Hon. Marc Gold (Government Representative in the Senate): I really don’t know specifically what the government may be doing with regard to CRA delays on audits. Thank you for the question, and I will certainly look into it. I won’t take up time to underline and agree with you how important small business is for the economy, not only post-pandemic but 12 months a year, year in, year out.

Hon. Leo Housakos: Thank you, Senator Loffreda, for your speech. I listened quite attentively, and it sounded pretty dire when we’re talking about essentially giving aid to 11 million Canadians because of rising costs. It is indeed a dire situation, despite what the government leader said earlier in an answer to a question about how the economy is so wonderful and how the government has done an outstanding job.

The reality is that we are in a country where we have the second-largest land mass in the world — yet rents are off the charts. Housing affordability is off the charts. We have agricultural capacity that is among the best in the world, yet our food costs — milk, bread — are exponentially growing. We have a need for energy, of course, to produce food at a decent cost, and energy prices are off the charts because we’re keeping our energy in the ground thanks to legislation like Bill C-69 and Bill C-48.

My question to you is the following: Nobody discredits the fact that we need to act urgently to help Canadians who are suffering. But what happens in six months if Royal Bank of Canada, or RBC, for example, is right in their prediction of a recession being around the corner? What happens if the Governor of the Bank of Canada finally wakes up and says inflation is the biggest challenge facing Canadians? What is going to happen six months from now when we face these dire realities? Are we going to come back with more aid or will we turn to quantitative economics, which clearly this government needs a lesson in? I know you understand it well.

How do we address the problem at its core? Six months from now, would you be willing to go back to the well to give maybe 15 million Canadians more help?

Senator Loffreda: Thank you for your question, Senator Housakos. It’s always interesting to hear your perspective.

I’ve said from the beginning that agility is so important. This is agile, targeted and necessary at this point in time. What we’ve seen so far during this pandemic is that it’s very hard to forecast and predict what’s going to happen in six months or what’s going to happen in a year. We have a war in Ukraine. We have so many issues going on. You discussed inflation, and I think it’s a debate that needs to be had. Inflation is always caused by excess liquidity, scarce resources and expectations.

I want to say “kudos” to Loblaws, who announced today that they are freezing prices on No Name products until January. I say that because you’re asking what happens in six months if this is still the situation. If more Canadian companies were to take action like Loblaws and freeze prices and lower expectations for increasing prices, I think we would come to easier solutions to this crisis, and it would be quicker to resolve inflation.

I’m looking at a great paper here from Professor Trevor Tombe of the University of Calgary, who attended one of our committee meetings. He appeared at a meeting of the Senate Committee on Banking, Commerce and the Economy on September 29, 2022, and he confirmed that 75% of rising inflation is supply driven, 15% is demand driven and the rest is miscellaneous. He confirmed in his paper, which I read thoroughly a few times:

We find that a clear majority of Canada’s high inflation is due to a small handful of items: energy, food, and home-ownership costs.

The home ownership affordability crisis is a major issue, and we’re seeing that increasing interest rates will help with home affordability. If you look at the numbers lately, that will help. We hope more companies will do like Loblaws and freeze prices. Kudos to Loblaws; I think they deserve a hand. Hopefully, within six months, we’ll have a better economy.

Yes, RBC was the first to predict a recession. But I’ll tell you one thing — I said then and I’ll say it again — economists are always right: There will be a recession. I’ve had economists tell me that there’s going to be a recession. Two years later, they call me and say, “I told you so.” And I say, “Yeah, but you told me that two years ago.” So there will be a recession. When will it be? Your guess is as good as mine.

With the situation we’re in now, with the pandemic behind us but the war in Ukraine, the scarce supply and the scarce resources, I think we need to find solutions. Again, kudos to Loblaws, who own Maxi and Provigo in my cherished province of Quebec. More businesses should do like Loblaws. Let’s cut the expectations for inflation. Let’s create policies. Let’s find solutions for scarce resources. If we do all that within six months, we won’t need additional aid. I hope it will be the case that we, in this chamber, look for solutions. Thank you.