44th Parl. 1st Sess.
June 21, 2023 02:00PM
- Jun/21/23 2:45:19 p.m.
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Mr. Speaker, many of the elements in his supposed plan are things that we are already very much working on. The one place we disagree is his proposal to cut programs, to cut supports to low-income Canadians and to cut supports like the housing benefit that he not only voted against but delayed passage of in the House, when we were offering a $500 top-up to low-income Canadians. He has consistently stood against those kinds of supports and investments in Canadians, offering instead cuts and austerity at a time when Canadians need continued support.
On fiscal responsibility, we are still at the top of the class in the G7.
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- Jun/21/23 3:01:40 p.m.
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Mr. Speaker, Canada has the lowest deficits in the G7. We have the best debt-to-GDP ratio, and the lowest one in the G7 as well. We are one of the three largest economies in the world, along with Germany and the United States, to have a AAA credit rating from the bond rating agencies.
Our fiscal plan is sustainable, even as we continue to invest to support low-income Canadians, to support municipalities in building more housing, and to move forward with a plan, while the Conservative Party, once again, continues to talk about cuts to programs, cuts to services and cuts for Canadians.
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Mr. Speaker, I move that notwithstanding any standing order, special order or usual practice of the House:
(a) on the last allotted day in the supply period ending June 23, 2023, the proceedings on the opposition day motion shall conclude no later than 10:30 p.m., the House shall then proceed to the putting of the question on the motion and then, if required, the taking of any division or divisions necessary to dispose of the motion, and the Speaker shall then put forthwith and successively, without further debate or amendment, every question necessary to dispose of the motions to concur in the Main Estimates for the fiscal year ending March 31, 2024, and to the Supplementary Estimates (A) for the fiscal year ending March 31, 2024, and for the passage at all stages of any bill based on the said estimates;
(b) notices of opposed items in relation to the Main Estimates for the fiscal year ending March 31, 2024, and to the Supplementary Estimates (A) for the fiscal year ending March 31, 2024, listed on the Notice Paper be deemed withdrawn;
(c) the recorded divisions on government legislation currently deferred to the expiry of the time provided for Oral Questions today be deemed further deferred to the conclusion of all proceedings in relation to the estimates tonight;
(d) the motion standing on the Order Paper in the name of the Leader of the Government in the House of Commons related to the appointment of Harriet Solloway as Public Sector Integrity Commissioner pursuant to Standing Order 111.1(2) be deemed moved, a recorded vote be deemed requested and deferred after the recorded division on the motion for third reading of Bill C-42, An Act to amend the Canada Business Corporations Act and to make consequential and related amendments to other Acts;
(e) in relation to Bill C-9, An Act to amend the Judges Act, the amendment to the motion respecting Senate amendments made to the bill be deemed withdrawn and the motion respecting Senate amendments made to the bill, standing on the Notice Paper, be deemed adopted;
(f) Bill S-8, An Act to amend the Immigration and Refugee Protection Act, to make consequential amendments to other Acts and to amend the Immigration and Refugee Protection Regulations, be deemed read a third time and passed;
(g) Bill C-40, An Act to amend the Criminal Code, to make consequential amendments to other Acts and to repeal a regulation (miscarriage of justice reviews), be deemed read a second time and referred to the Standing Committee on Justice and Human Rights;
(h) Ways and Means Motion No. 18, notice of which was tabled on June 16, 2023, be deemed concurred in, a bill based thereon standing on the Order Paper in the name of the Minister of Crown-Indigenous Relations, entitled “An Act respecting the recognition of certain Métis governments in Alberta, Ontario and Saskatchewan, to give effect to treaties with those governments and to make consequential amendments to other Acts”, be deemed to have been introduced and read a first time, deemed read a second time and referred to the Standing Committee on Indigenous and Northern Affairs; and
(i) the written questions dated June 20, 2023, standing on the Notice Paper, be deemed to have been transferred to the Order Paper on Wednesday, June 21, 2023, for the purposes of Standing Order 39.
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- Jun/21/23 5:53:47 p.m.
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Madam Speaker, I will be splitting my time with the member for Kingston and the Islands.
It is a pleasure to rise to discuss Canada's current fiscal position, our independent monetary policy, the current economic context and the 2023 budget, as well as to highlight a number of measures that are making life more affordable for Canadians while building a sustainable economy that works well for all Canadians.
This week, the International Monetary Fund reaffirmed not only that Canada enjoys the lowest deficit in the G7, but that this advantage continues for each and every year through its projected horizon. It said, “Canada is a strong fiscal performer”, with an enviable job market and a strong labour participation rate, which have been bolstered by the government’s investments in a Canada-wide early learning and child care system.
The IMF went on to note the resilience of Canada’s financial system in the face of recent global financial challenges, pointing specifically to Canada’s robust regulatory framework and contingency tools to safeguard federally regulated financial institutions, as well as insurance deposits. The IMF praised Canada’s progress in strengthening our anti-money laundering and anti-terrorist financing frameworks. It also noted our government’s efforts to increase housing supply and to address housing affordability challenges, including with the housing accelerator fund, which provides incentives for municipalities to bolster the housing supply even further.
At the end of March, our government released budget 2023, our made-in-Canada plan for a strong middle class, an affordable economy and a healthy future. It comes at an important moment for our economy.
As we have seen, Canada’s economy has made a remarkable recovery from the COVID recession. There are 890,000 more Canadians working today than when COVID first began. In the first four months of 2023 alone, the Canadian economy has added nearly a quarter of a million jobs. We have now recovered 128% of jobs lost during the first months of the pandemic, while the United States has only recovered 117%. Also, universal child care has increased the labour participation rate for Canadian women to a record high of 85.7%, showing the success of that policy, and our unemployment rate remains close to all-time historic lows.
Global inflation, while still too high, has fallen in Canada from its peak of 8.1% last June to 4.4% last month, and the Bank of Canada predicts it will be 3% by this summer and 2% by the end of 2024. Canada’s inflation rate also remains below that of our economic peers. Inflation in the U.K. is almost double, at 8.7%; the OECD average is at 7.4%; the EU is at 6.1%; and the G7 is at 5.4%. We can see that at 4.4% we are way below those.
Since February, the average wage for Canadians has grown by more than 5%, meaning that paycheques are now outpacing inflation. That means more money in the pockets of Canadians after a hard day’s work.
Canada had the strongest economic growth in the G7 over the course of 2022, and that is projected to continue through to 2024. Also, in April, S&P reiterated our AAA credit rating, and we have the lowest deficit-to-GDP ratio and the lowest net debt-to-GDP ratio in the G7, lower than other major AAA-rated economies, such as the Netherlands and Australia.
It is this remarkably strong economic foundation that underpinned the investments we made in our 2023 budget. Unlike the Conservatives, we believe our commitment to invest $196 billion to improve Canada’s health care system over the next 10 years is a prudent investment to make, especially in a context where we are exiting the greatest global health emergency we have faced in more than 100 years. We also think it is prudent to invest in fighting climate change and to develop the net-zero technologies that our world will demand as we continue to confront the increasing costs of previous inaction on reducing emissions.
If investments in health care and the clean economy are the first two pillars of the budget, the third is our government’s focus on affordability. Let us not forget that our government reduced our debt-to-GDP ratio every single year before the pandemic. This allowed us to support Canadians and Canadian businesses through the pandemic, and it is what allows us to invest in making life more affordable for Canadians today.
While inflation is coming down, I think we can all agree that it is still too high and is making it difficult for many Canadians to make ends meet and put nutritious food on the table. That is why budget 2023 introduced a grocery benefit that will help support 11 million Canadian families, including more than 50% of seniors. It will be delivered by cheque or direct deposit on July 5, so Canadians should watch for that over the next two weeks. We also secured a deal to reduce interchange fees for credit card-accepting businesses. This will save small businesses more than $1 billion over the next five years.
At the same time, we are looking to reduce additional fees and charges for Canadians. This includes fees on their cellphone bills, event and concert fees, excessive baggage fees and unjustified shipping and freight costs. We are also cracking down on predatory lending. We are reducing the criminal interest rate from 47% to 35% and imposing a cap on payday loans.
We are also supporting low-income Canadians by introducing automatic tax filing so that individuals can get access to the benefits they are entitled to. For some families, this will mean tens of thousands of dollars that they might not otherwise receive.
Students are receiving better access to student loans with increased student grants. The average student is likely to save $3,000 as a result of our government's eliminating interest on student loans. This will help young workers and apprentices get the start they need when they are looking to first enter the workforce. I have not even mentioned dental care, which will benefit nine million Canadians, as well as our investment in creating high-paying sustainable jobs that will benefit generations to come.
These investments build on significant investments that our government has made to support Canadians since first being elected in 2015. Child care costs, for example, have been reduced by 50%, with $10-a-day child care on track to being fully implemented by 2026. Child care on its own used to be the same amount as a mortgage payment. A family with two children is now saving over $20,000 a year in many cases.
We have increased old age security and have worked with premiers to increase the average value of pension payments going forward. We have reduced taxes for the middle class while increasing them on the top 1%. We have also increased the amount everyone can earn before paying any federal income tax at all and have reduced taxes for small businesses not once but twice.
Of course, let us not forget the Canada child benefit. This benefit, like many of the programs I have already referred to, is indexed to inflation and supports more than 3.5 million families. This means that as the cost of living rises, so will the benefit that Canadian families receive. On its own, the Canada child benefit has helped to lift hundreds of thousands of children out of poverty, and combined, these measures have lifted more than 2.7 million Canadians out of poverty, demonstrating that Canada’s first poverty reduction strategy is having a significant impact.
Finally, our enhanced workers benefit is supporting 4.2 million Canadian workers with higher paycheques. We have ensured, for the first time, that our investment incentives include measures to support workers with fair wages and benefits.
All of this together is happening because we believe that confident countries like Canada do well when they invest in themselves and when we invest in our people.
These are challenging times, but Canada is in an enviable position to be able to support Canadians who need it the most in a responsible and targeted way while ensuring that global inflation continues to decline in Canada. At the same time, we are securing health care and retirement security for the next generation while creating high-paying sustainable jobs for this generation.
There is obviously more work to do, more work to do on housing, more work to do on climate change and more work to do on affordability. Canadians are up to this challenge, and we are well positioned as a country to address those things. I hope that all members of this House will work together to bring forward the best Canadian ideas from right across the country, and that we will work to implement those ideas and positive solutions through the fall and through to budget 2024.
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- Jun/21/23 6:03:43 p.m.
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Madam Speaker, I really appreciate having another opportunity to address Canada's current fiscal situation.
We have the lowest deficit in the G7. We have the lowest net debt-to-GDP ratio in the G7. That is what has allowed us to focus our investments in this budget on securing health care, with $196 billion invested over the next 10 years; investing in the future with sustainable jobs; investing in the clean economy; and of course investing in affordability.
There is global inflation, and while inflation in Canada has come down from 8.1% to 4.4% and is now likely, as forecast by the Bank of Canada, to hit 3% by the summer and 2% by next year, we need to make sure that Canadians who need our support are receiving that support. We have invested in very targeted measures to make sure that the most vulnerable Canadians who need support the most get it through these hard times, while we position Canada as a country, as a whole, to thrive going forward.
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- Jun/21/23 6:23:26 p.m.
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Madam Speaker, my colleagues are applauding me because I am announcing that I will be sharing my time with the member for La Prairie, who is also my esteemed House leader.
Populism is proposing simplistic solutions to complex problems in order to pander to the population's most basic instincts. Today's motion is a good example of that. After giving an accurate picture of inflation, household debt and the housing crisis, the Conservatives are saying that the solution is simply to eliminate deficits. I guess that housing prices will then magically drop and households will have less debt. That is populist rhetoric.
Beyond the rhetoric, the motion asks only one thing, which is that “the House call on the government to table a plan to return to balanced budgets.” That is what we are voting on today, and the Bloc Québécois wholeheartedly supports that, because governing involves planning and forecasting. Bringing forward a plan to return to balanced budgets is the least that we can do. Had the motion called for approval of the rhetoric of the Conservatives or the Liberals, the Bloc Québécois would vote against it in either case.
Canada is going through a tough time right now. On the one hand, a spendthrift and unserious Prime Minister is spending lavishly on one-size-fits-all programs to promote his ideology rather than to meet immediate and real needs, including in areas that are outside federal jurisdiction. On the other hand, the populist and somewhat mean-spirited Conservative leader is proposing nothing except to get rid of the Liberals. His sound bites serve as economic policy, and his vision of the economy and the environment is stuck in the 20th century, the century of oil.
Between the two, there is the Bloc Québécois, which proposes tangible measures. It proposes flexible and targeted programs to meet people's real needs. These are much less costly and more effective programs than the current one-size-fits-all initiatives. It proposes to bring some order to how the government operates to end waste and the chronic inability to manage properly. This is all related to my question.
The Bloc proposes to end interference by having a government that uses its flexibility to address matters within its jurisdiction rather than increasing initiatives in areas that are not its responsibility. The Bloc proposes to end support for oil companies and shift that money to programs specifically designed to transition to renewable energy rather than remaining trapped any longer in the 20th century of oil.
The Bloc proposes a federal government that stops spreading itself too thin and focuses on its fundamental responsibilities, which are the following: stopping the erosion of purchasing power, especially for seniors; providing a level of health transfers that ensures the sustainability of public services; creating a Marshall plan for the construction of social and community housing; and ensuring we have employment insurance that works.
In short, we are proposing a real plan to balance the budget, which will strengthen the core responsibilities of the government and avoid the full-scale austerity that could risk plunging the economy into a recession. A plan to return to a balanced budget is necessary, especially since the government is increasing its initiatives in areas that are not within its jurisdiction, which causes tensions, boondoggles and costly duplication of efforts.
A study by the Centre of Excellence on the Canadian Federation, a research group at the Institute for Research on Public Policy, analyzed federal spending since 2015 and came to the following devastating conclusion on June 7, saying, “the current Liberal government has used federal funds to seek provincial engagement with its own social policy priorities....the current trend is toward a more directive and less collaborative use of the spending power....Partnership seems to be conditional on a province accepting the federal government's policy vision.”
A plan to re-establish balance is also a way to put an end to federal paternalism that uses its spending to impose its own political choices on Quebec.
Things have also been mismanaged. Every time Ottawa touches something, it ends up costing too much. Ley us take the gun registry fiasco. They spent $2 billion to maintain a list. At that price, Quebec could not afford to keep a registry of vehicle license plates. Managing employment insurance costs two and a half times more than managing social assistance. Ottawa's management of passport files costs four times as much as Quebec's management of drivers' licences.
That is another product of fiscal imbalance. Since Ottawa is collecting more taxes than it needs to meet its responsibilities, it does not need to be a good manager of public funds.
For the Bloc Québécois, a plan to re-establish balance means putting an end to waste. There is a way to manage the state a little more rigorously. That rigour will make it possible to avoid the austerity the Conservatives are inviting us to accept today in their speeches.
Historically, the biggest driver of price volatility has been oil prices. The best way to protect against this is to move to the post-oil period as soon as possible. Already, 98% of Quebec's electricity comes from renewable sources and is immune to oil prices. Oil and gas account for only 13% of home energy consumption. The rest is electricity or firewood. These are all energy sources that are not affected by oil prices.
The Quebec fleet is the most electrified in Canada. The network of charging stations in Quebec is the most developed. The price gap between electric vehicles and gas-powered vehicles is constantly shrinking. The sale of personal gas-powered vehicles will be banned in Quebec as of 2035.
We need to accelerate this shift. The best and cheapest way to do that is to redirect the money currently earmarked for modernizing the oil industry to clean energy. In the post-oil world, Quebec has everything it needs to be the most prosperous society on the planet.
Since the government has not taken any budgetary or legislative measures to address the sources of inflation, it is the Bank of Canada that has had to act with the monetary tool it has at its disposal: rising interest rates. Yet there are things the government could have done.
In order to provide relief for pensioners on a fixed income, the government should have increased old age security. The government increased OAS only for those aged 75 and up, leaving those between the ages of 65 and 74 to fend for themselves.
As we know, according to OECD estimates, the net pension replacement rate was 50.7% of pre-retirement income in Canada. In other words, the transition to retirement means a major drop in the average standard of living for Canadians and Quebeckers.
The average net pension replacement rate for OECD countries was 57.6% and the EU average was 63%, so Canada has a poor record in this regard, lagging far behind Italy, India, France and Denmark. We are doing only slightly better than the U.S., where inequality is skyrocketing. We need to take action. We need to better protect the standard of living of our seniors.
To reduce pressure on the cost of housing, the government needs to increase the supply of social and community housing. The current funding will not make up for two decades of underfunding and the resulting housing shortage.
To limit price increases on consumer goods, we need to improve competition laws. Last December, the Governor of the Bank of Canada told the Standing Committee on Finance that concentration in the food distribution sector and the lack of competition had led to the prices hikes we saw, which resulted in significantly higher profits for that sector, on the backs of consumers.
The competition regime needs to be reformed, particularly to slow down the trend towards concentration and the abuse of dominance that naturally ensues.
In the face of rising household debt, we need to regulate credit card fees, which are the costliest form of debt for heavily indebted households. The government's announcement in the last budget that it trusted credit card issuers to set and maintain reasonable fees is woefully inadequate.
In the face of supply chain problems, we need to make it easier to increase local production; support investments that help boost productivity to counter the adverse effects of higher interest rates on investments in production equipment; address the labour shortage, which is getting in the way of adjusting the supply to meet demand; encourage seniors to keep working by not penalizing them with GIS clawbacks; and make it easier to use temporary foreign workers in professions where there is a labour shortage by transferring management of the program to Quebec City, which is already doing the impact assessments that the federal government is asking business owners to do.
Those are some of the measures the government could take to address both the cause and effects of inflation.
Lastly, let us not forget the importance of seriously addressing the use of tax havens by major banks, multinationals, web giants and the wealthy. It is high time that this grossly unfair loophole was closed. It is immoral and we must make it illegal.
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- Jun/21/23 6:37:56 p.m.
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Madam Speaker, I will follow up on the fine speech by my colleague, who let the cat out of the bag: We will be voting in favour of this motion. The arguments contained in the motion, and I think that he elaborated on them, are obviously not to our liking. However, we agree with the conclusion: that “the House call on the government to table a plan to return to balanced budgets”.
When it comes to inflation and interest rates, things can get quite complicated. What better way to simplify issues than with populism and things that seem obvious to everyone, when they are actually not?
Why do we have inflation? Some will say that inflation is caused by government spending. I want to sound a note of caution, however. Inflation happens if the government spends money and if it creates deficits. Some people will therefore be tempted to say that deficits lead to inflation. That is not necessarily true. This is what is known in economics as the crowding-out effect, a term we do not often hear. It means that government deficits might not result in inflation because there is a crowding-out effect, meaning consumers save money to make up for the government deficit. The result is that there is no impact on inflation. The crowding-out effect may mean that there might be an impact on interest rates, however.
Why am I saying this? I am saying it because the thing is not so easy to understand. We could spend a long time discussing economic theories. Furthermore, some theories clash. Keynesianism is different from classical or neo-liberal economics, and so on. We have to be careful to avoid simplistic analyses or we run the risk of ignoring real solutions.
Is government spending to blame for the deficit? Is the Government of Canada responsible for global inflation? Did it ride around on a scooter, waving its arms, saying it was going to send us money and create inflation, before running away like Batman and Robin? The answer is no.
I just spelled it out in simple terms. The government is not to blame. The fault lies with the global pandemic, and with the fact that governments were forced to spend like never before in history. I never saw anything like it before. Governments were spending money hand over fist, like it was going out of style.
That is the reality. Faced with an extraordinary situation, we came up with what we believed were the best solutions at the time. That is why we have inflation. I have the figures. Inflation rose to 6.8% in 2022 and fell to 4.4% in June 2023. We can therefore agree that inflation was mainly caused by a pandemic.
Why is that? It is because we have economists who are monetarists. Monetarists believe that inflation is caused by printing money and that abundance reduces value. The more money is printed, the less that money is worth. This means that the value of money is eroded by inflation. That is the view of monetarists. A lot of people agree with this.
That is why it is the Bank of Canada that finds solutions to Canada's inflation. Our colleague, the leader of the official opposition, believes that it has fangs and prowls around at night, but in reality, the Bank of Canada is one of the most renowned banks in the world. When we travel abroad, for example to universities, we only have to mention the Bank of Canada and the audience applauds for half an hour. It is unbelievable. It is so renowned that the English decided that they wanted the Governor of the Bank of Canada for themselves. It is a little like Bedard in the world of hockey. He was that sought after.
I am just talking, but if members want to read something that is well done, they should read the Bank of Canada Review. It is well done. When they finish their university degree in economics, good economists often end up at the Bank of Canada—except for me, because I escaped. I was in the washroom when the recruiters came by. Some say that they are crazy, but they really do know their stuff. It is a renowned bank.
In 1991, they said that the only way to fight inflation effectively is to tweak interest rates. Starting in 1991, the Bank of Canada was the second bank, after New Zealand, to say that it would adjust interest rates to keep inflation between 1% and 3%. That worked beautifully until the pandemic hit. It was going so well. We were a model for the world. Now, with the increases, what did they do? They were forced to raise interest rates. It is a bit complicated.
When a government adjusts monetary policy and plays with interest rates, it takes 18 months for it to have an impact on the economy and 24 months for it to have an impact on inflation. This requires projecting two years in advance before starting to play with things. That is the reality. It is not easy.
Having said that, we could all go for a beer and tell ourselves that there is no point in us being here because the Bank of Canada manages inflation. Wait a minute. That is not true. There are things that the government can do.
First, the government can introduce well-defined policies. If wages are very high and workers are scarce, then perhaps workers could be found if the government offered tax exemptions to older people who want to go back to work. Is that complicated? A guy with glasses and a computer can do that.
No, the government would rather use the stick. They bleed dry seniors between the ages of 65 and 75 and hope that once they are at the end of their rope, they will surely want to go to work. No, that is not how to create jobs and ensure that these people can go to work.
Let us talk about housing. There is a lack of housing. It is a matter of supply and demand. We need more supply. The government needs to invest in housing. That is the smart way to fight inflation.
As for oil, we have been ripped off by shameless increases in the price of oil. Perhaps it is because we should be doing something other than burning oil. Perhaps we should be investing in the energy transition of oil companies.
With regard to productivity, we have to increase worker productivity without making more widgets. If we make more widgets, then there are more widgets on the market and the value of widgets will drop. This is not complicated.
People are wondering where I stand because I have not talked about it yet. The last part of the motion reads, “the House call on the government to table a plan to return to balanced budgets.” I would like to emphasize two things. We need restraint, not austerity. The government must stop wasting, stop encroaching on the jurisdictions of Quebec and the provinces, stop proposing one-size-fits-all measures, and stop giving money to oil companies because doing so is wrong. It has to get smart about its spending. That does not mean embracing austerity. Most of all, it must not achieve these things on the backs of Quebec and the provinces, or else services to the public will be disrupted. Most public services are delivered by Quebec and the provinces. The government must not try to rebalance its budget by cutting back on health transfers to the provinces like Jean Chrétien and Paul Martin did in the past. That must not happen.
There is something called the fiscal imbalance, which proves beyond a reasonable doubt that the needs are in Quebec City and in the provinces, and that the money is in Ottawa. This means that, even if the government remains virtually static, it will be so drowning in money thanks to the taxes it collects and the fact that it has few areas of responsibility that 40 years from now, in addition to not having a deficit, it will no longer have any debt, and some provinces will not even be solvent. They will be forced to start from scratch under another name. I do not know if they will, but they will no longer be solvent. There is a problem somewhere.
Some think that a plan to return to a balanced budget means austerity measures. That should not be the case. There is no reason why it should be, for the reasons I outlined. This government must become responsible in how it spends money. No one can claim that it is an example. I understand that the country has weathered the COVID‑19 pandemic, but after returning to normal, no one can say that it has been rigorous and intelligent in its spending choices.
I just mentioned some ways in which the government could have done better. Some people spoke earlier about how the government provides its services. Let us just say there is a lot of room for improvement. To impose a plan would make this government more serious, less frivolous and less careless.
The government needs to make do with the amount of money it has available. It must be intelligent. It must not cut transfers to the provinces, because they are the ones who deliver the most important services to the public. It must be preventive with regard to inflation, which is currently eroding the purchasing power of those least well-off. As I said, this government needs to have targeted, intelligent spending to protect people in need. Doubling the GST tax credit was the right thing to do. I applaud that. However, we also need to fight inflation intelligently, not in a populist way.
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- Jun/21/23 7:18:21 p.m.
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Mr. Speaker, I joined the debate 15 or 20 minutes ago. I heard part of my colleague's speech. I would like to take him back to what we call the “fiscal imbalance” and what I could also call “federal paternalism”. This refers to the fact that the federal government uses the money it has and its own spending to impose its own choices on Quebec.
What does my colleague think about federal paternalism? I imagine that he must support it.
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- Jun/21/23 7:40:26 p.m.
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Madam Speaker, I rise in this place today to speak to the opposition motion put forward by the Conservatives to address the cost of living crisis facing Canadians. This is a crisis that the government has done nothing to fix. In fact, it is the Liberals' inflationary policies that created the crisis in the first place.
What has their response been? They have continued to run high deficits, pushing inflation to 40-year record highs. The Prime Minister excused this reckless spending by claiming that interest rates were at record lows and would remain there for many years to come. Now we have record debt, record inflation, and interest rates that have continued to rise despite the Prime Minister's prediction. This is causing pain for Canadians across the country, as their household budgets are being stretched thinner and thinner under the Liberal tax-and-spend plan. While Canadians are struggling, the government continues to increase taxes, making the essentials more expensive.
The Liberals have been persistent in their misinformed statements that the carbon tax is a net positive for Canadians. The Parliamentary Budget Officer's reports on the two carbon taxes have rejected this notion. The first carbon tax the government introduced will end up costing Canadians up to 41¢ per litre of gas. The added second carbon tax will cost another 17¢ per litre. Adding GST, this comes to 61¢ per litre. This will cost Saskatchewan families an extra $2,840 each year, but some Canadian families will pay up to $4,000 for the combined Liberal carbon taxes in other parts of the country.
This is a slap in the face to Saskatchewanians and Canadians. The carbon taxes have only made life more expensive for Canadians and have cost them more money for no results. The carbon taxes were never an environmental plan; they were a tax plan to fuel government spending.
Even while Canadians are struggling, the government cannot show fiscal restraint. It has no respect for taxpayers, as it continues to ramp up its inflationary spending. When the Prime Minister formed government, the national debt was $612.3 billion. By the end of this fiscal year, the federal debt is projected to reach $1.22 trillion. This means the Prime Minister has doubled the national debt in just eight years.
The national debt will break down to $81,000 per household in Canada. Additionally, debt-servicing costs have been growing just as fast as the government's deficits. This fiscal year, it is projected that the cost to service the national debt will be $43.9 billion. This cost is quickly approaching the amount of money given to the provinces through health transfers.
Canadians are deeply concerned about the economic policies of our country, except, it would seem, those sitting on the government benches. Most Canadians do not have a trust fund to fall back on, so they need to be careful with their money. The government needs to start demonstrating respect for hard-working Canadians by being good stewards of the public purse.
Without a plan to eliminate the deficits and balance the budget, inflation and interest rates will continue to rise and hurt Canadian families across the country even more. The Liberals have not put forward a plan to do this. Instead, they poured more gasoline on their inflationary fire by adding more than $60 billion in new spending. That is $4,200 per Canadian family. This spending is driving up deficits and consequently increasing inflation.
The Bank of Canada, which was widely predicted to lower interest rates, instead raised them from 4.5% to 4.75% following the tabling of the Liberals' budget. That is why the Conservatives are now calling on the government, through this opposition motion, to return to balanced budgets and give Canadians a break.
Now we are receiving warnings from the International Monetary Fund that Canada is the country most at risk of massive mortgage defaults. Across Canada, average mortgage payments have increased by 122% since the Prime Minister took office. Despite this warning, we see no plan from the government to get inflation under control to avoid a potential mortgage default crisis. Instead, the Liberals are burying their heads in the sand, leaving Canadians to their own devices as they spend away their future. This is not sustainable and is pushing Canadians closer to the edge.
Canadian households now have the most debt as a share of GDP of any country in the G7. This is not a record we want to hold. There is a solution. The Liberals must eliminate the deficits and balance the budget in order to bring down inflation and interest rates. I know this may not be easy for them, as they seem to know only one economic policy, which is to raise taxes and print money, but the fact is that if the Liberals were to put together a plan to return to balanced budgets and eliminate deficits, lower inflation and interest rates would follow. However, this is not something they can wait to do. We are already at a crisis point.
Just last month, the food bank in Saskatoon held a food drive, as the usage of food banks has reached a new record of 24,000 people a month. Across Canada, there are 1.5 million more people using food banks on a monthly basis, not to mention that one in five Canadians is skipping at least one meal a day because they cannot afford to eat. This is because food price inflation is also at a 40-year high. “Canada's Food Price Report 2023” has predicted that a family of four will spend up to $1,065 more on food this year. With many Canadians struggling paycheque to paycheque, the rising cost of food is breaking their banks.
The dream of home ownership is also fading fast. When the Liberal government took power, Canadians spent 39% of their paycheques on their monthly housing payments. Now they spend 62% of their paycheques. This is reflected by the growth of average rental and mortgage costs. Mortgage payments have doubled, from $1,400 per month to over $3,100 a month. Rent across Canada has doubled, from $1,172 to $2,153 for a two-bedroom apartment, and it has more than doubled in Canada's largest cities. This is why we must get interest rates under control.
For years, the Conservatives have warned the Liberal government that its out-of-control spending has consequences and hurts Canadians across the country. However, it responded with the infamous quote from the Prime Minister that budgets will balance themselves. We are now eight years into the government's tenure and have seen the effects of the Prime Minister's so-called self-balancing budgets. It has been a disaster for Canadians.
According to an article last month from the Financial Post and the Macdonald-Laurier Institute, over 10 years, real GDP per capita growth has been at its lowest since the 1930s. The article states, “This extended period of slow growth has widened the gap between per capita growth in the United States and Canada, demonstrating that the causes of our slumping growth are domestic, not external.” The Liberals can no longer blame external factors for their own failures. The economic troubles our country now finds itself in are a result of the failed economic policies of the government.
In conclusion, I think it is in the best interests of every Canadian that this House call on the government to rein in its spending. It is time for the government to show the fiscal restraint that was promised by the Minister of Finance prior to the introduction of her latest budget. Instead of cancelling Disney+, let us cancel the deficits, axe the taxes and balance the budget.
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- Jun/21/23 8:07:36 p.m.
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Madam Speaker, my hon. colleague is someone I have known for many years in the House, and I have travelled with him. I can say the member for Central Okanagan—Similkameen—Nicola is a dear friend.
That is a very important question that I, as an economist, would definitely like to address. I have always believed in Canada maintaining its AAA credit rating. Our deficit-to-GDP ratio should always be on a declining trend, as our deficit-to-GDP ratio is now and is being maintained. I also believe that we must always review our spending. I think that is a natural thing to do. In the budget, we have identified a number of savings, and that was in budget 2023, so we should continue to do that.
We have maintained fiscal prudence in our government. We have done the right thing in having the backs of Canadians during the pandemic. That is why we have recovered so quickly. That was the right thing to do, and any economist I ask would state that. At the same time, we must be fiscally prudent. I have always believed in that. I will continue to believe in that, and I will continue to advocate for that. That is the path we are going on, and we will continue to be on that path.
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- Jun/21/23 8:08:54 p.m.
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Madam Speaker, I thank my colleague for his speech. However, I would like to talk to him about something he did not cover, namely the fiscal imbalance. The Liberal government has too much money for its budget items, so it is spending like there is no tomorrow in areas under the jurisdiction of Quebec and the provinces. Then it tells us it has no money for critical expenses like health transfers.
I hope no one will try to tell me that Quebec and the provinces wanted it this way. In classic style, they were given no alternative.
What does my colleague think about the fiscal imbalance?
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- Jun/21/23 8:43:25 p.m.
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Madam Speaker, I am pleased to rise on behalf of the fiscally responsible constituents of Renfrew—Nipissing—Pembroke.
The Ottawa Valley is as diverse as it is beautiful. The average day of a soldier in Petawawa is very different from a farmer's day. A nuclear scientist in Deep River has challenges very different from those of a logger in Wilno. Despite their different backgrounds and different daily routines, every single one of them understands what it means to be fiscally responsible.
Listening to the Liberals and my colleagues, it seems as though the government has a different understanding. For most Canadians, to be responsible with money is to live within their means. Our finance minister's understanding of fiscal responsibility seems to be torn from the pages of a Disney fairy tale. Like a naive, entitled Disney princess, the finance minister has advice to Canadians struggling with inflation: “Let them eat Netflix.” Canadians should set aside the minister's advice on how to save on streaming costs.
As with every other policy priority, the Liberals' goal is to make life unaffordable. This costly coalition's online streaming tax will only increase the cost of enjoying a movie. This costly coalition's carbon tax will triple the costs of anything that requires energy, which is everything. This costly coalition's clean fuel regulations will make gasoline more expensive, while simultaneously ruining two-stroke engines as a result of the added ethanol. This costly coalition's latest budget will only spur more inflation. Every extra dollar the out-of-control socialist coalition borrows and spends puts pressure on the Bank of Canada to increase interest rates. Every rate hike means more money going to wealthy bondholders and less money for critical services and national security. Canadians are drowning in a sea of rising inflation, and the Liberal plan is to throw water bottles at them.
During his recent speech on the budget, the Conservative leader quoted from Ecclesiastes:
What has been will be again,
what has been done will be done again;
there is nothing new under the sun.
When it comes to the government, that quote hits hard. Canadians are learning that there is nothing new under the son of Pierre Trudeau. Just like his father, he swept to power with a mania that seemed to capture the spirit of the times. Within four years, that spirit was dead, and disillusioned Canadians returned a minority government.
Like father, like son: Both cut expensive deals with the NDP. Both of them repudiated the fiscal policies of their Liberal predecessors. If someone told me when I was first elected that I would feel pity for the legacy of Paul Martin, I would have suggested they seek professional help, and here we stand in the wreckage and ruins of Canada's consensus that budgets should be balanced.
After eight years of Pierre Trudeau, Canadians found themselves living with stagflation. After 16 years of Pierre Trudeau, Canada was on the brink of bankruptcy. Pierre Trudeau was in power for 16 years, and it took another 16 years just to get back to balance. After eight years of the current Prime Minister, the situation might be even worse than it was in 1984.
As much as the Prime Minister would like to live in a fantasy world where budgets balance themselves, Conservatives believe in reality-based policy. The hard truth some Canadians will need to relearn is that progressive socialism always fails everywhere it is tried, because eventually they run out of other people's money. Unfortunately, progressive socialists never admit that they are economically illiterate and historically blind.
When they have taxed away all of Canadians' income, they will come for their savings next. When progressive socialists turn government into a gravy train, we should not be surprised that groups of people begin to fight for the best seats on board, but it does not have to be this way, and it is not too late for the government to change course. That is why Conservatives are calling on the government to come back with a plan to balance the budget.
Canadians should remember that the Liberals claimed that they did have a plan. Originally, the plan was to run itsy-bitsy deficits of $10 billion for two years.
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- Jun/21/23 9:37:53 p.m.
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Mr. Speaker, I appreciate the compliment. I know everybody is waiting with bated breath to hear what I have to say next. I will try not to disappoint.
The fact of the matter is the IMF is now urging Canada to bring a debt anchor and to keep fiscal policy tight. What does that mean, keeping fiscal policy tight? It means moving toward balanced budgets, not just relying on what they might call fiscal guardrails or reducing debt-to-GDP ratios, but actually having a hard fiscal anchor. This is the IMF talking, not me. A hard fiscal anchor. What they mean is a plan to get back to balanced budgets.
The Bank of Canada, to its credit, has been engaged in a policy of fiscal tightening, trying to reduce the money supply and raising interest rates, trying to grapple with the scourge of inflation. The problem is that the fiscal policy of the Government of Canada is running counter to that.
We have loose fiscal policy in this country, meaning that billions and billions of dollars are still going out the door of the budget this year. It was $495 billion, almost half a trillion dollars. Mr. Speaker, I know you have been here for a while, and I know you know that is a lot of money. It is way more than it was even in 2019.
We have a real issue in this country, and I think we need to bridge the gap. We need the government and its coalition partners to take this concept seriously, go back to the drawing board and at least come back with a plan. That is all this motion asks for, not to balance the budget tomorrow or at two o'clock this morning when we are voting on the appropriations, but to come back soon with a plan, just like they had for 2027, to bring the budget back into balance.
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- Jun/21/23 9:43:04 p.m.
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Mr. Speaker, I actually really enjoyed the hon. member's speech, especially at the beginning when he talked about how incredible the NDP has been in balancing provincial budgets. It is because, at the time, the NDP ensured all people were paying their fair share, including CEOs and corporations. The share they paid was equal to what they owed.
Considering the NDP's incredible record of good fiscal management, building a social safety net and ensuring there was balance while supporting people, I want to ask the hon. member this. Why will the Conservative Party not follow our lead and call on this government to implement a windfall tax on excess profits?
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- Jun/21/23 9:44:53 p.m.
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Mr. Speaker, I think I am the last speaker in this session of Parliament before we take a summer break, and it is my pleasure to be serving here for the constituents of Calgary Centre. I hope I have represented what I said I would represent in the House for them. If I have let them down in anything I have done or said in the House or anything I have done publicly, I apologize to them for that. I hope to represent them well on all these things, with the highest regard for this House.
Let me take 10 minutes, and this will be as concise as I can make it, to talk about where we are going in the financial future of this country. We need to link here exactly what is happening with the government. It is about truth and consequences. The truth, of course, is that we are running bigger and bigger deficits. Our debt is getting higher and higher. There are consequences to this going forward, and those consequences are going to be borne not by the government in power here but by the Canadian people, who are going to continue to face mounting debts, deficits, interest payments and household debts going forward.
Three months ago, we had a Liberal finance minister deliver a budget. In it, there was a lot that she put in front of Parliament, including another $40 billion-plus deficit added to Canada's debt, which has now reached $1.3 trillion. That is only federal government debt. Layer the provincial government debt on top of that, of all the combined provincial governments, and there is another $900 billion. We are talking about a society that, from a government perspective, is very much in debt.
The government, in its fiscal wisdom, says that the provincial governments are starting to actually get more money. There is one provincial government that received money last year, and that was my home province of Alberta, because of a boom in oil prices that led to a whole bunch of royalties. This translated into over $21 billion being forwarded to various governments across Canada as a result of a prosperous industry. We need to make sure we understand what is happening here. This is an industry that suffered for a number of years before it actually made any profit. This is the economic basis of what is holding up the social welfare of this country at this point in time.
I am going to go back to the finance minister's speech. There was federal debt and provincial debt, but she was also facing an inflation regime at that point in time that was around 4%. It had come down from last summer from about 8.2% to 4%. How did that happen? It happened because the Bank of Canada, an instrument of the Government of Canada, had raised interest rates from 0.25% to 4.5%. It had done its job in trying to control inflation. This is the mandate of the Bank of Canada. It performed that mandate, but it had to do so because of government overspending.
The Bank of Canada did what it had to do to bring that rate back down. It came down to 4%. What happened in April? The consumer price index went back up. Inflation in Canada's economy went back up. Why did it go back up in April? It is because the government imposed a 30% increase on the carbon tax upon the backs of Canadians. Of course, that rippled all the way through the economy and caused inflation at the pumps, inflation at the food stores and inflation in everything we do that involves energy.
There is something the government does not seem to have a hold on. If it increases the costs in the economy, it is going to increase inflation. It is doing this in two ways. It is increasing the costs to Canadians, and it is increasing deficits. These are all monetary mechanisms, fiscal mechanisms, that increase inflation. The government asked the Bank of Canada if it could come in and fix its mess from imposing more costs upon Canadians.
When the minister delivered her budget, the Bank of Canada rate was 4.5%. That went up this month, on June 7, to 4.75%. What was declining in both respects has gone up. The cost of inflation has gone up, and the cost to Canadians has gone up again. They are all refinancing their mortgages, and it is another 0.25%. Where will this end? We do not know at this point in time. It is costing Canadians more and more.
What is the principal cause of this inflation? The number one cause of inflation in the economy is money printing. The government continues to print money. It has doubled Canada's debt in eight years.
The government is going to say that we had to do that to keep people safe during the pandemic. I say to my friends on the other side that the pandemic is over. We have to get back to some sort of balance, where we are actually paying for the goods we consume in society today with today's dollars. We keep taxing the future generation of Canadians to pay for our spending today, and that is something that has to change. That is something my party is asking the government to change, because it is a necessity for the future of this country.
Now, I will talk about this recipe for inflation that the government has imposed upon this country at this point in time. It has asked the Bank of Canada to come in and fix our mistakes again and again.
What is the consequence of the Bank of Canada coming in and raising the interest rates throughout the economy? It is having higher mortgage rates. This means that the actual cost of maintaining the mortgage on the same house has risen by 122% in the last eight years, which is significant. I will explain what the issue is.
When mortgage rates are low, as they were up to a year ago, people buy houses. However, we have a saying in finance that we do not really buy the house that we need; rather, we buy the house the payment will afford. A 25-year mortgage at 0.25% with a $100,000 down payment, for instance, will equate to a bigger house than if the mortgage payment is around 4.75%-plus, which is what we have done to Canadians. We have added four and a half points of interest to mortgages, which is hundreds of thousands of dollars to the average Canadian. We have actually picked their pocket here, or pulled a bait and switch as to the house they can buy. The end result for many Canadians is that they are going to have to walk away from their house, because the equity in their house is not going to equal what it was when they bought the house. They are losing value in their house because of the current government.
However, there is not enough housing in this country anyway. We have to get building again, and we have to make sure we get back to balance. We have to ensure that we serve Canadians to make sure that they have the ability to build a life in Canada going forward.
Canada's GDP is $2.3 trillion at this point in time, and the consumer debt of Canadians equals 107% of that; therefore, it is over $2.3 trillion, and about 75% of that is mortgage debt. This is the most indebted ratio in the G7. We are more exposed to a downturn in the economy than any other economy in the world is at this point in time. This is on the cusp of danger.
We call it moral hazard. The government has not faced the fact that, in supposedly good times, it is supposed to balance the budget, pay back some of the debt and bring down interest rates so that people can actually get the economy going. However, it continues to spend more money, ramp up the cost of everything and make sure that Canadians are bearing it on their backs. The back it is going to bear the most on is mortgage rates, which are going to push many Canadians out of their homes as the rates rise and Canadians have to refinance. That is the great tragedy we are visiting upon Canadians without balanced budgets.
My party has actually been pushing the government for a long time to show us a plan where it gets back to balance, because in every budget it has shown us so far, it says, “Well, you know, we are going to continue to spend more and more.” A $10-billion temporary budget deficit in 2016 has turned into hundreds of billions of dollars per year. There is another $40 billion-plus this year and more of that going down the road. This is to say nothing of the debt service charge, which has doubled in the last two years. We are up to $44 billion that we are going to have to pay as interest. All of this is contributing to inflation. We have to get back on track.
I will tell the government to please bring us a plan so Canadians can see that they will actually get back on track.
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- Jun/21/23 10:24:10 p.m.
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Mr. Speaker, I would like to begin by wishing you and all my colleagues here in the House a wonderful summer.
Regarding my colleague's speech, I would like to share one of the conclusions reached by the Centre of Excellence on the Canadian Federation, which has analyzed federal spending since 2015. It found that “the current trend is toward a more directive and less collaborative use of the spending power....Partnership seems to be conditional on a province accepting the federal government's policy vision”.
I would call that federal paternalism. In other words, if the provinces want money, they have to do what the federal government wants. The federal government can behave this way because it has too much revenue for its budget items.
I would like my colleague to comment on the fiscal imbalance, which is precisely why the government is increasing its initiatives in areas of jurisdiction that are not its own.
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- Jun/21/23 11:18:02 p.m.
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moved That the Main Estimates for the fiscal year ending March 31, 2024, less the amounts voted in the interim supply, be concurred in.
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moved that Bill C‑54, An Act for granting to His Majesty certain sums of money for the federal public administration for the fiscal year ending March 31, 2024, be read the first time.
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- Jun/21/23 11:41:36 p.m.
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moved: That the Supplementary Estimates (A) for the fiscal year ending March 31, 2024, be concurred in.
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moved that Bill C-55, An Act for granting to His Majesty certain sums of money for the federal public administration for the fiscal year ending March 31, 2024, be now read the first time and be printed.
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