44th Parl. 1st Sess.
March 31, 2022 10:00AM
- Mar/31/22 3:50:17 p.m.
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Madam Speaker, I thank my colleague who is quite gifted in the area of economics. I love asking him questions. I love hearing him speak in this House of Commons, especially when he delivers a speech that is full of meat. I will ask him some questions that, I hope, will give him an opportunity to put some more meat on the bones of what he gave us here today.
One of the things I like that he said was “promise made, promise kept”, and he talked about externalities of pollution. Let me ask about those externalities of pollution and the promises made around planting two billion trees, which he knows his government has not even come close to delivering.
He also talks about the affordability that Canadians have at this point in time, a point when inflation, according to Statistics Canada, is going up 5.7%. It is actually much higher. Debt is ramping up at an unsustainable pace. We are reaching an actual cliff point here where we will not be able to manage it anymore as a country. We are subsidizing industries in Canada more and more, and we are putting competitive industries out of business.
How does he see this path, economically, moving forward along these current lines?
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- Mar/31/22 4:10:25 p.m.
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Madam Speaker, it is a pleasure to rise in the House today to debate the motion. There is a lot in here that is economically needed, and I think members on the other side of the House will appreciate some of the metrics we need to put on the page about what we do going forward.
I am going to start with a story. Eleven days ago, I hosted a town hall meeting in the community of Killarney-Glengarry in the riding of Calgary Centre. I host these to hear directly from constituents about what their concerns are. Let me summarize what I heard: cost of living and paying bills or, in other words, inflation. I also heard about spiralling government debt and no indication that this is a problem for the government.
Here is a real touchpoint. A young woman with her first job was shopping for a home in her neighbourhood to buy with her mother. She recognized that house prices were beyond her reach. She wanted answers as to why and how house prices rose so high, so quickly. New homebuyers cannot afford homes. In case it is not glaringly obvious yet to the government, Houston, we have a problem.
Housing costs have doubled under the government's seven-year economy-destroying tenure. The best investment in Canada is a passive investment in housing, if people can afford it. It says a lot about the growth sectors that do not exist in the Canadian economy, for good reason. The government has penalized economic growth in Canada. Foreign investment has left Canada. Canadian investors have fewer choices. Canadian companies pursue growth opportunities elsewhere, and I will come back to that later. Canadian pension funds invest elsewhere.
I said that housing prices have doubled in Canada in the government's seven-year tenure. What else has doubled? It is the amount of federal government debt, now at $1.3 billion and growing. How about that now-sacred debt-to-GDP ratio? From less than 30% and declining seven years ago, it is more than 50% now, and that supposed fiscal anchor is flexible.
I do not think members of the government even understand that metric, let alone how to calculate it. There is one GDP, or gross domestic product, in Canada. There are layers of mounting debt: federal debt, provincial debt, corporate debt and personal debt. Which of these did not increase significantly over the past few years? All of these increased significantly, putting Canada's debt-to-GDP ratio among the highest in the world.
How does the government facilitate this massive infusion of cash into Canada's financial system? It is by monetary measures, which the Prime Minister told Canadians he pays no attention to.
First, it dropped interest rates to a level close to zero, as in 0.25%, encouraging borrowing and spending. However, at 0.25%, inflation was recently at 5.7% according to Statistics Canada, which always understates this measure. We are, by Canadians' experience, at a higher rate than the 7.1% inflation rate calculated in the U.S.
Second, there was quantitative easing. When market forces will not buy the bonds the government issues to print cash, well, we just buy them back and put them on the balance sheet of the Bank of Canada. Canadians own the debt more than once. The mispriced assets on the balance sheet of the Bank of Canada will increase the debt going forward.
It is as if the government does not know that all these economic indicators are connected. Deficits lead to higher debt, and higher debt leads to higher debt service and the need to increase taxes to pay just the interest on the debt. Lower interest rates lead to asset price inflation by definition. The government has therefore intentionally raised housing prices and priced new homebuyers out of the market. There is another possibility, though: The government does not really know what it is doing. It is either intentional inflation and the trickle effect destroying the savings of Canadians or incompetence.
I am going to talk about the Canada Pension Plan Investment Board. This year, the deductions for the Canada Pension Plan Investment Board went up 10% both for employees and employers, yet the CPPIB reported that it had enough assets on its balance sheet to cover its liabilities for at least the next 75 years. Some would ask why there was an increase.
When members say in the House that the CPPIB is postpaid compensation, they need to ask the government why it includes the Canada pension plan in its debt-to-GDP ratio as a government asset, if it belongs to the people. It also includes the Quebec pension plan as a government asset against the government's debt, yet it is supposedly postpaid compensation. Was this why deductions were raised 10% this year? Was it to make its balance sheets look a little better, even though it is supposed to go to Canadians going forward? By the way, employment taxes are the most regressive form of taxes. They destroy jobs because they are applied both to the employee and to the employer, so they again increase the cost of doing business in Canada.
Perhaps this is what the government is trying to give Canadians as an indication of what to expect with respect to inflation going forward. An illusory 5.7% is marginal compared with the 10% the government has indicated in its CPP deduction increases. Is this what we need to expect from inflation as Canadians? Canadians have their first taste of the effects of the current government's economic mismanagement. The government's dismissive narrative is starting to unravel, with reality hitting really hard.
There are many ways in which the government has marginalized business in Canada so that it can no longer pursue the projects that have to be done in order to increase the capital stock of Canada. We no longer invest in Canada. We no longer provide the environment to invest in Canada.
How many of my colleagues across the way have touted all these investments that have come into Canada? They are predicated upon a government-run subsidy program that continues to drain Canadians of their savings and puts it into all kinds of programs that are somewhat chosen, yet we do not know the actual effects of that, going down the road. We continue to destroy actual tax-producing sectors while we continue to give money to sectors we do not yet know the effect of, going forward. This is economic micromanagement at the government level, and we do not know the outcome yet. The government is choosing winners and losers here. It is not necessarily going to be any good for the Canadian economy, and it is a bad taste we are getting across the entire Canadian economy.
Canadians are finally getting their first taste of the inflation they should have expected when the government started running up over half a trillion dollars in debt over the last few years. Half a trillion dollars in debt means our dollar is going to be worth less at the end of the day, so our houses will be worth more but we will not be making any more money. If we did not have houses beforehand, we are not going to be able to buy one. We are not going to be able to save for our RRSPs, and we are not going to be able to put away enough money so that our kids can go to university. I am sure there will be some kind of program going forward to take care of that. At the end of the day, we are just draining the piggy bank of every future generation of Canadians. It is something we need to keep our eyes on here very closely.
I am asking the government to start pursuing measures that look at these metrics, and to bring some forward-looking perspectives to the future of Canadians because they are dealing with the present. The government is spending and spending. We have to get this under control and make sure we balance our opportunities with our future. It is time to get Canada's economic fiscal house in order.
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- Mar/31/22 4:20:55 p.m.
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Madam Speaker, I did hear what my colleague said, and I want to tell the member very clearly that he is in over his head with his comments. That is not the way it works in business. Businesses do not keep those on their balance sheets. They actually remit them to the government right away and the government puts them over to another organization called the CPPIB, the Canada Pension Plan Investment Board, which invests that on behalf of Canadians for their retirement. That is the way it works in Canada. To continue to have these on the balance sheet of the Government of Canada when it does the calculation on what it calls its debt-to-GDP ratio is completely facetious, and I will maintain that.
The member also talked about this being a source deduction versus a tax, with respect to one versus the other. If source deductions are going to be postpaid compensation, they should be taken off of the balance sheet of the Government of Canada. That is all we are saying here.
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- Mar/31/22 4:22:16 p.m.
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Madam Speaker, the oil sector contributes nearly $25 billion annually to the federal, provincial and municipal governments. It is one of the sectors that contributes the most in Canada, and I think that it is the largest sector in Canada to pay taxes. Some other sectors do not pay any taxes, like those that receive government subsidies.
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- Mar/31/22 4:24:07 p.m.
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Madam Speaker, I do not know where my hon. colleague on the other side of the aisle believes that I think the status quo is helping Canadians. I think the status quo is a disaster for Canadians. Yes, we do need to change the status quo considerably. There are sectors that have been protected during the pandemic by the government in charge of this. That sector needs to kind of make sure that it steps forward.
All kinds of corporate welfare have been doled out through this $560 billion of debt that the government has built up over the last handful of years. That has to change considerably. That is what I am after here. I will tell the hon. member on the other side of the House again that we need to stop this corporate welfare. This is what we mean by winners and losers. Who is making these choices, as far as giving Canadian taxpayer dollars to their own friends and relations on the other side of the House?
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- Mar/31/22 4:44:08 p.m.
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Madam Speaker, it is great to have such a high-minded debate on such an important issue, and on this side of the House, we appreciate the member's comments referring to so many of our colleagues who made some important points about this motion. I thank him for repeating what we have said here.
I am going to correct him with regard to CPP. CPP payments from the employers and employees are going up 10% and the payouts are staying the same, in case he does not realize that about CPP either.
When are we going to get to balance? We talked about the amount the government has spent in the last couple of years, which is $560 billion, and the Parliamentary Budget Officer has told us that over $170 billion of that was not necessary at all for the pandemic. It is excessive government spending that was not required in order to get us out of the hole the pandemic put this country in. Before a pandemic, $170 billion was the most that has ever happened. This will be the highest deficit in Canadian history.
The member talked about all kinds of stuff. If he does not think it is because of the regulatory burdens the government is throwing on their backs, including the payroll taxes that are rising without benefit to the employees, why are companies leaving Canada?
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