44th Parl. 1st Sess.
April 25, 2022 11:00AM
- Apr/25/22 1:01:17 p.m.
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Madam Speaker, I rise today to discuss what disappoints us the most, as Conservatives, in the wake of the tabling of what could be described as a very bad budget on the Thursday before Easter break. I remember a time when the Conservatives were accused of acting in bad faith for tabling bills or budgets just before a long break. The transparency of this Liberal government leaves something to be desired.
We are disappointed because this is a document that shows once again that the government sees Canada's finances through rose coloured glasses. Instead of focusing on returning to a balanced budget, it is offering a host a new spending to fund new programs in order to buy—indeed, buy—the NDP's support.
We knew long before the pandemic that a budget does not balance itself. The Liberal government was running a deficit long before the pandemic. It had to add to the deficit during the pandemic, a necessary move that we agree with. However, the economy is now firing on all cylinders and government revenues have drastically increased, in large part because of inflation and the increased cost of energy products such as oil and gas.
The Liberals have posted another deficit and plan to keep us in a deficit for five years, which is absolutely ridiculous. The government will claim that the deficit will help stimulate the economy and that the additional revenue generated by inflation will cancel out the deficit and reduce the debt. It will once again trot out the infamous debt-to-GDP ratio it loves to talk about every chance it gets.
However, there are big differences between the current deficit and past deficits in response to economic crises, such as the Great Depression, the Second World War or even the 2008-09 financial crisis, which was comparable to the crisis in the 1930s.
A lot of money went towards building sustainable infrastructure during and after the war. The governments at the time had the foresight to spend when unemployment was high and construction costs were much lower. This money was recovered over time, and much of the infrastructure built then is still used today, such as the many bridges that cross rivers all across the country.
The previous Conservative government made similar expenditures through its recovery plan, which helped build some now-essential infrastructure in our communities, in particular in rural areas. I was there from 2009 to 2011. People today are benefiting from the Harper governments' investment in our communities' infrastructure, as will future generations.
Fundamentally though, all the new spending in the current Minister of Finance's budget will go to new government programs, programs the NDP clearly demanded.
As if the Liberals did not already have enough on their plate, now they are getting involved in areas under provincial jurisdiction, such as childcare, dental care and so on. These are things under provincial jurisdiction, but the government will be investing billions more and imposing conditions, and the Canadian provinces are really not happy about it.
Here is the difference: Infrastructure is built once and its cost is amortized over a long period, with the relative weight of the expense diminishing over time. In contrast, a new program means annual funding that will vary and not shrink over time, as we have seen lately.
These costs can only go up, and there is no doubt they will rise with inflation. Plus, does anyone truly believe that early childhood educators and dentists will not eventually demand wage and fee increases, with inflation at 6.7%? Of course they will.
This budget has not even been approved yet, and spending estimates are already out of date. Interest rates are going up too; the Bank of Canada now has no choice but to raise them to fight inflation. Well over a year ago, we asked the government to make sure interest rates were appropriate. Who would have believed that, in the space of just a few months, the key interest rate would rise from 0.25% to 1%? Hold on tight, because it is expected to hit 2% in the coming months.
New programs are being created that are not funded by current taxes, but by deficits. It is borrowed money that will have to be paid back later. Inevitably, there are costs associated with this. The interest costs are projected to be staggering for the federal government now and in the future. Furthermore, the interest costs are equivalent to the increase that the provinces are asking for in health transfers every year. Imagine that.
Of course, surveys are being done. The media conducts surveys, all the political parties conduct surveys and the government conducts surveys. What comes up most often? The cost of living, the cost of living, and the cost of living.
That is what we are experiencing right now. A visit to the dentist is expensive. That costs a few hundred dollars, but there is nothing as expensive as the cost of housing for the young and the not-so-young who do not already have a house in their name.
The government may well claim that the staggering price increases experienced in recent years are a global and inevitable phenomenon. The Minister of Finance's defeatist attitude was evident in her budget speech in the House on the Thursday before Easter, as well as in the media interviews in the hours that followed.
Because the federal Liberals have been mismanaging the economy since 2015, real estate has become the only attractive economic sector for investors. It has come to the point where between 30% and 40% of homes in Canada are not owned by people who actually want to live in them themselves, but rather by individuals who already have a home and want them as investment properties.
I just got back from a trip to western Canada, to Jasper and Banff, an area where there are a lot of construction workers, especially for the Trans Mountain pipeline. These workers are given extra money for housing, because it costs $3,500 a month just to rent a room in someone's basement. It is completely ridiculous. It is crazy. This is out of control.
Budgets do not seem to acknowledge how absurd this situation has become. The average price of a house in Canada is now over $850,000. That is the average price. It is not uncommon to see houses in some places, even quite modest houses, priced at between $1.5 million and $2 million. I am not talking about posh neighbourhoods in London, New York or Singapore. I am talking about the suburbs of Toronto.
Many young people from generation Y and generation Z have no hope of owning a home. Time is of the essence if they even hope to have place to call their own, to pay off a mortgage and then diversify their savings so that they can retire at age 65. Contrary to popular belief, a home is not a retirement plan. The walls are not edible. Selling a home does not guarantee that there is something cheaper out there to live in. Using a reverse mortgage essentially means the home you worked for your entire life goes directly to the banks instead of to your children when you die.
There seems to be no sense of urgency on the Liberal side, and even less so on the part of the NDP who support them, to address this problem. In some cases, they even try to normalize the situation. That is clear when we look at the ceiling for the new FHSA to help individuals access home ownership. By saving $8,000 a year for five years, they can reach $40,000. Imagine what saving $40,000 means for young people who earn on average $50,000 a year. We can agree that it is very hard to save $8,000 with the current cost of living. That represents a 5% down payment on an $800,000 home.
Does the government think it is normal and acceptable that a young person or a couple today is starting out $760,000 in the red because homes cost $800,000 on average? The government estimates that it takes five years to save up a 5% down payment. How can it expect these people to repay the remaining 95% within 25 years?
All financial planners agree that an acceptable price for a house is about three times the buyer's salary. According to Statistics Canada, the average salary in Canada in 2019 was $51,740. Multiply that by three and we get roughly $155,000. Try to find a $155,000 house in Canada. There are not many left. There are some in my riding, but I will say that they are not very big houses.
I have not finished my speech, but unfortunately my time is up. I hope I will be able to answer my colleagues' questions. The government has totally mortgaged the future of today's young people. It is appalling. All the debt that the government has racked up over the past seven years is going to have an impact on young people's lives and future.
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- Apr/25/22 1:11:23 p.m.
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Madam Speaker, when the member makes reference to the issue of deficits, one of the things that has to be factored in is the fact that, over the last number of years, yes, the government has spent a great deal of money. We spent a great deal of money to support Canadians and small businesses, whether it was millions of people who found themselves without a paycheque or literally hundreds of thousands of businesses and others that needed supports such as wage subsidies and rent subsidies.
By doing that, Canada was in a much better position to be able to recover from the pandemic. We are seeing that in terms of the job growth, as our economy continues to do better than any of the other G7 economies when it comes to job recovery.
I am wondering if the member opposite has any remorse or regret, given that the Conservative party actually supported the many expenditures that we made, the billions and billions of dollars.
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- Apr/25/22 1:12:26 p.m.
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Madam Speaker, as I said in my speech, like the government, we had no choice but to support the pandemic spending. Obviously, we are not disputing that. We think that the government did far too much, but that is another issue.
Then there is the matter of young people. I am a businessman, and I have some young employees. They are not getting paid $80,000, $100,000 or $200,000 a year, but these young workers want to earn a living and buy a home.
Here is the problem with the deficits. Other members will tell me that the government is not a business, and I agree. However, the fact remains that, if I applied the current government's way of thinking and logic to my business, I would have gone bankrupt a long time ago. It makes no sense.
The country was in a period of economic growth when the current government took office. There was no deficit when this government came to power. In 2015, the budget was balanced. Mr. Trudeau promised to run three small deficits of $10 billion, and now I do not even know how big the deficit is.
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- Apr/25/22 5:43:28 p.m.
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Mr. Speaker, I want to thank my colleague for giving me the opportunity to remind him of how many deficits the Conservatives, prior to 2015, had in this House.
Looking at what we have put together, the transformative changes are extremely impressive. The economy is very strong, as I indicated. We have 112% of our jobs back. The unemployment rate is down to 5.4%, and the best was 5.3%. Those numbers speak for themselves. Facts are facts.
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