44th Parl. 1st Sess.
March 21, 2022 11:00AM
- Mar/21/22 1:26:33 p.m.
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Madam Speaker, I enjoyed the speech given by my colleague from Mirabel. We can always count on him to identify the limitations of the market in a crisis.
He would make the founding fathers of political economy proud, because they emphasized the importance of redistribution. My colleague is offering to teach a course in economics, so I suggest that he also offer a course in economic history.
Historically, whenever there was a crisis, governments always opted for a policy of redistribution through taxes.
Can my colleague tell me whether this is true or false, and provide more details?
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- Mar/21/22 1:27:45 p.m.
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Madam Speaker, I would first like to thank my esteemed colleague, the hon. member for Mirabel, for sharing his time with me.
We are here to debate the motion put forward by the hon. member for Burnaby South, highlighting several wealth gap issues that have been exacerbated by current inflation. Let me remind the House that, during the last election campaign, this government promised to levy a 3% surtax on the profits of banks and insurance companies.
We agree with this measure. Let me also remind the House that, while the public finances recorded colossal deficits and the pandemic forced SMEs out of business, several sectors of the economy besides banks and insurers became richer. Today's motion seeks to leverage the huge profits that certain companies earned in spite of the crisis. Their support will essential.
We are currently experiencing a period of high inflation. In December, the consumer price index rose by 4.8% on a year-over-year basis. This major acceleration of inflation significantly affects the purchasing power of Canadians and Quebeckers. The price of groceries rose by 5.7%, and the price of housing grew by 9.3% compared with December 2020. The simple fact is that inflation is affecting almost all goods. That in turn is affecting both individuals and businesses.
The Russian invasion of Ukraine has had a significant impact on the price of energy. Even if the price of gasoline does go back down eventually, its current volatility and unpredictability are enough to worry Quebeckers. We were used to countering inflation by addressing surges in demand, but we are now also facing problems with supply, including increasing pressure on labour and energy costs.
That being said, it is important to implement measures to protect the general public, especially the most vulnerable members of our society, from price increases. Let us look specifically at who could be doing more in this situation. In the past 12 months, several financial groups have earned record profits. National Bank, Laurentian Bank, Royal Bank of Canada, Bank of Montreal, TD Bank, Scotiabank, CIBC and Mouvement Desjardins collectively earned $60.68 billion in profits. That is 39% or approximately $17 billion more than the previous year, which was also a pandemic year.
The year 2020 was a good year for some businesses, according to an analysis of the profits of the largest Canadian businesses published at the end of last year. According to Canadians for Tax Fairness, 111 publicly traded companies headquartered in Canada made profits of at least $100 million in the first nine months of the year, and 34 of them posted record profits. The top profit-maker was TC Energy, formerly TransCanada, whose Keystone project has been in the news for years. The company made $3.5 billion in profit on $9.7 billion in sales in the first three quarters, for a profit margin of 35.6%.
This stands in stark contrast to what has been happening with our SMEs. Many went into debt to get through the pandemic, wagering that the economy would eventually get back to normal. Even if the economy recovers, they will still be in debt. There is a reason the Canadian Federation of Independent Business says that one in four SMEs could close down permanently in 2022 because they went into debt during previous waves. Small business confidence in Canada and Quebec remained especially low in January because of supply issues, the health restrictions and labour shortages.
The Bloc Québécois agrees with the idea of implementing a tax on profits over $1 billion for banks and insurance companies, as well as oil companies and big box stores. The tax should be used for assistance programs, in particular for SMEs.
Such significant measures require an explanation. They are aimed at increasing the government’s revenues to help it deal with the deficit and assist struggling SMEs. These measures would directly help those who are hardest hit by inflation. I can already hear our Conservative friends say that taxing corporate profits makes it more difficult for those that keep the economy rolling to reinvest. However, they are well aware that the large profits made by these companies mean that they already have considerable reinvestment power.
In the final analysis, we would be taking 18 cents out of every dollar of the profit made by billionaire companies. They would still have a bit of a margin left.
In the case of oil companies, we need to make sure that the plan includes programs aimed at reinvesting in the urgently needed energy transition. If we collect these funds, it will have to be to better guide the investments of corporations that have a significant societal impact.
The purpose of taxes is to take a small portion of the surplus of wealth-creating businesses to correct market failures and thus redistribute wealth, while redirecting the funds with a plan and coherent vision aimed at improving Canadians’ well-being. Let us keep in mind that we are talking about 3% for businesses that make more than $1 billion in profits. We are in the middle of a climate crisis and economic tensions that often require state intervention to redistribute wealth.
In short, we support the spirit of today’s motion. The Bloc Québécois will support any measure that effectively benefits the most vulnerable. We cannot just stand idly by while workers and businesses struggle with the effects of the pandemic.
The objective of the proposed surtax is to get revenues from those who benefitted from the crisis to help those who suffered from it. That is why governments exist. We know that the extremely costly measures taken during the pandemic increased the deficit. Now it is time to take stock, and we must correct the failures of a market we know to be imperfect, especially when it is faced with the uncertainty of a pandemic.
What is our purpose as members of Parliament in these critical times if not to propose and support measures aimed at protecting the most vulnerable and promoting a vision whose only goal is the well-being of society?
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- Mar/21/22 1:39:50 p.m.
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Mr. Speaker, I thank my colleague for the question. This gives me the chance to say a bit more about the issues of economic development and the redistribution of wealth.
In this time of climate crisis and economic tensions, that money must first be used for an energy transition. Then it must be used to help businesses that create a tremendous amount of value but that are vulnerable during this pandemic period. There are major supply problems, including with respect to the labour shortage and the supply chain, and we must absolutely help wealth‑creating businesses that do not have the luxury of making more than $1 billion in profits. We must also help with the energy transition by redirecting investments in oil companies, in particular, to a meaningful investment that is good for society in general.
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- Mar/21/22 2:45:06 p.m.
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Mr. Speaker, the Conservatives continue to talk down the Canadian economy and spin economic fiction, so let us talk about some facts.
Fact: last week, Statistics Canada showed that our annualized growth is 6.7%. Fact: our economy is the second-fastest growing in the G7. Fact: despite omicron, our debt-to-GDP ratio is the lowest in the—
Some hon. members: Oh, oh!
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- Mar/21/22 3:01:21 p.m.
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Mr. Speaker, our government has developed several programs to support Black communities across the country, strengthen community organizations and help Black entrepreneurs finance their activities. In order to promote an inclusive economy, I announced a $25-million investment to support 10 Black-led organizations.
Can the Minister of Economic Development talk about the impact this support has had on Black communities in Canada?
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- Mar/21/22 3:55:59 p.m.
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Madam Speaker, I will be sharing my time with the member for Whitby.
We are fully aware that the effects of high inflation are being felt across the country. As the member for Burnaby South surely knows, it is a global phenomenon, and the price of goods has increased around the world. This is due to a number of factors.
First, during the pandemic, millions of people reallocated money they usually spent on services to the purchase of physical goods. This put extraordinary pressure on global supply chains and led to shortages and bottlenecks. Furthermore, droughts in the main food-producing regions, including the Canadian Prairies, resulted in higher grocery bills. All of this has been exacerbated by the current instability of global markets following Russia's illegal and unwarranted attack on Ukraine.
President Putin's unjustified war has led to an increase in the price of raw materials and again threatens to disrupt the supply of goods. This puts upward pressure on prices. There is also the pandemic, which continues to threaten global supply chains and increase inflation as a result of a resurgence of cases in China and another wave starting in Europe at this time.
Many factors are putting upward pressure on prices. Canadians are worried about the rising cost of living and I am too. The Bank of Canada and private sector economists predict that inflation could remain higher for a little longer than initially thought. However, they expect it to go back down to the 2% target over the next two years, as the repercussions of the pandemic start to fade.
Let us face it, these are truly uncertain times on many fronts. The Russian invasion of Ukraine is a new major source of uncertainty. The price of oil and energy have recently spiked. Our government acted swiftly and decisively with the European Union, the United States and the United Kingdom to impose the harshest sanctions ever placed on a major economy. For those sanctions to be truly effective and have a real impact, we must be prepared for any adverse consequences to our own economy. This could temporarily affect the cost of living for Canadians.
Opposition members often bring up the rising cost of oil and gas. It is true that prices have risen sharply as of late. However, my colleagues have an unfortunate tendency to make obscure connections to explain this increase, for example by tying it to our pandemic spending or our tax on pollution.
They are obviously ignoring the main factor behind this increase, which is, of course, Russia's unjustified war against Ukraine. The Conservatives like to say that we must do more for Ukraine. They even brought up a no‑fly zone over Ukraine before changing their minds a few hours later. They seem to be not only unsure of where they stand, but also completely oblivious to the economic consequences of this war and of our sanctions.
That said, I remind members that the federal government's assistance programs, such as the Canada child benefit, old age security, the guaranteed income supplement and the GST credit are indexed to inflation. This ensures that the benefits will increase in tandem with the increase in the cost of living.
In recent years our government has also lowered taxes for the middle class and increased taxes on the wealthiest 1% of Canadians. We are also working very hard to address the high cost of housing.
Over the longer term, Canada's monetary policy framework is the best weapon in our arsenal to keep prices stable and keep inflationary pressures in check. That is why, last December, our government and the Bank of Canada announced the renewal of the 2% inflation target for another five-year period. This renewed framework will keep the bank focused on delivering low, stable and predictable inflation for Canada.
Since Canada adopted an inflation targeting framework about 30 years ago, inflation has averaged close to 2%. This has contributed to our country's strong labour market performance, to our economic growth and, of course, to our prosperity. Maintaining a stable environment for the prices that Canadians pay is a paramount objective for Canada's monetary policy, as implemented by the Bank of Canada.
I trust that my fellow members are aware of the efforts that our government is making to address the rising cost of living and to make life more affordable for Canadians. It is also important to remember that the significant support our government delivered to Canadians and businesses during the pandemic has contributed to a rapid and resilient recovery so far.
Canada has far exceeded expectations, surpassing its goal of one million new jobs and posting the strongest job recovery rate in the G7. Still, we recognize that the recovery is happening more slowly in some sectors. That is why the government has shifted from very broad support to more targeted measures that provide help when and where it is needed.
It is also true that some sectors and businesses have seen their profits go way up during the pandemic. We know that banks have continued to make a lot of money during the pandemic. That is why one of the planks in our campaign platform was to raise corporate income taxes on the largest, most profitable banks and insurance companies in the country and on corporations earning more than $1 billion per year.
That is very important, because we want to build a sustainable, united Canada. We want to build a fairer, more equitable Canada where nobody is left behind. That means focusing on jobs and economic growth. It means making sure the cost of living is within everybody's reach.
I know our government will have much more to say about this in our next budget. I am looking forward to debating it here in the House.
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- Mar/21/22 4:54:54 p.m.
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Madam Speaker, I would like to congratulate my colleague from British Columbia on his speech. I acknowledge the high calibre of his work and the soundness of his comments.
It is said that a nation's greatness is measured by how it treats its weakest members. Personally, I do not disagree with a 3% surtax.
However, the NDP's general comments about the “super-rich” bother me. I realize that they do exist, but when I hear this term, I feel it is an insult to some. Is this an ideological or an economic term?
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