Notes From An Address By Gord Brown To The Brockville Chamber Of Commerce

February 01, 2008

Thank you. And thank you for inviting me to be here today to participate in this panel discussion.

For the next few minutes I want to discuss some of the actions that the federal government has taken in the past two years to improve Canada’s economy and promote economic development and I also want to highlight some of the actions and results that have been taken here in Leeds-Grenville.

At previous discussions here I have outlined our Advantage Canada Plan and the actions we are taking to address the manufacturing issues in Canada.

Advantage Canada is an economic blueprint for Canada developed by Finance Minister Jim Flaherty.

On the manufacturing front, early in our mandate a parliamentary committee examined the manufacturing issues in Canada and came up with 20-some recommendations. We are acting on all of those.

To aid and support both of these initiatives we have announced, in the past two years, nearly $190 billion in tax relief measures. Some have already taken effect while others are being phased in over the next few years.

Let me outline some of these initiatives – especially those that affect businesses and industries.

Budget 2006

Reduce GST from 7 to 6 per cent

Reduce general corporate tax rate to19 per cent by 2010

Elimination of corporate surtax for all corporations effective January 1, 2008

Reduce small business tax to 11 per cent in 2009

Increase threshold for small business tax rate to $400,000 to $300,000

Accelerate elimination of the federal capital tax two years ahead of schedule to 2006 from 2008

Extend carry-forward periods from 10 years to 20 years

Reduced excise duties for vintners and small brewers

Accelerated CCA for forestry bioenergy.

Tax Fairness Plan 2006

0.5 per cent reduction in general corporate income tax rate to 18.5 per cent in 2011

Budget 2007

Lifetime capital gains exemption to $750,000 from $500,000 for small businesses, fishers and farmers

Accelerated CCA for clean energy generation

Reduced frequency of tax remittance and filing for small business

Temporary straight-line write off for manufacturing and processing machinery and equipment – 100 per cent over two years

Aligned CCA rates with useful life

Canada – US Tax Treaty – no withholding tax on interest – encourages venture capital

Economic Statement 2007

Reduce GST to 5 per cent

Reducing general corporate income tax rate to 15 per cent by 2012

Accelerate small business tax reduction to 11per cent to 2008

As a further note on tax-related issues - on January 14 Finance Minister Jim Flaherty announced his on-line budget consultation in the run-up to this spring’s budget.

The consultation process ends at midnight Feb. 11 so if you have anything to say – visit www.fin.gc.ca

Locally I am pleased to report that we have been responsible for a great deal of progress on several fronts. From infrastructure to job creation we have been working hard for the riding.

In 2007 I was pleased to attend the opening of several reconstructed bridges in Leeds-Grenville which will ensure that traffic flows unimpeded.

We provided $23 million for the Brockville treatment plant and more money for the Prescott plant that had been stalled for a number of years.

I am currently working hard to ensure other communities in Leeds-Grenville receive money for sewage treatment.

In the fall, the government announced the Building Canada program, the largest infrastructure program since the late 1940’s.

Several provinces have already signed agreements to access funds under this program and we are hoping that Ontario will do the same fairly quickly.

Once the province is on board we can start submitting applications and hopefully getting approvals on those emergency applications that are already in the works.

I encourage municipal leaders to have a look at the Building Canada web site now so that you can familiarize yourself with the type of projects that will be funded over the next five years.

Although municipalities are the responsibility of the provincial government, our government recognized the need for longer term, stable infrastructure funding dedicated to municipalities and that is why when we came to power we almost immediately directed a portion of the gas tax to municipalities.

For example, the City of Brockville in 06/07 received over $416,000, in 07/08 over $555,000 and in 08/09 will receive over $694,000. By 09/10 the city will receive over a million dollars with no strings attached from the federal government.

Our recent budget extended the gas tax rebate to 2014.

As well we have provided a total GST rebate for municipalities.

One of the biggest success stories for local economic development in Leeds-Grenville come from the Community Futures Development Programs. I have been a champion of these programs.

There are three operating in Leeds-Grenville primarily the 1000 Islands CFDC headquartered here in Brockville, the Grenville CFDC and Valley Heartland CFDC which is active in the Northern part of the riding.

To me, CFDCs are the perfect model for economic development. The federal government provides the money but the initiatives and decisions for local economic development are made right here in our communities.

I am impressed and amazed at how these folks put your money to work.

It seems every month I attend several events where we are providing more money for economic opportunities. I can’t even give you a list because it is too long.

However, a couple of highlights from this past year include Model Forest initiatives that will see new jobs, an announcement next week that I can’t tell you about that will see new jobs, money for sustainable tourism workshops, money to assist with the Senior Winter Games last year – the lists from all three of these organizations are long and impressive.

From training to job retention, to seminars to economic development studies to strategic planning to economic analysis, to business plan competitions, to anything else related to business planning and economic development, these folks really deliver on behalf of the federal government.

Here are some figures …

Valley Heartland

Serviced 6,164 client inquiries in 2007.
Provided training to 81 employees in 20 companies. Delivered 15 small business seminars to 265 local entrepreneurs.
Made contributions of $198,000 to 26 community economic development projects.
Made loan investments of $727,000 to 12 companies affecting 103 jobs.
And much more.

Grenville CFDC

Business Financing 2006-2007
Assessed Loan Applications of $1.11M
Approved $828K in Loans and Disbursed $665K in Loans to 16 Businesses Impacting 86 Jobs. Loans Disbursed Leveraged $3.6M in Investments from Third Parties (i.e. for every $1 GCFDC loaned, $5 were leveraged from other sources)

Self Employment Benefit Program 2006-2007
Delivered 3 Business Plan Development Workshops
Approved 59 Applicants for Business Start Up
Created 87 Jobs in Leeds and Grenville

Business Counseling 2006-2007
Responded to more than 300 General Inquiries
Delivered more than 100 In-Depth Counselling Sessions
Assisting more than 70 New and Existing Businesses
Impacting more than 250 Jobs
Leveraging $6.9M

Community Economic Development Services and EODP Program Delivery 2006-2007
Accessed $574K Investing $592K in 68 Local Projects
Project Examples:
Strategic Plans, Tourism Initiatives, Marketing Projects, Signage, Business Plans, Training Plans, Workshops, Youth Internships, Capital Projects, Façade Improvements

1000 Islands CFDC Brockville
2006-07 - provided $706,000 in loans to a total of 21 clients (34 jobs created, 128 jobs maintained) and invested $600,000 in community economic development initiatives. Also partnered with Grenville CFDC to deliver the Self Employment Benefit program creating 87 jobs.

Fiscal year 2007-08 is not yet complete but by March 31, 2008 it will have provided approximately $550,000 in loans to 25 clients (expect 45 jobs created and 125 jobs maintained) and invested another $600,000 in community economic development initiatives.
Also continue to partner with Grenville CFDC on the SEB program which will see another 85+ jobs created.

And it is important to remember, as mentioned in several instances, that much of the money from all three of these CFDCs was leveraged to create even more investment.

These folks are really doing an incredible job with federal money to encourage and seed economic development.

Last month I was pleased to participate in the launch of BizPal here in Brockville.

This federally funded initiative gives business owners and potential business owners the opportunity to sit down in front of their computers and review all the permits and licenses they will need for business development or expansion.

It will save small business owners much time and effort.

The last item I wish to speak about is the new Ethanol plant in Edwardsburgh-Cardinal that will begin production this year.

Greenfield Ethanol will spend $170 million building this facility that will employ 150 people. During the peak construction period there will be 400 workers on the site.

Bliss Baker, Vice-President of Public Affairs at Greenfield credits our government for ensuring the plant was built in Leeds-Grenville.

He noted that the government provided $15 million in financial help but more importantly it put in place policies that ensured the need for ethanol.

He told a local reporter and I quote: “We wouldn't be here without these guys. The $15 million is a lot of money, but more important are the policies they are putting in place.”

Tax policies and the government’s emphasis on making the economy friendly to industry also play a role, he explained.

Two ministers have already toured the site – environment John Baird and Agriculture Minister Gerry Ritz and I am looking forward to the opening.

I think I will stop here, although I could talk a lot more about economic issues. But I am sure you will have questions.