The two-year Economic Action Plan™ announced by the Harper Government™ in 2009 will apparently be extended by another year. This will apparently be dubbed the Next Phase of Canada’s Economic Action Plan™.
Herein the Prime Minister’s remarks to a luncheon in Brampton this afternoon.
“Chairman Rhodes, President Leiba, the Honourable Bill Davis, head table guests, colleagues from the Parliament of Canada, representatives of provincial and municipal government, ladies and gentleman.
“First of all, my thanks once again to the Boards of Trade of Brampton and Mississauga for accommodating me today. It’s getting to be a bit of a habit, or maybe we should call it a best practice.
“Anyway, it is almost exactly two years since I was last with you – I think in this very room – and at that time, I laid out the details of the First Phase of Canada’s Economic Action Plan.
“Today, I’m here to talk to you about the Next Phase of Canada’s Economic Action Plan, which, of course, will be elaborated in some detail in next week’s federal budget.
“But I want to tell you now, more generally, how we see things going as we continue the recovery from the global economic crisis of two years ago.
“Most of all, I want to tell you that I am hopeful. If we stay the course with tested, well conceived policies that are already working, we can all be quite optimistic.
“I want you to remember what I said to you here at the depth of the crisis. I said: ‘Canada was the last advanced country to fall into this recession; we will make sure its effects here are the least severe; and we will come out of this faster than anyone and stronger than ever.’
“Ladies and gentlemen, that is exactly what Canada is accomplishing, and we should all be very proud of that!
“Why has this been?
“First, we entered the recession having made some good decisions that put us in a good position. Our financial sector was strong. Our banks and financial institutions were both sound and well regulated.
“As a consequence, Canada had no failure of any major financial institution and no bailout with public funds, during a crisis caused by financial-sector instability and insolvency virtually everywhere else.
“In fact, I recall that two years ago, you all cheered when I talked about Canada’s banks, which I don’t think has ever happened, and probably won’t ever happen again, but those were the days.
“Second, we had used our years of budget surpluses to do the right things: pay down debt and reduce taxes.
“As a result, we had a dramatically lower debt burden than other G-7 countries, and the federal tax burden in Canada was already at its lowest level in 50 years – the lowest since Prime Minister Diefenbaker was in office.
“You’ll recall that we had cut taxes for consumers, lowering the federal sales tax from 7 to 5 per cent.
“We had enacted personal tax reductions in many areas, lowering the total tax burden of the average Canadian family by $3,000 compared to where it was when we took office.
“And, of course, in 2007, we legislated a phased, five-year tax reduction strategy for business in order to provide certainty for the planning of investment and job creation.
“I’ll say more about this later.
“Finally, of course, in response to the recession, we joined with all members of the world economy in implementing a program of stimulus spending in order to respond to the financial crisis and the global collapse in business and consumer confidence, that was threatening to take hold.
“But we did it right. We didn’t just mail out cheques, or invent brand new programs or new bureaucracies.
“With our provincial and municipal partners, we slashed red tape and accelerated thousands of already-planned capital investments from coast to coast to coast: in roads, bridges, public transit, harbours small and large, airports, colleges and universities and other infrastructure that will support economic growth for generations to come.
“You know, there’s a saying that pilots have: that you plan your flight, then you fly your plan.
“That’s what we did.
“We had a plan: a good, well-conceived plan, and we executed it quickly. We didn’t deviate or dither.
“For the most part, we simply took existing infrastructure plans and ran with them.
“We also provided some more targeted help to hard-hit industries and to some Canadians who had lost their long-term employment, through no fault of their own.
“We didn’t, as some wanted us to do, use the recession to engineer a massive, permanent expansion of Employment Insurance benefits.
“But we did do things like, for example, providing temporary extra funds for work-sharing, so companies and workers could avoid the expense and pain of layoffs and subsequent re-hiring and re-training.
“Today, I toured the plant of one beneficiary of that program, a program that protected over a quarter million jobs.
“And of course, we also kept taxes low.
“In fact, we cut some more, some personal tax relief and some investment incentives for business.
“We certainly didn’t pick up the Opposition’s idea for the recession, which you will remember was a new national carbon tax.
“We were operating on the theory that you don’t help a struggling swimmer by holding his head under water.
“So we made a plan for success and we flew the plan.
“I just want you to take a minute to look at some of the results.
“First, here’s employment and recovery of jobs. This shows pre-recession. There’s the recession. The start of the first phase of the EAP… Now see the effect kick in.
“Close to half a million jobs have been created by the Canadian economy.
“And as you can see, there are actually more Canadians working now than before, one of the very few developed countries that is even close to achieving that.
“Same thing, other countries. And you can see how much stronger our employment numbers are.
“Why is that?
“Here’s why. Our growth is stronger. We’ve had six consecutive quarters of growth.
“These figures are updated to the fourth quarter. As they clearly show, Canada has led the recovery in the G-7 with clear, positive net growth.
“So stronger growth equals more jobs. But how do you stimulate growth?
“Well, in the long haul, it has to come from private investment and that happens best when you keep taxes low for job creators.
“When you make it easier for entrepreneurs to invest, they start more enterprises and create more jobs.
“As you see here, Canada now has the lowest effective tax rate on new business investment in the G7 – and that is a big change.
“So, low business taxes lead to higher growth, lead to more jobs and finally to – next slide please – to greater wealth.
“This is growth in real disposable income over the past few years. As you see,
“I also want to talk about the cost of this, the First Phase of Canada’s Economic Action Plan. As I said, we did borrow and spend during the global financial crisis, as indeed, economic theory and history says we should under such conditions.
“But for Canada, this has been very affordable.
“Here is how we stood on deficit and debt measures compared to our competitors, first before the recession, second, in 2009 at the depth of the crisis and finally in the future, according to the fiscal plans that are in place.
“So, ladies and gentlemen, all of this – and more – is why there is much optimism about Canada; why Canada has become a model for other countries; why Canada’s actions are praised as best practices at international forums like the G-8 and G-20, and the IMF, and by authoritative publications with worldwide influence.
“You know, sometimes I wish The Wall Street Journal could vote.
“So that was the First Phase of the Economic Action Plan – stimulating the economy, supporting industries, supporting workers hard hit by the recession, while keeping our fiscal position stable in the long-term. And that really leads me to what’s next.
“Because, for the longer term, the challenge is to have policies that will support the private-sector-led growth that is starting to kick in.
“The fundamental elements of this Next Phase, in our judgement, are: preserving Canada’s fiscal advantage; investing in innovation, training and education; supporting families and communities; and keeping taxes low to create jobs.
“Of course, the first, preserving Canada’s fiscal advantage, means returning gradually but surely to a balanced budget, and to do so by keeping spending down.
“Now, let me assure you, this will not be on the backs of pensioners. Nor need the provinces fear shrinkage of federal transfers for health care and education.
“Nevertheless, this spending control is real. Program spending this coming year is essentially flat.
“You will also see that the deficit over the past year has already shrunk by a quarter – by over 25 per cent.
“And it will shrink by the same amount once again in the year to come.
“This doesn’t mean deep cuts, but it certainly doesn’t mean a whole new suite of large, unaffordable, new government spending commitments.
“For instance, you will not see from this Government – you absolutely will not see – a new national program to build professional sports arenas and stadiums across the country.
“Second, we will invest in innovation, training and education, the national reservoir of knowledge, to insure we attract the sources, future global growth, and to insure that Canadians have high-wage employability in the economy of tomorrow.
“At the advanced level, we shall continue to invest in research. With programs such as, the Vanier and Banting Scholarships and the creation of Canada Excellence Research Chairs, we have successfully reversed the academic brain drain.
“We have also oriented our programs to focus much more than before on results and commercialization, and we are seeing the research community adapt as a consequence.
“We will, by the way, also continue to focus our dollars here, on priority areas, like cleaner energy and climate change.
“We’ve also brought in numerous measures to assist students and their parents with the cost of higher education.
“As well, we have focussed on groups that need special help. For example, we have the Targeted Initiative for Older Workers, to help older, long-tenured workers who have suddenly lost their jobs, to upgrade their skills and find good new ones, securing their dignity as well as their incomes.
“We will also continue to focus on ensuring that the credentials of immigrants are appropriately recognized and employed.
“Having the relatively largest immigration program in the world, especially at a time of looming demographic challenges in the advanced countries, is one of our country’s great strengths.
“But Canada, and immigrants themselves, must reap its full potential.
“How many times have you got in a cab and found that you’re being driven by an accountant, a doctor, a man with more degrees than a thermometer?
“It’s a waste of talent. We must use those skills. We don’t have immigration so that we can have the best-educated cab drivers on earth.
“So that will continue to be a focus.
“The third important theme of the Next Phase of the Economic Action Plan is support for Canadian families and communities.
“The family is the basic building block of Canadian society, and supporting it is one job government not only can do, but must do.
“Just as we must help those members of our wider family who genuinely need our help, we’ve had a special emphasis on the needs of the disabled and caregivers with major initiatives like the Registered Disability Savings Plan.
“As you know, we have introduced a wide range of measures to assist our senior citizens: like higher age and income credits; more flexibility in conversion to RRIFs; income-splitting for our pensioners; and the Tax Free Savings Account, which, of course, is available to seniors and non-seniors alike.
“In our very first budget, we helped hard-working parents with the Universal Child Care Benefit, worth $100 a month to parents of pre-school children.
“And, I should mention, we also helped parents with tax credits to encourage their childrens’ participation in sports. Let me be clear today, that the next phase of Canada’s Economic Action Plan will, as we’ve promised, introduce a similar tax credit for children participation in artistic activities.
“In any case, I will leave further details in this area to the budget.
“Finally, ladies and gentlemen, we will continue our focus on a low-tax plan to create jobs and growth.
“This is, of course, where we part ways with the Opposition. There will be, in fact, much that the Opposition should support in the upcoming Budget.
“However, we have been clear for some time that there will not be job-killing taxes increases in this budget. We won’t bring in a carbon tax which, amazingly, the Opposition has just dusted off and brought back out.
“We will not be, as they want, creating a 45-day work year under the EI system and raising premiums by 35% to pay for it.
“There will be no GST hike; it is ‘off the table.’
“And we will not bring in legislation to change business tax rates, and certainly not to raise them.
“You know, the plan we enacted in 2007 to reduce business tax rates has even been supported by provincial Liberal and NDP governments who have lowered their rates to match our reductions.
“And frankly, I don’t know what other country in the world would even contemplate raising its business tax rates just at the beginning of a recovery.
“This is pretty fundamental ladies and gentlemen. You either get that it takes a low-tax plan to create economic growth and jobs. Or you have a high-tax plan.
“We get it. The world, by the way, thinks Canada gets it. And we intend to stay on a low-tax course.
“Ladies and gentlemen, as you know, that it is my hope that, in Parliament, everyone will step back, not create an unnecessary election, but rather think about the fragile global recovery, focus on the economy, read the budget, and pass the sound measures that will move forward the Next Phase of Canada’s Economic Action Plan.
“I told you two years ago, in the midst of the global meltdown, that if we kept our focus and stayed on course, we would emerge from the global recession in a stronger position in the world than we have ever been.
“I was confident in that then and I am more confident in it now.
“Canada has faced a period of crisis: not a crisis Canada created, not a crisis we alone can solve, but a crisis we have faced up to and taken advantage of.
“You know, as we see some of the terrible things that are happening elsewhere – which I know concerns us all – we are reminded that this is a truly blessed country that we are very fortunate to be part of.
“Canadians are a strong, compassionate and adaptive people.
“We have faced hardship before and we will again.
“But neither recession, nor war, nor natural disaster, have ever seriously impaired the destiny of this great land.
“And Canada’s best days are still yet to come.
“Thank you for having me here once again. And all the best in your own goals for the future.