August 17, 2006
Archived - Address by the Honourable Jim Flaherty, Minister of Finance, to the Ontario Convenience Stores Association Annual General Meeting
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Convenience store owners make a big contribution and valuable contribution to the Canadian economy and the Canadian way of life. I am happy to be here, to share some time and ideas with a group of entrepreneurs like you-people who work hard and contribute more than many of us know to Canadians, to our communities and to the national economy as a whole.
My friends, you're always there for Canadians, and I say that living in Whitby with three 15-year-old boys who are constantly going out to the store. You're there 24 hours a day, 7 days a week. I'm sure everyone in Canada has paid a visit to a convenience store at one time or another. We've been there as children to buy-I guess I'm dating myself-I was going to say penny candy but that shows how old I am, is anything sold for a penny anymore? I don't know. As teenagers certainly to buy snacks and magazines, as adults to pick up milk and diapers for our children-I can remember that well-and newspapers that connect us to our communities.
Corner stores are the cornerstone of our economy in Canada. You are the heart and soul of small business. You keep the entrepreneurial spirit alive from generation to generation and many of you, I know, work long hours alongside your families. Many of you provide young Canadians with their first jobs and their opportunities to learn and to teach and to be taught the value of hard work and responsibility and the value of a dollar. So your contributions cannot and should not be underestimated and certainly are not underestimated by the new Government of Canada.
In Ontario alone, convenience stores contribute $12 billion a year to the Canadian economy and provide more than 70,000 jobs, which is an enormous contribution to the province of Ontario, Canada. As your association itself has noted, every 30 days Ontario's convenience stores have as many visitors as Canada has people-that's about 32 million people. This impact is profound and your determination is inspiring.
So on behalf of Canada's new government, on behalf of Prime Minister Stephen Harper, I thank you and your families for the constant sacrifice you make in order to make our lives a little easier.
Now let me say a few words about the direction of the new Government of Canada. It seems like a while ago now but it was only in January this year that Canadians voted for change. They chose change to replace a culture of entitlement with a new government that is open and accountable. They chose change to replace years of excessive spending-and, my goodness, I've seen that-with a government that is focused and deliberate and fiscally responsible. They chose change. They chose a government that will move this country forward and help Canadians reach their goals.
Like you, we keep our word. We respect the trust that Canadians have placed in us and we will not take that for granted. We told Canadians we would clean up government, and the first piece of legislation we introduced in the House of Commons was the Federal Accountability Act. This act puts an end to the culture of entitlement which was prevalent in government. It ensures that Canadians receive a full accounting of how their tax dollars are spent.
We also told Canadians that we would lower their taxes, and in our first budget, which I was honoured to present in the House on May 2nd, we did just that. We cut taxes of every kind. We cut taxes for working Canadians beginning with a 1 per cent cut to the GST. Sales taxes are down. Income taxes are down. Business taxes are down. Small business taxes are down. Immigration taxes are down. Capital and capital gains taxes are down. And we're not finished yet.
We told Canadians we would make their streets safer. We've now introduced legislation designed to protect Canadian families and communities by strengthening the justice system, putting more police on the streets, creating reality in sentencing in Canada and giving those police officers better resources and training.
We also committed to Canadian parents that we would support their rights to choose the best way to care for their children. After all, the best parent is not the government; it's mom and dad. Now Canadian parents are receiving a $1,200 per year Universal Child Care Benefit designed to support their child care choices through direct assistance. Our government is also working to create more day care spaces.
And, finally, we told Canadians we would protect and strengthen our health care system by working with the provinces to provide a patient wait times guarantee. I can tell you that our government is hard at work on this and making significant progress.
So those were the commitments that we made, and I'm going to talk a bit about reducing the tax burden since that's my job as Minister of Finance. You know, a lot of you will say: why cut taxes? Well, simply put, it's the right thing to do. Simply put, we want Canada to grow. We want people to make profits. We want people to reinvest in their businesses. We want them to employ more people. We want people to view Canada as a great place to invest and grow businesses and employ people and create wealth and watch this economy grow.
Government has been overtaxing Canadians for too long. Under the previous government, billions of dollars were taken from Canadians through overtaxation to fund large and often hidden surpluses. Meanwhile, Canadians are working longer, paying more taxes and saving less than they were 13 years ago when the last government came into office. We know that it's in the shop, on the farm, in the classroom, on the factory floor, in research labs, small businesses, on construction sites, community centres and church basements, all denominations, where this country moves forward every day.
And that is where we should remove the burden of overtaxation. Why? So that we can encourage independence, initiative, family, hard work because they are the very core of what drives and enriches Canadian lives. Canadians don't need to hand over more and more of their hard-earned money to government in order to fund continued surpluses and wasteful spending, much of which arises out of so-called windfalls at the end of fiscal years, where the previous government would go ahead and spend money without parliamentary authority on all kinds of programs, many of which had nothing to do with the core responsibilities of the Government of Canada, and we're not doing that anymore.
Canadians need to keep more of their money to invest in their own families and their own priorities and their futures, to invest in our economy and help businesses thrive, and that helps all of us as Canadians.
So it's time to take less from Canadians in terms of taxes. That's what we started doing in Budget 2006. We delivered over $20 billion in tax relief over two years. That's more tax relief in one budget than the previous government's last four budgets combined. In all, we introduced 29 tax cuts, with over 90 per cent of those tax reductions going to individual Canadians and their families. As you know, we reduced the GST from 7 to 6 per cent effective July 1 of this year and there's more to come. As you know, we had a further commitment with respect to another point over the course of the mandate.
Cutting the GST cuts taxes for everybody, including those who don't earn enough to pay income tax. And you may think that's not very many people in Canada, but it's actually about a third of Canadians that benefit from the GST that would not benefit from simply an income tax cut. So we're providing, by that GST reduction, we're providing a benefit for all Canadians every time they buy something in one of your stores or elsewhere in the retail market. We reduced the lowest personal income tax rate as well. And this is a substantial tax credit.
We brought in a credit for transit passes so that people who take public transit now with a monthly pass will in effect have two months free per year. And this is an encouragement. It's an environmental measure. It's good for our cities. It's good for our great urban areas like the Greater Toronto Area and I think it'll have a marked effect as it comes into play.
We delivered the Canada Employment Credit and that helps Canadians-you know many Canadians have complained that if you have your own business or you're self-employed or whatever you get certain deductions but if you're employed you don't. We brought in the Canada Employment Credit to help Canadians offset the costs of working. Canadians can put this money towards things like uniforms and computers and so on. And that's available on employment income of up to $500 and it will double to $1,000 starting January 1, 2007.
Now looking forward, you know, every Canadian, I think, certainly in my experience, dreams of a better future for themselves and for their children, for the generations that will follow. It's the Canadian dream and it's Canadian history-when you look at Canadian history. And all of us are newcomers to this country, as you know, except for the Aboriginals in Canada. And the dream always has been and the reality always has been in this great country that each generation does better than the generation before, that the standard of living and the quality of life of each generation is higher than the generation before. And it is our goal to ensure that that happens, in the new economy of the world, that this great country, this great economy of Canada grows with that world economy.
We're making it easier for new Canadians to pursue and realize their dreams. We're making it easier for those who make the difficult choice to leave their country of birth and build a new life here in Canada, easier to get settled and to get ahead. Our country is what it is today because of the people who struggled before us.
Effective May 2nd this year, we reduced the Right of Permanent Residence Fee, as we promised we would, by 50 per cent from $975 to $490. We increased immigration settlement funding by $307 million and, very importantly, we funded the establishment of the Canadian Agency for the Assessment and Recognition of Foreign Credentials so that people who choose to make Canada their home have the opportunity to put their professional training to good use.
You know and I know that we have thousands of immigrants already in Canada who have the skills and training necessary to make a much-needed contribution to our economy and our labour market, and this is more and more important in Canada today because in certain parts of the country, certainly, we're facing a shortage of qualified people for many jobs. Now the problem has been that they often didn't get their qualifications evaluated and recognized by employers or by the appropriate licensing or professional bodies. When they lose out, Canada loses out. It's a waste of potential and that's why we've created the new agency so that we can ensure that newcomers' skills, training and credentials are recognized and respected and rewarded promptly.
And we want Canadian business to grow. Canada is a country of entrepreneurs. If you look at Canadian history we're risk takers, we're innovators, we're achievers. Some of the world's most innovative companies today and inventions today started right here in Canada. You know this-I do have it with me-this device here, this RIM BlackBerry, which every member of Congress in the United States carries, by the way, because of 9/11. It was the only thing that kept working so they could communicate with each other in Washington and elsewhere. That's a piece of brilliant Canadian innovation from, as you know, from Kitchener-Waterloo, from RIM. It has revolutionized the way we communicate and do business. As I say, created by Canadians.
Our government believes that it is important that entrepreneurs like you have the opportunity to compete in a country with a supportive economic environment which rewards hard work and helps entrepreneurs get ahead. The reduction that we made this year in the small business eligibility threshold moved from $400,000-sorry, to $400,000 from $300,000. That goes to the point of wanting Canadians to reinvest in their small businesses and grow their businesses.
We're also reducing the 12 per cent rate to 11.5 per cent in 2008 and 11 per cent in 2009. That's the small business rate. We've provided the tax relief promised but not delivered, I might add, by the previous government.
We reduced the general corporate income tax rate. We eliminated the corporate surtax for all corporations. We eliminated the federal capital tax as of January 1, 2006. We are delivering results for businesses, not just good intentions. Just like you deliver results in your businesses.
So cutting taxes is one way to help Canadian businesses grow. Providing the right environment for growth is another. There is a new momentum building in Canada. I can tell you as I travel across Canada and including here in the GTA, there's a great feeling of optimism in this country. It's not just in Calgary we all know is boom times. There's a tremendous sense that we have an opportunity here, particularly with a new government, with a new point of view, with a new optimism to grow the Canadian economy and ensure that we fulfill that Canadian dream of a higher standard of living and a higher quality of life.
So being Canadian today means being innovative, having initiative, being confident, optimistic, ambitious. It means seeing ourselves and the world through new eyes with a renewed will to achieve even more than we have before in this great country. It means unleashing our country's entrepreneurial potential.
You know, Canada wasn't built by programs. Even though I've been in government for a while, it wasn't built by governments either. It was built by people, hard-working Canadians like you, like my parents, like my grandparents, like your parents, striving for better lives for themselves, their families and their communities. We as a government can never forget that. The engine of the economy isn't government. It's people that get up every morning, even those dark days in January and February, and go out and work. I'd like to say you don't work half the year for the government but it still is almost half the year that you're working for the various levels of government in Canada. But we're working on that and we'll continue to reduce that tax burden in order to encourage people to work and grow the Canadian economy.
So that's why we're here. We're here to create a better future for Canada. We are fortunate-we all know that. We're living in a country where we are free to speak, and given the events of recent times, as you look around the world, you know, just the ability to speak openly, to worship freely, to vote, to raise a family, to educate our children, to have the fabulous educational opportunities and skills training opportunities we have for young people in Canada and to spend our lifetimes reaching higher, striving to become better in whatever we define as success. That's why where previous governments pursued unsustainable spending, we are pursuing and offering choices for Canadians, choices that will lead to greater opportunity.
Now, as the Minister of Finance, I have had the opportunity recently to discuss Canada's potential with the finance ministers of the world's leading economies in the G7. I can tell you that they're impressed and excited by our country's, by Canada's growth and Canada's potential. We have the lowest unemployment rate in over 30 years, low inflation, continuing budget surpluses and an economic expansion that is now in its 15th straight year, but we must have a vision. We must set clear and practical goals, make the right choices and work together-private sector and public sector-in a sustained and systematic way for an even better economic future. We need a competitive tax system. We need a competitive regulatory system. We need to make investments in our economy attractive and easy. We need to educate our youth so that they can reach their full potential and compete on the world stage. We need to invest in the continuing development of those already in the workforce. We need to invest in research and development. And we need to unleash and support the entrepreneurial spirit of Canadians.
Now we've taken the first steps to do that with our first budget in May but we are determined to do more, to do more to ensure Canadian businesses can continue to grow, to do more to offer new incentives and create jobs. That is why in the weeks and months ahead our government will set out a clear, long-term economic plan to strengthen this country with objectives aimed squarely at increasing opportunity for Canadians. We will talk with Canadians across the country, listen to their challenges and their ideas and develop a plan which will take Canada even further in the years ahead.
Now I've gone on here almost as long as it seems. I'm almost done. These are good times for Canada. It's great to represent Canada in the finance meetings that we do with the G7 and G20 and the IMF and the World Bank. We have a tremendous amount to be proud of in Canada. And what opportunities we have in Canada to have what would be a dramatically splendid economy going forward if we make the right decisions and have the right vision.
As I say, our economy is solid. We have a new government and a new, exciting direction. We have a great prime minister who knows where he wants to go in terms of leading the Government of Canada and leading the growth in the Canadian economy. Some people might think that this is not a bad start. Well, it hasn't been a bad start, I must say, for the government these past six months or so. But we have much more to do. It can get much better. We can do even better. Canada now has a government that embraces and embodies the Canadian spirit to exceed our own expectations and reach for our dreams. So let's work together to create even more opportunity and an even stronger and more prosperous Canada for today's generation and for those who will follow us.
Thank you for inviting me to be with you today, and I'll be happy to hear your questions. Thank you.