June 17, 2016
St. John’s, Newfoundland and Labrador
Archived - Speech by the Honourable Bill Morneau, Minister of Finance
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St. John’s Board of Trade
Check against delivery
Thank you, Judy—and good morning, ladies and gentlemen.
I want to start by offering my sincere thanks to the St. John’s Board of Trade for their extremely accommodating nature.
I also want to acknowledge Premier Dwight Ball, Finance Minister Cathy Bennett—and my colleagues Ken McDonald, Nick Whalen, Seamus O’Regan and, of course, Minister Judy Foote.
You may know that I was supposed to come for breakfast in April—but a spring snowstorm got in the way.
Someone told me it might have been Sheelagh’s Brush.
This being Canada, I suppose I should have expected at least one snowstorm to get in the way after we tabled a budget in late March.
But—nevertheless—you were kind enough to invite me back.
Each time I come, I am struck by the amazing natural beauty of this place, and the generous nature of Newfoundlanders and Labradorians.
And I know that you’re facing some tough times here on the island these days.
Across the country we know middle class families are having a hard time feeling like they’re getting ahead—but in this province you have been hit particularly hard by the drop in oil prices and events around the world.
And I know much of this can feel like it’s out of your control.
We look at what’s going on in China where the economy is slowing as it finds a more sustainable path to growth.
We look at the U.S. where the dollar is weighing on growth.
Earlier this week I was in London, England, where the threat of a Brexit—the UK leaving the European Union—is a very real concern not just for Europe but for the world economy and for Canada.
I made Canada’s position clear: we support a strong UK, as part of a strong European Union.
These are just some of the things I watch closely as Finance Minister—because I know they can have a very real impact on people as they go about their daily lives.
You know that all too well.
But I’m happy to report that there are signs things are about to get better.
Just this past Wednesday, Bank of Canada Governor Stephen Poloz said that while our economy will ultimately need to adjust to a world of significantly lower oil prices, there is reason to be optimistic; we are on the right track, we are making real progress.
So, I want to do two things this morning.
First, I want to tell you, you are not alone. The federal government is here to help.
Second, I want to tell you that we’ve got our eyes on the future.
Help for Newfoundlanders and Labradorians
To my first point, we’ve been working with Minister Bennett and Premier Ball. And I can assure you that Judy and the caucus have been very strong voices for you around the table.
As a first step, a few months ago we provided an advance fiscal stabilization payment of approximately $31.7 million directly to the province.
More recently, we gave the province a little more breathing room by deferring provincial loan payments until 2022—meaning that more than $27 million in annual loan payments won’t need to be made right now.
This has allowed the province a chance to focus on long-term economic growth, and to scale back its new temporary deficit reduction levy.
This is all in addition to the investments we’re making across the country that will benefit you as well.
We know, for example, that many families across the province are struggling with unemployment—which is why we are extending EI regular benefits by five weeks in many parts of this province.
This will help families continue to provide for their children as they take the time to seek out new opportunities.
We’ve cut taxes for nearly 9 million Canadians, and we’re providing even more help for families with the Canada Child Benefit.
When the cheques arrive at the doorstep this July, 9 out of 10 families will get more than they were getting under the previous system.
Families who benefit will get $2,300 a year more, on average.
That’s money that can be used to send kids to summer camp, or purchase school supplies for the fall, or tuck away for their educations.
And then there are other investments designed to create good jobs, keep goods and people moving and ensure thriving communities.
Of the $11.9 billion over five years we plan to invest in infrastructure, we will invest $4.9 million to upgrade and improve public transit systems in Newfoundland and Labrador and $70.6 million to improve water, storm water and wastewater infrastructure across the province.
These projects are national in scope, but they have real, tangible benefits for families.
We all know what it’s like to try to get out the door and to work on time, or home at the end of a long day.
And each of us relies on clean, safe, drinkable water, right at our fingertips.
We’ve also committed to affordable housing investments of $15 million for Nunatsiavut in Labrador.
We’re waiving the 25 per cent tariff on ferries imported after October 1, 2015—a total savings of $25.1 million on the purchase of your two new ferries, the Veteran and the Legionnaire.
We’re also increasing the maximum daily residency amount of the Northern Residents Deductions to $22—a difference of about $7 million for this province over the next two years.
Finally, major transfers will total $723 million in 2016–17, an increase of $31 million from last year.
We know none of these measures are a silver bullet.
But I do hope they demonstrate our willingness to work with you as we weather this storm together.
Expanding the Canada Pension Plan
And you should know we are looking well beyond next month, or next year.
We’re looking out over the horizon to take a long view of not just what’s coming, but how we want to position Canada in the global economy of tomorrow.
And to get the biggest impact for people, the federal government has to work with others.
As you know, this hasn’t always been the case.
It is in that spirit of forward thinking and collaboration that on Monday I will meet with Cathy, and all provincial and territorial Finance Ministers, in Vancouver to work towards ensuring a safe, secure and dignified retirement for all Canadians.
And it’s not just for seniors—it’s about ensuring peace of mind and a better outcome for generations of Canadians to come.
In fact, retirement security is something I’ve spent most of my professional life thinking about and working towards.
We know too many of our friends and neighbours—from young adults to those with a little more grey hair—are worried about saving enough for retirement.
After all—it’s the difference between spending more time with your grandkids later in life, rather than worrying about the rent.
That’s why we began an important discussion last December about expanding the Canada Pension Plan.
To be sure, there is a diversity of views around the table.
But these views only add to the discussion. They enrich the debate. And I believe they will lead us to the right solution.
Each province and territory has pledged to participate in our upcoming discussion—and they have all been actively participating in talks in the months since our last meeting.
We’ve made real progress over the last weeks and I want to thank Cathy and my Finance Minister colleagues from across the country for their cooperation, their candour and their help.
And I think we can all agree there is simply nothing more central to our goal of inclusive growth, and a strong middle class, than ensuring that all Canadians have the ability to access a safe, secure and dignified retirement.
Transforming an economy so that it works for the middle class won’t happen overnight, nor will it ever happen on its own. It takes guts. It takes leadership. It takes vision.
Part of that is looking beyond the easy stuff.
Over the years, our tax code has been clogged up with deductions, exemptions and other tax expenditures that cost money, and may no longer be needed.
Recent examples include the Children’s Fitness and Arts Tax Credits and the Education and Textbook Tax Credits which we eliminated in the last budget to provide better-targeted, more generous benefits to middle class families and students.
In all, there are about 180 of these tax expenditures contained within the tax code, some dating back as far as the inception of the Income War Tax Act in 1917.
To ensure that federal tax expenditures are fair, efficient and fiscally responsible, work on the tax expenditure review announced in the budget has begun with external experts having been engaged recently to provide advice to Finance officials.
This approach will ensure that the review is informed by a range of perspectives, and at the end of the process we will be one step closer to fairness and efficiency across the board.
Conclusion: Help for the Middle Class
Help for families in Newfoundland and Labrador, retirement security, tax fairness—these are just some of the ways we’re transforming the Canada of today into the Canada our kids will need tomorrow.
And here’s why we’re doing it.
Canadians looked at the last 10 years—where we saw some of the worst job growth since the Great Depression—and said: enough is enough.
Our government is confident about the path forward: long-term economic growth will be achieved with a thriving middle class, and by securing our role in the world as one of leadership and strength.
Now—we don’t have all the answers. This is bigger than one budget, or even one government.
But we do have momentum.
And we are building on that momentum to bring back hope to the middle class.
Hope for families that have struggled for too long.
And hope for Newfoundlanders and Labradorians.
We will do that by taking care of people now, and making sure Canada is prepared for the challenges and opportunities we will face tomorrow.
I look forward to your support as we work—together—to achieve our immense potential and build a better future that works for you, and for all Canadians.