Richmond, B.C. - June 10, 2010
Speech by the Honourable Stockwell Day, President of the Treasury Board and Minister for the Asia-Pacific Gateway to the Vancouver Transportation Club
Based on a transcript.
Thank you folks, you, each of you are very busy so I’m honoured by the fact that you would be here tonight. It’s great to be here.
How many of you were here and were able to take part, maybe not as athletes, but take in the Olympics, the Winter Olympics? Great, quite a few of you, fantastic. Really a fantastic event. And showcasing Canada and mainly Vancouver and BC. When you think about it, at times there was over four billion people watching on television and internet and it was just a fantastic show and we continue to reap the benefits of that.
I’m honoured to speak about something that many of you, well all of you know a lot about and many of you could probably speak in more detail and with even more expertise than I could. But I do want to share with you our perspective on where we’re at, see how it kind of dovetails with where you’re at in terms of the Asia Pacific Gateway itself and everything it means to us and the potential that it holds for us.
Before I talk about the concrete and the road and rail integrations and the ports and the cranes and all the hard infrastructure, the human gateway is so important, especially when we’re talking about our Asian friends and our contacts. I’ll zero in on China a fair bit in my remarks, but that is to no exclusion of any of the other great Asian economies which are just so robust right now and that we are engaging with and the same principles will apply.
I mean we are also engaging vigorously with India, certainly the largest and most robust democracy in that part of the world with whom we have a lot in common and that’s just one example of so many of the different countries there that we’re pursuing. But using China as the example in talking about the importance of the human gateway, there’s about 1.4 million Chinese Canadians that live in Canada. There’s a natural human gateway right there that allows us incredible opportunities on a variety of levels.
And then it’s always important, from our perspective as government, in terms of advancing your opportunities, to look at the other things historically that link us to so many of these countries. Many of you will know of course that they still talk about, in fact every time I visit China, they still talk about Dr. Bethune. He’s in their textbooks in the schools, this Canadian who came at an early part of their development at a time of impoverishment and everything else and literally gave his life serving the people of China. That is a wonderful human gateway contact that we’ve got there.
And then sometimes we forget, but I’ll tell you what, in China they don’t forget that it was Canadian soldiers in the Second World War who went to defend Hong Kong. And of course as you know they were overrun, they eventually had to surrender, they took huge casualties, many spending time in a prisoner of war camp and when I visit Hong Kong, I mean that just, that still resonates not just in Hong Kong, but on the mainland also, the fact that Canadians were there literally laying their lives on the line.
That part gets a little personal for me because my grandfather was one of those veterans. He was one of the ones who was captured, four years in a prisoner of war camp, he actually was still alive on liberation. And they got him to a hospital ship, he died in hospital when he got back to Canada. And you know I had the opportunity in a meeting a few years ago to share that with President Hu Jintao. We were in a meeting in Ottawa and of course talking through interpreters. And we were just talking about the past. There were a lot of people in the room but we were seated at a table and I was sharing some of the Canadian history and I shared that particular history.
And after the meeting everybody was dispersing and the security guards were running around everywhere and it was a room about this size and about this many people and there was a lot of confusion. And out of the crowd, the president came over to where I was and he had his interpreter with him and he just, he took my hand and held it and wouldn’t let it go.
But he was very sincere and in a very soft voice he spoke through his interpreter and the interpreter said, “the president of China would like to, would be pleased if you would extend to your mother and to all your family what your grandfather did for the people of China.” These are valuable human gateways that just lead naturally to the type of contact that makes us realize we’ve got a lot of things in common.
We’ve got some things that aren’t in common. Their political system is a little different than ours, moderately.
So there are differences of course. But when it comes right down to it, people in China want the same things we do. New cars. They want to be able to raise their families. They want the opportunity for prosperity. They’d like to have an income where they can feel good about you know raising their families, buying what they need and having some kind of a future.
And so together we share these things. So it’s very important that we build on the human linkages that have already been established and we will continue to do that. And then there’s certain realities, which in many meetings now with Chinese officials at the government level, they are starting to realize some things about economics. And it’s basically this, that within every person and group of persons there is an incentive to do well, to work hard if you have a sense there’ll be some reward for that.
And so within getting into the geopolitical details we know that over the last 15 years or so, maybe 20 years starting with Hong Kong many years ago, but now going to other areas, virtually every area in China where the government has circumscribed an area on the map and said there, within that area, go for it. Be entrepreneurial, we’re still in control of the government and we’re going to have rules and regulations, but basically go for it. There’s been an explosion of economic activity.
And it has just begun. Most of you who have visited China certainly know that they redefine growth and velocity and things like quality are becoming part of their lexicon, environmental concerns, resources of course, alternate forms of energy. They’re very sensitive about the past criticism, which was appropriate of their lack of environmental concern. All of this is changing.
And what I share with them, what the prime minister and others share with them, is that we believe as government, it’s our duty to do everything we can to clear the way for entrepreneurial business-oriented investing people to make the choices that you want to make. We don’t think as a government we should be saying you must sell this, you must offer that service, you must go to this country, you must sell just to the United States or you must think of Europe. It’s our duty to keep your taxes as low as possible, to have a common sense regulatory regime that doesn’t clutter the way for you. To fight back against protectionism so that whatever decision you’re making on the business side or the shipping side or the transportation side, whatever it might be, we have decluttered the field as much as possible.
And then you get into deciding where you want to invest, where you want to work.
If we allow the human entrepreneurial spirit to have a relatively free playing field with the guidelines that are in place and that are predictable, then good things will happen. In China now, this year, they made more cars and mainly purchased domestically than any other country in the world. This was, this is the new life, this is the new way of things. And more cars than anybody else in the world, and guess what? Less then 2% of the population has a car over there. I mean talk about opportunity.
India, when I was on one of my recent trips there, we were opening trade offices, I met an individual who has a cell phone company. He’s increasing his subscribers to his cell phone company at the rate of 10 million people per month. Anybody selling cell phones? How would you like to take those kind of numbers to the monthly meeting?
The sheer magnitude not only of the population, but therefore of the possibilities, go beyond – the sky is not even the limit, it goes beyond that. I had the opportunity to speak at Dr. Sun
Yat-sen University about a year ago when I was China. As we were on the campus and walking through with the university officials, I said “How big is the university?” They said “It’s about 14,000.” I said that’s pretty big. They said that’s faculty.
I mean folks, the order of magnitude goes beyond, almost goes beyond our imagination. And that’s why it’s important that we have not just the human gateway, but that we have this physical gateway called the Asia-Pacific Gateway, this corridor. And that we talk about it and that we sell it and that we remind people in Asia what we’re offering here and what we’re doing.
Because I’ll tell you what, whether it’s China, whether it’s Singapore, whether it’s India, the world is rushing. The world is there at their doorstep offering technology, services, products. If we think that we have a certain market cornered because we’ve got resources, there’s a lot of other countries in the world that have resources and they’re offering to them.
The World Expo that’s going on right now in Shanghai is sort of a metaphor of what’s happening because there are 242 countries represented from all over the world. And that’s just a picture of the world rushing to China. So when we are there and when you’re there, I know you’re doing this and thinking of China and India and Malaysia and all these other places and Japan and Korea and Vietnam, we have to be reminding them of what we have.
And so when I’m there, I’m meeting with leaders and also the business leaders and we all, including some of our business folks with us who are involved in the labour market, are selling certain things. We’re telling them about the Asia-Pacific Gateway, we’re telling them that since 2006, there’s been over $1 billion in federal funding for projects worth $2.8 billion. Investment that integrates our road and rail lines, improves the efficiencies of the ports of Vancouver and Prince Rupert.
We tell them, sometimes to their surprise, that there’s actually less days sailing time from Asia to Prince Rupert than there is to Los Angeles. Two to three days faster sail depending where you’re embarking from. And that when their product hits our ports like the Port of Vancouver, because it’s efficiently run, all the Port of Vancouver people tell them that the dwell time for their containers is going to be less, in most cases less then 30 hours. And that within just over a hundred hours, they’ll be having their product in the heartland of free trade, a North American free trade agreement that serves about 440 million people, into Omaha, into Chicago.
And we’re aggressively selling that message, we’re reminding them of that because 2014 is coming. And no I’m not talking about the Winter Olympics in Sochi, Russia, I’m talking about those big tankers that are going to be able to sail on through the Panama Canal.
And as you know, in the southeast corner of the United States, they are investing billions in the Savannah and area and other ports. In Brazil, I visited the port just south of Recife. It is unbelievable what they are investing there. And how that port is growing and we run into those folks on our travels and they’re selling efficiency. They’re talking about how efficient their ports are, how rapidly products can move through. This is a day and age where competition at these levels is huge. And it is critical that we sell and send this message.
Now on the resource side. There are other places in the world where these emerging economies can get resources. But we maintain there’s few places, if any, as safe, as predictable and as competitive as Canada. Whether they want the value-added resources or the resources themselves. And so the other thing that we talk about and I’ve talked about this in Shanghai, in Beijing, in Tokyo, in Singapore, the number of times I have been there, we’ve talked about what we’ve got going on here in Canada.
I do get the sense, as I’m travelling around the country, that most Canadians are aware of our relatively strong economic situation compared to the rest of the world.
The International Monetary Fund says that Canada is the best, was the best positioned going into this global downturn and we’re the best positioned coming out.
The World Economic Forum says that our banks are the most stable in the world. I want to come back to the bank thing in a second. The OECD says Canada is quote, “shining,” our economy shines. And the Economist intelligence unit says that Canada is an economic miracle.
Well whether you believe in miracles or not, the reason that we’re getting these kind of reports, there are reasons for that. Because policies have consequences and we put certain policies in place that would hopefully yield to these type of results. These things don’t just happen. For instance our debt to GDP ratio is a little over 30% depending on you know the time of day, 30, 31%.
The United States it’s up over 80%. England, UK is about 100%. Japan, the debt to GDP ratio is 200%. The reason that they haven’t collapsed under that, most of their banking is internal and domestic and so they can get favourable arrangements to be able to carry that. They’re very concerned about it. They’re still the second largest economy in the world and we don’t ignore Japan. As great as China and India are doing, Japan’s economy is still bigger than China’s and India’s put together. So don’t think we’re ignoring Japan.
Our deficit, that’s the annual amount we’ve been borrowing the last, just the last two years to get us through the time of downturn by putting economic stimulus in place, our deficit to GDP ratio is about 3%. And we have, we announce everywhere what we’ve put in place, that we have a tax regime in place, business, small, medium and large that is the loss and will continue to be, we’ve got it chartered out, we did this in 2008, chartered out for you and for the world to see where our taxes are going for the next four years all the way through to 2012.
So that people who are thinking of investing, they can see there’s some kind of predictability on what the tax rate is going to be. And it is the most competitive among the G20.
We’ve also put in place, this is more for domestic consumption, but it’s part of the message we sell, and I’ll tell you why we sell it, we’ve also put in place in budget 2010, a freeze on all government operational spending for the next three years. That is not going to be an easy task. But that is our commitment, it’s frozen now for the next, operational spending, not programs to people, we’re not cutting people’s pensions or health care. But on how we run government that’s frozen. And every year one-third of all departments and Crown agencies have to go through what we’re calling a strategic review and they have to reduce their spending by 5%. So they’re not just in a time of freeze, one third of them are going to go through a 5% reduction.
Now we tell that message here, but why do we tell it abroad? We tell it abroad because that sends some messages. If people intuitively know when they look at the markets, if debt is going down in a country and if government spending is being held, that means the chances that taxes are going to have to go up to pay off increasing debt is very low. If in fact negligible.
It shows that there can be predictability when it comes to investing. I think that’s one of the reasons that last year investment, foreign direct investment coming from China into Canada was $8.8 billion. That’s about a 68% increase over the year before which was in the middle of a global downturn. So the signs and the signals are working. The message is getting out there and we’re going to continue to get that message out. We’re going to continue to control things at our end.
We made some adjustments on our foreign investment framework so that there’s long-term positive effects for those thinking of investing in Canada. We continue to fight back against protectionism to keep the doors open. We will continue to be investing in our gateway right here, integrating the road and rail lines. There has been thousands of kilometres that have already been addressed with this. I was just in Saskatoon announcing an Asia Pacific Gateway project which integrates road, rail and bridges there to move traffic, truck traffic and container traffic, more rapidly to the coast.
Two bridges right here in the lower mainland, we have five short-sea shipping projects. One is already completed. And on it goes. And the investments will continue.
We think we’re in a good place. But our pavilions are, there’s actually three there in China, not just one, but three: Vancouver, Montreal and Canada. But we are three out of 242. And a huge percentage. As a matter of fact, the Canadian pavilion is getting more visitors almost than any other pavilion, over 20% of the people who arrive at the expo every day, 30,000 people a day, they want to come to the Canada pavilion. We’re over there, we’re competing against 242 others, but it’s our job and our mission as a government to stay out front so that your investments, your time and your energies have a very good chance of paying off.
Thank you for being a part of that, advising us, working hard with us to make this happen. We appreciate that.
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