44th Parl. 1st Sess.
June 7, 2023 02:00PM
- Jun/7/23 8:25:49 p.m.
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Madam Speaker, I have a point of order. The members on the other side are speaking even louder than he is. I would ask that they show us—
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- Jun/7/23 8:25:58 p.m.
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I do want to remind members, if they want to have conversations, to please take them out to allow the speaker to be heard, so that MPs could be ready for questions and comments.
The hon. Leader of the Opposition.
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- Jun/7/23 8:26:17 p.m.
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Madam Speaker, I know that the Liberals across the way would love to silence my voice. They want to silence Canadians by censoring the Internet. They want to bring their woke censorship ideology to university campuses—
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- Jun/7/23 8:26:32 p.m.
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Order. The hon. parliamentary secretary knows full well that he should be a role model to other members and should not be making any disturbance while someone else has the floor.
I would ask him to put his eyeglass piece away as well.
Some hon. members: Oh, oh!
The Assistant Deputy Speaker (Mrs. Carol Hughes): Order, order, order. I am sure we can get through this evening. It would be beautiful if we could run through this evening smoothly. I have a feeling that is not quite going to happen, but I am going to try.
Again, I want to remind all members, if they want to have conversations, to take them out.
Some hon. members: Oh, oh!
The Assistant Deputy Speaker (Mrs. Carol Hughes): Order. Even when I am speaking, I think I deserve the respect of this House.
The hon. Leader of the Opposition.
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- Jun/7/23 8:27:41 p.m.
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Madam Speaker, I think we can all agree that if the member from Kingston is our role model, that is a good reason why we are in so much trouble today.
This spending that has led to the inflation was utterly predictable, but its consequences have been utterly devastating. It is obvious by looking at the lineups at food banks across the country, which, in many cases, actually go many blocks down the street and around the corner. There are the cases of the young people who now estimate that they will be in their fifties before they will be able to move out of their parents' homes. These are not anecdotes.
Just the other day, one prominent financial institution estimated that if a family was earning a quarter of a million dollars, it would take them 25 years in Toronto to save up for a down payment. It used to be that 25 years was the term it took to pay down a mortgage, now it takes that long just to get a mortgage, which illustrates the immense contortion that our economy has suffered. This is not without notice around the world. The IMF now says that Canada has the economy that is most at risk of default crisis out of all the countries in the advanced and developed world. Right now, household debt is 107% of GDP, which is to say that the combined debt of Canadian families is 7% bigger than the entire GDP of our country, and we have the worst household debt of any G7 country.
This debt was not an accident. When governments create cash, they are sloppy about it. They do not simply print the money and hand it over to the Prime Minister to spend, although I think he might prefer that kind of efficiency, rather they have a central bank purchase government bonds on what is called the “secondary market”. In other words, the government sells the bonds to the financial institutions and the central bank buys them back.
This creates an artificial private-sector demand for government debt, which makes it very easy for government to borrow money. After all, if I say to members that I will sell them a bond today for $1.00 and buy it back tomorrow for a $1.10, it is pretty easy to imagine that members would accept that transaction so that they could arbitrage the 10¢ profit on the back and forth. This allows government to spend cash very easily and it also increases the money supply. It balloons government and the financial industries. It is why, when the Federal Reserve is engaged in this practice of so-called quantitative easing, it has been wildly popular in both Washington and on Wall Street among Democrats who like big government and among Republicans who like big banks, because both of them actually profit when government creates cash to inflate financial assets and to inflate the spending capacity of itself.
Therefore, what ends up happening is that those who benefit off government expenditures profit, those who benefit off the financial sector profit—
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- Jun/7/23 8:31:12 p.m.
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I will interrupt for a second.
I am made aware that there is someone who is taking pictures from the lobby into the chamber. I will ask one of the clerks to go over there and ask anybody who has been taking pictures from the lobby into the chamber here to delete those pictures.
I would remind members that they are not to be taking pictures in the House whether they are in the House or in the lobby looking into the House. If they want to take pictures, they can take pictures from the TV.
I am hoping someone will take care of it.
The hon. member for Mégantic—L'Érable on a point of order.
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- Jun/7/23 8:32:05 p.m.
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Madam Speaker, we just heard a government member say that she took a picture in the House. I would ask her to delete the photo from her device, since everyone saw it happen.
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- Jun/7/23 8:32:18 p.m.
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If members have taken pictures, I would ask them to make sure they delete those pictures. Members know that taking pictures in the House is not permitted. If they cannot help but take pictures, I would ask them to leave their phones in the lobby.
I will also remind members not to be talking across the chamber. They can take their conversations into the lobby.
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- Jun/7/23 8:33:08 p.m.
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Madam Speaker, as I was pointing out, this practice of so-called quantitative easing was not invented in Canada. In fact, it started long ago in Japan, which caused a massive gap to appear between the rich and the poor, because the Japanese government printed cash, inflated asset values, left the working class behind and inflated the wealth of the super-rich. This led to a long-standing slump in Japanese economic growth, because investors no longer had to invest in productive assets that would generate wealth for the Japanese economy. Rather, they could just sit on their property, their stocks or their bonds and allow the Japanese central bank to inflate the values. The Americans then replicated this idea of quantitative easing in the U.S. financial crisis. The result was a disaster. It was a decade of very slow economic growth.
Furthermore, there was a major expansion in the gap between rich and poor. While the working class in America was losing its jobs to automation and outsourcing, it was not enjoying any of the lower prices that those competitive forces should have provided because the central bank was neutralizing cost savings by inflating the cost of living by printing cash. We saw a massive explosion in the wealth of Wall Street and Silicon Valley, while the working poor in industrial states, such as Pennsylvania, Ohio and others, found themselves more and more disenfranchised. Their wages were going down, yet their prices were going up. They looked around and saw incompetent CEOs and other financial sector insiders, the same ones who had caused the U.S. financial crisis, not going to jail where they belonged. Rather, they were getting richer and richer. Therefore, the working poor came to believe that the system had ultimately been rigged against them.
Now I bring this to the present, because the government claims that because all central banks were engaging in quantitative easing, we had to do it as well. The American federal reserve is our big, friendly neighbour to the south. The argument goes that if it does something, we have to do it too. However, that is provably false. In the 2008-09 financial crisis, the American government printed cash to buy government debt. They did something called quantitative easing. In Canada, we did not do that. Our government signalled to the central bank that it would not be authorized to participate in fiscal policy by printing cash to buy government bonds. Yes, we ran small, temporary deficits to get through that financial crisis, but we did it by borrowing real money, not by printing cash. That is why we rebounded faster than the Americans did. We had lower unemployment. We were the last in and the first out of the recession, and we never had inflation above 4%. We were back to our inflation target in a year. This proves that we did not need to do what the Americans did, just as our mothers taught us. Just because our friends are jumping off a bridge, does not mean we should do the same.
We know that the Swiss did not print cash during the COVID crisis. Rather, they used real money; when they ran deficits, they borrowed real money. They quickly returned to a balanced budget, and the result was the lowest unemployment, the lowest interest rates and the lowest inflation. This was despite the fact that their European neighbours all had massive inflation crises because their central bank on that continent had behaved differently.
All these experiences were laboratories to demonstrate the folly of the government's actions. I called this folly out on the floor of the House of Commons as early as the fall of 2020, when all that cash was moving into our economy and already beginning to inflate the cost of living. Core inflation was already rising and starting to break above the 2% target, yet they continued when it was clear that there was—
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- Jun/7/23 8:37:42 p.m.
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I have a point of order.
The hon. Minister of Seniors.
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Madam Speaker, an agreement could not be reached under the provisions of Standing Order 78(1) or 78(2) with respect to the second reading stage of Bill C-33, an act to amend the Customs Act, the Railway Safety Act, the Transportation of Dangerous Goods Act, 1992, the Marine Transportation Security Act, the Canada Transportation Act and the Canada Marine Act and to make a consequential amendment to another act.
Under the provisions of Standing Order 78(3), I give notice that a minister of the Crown will propose at the next sitting of the House a motion to allot a specific number of days or hours for the consideration and disposal of proceedings at the said stage.
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- Jun/7/23 8:38:41 p.m.
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Madam Speaker, now that we know what worked and what did not work, we have to understand the consequences of the fact that the government took the wrong path. I do not need to go on at any length about the ravages of inflation. We have all heard the stories. We can all tell heartbreaking stories.
I see a member right now looking at emails on his phone from people who cannot pay their bills. I see a member across the way saying that our member for Barrie—Innisfil is in trouble for looking at an email from a constituent. He should be looking at those emails. Maybe that member would benefit if she looked at emails from her constituents as well. I understand that, if she were to do so, it would be a great burden on her personal guilt to learn of the single mothers who are skipping meals, the families who are now defaulting on their loans from a 16% year over year increase and the number of Canadians who are missing their mortgage payments. She could take a moment to look into the eyes of the 37-year-old who has been working all his adult life and still cannot afford a home. She could talk to the farmer who borrowed so he could expand his farming operation under the government's promise that the interest rates would be low for long. If she looked at their emails, then maybe she would be less arrogant in supporting the very inflationary policies that have caused all this misery. Maybe, if the Liberals would listen to the people who pay the bills in this country, just for once, we would not be in the mess we are in right now.
This was all so predictable. The great Nobel Prize laureate and economist Milton Friedman said, “Inflation is taxation without legislation.” He also said, “Inflation is always and everywhere a monetary phenomenon in the sense that it is and can be produced only by a more rapid increase in the quantity of money than in output.” In Friedman's view, central bankers try to avoid their last big mistake. Every time there is a threat that the economy will contract, they overstimulate it by printing too much money. This results in a rising roller coaster of inflation, with each high and low being higher than the preceding one. Rapid increases in the quantity of money produce inflation. So said the greatest expert on monetary economics in the history of the world, as recognized by the Nobel Committee.
Thomas Sowell, one of the greatest economists ever, said that “inflation is a way to take people's wealth from them without having to openly raise taxes. It is the most universal tax of all.” He said that the first lesson of economics is scarcity. That is, “there is never enough of anything to satisfy all those who want it. Meanwhile, the first lesson of politics is to disregard the first lesson of economics.”
The great Hayek said, “With government in control of monetary policy, the chief threat in this field has become inflation. Governments everywhere and at all times have been the chief cause of the depreciation of the currency. Though there have been occasional prolonged falls in the value of metallic money, the major inflations of the past have been the result of governments either diminishing the coin or issuing excessive quantities of paper money.” He also said, “A great many of the activities which governments have universally undertaken in this field and which fall within the limits described, are those which facilitate the acquisition of reliable knowledge about the facts of general significance. The most important function of this kind is the provision of a reliable and efficient monetary system.” That is something the government has failed to provide.
Furthermore, the great French philosopher Frédéric Bastiat said, “Money serves only to facilitate the transmission of these useful things from one to another.... When legislators, having ruined men by war and taxes, persevere in their idea, they say to themselves, ‘If the people suffer, it is because there is not enough money. We must make [more].’”
The tactic the Prime Minister deployed was nothing creative or new. It has been the tactic of emperors, kings, presidents, prime ministers, and incompetent and self-indulgent leaders. When they run out of other people's money, they create more cash.
I think of the story of Henry VIII, who spent lavishly and without restraint on himself, spoiled his court and, of course, ran out of money. However, there was a difficulty in creating cash in his time. That was because the British pound was actually a pound of silver. When people ran out of silver, they ran out of the ability to make money. Henry VIII had a silver coin. How could he create cash when he had no more silver left? He had already spent it all. What did he do? He had his smelters melt it down and remint it with copper on the inside and a tiny layer of silver on the outside. Then he could multiply the number of coins almost without limit.
I know members are anxious to hear the rest of the story.
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- Jun/7/23 8:44:30 p.m.
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I know members may be very interested, but I do not think they should be chatting at this point or trying to answer some of the questions that the Leader of the Opposition is asking during his speech. It is not quite time. I would remind members to afford the speaker the respect he deserves.
Aside from the person who has the floor, I would ask members to please be quiet. If they are having a hard time doing that because they are sitting together, I can do what teachers do and separate them.
The hon. leader of the official opposition.
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- Jun/7/23 8:45:28 p.m.
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Madam Speaker, I know they are just excited to hear the rest of the story and that is why they are having troubling containing themselves.
What was Henry VIII to do? He used copper on the inside of his coins and silver on the outside to multiply the coins without limit. There was only one problem, and that is that he put his big, ugly, fat mug on the front of the coin facing outward. He wanted everyone to see him straight on. That meant his nose protruded. His nose would rub on the inside of pockets, and that silver would rub off and then everyone would see the red nose. Every time an Englishman pulled out a coin and saw a silver coin with a big, ugly red nose in the middle of it, they knew they had been robbed of the real purchasing power of their money and that Old Coppernose had stolen from them again.
By the way, the money supply in that period increased by 80%. Guess how much prices went up in the same time period: They went up 80%, but he was not the most creative.
An hon. member: He knows.
Hon. Pierre Poilievre: Madam Speaker, the House leader knows. He is the most ambitious student in the lecture hall today. In fact, he knows he could give the lecture. He knows more about it than I do. The great House leader of the Conservative Party is here today.
Henry VIII, despite the creativity of his copper coins, was not the most creative at all. I would say that Dionysius was even more creative in generating new cash. Let me tell members about Dionysius, and then that member can tell me about Diocletian afterward.
Dionysius was a Greek ruler of the island of Sicily. Yes, the Greeks at one time ruled Sicily. I know it is now Italian. Members do not need to tell me that, but back then it was Greek. Dionysius could not control his spending either, just like Henry VIII. He would run out of money, so he sent his men out to take all of the jewellry off the statues of the gods so he could sell them off, saying that they were merely loans that had come from the gods above.
When those riches ran out as well, Dionysius had to resort to other tactics. This is what he did. He took all of the coins he had collected, which were called drachmas. That is the Greek word for what we would call a dollar. Every coin was one drachma. He said he had a simple answer and just marked a “two” in place of the “one”. All of a sudden they could have twice as many drachmas.
I hesitate to share this story in front of the Prime Minister, because I do worry he might simply turn every loonie into a toonie and every toonie into four. If we run out of money, we can always create more. To the Liberal friends across the way, please do not tell this story to the Prime Minister. I thank them very much. We have a bargain. This is a strict secret. By the way, those listening out there are sworn to secrecy as well. Do not tell the Prime Minister. We do not want to give him any ideas.
The result of course was that all of the working people on the island effectively had a real cut in their purchasing power of 50%. Yes, they had the same number of drachmas but half as many coins, so each drachma would buy half of what it did. He literally cut the wages of the people in half, but he was able to spend those coins before the inflation set in. In other words, he was able to enjoy the newly created riches for the brief instant in time they lasted before inflation melted them away, and then it was the people who lost the purchasing power.
So it is with so-called quantitative easing. It is always the bankers and the government insiders who touch the new money first and, therefore, enjoy the riches most splendidly. The working class only get those dollars when they trickle down from the top and they no longer have their purchasing power. That is why we must, and when I am Prime Minister we will, once and for all put an end to trickle-down economics. It does not work. It never works. I will never allow it.
We know the creation of cash has caused the inflation that exists, the massive poverty, the misery and the feeling of brokenness across the land. The tent cities, all of that, are the result of what the government has caused through the creation of cash, but I am here today to warn of a much graver and insidious risk still ahead of us.
This is where I rely on Churchill's second method of foretelling the future, and that is the cyclical method: Look at what has happened in the past to predict the cycles of the future. We know that this is not the first time governments have created cash or run up massive debts. We need to understand where it leads after the inflation cycle is gone, and what can often come next.
Here, today, I rely on the wisdom of the Stoics. The author of Stoicism, the modern author of Stoicism, Ryan Holiday, wrote of the “premeditation of evils”, a Stoic exercise of imagining things that could go wrong or be taken away from us. As Seneca would say, the unexpected blows of fortune fall heaviest and most painfully, which is why the wise man thinks about them in advance.
I regret that I have to think about these unfortunate and possible blows of fortune that are coming our way.
I have a question for us. If someone had a time bomb ticking away under their home, what would they do about it? Well, if the person did not know it was there, they would not do anything at all because they would have no reason to respond. Assuming that the person survived its detonation, they would have to scramble to rebuild their life.
We know what it is like to be struck by unexpected blows. We have seen them: the attacks of 9/11, the COVID pandemic, of course the U.S. financial crisis, all things that were little foreseen and little foretold. As a result, we all had to scramble to respond to what we did not prepare for.
Why is it that western nations have such difficulty foretelling the dangers that are coming? In recent decades, we have been breathtakingly unprepared for terrorist attacks, natural disasters, mortgage crises and al Qaeda. All of these things were words that were unknown until, all of a sudden, they struck.
I quote again from Ryan Holiday that it is impossible to prepare for or prevent something you're unaware of, yet in each of these recent crises, the warning signs were there if we had looked for them. If we only listened to the ticking time bomb, we could have found that bomb and defused it before it detonated, saving the world untold misery.
Now a new danger gathers in this country. It is the growing probability of a debt crisis. Here is the simple math. When governments and their people amass a total stock of debt that is three times bigger than the size of their economy, they become predisposed to experiencing massive debt crises. I regret to report to the House of Commons—
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- Jun/7/23 8:53:44 p.m.
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There is some feedback from the government's side. I would ask them to please be respectful and to be quiet.
The hon. leader of the official opposition.
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- Jun/7/23 8:53:59 p.m.
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Madam Speaker, I regret to inform the House that, while history shows that countries where the debt is more than three times the size of the economy have a strong propensity toward debt crises, according to S&P, Canada's total public and private debt is now 474% of GDP. That includes government debt, household debt, business debt and financial sector debt combined. This makes us the second most indebted country, relative to GDP, of any country in the G7, with only Japan being worse.
I spent a lot of time when I was the shadow minister of finance studying debt crises, and there is a phenomenal book called Big Debt Crises, written by Ray Dalio, the single most successful hedge fund manager in the history of the world. In it, he quantifies the precursors to debt crises. He put together the 48 biggest debt crises that have happened in modern world history, and he put together a chart of the debt-to-GDP ratios of all of those countries. I will list off some of the crises that might come to mind.
There was the Greek debt crisis that happened roughly just over a decade ago in Europe. That crisis then spread to Spain, Portugal and other European countries. There was the U.S. financial crisis, which was ultimately a mortgage debt crisis. There are the examples of the Argentinian debt crises of 1998 and 2001. I could go on.
In putting together all 48 of these biggest debt crises, he recreated the debt-to-GDP ratios that all of these countries had, public and private debt as a share of GDP, and I took the liberty of taking Canada's current debt-to-GDP ratio and putting it in that list. What did I find? Our current debt-to-GDP ratio is bigger than all of those other crisis countries except for two. In other words, there were 46 countries on this earth that had massive financial meltdowns with significantly smaller debt levels relative to the size of their economy than we have here today.
The question is why we have, up until now, not had a full-scale meltdown. The answer is obvious. It is because we have had such inordinately and artificially low interest rates. Even today, as rates rise, much of the debt that is in the current stock of the country is still locked in at lower rates, but that is not a permanent phenomenon. In other words, every passing day, somebody's mortgage comes up for renewal, and the artificially low rate they had up until then renews at a much higher rate. This is the fundamental risk we have. The same goes for government debt. Some of it is locked in at lower earlier rates, but governments have mortgages.
Bonds are just mortgages. They are just varied terms. Some of these mortgages are 90 days. Some of them are 30 years. Most of them are somewhere in between, but all of them at some point come up to renewal, and when they renew they do so at the rates that are present when the renewal occurs. Slowly but surely, that is happening already.
Where do we manifest the higher rates? Ironically, it is in the Bank of Canada itself, because the bank purchased government debts and government bonds when rates were low, and is therefore collecting a small yield on those debts. The bank purchased those debts by depositing money in the central bank's accounts of financial institutions, which sold the bonds back to the bank.
Those deposits are receiving the policy rate of interest that the central bank pays out, which is now 4.75%. In other words, the Bank of Canada has bought government bonds that pay out 0.6% and paid for them with deposits that it now has to pay out 4.75% on, so our central bank is losing money every single day. In fact, the central bank, were it not backed up by the government, would be bankrupt today, because its liabilities are worth so much more than its assets. This is a very unusual situation, but it is a precursor for what everyone else is facing.
I ask this: What happens in the year 2026 when all of the mega mortgages that people took out five years before at artificially low rates with artificially high home prices all come up for renewal, and the rates are three or four times higher than the families had been paying up until that time? All of a sudden, we are going to have hundreds of thousands of people renewing their mortgages at the same time at an increase of interest rates of 3% or 4%. That is not a three or four percentage point increase. That is a 300% increase, because four is actually 300% higher than one. The artificially low rates then create a multiplying effect when they collide with new and real higher rates.
Imagine then that there are hundreds of thousands of people who can no longer afford their monthly payments because they have gone up by $1,600 a month, and the average family only has $200 extra in their bank accounts. They are now paying $15,000 or $16,000 more per year in interest on their mortgages, all at the same time. What will they all think to do? They will sell. What else are they going to do? They cannot afford their homes anymore, and they cannot pay for them, so what will they do? They will sell when everyone else is selling and then, all of a sudden, there is a fire sale.
Furthermore, who is going to be around to buy? Are other people going to be able to pay 5% or 6% mortgages on million-dollar homes? Of course not. Therefore, there will be a preponderance of sellers without buyers to match then. Then what happens? House prices—
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- Jun/7/23 9:01:04 p.m.
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- Jun/7/23 9:01:04 p.m.
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It is a huge assumption. There is no guarantee—
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- Jun/7/23 9:01:04 p.m.
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I would ask the hon. parliamentary secretary to hold off until it is time for questions and comments. There is still a little while until then, so I would ask him to be patient.
The hon. Leader of the Opposition.
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- Jun/7/23 9:01:16 p.m.
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Madam Speaker, that was an unusually helpful comment from the member across the way. He says that there is no guarantee that interest rates will be that high when people are up for renewal. There is no guarantee that I will get into a car accident, so why should I wear a seat belt? There is no guarantee that the plane cannot land itself, so why could the pilot not just have a nap while the flight is in course? There is no guarantee that I will die if the parachute does not open, so why do I not just forget to pull the cord? That is the kind of logic we get from the other side. It is so ridiculous, and we wonder why we are in such a mess.
There is no guarantee that the house will get robbed, so why bother locking the doors, right? There is no guarantee I will get into a car accident, so why buy insurance, right? Why would we mitigate against any risk because there is no guarantee that risk will manifest itself into any mal, right? That is exactly the kind of mentality that is getting us into this trouble. He is saying that because there is no guarantee that things will go wrong, we should do nothing to protect against it going wrong.
An hon. member: What would you do?
Hon. Pierre Poilievre: What would I do? Well, I have been telling them what to do for the last three years, and if they had listened, they would not be in the mess they are in today.
What can be done? Obviously, we have to find a way to bring rates down before those mortgages come up for renewal. As I said earlier, why did the rates go up in the first place? Government deficits led to higher inflation, which led to higher interest rates, which will lead to higher defaults. How do we reverse that? We bring down the government deficits so we can bring down the inflation, which allows the Bank of Canada to bring down interest rates, and this will allow us to bring down the defaults. That is my IKEA instruction manual for the hon. member today. That is obviously what we need to do to avoid the crisis that is ahead of us.
However, make no mistake, this is a crisis, and it is one that is coming quicker and quicker. It is like a train that is coming down the track, and if we do nothing to prepare ourselves to get off the track now, we will face that very real threat. Now, the member across the way might say “Oh, the debt crisis, who cares? That's something accountants and economists will fray about. They'll wring their hands and it will be discussions on business channels about what that means. Why should anybody really care?”
Well, let me tell members that a debt crisis is a massive humanitarian crisis. The human toll of debt crises are staggering. They produce massive unemployment, which leads to increased depression, suicide, alcohol and opioid addiction, overdoses and other miseries that we are already beginning to see.
Two Harvard economists who studied over 800 years of debt crises, Kenneth Rogoff and Carmen Reinhart, found that debt crises typically bring a 35% decline in house prices, leaving people with mortgages that are worth more than their homes. On average, GDP falls 9%, roughly twice the GDP drop during the COVID recession of 2020. Unemployment rises, on average, 7%, which lasts, on average, four years. That means not just a loss of livelihoods but also a loss of lives.
A University of Calgary study found that a 1% increase in unemployment increases the suicide rate by 2.1%. A paper by the British Journal of Psychiatry estimated that, in Europe and North America, the great recession is associated with at least 10,000 additional economic suicides between 2008 and 2010. There were 10,000 people who killed themselves. More people killed themselves during the great global recession in the United States than would otherwise have done so absent that financial crisis.
The same thing happened in Asia. According to researchers in the British Medical Journal, it is estimated that the 1997 economic crisis in Japan, South Korea and Hong Kong resulted in over 10,000 excess suicides.
The long-term job loss from a financial crisis would be at least as bad as what we experienced during the COVID lockdown with the devastating personal consequences. Unemployed men and women would have no job to go to in the mornings and nowhere they could afford to go in the evenings for recreation.
As a result, they end up isolated and alone. Many turn to alcohol and drugs. We are already seeing these pernicious mals exacting themselves on our people today.
Calls to one national suicide prevention line rose 200% over the period of COVID, according to CBC. That prompted one of our members, the member for Cariboo—Prince George, to introduce a bill creating the 988 suicide prevention line. Make no mistake, the forced unemployment that happened during COVID led to more suicides, and if we do have the kind of financial crisis I am trying to avoid, I am afraid to report to the House, then there will be similar desperation.
The number of overdose deaths in B.C. alone in 2021 was by far the highest on record, and more than twice as high as it was in 2019. In Ontario and Alberta, opioid deaths spiked almost 50% during the lockdown periods. All of this could be associated with unemployment. Researchers have found that, when unemployment in a country rises one percentage point, the opioid death rate jumps 3.6% and opioid overdose emergency room visits jump 7%.
When the greek debt crisis happened, there were problems with wages, pensions and social programs, and desperate people flooded into the psychiatric units across the country. The Commissioner for Human Rights of the Council of Europe wrote in a report, “Most patients admitted under this regime are unemployed persons, bankrupt businessmen, or parents who have no means of taking care of or feeding their children. Most are reported to be over 40 years old and have never shown previous signs of mental illness.”
Then there are the painful government policies that follow debt crises. Some of the harshest austerity measures, of which we have been warned by the Prime Minister, happened in Greece under a Marxist government. It was led by something called the coalition of the radical left, an alliance of communist, eco-socialists and anti-capitalists.
Why would a party, that has an ideology that believes in boundless government programs, slash public spending so dramatically in Greece? It is for the same reason that the federal Liberal government slashed health care and 45,000 public servant jobs in the 1990s. It is the same reason that the Saskatchewan NDP, a party that credits itself with inventing Canada's medicare program, shut down 52 hospitals in Saskatchewan in the 1990s.
Why? They ran out of money. That is what real austerity is, it is when we run out of money. That is the result of major debt crises like the one I am trying to warn against right now, which proves that debt crises actually do not care about ideology. Numbers are not partisan. Merciless mathematics trump political philosophy in a debt crisis.
When the money is gone and no one will lend more, where the funds have been exhausted, how do we pay the wages of the public servants, the pensions of the retired, the hospital bills, the schools, the food and other essentials? As Pythagoras said, “numbers rule the universe”. Austerity is almost never a choice. It happens when irresponsible governments, like that one over there, make it mathematically unavoidable.
Harvard economists, Reinhart and Rogoff, also found that financial meltdowns cause government debt to further explode. It is an explosion within an explosion, and a crisis on top of a crisis. That is why it is always most humane to protect the country's finances in advance to avoid the need for austerity. That is what we, as Conservatives, do. We protect the finances, not just so that an accountant can be happy with the balance sheet, but because we care about health care, education and the social safety nets that we desperately need.
That is why we want to protect our finances. That is why we want to avoid the nasty and ruthless cuts that the Prime Minister has in store for this country if he succeeds in bankrupting the nation's finances. We have seen these ruthless mathematics under his father, who gave us not just inflation, but also stagflation. He was successful at delivering both record highs in inflation and unemployment at exactly the same time.
Look at the years of 1980 and 1983. During those years of the Trudeau debt crisis, unemployment and inflation both hit 12% at the same time. That means we had a misery index of 24. Inflation plus unemployment is the misery index. That drove interest rates up to an almost unimaginable 19% a year. I remember those days. In fact, some of my earliest memories—
An hon. member: You would have been in diapers.
Mr. Pierre Poilievre: That is pretty close, actually. A member says I would have been in diapers. I was born in 1979. I just turned 44.
My earliest memories started to appear around 1982-83. I remember the horrible strain and stress my parents faced. There was actually the national energy program, whereby the Trudeau government demolished the Alberta economy, where I was growing up. We were largely protected from that because my folks were teachers, so they did not lose their jobs, unlike many of the unfortunate but greatly patriotic and courageous Albertans and Saskatchewanians who were hit directly. However, my folks had a few little rental properties that my mother had scrounged and saved to make possible, and we were all hit with the higher interest rates, rates that could not be paid with the rent the tenants were paying. We could not pay our mortgage, so we had to move to a smaller house.
That period was very stressful. There was massive dislocation. It is no wonder that the misery index reached its highest level, because misery is the best way to describe it. Some people cannot take the misery. During that time period, the suicide rate reached a record high. In 1983, when I would have been four years old, the suicide rate hit 14.8 per 100,000 people, an 8% increase from 1980. Seven of the eight worst years for suicide rates in Canada happened when Pierre Elliott Trudeau was prime minister. That is because people's lives were coming apart.
Members can just imagine. It is not just money. It is not just the desire to have more stuff. It is the shame of coming home to one's kids and saying, “You can't go on that little camping trip. I'm cancelling your hockey. We have to leave this house and move into a tiny, little apartment.” That is the real, human anxiety, the guilt, the pain and the frustration that literally break families apart and cause divorce and suicide. People lose hope, and everything falls apart.
When I talk about the possibility of a very real debt crisis, with all of these mortgages that were locked in at low rates three years ago, two years ago, even one year ago, I am not talking about an accounting phenomenon. I am talking about a human phenomenon, one that we have a duty to avoid. We have a duty now to foretell the dangers that are coming and to protect our country against the ravages they would mean for our population. We know how to do that. We know there are simple, common-sense decisions that we can make in order to avoid such an eventuality here in our country, as we have seen all around the world and that we could replicate if we do not change course now.
We know what the necessary steps are today. It is about spending less and creating more. The member across the way will instantly assume that if something costs less, it must be of less value. This is a fundamental breakdown in his understanding. The Prime Minister is the worst for this. He thinks that if something costs more, it must be worth more, as though the half-billion dollars he wanted to give to WE Charity was worth more than, for example, just having a passport actually delivered to people on time. Just because something costs more does not mean it is better.
For example, the government has a housing program. It has spent $89 billion on it. In fact, the number one bragging point it has is that its housing plan is really expensive. One can almost imagine a restaurant running an advertisement: “Come dine with us. We have terrible ambiance; the service is garbage; the food is rotten. It might even make you sick, but guess what? It costs 1,000 bucks a plate. Therefore, it must be the best, because it is the most expensive.”
Let us take this back into the government realm. When I was employment minister, we had a program, which I believe is still in place today, to help visually impaired Canadians read books by sending them CDs with the books on them. They could then put them in their computers, hit play and listen to them. One of my constituents was actually capable of listening to books at four times the speed, because she had trained herself. To the rest of us, it would sound like gibberish, but she had trained herself to speed read using audio players. It was a wonderful program.
However, the Canadian National Institute for the Blind said there was one problem, which was that it did not use CDs anymore, so we did not have to pay Canada Post to ship these CDs to people's homes. It had come up with a technology that would allow the Canadian government to simply pay the cost of having radio personalities go into an audio room and record the book, and then it could be sent as an audio file, a particle of light through cyberspace, and people could read the book without having to have a cassette.
It turned out that this reduced the cost of the program by about 80%. Furthermore, we signed a deal with the other countries that had the same English-speaking and French-speaking books as we had. We said we would waive copyright on all of our recordings, and all the authors would agree to waive copyright if the other countries did the same. That way, the other countries could give all the books they had to us and we could give all the books we had to them. Therefore, everyone would have more books, and because there was no longer a physical copy of any of these books, we were going to massively increase the number of books by something like 500,000, all of a sudden.
The cost of the program went down by 80%. Using Liberal logic, Liberals would say that was a savage cut and ask how we could do such a thing, even though it meant more convenience, more books and a faster turnaround in customer service for people. Just because it cost less did not mean it was not worth more. This is common sense.
Let us think about it this way. We have had these arguments with the Prime Minister. He says that my time as housing minister was no good because I did not spend $89 billion on housing, but housing cost half as much. When I was housing minister, the average mortgage payment was $1,400 and the average rent was $900 for a single-bedroom apartment. The average down payment needed for a house was $22,000. Now it is double, double and double.
However, the Prime Minister would say that his is a success, because even though nine in 10 young people believe they will never be able to afford a home, he has the most expensive housing program in Canadian history; therefore, it must be the best. He thinks that the price is equal to the value. There is a difference between value and cost, a distinction that the government never makes. That is why it has spent so much to achieve so little.
How can we organically impose discipline on government to ensure that it gets more for less? One way is to impose the simple law of nature, called scarcity. Every creature in the universe, every bird in the trees, every fish in the sea, must live with the law of scarcity: maximum use of scarce resources. They can have this or that, not this and that, or they can find a bargain on this and that. The single mother who wants to build a new porch might pass up on the vacation, or she might go to the local lumber yard to see if she can get a bargain on the lumber to build the porch for a lower price and maybe get a bargain on kids' camp so that she can do both. That is the common-sense budgeting that families do every single day.
Politicians are the only creatures in the universe that do not have to live by the universal law of scarcity, because by using inflation, taxes and debt, they externalize the scarcity on everyone else. They push austerity out of government and into the living rooms of the people, into the small businesses and onto the farm gate, where someone else has to deal with more scarcity because government is pushing its costs onto everyone else.
What if we internalized that scarcity? What if we required that government make the same trade-offs, the same common-sense bargains that the single mom, small business person or farmer makes every single day? What if we passed a common-sense law, called the “dollar for dollar law”, that required a politician to find a dollar of savings for each new dollar of spending?
I promise, by the way, to be conservative in my remarks, if members promise to be liberal in their applause. That is my idea of a bipartisan speech: Conservative content and Liberal applause.
This—
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