44th Parl. 1st Sess.
June 7, 2022 10:00AM
- Jun/7/22 1:20:43 p.m.
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Madam Speaker, I think we need to recognize, when we talk about consumption taxes, that there is absolutely no guarantee, and the Conservatives cannot guarantee, that any sort of savings could be passed on in that direction.
I would suggest to the member that there are other things the government does. For example, a GST rebate and a price-on-pollution credit are given out so that individuals in the most need are receiving benefits. Those are the types things that I believe a government could be more focused on, as opposed to the simple solutions the Conservatives like to put on paper while they say to get rid of this or get rid of that. It is a populist attitude, and is much like when the leader of the Conservative Party says he will fire, banish or punish the Bank of Canada governor, or makes irresponsible statements of that nature. We are not going to do that on this side of the House.
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- Jun/7/22 1:40:41 p.m.
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Madam Speaker, it is a pleasure to rise in this chamber to talk about the Conservative opposition day motion on a very important issue affecting Canadians: affordability and the cost of living.
Before I talk about the motion, I would just like to set some context for individuals who are here. Food prices have increased 9.7%; in many cases fuel is up, depending on what time it is measured, almost 65% to 70%; in some cases diesel has doubled in about 12 months; and retail prices, the prices paid for clothing and other goods, are also significantly higher.
It is also important to recognize that we were on an incredibly high trajectory of inflation before the war in Ukraine started. Inflation was at a 25-year high of 5.5% in February, before the Russian Federation's invasion in Ukraine. To suggest that it is all explained by the war misses the point that we were on a quite high inflation trajectory before that war started.
For full disclosure, I will concede to the members across the way that there are multiple reasons for inflation. Of course there are supply chain issues and of course there is the war. However, there are also serious structural issues that are leading to inflation. By its definition, a consumption tax is inflationary. The Bank of Canada even says this. At least half a percentage point of inflation can be attributed to the carbon tax, according to the Bank of Canada.
The challenge that I have, or perhaps some of the members on this side of the House have, is that every time questions about inflation or costs of living or affordability have been raised, they are waved away and explained away by referring to these external factors that are out of the government's control. I do not believe that to be true. Yes, there are things that are outside of the government's control, and I just mentioned a few of them, but there are simple things that the government could do to provide immediate relief to Canadians.
The challenge is about not acknowledging that inflation is perhaps not transitory. If we take a long enough view, everything is transitory. Even life is transitory, if we take a long enough view. The challenge is that the facts are changing on the ground. The government is now out of step with the rest of the world because it has yet to acknowledge the challenge of inflation and the tools that it has to deal with it.
In fact, just last week President Biden wrote an op-ed to the American people. In it he vowed to take action on inflation immediately and provided a three-point plan on how the federal government in the United States was going to deal with it, acknowledging that of course the central banks have a role to play.
Secretary Yellen said last week in an interview that she was wrong about inflation, that inflation was persisting longer than they had thought. We have also heard this from the Federal Reserve chair in the U.S. We have also heard it from Bank of Canada officials, who admitted that they had all underestimated inflation, but we have not heard it from the Liberal government. The government refuses to even acknowledge that it might be behind the curve.
I think Canadians would appreciate a little bit of humility in hearing, “Look, we were a little slow on the inflation front, but we have tools that we can use to combat inflation.” The question I have every day is this: How long does inflation need to persist or how high does inflation need to get before the government realizes that it must act?
We have put forward an opposition day motion, which I think some would even call an omnibus motion, with some interesting ideas. In the interest of constructive discussion in this House, there may be some ideas that individuals feel strongly opposed to, but they are ideas. The government could feel free to take any of these ideas it might like and act on them. We do not need to pass this entire motion. It does not sound as if we will have support from some other parties, but certainly there are some reasonable ideas. I would like to highlight a couple that speak to me.
With respect to suspending the GST on fuel, both regular gasoline and diesel, the price for diesel has doubled in 12 to 16 months. That also means that the HST the government receives on diesel has doubled. The revenue the government is making has doubled because the price has doubled, and it is applied right before people pay the final price. In fact, the government has never made as much money as it is making right now. That is why I have significant concerns about the idea that the answer to inflation is for the government to tax companies more so it can take that money and do something with it. The government does not need that money. It has never made as much money as it is making right now.
If we consider the budget of 2021 and what we believe the government will be making in revenues over the next five years and compare it to budget 2022 and the revenue it is going to be receiving now, it has found an extra $170 billion. The question is this: What is it doing with it? Why is it not returning that money to Canadians? It is coming from Canadians in the first place.
I think we have to be a little more realistic and pragmatic, because increasing taxes on companies is not going to all of a sudden solve our inflation problem. We have a bunch of extra revenue now and we still have inflation, so making the government bigger is not the answer to our worries.
The hon. colleague from Foothills talked about fertilizer, and because of the significant farming community in Simcoe North, I will mention it just for a moment.
I have phone calls every day, and I visit farms to talk to farmers in my riding. They are all saying they want to help Ukraine and do their part and that they do not mind paying a fertilizer tariff on fertilizer that is purchased after March 2. However, they prepaid for fertilizer in December and are still being hit with this tariff. The government did not even understand the impacts of that tariff before it brought it in, nor did it have very clear and defined rules, which shows a lack of understanding or an unwillingness to understand the farming community.
There is an element of this motion that talks about money laundering. Some members will wonder why we are talking about money laundering and will think it is incredible to be talking about money laundering when it is such a long-term problem. Well, the best time to plant a tree, if not yesterday, is today. The Cullen commission is coming out with an 1,800-page report, which I hope becomes public very soon, about the challenges of money laundering in British Columbia, but it is going to expose a significant challenge nationally that we must take head-on. We have to understand the impact of money laundering, especially on our real estate sector, because it distorts our real estate markets.
In Orillia, which is in Simcoe North, we have seen a 300% increase in the price of housing in six years. That is unsustainable. I believe some of that is due to the distorting effects of money laundering in our big cities, because people are now moving out and looking at other places.
It is in this context that I think most of the ideas in our motion are quite reasonable. We may not expect the motion to pass, but I hope we have a great debate and I would welcome the government to take any of these ideas as its own.
In closing, I will make a brief comment about leadership. True leadership is recognizing that perhaps one's original plan needs to change when the facts on the ground change. True leadership is showing a level of humility by acknowledging that humans can sometimes get things wrong. There are some interesting examples from the previous government, but I will only mention three: It decided to change its mind and tax income trusts in the face of different facts changing on the ground; it reversed its decision on interest income deductibility; and when the global financial crisis hit, it reversed its ideological position on running deficits and saved Canada from significant financial ruin.
I am thankful to have been afforded this opportunity today.
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- Jun/7/22 4:11:54 p.m.
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Madam Speaker, I find the motion actually pretty easy to vote against. Whoever wrote the motion has been quite brilliant at describing the issue, but not nearly so brilliant at describing the solution.
You might be interested in knowing, Madam Speaker, that I do all the family shopping. I also do the gas purchases and I buy materials for the house. I remember buying two-by-fours during COVID and I had to go to three stores to try to just get one two-by-four and the cost was 100% more than I paid in years previous. I agree with the description of high inflation for everyone, that gas is more expensive and that the cost of food is up. I have experienced that personally.
What the hon. members from the Conservative Party do not seem to realize is that the supply chains were pretty badly messed up during COVID. Some were out because the countries were locked down. Some were not able to produce the products they had previously. Take for instance, microchips. We could not get any microchips for anything, including a car. Again, within my experience we live in a neighbourhood where we bought a couple of cars and for a considerable period of time there were no cars on the car lot. In fact, we could buy a used car for what we paid a year or two previously for a new car. Just a simple thing like microchips has in and of itself driven up the cost of living quite dramatically.
Add to that the great resignation. People simply do not want to do the jobs that they were doing pre-COVID and that in turn has driven up the cost of labour. I took note in the Report on Business Magazine last weekend that the Royal Bank of Canada has just given a 3% increase across the board to all of its staff because it knows it has difficulty recruiting and retaining staff. We have had representations from Irving, which is building our warships. Its biggest challenge is, again, recruiting and retaining staff, even with substantive increases in salary.
Add to that the Putin war, which took supply chains that were really badly messed up by COVID and only made them more difficult. Sanctions do mean something. They mean that certain products that we are used to purchasing simply cannot be purchased any longer from the Russian-based sources. Add to that the fact that Canada is about 2% of the world's economy. We are in effect inflation takers as opposed to inflation makers. Even for products that we have in substantive quantities such as oil and gas, wheat and various other mineral products, we do not actually get to set the prices. The prices get set by places other than Canada. As I say, we are price-takers, not price makers. We are inflation takers. We are not inflation makers.
On a point of information, as much as the Conservative Party would wish to pin the inflation upon the Prime Minister, I would suggest respectfully that it is a bridge too far even for them.
What is the Conservative solution? The Conservative solution is a reduced consumption tax, and if we do that on the GST and the tax on carbon, everything will be resolved. That is possibly the worst idea ever. Any economist in Canada will say, with the notable exception of Stephen Harper, that if we want to generate government revenues we should be taxing consumption and we should be reducing the tax on labour.
Income tax is a tax on labour. Consumption tax is a tax on consumption. In effect, it is taxing the person who works hard and reducing the taxes on the person who plays hard. If we reduce the consumption tax, it is practically a guarantee that large oil and gas companies and other companies as well will backfill with price increases, and I would expect that our Conservative friends would have recognized that before drafting this motion. The consumer gets no relief. The government revenues are drained. Rich companies get richer, and the working person gets increased income tax. Hardly what one would describe as a brilliant solution.
Finally, there is carbon pricing. The most effective way to reduce carbon consumption, short of turning down the thermostat or reducing unnecessary travel, is to apply a tax to it. If, in fact, the tax is collected and applied as it should be, then, in the end, the lower-income families will actually receive rebates in the mail. In Ontario, that means $745, and in Alberta, it means something in the order of just over a thousand bucks.
There are those who say they cannot adjust. For some that is actually true. For others it is simply a lifestyle choice. However, if we are going to be serious about carbon reduction, then we have to apply this sort of tax, which has repeatedly demonstrated to be the most effective way to reduce carbon consumption.
Given that inflation is real, given that we are just 2% of the world's economy, given that we are a trading nation and highly dependent upon external trade, given that the Putin war will not end any time soon and given that inflation is well beyond the Bank of Canada target, what is a relatively small but prosperous economy to do?
We will start with some of our strengths. We have a relatively low debt-to-GDP ratio, possibly the best in the G7. It is the same thing with jobs, as we have had 115% job recovery in the post-COVID era. We have a number of products that the rest of the world wants. There are, frankly, more jobs available here than there are people to fill them. Something about over a million positions are begging for people. Again, we have heard that from various employers who are looking for people to fill positions and simply cannot find them, so we are in a relatively strong position.
Then there are some direct relief measures. The Canada child benefit in my riding is worth over $100 million per year. That is a significant relief to those constituents of mine who have children. The $10-a-day child care plan, which is just being rolled out in Ontario, will help a lot of people and it will make a significant difference in terms of the choices that those who wish to take advantage of the program have. In some instances, particularly during the earlier part of this government, we were able to reduce the tax margin for those with lower incomes and apply relief to those who actually needed it the most.
However, we should recognize that the Bank of Canada is the main player here. It has control over monetary policy. The Bank of Canada's monetary policy is independent from government, as it should be. It is possibly the worst idea in the world to have the government control monetary policy because government interests and central bank interests are not always lined up. As an example of that, I might point to Turkey, where the government of the day has taken over monetary policy. That has led to something in the order of 70% inflation. The central bank has renewed its 2% target. We need to recognize that interest rates are going to rise and possibly even dramatically rise.
Our strong monetary policy is our most effective weapon. We have a relatively decent fiscal position. We do not need to yield to the siren song of reduced consumption taxes.
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- Jun/7/22 5:57:55 p.m.
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Mr. Speaker, before I begin, I want to say that I will be sharing my time with the member for Abitibi—Témiscamingue.
I am very pleased to speak to this motion, and I thank the Conservative Party for bringing it forward. The rising cost of living is affecting everyone, including people back home in the Lower St. Lawrence and the Gaspé. Gas, groceries, housing and necessities have all gone up in price. People need housing, they need food and they need to travel to get to work, but they are increasingly struggling to afford all those things. I think it is our job, as parliamentarians, to find solutions to this problem.
What bothers me a little about this motion, though, is that the Conservatives have again found a way to bring up lifting the health restrictions. They talk about inflation, but they put a spin on it so that they can revive an issue that we have already discussed many times in the House. Each time, we have argued and defeated these motions calling for the health restrictions to be lifted immediately. I think it is ridiculous to drag up the issue again with this very long motion. We have debated this issue extensively and concluded that it should not be a political choice, but a scientific one. It is a bit unfortunate to see the Conservatives putting forward a motion like this again and trying to link it to the rising cost of living affecting all of our constituents.
As a solution to help people, the Conservatives are suggesting in this motion that consumption taxes be suspended, that the health restrictions immediately be lifted once and for all, and that the carbon tax be eliminated. That is their solution to help people deal with the rising cost of living: eliminate a measure brought in to fight climate change, politicize an issue that should not be politicized and reduce government revenues.
My colleagues have already shared the Bloc Québécois's position on these measures. Since our position has not changed, allow me to reiterate them. I think that inflation and the rising cost of living are the result of a complex structural problem that will not be fixed by one-time half measures that have little impact. As I was saying, these measures could immediately reduce the government's revenues, and I think that we could find stronger, more sensible solutions that would deliver quick, concrete results.
I am not the best at math, but I can do basic calculations. If a measure reduces the government's revenues, then the government will not be able to fund reliable public services and programs that provide direct assistance to individuals. I do not know whether my colleagues are experiencing the same thing, but I am getting a lot of calls for help in my riding. Constituents are calling on their member of Parliament to help them deal with the rising cost of living.
I think that we need resources to achieve our ambitions in this case. It would be unrealistic to think that implementing one-time measures on the cost of goods will truly help Quebeckers and Canadians deal with global inflation, which is affecting a variety of products and services and which will require long-lasting measures.
In reading between the lines of the motion, I came to a simple realization. These proposals will not really help people deal with the rising cost of living. What I understand, and I hope I am wrong, is that this measure to abolish the carbon tax will only help the oil and gas companies. I will say this again and again, as often as I have to: The oil and gas companies do not need federal help right now.
Take the energy company Suncor, for example. Last year, in the first quarter, it had net profits of $821 million. This year, in the first quarter, it made almost $3 billion in profits. I honestly do not believe that this company needs to be exempted from paying tax. I do not think that abolishing this tax is really going to directly improve the lives of citizens or households. Furthermore, some provinces already have their own systems that work well. For example, Quebec's carbon market is effective, and it is good for the environment.
As I said, getting rid of these kinds of measures will not put more money in our constituents' pockets. Inflation is real, we know it, and it is putting households in Quebec and across the country in a real jam.
Real solutions go deeper. To get there, we have to think about how to create wealth while respecting the environment and, most importantly, how to share that wealth. This situation is not going to fix itself. I do not think band-aid solutions will get us there, certainly not when voter confidence in elected representatives in general is lukewarm. I do not think putting these inadequate solutions forward helps anyone. It just fuels voter cynicism. It is our job to bring a little more wisdom and rigour to the proposals we put to the government.
I heard my colleague from Mégantic—L'Érable say yesterday that Quebeckers are suffering from the rising cost of living, and he is absolutely right.
The Comité des citoyennes et citoyens Mitis organized a march that was held last Friday in my riding. The participants were essentially asking for appropriate measures. About 20 people who often live in precarious conditions braved the rain to ask for help, to ask us to take action and to ask the federal government for a little assistance. As they marched, they chanted a slogan: “I found a place to live, but I can't afford to eat.” We need to take a moment to reflect on the fact that my constituents were basically telling us that they have to choose between food and shelter. That is what people living on low incomes are worried about right now.
Supporting this motion would mean abolishing the carbon tax. That is the solution this motion proposes to these individuals, and it makes no sense. Have we lost sight of how serious this is? Maybe.
Let us talk instead about meaningful solutions that can be applied quickly to truly help our constituents. If we wanted to seriously address inflation, we could consider taxing the wealthiest members of society. This is not a new idea. During the last election, the Bloc Québécois proposed creating a special temporary tax on the wealthy to have them contribute to the economic recovery and, to some extent, pay down the pandemic-related deficits.
We are not the only ones who think this is a good idea. Last year, the Parliamentary Budget Officer estimated that a tax on excess profits earned by big firms in 2020 would have generated $7.9 billion for the federal treasury. That $7.9 billion is something to think about. I think it is a good start.
The President of United States has also proposed some good ideas, including a tax on the super-rich to finance his postpandemic investment plan. This tax on unrealized capital gains would apply to roughly 700 taxpayers and would raise hundreds of billions of dollars, ensuring that the wealthiest Americans contribute their fair share of the historic funding needed for a strong recovery.
Last winter, some Quebec business people even proposed another special temporary tax, one that would apply to businesses that kept operating or made a profit during the pandemic, in order to help those that were severely affected.
There are plenty of good ideas out there, so we could set aside the idea of eliminating carbon tax. As I was saying, I do not believe that that is the type of solution that will improve people's lives, because the carbon tax was created to fight climate change.
There are many other subjects I wanted to address, such as the fact that higher gas prices are affecting people back home, such as taxi drivers, truckers and farmers. I have mentioned that my father was a trucker. He recently told me that he thought he might stop driving his trucks because gas is too expensive. It is terrible to see entrepreneurs give up on their dreams while oil companies get richer.
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