Mr. Perrin Beatty President & Chief Executive Officer Canadian Chamber of Commerce. Dear Mr. Beatty

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1 Mr. Perrin Beatty President & Chief Executive Officer Canadian Chamber of Commerce Dear Mr. Beatty Attached is the Conservative Party of Canada s response to the Canadian Chamber of Commerce 2015 Federal Election Questionnaire. We have a strong track record of removing trade barriers and lowering taxes and a re-elected Conservative Government will continue to promote economic growth with our low-tax plan for all Canadian businesses. Sincerely, Jenni Byrne National Campaign Manager Conservative Party of Canada

2 Question #1: Access to a Powerful Workforce Will your party commit to: Investing in more and better labour market information Ensuring immigration changes stop unduly limiting employers access to the international talent they need Addressing the serious processing issues and inflexible features of the Temporary Foreign Worker Program that are negatively affecting employers access to workers in a range of sectors Providing incentives for employers to offer more post-secondary co-op placements and internships Creating a financial incentive for employers to retain employees through to completion of their apprenticeship training Under Prime Minister Harper s proven leadership, our Government s top priority has been creating jobs and economic growth. While Canada has one of the best job records in the G7, too many Canadians are still looking for work or are underemployed. An increasing number of jobs in Canada are going unfilled due to a lack of people with the matching skills. That is why our Conservative Government has consistently put in place initiatives that create jobs and fill the demand for skills development and foster healthy and dynamic workplaces. Our proven record has included: Implementing the Canada Job Grant, by connecting Canadians looking for skills training and a job with employers looking for skilled workers. Creating the Canada Apprenticeship Loan, by providing apprentices registered in Red Seal Trades with access to over $100 million in interest-free loans each year. Strengthening the Apprenticeship System, by introducing the Apprenticeship Incentive Grant, Apprenticeship Completion Grant and the Tradesperson s Tools Deduction. Ensuring that Canadians are first in line for available jobs, by launching an enhanced Job Matching Service to match job seekers and employers on the basis of skills, knowledge and experience. Enhancing Labour Market Information for Canadians, including the launch of a new one-stop national labour market information portal. This mitigates labour shortages and efficiently matches Canadian workers with jobs. Removing financial barriers to Foreign Credential Recognition by making the Foreign Credential Recognition Loans Pilot Project permanent and committing to expand it further. Reforming the Skills Training System by aligning the curricula of post-secondary education institutions with the needs of employers through an investment of $65 million over four years. Supporting internships for young Canadians with a $40 million investment to support up to 3,000 internships for post-secondary graduates in high-demand 1

3 fields and $15 million to support up to 1,000 internships in small and mediumsized businesses. Investing $70 million to support 5,000 more paid internships for recent postsecondary graduates. In addition, we are committed to expanding the Apprenticeship Job Creation Tax Credit, which our Government introduced in A re-elected Conservative Government will increase the maximum credit from $2,000 to $2,500 and will extend it to the third and fourth years of apprenticeship training. Our Government has also taken action to improve the immigration system as a whole, making it more efficient, flexible and responsive to ensure it supports the needs of the Canadian labour market and businesses. Important reforms to the Temporary Foreign Worker Program ensure Canadians are considered first for available jobs and temporary foreign workers are only used as a last and limited resort when Canadians are not available. In January 2015, we launched the Express Entry system that allows the federal government, provinces and territories, and employers to actively target skilled immigrants under key economic immigration programs. Only the Conservative Party has committed to keep CPP payroll taxes low and reduce EI premium costs by 21 per cent in For job-creating businesses, this will amount to significant payroll savings that can be reinvested in training their staff, upgrading their equipment, or hiring new talent. Under Justin s and Mulcair s high-tax plan, CPP payroll taxes would increase by thousands of dollars and EI premiums would also be higher. Businesses on the cusp of growth would lose ground to higher payroll tax bills and some would be forced to close altogether. Our plan is working. Canada is benefitting from 1.3 million net new jobs, of which 90 percent are full-time and 80 percent are in private sector. Question #2: Access to Capital Will your party commit to: Introducing better tax incentives for venture capital and angel investors Changing regulations to encourage insurance companies and pension plans to invest a modest part of their funds in venture capital Forming an impartial panel of experts to review the tax system and recommend measures to simplify Canada s tax system Increasing the income threshold for the (11%) small business tax rate to $1,000,000 from $500,000 to encourage small companies to continue growing Simplifying the Capital Cost Allowance rules from 52 separate asset classes to a few broad categories Our plan for the federal tax system is to ensure it continues to provide a world-leading, competitive tax environment for job creating businesses. Our Conservative government has a proven record of lowering taxes. We have consistently lowered taxes on 2

4 businesses to help them grow their businesses and hire more workers. Early in our time in government, we lowered the small business rate to 11 percent and increased the small business threshold by two-thirds, to $500,000. The result of these changes is a small business with $500,000 in taxable income is receiving $28,600 in tax savings. We also introduced the Small Business Job Tax Credit for this year and next to provide over $550 million in tax relief to over 780,000 small businesses. Our latest budget Economic Action Plan 2015 set out medium-term plan for lowering small business taxes even further. We legislated a further small business tax rate reduction from 11 percent to 9 percent over the next four years. This is the largest tax rate cut for small businesses in over 25 years We reduced the general business tax rate from 22 to 15 percent, and eliminated the federal capital tax, helping to secure the elimination of provincial general capital taxes through a financial incentive. Actions taken by our Conservative Government will reduce taxes for job-creating businesses by $14.7 billion in and have given Canada the lowest overall tax rate on new business investment in the G-7. Under Prime Minister Harper s leadership, we have created a world-leading, competitive tax environment for job creating businesses. Our Party has a low-tax, low-debt plan for Canadian business and the economy. The other parties have opposed every tax cut we have introduced and have promised to hike taxes on businesses and employees alike. To reduce the compliance burden for taxpayers, Economic Action Plan 2014 announced a public consultation on the proposal to repeal the eligible capital property regime and replace it with a new capital cost allowance class. This is one of many concrete steps to ensure that businesses are free to devote more time to creating new products and new jobs, and less time on administrative red tape. In 2012, in partnership with Canadian Federation of Independent Business, we launched our Red Tape Reduction Action Plan, and we were proud to pass One-for- One legislation requiring that every new regulation must be accompanied by the elimination of a current regulation. We have worked to harmonize our regulations with major trading partners to make it easier to do business across borders. And, we improved the process for consulting with business owners on new government policy, requiring the public service to apply a Small Business Lens when considering regulations. As a result, Canada is a world leader in reducing the red tape burden and creating a more predictable environment for small businesses to grow and succeed. To date, our Conservative government has saved Canadian businesses over $32 million in administrative burden, as well as 750,000 hours in time spent dealing with red tape each year. This is significant as regulatory compliance costs are disproportionately borne by small businesses. Under our Government, we have seen a steady shift in the culture of the federal government in favour of the needs of Canadian small businesses. But we have a plan to do even more and move forward to a stronger economy. 3

5 A re-elected Conservative government will build on our current success in cutting red tape by: Launching a new round of cross-country red tape consultations to get feedback on our current reforms and help to inform future ones. Expanding the red tape baseline to account for requirements on businesses stemming from legislation and policy rules in addition to regulations. Achieving a net reduction in the red tape burden of 20 percent by the end of the next mandate. We have a proven record that has controlled the growth of red tape, to the benefit of Canada s economy. These new measures will move our economy forward to a stronger position as we significantly reduce the administrative burden faced by businesses, saving Canadians even more time and money. Our Conservative Government recognizes that access to capital is essential for innovative businesses to grow and to create jobs. In January 2013, we announced the Venture Capital Action Plan, a comprehensive strategy to increase private sector investment in innovative businesses. The Venture Capital Action Plan has made available up to $400 million to establish four large-scale, private sector-led funds of funds in partnership with institutional and corporate investors as well as interested provinces, and to support established, high-performing venture capital funds in Canada. We also provided support to ensure entrepreneurs can succeed, find financing and grow, through the Canada Accelerator and Incubator Program. This program is helping fifteen outstanding and high-potential incubator and accelerator organizations across Canada expand their support to entrepreneurs, supported by $100 million from Economic Action Plan 2013 and Business accelerators and incubators offer mentoring, financial support, business advice, commercialization support, office and development space and complementary services to entrepreneurs with a view to increasing the number of innovative firms that are investment-ready and able to develop into sustainable, high-growth businesses. Question #3: Access to Technology and Innovation Will your party commit to: Providing incentives to move ideas from mind to market, such as an innovation box regime in Canada that would see any sales/revenues earned on a patent or a new technology developed here in Canada taxed at a much lower rate Investing in digital infrastructure and rewarding private sector investment driven by profit motives Providing incentives that encourage collaboration through technology clusters or centres of excellence Under Prime Minister Harper's proven leadership, Canada has the necessary ingredients for a cutting-edge economy: world-class research strengths, a highly- 4

6 educated and skilled workforce, and one of the best business environments on the planet. We have a proven record of supporting high-value, advanced research with a strong focus on projects that can be commercialized and produce economic growth for Canada. As of March 2015, our Conservative Government had invested more than $13 billion in science, technology and research initiatives since Economic Action Plan 2015 included more than $1.5 billion in new investments in science, technology and innovation over the next five years. In December 2014, Prime Minister Harper launched the Canada First Research Excellence Fund which will help our universities and colleges become among the best in the world for talent and breakthrough discoveries, creating long-term economic benefit for Canadians. Canada ranks first among G7 countries in higher education research and development funding compared to the size of our economy, ahead of Germany, France, Japan, the UK and the US. In Economic Action Plan 2015, the Harper Government provided $30 million over four years to support cutting-edge research and technology development in Canada's satellite communications sector. In 2012, our Government announced that the National Research Council would be refocused to support collaborative research and development projects that are driven by real needs of Canadian businesses Our Government has provided support for the technology adoption needs of small and medium-sized businesses, through a $200-million investment from the Business Development Bank of Canada. This initiative is helping entrepreneurs learn about information and communications technologies and how they apply to their business, providing specialized advice, resources and tools. Other investments in innovation and research and development include: $105 million to support Canada's advanced research network CANARIE, an integral element of the country's digital research ecosystem; $100 million to support digital research infrastructure through the Canada Foundation for Innovation; $119.2 million to the National Research Council of Canada's industry-partnered R&D activities; and $56.4 million to Mitacs to support more than 6,000 new graduate-level R&D internships that will focus on business-related challenges while helping develop the next generation of R&D leaders. Our Conservative Government recognizes that intellectual property is a valuable strategic asset for businesses competing in local and global markets. Our Government has a strong record of taking action to ensure Canada s intellectual property framework provides robust, balanced protection for consumers and rights holders. The 2012 Copyright Modernization Act updated Canada s copyright laws for the digital age; the Combatting Counterfeit Products Act implemented new measures to address the serious problem of counterfeit goods; and Economic Action Plan 2014 harmonized Canada s intellectual property administration framework with international norms, helping innovative Canadian businesses access international markets, lowering costs and reducing the regulatory burden and red tape. Building on these measures, 5

7 Economic Action Plan 2015 further modernized Canada s intellectual property framework to keep pace with internationally recognized best practices. Question #4: Access to Markets Will your party commit to: Conclude and implement the Trans-Pacific Partnership and trade agreements with the European Union, India and Japan Study the potential for a trade agreement with China A national regulatory cooperation strategy that will mobilize resources and political attention to tackle internal trade barriers and enhance alignment with Canada s trading partners Strengthening export and tourism promotion services by improving coordination between the private and public sectors, expanding marketing campaigns and diplomatic presence abroad and establishing a national development finance institution Investing in transportation infrastructure and improving Canada s border services and visa administration to make it easier for businesses to get their products in and out of Canada Stringent, but streamlined, regulatory processes to facilitate the extraction and transport of natural resources Policies that will stimulate innovations in environmental sustainability and ensure a supply of skilled workers to help Canada meet the demands for its natural resource industries Canada has always been a trading nation. Prime Minister Harper knows that trade creates jobs and fuels the economy. More than one in five Canadian jobs and 60% of Canada s GDP are linked directly to exports. Without international trade, there would be 3.3 million fewer jobs. That s why Prime Minister Stephen Harper has worked tirelessly to open new markets for Canadian goods and services, and to equip Canadian businesses to compete internationally. When the Harper government came to power, Canada had free-trade agreements with five countries. Now we have agreements with 44 countries. Under Prime Minister Harper s leadership, Canada has concluded free-trade agreements with 39 countries: We launched and concluded the Canada European Union Free Trade Agreement. This agreement could increase Canada s income by $12 billion annually, equal to increasing the average Canadian family s annual income by $1,000. We launched, concluded, and implemented the Canada Korea Free Trade Agreement, which is expected to create thousands of new Canadian jobs, grow Canada s GDP by $1.7 billion and increase our bilateral exports by 32 percent. We launched and concluded the Canada Ukraine Free Trade Agreement. 6

8 We launched, concluded, and implemented agreements with Honduras, Panama, Jordan, Colombia, and Peru. We concluded and implemented an agreement with the European Free Trade Association, and modernized existing agreements with Israel and Chile. We are making more inroads into other major markets, and we progressing on bilateral negotiations with India and Japan, and we are a full member of the 12- country Trans Pacific Partnership negotiations. We have also improved the foreign investment climate for Canadian companies to expand globally by concluding, signing or bringing into force 24 foreign investment promotion and protection agreements (FIPAs). Once fully implemented, these agreements will give Canada preferred access to more than half of the global marketplace and benefit every sector of the Canadian economy. And we are helping Canadian businesses take advantage of new export opportunities being created as a result: We launched the Global Markets Action Plan in 2013, which targets markets that matter most to Canadian businesses and ensures that Canada s key export interests are promoted in those markets. In 2014, we launched the Go Global initiative, providing $50 million over five years to help hundreds of small and medium Canadian businesses to expand into global markets and reach their full export potential. Small and medium enterprises represent 99% of Canadian businesses and more than 40,000 are exporting. We are also expanding our Trade Commissioner networks, including to key markets such as China and India where we have expanded to 23 trade offices with 150 trade commissioners in those two countries alone. There are now more than 160 trade offices located around the world to help provide export advice and guidance to entrepreneurs, including more than 25 trade commissioners who are embedded in industry associations in Canada to better understand their export needs. But Prime Minister Harper also doesn t hesitate to stand up for Canadian businesses, recognizing that the success of our international trade agenda hinges on creating jobs and business opportunities for Canadians: We have defended Canadian businesses when other countries have discriminated against our exports including forestry, seal, and agricultural products. Thanks to the cooperative efforts of the Harper Government and our domestic industry, the World Trade Organization has repeatedly found that the United States has violated its trade obligations to Canada through its discriminatory treatment of our beef and pork exports. While welcoming foreign investment, we have also introduced new rules under the Investment Canada Act to ensure that major foreign transactions associated with Canadian companies are of net benefit to Canada. We created a national security review process in 2009 and introduced new rules to limit investment by foreign stateowned enterprises in Prime Minister Stephen Harper is the first Canadian Prime Minister to invoke the Investment Canada Act to reject a foreign takeover bid that was not in Canada s 7

9 best interests. Several additional foreign takeovers have since been rejected by the Harper Government. A re-elected Stephen Harper Government will continue to prioritize international trade to create Canadian jobs and increase our long-term prosperity, particularly through growing trade with the Asia Pacific region: Concluding the Trans Pacific Partnership Trans-Pacific Partnership negotiations are nearing completion and Canada is a tough negotiator. Under Prime Minister Harper s leadership, we are committed to concluding an agreement that reflects Canada s best interests. The 12 countries currently negotiating the Trans-Pacific Partnership represent a market of nearly 800 million consumers and a combined GDP of $28.5 trillion. Twoway investment between Canada and TPP markets was valued at more than $780 billion in 2014, and a TPP agreement will create new jobs and long-term prosperity for Canadians. Workers in every region and sector of the Canadian economy stand to benefit from greater access to TPP markets, including fish and seafood, industrial goods, forestry, agriculture, services and more. Promoting Asia Pacific Trade Infrastructure A re-elected Harper Government will provide dedicated trade infrastructure funding through the New Building Canada Plan to help position Canadian businesses to take full advantage of new market access opportunities being created in the Asia Pacific. Increasing Bilateral Trade A re-elected Harper Government will also work to conclude bilateral free-trade agreements with Japan and India. Negotiations are already well underway with both of these countries. We will also continue to develop other new markets under the Global Markets Action Plan and further develop our Trade Commission network in the Asia Pacific region and elsewhere. The emphasis that Prime Minister Stephen Harper has placed on growing our international trade agenda is benefiting every Canadian region and sector. He understands that opening up new markets for Canadian exports will create new jobs for Canadian workers, and will encourage economic growth for our long-term prosperity. By contrast, the other parties are unreliable on trade, resource development, and business taxes. Both the Liberals and the NDP would put at risk the Canada s economy in general and the interest of the Chamber s members in particular. 8

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