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Results: 1 - 15 of 44
View Pierre Jacob Profile
NDP (QC)
Thank you, Minister.
I would now like to know why Canada does not include its ecological debt in its economic debt, as do several European countries.
View Peter Kent Profile
CPC (ON)
Well, we have different procedures and protocols. On a recent visit to a number of European capitals, I discovered that in fact the transparency of our accounting for environmental impact, for such things as emissions impact and across the spectrum of environmental considerations, is in fact more transparent than that of a number of European nations.
This country, as you know, is larger than the original European Union, and the amount of work required to create that sort of negative inventory again would get into areas of redundancy and duplication. We know well where the threats are to the Canadian environment and we're responding with appropriate action.
View Jim Flaherty Profile
CPC (ON)
Thank you, Chair.
It's good to be here with the finance committee and the members of the committee. This is a hard-working committee, of course, particularly with respect to budget preparation, and I thank all of you for that.
I'm always short, but I'll also try to be brief in my opening remarks.
Your work pre-budget and the report you wrote were an important part of the presentation of the budget this year, as it is most years. Your recommendations do inform the budget, and I include from the committee's report—because I looked to see—some of the things that ended up in the economic action plan of 2013, including establishing a long-term plan for infrastructure, reviewing the temporary foreign worker program, extending the mineral exploration tax credit, reviewing current tariffs on consumer goods, ensuring fairness and neutrality in the tax system by closing tax loopholes, and further strengthening Canada's manufacturing sector.
Secondly, I'd like to congratulate the committee on its recent study and its in-depth report on options intended to increase charitable donations in Canada by using tax incentives and other targeted initiatives. The recommendations in this report also greatly influenced the preparation of the 2013 budget.
I will continue, but I will not say all the things I was going to say because I'm sure some of it will come up in questions, and I know votes may interfere.
Canada has done relatively well. Let me speak about this context. I use the word “relatively”. The world has been through a difficult time, particularly the western industrialized economies, since what the economists are now calling the great recession of 2008-09.
We had been paying down public debt in 2006-07 and into 2008—about $38 billion of public debt in Canada—in preparation for what was at that time the concern, quite frankly, which was more the American deficit and the accumulating public debt than it was Europe, although today perhaps the emphasis is more on the continuing recession in most of Europe.
In January 2009 we brought in the economic action plan, which was the budget of 2009, the earliest budget in Canadian history. It was a dramatic move toward stimulating the economy because of the fear that we had of very large unemployment and a deep, dark, prolonged recession.
The economic action plan worked. Canada came out of recession before any of the other industrialized economies. We were in recession for three quarters only. Our unemployment rate, thank goodness, never went into double digits.
Times remain challenging. I just came back from a G-7 finance ministers and central bank governors meeting 10 days ago in the United Kingdom. As I said, Europe has been in a prolonged recession. We're not out of the woods yet. There's a tension between some of the industrialized countries in the west—and I shouldn't just say the west because Japan is part of this—about spending more, stimulating more, more debt, more deficits, more perceived economic growth, and more printing of money, which is euphemistically called “quantitative easing”.
And then there are those of us who feel that the correct balance is what we tried to do in the budget this year in economic action plan 2013; that is, moving continually toward a balanced budget, which we will have by 2015, which was the plan from January 2009, while at the same time stimulating the economy in a few very important areas, which this committee has also highlighted from time to time—manufacturing through the accelerated capital cost allowance extension; infrastructure, which is vitally important to our communities and our municipalities in Canada; and skills training through the Canada job grant.
We feel we've hit the right balance, and we encourage our colleagues in the G-7 to follow that pattern.
The IMF recently remarked—and I'm quoting—“Canada is in an enviable position...[and] the policies that are being deployed are, in our minds, broadly appropriate”.
However, as our government has said over and over, we cannot let our guard down. As we are reminded too often, the world economy remains fragile. The United States and Europe, who are among our biggest partners, continue to face serious economic challenges. As it was noted earlier this month, the euro zone is now in the longest recession it has ever experienced, that is to say negative economic growth for six consecutive quarters.
In the middle of this economic and global turmoil, Canada must also face the reality of a more and more competitive world market, with the increased participation of emerging economies such as Brazil, India and China.
To build a stronger economy and produce increased job growth, the many positive initiatives contained in Bill C-60 include the major measures I've already mentioned with respect to manufacturers. There is also the indexing of the gas tax fund, which was a major pre-budget request of the Federation of Canadian Municipalities during our meetings with them, and I know the committee had the same experience. We are extending the mineral exploration tax credit. We know that sector of the Canadian economy has a lot of growth and is very important to Canadian economic growth overall. We are providing $165 million in multi-year support for genomics research, $18 million to the Canadian Youth Business Foundation to help young entrepreneurs grow their firms and their futures, and $5 million to Indspire for post-secondary scholarships and bursaries for first nations and Inuit students.
Additionally, Bill C-60 brings forward many positive initiatives to support families and communities. Some of these are much less expensive than the major initiatives, of course: promoting adoption by enhancing the adoption expense tax credit; introducing a new first-time donor's super credit to encourage Canadians to donate to charity—that came in significant part out of the work done by this committee on charitable issues. We are expanding tax relief for our home care services, providing $30 million to support the construction of housing in Nunavut, investing $20 million in the Nature Conservancy of Canada to continue to conserve ecologically sensitive land, providing $3 million to support training in palliative care for front-line health care providers, committing $3 million to the Canadian National Institute for the Blind to expand library services for the blind and partially sighted, and supporting veterans and their families by no longer deducting veterans' disability benefits when calculating other select benefits. There are also many other initiatives.
I know you have had an opportunity to look at Bill C-60 carefully. I know some parts of the bill have been referred to other committees of the House of Commons. I emphasize to you the need for balance in the approach we take as a government. I can tell you that in international discussions I have had with my colleagues in finance and central banking around the world, Canada is well respected for the way we have grappled with economic issues also facing other countries over the course of the past several years.
I am prepared to receive questions, Mr. Chair.
View Alain Giguère Profile
NDP (QC)
Thank you, Mr. Chair.
Someone pointed something out. Even though the deficit is $26.2 billion, our debt has increased by $35.2 billion.
Can anyone explain that to me?
That comes from the Library of Parliament's briefing notes, point 9.
Douglas Nevison
View Douglas Nevison Profile
Douglas Nevison
2013-02-14 16:27
When it comes to, obviously, the financing requirements of the government, there are also non-budgetary transactions that are involved. In that case, most of the financing, the increase in the deficit, was due to the $26 billion deficit that you mentioned, but there were also non-budgetary transactions of $6 billion that were required. They reflect a lot of things, such as loans and investments, accounts payable, but they're considered off-budget transactions. So they contributed to the increase in unmatured debt that occurred over and above the financing that would be required to fund the deficit.
Jim Ralston
View Jim Ralston Profile
Jim Ralston
2013-02-14 16:30
Just by way of an analogy that might help you to understand, in the case of a corporation, if a corporation spends money to acquire a long-term asset, that asset will be capitalized on the balance sheet. It will have no impact on the profit and loss statement. But if that asset were financed with debt, there would be debt associated with it. This is not an exact example, but I'm using it because it kind of illustrates what we're talking about here. It's whether something belongs on the statement of operations versus belonging on, say, our statement of financial position.
View John Williamson Profile
CPC (NB)
Right.
Just as a side note in terms of the EI debate, there are kind of flyers floating around in my province saying that the federal government doesn't contribute to EI. That's not quite accurate, is it? I mean, we carry any surplus or deficit.
Douglas Nevison
View Douglas Nevison Profile
Douglas Nevison
2013-02-14 16:47
The EI account is currently in a deficit position.
View John Williamson Profile
CPC (NB)
Right.
As a kind of projection, if interest rates were to increase by, say, 1%, what kind of impact would that have on the deficit, and I suppose on the debt as well?
Brian Pagan
View Brian Pagan Profile
Brian Pagan
2012-12-03 16:55
It is not, I would argue, because of the measures that this government and previous governments have taken to manage our debt down to put us on a downward track in terms of debt to GDP and the underlying size of the debt.
If the question is what component of our interest rates is driven by the size of the debt versus the size of program reductions, I'm afraid I can't answer that. I don't know if anyone can. Suffice it to say it is driven by a number of different factors, one of which is the overall size of debt as a portion of the economy. That's something this government is mindful of and wants to ensure is managed in such a way that servicing our debt does not become a problem, and therefore drive up interest costs as we've seen both in other countries and in this country in the past.
View James Rajotte Profile
CPC (AB)
I have a couple of questions following up on Ms. Nash's comments. Mr. Pagan, if Canadians and parliamentarians want more information with respect to unmatured debt, we have the “Debt Management Report” and the “Debt Management Strategy”. Would you recommend these sources for finding more information on this matter?
View Peter Braid Profile
CPC (ON)
That's fine. IRAP is such an important, effective program that I would encourage you to find any additional funding you could.
My last question—I was sort of curious and intrigued by this—is about a $1.2 billion decrease in forecast interest on unmatured debt. Again, I'd like some elaboration here. It sounds as though the government as well has been a victim, if you will, of bond markets, and that this has affected the government's bottom line. Is that essentially what's happened here? I'm curious to know from a financial and investment perspective what has occurred here.
Bill Matthews
View Bill Matthews Profile
Bill Matthews
2012-11-20 9:48
The interest expense on public debt includes everything from regular debt as well as pensions and long-term liabilities, so it is very much influenced by those large numbers.
The government's debt mix, as Mr. Smith has already mentioned, is a finance issue. It is a mix of short-term and long-term borrowings. What they've done is simply updated their forecast here. I believe the reason for the decrease is the longer-term projections for interest rates are now a bit lower than was originally forecast, so that's why they've adjusted their forecasts.
Pierre Gratton
View Pierre Gratton Profile
Pierre Gratton
2012-10-23 17:18
Thank you.
I'm here with my colleague, Brendan Marshall, the director of economic affairs for the Mining Association of Canada.
In 2011, the mining industry contributed $35.6 billion to Canada's GDP, employed 320,000 workers, and paid $9 billion in taxes and royalties to both levels of government, an increase in all three areas over the previous year, reflecting the strong performance of the mining industry in recent years.
According to recent MAC research, Canada's mining industry is poised to invest some $140 billion in projects across the country over the next decade.
The government has contributed positively in recent years with policy developments and investments supporting the growth of our sector, including geo-mapping, exploration financing, capital investment in critical infrastructure, and a responsible resource development plan in budget 2012.
To ensure that the mining industry's contribution to Canada's economy remains robust, a competitive and predictable domestic regulatory environment is key. To this end, the government should continue upholding Canada's economic fundamentals by maintaining low inflation, eliminating the deficit, preserving and improving our tax levels, and decreasing the national debt.
Continued forward thinking, such as the promise of regulatory reform displayed in budget 2012, is essential. Canada has the opportunity to capitalize on a growing mining sector and the many economic benefits that flow from it. Though many improvements are anticipated to result from the federal government's responsible resource development plan, uncertainty currently exists over how relevant authorities will work together to enact the legislation. Governments should continue working with each other and stakeholders to ensure that the intended outcomes are achieved.
Further, the government should implement a functional permitting system for the Species at Risk Act and should modernize and complete the environmental legislation governing Canada's north.
On the human resources front, it is estimated that the mining industry will require 140,000 new workers over the next 10 years. Governments must work with industry, schools, aboriginal groups, and other communities to address the skills shortages facing mining and other sectors and to address issues such as mobility and immigration needs.
Despite the abolition of the mining industry human resources sector council, the mining industry, through MAC, will be stepping in to secure the future of MiHR. Replacing government core funding with our own, we are hopeful that MiHR's proposals for specific program funding to support labour market research, labour certification, and aboriginal inclusion will be supported.
The mining industry is the largest private sector employer of aboriginal people, and the recent discontinuation of the aboriginal skills and employment partnership program has created a gap that needs to be filled. The potential for significant aboriginal employment opportunities in our sector is strong, but essential training to develop the requisite skills is needed.
Innovation is key to addressing declining ore reserves, meeting increasing regulatory standards, and managing higher operating costs. To capitalize on a pan-Canadian research program, the Canadian Mining Innovation Council is requesting $18 million per year over five years in support of the industry's R and D priorities. Mining already spends some $500 million annually on R and D in Canada, but not through CMIC's collaborative model. Support for CMIC, which is the Canadian Mining Innovation Council, would bring federal investment in mining R and D closer to levels already enjoyed by other major Canadian economic sectors. It would also bring Canada in line with what some other major mining jurisdictions, such as Australia, Sweden, and Norway, have done, recognizing the potential that exists in their countries for mining but recognizing that more R and D is needed to capitalize on that.
Guillaum Dubreuil
View Guillaum Dubreuil Profile
Guillaum Dubreuil
2012-10-22 15:48
Thank you, members, for having us here today.
For over 20 years, the Regroupement des jeunes chambres de commerce du Québec has been supporting and growing a strong network of young people's chambers of commerce and youth sections throughout the province. The RJCCQ represents more than 7,000 young entrepreneurs, businesspeople and professionals aged from 18 to 40 from 34 different organizations. In addition to covering a vast territory, the RJCCQ represents eight culture-specific organizations, which gives it a unique perspective and allows it to defend its members well.
It is in indeed in our role as representatives and advocates that we have noted some concerns. At the RJCCQ, we believe that the demographic and economic changes of the next few years will have major repercussions. Furthermore, we believe that we must take on these changes properly and maintain Quebec's financial momentum. In order to do so, we suggest three strategic points.
The first is to consolidate. Canada's economy is based largely on a comprehensive and dynamic system of small and medium enterprises, working in all areas of business from the primary sector to the service sector. These companies are finding it increasingly difficult to maintain a competitive position on the world stage, not to mention that Canada is beginning to see its rate of entrepreneurship decrease compared to its international partners.
Without diminishing the role of big business, the RJCCQ continues to believe that Canada's economic strength lies largely in this complex web of small and medium enterprises. They are the cornerstone of our economic system. Today in Canada, 97.9% of firms have fewer than 100 employees. Unfortunately, many of these companies are destined to disappear or fall into foreign hands over the coming years. The reason is very simple: our entrepreneurs are growing older and approaching retirement. At that point, they will transfer the business as profitably as possible. Unfortunately, we are seeing more businesses being sold than businesses who have the next generation ready. We believe that this outcome is unacceptable. That is why we suggest that means of promoting the transfer of businesses to young entrepreneurs be implemented.
For the past few years, the RJCCQ has been advocating the introduction of a Business Ownership Access program. This BOA program would allow a young entrepreneur to use the funds in his or her RRSP to finance the purchase of a first business, without incurring penalties or taxes. The entrepreneur would then be required to repay the amounts within 10 or 15 years, ensuring he or she will not be penalized at the time of retirement.
As you know, the issue of credit, of a downpayment, is the main obstacle for people who want to buy a business, and the Home Buyers' Plan already exists. Buying a house is certainly a safe investment. Buying a profitable company is even more so. We therefore suggest that a similar program be created for purchasing a business.
We also believe—and it is our second strategic point—that we must invest in youth. The RJCCQ believes that the main challenge that stems from the aging of the Canadian population is ensuring inter-generational equity. Previous generations have enjoyed substantial benefits that are unsustainable now that the number of workers is decreasing. The RJCCQ is fully aware that it is impossible for the new generation of workers to enjoy the same benefits as previous generations, but we also believe that we must make sure that we do not have to pay the price.
To do so, the current government's efforts to return to a balanced budget must obviously be maintained. We congratulate the government for implementing a plan that is certainly bold. It requires a lot of sacrifice, I'll admit, but we believe that for the future of the country and the next generation of workers, it is the right path.
However, we also believe that we must take it a step further. Once the budget balance is restored, it will be important to prepare for the future by developing a plan to repay the national debt. The RJCCQ believes that the country's debt is a heavy burden to carry and undermines Canada's economic development.
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