Halifax Chamber of Commerce Distinguished Speakers Series
Thank you very much for the kind introduction. I am pleased to be here to talk about a subject that I think is certainly very important to Nova Scotians and indeed to all Canadians.
In 2011, we asked Canadians to entrust us with a majority mandate with a very specific focus of strengthening the Canadian economy to improve the quality of life of Canadians.
Canadians offered us the opportunity of that mandate, and we have delivered.
We are continuing our focus on the great project of building a prosperous Canadian economy.
Despite continued global economic uncertainties, Canada's economy is strong and steady, and it remains among the top performers of G7 nations.
As a home to international investment, Canada offers global investors an attractive tax environment and sound public finances.
Canada is a leading global example of a tax-competitive economy.
In 2012, we reiterated our commitment by lowering taxes again, bringing Canada's federal corporate tax rate to 15 percent, with a combined federal rate of taxation to 26 percent across Canada—well below the G7 average for corporate taxes and more than 13 percentage points lower than that of the United States.
In fact, our government has lowered taxes in every way in which it collects taxes: sales taxes, income taxes, taxes on small business, taxes on investment. Taxes in Canada today are at the lowest point that they've been in 55 years.
And just three weeks ago, Canada's Parliamentary Budget Officer reported to Canadians that, since 2005, the tax relief we've implemented has put $30 billion back into the pockets of Canadian families.
So we've lowered taxes on families, we've made our country more competitive and we've controlled government spending. And, as you've no doubt read, we're well on our way to balancing the budget next year.
We're in this position to balance the budget because we've budgeted responsibly and we've kept program spending under control, and we've grown the Canadian economy.
We're second only to the United States in growth amongst G7 countries during the recession; all credit rating agencies have affirmed Canada's AAA rating; and for the sixth consecutive year, the World Economic Forum has declared our banking system to be the soundest in the world. And just this week, KPMG released a report that declared that Canada has the most tax-competitive economy for businesses in the world. We've got the second-lowest business operating cost in the G7, a full 5 percentage points lower than what they have in the United States.
So in Canada, where our financial system is stable, credit conditions are strong and capital costs are well below historic averages, investors have tremendous confidence. According to Forbes magazine, Canada is the best country in the G20 in which to do business. The CEO of Cisco Systems recently said that Canada is "the easiest place in the world to do business," and in a speech just last month, Hillary Clinton asserted a fact when she said, "Canadian middle class incomes are now higher than in the United States. Canadians are working fewer hours for more pay, living longer on average and facing less income inequality." And she's right.
As a country, we are free traders. We believe in creating Canadian jobs through world sales. Canada has been and always will be a trading nation, from the Hudson's Bay Company through the Canada–U.S. Free Trade Agreement to NAFTA and now to the Canada–European Union free trade agreement.
Roughly one in five Canadian jobs depends on Canadian exports to world markets. Since 2006, our government has pursued a very aggressive free trade agenda. In fact, when Stephen Harper became Prime Minister, Canada had free trade agreements with exactly five countries. Today we have free trade agreements with 43 countries, including the historic Canada–EU free trade agreement, which will create 500 million new customers for Canadian goods and services.
Here in Halifax, you will benefit greatly from the massive growth in Canadian trade to Europe that will transit through the city. The economic opportunities for Nova Scotia and Halifax are immense as a result of this deal.
We've also recently signed the Canada–Korea Free Trade Agreement. It's our first Asia-Pacific free trade agreement—a 50 million person market in a geographic footprint the size of New Brunswick. We tabled this legislation in Parliament last week and hope to have the agreement fully enacted by the end of this year.
In addition to this, we're also expanding FTA negotiations with other key markets like Japan, and we've put in place new and expanded air transport agreements covering almost 80 countries around the world. This ensures Canada's connectivity to the rest of the world through open sky deals and through foreign investment and protection agreements at a pace that we've never seen before in this country.
And right here in North America, in our own backyard, in this year's budget, we renewed our funding to create a second crossing between Windsor and Detroit, the busiest and most economically important border crossing in all of the world. We've expanded the Beyond the Border Action Plan with President Obama and the American government.
So on the trade side, it's no exaggeration to say that Prime Minister Harper and our government have been the most aggressive pro-free trade government in Canada's history. We have seen great results as a consequence of all of this. The strength of the economy, the lowering of taxes, responsible spending, effective infrastructure investment and the expansion of free trade agreements have brought real results for the Canadian economy.
It was reported by Statistics Canada just two weeks ago that the Canadian economy has added more than 1.1 million new jobs since the recession. We've gained back all of the jobs that were lost during the recession and that job growth has been realized in every region of the country. But even better than that, we've outperformed all other G7 countries in job creation over the course of the recovery, and even better than that, 87 percent of them are full-time, 71 percent of them are high-wage and 80 percent of them are in the private sector.
And so why do we do all this? Ultimately, it is to leave our country better than the way we found it.
So that's why I'm here today. It's to talk about what's next to build a stronger country, to improve our nation and to grow our economy.
In my view, it needs to be this: breaking down barriers between Canada's provinces and territories and opening up the Canadian economy.
I believe the primary job of any government should be one of nation building—through policies and projects that build our economy and strengthen our country.
No doubt, our ambitious international trade expansion plan is working.
We are seeing some tangible results on the world stage.
However, trade within our own borders has not kept up with the speed of our international agreements.
When Canada's Agreement on Internal Trade was signed in 1994, Canada had a free trade agreement with two countries—Mexico and the U.S.
Today, we have free trade agreements with 43 countries around the world.
And the sad reality is that currently foreigners have greater trade benefits in Canada than our fellow Canadians do.
We have too many barriers to commerce, trade, mobility and growth within Canada.
Barriers to trade within Canada are costing us jobs. They're limiting the growth of our businesses. They're preventing consumers from having more choices, and they're hurting Canada's economy.
The examples of barriers to trade are everywhere. Some of them are extraordinarily irritating, but they're everywhere.
For example, just drive a truck across this country. It was noted once by the Ontario Trucking Association that you could drive a truck from downtown Windsor to downtown Miami and en route you will go through precisely 17 stop lights. Sixteen of those stop lights are in Windsor. Worse than that, many provinces have different rules for truck weights, dimensions, tires, height and clearance.
We're the second-largest country on earth in terms of size, thirty-seventh largest in terms of population, and we still don't have basic transportation infrastructure standards synchronized across the country.
So what does this lead to? It leads to our firms focusing on trade that goes north and south rather than east and west. Firms in some provinces can grow and do, but overall it hurts Canada's economy. It hurts our connectivity, and it hurts job opportunities in this country when businesses see more benefit to partnering straight south with the United States rather than doing business with their partners east and west.
One example that's talked about frequently in my home province is the issue of wine in this country. Some provinces prohibit wineries from shipping their products directly to Canadian consumers outside of that winery's home province. And why do we do this? Because of a system of protectionist measures that exists in every single province in this country, that denies consumers choice, that stops Canadians from purchasing world-class, award-winning wines and that hurts our economy.
Take the example of Beau's All Natural Brewing Company in the small town of Vankleek Hill, Ontario. It's an award-winning brewery right in Ontario, and they're banned by law from selling their beer 20 km away in the province of Quebec. It's prohibited for them to sell their product in Quebec, but they can sell their product freely and openly in the United States.
As a result, they're expanding their operation into New York State and taking all the associated business with it. Jobs in manufacturing, jobs in trucking, jobs in retail and jobs in bottling—all of it is going down to New York. And as Canadian consumers, we're denied more choice of a Canadian product that is being freely sold in Ontario and is now being expanded into New York State, but we can't get it here in Nova Scotia.
When Canadian comedian Tom Green was on Jimmy Fallon's show just about a month ago, he brought a bunch of Beau's beer. Jimmy Fallon has now said that Beau's beer is one of his favourite beers and he's going have it on-hand in the green room for his guests. So Jimmy Fallon will get Beau's beer before any Canadians outside of the province of Ontario will have an opportunity to get it.
Another example is from the Dairy Processors Association of Canada. I met with them recently in Ottawa. Did you know that every single province in this country has a different standard for the little coffee creamers we all know so well and fidget with every morning? Every province has its own regulation for size, dimensions, weight, and even the type of glue to hold the little hatch down.
So dairy producers in every province have to choose which province they're going to operate in because they're not going to duplicate the cost of packaging their cream in every province and territory. So what happens to that dairy farm? They develop their product and they're locked into a local economy, a regional economy or a provincial economy, but they can't grow beyond that. They can't grow to scale, they can't have pan-Canadian success and they can't learn about logistics. It prevents them from the experience of being effective across Canada, developing their supply chain domestically and then launching forward and engaging in world markets to become global leaders.
Trade barriers are holding businesses in Canada from growing, and why are we doing that? Well, in the case of wine, we do that because we have government control of how liquor and alcohol and wine and spirits are distributed within provinces. And why do we sustain that model? Well, because government gets a taste of the revenues. It's about taxes and income directly to the government and the control of it.
And as a consequence of that, Canadian businesses are suffering. Canadian wineries are suffering. We're losing jobs, we're losing economic opportunities and businesses are not being allowed to grow. It's causing huge consequences for Canada to continue to move forward.
Canada needs a bold policy to break down barriers to trade within Canada.
Foreign firms operating in Canada should not have a systemic advantage over Canadian firms operating in Canada.
The opportunity to take action is here.
All of Canada's provinces and territories, for the first time in 20 years, have expressed a willingness to aggressively pursue a new free trade agreement for internal trade in Canada.
As Canada's Minister of Industry, I am making modernizing Canada's Agreement on Internal Trade my top priority.
This problem cannot be allowed to continue.
And this is too important an opportunity for us to let slide by.
We are reaching out to businesses.
We are identifying irritants that we can address for immediate and tangible results.
We are looking to modernize dispute settlement mechanisms that support the Agreement on Internal Trade and to update the governance of our committee.
So here we are in 2014, on the doorstep of our 150th birthday in 2017. What I'm asking for is your support, as a Chamber and as business people, to see the self-evident failure of the status quo and to join me in the push to get all governments across the country to move forward.
Today we're in a great spot to actually move forward on this file. A month ago, I was in Montréal and I met with Minister Jacques Daoust, who is my counterpart in the Province of Quebec, and he said to me, "Minister Moore, I understand that you're pursuing this ambition to have a new free trade deal within Canada. I want you to know that I'm a Quebecer and I'm a federalist. I'm a Quebecer, but I'm a Canadian first."
We want more Canadians to have that spirit. Preston Manning used to say, "There are two kinds of people in politics: those who want to be something and those who want to do something." Minister Daoust in Quebec is a guy who wants to do something.
So here we are now. We have continuity all across this country—Liberal and Conservative and free enterprise governments all across the country, people who are open to free trade, here in Nova Scotia and in Quebec as well. The Province of Ontario is also at the table and prepared to do something substantive.
In August, we're going to be having a meeting of all the ministers responsible for internal trade. I'm trying to stand this back up, get some inertia going, get people interested in understanding the economic consequences of the stupidity of the status quo and the ultimate economic imperative of breaking down these barriers to trade.
So that's why I'm here. That's why I'm on this tour. I will be meeting with my provincial counterpart here in Nova Scotia today. I'm going to be in Regina tomorrow making the same presentation. I'll be talking to them about the imperative to do this and what it means for Saskatchewan. Then I'm going to British Columbia, reminding British Columbians what it means for them.
We have an opportunity here, with governments all across the country that are open-minded and forward-leaning and engaged in this file and that actually want to get something significant and substantive done. And we, as the federal government, also have tools at our disposal to go alone and break down barriers to trade, and we're going to be implementing those tools in the fullness of time. It's essential that all provinces work with us and that we build this economic union all across this country.
By working together, we will achieve great things for Canada.
Thanks very much for your time.