Business investment declining
In an early December MP report I covered the topic of "progressive trade" that has been frequently mentioned by the Trudeau Liberal Government.
In a more recent MP Report on the status of NAFTA discussions, I raised the topic of progressive trade and asked the question "Do you believe the prime minister should abandon the demand to include "progressive trade" language in trade negotiations or do you view this as something that Canada should be steadfast on"?
I am thankful that each week my MP Reports generate a considerable amount of feedback and on this particular question the response was overwhelming.
The vast majority of the feedback I received was that the demand to include "progressive trade" language should be abandoned.
It appears even the Prime Minister had taken this advice as this week we learned that Canada will now be signing on to the TPP (Trans Pacific Partnership) deal that has since been renamed the Comprehensive and Progressive Agreement for Trans-Pacific Partnership.
The revised text that Canada agreed to contains no elements whatsoever related to the progressive trade values that had been previously demanded by the Liberal Government.
The Official Opposition supports this agreement and on a personal note I would like to publicly credit the Prime Minister for demonstrating some flexibility and dropping demands that other countries would not accept.
As I have previously pointed out most Canadians would not accept values from another country being imposed on Canada to accept a trade deal so it is an unrealistic expectation that other countries would adopt our values.
However. while I view most of this as a positive there is still another problem.
In a word competitiveness.
Here in Canada, we will have an increase to CPP Premiums that employers contribute to. In addition we will soon have a national carbon tax that will be coming into effect that some economists predict will become a $30 Billion a year tax grab by the year 2022. Top income earners in many Canadian provinces are now facing a personal tax rate over 50% of what they earn.
The challenge is that all of these factors add costs to doing business here in Canada.
It should be noted that in many cases these same costs are NOT being imposed by other countries that Canada competes with.
Further a free trade agreements means that a company can set up an operation in another country to take advantage of these lower costs and then freely access the Canadian marketplace and thereby undermine certain interests in Canada in terms of jobs and business investment. In return there may be a decrease in cost to consumers and foreign imports that may help some industries, in addition to more market access for our industries- like wood, agriculture and specialized manufacturing in our riding.
This, in theory, is where "Progressive Trade" comes in.
If other countries were willing to adopt some of these labour and environmental policies that would correspondingly increase costs the international trade playing field would be more level and Canadian interest would be better protected.
The challenge is that many other countries are well aware of this and are using a lower cost regulatory environment to be more competitive in attracting investment, not unlike what has just occurred with the United States significantly reducing business taxes.
As it stands Business investment peaked in 2014 under the former Conservative Government and since the Liberal Government has been in power has declined to the point where Canada now ranks 16th out of 17 OECD Countries in this category.
My question this week: are you concerned about the decline in business investment?
I can be reached at Dan.Albas@parl.gc.ca or call toll free at 1-800-665-8711.
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Dan Albas is the Member of Parliament for the riding of Central Okanagan-Similkameen-Nicola.
Central Okanagan – Similkameen – Nicola