44th Parl. 1st Sess.

December 5, 2022 11:00AM

Mr. Daniel Blaikie (Elmwood—Transcona, NDP)

Dec/5/22 12:49:10 p.m.
Watch
Re: Bill C-32

Madam Speaker, I am pleased to rise today at report stage of Bill C-32 to talk a bit about the bill. One of the really important measures contained in this bill is the Canada recovery dividend. We have talked a lot in this place about the impact of the pandemic on people and about the need for the government to have spent a considerable sum of money to support people as they contemplated losing their homes during the pandemic, particularly in those early days when the economy all but shut down and people were put out of work and were not sure how they were going to pay their bills. We have also talked a lot in this place about the amount of financial aid that was made available to large financial institutions like banks right at the outset of the pandemic. Indeed, we have talked about some of the knock-on effects in the economy of providing that liquidity, support and de-risking to major financial institutions. The Canada recovery dividend is a one-time tax assessed on Canada's largest financial institutions for profits of over $1 billion during those early years of the pandemic. It is to be paid over five years and represents a considerable amount of revenue. It is something the New Democrats would have liked to see applied to big box stores, grocery stores and oil and gas companies, which also saw considerable profits during that period. By considerable profits, I do not just mean their normal considerable profits. I mean extra profit above and beyond the normal rate of profit that these companies enjoy. While we would have liked to see that expanded and while we continue to ask and push for that, there is an important piece of work being done here, which is to assess the Canada recovery dividend, or what in other jurisdictions has been called a windfall tax, on Canada's financial institutions. It has not been done before, to my knowledge, in my own lifetime, so it is a really significant undertaking to go to the large financial institutions, which made a lot of money and benefited significantly from public funding during the pandemic, and say they need to pay their fair share. Oftentimes, we talk about folks having to pay their fair share. The New Democrats talk about large companies having to pay their fair share. Rarely do we see actual instances of their being required to do it. This is what it looks like when they do it. While going ahead with this with respect to financial institutions is a positive thing, it also demonstrates the extent to which we are not requiring other large profitable companies to pay their fair share, because they are not mentioned in this legislation. They are not going to do it spontaneously. They are not going to do it out of the goodness of their hearts. They are not going to just come around. The banks did not, but they will have to do it because it is legislated. It should be legislated for other sectors as well, but it matters that we are doing it for some sectors. In addition to that, this legislation would permanently increase the corporate tax rate on those very same companies, including the big banks and life insurance companies, from 15% to 16.5%. That is also significant. That is what it means to make companies pay their fair share, and it is something too infrequently seen in this place. I note to anyone listening at home who has an outpouring of sympathy for these large institutions, although I doubt many are, that this is still far less than the large institutions paid in the year 2000, when they paid a 28% corporate tax rate. Going up to 16.5% for a small cross-section of corporate Canada, albeit a large, powerful and profitable cross-section, is hardly what we mean when we talk about tax fairness. It is at least, for the first time in over 20 years, a step in the right direction. I am proud to be rising today to support that step in the right direction. I hope it is the first of many. I know if Canadians see fit to elect a New Democratic government, it will be. In the meantime, we will be here fighting the Liberals and dragging them kicking and screaming at every opportunity we get so they do the right thing and ensure that corporate Canada is paying its fair share. Canadians who want a sense of what that looks like need only look at this bill and see the progress we are making. There are also some things in this bill that have to do with the housing market. Ultimately, they are a drop in the bucket because they are predicated upon the same ethos or philosophy that has been driving the housing market since the Liberal government of the mid-nineties first terminated the national housing strategy, which had a commodity-based and market-based approach to housing. This is not because we ever had a time when there was not a housing market. There has always been a housing market in Canada, and rightly so, but we used to have a housing market in Canada that was about people being able to buy a family home and sell a home when it came time for them to downsize in retirement and have a bit of a nest egg. That was complemented by a parallel public housing sector that was meaningful, made real investments and built a significant number of units every year. That stopped in the mid-nineties, and we have never really gotten back to that. Things that the New Democrats support, incidentally, such as a doubling of the first-time homebuyers' tax credit, will make a difference for certain families that are already financially well positioned to contemplate buying a house in this market. Fewer and fewer Canadians belong to that category because of the astronomical increase in the cost of housing. Fewer and fewer Canadians belong to that category because of the significant depreciation in their salaries against inflation and the prices of many things. These are things that will make a difference for some Canadians. Some of these things the New Democrats have advocated for, such as the doubling of the first-time homebuyers' tax credit and cracking down elsewhere, to the extent that the government has done so in this bill. We will see in time how effective that is and what the loopholes mean, but things like house flipping and other things are making it harder for Canadians to compete and get a first home. They are being outbid by people who have made a science of bidding on homes and flipping them and who are backed by access to a lot of capital that most Canadians do not have ready access to. Nevertheless, there are some measures that may help certain Canadians. That is fine, but there is a lot more work to do to combat the idea that houses are commercial assets as opposed to homes. Significant government investments will be required to make that case and take the framework on so that we are building more social housing units for which rent is geared to income. Also, not unlike what I was just talking about with regard to assessing real taxes on the biggest corporate players in Canada, there is a lot of work to do in changing the regulatory environment so that big real estate investment trusts and other large corporate players in the housing market, which are pushing up prices and evicting low-income tenants, do not have a free hand to do that in the way they have. That is what it will ultimately take for us to live in a country that has made a real decision about its values in respect of housing so that housing is not a simple market with a good like any other good in the market, but is a right for Canadian citizens. We have to design our housing market, including using non-market tools, to ensure that everybody has access to housing. This bill does not get us there, but it does tinker at the edges in ways that will be helpful for some people. I want to talk a bit about what is not in the bill. The New Democrats are quite prepared to support this bill on the basis of some of the things that are significant and some of the things that tinker at the edges, albeit in helpful ways as opposed to harmful ways, but there is a lot that is not in the bill. I think particularly of employment insurance reform as the government begins to talk about a recession. We do not see any clues in this bill, just as we did not see any in the fall economic statement, about where the government is going on certain key policy decisions that have been made to get our employment insurance system up to where it needs to be. I would note, while I have the opportunity, that one thing the government has decided to do, which we do not see in this bill but is on the books, is attribute $25 billion of debt, a big number, to the employment insurance account for the CERB and CRB payments that were made under the auspices of Service Canada, as opposed to the CRA. I have to say that whatever the government has in store for EI modernization clearly cannot involve any funding, because a $25-billion debt on the EI account means that we are going see maximum premium increases for the next seven years, with all of that money paying down CERB debt that should not be on the EI account. That was a general expense by the government in the context of a global emergency, and it should not be on the on the EI account. I am happy to talk more about that during questions and answers.

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