SoVote

Decentralized Democracy

House Hansard - 337

44th Parl. 1st Sess.
September 17, 2024 10:00AM
Context: House Hansard - 337 - Sep/17/24
Mr. Greg McLean (Calgary Centre, CPC)
  • Sep/17/24 7:39:39 p.m.
  • Watch
Madam Speaker, I thank you very much for allowing me to speak here tonight. I appreciate my colleagues who are here. Let me address this escalating problem we have with government debt in Canada. I asked a question a long time ago in which I really tried to nail down the government on its debt-to-GDP ratio calculation, which is a fabrication. Canadians understand what debt costs them and the mounting cost of debt that has been happening across the economy. They are particularly looking at their own accounts, but they are also looking at the government accounts. The projected amount the government is going to have to spend servicing the debt this year is $47 billion. Within four years, that is going to grow by about 50%, to over $67 billion, because of the mounting and escalating debt the government is adding on to the backs of Canadians at the federal government level alone. There is one thing I want to make sure people are clear about here. There is more than one debt in Canada. There is more than one government debt. There is $1.4 trillion of federal government debt outstanding. We add in an extra $700 billion of provincial government debt, and that is about $2.1 trillion of debt held by governments across Canada, for a country whose GDP is about $2.25 trillion. Those numbers are not updated. When we look at the IMF, it states that our debt-to-GDP ratio in Canada is north of 100%; its number is 107%. However, the government, in its pretense, said that it is 40%. How does it arrive at 40% at the federal government level alone? What it does is it takes the money that is in the Canada and Quebec pension plans and it says that is an asset of the Government of Canada. That is the money it takes off people's paycheques that goes into a separately managed account for the retirement of Canadians; the government uses that as collateral to jump into, to piggyback off and to make sure it does not have to pay the debt that is due in the future. This is a problem. I am going to talk, first of all, about the IMF. I know my colleague across the way tried to say that Canada has the best debt-to-GDP ratio in the group of seven countries. That is completely false. He needs to look at the chart, and I can point him to the website if he would like. There is an additional problem here, of course, because debt is not just government debt in Canada but also personal debt and corporate debt. We call it nonfinancial debt. The personal debt alone in Canada is about $3 trillion, on top of the government debt, which is $2.1 trillion. If we add the private debt on top of that, which is about another $3.75 trillion, we have a massively debt-financed economy here in Canada. The amount of interest spent by Canadians is exorbitant, and it is going to continue to rise because of the government's profligate spending. We have to get this under control. The problem with debt is that, once it is a problem, it is an escalating problem. There is a reason the International Monetary Fund was going to interfere in Canada's public budget processes back in the 1990s. The Chrétien government, at that point in time, had to intervene and cut the actual amount it spent on health care by half and put it on to the backs of the provinces. This was because the country was loaded up on debt, and it had to be dealt with very quickly. The way it dealt with that was by loading it on to the backs of the provinces. We are going to see the same thing again because the government is going to face a problem in the very near future. Will it please address this debt-to-GDP ratio, which we have to get under control?
682 words
  • Hear!
  • Rabble!
  • star_border
Context: House Hansard - 337 - Sep/17/24
Ms. Rachel Bendayan (Parliamentary Secretary to the Deputy Prime Minister and Minister of Finance, Lib.)
  • Sep/17/24 7:43:28 p.m.
  • Watch
Madam Speaker, the member opposite is a graduate of the Ivey Business School. He knows numbers very well. Clearly, he is a fan of numbers, and I am too, so I will follow along his line of argument around the number 40, a debt-to-GDP ratio at 40%. As a woman in her forties, I feel like I know this number well. The member opposite mentioned 40% debt-to-GDP ratio, and I understand why most people feel like that is a large number. After all, 40% is close to half. Forty per cent is usually enough to be elected in a riding in Canada, so 40% can seem impressive to my Conservative colleagues. However, when it comes to government debt, it is a different story. The last time the U.S. had a debt-to-GDP ratio of 40% was in the early 1980s, before Ronald Reagan blew a hole in the American financial system with his irresponsible tax cuts for the very wealthy. What is the U.S. debt-to-GDP ratio today? In the U.S., it is around 120%. Yes, members heard that right. It is actually over 100%. Is the U.S. an isolated case? I do not think so. Let us look at our G7 peers. In France, it is over 90%. In the U.K., it is over 100%. Italy is at over 140%. In Japan, it is over 200%. What do these numbers tell us? First, Canada has the lowest debt-to-GDP ratio in the G7, and our comparative advantage is growing. Why does that matter? It is because when comparative advantage grows, that is when foreign investment flows into the country. That is what creates more jobs, more good-paying jobs. Second, Conservatives are desperate to gaslight Canadians and scare folks with scary-sounding numbers without context. Third, Conservatives argue that we should not make the tax system fairer, that we should not help Canadians feel like the playing field is actually level. My time is short, so I would like to touch on another 40 that my colleague raised in a previous conversation in this House, which is a $40-billion deficit. That also sounds like a big number, but I like another even bigger number, which is $2.2 trillion. That is our gross domestic product in Canada, the size of the entire great, amazing and beautiful Canadian economy. That is $2,200 billion. That is what the deficit is measured against, and that means our deficit is actually below 2% of GDP. That is to be compared with about 6% in the United States and about 5% in France. Yes, numbers do matter. Context matters.
449 words
  • Hear!
  • Rabble!
  • star_border