44th Parl. 1st Sess.
September 22, 2022 10:00AM
- Sep/22/22 4:31:56 p.m.
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Questions and comments; the hon. member for Edmonton Griesbach.
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Madam Speaker, I want to thank my hon. colleague for what I think is a very important piece of legislation that will help many Canadians from coast to coast to coast.
However, I do want to mention that the New Democratic Party tabled this very same request of the government last May. All of a sudden it took New Democrats to force the government to finally act and to see results for Canadians. We have been clear, as a party, that we want to see results for Canadians, as they are seeing one of the greatest cost-of-living challenges in a generation. This support is needed. Albertans, where I am from, are just $200 away from not making their rent.
Why did the government not do this sooner, when we called for it?
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Madam Speaker, the Minister of Finance has been very open in listening to all members of Parliament on all sides of the House. Over the last three years we have brought in all sorts of programs, whether it is CERB, direct payments for seniors and people with disabilities or support for students. There has been a smorgasbord of all sorts of programs over the last three years and up to today, not to mention the programs prior to the pandemic itself.
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- Sep/22/22 4:34:12 p.m.
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Order. It is my duty pursuant to Standing Order 38 to inform the House that the questions to be raised tonight at the time of adjournment are as follows: the hon. member for Saanich—Gulf Islands, The Environment; the hon. member for Stormont—Dundas—South Glengarry, Passports; the hon. member for Courtenay—Alberni, Health.
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Madam Speaker, I am pleased to participate in the debate today on Bill C-30, an act to amend the Income Tax Act.
Before I go any further, let us all recognize that this bill ultimately proposes, for six months on a temporary basis, to increase the GST credit for those earning up to $49,200, or to $58,500 if it happens to be a household with children. That is when the benefit will be fully phased out. The cost of doing this will be around $2.5 billion. To put it another way, this will be yet another $2.5 billion being injected into our economy, where it will be spent driving, up further demand. This is the inflationary cycle that we are in.
Let us take a moment to stop and think about that. I am certain that I am not alone in hearing from citizens who are facing monthly mortgage payment increases they cannot afford. The stress and anxiety this is causing to many Canadian families is severe. However, let us also recognize that not everyone is impacted by this. Many of those who are wealthy are not only not impacted; some are actually coming out ahead and earning more interest on their savings and investments.
However, some of the financially most vulnerable, often working families with good jobs and living in established neighbourhoods, are the hardest hit. Let us keep in mind that they did not create this situation, but they are certainly being disproportionately impacted by it.
What have we heard from the government until only recently? Let us harken back to June, just as this place was preparing for the summer break. My office and, I am confident, a large majority of other members' offices, were getting call after call from people struggling with $2-a-litre gas, runaway grocery costs and rents. Conservative MPs, in question period after question period, were calling for the government to hear these calls and to act.
What did we get? We got a lecture by the finance minister on Bay Street, essentially telling our constituents that they never had it so good. The government tried to repackage its last two budgets as a so-called affordability plan, claiming that benefits were tied to inflation. I should note that the inflation was from last year and does not reflect the record high inflation of this year, so those CPI increases are from last year. It is a big shortfall that many are upset about. The minister claimed at the time that this was what was needed when clearly it was not.
Then what happened? Silence. There was so much silence that I have called it the “summer of silence”, as the government appeared to shut down. Sure, more taxpayer-funded projects were being announced. They were announced almost daily, keeping the ”Ottawa spends” Twitter account posting at a record pace, but what did the government do while Canadians saw more inflation records and higher interest rates? They saw nothing in response from their federal government. Believe me, I tried to look for statements with any recognition of what Canadians were going through.
What we can assume is that the Liberals spent the summer polling. I can only assume that when they came back, they did not like the numbers they were seeing, and that is why we are here today. Only now, after Conservatives have been banging on pots and pans about gas, groceries and rents, as well as increased mortgage costs, has the government finally conceded that it was wrong on inflation.
Do members remember that it was the Minister of Finance who claimed that deflation was the major concern and that the Conservatives had it all mixed up? Then when inflation was heading through the roof, the Liberals pretended that it was not. Wrong again. Then they said that their housing budget in the spring was actually an affordability plan, but it turned out that it did little for either. They were three strikes out.
While the government posted quarter after quarter of record revenues due to inflated prices, Canadians slipped further and further behind. When the Canadian public needed them, the only action they received was a government that acted as if it were uninterested, disconnected and distant. That is remarkable for a government that likes to say it has Canadians' backs. Here we are, months after the fact, discussing a payment that will not likely help those that it targets—students, persons with disabilities, pensioners and low-income families—until November or December, at best. How much suffering will happen before these payments finally arrive in the mail?
Inflation, it is said, is a silent tax that predominantly hurts the most vulnerable. I am sure any of the people who have spoken with me will tell us that is true, but what is also true is that the pain I speak of goes much further than just those targeted in Bill C-30. There are others who are also finding it harder and harder.
That list with the latest GDP projections downgraded our GDP for this year by a full percentage point. With growing unemployment and with new payroll and carbon taxes set to increase in the new year—and this before we take into account higher interest rates—there will be more “middle class and those seeking to join it” who will not be doing well.
Let me explain by returning back to Bill C-30, the bill that is essentially capped and fully phased out for those families making $58,500, which includes the vast majority of working families who are being hit the hardest. I do not want to make my comments sound partisan for the sake of being partisan, but our banks are not partisan. Their chief economists are typically offering unbiased advice, and they are all clear that the government cannot continue to pour more fuel on this inflationary fire. The reason I reference government spending is that it is something within our control to deal with.
Let me provide another example of something we can control. We have all watched skyrocketing gas prices dramatically increase inflation. Of course, with so many of our goods being delivered to market through our supply chains, which are burning gasoline to do that, there is a serious compounding of higher gas prices. That makes everything more expensive. This is one lesson we learned clearly over these past months. That is precisely what a carbon tax does: It drives up the cost of fuel and, by extension, inflation.
I know some members will say that there are rebates. Here is the thing. For those like the Minister of Finance who live in a city like Toronto and do not own a car, I have no doubt they would come out ahead with the carbon tax rebates, but if they lived in a place like Hedley, B.C., in my riding, largely because it is the only place where you can find affordable housing, they would not come out ahead. Why? It is because Hedley has no hospital. It has no high school. It has no major grocery store or insurance agent. To access these services, they would need to either drive to Princeton, Keremeos or in some cases Penticton. That is true for so many rural municipalities across Canada. For them, carbon taxes are devastating. They do not treat people equally and they favour those who live in larger urban areas.
Why should Canadians be discriminated against because of their postal code? No one living in a rural community pays less income tax than a person living in Vancouver or Toronto, yet the federal Liberal government does not treat them equally. That is why our official opposition caucus will continue to call on this Liberal government to scrap the carbon tax. None of our major trading partners has it. It is time to recognize that.
We will also see an increase in payroll taxes in the new year. Both CPP and EI premiums will increase. This will result in more money coming to Ottawa and less money staying in the household incomes of Canadians. At a time of higher inflation, with crushing interest payments, this makes things worse, not better. That is why our opposition caucus has called on the current government to stop all tax increases. We know the Liberal government likes to say that it is not its fault, but there are other countries that did precisely as Canada did and have similar problems. In some cases, it is even worse.
None of this changes the fact that we have a serious affordability crisis here in Canada. We would not be here debating this small band-aid of a bill were that not the case. That is ultimately the problem. In this case, providing some of the GST they have paid back to them at such a challenging time is something we, as the official opposition, would support, no differently than we would have supported GST relief on gas and diesel. Unfortunately, that measure failed to win support, as it is ideologically against the NDP and Liberal desire to see higher gas prices here in Canada, regardless of what the benefits would be for the general population.
Earlier this week, Bank of Canada deputy governor Paul Beaudry said, in hindsight, governments and central banks should have withdrawn stimulus measures much earlier, as their economies recovered from the COVID-19 pandemic, which likely would have put a lid on inflation. They, of course, did not do this, but it is a clear admission from the Bank of Canada that the “always be spending” approach favoured by the Liberal government has played a huge role in how we got here. If we listen to most of the major banks, inflation is not something the Liberal government can simply spend its way out of, and I worry about that, because unlike previous Liberal governments, the present Liberal government and the Prime Minister seem to have no understanding that we cannot spend Canadians out of inflation.
We are told that we may be in this situation for potentially the next two years and that interest rates may have to go even higher, if the Liberal government continues to spend. That is a point I made earlier to the Minister of Tourism. Why did they not use the summer to actually do the hard work that was in the budget, where they said they had identified billions of dollars in potential savings through a policy review? Why did they not pare back that spending over the summer and then produce this bill, having done the hard work of trying to reduce inflation while helping Canadians?
However, they did not do that. They do not, like our leader, the member for Carleton, have a pay-as-we-go rule, where we are trying to make sure Canadians are getting maximum value for every dollar that is used and that it is to their benefit. Unfortunately, the government seems to only know one lever, and that is to spend.
There are Canadian households that are barely hanging on, and they cannot afford any higher interest rates, nor can they afford two years of more pain and suffering. I am certain that every member of this House has likely heard from citizens in dire straits right now. Do we listen to them? Do we listen to experts and central bankers who say to stop the spending, or do we continue to have the Prime Minister's Office dictate more never-ending spending to help fuel this inflationary fire?
Let us not forget that just two years ago the Bank of Canada Governor Tiff Macklem said, “If you have got a mortgage or if you are considering making a major purchase...you can be confident as rates will be low for a long time.”
Some of the people who followed that advice in good faith are now in a dire financial situation. I do not say that to point fingers of blame, because that helps no one in this situation, and likely no one in this situation will be helped by the bill we are here debating today. I point this out because we need to recognize that many of the Canadians who worked hard, who followed the rules and did all of the right things are suffering right now, and the government needs to recognize that.
The latest headlines are saying that home ownership is on the decline. Many young Canadians I have spoken to have largely given up on home ownership. Their hope is not to own, but just to keep their heads above water. Paying down student debt, finding a safe rental and trying to raise a family while putting gas in their car and food on their table is difficult enough. They know the hard work, but under the current government they have lost hope. This crisis is real, and it affects some households all across Canada.
Before I close, I would like to share a thought. First of all, Canada's Conservatives, under the member for Carleton's leadership, will be supporting this bill. However, as we all know, while this bill would help some, a great many will be left behind. This is one of the challenges with government bills like this one. Inevitably the government picks the winners and the losers. In voting to support this bill we recognize that we will be helping some. However, I know in my riding for some of those who are most adversely impacted right now, not just by inflation but by crippling interest rates that will be increased by this bill, this bill would do nothing to help them. I think we all need to be critically aware of those who are still suffering and will not be helped by this bill.
Let us also bear in mind that those this bill intends to help will not receive help until November or December at the soonest. However, many people live in fear of higher interest rates for their mortgage or going to the grocery store and walking out with less and less, because they just cannot afford it. Who can blame them for these fears? The affordability crisis is real, and I am hopeful that all members in this place realize that it is more than a talking point.
Also, as people see less and less of themselves reflected in the government, they are looking more and more to my party to step up, to continue to be their voice, to remind the Liberals that more is not always better. A government that cannot do things like issue passports or resolve lineups at airports should stick to its knitting instead of constantly seeking to expand government. It needs to be reminded that government office is a duty where those around the cabinet table are there to serve Canadians and not the other way around, which is why Conservatives will support the bill: to offer tax relief, to serve Canadians who are hurting and to advocate for the ones who were left out by Bill C-30. It is a reality.
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Madam Speaker, I will start with a couple of things. First, I heard the member say that no other trading partner has a price on pollution or a “carbon tax” as he referred to it, which is not true. Fourteen out of 31 of the OECD countries do tax pollution, including Japan, the United Kingdom and France.
The member also talked at great length about the price on pollution or a carbon tax in B.C. However, my understanding is that B.C. has its own carbon tax. Indeed, B.C. is not utilizing the carbon tax that is imposed, because it chose to do its own model, which was the premise of this entire exercise of pricing pollution, so the member is slightly perhaps misleading by making that comment.
Finally, at the beginning of the member's speech, he talked about the supports that would be put in place as a result of the bill, but that perhaps spending this money would add further to inflation. I do not reject the economic theory behind that. I recognize that he said he is going to be supporting the bill, but is he suggesting that we just abandon people because if we spend any new money on them we are just adding to inflation? Is his suggestion that, because it will contribute to inflation, we should just not spend money on people?
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Madam Speaker, I will start with the last question the member opposite had and see if I have time for the other ones.
First of all, in a question earlier to the Minister of Tourism during his speech, I asked specifically why the government did not do the hard work within the budget that was announced this year. The Liberals said that they would have billions of dollars from a policy review to look at curbing back spending. They could have easily, dollar for dollar, gone through these other programs to find things that are either wasteful or no longer necessary and actually put forward a plan to say, “Look, we are going to be reducing the cost of government here while we put forward this GST tax relief for Canadians to help them.” That would have actually lessened or even alleviated the inflationary concerns regarding this bill, but they do not do the hard work.
This government is built to spend with this “always be spending” Prime Minister and this “always be spending” finance minister. This is the challenge we have here: The environment in which they make policy decisions is no longer 2015. They need to do better when it comes to doing these things. This is not a balanced way to be helping people. A proper way would be to find balance and savings.
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Madam Speaker, I want to commend my colleague on his speech. I am fortunate to serve with him on the Standing Committee on Finance.
The government has announced three measures to fight inflation: the payment of GST refunds under Bill C-30, and dental benefits and rental assistance under Bill C-31.
My colleague was with me for the briefing on Bill C-30, and it went well. However, members of the House were not briefed on Bill C-31 until well after journalists were.
I would like to my colleague to share his thoughts on that. Does he think that the government lacks respect for the members of the House?
Again with regard to Bill C-31, does my colleague agree that we should ask the government to split the bill into two separate ones, since dental benefits and rental assistance are two very different types of measures?
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Madam Speaker, this government definitely lacks respect for Parliament and parliamentarians. That is true.
The problem is that the government believes that the other parties are not important. It uses the media for its own purposes. It is important for all parliamentarians that the government treat all members with a modicum of respect. I would encourage the government to think about that.
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Madam Speaker, when I was listening to the member's speech, I heard him lament that this GST credit is going to be coming too late, not for the next couple of months. On that point I agree. I think this should have come much sooner. We know the inflationary pressure affecting families across the country started much earlier in the year and families have been suffering for too long.
I am puzzled, because if the member feels that these interventions should have come sooner, why did he and his party join with the Liberals in May to vote against the NDP? Why did he not support New Democrats in redirecting that into benefits to help families, such as a doubling of the GST credit? We called for this back in May and he voted against it back then.
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Madam Speaker, I think my fellow British Columbian answered his own question. The New Democrats tend to want too many things connected to too many other things. They are ideologically against the oil and gas sector, despite its being one of the chief sources of green technologies and despite its helping pay for hospitals and other important social services. They are ideologically opposed to that.
Conservatives look at every single request, whether it comes from the government or through a motion, and we look to see what is in the best interests of Canadians. Today we have seen that this is important to help a small targeted group of the population that we know is hurting. Inflation, as I said, is a silent tax that particularly harms the most vulnerable, but this is not supporting broad-based things like reducing GST at the pumps.
I will also remind the member that he had the opportunity to support that and did not. When his constituents ask him what kinds of things he has done for people that are outside of this bill, I would ask him to look in the mirror and say that he voted against giving people a break at the pumps because he is ideologically against oil and gas and the utilization of fossil fuels. This cuts both—
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- Sep/22/22 4:59:28 p.m.
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Questions and comments, the hon. member for Regina—Lewvan.
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Madam Speaker, I would ask the shadow minister of finance if he believes these tax credits will be vaporized by the ever-increasing inflation and cost of living that Canadians are facing now and into the future.
Has he done some research and has he heard anyone say that these cheques coming at the end of the year are going to offset what people would be paying for in the long term and what they have been paying for years now in inflation and the carbon tax? Especially on January 1 with the increases in payroll taxes and on April 1 with the increase in the carbon tax, are these cheques going to help or is it just going to be too little too late?
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Madam Speaker, that is a great question. I thank my colleague for his work, standing up for his constituents.
First, I hope that the Prime Minister can avoid wanting to act as Santa Claus and handing out these kinds of cheques himself during that time. That is just a bit of a joke.
Getting to the issue, this one-time help, which Conservatives support, is welcome tax relief for families, which would be around $467. The average family of four is now spending over $1,200 more each year to put food on the table, not to mention the rising costs of heat, gasoline and rent. In British Columbia, where we have tons of natural gas, we are seeing natural gas prices go up. We are seeing, right now, that people cannot get by. If it is a cold winter, it will be really difficult, especially for those areas that do not have access to things like natural gas.
This is only a small piece. It is already going to be up against so much inflation in groceries, gas prices and home heating.
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Madam Speaker, I would ask for the consent of the House to share my time with my esteemed colleague, the member for Trois-Rivières.
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- Sep/22/22 5:01:48 p.m.
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Does the hon. member have the unanimous consent of the House?
Some hon. members: Agreed.
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Madam Speaker, to address inflation, Bill C-30 proposes an additional GST rebate for the less fortunate. It is a good measure. We have been asking for this for quite some time, and we will be voting for it. It is good, but it is long overdue.
This measure was announced at the same time as the measures introduced in Bill C-31, namely rent relief and dental insurance. We support those measures in principle as well, but I feel the need to scold the government here. Bill C‑31 is really poorly constructed. It is sloppy. It is embarrassing that Parliament is considering something so poorly drafted, and I am choosing my words carefully.
With respect to rent relief, we are concerned that Quebeckers will not get their fair share because it is a supplement to the Canada housing benefit, which no one in Quebec receives. Quebec has had its own program since 1997, so we have the right to opt out with compensation. Our program is more generous, but the eligibility requirements are completely different. However, Bill C‑31 makes no mention of it. Once again, the government has forgotten that Quebec exists. There is no talk of aligning the two. It is embarrassing. It is as though the bill was written on the back of a napkin.
The same is true of the so-called dental insurance. If the parents pay any fees for a child who is 11 or under, then Ottawa will send them a big cheque. The programs are not properly aligned. What is worse, in Quebec, dental care is covered for children under the age of 10. People in Quebec are already paying for insurance. Once again, the government did not harmonize the programs, except to say that, if the services are covered by Quebec, then Ottawa will not pay and will not compensate Quebec for the cost of its insurance. However, if the parents pay for a service that is not covered, then they are entitled to a big cheque, even if Quebec is already covering most of the costs.
How much is Quebec being penalized? The government is not saying. This is sloppy work. The bill is badly written. It seems as though the department did not even calculate the cost of all this. All it did was reuse, dollar for dollar, the numbers that the Parliamentary Budget Officer came up with and the work that he did when he costed the NDP's proposal.
Once again, this shameful government forgot that Quebec exists. Once again, there is no alignment. This bill could be called “how to turn good principles into bad legislation” or “Quebec does not exist”. I say to the government, way to go. To add insult to injury, this government chose to brief journalists on this bill long before it briefed parliamentarians. This government is showing a serious lack of respect for the House.
I now want to talk a little about inflation. There are some well-known factors driving the surge in prices, such as changes in demand during and after the pandemic; supply chain problems and bottlenecks in response to fluctuating demand and health measures; China's COVID-zero policy, which is drastically disrupting supply lines and is a good example of the health measures I mentioned; the terrible war in Ukraine, which we all hope will come to an end soon; the radical transformation of the labour market and what is being referred to in the U.S. as the great resignation; the ongoing housing shortage; and natural disasters associated with climate change that are also having an impact on the global economy.
All of these factors have significantly affected the economy both here and abroad, and prices have skyrocketed. In a number of sectors, economic abundance has given way to Soviet-style scarcity.
We hope to be able to return to some semblance of normalcy, especially if we get serious about tackling climate change. In the meantime, however, families, people, businesses and farmers are bearing the brunt of this overall imbalance. The world is struggling, and there is no easy solution.
What can be done?
In the short term, we must support the most vulnerable with measures such as those set out in Bill C‑30. We should also support the hardest-hit sectors to ensure that they get through this imbalance. I am thinking of our farmers, for example. In the longer term, we must help make our economies more resilient. With oil and gas prices rising, we must support the development of the green economy.
Unfortunately, there is no quick fix for the type of imbalance we are currently experiencing. Keynes proposed effective tools to deal with crises in demand, but not crises in supply.
In light of this imbalance caused by multiple factors, how long will inflation last? It is difficult to say. The central bank has chosen to get out the heavy artillery to fight inflation. It wants to clamp down on inflation expectations. Here is its reasoning. Once expectations of higher inflation become entrenched in the economy, everyone tries to raise their prices to compensate. That creates a snowball effect. In other words, inflation expectations cause inflation.
It is easy to fall into this vicious cycle. The Bank of Canada, like the U.S. Federal Reserve, the Fed, wants to minimize that risk, even if it means seriously slowing the economy or even helping trigger a recession. Central banks believe that it will then be easier to stimulate the economy to support growth as needed. They are still traumatized by the inflationary episodes of the 1970s and 1980s.
Inflation is still high, but there are signs it is stabilizing. We appear to be emerging from this period of overall imbalance, at least in some sectors, but not because of monetary policy, which is slow to bring about change.
Is the central bank's policy too aggressive? Possibly.
Some economists suggest waiting a little longer to see how the economy will respond to this interest rate hike. Nobody can say for sure where lies the sweet spot between fighting inflation and avoiding recession. The Bank of Canada, again inspired by the Fed, apparently prefers to fight inflation. Over the next few months, we will see if it made the right choice. Meanwhile, economic conditions remain uncertain.
This is a difficult situation for many people, as I said. It is important to adopt policies aimed at those who are struggling the most and to implement them in the context of the Bank of Canada's monetary policy. We also need to promote structural measures, including supports for social housing and measures to address the labour shortage. On that point, I do not understand why the government still has not introduced any tax breaks to lure retirees back to work.
I want to talk briefly about the situation in developing countries. It is downright catastrophic, and Canada and other rich countries must do a better job of supporting them. On top of food shortages, developing countries face high levels of public debt, as international institutions encouraged them to take on debt during the pandemic. Most of their imports and loans are in U.S. dollars. However, in the context of global uncertainty, the value of the greenback has soared, serving as a hedge and reducing the purchasing power of these countries. The energy crisis is also taking a toll. Lastly, China is drawing back from doing business with developing countries due to its own economic difficulties.
That is why wealthy countries need to come together quickly to support these countries in order to avoid a cascading series of crises in these emerging economies. Everyone will be affected. We have to prevent that from happening.
Let us also invest in the green transition. We are facing a serious crisis, and we need to act urgently.
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Madam Speaker, it was refreshing to hear a detailed economic presentation from the hon. colleague across the way, and one that is not putting forth simple answers.
The hon. member mentioned the targeted programs trying to do one-time transfers to people who are getting hurt the worst in a way that will not stimulate inflation, and that balance is very difficult for us to make and for the Bank of Canada to make in conjunction with us. The constrained supply cycle that we are in right now is one that is unusual for us to deal with.
Could the hon. member comment on how we need to be nimble in the months ahead, knowing that we could be facing higher unemployment and we could also be facing other challenges on the road ahead?
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Madam Speaker, I thank my colleague from Guelph for his comments and his question. I quite agree with the issues he raised.
The global economic outlook is uncertain, especially considering the central banks' fight against inflation and the entire context that I referred to. Most economists expect there will be a recession in Europe, especially with the war in Ukraine, which is having serious consequences there. It will be very difficult to get out of. China is also experiencing a major economic slowdown. The unemployment rate among young people is especially high in the major cities. It is very concerning because China is still the workshop of the world, or at least a major production centre. Then there is Canada and the United States. What will happen? We expect a slowdown. The latest figures are less encouraging.
In the meantime, I believe that the labour market is going through a transformation, and comparing current job market statistics with the ones from a few years ago is tough. We have to be very alert and careful for the next steps.
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Madam Speaker, my colleague, whom I greatly respect, spoke at length about Bill C‑31. However, we are supposed to be debating Bill C‑30, which was introduced thanks to the hard work of the NDP. This bill will put an average of $500 into the pockets of Canadians who are struggling to cope with inflation. This measure will help around 12 million Canadians.
Bill C‑31 will provide dental care for all families with children under 12 and will help people who are renters. We are talking about nearly two million Canadians. The NDP had a hand in getting both of these bills introduced.
My colleague spoke about Bill C‑31 and we are currently debating Bill C‑30. I have a simple question: Which of the two NDP bills does he like best?
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