policies have systematically gutted the manufacturing sector, created a business climate discouraging to entrepreneurs, continually bailed out corporate losers at the cost of successful companies and created a fiscal fiasco that will take some time to repair. The notion that falling oil prices will somehow reverse all of these negatives overnight is ludicrous, especially in a province that is well-ensconced in its “have-not” status.
The only feasible way the Ontario government can balance its books is with higher tax revenues derived from a more robust economy.
Quoting from yesterday's Financial Post, according to an analysis by the Consumer Policy Institute and Energy Probe, 90% of the wind subsidies, a carbon tax, went to just 11 companies, 80% of the subsidies went to nine companies with annual revenues over $1 billion, 60% of the subsidies, carbon tax, went to six companies with more than $10 billion in annual revenue. As for the province’s claim that it wants to create an Ontario-based “green economy,” less than 10% of subsidies to wind generators went to small-scale or local owners. Since 2006, when the province first started subsidizing wind turbines, the province has provided more than $1.92 billion in subsidies, carbon taxes collected from Canadians.
Contrary to what the NDP has proposed, our government is still a great place to provide an environment to do business, and our country has a low-tax agenda for jobs and growth, and has been recognized internationally.
Our government scores high marks for our ambitious free trade agenda and low business start-up costs. That is in addition to our country's outstanding business environment and competitive corporate tax rate. We have already made the tax reductions. Moreover, according to The Economist Intelligence Unit, Canada will be the best place to do business in the G7 and G20 over the next five years.
Since coming to office, our government has made job creation and economic growth our top priority, unlike the opposition that wants to take money out of the pockets of hard-working Canadians.
Mr. Speaker, the motion before the House, as I read it, is that the government can take action to create a balanced economy, support the middle class, and encourage manufacturing and small business job creation.
In my opinion, to do that we have to look at our country's ability to be financially stable, with a strong social safety net, including a fiscal house that is in order, because a lot of the dialogue on the economic downturn in 2008 concerned the debt ratios of governments in certain countries.
We can look at our government's track record on this, and I wish I had an hour to talk about it, when it comes to that balanced economy component.
First, when we came into office between 2006 and 2008, we aggressively paid down our government's debt in our desire to have a balanced budget and to ensure that we do had a strong fiscal house that was in order. When the economic downturn hit in 2008, we took measures to bolster consumer confidence and job creation through targeted infrastructure spending, like the knowledge infrastructure program and community infrastructure improvement program. These were designed to create jobs, but also in a way that we could move back toward fiscal balance once we were out of the economic downturn.
We were also trying to ensure that the situation was right for job creation, and so we increased our trade agreements. When we came into office, I believe were six trade agreements in place. We now have over 40.
We also invested $50 billion in infrastructure through the building Canada plan, which is one of the largest infrastructure funding programs in Canadian history.
We also looked at ways to ensure that we have a strong, skilled labour pool, which I could speak to in detail, and a healthy and educated population, which is why we have increased transfer payments to the provinces. We have ensured a stable source of funding for both health care and education so that our provincial partners can plan for those investments well into the future.
Two other things are important. We have also made sure that we lowered the tax rate on job creating companies. Why have we done that? It is because, all else considered equal, tax rates are certainly a determinant to whether or not we attract foreign investment into the country.
We have also looked at ways to reduce our red tape burden, which I will speak to in a moment, but most important, we have undergone a strategic review in government.
Through all of these other economic actions I just talked about it, we have increased revenues for the government while ensuring that we are taking good care of our fiduciary responsibility to manage taxpayer dollars wisely. We have made sure that we are on track to balance our budget, which we will continue to do this fiscal year.
All in all, with this economic plan that we have put in place, the ground is fertile for Canada's continued long-term economic success. That is the macro picture of our balanced economy. The conditions are right for job creation and entrepreneurship, et cetera, in Canada after and years of our government's strong, stable, steadfast focus on smart and predictable economic policy.
In terms of support for the middle class, the tax burden in Canada is at its lowest level in 50 years. When we look at the tax relief and benefits that an average two-earner family of four will accrue, historically since 2006, and with our new measures, there will be an additional $6,600 in the pockets of Canadian families per year.
That is not insubstantial. It means a lot to Canadian families. Ensuring that Canadian families have choice in how they can spend their money, with more income flexibility, that tax reduction means a lot to Canadians.
Through our economic action plan, we have one of the best job creation records in the G7, with more jobs available for Canadians and their families, which addresses the middle class piece of the motion.
As the , I want to speak a little bit about my portfolio. I do not think the debate is about our inability to support the energy sector and have a stable Canadian economy at the same time. It is about the fact we have some very strong primary industries in Canada. Certainly in western Canada, the energy sector is part of that, as are agriculture and forestry, but the strength of those primary industries can be used to create receptor capacity for emerging secondary industries.
Whenever I address a chamber of commerce in western Canada, I always talk about the fact that in my position I want Canadians to see western Canada as more than hewers of wood and drawers of water. While those industries create hundreds of thousands of jobs and will continue to be important for the economy, there are stories to be told about the emergence of digital media clusters, of biomedical technology, the pharmaceutical sector, of the burgeoning field of clean energy technology, of our aerospace sector in western Canada. It has been through our government's targeted measures to support these areas, many of which are small businesses, that we have seen them start to grow and thrive.
With regard to small business support in general, I want to explain our tax rate policy for job-creating companies. I will first quote my colleague from , whom I have great respect for, from debate in February 2011. She is a very talented parliamentarian, but I do disagree with her on this point. She rose in debate on a Liberal motion and said:
I am delighted to rise in the House to speak to the Liberal motion calling on the government not to proceed with further corporate tax cuts and to restore the tax rate for large corporations to 2010 levels in the upcoming budget.
She continued to talk about why we should not be lowering tax rates on job-creating companies.
A lower taxation rate gives companies the ability to be more liquid and to have more choices, and it also attracts foreign direct investment. That is why we have reduced the corporate tax rate to very competitive levels internationally. On the small business side, we lowered the threshold on tax rates for small and medium-size enterprises to $500,000, so that more businesses would be classified at that particular rate. Again, we reduced the rate and I believe my colleagues opposite voted against those motions. So I find it somewhat rich that they are putting this forward today, because it has been our government that has consistently put forward both in its messaging and tangible policy our commitments to small business.
Small business can be supported in many ways above and beyond these tax breaks that we have already done. Indeed, through Western Economic Diversification we have a wide variety of measures to support small businesses. For instance, we support the Western Canada Business Service Network, which includes organizations such as Alberta Women Entrepreneurs, a great organization. We have the Community Futures Alberta organization, which provides small business loans to small businesses in rural communities to see economic diversification.
We have also invested across the R and D life cycle for innovation. To say that we do not have an innovation tax credit is simply ridiculous, because we have the SR and ED tax program.
My concern about the NDP's motion is that there is absolutely no detail on what this would be spent on. New Democrats have not tried to define innovative activities, what areas they would focus on. I believe that through the Jenkins report and the things we have done, we have done a very good job to support basic research. We have supported commercialization activities as well as tax credits for innovation-happening companies.
In my department, we have the western innovation initiative, which is a new program with $100 million over five years targeted at providing support for small businesses that are looking at prototype development, process, scale-up, and these sorts of things. This has been an awesome program. We have seen huge subscription rates for it. Again, in the area of the R and D life cycle, we could talk about every step of the way that our government has supported, including our venture capital action plan.
I want to close with something my colleague was alluding to. When looking at corporate tax rates, we cannot just look at tax cuts. We also have to look at other tax rates. My concern is that the NDP has never come out and said that it would not impose a carbon tax on Canadian businesses. I know there is usually a giggle on the other side when this is brought up, but a carbon tax would in fact raise input costs like electricity, like consumable goods and manufacturing, which I do not think my colleagues opposite have adequately modelled.
Frankly, if I had a small business, I would be concerned about the inability of the NDP to put forward a predictable and stable plan when it comes to taxation rates. This is what our government has done. We have said, “here is what we are going to do to help you”, and we have followed through.
Mr. Speaker, I will be sharing my time with the member for .
I am very happy to make this presentation. We have spoken at length about the economy recently in this House. With the drop in the price of oil, Canadians are concerned about the economic health of our country, and with reason. The situation really shines a light on the Conservatives' mismanagement.
Because of a failure to invest in innovation and diversification, our economy is now vulnerable to shocks like this to natural resource prices. It is time for things to change, and Canadians should not have to wait until the next election for solutions.
In the NDP, we have a plan to repair the damage caused by the Conservatives. The motion moved by my colleague, the member for , proposes three concrete steps the government can take today in order to boost our economy and support the middle class.
Our first suggestion is to stimulate job creation in small businesses by extending the accelerated capital cost allowance by two years. The second is to reduce the small business income tax rate from 11% to 10% immediately, and then to 9% when the economic situation permits. Finally, the third suggestion is to introduce an innovation tax credit to support investment in machinery, equipment and property in order to further innovation and increase productivity.
Clearly, our proposals focus on small and medium-sized enterprises, the real creators of employment in Canada, and they are very easy to implement. Between 2002 and 2012, in fact, 78% of new jobs in the private sector were created in SMEs. That is not surprising. Furthermore, 98% of all Canadian companies are SMEs: companies with fewer than 100 employees. They account for 40% of Canada’s GDP and employ nearly 8 million Canadians across this country.
However, the Conservative government does not seem to have gotten the message. It continues to pay no attention to SMEs. Since 2010, Canada has lost over 1,500 of them, mainly because of measures like the elimination of the small business hiring credit. Meanwhile, the Conservatives had ample resources to provide tens of billions of dollars in tax breaks to large companies. By constantly serving the interests of the Conservative Party and its friends, the government has lost sight of the interests of Canadians. They are out of touch with reality.
Personally, I have just completed a tour of the SMEs in my constituency. At ground level, it is very clear that the economic reality is difficult for SMEs. They constantly have to find new approaches and new ideas in order to remain profitable. I was truly impressed by the creativity and tenacity of the entrepreneurs I met with.
I am thinking, for example, of the Créagora initiative, a co-operative workspace in which a number of entrepreneurs work under the same roof. This space enables professionals to work independently, while sharing their resources and ideas. It is brilliant. I am also thinking of APICA, a group of business people and SMEs in the Aylmer sector who are constantly innovating and support numerous activities locally. Their contribution is not limited to creating jobs; they contribute their energy to our community. I congratulate them on what they are doing.
I should also say that one thing that came up often in my conversations with entrepreneurs is the fact that they often do not have the resources to offer full-time jobs to their employees. Part-time jobs can be useful, for example, by enabling students to balance working and going to school. However, people know as well as I do that you cannot live on a part-time job. As a result, in many cases, employees are just passing through such companies. It is truly difficult to build a succession in such circumstances.
Many entrepreneurs also tell me that government cuts have had a negative impact on the business climate in the Outaouais. That is not really a surprise. In the Outaouais, we know that the presence of the federal public service has a major impact on our economy.
That is one of the reasons why the NDP wants to make sure that at least 25% of investment in the national capital region takes place on the Quebec side of the river.
Since 2013, we have seen a clear deterioration in the job situation in our area. According to a study commissioned by the Gatineau chamber of commerce, the Outaouais lost 4,000 jobs in 2013, whereas the rest of Quebec posted an increase.
According to the study, job cuts in the federal public service are the direct cause of this poor performance. We can see that it is the entrepreneurs and families in my constituency who are paying the price for the ideological cuts made by this government. However, after shaking the economy of our area, the Conservatives have folded their arms and are refusing to support the entrepreneurs who are trying to diversify the economic structure of the Outaouais.
I was discussing this very subject this morning with Antoine Normand, who chairs the board of the Gatineau chamber of commerce. I must thank him for making himself available. It is always a pleasure to talk with him. He is always very open and helpful, which is very pleasant.
He was telling me that diversification should be a priority for sustainable economic development in the Outaouais. There is a huge potential for jobs in the Outaouais. The Canadian Federation of Independent Business ranks Gatineau among the most dynamic Canadian cities in terms of entrepreneurship.
We have the highest rate of bilingualism in Quebec and one of the highest graduation rates per capita. To put all this potential to work, it is time the three levels of government started working together to develop and fund a strategy to develop and attract businesses.
As Mr. Normand said, we have to support our businesses directly in terms of both research and development and facilitating imports. He proposed establishing a business mentoring program.
At present, there is not much mentoring of this kind in the Outaouais, for one thing because of the lack of leadership and resources from the federal government. He is nonetheless convinced that this kind of program could help businesses that are starting up to make it through their first five years of existence. Those first five years are a critical period, and we really have to help them get through that time to make sure they survive.
What the job creators in the Outaouais are asking for is not extravagant. They are not asking for business opportunities to be handed to them on a silver platter. These are people who are not afraid of hard work, and I can attest to that. In addition to meeting with SMEs, I come from a family that had a small business, and I saw my family work really very hard to help the employees and make sure that services were provided to the community and that at the end of the year they had saved some money and there was money to pay the taxes.
It is sad to see such extreme deterioration where we live in the Outaouais and see the government failing to meet the needs of small businesses to diversify the economy and make sure that someone can step in after the federal government’s budget cuts.
What these people really want is for the federal government to do its fair share to contribute to the economic development of our communities.
As I said, we in the NDP agree with them. We understand them and we support them. We believe that the government can take measures, starting today, to help SMEs do what they do best: create jobs. We have to support them in that effort.
I therefore urge my colleagues on both sides of the House to vote for this motion and start the work. This is a program that could be implemented very easily and very quickly.
Mr. Speaker, I would like to thank my friend from who has put forward this important motion, which I think addresses in part the context that the Canadian economy faces today.
We have seen from the sitting government a certain element of panic, perhaps confusion, with respect to how to respond to some of the key elemental and fundamental aspects of the Canadian economy and the weakening of the economy over the last number of months. We have seen the unwilling and unable to answer questions in this place and unwilling and unable to present a budget until at least two months later than was originally planned.
We have seen confusion among the senior ministers about key aspects. Will the government need to bring forward another austerity budget in terms of cutting services to meet its agenda to balance the books? Will it need to raise revenues? Will it need to dip into its $3 billion rainy day fund, which is meant to cover natural disasters?
To all of those basic questions for the government, we have only seen confusion. We have had completely different answers, on the same day in some instances. We have seen a government that is scrambling, with no real plan B. We have seen an economy, due in some part to the government, that overrelied on certain sectors to the detriment of others.
The reason I can say that with some confidence is that the numbers from Statistics Canada hold this picture up for Canadians and, particularly, for the Conservative government to view.
There are 400,000 lost manufacturing jobs just since the Conservatives took power. In 2014, we saw the lowest job growth since 2009. Again, these are not disputed numbers. This is the reality going on in the Canadian economy. In 2014, which was supposed to be a spectacular year for the Canadian economy, according to some of my colleagues on the Conservative benches, the Canadian economy grew at half the rate of the Canadian population, in terms of job growth.
This should be a concern for anybody who is concerned with the economy. When the population is growing at nearly double the pace of the number of jobs that are being created, that is not a good trend.
We have seen persistently high youth unemployment, at nearly double the national average, and we now have 200,000 more Canadians out of work than before the recession started. Take a moment to think about that. We went into the recession with 1.1 million Canadians out of work, and we now have 1.3 million Canadians out of work after the recession and after the government has taken so much self-offered credit for the spectacular job it has done.
Those are the realities. The economy also shrank in November, which is a concern. These are all numbers from before the latest wave of job losses, particularly in the Canadian retail and energy sectors. There, we have seen not thousands but tens of thousands of Canadians losing their jobs. Our worry is that many of them are part time and do not qualify for employment insurance. That is just in the last number of weeks and months.
For any government to not be preoccupied is a concern, when we have six unemployed Canadians for every job opening in the Canadian economy right now. The Conservatives can spin where they want to, but the reality of those numbers comes from their own departments, and they come from Statistics Canada, and they are not to be disputed.
In light of that reality, as well as the plummeting oil prices sitting just a little north of $50 today and lost revenue to the government, we ask what the plan is. What is plan B? We have seen plan A. We have lost 400,000 manufacturing jobs, we have a high youth unemployment rate, and we have 200,000 more Canadians out of work. We have the lowest female participation in the workforce since 2002. Those are all indisputable facts. What is the government's response, other than to delay the budget?
In that vacuum of ideas and opportunities for Canadians, New Democrats focused in on two primary sectors. The first is the small business sector, which accounts for 80% of all new jobs created and is 40% of our GDP. We also focused in on the manufacturing sector for reasons that I have already outlined.
We have lost so many value-added jobs. In a country that is primarily basing its economy on natural resources, value-added jobs have been the cornerstone to build the middle class and the compact that the government has had with the corporations for the last 80 years. That is what built the middle class in Canada. To lose 400,000 manufacturing jobs just since taking office should be a priority for the government, but its record obviously shows that it is either not a priority or that whatever opportunities it has given have not worked.
Let us look at other planks that the NDP has laid down, steadily, fully costed and accounted for, like a $15 federal minimum wage and affordable child care for all Canadians at up to $15 a day.
We know from the TD Bank and private sector economists that a fully funded, affordable child care plan would have a dividend in return back to the economy.For every $1 put in by government, the government can see back as much as $1.70 to $2.40. Why? It is because productivity is increased and particularly women's ability to get back into the labour force if they so choose. Private sector employers tell us that this has been a concern for a long time. As I said earlier, Canada has the lowest female participation rate in our economy since 2002. That has been the trend. What do we do about the trend? We offer up ideas, and this is where I find such a challenge with my Conservative and Liberal colleagues today.
Happily, we have support from the Canadian manufacturing sector and the small business advocates in this country, who historically have not always been fans of New Democratic policy. Dan Kelly and the head of the Canadian Manufacturers & Exporters say that these initiatives put forward by the leader of the NDP just last week are good for the economy. We have been reading some of their quotes all day.
I find it confusing when my Conservative and Liberal friends get up and make speeches and try to denounce New Democrats for what we propose. They say they are going to vote against this effort to lower the small business tax rate and help the Canadian manufacturing sector. Both those proposals alone are supported by the people who know best, the Canadian Manufacturers & Exporters and the Canadian Federation of Independent Business. The Conservatives say they are going to vote against it, but for what reason? Do they not believe that lowering the small business tax rate one point would help, potentially two points if finances allowed? Do they not believe in lengthening out the ability of the manufacturing industry to write off heavy equipment at a time when it is most critical?
The minister can make a speech any time she wants. If she wants to make a speech and tell us why they are going to vote against this—because they have not done that all day today—then I welcome her to the debate.
It is important for us. At a time when the Canadian economy is growing at half the pace of our population, when 400,000 manufacturing jobs have been lost under the Conservatives watch, one would think the government would at least be a little preoccupied with that fact. When youth unemployment is twice the national average and has been persistently so, and 200,000 more Canadians are out of work than before the recession started, one would think the government would be interested in more than just talking points and spending $1 billion on self-promoting ads to tell people how spectacular it is. An ad does not help a family feed itself. An ad does not help people get back to work when they need a job.
The Conservatives just spent another $2 million promoting the oil sector. They spent $2 million in support of Chevron, Shell, and all the companies that had extraordinary profits, and yet they do nothing for the forestry sector, the manufacturing sector, or the clean energy sector, all groups that are looking to grow and need to grow and are on the rebound, in some cases. The Conservatives are going to buy ads for the oil lobby because it is so good at lobbying.
If the Conservatives do not want to believe me, then perhaps they will believe Jayson Myers, who is the president and CEO of Canadian Manufacturers & Exporters. He said that these tax credits for new product development and commercialization are key measures that support manufacturing success.
Dan Kelly, president and CEO of the Canadian Federation of Independent Business said that cutting the small tax rate by nearly 20% will provide a big boost to small business owners across the country and help them create jobs.
What part of that do Conservatives and Liberals not agree with? Is it simply because of the source? Is it because New Democrats are offering up these solutions that they will not vote for these things, that they will not help out the manufacturing sector, and that they will not help small business?
I was a small business owner before getting into politics. There are two things small businesses need. They need a competitive tax rate and they need customers. We have shrinking and slowing growth in the middle class sector; we have lost more than 400,000 manufacturing jobs; more than 200,000 more Canadians are unemployed than before the global crisis. My goodness, do they want to help out small businesses?
The Conservatives cut the corporate tax rate for the wealthiest corporations like banks and oil companies by 25% since coming into office. They cut it by 1% for small businesses that create 80% of all new jobs in Canada. We can see where their priorities are. They put all their eggs in one basket.
An hon. member: And credit card issues.
Mr. Nathan Cullen: Yes, Mr. Speaker, volunteer credit card fees. That is excellent. Small businesses are always telling us that merchant fees from credit card companies not only hurt them as small businesses but they hurt their customers who have to pay these exorbitant interest rates.
These are things that small businesses are asking for. New Democrats have answered with this motion. For heaven's sake, just get on board. Just say yes. It is so easy. All the experts in the field who know what they are talking about say these are good ideas. It is just as easy as standing and voting for it.
I look forward to their support.
Mr. Speaker, I have a number of thoughts that I would like to share with the House with respect to the motion the NDP has brought forward for debate today.
I will first respond to a couple of comments. The New Democrats like to talk about the employment insurance program. In previous speeches, NDP MPs have said that we should reflect on provincial NDP governments and some of the wonderful things that they do. I would suggest to the NDP finance critic that he might want to reflect on the resources that were withheld and taken away from injured workers in the province of Manitoba through workers' compensation. That is something for which the NDP is ultimately responsible. We are talking about injured workers.
During the 1990s, the recommendation from the national auditor general at the time was to deal with the employment insurance program, and lo and behold, the Liberal Party in government followed those recommendations.
Day after day, there are other comments and messages from the Conservative Party that hit home to a certain degree. The is very good at giving out this misinformation. We saw examples in the questions that he put forward.
I can appreciate why. The Liberal Party leader has asked us, as members of Parliament, to go out and connect with Canadians wherever we can to get a better understanding and to be able to bring forward ideas and solutions so that we will be ready for the next election. Part of that was an outreach in which our caucus went to London, Ontario. It is an area of the country that we feel passionate about. We are very much concerned about the number of jobs that have been lost in that region. Never before, under any other administration, have we seen so many manufacturing jobs disappear.
The needs to recognize that it is his government that has stood by and allowed tens of thousands, going into hundreds of thousands, of jobs in our manufacturing industry to disappear.
When Liberals and the Liberal leader go out and meet and connect with Canadians, what we hear is that Canadians as a whole believe in diversification. Liberals believe as well in manufacturing jobs. The Liberal Party has a record in government of creating manufacturing jobs, unlike the current government, which has lost hundreds of thousands of jobs.
When I was first elected back in a by-election, one of the first issues I raised had to do with aerospace jobs with Air Canada. I tried to get the current and his office to recognize that Air Canada had a legal obligation to protect aerospace jobs in Winnipeg, but the and his ministers did absolutely nothing, zero, to protect those jobs.
They were valuable jobs that led to manufacturing jobs. Those jobs were important to my province. That was not the case only in Manitoba; there were jobs in Ontario and Quebec that were also affected by the actions that were being taken by Air Canada. Because there was legislation to protect those jobs, we thought that some of the backbenchers and perhaps even some of the ministers would have taken an interest in the jobs being impacted in Quebec, Ontario, and Manitoba, and to a certain degree in B.C., and defend them. However, we heard nothing. We did not hear anything from the as he watched those jobs disappear. There was legislation to protect those specific jobs, and the Conservatives did nothing.
Should I be surprised that the national government chose to do nothing in a tangible way to deal with the severe loss of manufacturing jobs here, in particular in the province of Ontario, and other regions of the country also?
I am not surprised, but I am disappointed, and I believe Canadians are disappointed. They will get the opportunity to express their disappointment, not only to the members of Liberal caucus when we do our outreach to communities like London, Guelph and others, but when an election eventually comes around, some time in 2015.
When the talks about how the leader of the Liberal Party does not support the manufacturing industry, it is not true. He needs to look in the collective mirror of the Conservative government and see the tens of thousands of manufacturing jobs that the government is ultimately responsible for losing. That is quite the opposite of what we saw with the Liberal government.
The facts are very clear. I know the government does not like facts, but in 1993 the unemployment rate was 14%. That is what former prime minister Jean Chrétien and the Liberal government inherited when they came to the government benches. I remember Kim Campbell talking about double digit unemployment numbers for a long time. I was a provincial legislator at the time. The Liberal Party at that time said that it was not acceptable, that we would have to work hard for Canadians and get that number down. In 2006, Mr. Chrétien was very successful at cleaning up the Conservative mess.
We brought down that 14% unemployment rate to 6.5%. We handed that over to the governing Conservative Party in 2006.
When we think about the balanced economy, what else did the Liberals hand over to the Conservatives? We also handed over a trade surplus and a budget surplus. That was not the first time. Liberal governments under Chrétien and Martin provided a lot of budget surpluses. The Conservative government does not even know how to provide a budget on time, let alone a surplus, which it has been unsuccessful at accomplishing.
There is a great deal of room for improvement with the government. Thank goodness Canadians will have the opportunity to reflect on the incompetence of the government and its inability to get the job done.
This motion refers to a balanced economy and support for the middle class. I made reference to it earlier. A couple of years ago, the member for became the leader of the Liberal Party. He focused instantly on the importance of the middle class. That was the issue, and he wanted our caucus to give it more attention. From his perspective, it was important. We needed to start working for the middle class because a huge hole needed to be filled. It was not being debated. We were not working hard enough for the middle class.
When I say “we” I am referring to the Conservatives and the New Democrats as well. If we were to do a search of Hansard, we would find how many times the and the made reference to the middle class. If we look at it today, whether it is the Prime Minister, or the minions of the Conservatives who come with their speaking notes direct from the PMO, they all make reference to the middle class. The New Democratic motion does as well, and that is okay.
In third party status, the leader of the Liberal Party was able to elevate the needs of the middle class to number one. That is something of which I am personally very proud. I look at it as a significant accomplishment, coming from a third party in the chamber.
However, I believe the middle class drives our economy. The more we recognize the importance of the middle class, the healthier our economy will be. It is the consumers who make the purchases that ultimately make up for well over 50% of all economic activity. The healthier our middle class is, the better we are in a position to move forward in a stronger and healthier way, so that all regions in our wonderful country are able to expand. That is what is important.
I was surprised when the New Democrats twisted on a dime. Now they want to appear as if they actually understand small businesses. At the best of times, it can be a challenge. I will give them that. They need to recognize that they have made a serious mistake in one of their major platform issues, and they need to revisit that. I am referring to the small business income tax rebate. They want to reduce the small business tax, believing it will create more jobs and somehow level the playing field. I can understand why the New Democrats might be suspicious of me saying this. However, it is not just me saying it. I would like to provide some quotes for the New Democrats.
I have made reference to Jack Mintz. However, a number of economists are saying the same thing. The Centre for Policy Alternatives recognizes the deficiency of this proposal. I have some specific quotes. This is a direct reflection on what the New Democrats will vote for, and they need to be reminded of this. They might want to make an amendment, maybe even a friendly amendment, to their own motion.
Jack Mintz has done a considerable amount of work on the issue. He is the director of the University of Calgary School of Public Policy. There is an article in the Huffington Post, which members can read. A bit down in the article it says, “But Mintz and some fellow economists argue that the tax break will go overwhelmingly to Canadians who need it least and may not result in job growth at all”.
I almost wanted to start talking about the Conservatives' income splitting and their $2 billion tax break to the richest, when I first read that comment.
However, the article continues:
We find that 60 per cent of the small business deduction goes to households with more than $150,000 in income,” Mintz said, of research he has previously done on the subject. “That’s because you tend to have a relatively high number of high-income households who own small businesses...
The worst part [of the NDP plan]...is that it doesn’t have good economic impacts because small business deductions contribute to a wall of taxation, so if they grow, they lose some of their benefits and get hit with higher taxes…It tends to keep small businesses smaller.
The small business tax rate, which is really the taxation rate for a Canadian-controlled private corporation (known as CCPC), is also used by high-income households as a form of income splitting with dividend distributions shared between spouse...
When the reporter brought this to the attention of the NDP critic for finance, what did he say? This is the NDP critic:
When asked about the CCPC loophole, NDP finance critic...told HuffPost the NDP has fought against tax havens and closing up loopholes, and supported tax relief tied to job creation. But [the critic] acknowledged that the NDP plan announced Tuesday doesn’t tie any strings to the tax break. No jobs have to be created to take advantage of the lower tax rate.
The New Democrats need to read what their House leadership has provided to them. That is what they are being asked to vote in favour of. Before they say that Mintz is some right-wing individual, I am sure they are aware of the Centre for Policy Alternatives. The Centre for Policy Alternatives, Armine, reflected on Mr. Mintz' comments. On the CBC network, she said, “It's a little bit weird to say that we are looking at a way of benefiting small businesses when small businesses can also be tax shelters. If you want to do the things that they are saying, you could actually target your tax cut to incentivize the growth, or only give tax cuts when the behaviour you're looking for takes place, not just this broad-based thing”.
Let us reflect on this for a moment. The New Democrats will still be voting for that component in their opposition day motion. They had a chance to vote for a program that would have provided incentives for small and middle-sized businesses to hire additional employees. Outside groups, non-politicians, said that it was a wonderful idea. They said that it would generate tens of thousands of jobs in every region of the country. This was a proposal put forward by the leader of the Liberal Party late last fall, recommending an EI exemption for new hires. It would have provided the incentive for small businesses to hire people.
That is how we support the Canadian economy, not some pie in the sky, that we will now try to appease small business, this is what we will do, and not have thought it through. It appears that the NDP has done that. The New Democrats have to think through other policies that they talk about.
Canada is a trading nation. We are very dependant on trade. We need trade, yet the NDP is still the only political party inside the chamber that does not understand this, to the degree in which it continuously votes against trade agreements, even the EU agreement. When there was a motion before the House, the NDP members took the opportunity to vote against that. They do not recognize how small and medium-sized businesses benefit by exportation.
Small and medium-sized businesses need that exportation. It creates the type of jobs that Canadians want us to develop and promote. These are the types of policies that make a difference. If we want to improve the quality of life for the middle class, we have to look at initiatives that will make a difference in a very real and tangible way, because it is about priorities.
We will have the budget in a couple of months. We hope the Conservatives will have reversed their decision about the $2 billion commitment on income splitting, because there is so much more we can do to assist our middle class, as opposed to giving hundreds of millions of dollars to some of Canada's wealthiest people.
It is about priorities. If we want balance, if we want the economy to grow, and we want to enrich the middle class, we have to make sure that we think through our decisions and make good, solid decisions. I am going to suggest that the motion the NDP brought forward today has not been thought through. It has done a poor job. New Democrats might want to reflect on what their leader is asking them to vote for.