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Address to the Annual General Meeting of the Canadian Chamber of Commerce
The Honourable Christian Paradis, PC, MP Minister of Industry
St. John's, Newfoundland and Labrador September 18, 2011
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Thank you all for the warm welcome this morning. And thank you too, Perrin, for that very kind introduction.
It is a great pleasure to meet with you today. I am honoured to join you, the business and community leaders from across Canada, at this important annual general meeting.
I would also like to take a moment, in light of the 10th anniversary of September 11, to acknowledge the dedication and the legendary hospitality that Newfoundlanders showed the world that day. You made all Canadians especially proud—and that's no small compliment.
Canadians gave our government a strong mandate to stay focused on what matters—jobs and economic growth. I'd like to speak to you about these two topics.
Ladies and gentlemen, your members constitute the engine that drives the Canadian economy. And nowhere is this more apparent than here, in Newfoundland and Labrador. To look around the province is to see the positive effects that economic growth and jobs can have on a community. In fact, an RBC study released just this past Monday said that Newfoundland and Labrador is expected to remain alongside the prairie provinces as a national leader in economic growth.
It goes without saying that the Canadian Chamber of Commerce is a key advocate for businesses of all sizes across our great country. You are a strong and influential proponent for and representative of the Canadian private sector. It is not a coincidence that many of your policy priorities align closely to those of our government. I will touch on some of these shared priorities—foreign investment policy, border issues, and cutting red tape, to name a few—in a moment.
We often hear that Canada is lucky to be immensely rich in natural resources. But natural resources by themselves do not necessarily bring wealth. Countries like Switzerland, South Korea, Hong Kong and Singapore have no natural resources. And yet, they have become very rich. Natural resources can only be turned into wealth by entrepreneurs.
Entrepreneurs are in fact the only real natural resource a country needs. The innovators—the entrepreneurs—are absolutely essential for economic growth. Our government recognizes this and is working to ensure that you have the tools and support you need to grow, to hire and to keep Canada's economy strong—now and well into the future.
In my role as Minister of Industry, it is my job in Ottawa to stand up for businesses across Canada; to represent your interests during this period of global economic instability; and to be your advocate at the Cabinet table. I want to help create the conditions for you to succeed today, tomorrow and for many years to come.
Over the past few months, I have taken every chance to meet industry leaders—including some of you here today—to learn more about the challenges and opportunities that lie before you.
And as a former president of the Chamber of Commerce in my hometown of Thetford Mines, I know and understand many of the issues you face.
Many of you are working hard to grow your businesses, to develop new products and services and to find new markets. You are on the front lines, navigating your enterprises through the ongoing global economic uncertainty.
Now, I'm sure you have all been watching the news closely these past few weeks. And I'm sure you are aware of the economic uncertainty that countries around the world are facing.
The United States and Europe continue to face considerable challenges going forward. These produce headwinds that have an effect, whether we like it or not, here in Canada.
But if anything, this means that now is the time for government and the private sector to work together to seize new opportunities and new growth that will position our country as a leader in tomorrow's economy.
Indeed, it was Newfoundland's first premier, Joey Smallwood, who said: "It's not where you are, it's where you're headed that matters."
Well, my friends, I can tell you that Canada is headed in the right direction. And our government will take the necessary steps to ensure that Canadian businesses go as far as the innovation and hard work of their owners and workers allow them to go.
Canada has already achieved a great deal. When the recession hit, our country was well positioned to respond. Our government's fiscal house was in order, our banks were in a position of strength and our resources remained in high demand around the world.
But still, we acted swiftly. Through Canada's Economic Action Plan, our government took direct action early in 2009 to create jobs and protect Canadians during the global recession. This timely stimulus helped give a boost to the economy. And by helping those Canadian businesses and workers most affected by the downturn get back to work, our plan helped create jobs and stabilize affected communities.
Our support for business did not begin and end with stimulus measures. Since coming to office, we have cut the GST. We've offered tax incentives to help families retrofit their homes. We've cut import tariffs on manufacturing equipment. And by January of next year, we will have cut our federal corporate tax rate to 15 percent—the lowest overall tax rate on new business investment in the G7 and less than half that of our American neighbours.
Our work in reducing the tax burden for small businesses is one of our proudest—and more important—accomplishments since taking office. And it's one that the people in this room know the importance of.
In addition to the corporate tax rate, we have eliminated the corporate surtax for all corporations, eliminated the federal capital tax and increased the income limit for the small business tax rate to $500,000 from $300,000.
And in Budget 2011, we extended the temporary Hiring Credit for Small Business. This temporary credit will be available to approximately 525,000 employers whose total EI premiums were at or below $10,000 in 2010, reducing their 2011 payroll costs by about $165 million.
Ladies and gentlemen, our record on taxes and our support for small business is unparalleled. But these are just part of our work. Our government is also making it easier for Canadian entrepreneurs to access funding.
There is, of course, the Business Development Bank of Canada, which has been and will continue to be one of the small business community's most helpful and supportive lending partners. We have also raised the maximum loan amount under the Canada Small Business Financing Program to stimulate smaller enterprises and changed the tax code to allow businesses to attract venture capital with greater ease. For younger entrepreneurs, we have boosted the budget of the Canadian Youth Business Foundation to connect them with mentors, business resources and start-up financing.
We are also continuing our efforts to modernize the Investment Canada Act review process and encourage investment, while ensuring a net benefit for Canadians.
As you can tell, I am very proud of our government's work to promote growth across the economy.
Indeed, we have achieved a great deal. But there is much work to do to improve Canada's productivity, enhance its economic competitiveness and increase Canadians' standard of living.
Earlier this year Canadians voted to return our government to office with a clear mandate to focus on jobs and economic growth. It is a task we take seriously.
And as we move to the Next Phase of Canada's Economic Action Plan, we are monitoring the global situation closely. We have been clear that we will take action if necessary, but that for the moment, the best plan is to stay the course.
As you know, the past quarter saw a pause in growth, in large part due to external factors. The earthquake and tsunami in Japan, for example, had a considerable effect on our manufacturing supply chains.
All the same, Canada's domestic economic data remains largely positive. We are the only G7 country to have regained more than all of the output and jobs lost during the downturn. And Statistics Canada just reported this week that manufacturing sales in July rose 2.7 percent to $46.7 billion.
Both the International Monetary Fund and the Organisation for Economic Co-operation and Development forecast that Canada's economy will be among the strongest in the G7 this year and next. And recently, the credit-rating agency Moody's renewed Canada's Triple A credit rating based on, in their words, Canada's "economic resiliency, very high government financial strength and a low susceptibility to event risk."
The Next Phase of Canada's Economic Action Plan will shift emphasis away from stimulus and toward careful, considered and prudent action with a view to restraining government expenditures.
We must turn to you and your colleagues—business leaders in communities across the country—to lead during the next phase of this recovery.
On trade, we have been clear that protectionism is not the solution to economic challenges. Instead, we have undertaken a number of free trade negotiations, most notably with Korea, the European Union and India. When finalized, this will open Canadian companies to millions of new customers in the years to come.
We are working to deepen our economic and cultural ties with China.
And, following an announcement this past February by Prime Minister Stephen Harper and President Barack Obama, we are collaborating closely with our American friends as part of the Canada–U.S. Shared Vision for Perimeter Security and Economic Competitiveness. Through this engagement, we are working to find new ways to improve the flow of goods and people across our border, while maintaining the highest security safeguards for both countries.
Now, many of you may have heard in the media last week that President Obama's proposed jobs plan would renew the Buy American provision from 2009. I want to commend the work of my colleague, Minister of International Trade Ed Fast, on this issue. We will raise our concerns with the Obama Administration and with Congress regarding restrictions that may impede access for Canadian companies to the U.S. market. But I want to make it clear that our government is committed to delivering free trade leadership. Canadians can count on our government to defend free and open trade on the world stage.
Ladies and gentlemen, last year, we also turned our attention to another priority for the Canadian Chamber of Commerce: cutting unnecessary red tape. Specifically, we created the Red Tape Reduction Commission to hear from business owners on the ongoing burden of unnecessary government red tape and to help streamline federal requirements so that firms can focus their attention on growing their businesses and creating jobs.
We are very much aware that Canadian businesses spend considerable dollars each year complying with regulatory requirements—small businesses alone were estimated to bear $1.1 billion in costs complying with just 12 government reporting obligations.
This is unacceptable—and it has to stop. I want to commend my Cabinet colleagues, Treasury Board President Tony Clement and Minister of State for Small Business and Tourism Maxime Bernier, for taking the lead on this commission.
Having read the commission's interim report last week detailing stakeholder consultations, I certainly look forward to seeing its recommendations.
Now, as important as stimulus investments, access to financing, regulations and tax measures are, perhaps the most important factor in your success is innovation.
As Minister of Industry, I can say without a doubt that innovation is what will separate us from our competitors—whether they are around the corner or across the globe. Canadians—especially Canadian entrepreneurs—understand this reality.
However, despite our having laid a good foundation over the last five years and seeing many achievements, Canadian productivity continues to lag, as does business investment in R&D.
That's why we need your help to get ahead of the curve and challenge the status quo.
To achieve this, we have made a concentrated effort to link businesses and academic institutions in Centres of Excellence across Canada that are helping companies and university researchers collaborate to design, develop and commercialize their offerings.
And we have also struck the Expert Review Panel on Research and Development to study the broader question of government incentives for business-focused R&D.
I am pleased to say that the panel has received input from business people across the country, including a brief from the Canadian Chamber of Commerce.
We look forward to receiving this panel's report and recommendations in the coming weeks.
Another priority for my department—and one that has a significant innovation component—is the digital economy.
The digital economy includes everything we can or would like to do online. It includes the creation, supply and use of digital content and technologies that enable everyday life and innovation.
At the heart of the digital economy are information and communications technologies (ICTs)—everything from the personal computer in your home to the multi-purpose mobile devices that many of us can't seem to live without. Those in the room with teenagers at home already know all too well about that.
When individuals, companies and entire economies adopt these technologies, a number of important things happen. Adoption boosts productivity, accelerates innovation and generates new products, processes and business models.
The value of these technologies is self-evident. And the federal government will do its share to promote adoption of these technologies. We will be launching a new program, announced in the last budget, to promote adoption by small businesses using community colleges as partners.
We will be tabling new legislation on copyright and privacy to ensure that Canadian businesses and individuals have the legal protections to confidently and fully engage in the digital economy. We are boosting our support to increase university capacity in key digital skills disciplines. And this fall, we will be announcing the actions we will take to release more mobile broadband spectrum, thereby ensuring a world-class communications infrastructure in Canada.
But Canada will succeed as a world-leading digital economy only if government and the private sector work together. We look to the support of Chambers of Commerce like yours to ensure that Canada has a world-class digitally skilled workforce and that businesses in all sectors of the economy make smart investments in digital technologies to improve innovation and productivity.
We need to take concrete actions now to lay the foundation for Canada to regain leadership as a digital economy.
Ladies and gentlemen, let me conclude by saying that when our government was returned with a strong mandate, Canadians told us that we were leading the country in the right direction. Policies focused on maintaining stability, combined with targeted investments and legislation in strategic areas of the economy, were the right approach.
We have removed the barriers to growth today, while investing in preparing for the growth of tomorrow.
And I am certain that together we will be able to continue on this path of recovery.
I look forward to working with you and to getting things done for Canadian businesses and families.
Thank you very much.
