Thank you and good afternoon. It's a pleasure to be here, especially the day after our government introduced Economic Action Plan 2013. You know, it's not often that I get to wear both of my governmental hats: Minister of Industry and Minister of State for Agriculture. These are two very unique departments, both of which serve your very unique sector.
I want to begin today by congratulating the Council on all of the work it does on behalf of its members—and on behalf of Canadians. Be it enhancing food quality and safety, promoting sustainable development, or reducing trans fats and sodium, your organization remains at the forefront, initiating discussion and informing public policy.
As you represent the largest manufacturing sector in the economy—food processing—and our country's biggest employer, your engagement is crucial. The government is always happy to have such an active partner. That's one of the reasons why I believe that, in working together, we can make Canada the place for food manufacturing in the global supply chain.
Manufacturers are major contributors to our economy. There are close to 1.8 million manufacturing jobs in this country, with nearly half a million in Quebec. Manufacturing accounts for 14 percent of the province's GDP. Food and beverage processing alone accounts for over 82,000 jobs and $22 billion in sales, while generating $4.6 billion in exports.
Those are significant numbers, but they don't tell the whole story. Behind those numbers are jobs. Jobs that provide competitive wages and anchor communities. Jobs that drive innovation and productivity. Jobs that give us the capacity to develop new products and processes—and to create possibilities.
That is why our government has focused on getting the big picture right, on ensuring that the right conditions are in place so that you can seize new opportunities. So you can grow, innovate, compete and create jobs for Canadians.
Since 2006, our government has created a sound economic framework. We've paid down debt, harmonized regulations and reduced red tape. And we have the lowest overall tax rate on new business investment in the G7.
And these efforts are bearing fruit. Canada's net debt-to-GDP ratio remains the lowest in the G7 by far. Our top credit rating has been reaffirmed by all of the major rating agencies. Our banks remain the soundest in the world. And we've maintained a triple-A credit rating.
But beyond establishing sound economic fundamentals, our government has introduced measures that specifically benefit manufacturers.
We've lowered the corporate tax rate from over 22 percent in 2007 to 15 percent today. We've removed the federal capital tax. And we're eliminating tariffs on machinery and equipment, making Canada the first tariff-free zone in the G20. When we're done, this will mean savings of almost $400 million a year for Canadian businesses.
We've invested $110 million to double support through the National Research Council of Canada's Industrial Research Assistance Program. And this was complemented by $80 million for its Digital Technology Adoption Pilot Program, which helps small and medium-sized businesses adopt digital technologies. In January 2013, the Prime Minister launched the $400-million Venture Capital Action Plan to provide access to new financing.
And we've signed a new strategic federal-provincial-territorial agricultural framework—Growing Forward 2. It represents a $3-billion investment over five years designed to modernize the food processing industry.
This framework is intended to help producers and processors become more productive and innovative, develop new markets, and adapt to rapidly changing and emerging opportunities and issues, both here at home and around the world.
The new AgriInnovation Program, in particular, is backed by a federal commitment of almost $700 million, of which a full two thirds will be dedicated to industry-led projects. And the new AgriMarketing Program, which is also under the Growing Forward 2 framework, will help producers and processors gain and maintain access to markets, both at home and abroad. Last year, Quebec's agri-food exports reached a new record of $6.1 billion, driven for the most part by $4.6 billion in processed food exports.
Yesterday, Economic Action Plan 2013 went even further, extending the accelerated capital cost allowance for two years, which will increase support for manufacturers by almost $1.4 billion, and extending and expanding the Hiring Credit for Small Business for one year, which will save 560,000 small businesses $225 million in 2013.
Economic Action Plan 2013 also increased the Lifetime Capital Gains Exemption to $800,000 from $750,000 and indexed it going forward. This will make it easier for owners to transfer their family businesses to the next generation of Canadians.
And most importantly, our government increased support for business innovation. As manufacturing continues to evolve, the supply chain becomes more global and the world more digital, the keys to success are innovating, adopting technology, and making greater investments in machinery and equipment.
Whether we're talking about food safety standards, new consumer demands or more environmentally friendly packaging, they all speak to the need to be more innovative, productive and competitive.
And while our innovation performance has improved over the last decade, there is still some catching up to do when we measure ourselves against international competitors. This is particularly true when it comes to R&D intensity and productivity.
That is why we are reshaping the National Research Council of Canada and giving it $121 million to better meet the needs of innovative Canadian businesses. That is why we are giving $20 million to help small and medium-sized enterprises access research and business development services at universities and colleges. And that is why we gave the Canadian Youth Business Foundation $18 million to support young entrepreneurs between the ages of 18 and 34.
And because manufacturers need markets for their products, our government is pursuing the most aggressive trade agenda in Canadian history, concluding six free trade agreements with nine countries and actively negotiating with eleven others.
We can't underestimate the importance of these negotiations.
We need to break down barriers and unleash our full potential. We owe it to our businesses that innovate every day and want nothing more than the means to achieve their goals.
With all of these efforts, all of these initiatives, we have established the right conditions for companies to grow and compete. But—and this is the heart of my message today—now it's time for industry to step up, to boost its productivity and to enhance its competitiveness.
We know that Canada's productivity lags behind the U.S. And we know that innovation improves productivity. It drives growth. Innovation is the best way for a high-wage economy like ours to compete with countries around the world. It is the only way to create jobs and growth here at home.
That's why industry needs to pick up that ball and run with it. And R&D is a great place to start. And we're not just talking about new products. We're talking about innovation in our processes, in our organization, in our supply chains. And innovation in our markets.
Our government will continue to put in place the policies and economic framework that allow you to succeed, while also taking concrete action on taxes, technology, trade and talent.
But at the end of the day, ladies and gentlemen, the answer to meeting the challenges of manufacturing in the 21st century won't be found in a government program. The answer lies in each of you—and manufacturers in all sectors—investing in R&D, embracing technology and transforming businesses through innovation.
I am confident that by working together and by listening to and learning from one another, we can create a future for manufacturing in Canada that is brighter than we can imagine.
I look forward to working with all of you as we build that future together.
