Prime Minister addresses Canadian Club of Toronto

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Good afternoon, ladies and gentlemen.

Sponsors and honoured guests of the head table, colleagues from the Parliament of Canada.

It is a distinct honour for me, once again, to have the opportunity to address this prestigious organization, the Canadian Club of Toronto.

I think you will all acknowledge that we’re doing things quite differently in Ottawa compared with the former government. The last time I spoke to the Canadian Club, our Conservative government in Ottawa had been in office only two months. Now, we’ve become one of the longest-serving minority governments in Canadian history. Our government does not claim to be perfect but we can say, after 21 months in office, that our economy is strong; the government is clean; the country is united; and Canada’s back as a player in the world. Despite all the sabre-rattling by the opposition, it remains my conviction that the public doesn’t want an election but they do want us to get on with the job of governing so they can plan for the future with confidence. As I said in the debate on the Speech from the Throne, it is really the people, not the government, who have built this country:

The aboriginal people whose roots run deepest in our beautiful land;

The French explorers who laid the foundations of the Canadian state on the banks of the St. Lawrence nearly four centuries ago;

The British settlers who brought the democratic ideals and institutions we have moulded into our own; and

The immigrants from every corner of the earth who have enriched our society with their traditions and their ambitions - Canada is their legacy to us.

Enriching this heritage for future generations is our duty to them and every day millions of Canadians are doing just that. They’re setting the nation’s moral compass by teaching their children right from wrong. They’re making our communities better by giving more than they take and they’re building our economy with their hard work and their creativity.

The Speech from the Throne has now been passed by Parliament and our government will move forward on the five core priorities of our plan entitled Strong Leadership, a Better Canada. Those priorities are:

To strengthen Canada’s sovereignty and place in the world;

To modernize our federation and democratic institutions;

To make our streets and communities safe again;

To protect our environment and, by extension, the health of Canadians;

And to steer our economy towards continuing long-term prosperity. It is this last point that I wish to talk to you about today.

There are several planks in our plan to keep building the Canadian economy, including:

The largest national infrastructure investments in half a century,

An aggressive agenda of international trade negotiations;

Investments in a science and technology strategy;

New initiatives in education and skills, in immigration and foreign credentials recognition;

And a review of our investment and competition rules.

But, none of these things is more important than the priority of good national financial management, and of getting taxes down and keeping them low.  Last week, the Minister of Finance, the GTA’s own Jim Flaherty, issued the Government’s pre-budget economic statement. You know well the context of this action.  While our economy remains strong, Canada is not immune from the significant uncertainty that has grown in the world economy in recent months.

With weakness in some export markets – and the rapid appreciation of the dollar – we are living in challenging times. We felt a need to act early, to send a clear message that, for those looking for optimism about the future, this country is rock-solid and so, we announced another major step in our agenda of cutting taxes for every single individual, family and business.

With the $60 billion of cuts announced last week, the total actions taken by this government to date are approaching $200 billion in personal and corporate tax cuts over the next five years. Federal taxes will fall to the level they were at in the last year of the Diefenbaker government, before the policies of the late 1960s, before Trudeau, back to the lowest level in nearly half a century. We are determined to create one of the most competitive and attractive tax environments on the planet.

That means lowering taxes for everybody -- employees, businesses, investors and consumers and through the measures we introduced last week:

Purchasing power will go up

Take-home pay will increase.

Canadian businesses – from small domestic entrepreneurs to global giants – will flourish and create jobs.

Key to our objectives for a strong business environment is the reduction of the federal corporate income tax rate from 22 per cent this year to 19.5 per cent on January 1 to 15 per cent by 2012 - the lowest corporate income tax rate among the major developed economies.  Combined with the elimination of the federal capital tax, the acceleration of cuts to small business taxes and further drops in employment insurance premiums, our government is determined to create the conditions for business to succeed. That success will fuel prosperity by providing greater opportunities, better jobs and a better quality of life for all Canadians.

Individual Canadians are also benefiting from tax relief. The basic personal exemption has been raised again and the lowest PIT rate has been lowered and over 600,000 low-income Canadians have been taken off the tax rolls. Just as importantly, there have been important tax incentives to benefit families and workers, like the deduction for kids’ sports and the transit pass tax credit. There have also been major improvements in the system itself – like finally ending the marriage penalty, a $2,000 tax credit for every single child, and pension income-splitting for senior citizens.

Another major action is, of course, what we are doing with the GST, three years ahead of what I promised repeatedly in the last election, the GST cut from seven to six to five per cent. On January 1st, all of us will pay a little less on everything we buy. It adds up to a massive six-billion-dollar-a-year tax cut that touches every single Canadian.

Now I see some economists don’t like the GST cut. These are economists who believe the GST is a “good tax”, which comes from the school of economics that believes there are “good taxes.” But, look, as I said in caucus, we’re willing to write the legislation so that any economist or anyone else can pay a higher GST rate if they want to.

More troubling, ladies and gentlemen, was the reaction in Parliament to our tax reductions. None of the three opposition parties supported tax relief. The NDP basically called the tax cuts a waste of government money. The Bloc called them, what else, a humiliation for Quebec. (They really need a new line.) The Liberals called the tax cuts too big: the Liberal leader just kept saying “the GST costs $35 billion,” as if the only good tax cuts are really small ones – a philosophy they practised to perfection when they were in power. But seriously, the Liberals’ opposition to tax cuts should deeply trouble Canadian taxpayers. The Liberal party under Mr. Dion has been against every single tax reduction this government has proposed:

Tax relief for families with children – they voted against it.

Pension income-splitting and other measure for senior citizens – they voted against them.

Tax relief measures for businesses, small and large – they haven’t supported a single one.

And, of course, cutting the GST – they’re against it.

But, ladies and gentlemen, they are more than against it.  Mr. Dion and his party are making it pretty clear that, given the chance, they would raise the GST back again in a heartbeat. And is that really a surprise? The guy he has writing the Liberal policy for the next election is apparently Bob Rae, who spent five years using Ontario as a lab experiment for tax-spend-and-borrow economic policy. And the big spending proposals that Mr. Dion is already on the record supporting can only be financed through either massive deficits or higher taxes. I don’t question the Liberals’ right to articulate such policies. Democratic politics is about giving the voters choices.  But our government will continue to do what we believe is right for the economy - to keep taxes down – and we will continue to argue that reversing this direction is simply not worth the risk.

Ladies and gentlemen, never in half a century have Canadians had a lighter federal tax burden – or a more targeted economic plan. We are finally putting the tax, spend and borrow legacy of the last half of the 20th century behind us.

Besides reducing taxes, we’re keeping spending focussed on getting results and we’re paying off debt – by February we will have paid off $37 billion in debt since taking office.

It’s no coincidence that we are seeing economic numbers not matched since the tax, spend and borrow era began some 40 years ago. We’re en route to yet another year of strong economic growth:

Inflation and interest rates remain low.

Canadians’ real personal disposable income has risen six per cent over the last 18 months.

Average hourly wages are up over four per cent compared to this time last year.

Taxes are at a 44-year low. Unemployment at a 33-year low.

Ten years ago, 16 per cent of Canadians lived below the poverty line - today, only 11 per cent do.

Ten years ago, nearly 19 per cent of children under 18 lived in poverty - today, less than 12 per cent do.

Ten years ago over half of all single mothers lived in poverty - today, less than 30 per cent do.

This is not perfection. But by any fair measure, this is a good record of achievement, moving in the right direction, and it gives us the flexibility to tackle our challenges; to provide adjustment funds to the workers and communities of the struggling forestry sector; to allow big write-offs for capital investments in manufacturing; and to strengthen investments in world-class education and research and neglected infrastructure.

You know, it is worth noting that our economy has been showing tremendous resiliency. Here in Ontario, for example, despite the well-documented difficulties of the manufacturing sector generally and the auto sector in particular, we’ve just seen two straight months of strong job growth. And over the year, employment growth in the province is actually now running above the national average. Nationally, job growth among the self-employed and in the services sector is very strong, including professional, scientific and technical services. So far this year the construction and utilities sectors are doing well, and cultural industries are hiring too.  The employment rates for women over 25 and for workers over 55 are setting all-time records. So, yes, we have problems, but as our esteemed Finance Minister said more than a few times last week, the fundamentals of our economy really are as solid as the Canadian Shield. And keeping taxes down, not raising them back up, is key to keeping this country moving in the right direction.

Ladies and gentlemen, last year we titled our first Speech from the Throne “Turning a New Leaf,” reflecting our mandate for change. We have delivered on that mandate and now that we’ve turned a new leaf, we are fixing our sights on Canada’s long-term horizons, on where we want to go in the 21st century, and how we will get there.

This time we have chosen as our symbol, the North Star. The North Star has been a guide for mariners and explorers for centuries and, like the North Star, Canada has been a guide to other nations.  Through difficult times, Canada has shone as an example of what a diverse people joined in common purpose can achieve, a nation that is prosperity and hope, a land of freedom and human rights, a country where merit trumps privilege.  Yet Canada’s greatest strength has always laid in its energy and determination to move forward and build an even better future.

Our government is committed to strong leadership to realize an even better future, with a stronger Quebec within a better Canada; a Canada proud of its leadership in the world and confident in its economic prospects; a Canada built on a strong federation and a robust democracy; and a Canada that is safe for our families and healthy for our children. I believe that Canadians, standing on a proud history, should look forward to a horizon as limitless as the promise of our country.

Thank you. And until next time.