Good afternoon, and thank you, Mr. Szabo, for your kind introduction.
I'm pleased to have been invited to speak here today to such an impressive gathering of Canada's most successful entrepreneurs.
In fulfilling my mandate, the value of entrepreneurship is something I constantly keep in mind. I was born and raised in the Beauce region of Québec, a region known for its entrepreneurial spirit.
I grew up believing that when we are free to innovate and reap the benefit of our work, all human beings will tend to exhibit some quality of entrepreneurship. I believe in the spirit of entrepreneurship and all it stands for -- individual freedom, self-reliance, responsibility and autonomy.
When I am defending economic freedom and entrepreneurship, I am defending what to me are les valeurs beauceronnes, the values of my native Beauce. But of course, these are also universal values that are at the root of western civilization. They are shared by millions of Canadians in every community right across this country.
And they guide and inspire Canada's new government.
As a businessman, I am fully sympathetic to the challenges you face. And as Minister of Industry, I see my role as an enabler of entrepreneurs and as a defender of economic freedom and open competition.
Entrepreneurs like you are the heart and pulse of our economy. Governments do not create jobs -- entrepreneurs create jobs. That is why governments at all levels need to nurture entrepreneurs, not punish them with job-killing taxes and burdensome red tape. For too long in this country, we have had too much government on our back -- and too much government in our pockets.
These ideas are not as obvious and widespread as it may seem. On the contrary, many people believe that it is up to the government to bring about economic growth. As one once said, such a view of the economy could be summed up in a few short phrases: if it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidize it. This is not a view that I share.
In the short time since it was elected, our government has aggressively sought the input of the business community. We heard that you want the regulatory burden reduced. You want lower taxes, not handouts. You want to evolve in a strong, competitive economic environment -- one that encourages investment and stimulates growth.
Not only did we listen, we've taken positive steps to make it easier for you to do business in Canada.
Our first priority was to create a more competitive -- and equitable -- tax system. Our Budget 2006 lowered the GST and the personal income tax rate for all Canadians. We introduced the $1000 Canada Employment Credit. We reduced the tax burden on business, especially small business -- our greatest generator of jobs and wealth. In some cases, we eliminated corporate taxes.
We also eliminated the Federal Capital Tax, two years ahead of schedule. The corporate surtax will also be abolished in 2008. And, by 2010, Canada's corporate tax rate will have dropped by two full percentage points.
Improving the business environment also means removing trade barriers at home and enhancing trade relations with other countries. And I have started to work toward that goal. Last September, I met with my provincial and territorial counterparts to discuss ways to strengthen our country's economic union. We reached a labour mobility agreement that will allow Canadians to work and live anywhere in Canada, without restrictions, by 2009.
Our government has also moved decisively toward improving our working relationship with the United States. The agreement to end the softwood lumber dispute was the first step toward better cooperation between our two countries.
Last June, I met my American and Mexican counterparts to launch the North American Competitiveness Council. Its mandate is to make recommendations on broad issues to create a more prosperous North America, such as making our borders more efficient, reducing regulations, and increasing competitiveness in key sectors of our economies. They will be making their initial recommendations to our government in the coming months.
We recognize that, for you, time is money, especially when it comes to regulatory matters.
Excessive regulation has a cost, a huge cost. The OECD just released a study in September on how too much regulation slows the adoption of new technologies. The result is lower productivity for those countries that have more restrictive regulation.
The study estimates that the growth in Canada's business sector productivity could have been much higher. It would have been 1 percent higher every year between 1995 and 2003. That's if we had aligned our regulation with that of the least restrictive country in each sector -- 1 percent more every year. That ends up making a huge difference after a few years!
There was another important observation in the OECD study. Excessive regulation has a worse effect in sectors that produce or use information and communications technology intensively. So it is even more important to have less and better regulation in these sectors.
As you may have heard, I am spearheading an ambitious policy agenda in the telecommunications sector. The essence of this agenda is to create a new regulatory framework that is more modern, flexible and efficient. I also want to increase the reliance of this sector on market forces.
I started this process in June, when I tabled in Parliament a proposed Policy Direction to the CRTC. It marks our government's intention to instruct the CRTC to rely on market forces as much as possible in fulfilling its mandate. We want it to regulate only when necessary.
And, when regulation is necessary, we want to ensure that it interferes in the least way possible with market forces.
The proposed Policy Direction was published in the Canada Gazette on June 17 for a 60-day comment period. During that time, we received submissions from a broad range of stakeholders. We are reviewing these comments before commencing the finalization process.
In May, we also issued an order in council ordering the CRTC to reconsider its decision on the regulatory framework for VoIP services. For those of you who are technologically challenged, this means Voice over Internet Protocol. The CRTC had decided to postpone deregulation of VoIP. On September 1, it issued a response in which it confirmed its original decision.
Today, I am pleased to announce that our government has decided to change the CRTC's decision on VoIP -- Voice over Internet Protocol phone service. More specifically, we are telling the CRTC to start deregulating "access independent" VoIP services. These are the telephone services you get through a broadband Internet connection. Barriers to entry in this market are very low. There is no reason to regulate it. In a competitive sector, there is no reason to regulate some companies while others can offer the services they want at the prices they want. It is time to have a level playing field from which consumers and small businesses will benefit.
We firmly believe that eliminating unnecessary economic regulation will stimulate competition in this new and fast-growing market. It will mean lower costs, fewer regulatory proceedings, and more competitive markets.
More competition in this market will allow you to have access to a wider range of telecom options and solutions for the operation of your business. And Canadians will enjoy the same benefits in their homes.
The VoIP changes reflect a new approach to economic deregulation in the telecom sector. New technologies can be cutting-edge one day and virtually obsolete the next. In government just as in business, we cannot afford to be slow in adapting. We cannot afford to lag behind while other countries leap forward. There is no reason why Canada should not be the model for other countries in the field of regulation.
In the next OECD study on this topic, I want to make sure we get better results. I want Canada to set the standard. I want Canada to have the most flexible and the least restrictive regulation. I want Canada to be the country to which others should align their regulatory environment in order to grow faster.
I've just given you a brief outlook of what we have accomplished so far to improve the way we do business in Canada. But it's not over yet!
We will continue to listen and to be proactive. We see our role as one of support. We are not here to stifle your creativity. We are not here to cause you to waste time with needless regulations and bureaucracy. We are here to help you gain the freedom to seize opportunities, work harder, invest more and prosper -- all so that millions of Canadian consumers can benefit in quality at the end of the day, and benefit in price at the end of the month.
Thank you.
