Thank you for the kind introduction.
It's always good to be home in the Kitchener–Waterloo region.
Particularly when I am the bearer of good news.
Naturally, that's more and more the case since we formed the government in 2006.
Ours, however, is not a government that is willing to remain complacent in the face of challenge or change.
And there are still many challenges and uncertainties on the horizon.
Although Canada is emerging from the global economic recession, many Canadians are still looking for work.
Beyond our borders, the global economy remains fragile and any potential setbacks would have an impact on Canada.
Canadian businesses face ever-increasing competition from emerging fast growth countries and the challenges associated with an aging population and demographic change.
Fortunately, Canada is facing these challenges from a well-established position of strength.
And with a comprehensive and forward-looking agenda that will deliver high-quality jobs, economic growth and sound public finances, Economic Action Plan 2012 will allow Canada to meet these challenges and emerge from them stronger than ever.
It builds on our positive record of achievement to help further unleash the potential of Canadian businesses and entrepreneurs to innovate and thrive in the modern economy to the benefit of all Canadians for generations to come.
By focusing on the drivers of growth and job creation—innovation, investment, education, skills and communities—the new measures in Economic Action Plan 2012 will solidify, strengthen and draw upon the entrepreneurial sector's role as the driving force behind Canada's economy.
Canada's businesses—entrepreneurs and innovators—have proven time and again that they are up to the task…if they are given the opportunity.
Well, ladies and gentlemen, with our Economic Action Plan, the Government of Canada is ensuring that they will have all the opportunity needed to flourish.
For starters, this transformational agenda includes a new approach to supporting entrepreneurs, innovators and world-class research.
As a world leader in post-secondary research with a highly skilled workforce, Canada has strong fundamentals for innovation.
The federal government provides significant resources to support research, development and technology.
In fact, Canada invests more in higher-education research and development (R&D) as a share of the economy than any other G7 country.
Our Scientific Research and Experimental Development (SR&ED) tax incentive program, which is providing more than $3.6 billion in tax assistance in 2011, is currently one of the most generous systems in the industrialized world.
For our government, such strong fundamentals aren't enough.
Only results are.
The results of these investments, however, show room for improvement.
Canada continues to lag peer nations in terms of overall innovation performance, including private sector investment in R&D and the commercialization of research into products and processes that create high-value jobs and economic growth.
Our government is taking steps to fix this problem.
First, we set up an expert panel, chaired by Tom Jenkins of OpenText Corporation in Waterloo, to determine the reasons for this lagging performance.
And now we are responding to the panel's recommendations in a way that will create high-value jobs, through investments in:
- education and training;
- basic and applied research;
- financing opportunities for businesses with the potential to become globally competitive; and
- linkages between public research and market needs.
Among other things, Economic Action Plan 2012 will double the Industrial Research Assistance Program to better support R&D by small and medium-sized companies.
It will refocus the National Research Council on demand-driven business-oriented research that will help Canadian businesses develop innovative products and services.
It will support innovation through procurement, by connecting small and medium-sized companies with federal departments and agencies to build their capacity to compete in the marketplace.
It will help high-growth firms access risk capital by committing significant funds to leverage increased private sector investments in early-stage risk capital, including a $400-million investment to support the creation of large-scale venture capital funds led by the private sector.
It will support private and public research collaboration through internships for graduate students and funding for business-led R&D networks.
And it will streamline and improve the SR&ED tax incentive program and invest the savings in direct support programs that will reinforce business innovation in Canada.
But, to effectively compete and succeed globally, Canadian job creators need more than bright ideas.
They must be supported by a modern regulatory environment that promotes competition, business investment and economic growth.
This implies a competitive and efficient tax system, a well-functioning financial system and access to international markets. That is why Economic Action Plan 2012 includes key commitments in all of these areas that will improve conditions for business investment and drive the next wave of job creation.
This means we are transforming not only how we innovate but also how we regulate.
We are supporting responsible resource development that creates jobs, improving the review process for major economic projects to make it more timely and transparent while protecting the environment, and introducing legislation to modernize the regulatory system to realize our objective of "one project, one review" in a clearly defined time period.
This is fundamental to, for example, maximizing the potential of Canada's unique oil sands industry, which already employs over 130,000 people. In the next 25 years, it is estimated that oil sands growth will support, on average, 480,000 jobs per year in Canada and will add $2.3 trillion to our gross domestic product (GDP).
In broader terms, Canada's increasingly important natural resources sector now represents almost 10 percent of our economy and employs almost three quarters of a million Canadians.
So Economic Action Plan 2012 takes action to leverage our tremendous natural potential with other new and renewed measures in support of energy and mineral exploration, for example, by extending the Mineral Exploration Tax Credit for an additional year, improving access to modern and reliable seismic data for offshore resource development, and funding to assess diamonds in the North.
It will keep taxes low for job creating businesses, an established and proven cornerstone of this government's record. Canada leads the G7 with the lowest overall tax rate on new business investment.
It will strengthen business competitiveness by cutting red tape and reducing the tax compliance burden for businesses.
It will improve economic conditions for fishers and farmers.
It will further develop Canada's financial sector advantage.
Ladies and gentlemen, these actions are all fundamental to our success.
But, ultimately, our success as a nation also rests on maximizing the power of our greatest asset—our people—and unleashing their full productive potential.
With that in mind, Economic Action Plan 2012 invests significantly in training, infrastructure and opportunities, and it supports job creation by small businesses and opportunities for under-represented groups in the workforce.
Employment Insurance (EI), for example, is Canada's single largest labour market program. Our plan will make a number of targeted, common-sense changes to make EI a more efficient program that focuses on job creation and opportunities, removes disincentives to work, supports unemployed Canadians and quickly connects people to available jobs.
At the same time, we will ensure predictable and stable EI rates by limiting rate increases to five cents per year until the EI Operating Account is in balance and then moving to a seven-year break-even rate.
In addition, we are extending the temporary EI Hiring Credit for Small Business for one year to reduce the cost of hiring new workers. This will benefit approximately 536,000 employers, whose total EI premiums were at or below $10,000 in 2011, reducing their 2012 payroll costs by about $205 million.
In more targeted labour market actions, we are investing $50 million through the Youth Employment Strategy to assist more young people in gaining tangible skills and experience and connecting them with jobs in fields that are in high demand.
And at the other end of the demographic scale, we are also funding the extension and expansion of the successful ThirdQuarter project, which helps employers find workers over 50 who have the skills they are seeking.
Plus, we are investing an additional $30 million over three years in the Opportunities Fund to enable more Canadians with disabilities to obtain valuable work experience with small and medium-sized businesses and to ensure employers are aware of the invaluable contributions that persons with disabilities can make to their business and the Canadian economy. To further these efforts, we are launching a panel on the labour market opportunities of persons with disabilities that will identify private sector best practices in this regard.
Another glaring labour market deficiency is the under-representation of women on boards of directors and in top leadership positions.
Economic Action Plan 2012 will help address this with the creation of an advisory council of leaders from the private and public sectors to promote the participation of women on corporate boards and champion their leadership.
In parallel with our efforts towards creating, supporting and benefiting from a more inclusive, productive and dynamic workforce, we are seeing that Canadians are living longer and healthier lives and that many prefer to work longer.
Canadians can already count on a retirement income system that is recognized around the world as a model that succeeds in reducing poverty among Canadian seniors and in providing high levels of income replacement to retired workers.
This is why Economic Action Plan 2012 also takes much-needed action to strengthen the retirement income system and to ensure that it remains sustainable over the long term.
The Old Age Security program was designed for a different time. In the 1970s, there were seven workers for every one person over the age of 65. In 20 years, there will be only two. In 1970, life expectancy was age 69 for men and 76 for women. Today, it is 79 for men and 83 for women. At the same time, Canada's birthrate is falling.
The result is that Canadians are living longer and healthier. There are fewer workers to take their place when they retire. Canada has changed. And Old Age Security must change with it to remain sustainable and reflect demographic realities while serving the purpose it was intended to serve.
This is why the age of eligibility for Old Age Security and the Guaranteed Income Supplement will be gradually increased from 65 to 67, starting in April 2023, with full implementation by January 2029. This will not affect anyone who is 54 or older as of March 31, 2012.
And to improve flexibility and choice for those wishing to work longer, the government will also allow for the voluntary deferral of the Old Age Security pension, for up to five years, starting on July 1, 2013. This will provide the option to defer take-up of the Old Age Security pension to a later time and receive a higher actuarially adjusted pension as a result.
These changes are in keeping with international best practices, as many Organisation for Economic Co-operation and Development member countries, including the U.S., have recently planned or announced increases to the eligibility ages for their public pension programs.
At the same time, we will take action to ensure that the Government of Canada's pension obligations to its employees and parliamentarians are sustainable, financially responsible and broadly consistent with the pension products offered by other jurisdictions as well as being fair relative to those offered in the private sector.
Specifically, the government proposes to adjust the Public Service Pension Plan so that public service employee contributions equal, over time, those of the employer (50/50). Comparable changes to the contribution rates will be made to the pension plans for the Canadian Forces, the Royal Canadian Mounted Police and parliamentarians.
All of these transformational efforts will be supported by the responsible and sustainable fiscal management that our government has followed from the outset. It's a prudent approach that will see a return to budgetary balance in the medium term.
In keeping with this fiscal discipline, we will implement moderate restraint in government spending.
The savings from this review amount to less than 2 percent of federal program spending overall.
Although this was a comprehensive review of departmental spending, it was by no means an across-the-board cuts exercise.
There were things that weren't included.
We are not reducing transfers to persons, including those for seniors, children and the unemployed, or transfers to other levels of government in support of health care, social services and other important programs and services.
We will ensure continued and growing funding for the programs and services that are a priority for Canadians. Economic Action Plan 2012 makes a wide range of important investments in strong families and safe, healthy and clean communities that bear witness to this commitment.
The reductions in departmental spending simply reflect changes to refocus government and programs, make it easier for Canadians and businesses to deal with their government, and modernize and reduce the back office.
These actions will yield real dividends for Canadian taxpayers. They will support the return to balanced budgets at an appropriate pace as the economy continues to recover from the global economic crisis.
And three years after the stimulus phase of Canada's Economic Action Plan was launched in response to that crisis, it is clear that our economic recovery is advancing.
There is renewed strength in our exports, and our domestic economy is continuing to grow.
Among G7 countries, Canada has posted the strongest growth in employment by far during the recovery, with more than 610,000 jobs created.
The government is projected to return to a balanced budget over the medium term, and the federal debt is projected to decline to 28.5 percent of GDP in 2016 to 2017, in line with its pre-recession level.
Canada continues to hold a significant fiscal advantage over other G7 countries in this regard.
The International Monetary Fund projects that, by 2016, Canada's total government net debt-to-GDP ratio will remain at about one third of the G7 average and more than 20 percentage points of GDP below that of Germany, the G7 country with the next-lowest ratio.
Reducing this debt is no mere abstract accounting exercise. It will have very real tangible benefits, including:
- freeing up tax dollars otherwise absorbed by interest costs;
- keeping interest rates low and encouraging investment;
- signalling that public services are sustainable over the long run;
- strengthening the country's ability to respond to challenges such as population aging; and
- preserving Canada's low-tax plan, fostering the long-term growth that generates high-wage jobs for all Canadians.
So, clearly our prospects shine brightly.
But, while this jobs and growth performance is encouraging, the global economy remains fragile and too many Canadians are out of work. Securing long-term prosperity for Canadians in uncertain times means we must act today.
With our Economic Action Plan for 2012, we have done so decisively, creating unprecedented long-term opportunities for jobs and growth in Canada. With Economic Action Plan 2012, the opportunity provided to Canadians and to our nation's economy is significant and far-reaching.
I would encourage you to find out more about our plan, check out the details online and find out what sort of opportunities Economic Action Plan 2012 presents for you.
Because when opportunities are seized, Canadians succeed. And that's what our transformative economic plan is all about.
Thank you.
