PM outlines how Canada's balanced economic plan will deliver long-term prosperity for Quebec

Thank you very much. Thank you, Normand, dear colleagues, Ministers Fortier and Cannon and other parliamentary colleagues, Mr Ouellet from the National Assembly, municipal representatives, distinguished guests at the table of honour, members of the Laval Chamber of Commerce and Industry, ladies and gentlemen, thank you for your warm welcome, and for being here with us today. Spring has finally sprung in Laval and all over Quebec. I've noticed that the sky is getting bluer and bluer, which is always a good sign.

First, let me thank you for your invitation.

In fact, I get a lot of invitations from chambers of commerce, and I try to accept as many as I can, because well-organized, vibrant chambers of commerce like yours are powerful tools for economic and social development. Since 1967, your Chamber has successfully channelled its strengths to benefit your community, which has quickly become one of the most dynamic municipalities in Quebec and all of Canada. Congratulations.

This, as was mentioned, is in fact my second visit to the Laval Chamber of Commerce, and I'm here to tell you that the principles I outlined to you in 2004 are the same as the principles in which we govern the country today.

It was here, on April 15, 2004, that I gave my first speech in Quebec as the leader of the new Conservative Party of Canada. A lot has happened since then, but one thing hasn't changed since my last visit here. What we promised in opposition, when we were a young party, and what we have achieved in government, is the same thing. And you have my word: We will continue to give it our all to honour the commitments we have made here in Quebec and throughout Canada.

Some of you who were here may remember what I said four years ago.

I said, "We are proposing a new approach to relations between Canadians and the federal government, an approach based on respect for taxpayers and respect for the cooperative federalism that gave birth to our party. Our party will faithfully respect provincial jurisdictions, including the specific situation of Quebec." And ladies and gentlemen, among our achievements since being elected, we have set up a new, better program to replace the Millennium Scholarships, which invests more for students and respects Quebec's jurisdictions. We have invited Quebec to UNESCO. We have resolved the fiscal imbalance. We have recognized the Quebec nation within a united Canada. We are truly defending Quebecers' interests and values. As I also said four years ago, "We want to clean up public finances, cut taxes, reward individual initiative and streamline government operations." So I'd like to take a few minutes today to talk about how our government is managing the Canadian economy.

Now, as you all know, our minority government has now passed three budgets and two economic statements. Each time we do so, the story seems to be the same. In the days leading up to the budget, speculation is rampant that it will trigger an election. Mr. Dion says he has had enough and will almost certainly defeat the government, and the Bloc says in advance that whatever we do will be "insufficient". Yet, when the vote comes, everything passes. Why? Ladies and gentlemen, I believe that the real reason we continue to govern is quite straightforward: because despite these uncertain economic times, the Canadian economy is strong.

And because, despite the difficult budget choices required in times of economic uncertainty, our government has opted for a clear, balanced approach, which is widely supported by Canadians. In fact, we have gotten up to speed on financial and economic policy ever since we took office. We said we would make affordable tax cuts, pay down the public debt and keep spending under control and focussed on results. And in each of our budgets, that's exactly what we've done.

This approach reflects our clear conviction as Conservatives that low taxes, less debt and controlled and effective spending at the national level are key to the long-run success of any economy.

And that's our goal: a stronger, more prosperous Canadian economy that will benefit families and businesses now and in the future. If you think about it, that's also how families plan for success: spending on their priorities, keeping down debt and investing in the future for themselves and their children. In a nutshell, our budget appropriations from 2006 to 2010 break down as follows: half of all our discretionary fiscal action is for tax reduction, the other half evenly split between debt reduction and new spending. It's a real, consistent and balanced plan, and it is working. Canada's economic fundamentals are strong.

Inflation and interest rates are still low and stable. Disposable personal income keeps going up. The number of net jobs has increased by three quarters of a million since we took office. And the national unemployment rate is at six per cent, about as low as it's been since 1975, when I was in high school. All this at a time of growing uncertainty about the global economy, and we need to make sure that other countries know that Canada is the best-positioned of all G7 countries.

But as Finance Minister Flaherty – who's originally a Montrealer, I should add – observed in his budget speech, "Canada is not an island, and our trade-intensive economy is expected to grow more slowly over the next two years."

As we said last fall, the economic slowdown in the U.S., the troubled credit market, global financial volatility and a lower U.S. dollar pose challenges for us all. Some sectors are already paying the consequences of those longer-term factors or pressures. And the growing cost of some products in some regions of the country is putting a strain on Canadian families' budgets. There are a number of ways to meet those challenges. One is to close our eyes and throw money at everything, as the opposition parties called for before Budget 2008, and as they'll continue to do, suggesting that every problem requires an immediate response in the form of short-term intervention or costly subsidies. That's not what we put in the Budget, and that's not what we're going to do.

To do everything the opposition demands, and you know that has been $100 billion worth of demands in new spending initiatives, would require us to raise taxes, run a deficit or both in a very big way, literally overnight. That would be wrong for the Canadian economy, wrong now, and with worse consequences in the future.

History has taught us on numerous occasions that a balanced fiscal policy based on low taxes, paying down debt and disciplined spending lays solid foundations for a strong, vibrant economy, and broader economic policy needs to be squarely grounded in the long term, rather than ad hoc subsidies. We have applied that approach ever since we took office.

In our first budget in 2006, we established the broad direction of our government and delivered a series of specific campaign commitments, including the first of our tax reductions.

Budget 2006 contained $20 billion in tax cuts, more than the four previous Liberal budgets combined, as well as major initiatives like the Universal Child Care Benefit. It curbed expenditures and formalized a process for identifying and eliminating wasteful spending. It put Canada on the road to eliminating the debt, by committing billions of dollars to debt paydown and setting future debt reduction objectives.

Our second budget in 2007 was even more focused on longer-term objectives. It cut taxes and it reduced debt even more aggressively and kept spending focused on direct benefits for Canadian families and taxpayers. It unveiled our multi-year plan to undertake the largest investments in national infrastructure in Canada in half a century, an effort that will be led by Minister Cannon. And it resolved the fiscal imbalance.

For Quebec, resolving the fiscal balance means additional federal transfers of 37 per cent since we took office, $4.5 billion more to improve things like the health system, education, climate change initiatives and provincial infrastructure.

As well, we invested heavily in post-secondary education and training, and we provided new funding for scientific and technological development and research.

We developed a science and technology strategy which, as you know, is essential for maintaining Canada's competitive edge. And let's not forget that just last year, we took on a number of sectoral challenges. We helped the manufacturing sector with the accelerated write-off of machinery and equipment. Canada can have a competitive manufacturing sector, but to make that happen in the current global economy, it will need to focus on the high end of the capital-intensive market, which we are trying to help it do.

Budget 2008 stays the course, lowering taxes and focusing new spending while keeping the budget balanced.

Even more importantly, we took prompt action to build a climate of confidence in Canada as the US economy slowed, introducing $60 billion in new broad-based tax relief for individuals, families and businesses. Key measures included cutting the GST to five per cent, reducing the lowest personal tax rate and increasing the basic personal exemption. But of still greater importance for Canada’s long-term economic strength was the two-and-a-half-point reduction in the general corporate income tax rate this past January first, with plans to lower the rate to 15 per cent by 2012. For small businesses, we already increased the eligible amount of active business income in 2007 and, this year, we are reducing the tax rate for small businesses from 12 to 11 per cent. If we stay this course, we will soon have the lowest corporate tax rate in the G7.

As well, we announced the establishment of the Community Development Trust. It is designed to help communities and workers in areas highly dependent on struggling industries to adjust to current economic challenges.

I made the announcement concerning the Community Development Trust at Marwood Ltd., a solid forestry manufacturing company in Tracyville, New Brunswick. Some were surprised that I did not make the announcement at a sawmill that had just closed down. But the choice was deliberate. The program is not aimed at rescuing bankrupt businesses. That would be a mistake. Rather than rescuing such businesses, we are providing funding to the provinces so that workers and communities can seek new opportunities. The Development Trust supports initiatives such as pre-retirement and retraining programs, community diversification to foster local economic development, infrastructure development, and new approaches in traditional sectors.

Where appropriate, our government has also provided some sector-specific initiatives, for industries like forestry and automobile manufacturing. I should also mention the government's ongoing support for the aerospace sector.

The aerospace industry is benefiting greatly from the economic advantages derived from our government’s resolve to rebuild the Canadian Forces. In fact, Ministers Michael Fortier and Jim Prentice have already announced $660 million worth of contracts for the Greater Montreal area, and our defence strategy—Canada is just getting started. And as you know, Minister Prentice recently made it very clear in a major decision that he firmly believes in continued Canadian presence in the aerospace industry. This is an example of how we are trying to look forward, not back: to make prudent, strategic investments in a way that will take advantage of inevitable adjustment and the resulting opportunities. We are also responding to the challenges of the labour market, not only by increasing investment in post-secondary education and scientific research, but also by introducing the necessary reforms to the immigration system. Budget 2008 provides funding so that we can more quickly obtain the qualified workers needed by our economy and speed up family reunification.

I should also mention that this year's budget continued the implementation of a new comprehensive expenditure management system for the federal government.

In the first round under the new system, we reviewed 17 federal bureaucracies and identified nearly $400 million worth of potential savings.

This year's budget also addresses some of the particular needs of the Greater Montreal area. Montreal will benefit from a series of trust funds that we've established this year.

A significant portion of the national Public Transit Capital Trust will support transit expansion in Quebec and Greater Montreal. Also, Montreal will be the site of one of five national pilot projects undertaken by the new Mental Health Commission of Canada to deal with the problem of homelessness. And our Police Officers Recruitment Fund will help regional police forces to hire hundreds of new front-line officers. And as called for by Canadian municipalities, including your mayor, Gilles Vaillancourt, for years now, the Gas Tax Fund has now been made permanent. For Laval, this represents $15 million a year starting next year.

But having said all that, I do believe that the centrepiece of this year's budget is, as Minister Flaherty has said, the introduction of the Tax-Free Savings Account, the single most important personal savings vehicle since the introduction of the RRSP half a century ago.

With the Tax-Free Savings Account, the first of its kind in Canadian history, people will be able to save and earn tax-free income on their investments. This will encourage Canadians to set aside more of their hard-earned income, knowing that their earnings will be safe from the taxman—forever. Not only will the savings be there for proverbial rainy days, but because the money can be withdrawn at any time without tax penalty and without any loss to lifetime savings room, the savings and the earnings can be used flexibly—for a new car, a home renovation, the trip of a lifetime, or anything else. Obviously, this is important for individuals and families, but I ask you to think for a moment about how important this is from a long-term, macroeconomic perspective—the powerful incentive to create a growing pool of national savings.

Compare that with the situation in the United States, with a credit market buckling under the weight of an over-extended household sector. All the incentive there has been to borrow against the equity and real estate holdings, leading to a housing market bubble that burst with nothing to fall back on except foreclosure and bankruptcy.

By contrast, the tax-free savings account will create a new pool of investment capital that will help to grow our economy and create new jobs. It will start small, just as RRSPs did, but I predict that a generation from now, this country will see the difference—a much higher personal savings rate and much lower rate of taxation on investment. As a direct result, the national economy of our children will be even stronger than ours today and—I expect—one of the strongest economies in the world.

Now, I know you think that's pretty optimistic, but I believe in this country we should be aiming far and we should be aiming high. I believe in Canada's much bigger economic potential.

I believe that if governments lift the tax load off Canadians, free them from the debt burden, and spend their tax dollars in their own areas of jurisdiction on things that make Canadians’ lives better, then there is no limit to what our country can achieve.

Now, ladies and gentlemen, one of these days sometime between now and October 2009, and I have no idea when, you will have to make a choice as to how you want this country to deal with the challenges Canada faces in a slowing world economy, and you'll have to choose whether you want your national government to focus on the economy, or whether you want to go back to old unity battles between Mr. Duceppe and Mr. Dion.

Our government believes in lower taxes, less debt, and carefully targeted assistance for workers, families, communities and businesses. We do not believe in raising the GST, spending recklessly and running deficits. We are responding to short-term economic challenges, yes, but we are also planning for long-term prosperity. More than anything, these are the things that we are focused on. Unlike our opponents, we don’t want to rekindle the old battles of separatists and centralists. Mr. Duceppe and Mr. Dion are great champions of these positions, but it’s not our fight. We want a stronger Quebec in a more prosperous Canada, and if we stay the course I laid out to this Chamber four years ago, the course we have continued to follow since our government took office, that is what Quebecers and all Canadians will achieve.

Thank you very much, and go, Habs, go!

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