SoVote

Context: House Hansard - 105 - Sep/29/22

Sep/29/22 4:46:26 p.m.
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Madam Speaker, I believe what the member is referring to is something that is very procedural. There is the substance of something brought forward and then there is the process. We disagree with the process. We absolutely stand for Canadians who live with a disability. We are talking about a population within this country who lives on a small government stipend. They do not have an opportunity to go get a job or earn an extra wage right now, but they have to make those same dollars stretch even further due to the government's poor policies.

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The Assistant Deputy Speaker (Mrs. Alexandra Mendès)

Sep/29/22 4:46:58 p.m.
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It is my duty, pursuant to Standing Order 38, to inform the House the questions to be raised tonight at the time of adjournment are as follows: the hon. member for Vancouver East, Indigenous Affairs; the hon. member for Nunavut, the Environment; the hon. member for Renfrew—Nipissing—Pembroke, National Defence.

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Mr. Gabriel Ste-Marie (Joliette, BQ)

Sep/29/22 4:47:22 p.m.
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Madam Speaker, the current inflationary crisis is affecting everyone and putting millions of households in hopeless situations. Families must make agonizing choices to be able to continue making rent or mortgage payments. Many low-income people are cutting back on food and going hungry. The same is true for many middle-class households that are heavily in debt. Such a huge increase in prices, especially for food, energy and housing, creates considerable hardship, and that is not something to take lightly.

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The Assistant Deputy Speaker (Mrs. Alexandra Mendès)

Sep/29/22 4:47:54 p.m.
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I ask hon. members to please quiet down so we can actually hear the speech. I am having troubling hearing it, and I am sure the interpreters are also having trouble with the noise. The hon. member for Joliette.

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M. Gabriel Ste-Marie

Sep/29/22 4:48:09 p.m.
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Madam Speaker, thank you for keeping decorum in the House. As I was saying, we cannot take these huge price increases and the hardship they cause lightly, especially when it comes to the price of food, electricity and housing. My thoughts are with the millions of seniors who were already struggling to make ends meet before prices started going up. They are now facing an impossible task, making choices or making cuts to their budgets. The inflation crisis is one of the most worrisome issues in the world, and I acknowledge that people are trying to address it and find solutions. I am going to put on my CEGEP economics teacher cap and give an overview of inflation and the economy. The aggregate demand and aggregate supply model is a useful tool for understanding the phenomenon of inflation. This model tells us that inflation is caused by an increase in aggregate demand, a decrease in total supply or a combination of the two. Analysts generally agree that the increase in prices we are experiencing is essentially a global phenomenon primarily attributed to a decrease in aggregate supply. The supply chain problem led to a significant drop in supply. It is the same thing with the war in Ukraine. Crop failures due to droughts or floods are also reducing supply in the food sector. Labour shortages, which existed before the pandemic but have gotten worse since, are limiting business activity, leading to a decrease in total supply, and so on. On the demand side, we have seen more of a change than a significant increase in demand. During the pandemic, people shifted their usual consumer choices to new sectors. Supply was unable to adapt quickly enough, so we saw new price increases and often shortages, resulting from the imbalance. We are seeing the same type of imbalance in the real estate market, where the construction of new housing is insufficient to meet demand. Inflation in that sector is also driven by the increase in the price of building materials, which is itself explained by the current inflationary situation and the change in consumer habits during the pandemic, not to mention the impact of the war. Even though the central bank's injection of money into the economy and the government's support to keep consumption going during lockdown were more generous than necessary, because they were not always well targeted, the effect of those interventions on the increase in global demand and on prices is generally secondary. The government's actions are not the main reason for the global inflationary crisis. Unfortunately for us, and especially for those impacted the most by the current rate of inflation, there is no simple solution to a decrease in aggregate supply. The best solution is to support businesses as they adapt to the new reality. It is a long and complicated process, but as I said, even if the effect is not felt immediately, it is the best solution. For example, let us look at the labour shortage. The government could provide support for the automation of some economic activities. The government could also change the tax system to entice young retirees who want to remain in the labour market, perhaps with part-time work. The government could provide support for companies that invest in resilience, for example by making decisions that cut their energy consumption. The government could also do this for households, of course. That is the primary solution for addressing the supply side of the issue. Unfortunately, this government is doing very little about it. I am also disappointed that the official opposition, which says it is concerned about this issue, is not putting this solution forward. Both major Canadian parties seem to be short-sighted on this issue. It is often said that the central bank is well positioned to use monetary policy to counter inflation. The Bank of Canada must ensure that the overall economy is in good shape. To that end, its main policy objective for the past 30 years has been to keep the average annual increase in prices within a range of 1% to 3%. Obviously, we are well past the upper limit now. Although the central bank is extremely well equipped to control inflation when the economy is overheating because of an increase in aggregate demand, the situation is very different in the event of a supply crisis. That is because successively raising its key interest rate does not allow the central bank to influence supply. It simply reduces demand. In other words, since production is insufficient to meet the demand, equilibrium prices rise, and all the Bank of Canada can do is lower demand to reduce the price increase. However, at the end of the day, there are not more goods and services on the market, only less room to manoeuvre and borrow to make consumption or investment choices. Such a monetary policy could pose a risk. If, at the time of implementation, the economy is not in an overheated situation where overall supply is basically inelastic, the central bank's action could also slow down the economy or even plunge it into recession. Considering how much the labour market is changing, this could almost be described as a quantum leap. The signals of the economic context are difficult to pick up, and there is a real risk that the monetary policy will be too restrictive and therefore impede growth. Again, there is not much that either monetary or fiscal policy can do to respond to a supply crisis. These policies aim to reduce demand in order to lower prices, but they do not allow for increased production in the short term. I want to reiterate that the best government policy is to support businesses and help them adapt and become more resilient in order to push supply back up, even though that does not happen automatically. If there is one lesson we can learn from the global supply-and-demand model, it is that we need to avoid falling into the very tempting trap of responding to a decrease in supply by giving everyone money. That kind of policy may appear to meet people's needs, but it will quickly fuel inflation. It is therefore a futile, ineffective policy, especially if it drives society as a whole into debt. It is a good solution, but not for a supply-side crisis. Tax cuts would have exactly the same effect. It is tempting, but it is a short-sighted solution that would make the problem worse, not better. Indeed, such an expansionist policy would actually thwart the central bank's restrictive policy. That would be the worst possible situation. England is currently experiencing major difficulties that illustrate what happens when policies clash like that. What can we do? As I said, there are no simple or easy solutions. We can help companies pivot. We also have a moral obligation to help the most vulnerable people and the hardest-hit sectors cope. I am thinking of low-income families and single people, especially seniors who live on modest pensions that are not indexed. I am also thinking of sectors that are particularly affected by inflation, such as agriculture. We also need to reinvest in social housing to respond to the housing crisis. For goodness' sake, though, we should not send cheques to everyone, lower taxes for everyone or, above all, abandon our climate efforts.

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Mr. Warren Steinley (Regina—Lewvan, CPC)

Sep/29/22 4:56:41 p.m.
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Madam Speaker, the Bloc is very concerned about the environment and believes that the carbon tax actually cuts emissions, but I read this in the Toronto Sun: “The Americans, without a national carbon tax, reduced [their emissions] by 21%. Canada, with a national carbon tax, reduced [their emissions] by 9%.” When we are talking about this, we are talking about making sure the carbon tax does not triple, because we are worried about the affordability crisis that Canadians are facing. Could the hon. member explain to me how supporting a national carbon tax, which does not cut emissions but increases the price of food, is a good policy going forward for Canadians in all provinces?

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Mr. Gabriel Ste-Marie

Sep/29/22 4:57:29 p.m.
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Madam Speaker, I thank my colleague for his question. I have a few things to say to him in response. First, I would love to analyze and study the impact of the Liberal government's carbon tax. This tax will increase gradually, and it is set to triple by 2030, not right now when we are in the middle of an inflationary crisis. What will be the actual, concrete impact on the price of food and the cost of living? We have to study that in order to put a figure on the results. I think the impact will be much lower than indicated. Now I would like to ask my colleague if he acknowledges that human activity contributes to climate change. If so, does he agree that Canada should honour the Paris Agreement, which requires us to reduce our greenhouse gas emissions? If the answer is yes, what would his plan be? My concern is that this government's plan will not even enable us to honour the agreement. My colleague spoke of the national policy. In closing, I would like to remind him that the English Canadian nation is not my nation. Quebec's national policy is the carbon market, which, by the way, was created by a Liberal premier, one Jean Charest. Therefore, Quebec is not subject to this government's carbon tax. Since we have a different system and a different model, we are not affected by these changes.

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Ms. Laurel Collins (Victoria, NDP)

Sep/29/22 4:59:04 p.m.
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Madam Speaker, I would like to thank the member for his speech. I was interested to learn that he used to teach economics. I apologize, but I will have to stop for a moment because I can hear the interpretation in my earpiece. As the member mentioned, many economists have said that broad-based tax cuts would lead to inflation. People are frustrated about having to pay more for their rent and their groceries while rich CEOs rake in huge profits. Would my colleague agree that a better strategy would be to tax companies that increase the prices that Canadians pay at the grocery store and at the pumps?

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Mr. Gabriel Ste-Marie

Sep/29/22 5:00:19 p.m.
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Madam Speaker, first, I would like to thank the hon. member for Victoria for making such a concerted effort to ask her question in French. We have all had the experience in the House where we hear the interpretation while we are asking our question. To hear your question being translated, especially in your mother tongue, is quite disconcerting, so I salute her effort. The Bloc Québécois is a progressive party. We support the idea of a more progressive tax system, meaning that the wealthy pay a higher percentage of taxes than the poor. As we know, poorer people tend to use their income to cover the cost of essential goods. For example, members of the House earn high salaries and, despite what we pay in taxes, we do not have to make such agonizing choices. My colleague's question is well worth considering. The fact that big corporations are making excess profits as a result of the current situation is something that needs to be looked at. I have read quite a bit about this, and let us just say that analysts are quite divided on the feasibility of this. What is the right way to go about it? We certainly need to move in that direction, but we must do so efficiently while maintaining stability in the system. Again, bravo to my colleague for asking her question in French.

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Mr. Ken Hardie (Fleetwood—Port Kells, Lib.)

Sep/29/22 5:01:51 p.m.
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Madam Speaker, I must apologize to the hon. member because I will not attempt to speak French with the question I have. We have seen a “back to the future” move from the Conservative Party. Stephen Harper thought that lowering taxes would promote the trickle-down effect, but what trickled down certainly was not much help to the Canadian economy or the Canadian people. We are hearing the same thing from the new leader of the Conservative Party. Given that they are cut from the same cloth, we should not be surprised. I would like the hon. member to comment on the effectiveness he sees in the Conservative strategy to simply cut taxes as a way to help people through tough times.

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Mr. Gabriel Ste-Marie

Sep/29/22 5:02:42 p.m.
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Madam Speaker, I thank my colleague for his question, even though it was not asked in French. Perhaps he will try next time. The trickle-down theory, which refers to the notion of creating wealth before distributing it, was popular in the 1970s, 1980s and 1990s. I would say that it was possible to continue embracing the theory up until the 1990s. It was an ideological vision. Since the 1990s, however, this theory has been clearly debunked. Nothing ends up trickling down, so it is not a theory that can be supported. As for the second part of my colleague's question, I will use the example of England, which is really not doing well right now. The Bank of England has adopted a restrictive policy, but the government has adopted an expansionist budgetary policy. Together, these short-sighted policies cancel each other out and result in debt. It is wishful thinking to believe that cutting taxes will significantly stimulate the economy, especially at a time when the economy is overheated and inflation is high. When I taught in CEGEP, we taught the Laffer curve, which espoused this theory and was developed by an American economist. It never worked. It is a myth. Experience has shown that it does not work.

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Mr. Simon-Pierre Savard-Tremblay (Saint-Hyacinthe—Bagot, BQ)

Sep/29/22 5:04:20 p.m.
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Madam Speaker, I thank my colleague for his intervention and for his speech. Since he taught economics at two CEGEPs, I would like to ask him something. We are familiar with the incendiary declarations that the Leader of the Opposition made regarding the central bank, before he became leader of his party. We know that the central bank is often a target. In the 20th century, however, John Maynard Keynes started talking about the importance of these banks. He also suggested that inflation was not primarily a monetary phenomenon. If I were to ask my dear colleague and friend to give our Conservative Party colleagues a quick economics lesson on central banks, what would he say, in a nutshell?

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Mr. Gabriel Ste-Marie

Sep/29/22 5:05:06 p.m.
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Madam Speaker, I thank my colleague and friend for the question, although when he mentioned the second CEGEP, I realized he was talking about UQAM. That is a serious mistake. I would have him know that the economics department at UQAM does good work. Keynes' work certainly contributed to the establishment and creation of the first central banks and highlighted their importance. The other thing that came out of his work is the famous equation for the quantity theory of money. It does not happen automatically and instantaneously. It depends on several other factors. Keynes particularly drew attention to the perceptions or psychology of people and economic players in the phenomenon of inflation. For example, the U.S. dollar is the global reserve currency. If a lot of money is printed, prices will rise much more slowly than in an economy where the currency is weaker, where foreign investors have less confidence in their currency. If they deviate slightly from established practice, prices can soar because confidence is lost more quickly in those economies. The central bank plays an important role, and it is important to respect its autonomy.

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Mr. Fraser Tolmie (Moose Jaw—Lake Centre—Lanigan, CPC)

Sep/29/22 5:06:44 p.m.
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Madam Speaker, it is a privilege and an honour to be able to speak in this House on behalf of the constituents of Moose Jaw—Lake Centre—Lanigan concerning this issue. This past weekend I received a phone call from a constituent who is very concerned. This young man had been looking at his energy bills, and he noticed that on top of the carbon tax that he is paying on his energy and power bills, he is also paying GST. Come April, when the carbon tax will be tripled, so will his GST payments increase. Why did he come to me? It is because he is facing some struggles and challenges at home. When someone takes the time to look at that and understand that they are paying more in compound tax, they are very concerned. A tax upon a tax is just not right for the people of Moose Jaw—Lake Centre—Lanigan, and it is not right for the people of Canada. Policies should be there to help us, not to punish us, but I feel that is what is actually happening. The government in power right now is trying to coerce the people of Canada into changing habits. I do not think it is actually winning the people of Canada over, because the habits have not changed and the carbon reductions have not met the government's targets. The Liberal government is failing, not only with bad policy; it is failing the people of Canada, and it is not listening to the people of Canada. In the House, we hear about a climate crisis. When I do research and I look at what is happening in Saskatchewan and the challenges that farmers face, I see that drought is an issue in my riding. When I go to the University of Regina and look at the history of droughts in our province, I see that it goes way back. It goes back to 1910, 1914, 1917 to 1921, 1924, 1929, 1931 to 1939, 1958 to 1963, 1967 to 1969, 1974, 1977, 1979 to 1981, 1983 to 1986, 1988 to 1992, 2001 to 2003, 2009 and, people could argue, 2021. They cannot solve a crisis by creating another crisis. The crisis that the Liberal government is creating is taxing and burdening the people of this country. I know by the physical posture on the other side that my colleagues in the Liberal and NDP government are hearing the same concerns that we are having. They are hearing that their people are being taxed way too much, that the policies in place are not solving the problem and that people's concerns are food, fuel and essentials. They are hearing that people need to provide a roof above their heads for their families, and that they want to plan for the future. I am here because I want a better future for my children. One of the things I also teach my children is to be able to listen. The Liberal government is not listening to the people of Canada. The gentleman who called me last weekend said that at this point he would spend $600 million on an election, just to get the government out. He would spend a little to save a lot. That says a lot about what people are going through. The Liberal government needs to listen to the people of Canada. No more taxes. Axe the tax. It is about time the current Liberal government listened to the people of Canada. That is our job. We are in the House of Commons because we represent the common people of this country. We are commoners, and we should be looking out for the people who are in our ridings, who are our neighbours and who are our friends and family, and the government is not doing that. It is time to axe the tax.

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Mr. Simon-Pierre Savard-Tremblay (Saint-Hyacinthe—Bagot, BQ)

Sep/29/22 5:12:23 p.m.
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Madam Speaker, I still think there are better solutions. I would like to know what my colleague thinks about this. Right now, we know that rising prices are often driven by a lack of competition. We also know that the Competition Act encourages company mergers, which means more monopolies. Does my colleague agree that the act should be amended? Should the Investment Canada Act also be amended to counter the trend of foreign takeovers of our head offices?

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Mr. Fraser Tolmie

Sep/29/22 5:13:00 p.m.
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Madam Speaker, when I think about the free enterprise system we have in Canada, I believe in competition. I believe that what we see are people who are innovative. I find that the potential in our country is in its people, that we are creative and innovative, and that the solution for our future is always in the future generations of our country.

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Mr. Mark Gerretsen (Parliamentary Secretary to the Leader of the Government in the House of Commons (Senate), Lib.)

Sep/29/22 5:13:47 p.m.
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Madam Speaker, it is great to hear about believing in the market system and the free enterprise system. One would think, then, that the Conservatives would understand why pricing pollution is the right thing to do, because it builds into the equation of putting a cost on pollution. The member would know from this free market enterprise system, the system he speaks so highly of, that by doing that we then incentivize companies to look for solutions, to find alternative ways of doing business to reduce their costs. That is the whole point of putting a price on pollution, making it part of the economic model of pricing something and building the inputs into that product. Can the member at least not reflect on why he would be against something like this, since he believes in that model?

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Mr. Fraser Tolmie

Sep/29/22 5:14:40 p.m.
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Madam Speaker, when I have a gentleman who is being taxed by the carbon tax on his heating and power bills, I wonder where that question comes from, because this is the everyday person who is being taxed for an essential that he needs in his house.

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The Assistant Deputy Speaker (Mrs. Alexandra Mendès)

Sep/29/22 5:15:07 p.m.
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It being 5:15, it is my duty to interrupt the proceedings and put forthwith every question necessary to dispose of the business of supply. The question is on the motion. If a member of a recognized party present in the House wishes to request a recorded division, or that the motion be adopted on division, I would invite them to rise and indicate it to the Chair. The hon. member for Regina—Lewvan.

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Mr. Warren Steinley

Sep/29/22 5:15:55 p.m.
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Madam Speaker, I would request a recorded division.

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