INDU Committee News Release
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Standing Committee on Industry, Science and Technology |
HOUSE OF COMMONS CHAMBRE DES COMMUNES OTTAWA, CANADA K1A 0A6 |
Comité permanent de l'industrie, des sciences et de la technologie |
For immediate release
NEWS RELEASE
Review of Canada's Service Sector
Ottawa, June 17, 2008 -
The House of Commons Standing Committee on Industry, Science and Technology tabled in Parliament today the Committee’s final report entitled The Goods on Services.
The Committee began its study on the challenges facing the Canadian services sector in November 2007 and heard from 60 witnesses.
“Canada’s services sector is a vital component of our economy, accounting for almost 70% of Canada’s gross domestic product and more than 75% of employment in 2007. Growth has been spectacular in the services sector. Employment has grown, on average, by 2.4% per annum since 2002 and the sector has been responsible for creating more than 90% of all jobs created since the worldwide “commodities boom” began in late 2002” said Mr. Rajotte, Chair of the Committee.
Canada’s services sector is not without its challenges, however. During its study, the Committee heard of a number of challenges affecting the effectiveness with which the sector delivers services to Canadians, as well as the competitiveness of the sector vis-à-vis foreign rivals. First and foremost, these challenges include shortages of labour and work skills that are expected to grow over the next decade as Canada’s population ages, the rate of retirement increases, and the labour force shrinks. Secondly, the twin challenges posed by the high and rapidly appreciating value of the Canadian dollar against the U.S. dollar, and high energy costs, most notably gasoline prices, have also adversely affected specific industries such as tourism and travel services.
“The report that the Committee is tabling today contains 25 recommendations to the federal government in the areas of labour, taxation, innovation, intellectual property rights protection, internal and foreign trade, national border, infrastructure, regulatory, cultural and health care policies that the Committee believes will help the services sector adapt to the challenges it is facing” said Mr. Rajotte.
The report’s recommendations include the following:
- That the Government of Canada continue reforming fiscal policies that discourage work by: (1) expanding the working tax credit for low-income individuals; (2) reducing the claw-back rate for seniors on Guaranteed Income Supplement (GIS) and Employment Insurance (EI) recipients who return to the labour force; and (3) reducing the statutory personal income tax rate.
- That the Government of Canada work with the provinces and professional organizations to streamline the entry of foreign workers into the labour force, with the goal to commence, and if possible to complete, the process of recognition of foreign credentials in the country of origin.
- That the Government of Canada provide tax credits and/or other measures to companies providing employer-financed training and apprenticeships to their employees.
- That the Government of Canada improve the Scientific Research and Experimental Development (SR&ED) Tax Incentive Program to make it more accessible and relevant to Canadian businesses.
- That the Government of Canada continue to reduce the federal corporate tax rate.
The Committee believes that the Government of Canada’s timely implementation of these recommendations will help to ensure continued growth and prosperity of Canada’s services sector.
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