MASSE IN THE HOUSE: Debate on Bill C-50 & Employment Insurance

November 3, 2009 – House of Commons Debates

Debate on Bill C-50 & Employment Insurance

Mr. Brian Masse (Windsor West, NDP): Mr. Speaker, I would like to ask my colleague a bit more on the John Deere situation. It is an interesting situation that reminds me of some of the poor planning that has happened in the manufacturing sector and the vulnerabilities that we currently still have.
I would ask the member for Welland to elaborate on the John Deere situation, because there were good jobs that have now been lost.
Mr. Brian Masse (Windsor West, NDP): Mr. Speaker, I am glad to rise and participate in the debate on Bill C-50 in the House of Commons.
The employment rate in my riding of Windsor West in the last two years has been leading the nation and had historically high amounts prior to that. My region has been raising alarm bells for many years in the House with the previous Liberal administration and now the Conservatives that the lack of auto policy was going to cost us jobs. We had seen the erosion and now the drop-off at the cliff with regard to Canada moving from first in auto assembly to tenth.
Bill C-50 is not going to particularly help the auto sector and workers too much, as the member for Welland noted quite correctly. I will support this bill because I know what it is like for families to go through time and a process where they run out of benefits and do not have the supports necessary. The effect it has not only on families but communities is terrible and is something that can be avoided.
This bill has some elements that are positive and if we can cover 150,000 or 190,000 people for $1 billion, which is the estimated cost, or whatever it might be, then I am willing to vote for it because people in my community and I do not want people in this country have to through what we are going through right now.
We are faced with even greater complications because not only do we have the loss of jobs but also the loss of an industry due to a lack of policy. I noted in my opening comments that there is no auto policy in Canada. The minister is finally convening CAPC this Friday, which is a good move. There will finally be some action there.
The actual competition, which is the United States, has sprinted almost to the finish line with a new energy economy. In fact, it was not President Barack Obama but actually George W. Bush who set up a $25 billion fund for the U.S. auto industry prior to the sector's fallout and the repercussions that have taken place.
As a consequence, Michigan, for example, will get two new car factories and four new battery factories because it has been very assertive in procuring the technology, development and evolution to make sure things happen.
There are congratulations to extend to Ken Lewenza, president of the CAW, but there are also some difficulties. Once again, he has negotiated an investment in Windsor, Ontario for a new engine. Unfortunately, the St. Thomas plant in the London area is going to be closing. I am very concerned about the workers in that area. London is now quickly approaching the Windsor numbers for unemployment insurance. It is at 11%. What I am worried about is people continuing to fall off the system.
This bill will help those who in the past have not had claims in the system. There are some older workers that this targets and that is very important. I have seem some of the fallacies of policies that have evolved especially with older workers where it is claimed that they just need retraining, everything will be fine and the market will settle itself.
In my region there is tool and dye mould making, which is the best in the world, hands down. It actually engineered change to the industry and have led the world for many years. However, now jobs are being shed because of trade policy and the lack of enforcement of a number of trade issues such as dumping and the whole procurement process that leaves Canada many times outside the door.
I would point to one in particular. The Department of National Defence shamelessly out-sourced a contract to Navistar International. It is actually building Canadian vehicles for our military in Texas, instead of Chatham, Ontario.
Canadian men and women could have been working and we would have paid less unemployment insurance than to retool that factory, which was a small undertaking. Ironically, the trucks that our Canadian men and women could be building are now going to be built in Texas and our workers are sitting at home. It is unacceptable that this policy continues.
That procurement was allowed under our current trade agreements, but we are the only nation that does not do it. The United States does this on a regular basis and it is unacceptable.
I want to briefly talk about what we can do for employment insurance by increasing the benefits and what it means to individuals. They are able to save their homes, make sure their kids continue to go to school, pay the bills during difficult times and there is a sense of stability. We are making choices as a country about how we want to use our resources.
This government and the previous administration had an EI surplus windfall of $57 billion provided by the workers and the actual companies and their contributions. To take that money away is nothing more than thievery. It is a slap in the face to all those who have paid into the system, especially when they need it at a time when we have an economic downturn like we have right now.
Ironically, this downturn which was not brought on by workers, their wages and pensions, it was done by greed and mismanagement, often incubated in the U.S. housing market and other markets. It has now been turned on its head to be an attack on workers, wages and benefits, now what the new benefit descriptions have called a legacy cost which is absolute nonsense.
When people sit down at the table and work with an employer and negotiate a pension instead of a wage increase, instead of benefit increase, that is a deferred wage that they were entitled to, that they should have. It is something they have actually sweated for and is something they actually deserve for them and their family later. It is important for this country to continue to work on its pensions. I am glad that as a New Democrat we have been able to move the ball on this issue as well.
What could we do in terms of economic policy to change things around now, to provide the resources to expand the employment insurance system to make sure that people can continue to have their homes and be able to move forward and get some new employment?
One of the things that has been missed in the public debate, and it is very interesting, is that this country has been lowering large corporate tax cuts since the year 2000. I commissioned a paper, because as things stand right now we are going from about 29% down to 15% by 2012.
Independent of my own research, I had the Library of Parliament, economists and other supports through the Library of Parliament that every member of Parliament here is entitled to, run the numbers on estimates in terms of what it cost in the year 2000 to today in terms of corporate tax cut reductions. Then, on top of that, what it is going to cost from today to 2012 to bring us down to the 15%.
Interestingly enough, the first wave from 2000 to today, about two months ago, is $85 billion in terms of overall revenue that we have foregone as a country, that we no longer have for a number of different measures. Now, the second wave that is still coming up is going to cost us $86 billion. It is another $86 billion that is going to be necessary.
What is interesting is the government is right now borrowing money from future generations to provide a corporate tax cut for the oil and gas companies, some of the pharmaceutical companies, and the insurance companies, those profitable industries that do not need this type of incentive, that will not change the way they have their operations in the market.
It will be a loss of revenue that not only we will not have to spend currently on targeting different industrial areas, but also we will have to pay back with interest. We are borrowing at record lows right now, .25%. So it is going to be interesting if later on, over the years, when we pay this off, especially if we are in a structural deficit, which I believe we are because we have gutted our capacity to get out of this economic downturn quite significantly.
All we have to do is point to the fact that everybody is hoping for a market recovery and for shares to go up based upon speculation on the price of oil and other things, but our unemployment rates still climb.
I can say that even if we get some recovery, like the Ford plant, and the new investment that was done by the CAW at negotiations at the table, in isolation, the government was not there, they have been able to increase some jobs but it is not to the volume that historically we would have had to pull ourselves out of the system.
For the automotive sector in particular, this is a structural change. It is not a cyclical one. We are going to see some problems in terms of the overall recovery.
One of the things that Canadians need to understand right now is, why on earth would we not cease the large corporate tax cuts at this point in time? As we have shed record amounts of manufacturing jobs across Ontario and Quebec, obviously lowering the corporate tax cuts has not worked. Obviously for those industries that are under attack because of other economic policies from other countries as well as trade issues, they are not preserving the actual jobs. In fact we are shrinking them anyways.
We need to turn that, and have good sectoral strategies. One of the things we can do is invest in green technology, not only just for the consumer element but also research and development. That is going to require investment. Where does that come from?
I would suggest that one of the first things we should do is stop borrowing from our children to provide corporate tax cuts to the corporations that do not need it right now. Let us put that back into their future, so that they can actually be part of the solution instead of this continued policy of the problem.
Mr. Brian Masse: Mr. Speaker, I do not know if it is continued arrogance or even not understanding or appreciating what Canadians are going through. It does not make any sense.
However, he is correct in noting the $57 billion that was in the fund. Now, an unfortunate repercussion of the government's new policy to CFIB board of a $2 billion fund that is already exhausted, we are going to see payroll taxes increase. The Parliamentary Budget Review Officer has already done that. The member for Outremont did a good job for our side on that.
Ironically, what we are going to have--and this is why I spent some time on the corporate tax cut reductions when the auto sector has been reeling and will not benefit right now from that type of policy--is that this payroll tax will also be an additional tax on those companies that are struggling right now. So, the forestry sector, the auto sector, the manufacturing sector, any of those sectors that are actually struggling right now, will actually have a new tax introduced on them so that they are going to actually be subsidizing, once again, the banks, the oil industry, and the other types of institutions that are doing quite well.
It makes no sense to actually bring in this type of policy at this point in time because it would further prohibit economic development.
I can tell members the investors for the auto sector and for the manufacturing sector are looking at these types of policies. They are not necessarily looking at the overall corporate tax cut reduction. Just look at the fact I mentioned about Michigan and how they have been procuring plants much more significantly than we have here.
The finance minister can brag all he wants about having it down to 15% by 2012 and saying that right now we have a better rate than the United States. The reality is that jobs are going somewhere else.
In fact, in Michigan, they have also done a number of things in their sector.They are now competing for our film industry. They took an old auto facility and have actually made it into a mecca for film. The economic development is going to be quite significant. It is going to actually compete against Toronto.
We have a number of industries that we are losing out because there are other types of programs and services being offered by our competitor to the south. All we can do over here is just say, “We have a lower corporate tax rate and so you should come over here”.
The reality is that they have actually been getting the rebound, not ourselves. That is very troubling because some of the stuff that is actually developing, for example, in the auto sector is new technology, and not only is it the overall assembly of that new technology at the high level, at tier one, being the actual production of vehicles, it is a changing industry for the parts and supply development of this new technology. The clustering of those new facilities will often go around the new development, or might go there as opposed to retooling in Canada, which would be necessary to service this new type of investment that is happening in the United States. Because often, in the past, at least if anything, if a plant went to the United States, we would feed off it from parts and services, similar to them, between Ohio, Michigan and Ontario.
However, now, with some of the new emerging technology my concern, and it is being validated, is that the parts sector will be more vulnerable than ever before because Americans are looking at whether they should retool or just actually build new facilities in the United States to supply these new plants, and that would cost Canadian taxpayers significantly and communities very significantly.
One only has to look at the corridor region from London to Windsor, Ontario. As I noted, London is up to over 11% unemployment right now. We have to ask those members, where is the policy? We have been pushing for this policy all along. Once again, I do thank the minister for at least convening CAPSI on Friday, but it is not enough.
What the U.S. has done is a $25 million policy of low-interest loans. What we have to match in Canada is a $50 million policy over five years for $250 million. Ironically, that money, the industry knows, came from a new tax that the government put on the auto sector. A new tax provides for the incentive that they put out there at the end of the day and they do not accept that at all.