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Decentralized Democracy

House Hansard - 58

44th Parl. 1st Sess.
April 26, 2022 10:00AM
  • Apr/26/22 3:25:20 p.m.
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Mr. Speaker, in so many ways, the member was wrong in what he stated. The fact is that this government has invested more in rural broadband expansion than the previous Harper government did in its 10 years. We continue to invest significant amounts of money, recognizing how important getting those connections to our rural communities is. I am a little confused about the Conservative approach to Ukraine and the sanctions there, so I am wondering if this is a Conservative Party position. The member, on one hand, says that we need to do whatever we can to support Ukraine and the Ukraine war effort. We are seeing the world coming onside, and Canadians as a whole want to see that. Is the Conservative Party officially saying that the fertilizing industry should be completely exempt from having to pay any tariff, specifically with respect to Russia?
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  • Apr/26/22 3:26:28 p.m.
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Mr. Speaker, obviously the member for Winnipeg North did not listen to my speech. What I am requesting is clarity from the government for fertilizer purchases that were made pre-March 2, before the sanctions were announced. These were purchased, and paid for in many cases, before March 2. The purchases were already made. There would be no impact on Vladimir Putin with that tariff. The only ones who would be impacted are the farmers who have paid the price for those fertilizers. Therefore, I asked for clarity from the government. Will the tariffs apply to purchases made pre-March 2? We have heard all kinds of answers from the government, but no clarity on that. As of March 2, all Canadians are in favour of the sanctions that had to be made to combat Vladimir Putin's unprovoked, unnecessary, unlawful, illegal aggression against Ukraine. However, it is for purchases made pre-March 2 that clarity is needed from the government, and it is simply not there from the Minister of Agriculture and Agri-Food.
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  • Apr/26/22 3:27:25 p.m.
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Mr. Speaker, I serve as our party's agriculture critic, and we have certainly heard in the agriculture committee many of the concerns that my friend from Perth—Wellington has talked about. I guess the conundrum for my Conservative friends is that in their belief in the free market, sometimes that market chases areas of production that are in very undesirable countries, such as Russia. Russia, for example, supplies 16% of our fertilizer market, and of course, we are now finding those prices being impacted by the war in Ukraine. We know Canada has vast reserves of potash, but our manufacturing capacity has been hollowed out. Would the member support our building more capacity in fertilizer manufacturing here in Canada, so we can have that resiliency and food security here in Canada, where it so rightly belongs?
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  • Apr/26/22 3:28:19 p.m.
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Madam Speaker, in fact, my answer is yes. What we have found out during the last two years of this pandemic is that we need to do stuff in Canada again. We need to build stuff in Canada. We need to manufacture stuff in Canada. We need to be sure that we can rely on ourselves, especially for food security and especially for food sovereignty, so we are not once again finding ourselves beholden to dictators and thugs, such as Putin and his regime. This is not just for fertilizer. It is about so many issues that we saw over the last 24 months during this pandemic, whether it was PPE, vaccine production or anything else that we saw being outsourced, so we are reliant on foreign countries rather than producing it right here, with the bright talents we have here in Canada.
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  • Apr/26/22 3:29:12 p.m.
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Madam Speaker, I am really happy to hear my hon. colleague from Perth—Wellington speak to the issue of food security, which is not mentioned in this budget. I would have thought that after the pandemic and what we have experienced, we would be more conscious than ever in this country of the need to promote local food and local agriculture. Are there any other comments from the hon. member?
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  • Apr/26/22 3:29:34 p.m.
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Madam Speaker, my friend from Saanich—Gulf Islands is absolutely right. In a country that is as prosperous as Canada, with the most fertile farmland in the world and the most innovative farmers, whether they be dairy, pork, beef or grain farmers, we can do so much here in Canada. We can be an economic powerhouse, a powerhouse that feeds our communities and feeds our country, and makes sure that we do not have to rely on foreign entities to feed our country.
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  • Apr/26/22 3:30:16 p.m.
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Madam Speaker, I would like to dedicate my speech today to Tania Woroby, now retired from teaching, but who taught me my first economics class ever when I was in CEGEP in Montreal. Ms. Woroby had a gift for explaining economics with crystalline clarity. A good economics professor can play a crucial role, as I am sure the members for Joliette and Mirabel would agree. How would Ms. Woroby have graded the official opposition's response to the budget? She would have probably awarded them low marks for their partial analysis of the state of the economy. However, like a kind and patient teacher, she would perhaps have allowed them to rewrite the mid-term. There is a real economy and a money economy, as I learned in Ms. Woroby's class, and yes, they are connected, but the Conservatives insist on ignoring what is going on in the real economy. They focus solely on monetary policy, which seems misplaced since the government does not control monetary policy, something the Prime Minister has tried over and over again to explain in the simplest terms. The Great Depression highlighted the potential impacts of catastrophic events in the real economy. In the Great Depression, we saw the collapse of agriculture, the hangover from industrial overproduction, the rise of trade protectionism and a general crisis of confidence, something Keynes incorporated in his analysis under the rubric “animal spirits”. All these factors combined calamitously to sink the economy against the backdrop of a shrinking money supply tied to widespread bank failures. The money supply is always the backdrop, but contrary to what the Conservatives believe, the money supply is not the main driving force behind economic activity. As Andrew Coyne put it in a recent column, inflation is not “too much money chasing too few goods”. Rather, the price of a good or service rises when demand outstrips supply. For example, if the price of oranges goes up because of a frost in Florida that killed the crop, that is not inflation. It is a price signal that oranges are in short supply relative to demand, a gap the free market will move to fill by offering more economical substitutes. Quantitative easing, or “unconventional monetary measures” as it has been called, did not unleash inflation in the United States between 2009 and 2015 when the Federal Reserve used it in response to the 2008 financial crisis, because the state of demand in the real economy was weak, deflationary even. What quantitative easing did was save the international financial order. Quantitative easing has been front and centre during this pandemic, but this is not what has fuelled inflation. As Ian Lee, a professor of economics at Carleton University, says, “Over the last two years people realized there's some things they don’t need as badly or as much as they thought they needed.” What is more, those who received COVID benefits did not spend more. They essentially borrowed less and saved more. Canadian household savings rates rose during the pandemic, and much of the savings are still in personal bank accounts. Bank deposits have grown by an average of around $12,000 per household compared with prepandemic trends. Also worth mentioning is that consumers are expected to use their credit cards less in 2022 in favour of instead using cash. According to Nicole McKnight of finder.com, “Three times as many people said they would either stop using their credit card or use it less often, than those who said they would use it more.” None of this suggests a credit-driven spending spree linked to inflation. Quantitative easing is not the same thing as creating cash. It is not printing money, as the member for Carleton likes to tell us. Quantitative easing creates chartered bank reserves that are held at the Bank of Canada. These can be turned into loans, but this does not happen automatically. It happens only if there are profitable lending opportunities, including to businesses that want to expand capacity, something that actually mitigates inflationary pressure. As global chief economist for Manulife Investment Management Frances Donald has said, “For the past 40 or 50 years, we've tended to view the economy through a demand-side lens. What is so unique about this [period today] is that it's the greatest supply side shock since the 1970s.” In others words, to quote economist Armine Yalnizyan, “This is pandemic economics. The regular rules may not apply.” We have been living in a trade globalized world for the past two decades, with global supply chains built around just-in-time delivery and thin inventories that, if they had been more robust, could have better absorbed COVID supply shocks. When confronted by lockdowns at major ports and factories, the global just-in-time delivery system simply snapped. Pandemic economics is mostly about capacity constraints, and demand shifting from services like travel and restaurant meals to goods, mostly ordered online, and not about too much money chasing too few goods. We are talking about fewer semiconductors for cars and washing machines, the halt in housing construction for weeks, if not months, at a time during the lockdowns and even capacity limits in the oil and gas sector following a downsizing of its workforce in response to a precipitous drop in economic activity caused by the pandemic. Of course, there is a war in Ukraine that has created uncertainty in energy markets causing prices to rise, which has in turn raised the cost of food production, among other things. Energy prices may be about to stabilize. According to an article in the New York Times on April 12 referring to the impact of world oil prices on U.S. inflation: ...it now appears that the world oil market overshot in response to Russia's invasion of Ukraine.... President Biden's million-barrel-a-day release from the Strategic Petroleum Reserve makes up for much of the shortfall [in Russian oil supplies]. As of this morning, [on April 12], crude oil prices were barely above their pre-Ukraine level, and the wholesale price of gasoline was down about 60 cents a gallon from its peak last month. Then there are the impacts of climate change on agriculture. To quote from a CTV article from this past January: A recent NASA study noted that global agriculture is facing a new climate reality and with the interconnectedness of the global food system, impacts in even one region's breadbasket will be felt worldwide. According to Canada's Food Price Report, in 2021, Canada experienced climate change-related adverse weather effects, such as severe wildfires in British Columbia and drought conditions in the Prairies, that affected the prices of meat and bakery products. Finally, there are the all-too-familiar labour supply constraints, including shortages of port workers and drivers, who are so vital to a functioning supply chain. Here in Canada, the pandemic depressed immigration levels in 2020 and forced hundreds of thousands of women out of the workforce. That is why we are investing in immigration and child care. To see the impact of supply-side inflation, one needs only to dissect the components of the consumer price index. The main components of a rising CPI, in February 2022 relative to February 2021, were transportation, at 8.4%; food, at 6.5%; and shelter, at 6.6%. That is not to be confused with the cost of housing, but includes mortgage interest, property taxes, fuel and electricity. If we take energy and food out of the equation, the inflation rate in February was only 3.9%. When we looked at the inflation figures for March, we saw that the price of gasoline, year to year, went up about 40%. While mortgage interest, household operating costs, rent and furnishings are included in the basket of goods that make up the CPI, home prices are not. This is because homes are capital assets. Bidding wars have driven home prices to unprecedented levels, due in part to people moving away from core areas, shortages of new supply and cheap mortgages, clearly. However, house-asset inflation does not squeeze disposable income the same way that a rising CPI does, though it creates intergenerational inequality and this is a problem. That is why the budget is addressing housing supply and housing affordability. Independently, of course, the Bank of Canada is addressing interest rates and the cost of mortgages. Monetary policy, however, can dramatically suppress economic activity. It can cause great misery for a great many. We can think of the Federal Reserve's actions during the first Reagan administration, when former Fed chairman Paul Volcker wrung inflation out of the U.S. economy through an aggressive, tight money policy that created a deep recession. The question for the official opposition is this: What should the Bank of Canada have done at the start of COVID-19? Should it have suffocated the economy during a global pandemic and created deflation worthy of the Great Depression, in the process destroying production capacity in a way that would have comprised economic growth across future generations? Also, what should the Bank of Canada do now that it is not already doing? Should the bank go even harder on raising interest rates, to the point of provoking house price deflation and a deep recession? Would that bring down the international price of oil and food, or would these remain a problem, especially for the larger number of Canadians suddenly thrown out of work? Would a more aggressive interest rate policy resolve supply chain issues? No, and that is why our budget is taking aim at the supply chain problem. These are some of the questions that the official opposition needs to answer. They are answers that Canadians would like to hear.
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  • Apr/26/22 3:41:48 p.m.
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Madam Speaker, respectfully, the hon. member makes a fairly obvious error in his economic analysis. He is talking about the fact that the Bank of Canada controls monetary policy, but he misses the fact that fiscal policy can impact inflation as well. It is fairly well established. The first-year economics professor he spoke about at the beginning of his speech could, I am sure, confirm the fact that monetary levers and fiscal levers can both impact inflation. In fact, the expansionary fiscal policy being pursued by the government is having a significant impact on inflation. Of course, it is also important to acknowledge that the Bank of Canada, as a Crown corporation, acts within the general ambit of established policy on things like the inflation target, which is set by government. The member and other members of the government who try to absolve the government of responsibility for inflation by saying that it is just about the independent Bank of Canada are missing the obvious fact that the fiscal decisions of the government do impact inflation as well. Will the member acknowledge that fact and call his government to account for its fiscal decisions?
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  • Apr/26/22 3:43:04 p.m.
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Madam Speaker, it can in certain circumstances, but I do not think the member would like to argue that the massive amount of spending that took place during the depths of the pandemic was crowding out private investment. It is quite the contrary. It was helping to maintain private investment and was shifting the debt burden from individual Canadians to the government. If one looks at the recent budget, it allocates only about $31.2 billion in new spending over the next five years. That is about $6 billion a year. That is less than what is being invested in the REM project in Montreal.
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  • Apr/26/22 3:43:53 p.m.
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Madam Speaker, I think it is common knowledge that the hon. member for Lac-Saint-Louis is a champion of water and water policy in this place. I know this question might make him discomfited, but was he as disappointed as I was that the federal budget 2022 so badly ignores the previous commitments the government has made to deliver on the Canada water agency and to properly fund the neglected area of freshwater science, research and capacity in this country?
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  • Apr/26/22 3:44:29 p.m.
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Madam Speaker, I was happy to see an injection of about $25 million into the Experimental Lakes Area and an injection of about $8 million into creating the freshwater action plan. This is one budget, but there will be others to follow, and I can assure the member that I will continue to advocate for greater and greater investments in freshwater science and protection. There is money for the Canada water agency. The agency will take a while to develop, so it is good to take a step-by-step approach to funding it.
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  • Apr/26/22 3:45:16 p.m.
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Madam Speaker, one of the issues that I am quite disappointed about with respect to the budget is the lack of action by the government on its promise to deliver a “for indigenous, by indigenous” urban, rural and northern housing strategy. The budget only outlines $300 million, which is just a drop in the bucket, truth be told, to address the crisis with urban indigenous people in need of housing. Over 80% of urban indigenous people live off reserve, yet they are 11 times more likely to end up in a shelter. My question to the member is this. Will he take up the cause to advocate, on behalf of urban indigenous and northern indigenous people, for the government to make a substantive investment in a “for indigenous, by indigenous” housing strategy in this budget, and also with the fall economic statement coming up?
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  • Apr/26/22 3:46:21 p.m.
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Madam Speaker, that is an extremely important issue and priority, obviously. The government has taken housing very seriously from day one of its election in 2015. We are already on track, by 2027-2028, to deliver more than $72 billion in financial support through the national housing strategy, which is the very first national housing strategy in Canadian history. Of course, a priority on indigenous housing is an important part of that, and it should be. It is something we need to keep an eye on in the future.
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  • Apr/26/22 3:47:00 p.m.
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Madam Speaker, I have a brief follow-up to my earlier exchange with the member. I think it is clear there are a variety of government policies at the fiscal level that are impacting inflation, and that impact is especially strong at this point as we are seeing the highest level of inflation in decades. This is at a point when we have very much come out of the depths of the pandemic. There is also a question of the target the federal government sets and how seriously it sets that target, because the Bank of Canada operates within the target that has been set by the federal government. It is ultimately the government that establishes the policy framework that governs the way the Bank of Canada, which is an independent but Crown corporation, operates. To re-emphasize my previous question, does the member acknowledge that the policy choices of the current government are driving inflation and making things more expensive, and that it could be making different policy choices that would address this problem of inflation and the rising prices of goods that people are seeing?
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  • Apr/26/22 3:48:12 p.m.
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Madam Speaker, as I recall, the framework for the Bank of Canada in terms of its inflation target has not really changed much over the past few years. It is still aiming for a 2% inflation rate, so I do not see that there has been a radical change at that level. It is very important to recognize that the Bank of Canada is independent. I am quite fearful that private member's bills such as the one introduced by the former leader of the Conservative Party somehow try to shift the blame to an independent institution, impugn it and attack its credibility in the eyes of Canadians. I think that would be a great threat to the economic policy in this country.
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  • Apr/26/22 3:49:13 p.m.
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Madam Speaker, I was interested in the reference my colleague made in a previous response to the national housing strategy. Housing affordability is a huge issue in the riding of Cloverdale—Langley City, and I have been really pleased to see in this budget the commitments to housing. I wonder if my hon. colleague could speak for a moment about the housing commitments that are being made and how they will positively impact ridings such as mine.
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  • Apr/26/22 3:49:43 p.m.
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Madam Speaker, housing is a very complex area. We have brought in some important measures to help with housing affordability. We have a new savings vehicle. It is a very creative combination of a TFSA and an RRSP that will benefit first-time homebuyers. There are other aspects of the housing situation that are under the control of municipal governments. I think the member has probably seen this in his area. I have seen it in mine. There is a big debate going on in my community about densification, and some amount of densification is going to be necessary if we are going to increase the housing supply in a geographic area that is already highly developed. Obviously, we cannot influence municipal bylaws and permitting, but through the housing accelerator fund we can exert a certain amount of influence, and hopefully that will be helpful.
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  • Apr/26/22 3:50:52 p.m.
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Madam Speaker, I know the Liberals talked several times about this new RRSP. They talk about this program to help people who are first-time homebuyers, yet the majority of Canadians, over 50% of them, are less than $200 away every month. How does this plan actually help, when Canadians have no money to invest up to $40,000, to make sure it is a secure situation? How is this really benefiting first-time homebuyers?
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  • Apr/26/22 3:51:25 p.m.
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Madam Speaker, by that logic we could ask how the RRSP benefits anyone or how the TFSA benefits anyone. I just said in my speech, if the member was listening, that households have higher savings than before, so if those savings can be channelled into a creative instrument such as the first-time homebuyers' savings account, I think that would help. It will not be the solution to everything, but it is part of a bigger puzzle.
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  • Apr/26/22 3:52:01 p.m.
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Madam Speaker, I will be splitting my time with the member for Beauce. The Canadian dream is dying, and the Liberals are digging its grave. They put us on an economic suicide mission, and the world that millennials are inheriting will be far different, after six years of the Liberals' rule in this country, from that of the baby boomers who preceded us and that of our parents. I am very concerned about it, and very much looking forward to discussing the budget that they brought forward and the lack of vision and a positive plan to create a future that millennials can really believe in. Let us take housing, for example. Housing has effectively doubled in price since the Liberal government took power six years ago. It is over $868,000 to buy a house today. My generation is the most educated generation in history: We have dual-income households, with both people working full-time, yet half of us will never be able to afford our own homes. That is what the data is telling us. In our parents' generation, let us take the 1970s, the average income was about $25,000. A person could not have a formal, post-secondary education and earn $25,000 a year, and the average house price was about $50,000. A person could reasonably buy that house and pay it off within 10 years. Now, for my generation, the most educated in history with dual-income households, half of us will never own a home. Something is seriously wrong with this picture. People depend on houses for their retirement, so what is half of my generation going to do about their retirement plan? We have not heard a coherent plan from this government, but since they took office and with their new promises in their budget, the Liberals are spending about $74 billion on housing. One could argue that perhaps their plan is making housing more expensive, from the looks of it. We know that the Parliamentary Budget Officer himself has said that the Liberal plan for housing will only have a limited impact, so there is not a lot to look forward to for millennials. We hear every day that interest rates are going up. What does that really mean for the average homeowner? If a person recently bought a house at the average home price of $800,000, and was lucky to get in with a lower interest rate of about 2%, and paid 5% down, they would probably be paying about $3,400 a month for their mortgage. Let us say that it goes up even 3%, which does not sound like a lot. Let us say that the mortgage goes up 3% when it is time to renew it in a couple of years. That would mean that they would be paying about $5,200 a month. That is $22,000 more, for the year, that a family with the average home price would pay in interest. At $22,000 a year for a mortgage, it is catastrophic. That is families walking into the bank with their home keys, dropping them on the desk and saying “Sorry, take them. We cannot afford it any more. We are going to lose our equity. We cannot afford this.” It is very concerning to hear of these interest rate increases and the impact they will have on home ownership in this country. We know that the cost of living is going up as well. Of course, it is driven in large part by inflation. It hit 6.7% for the cost of goods in March, which is a 30-year high. Inflation has not been this bad since before I was born, to put it into context. That is what we receive as millennials and as Canadians, now after six years of Liberal rule. If we look at food and gas, a recent survey showed that a third of Manitobans said they do not make enough to cover their bills. That is one in three, and half of Manitobans are only $200 away from not being able to afford their bills. They are going to go bankrupt. They are $200 away from the doors closing and being unable to pay their bills. It is pretty astounding that half of Manitobans are only $200 away from that. Every time my colleagues work hard to bring up legitimate grievances on behalf of their constituents who are struggling to afford food, or struggling to afford gas that was about a dollar a litre when the Liberals came in and now is almost two dollars, we get a bit of an eye-roll and hear: “Oh, we're here for the people. We take care of them. We have Canada's back.” I do not think so. It does not seem that way when people cannot afford groceries. If we go to the grocery store to pick up four modest bags of groceries, we are looking at a $300 bill. Imagine families of four or five. How are they affording this? Interest rates are going up on car loans, credit loans, credit cards and mortgages. All of it is increasing. More money is going to just interest payments. Prices are going up, but what is the Liberals' plan to grow the economy and to bring prosperity to the millennial generation and to all Canadians? I am really not clear after reading the budget, and that has been a common criticism across the political spectrum. What is the vision? We know growth and investment have been way down since they took office. They have created an environment in Canada such that people look at Canada and say they are not investing there because the regulatory burden is too high. I was listening to a podcast of Paul Wells, formerly of Maclean's, who was saying that in the Liberal budget itself growth over the next several years is projected to be lower than in the rest of the G7. Total spending on research and development has been declining in Canada, which is the only G7 country where that has been happening. That is what Mr. Wells brought my attention to in this podcast. That is the Liberals' record of seven years of governance. The Financial Post said, “Manufacturing capital stock is the lowest it has been in 35 years.” The Fraser Institute said that “business investment dropped in seven of 15 sectors”, critical sectors. Economic engines of our country have dropped since the Liberals have been in government. Jack Mintz from the Financial Post put it quite well: “Ottawa needs to recognize that Canada's economic potential depends on private investment, not government spending”. If only they would recognize that. If we look at the country's main economic engine, what brings in the most revenue, more than any other industry, it is oil and gas. We have heard a lot about this. There were the “no more pipelines” bill and the tanker ban. Liberals repeatedly brought in major regulatory burdens so that Canada cannot develop its natural resources and get them to market. It has been moving at a glacial pace, yet we know that oil and gas brought in $700 billion in cumulative fiscal revenue to federal, provincial and municipal governments. That is $700 billion made from oil and gas and given to government. That pays for health care. That pays for education. That pays for roads. That pays for our generous social safety net. We talk about green investment. I am all for moving forward and greening our economy. I think most people are, but how are we going to get there? It is very expensive and the technology is not there yet. We need research and development dollars, which I just mentioned are declining. We need something to make the money so that we can invest in these programs, invest in making our economy greener, and that is oil and gas. That is LNG. If we would export our LNG and offset the world's dependence on coal, we could massively lower emissions, but we need a government with the will to make that happen. We see countries like Norway leading the way, making their economy greener and also aggressively pursuing oil and gas development, working with their oil and gas for carbon capture technology. It is incredible what Norway is doing: green and oil and gas. For six years, we have heard the government talk about green jobs. I looked on Google for quite some time to try to figure out exactly what “green jobs” means. We also heard this from the Kathleen Wynne government in Ontario, green jobs. Of course, the energy prices for households doubled during her time in the Ontario Liberal provincial government, much like what is happening with the federal Liberal government now with energy prices and household costs. I cannot seem to find any evidence of these green jobs. Maybe someone can correct me and quote some data, because I have not been able to find these green jobs that the Liberals have been talking about for six or seven years. Where are they? I would like to know, and I would like to see the data that says they are going to be as lucrative for Canada today as oil and gas has been for our social services and for our infrastructure. There is no evidence of this. Not to say it cannot happen, but they are not doing a great job. What does this create? I think people forget, but Canada is a very difficult country to govern. We are the second-largest land mass in the world. We have two official languages. We have over 300 first nation communities. We have the east coast, the west coast, the Prairies, Ontario, Quebec and the north. It is a difficult country to govern, historically and today, but especially when the Prime Minister and his father have been in power we have seen western alienation. We have seen Quebec separatism. This is what we are seeing, and the Liberals know it. They know that if they can focus the votes in the Toronto area, they do not have to pay attention to the rest of the country. We can see it in their policies. They do not consider what the west needs. Gerald Butts, former number one right-hand person to our Prime Minister, said, “What you see here is a long term optimization trend”. He also said, “Campaigns are a ruthless optimization exercise: where will your incremental investment drive the maximum return in real time”. He said, “We count seats, not votes, so smart campaigns focus on delivering them.” They are winning elections on division. I will end with this: If governments can't demonstrate that their efforts work for regular people, then people will start to look around for other, extreme alternatives. Who said that? It was the Prime Minister, at a Liberal convention in 2014. Maybe he should listen to his own words.
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