44th Parl. 1st Sess.
September 29, 2022 10:00AM
- Sep/29/22 10:06:50 a.m.
- Watch
moved:
That, given that the cost of government is driving up inflation, making the price of goods Canadians buy and the interest they pay unaffordable, this House call on the government to commit to no new taxes on gas, groceries, home heating and pay cheques.
He said: Mr. Speaker, it is an honour to rise today to speak to this very important and timely motion.
The government's economic policy can be summed up in four simple words: smaller paycheques, higher prices. The cost of government is driving up the cost of living. What do the Conservatives mean when we say that? If we look at why prices are rising, it is directly linked to the massive deficits the Prime Minister has been racking up pretty much since his first day in office. In its first year in power, the government made a conscious decision to spend more money than it received and plunge this country into those deficits. That weakened our economy before the pandemic.
It is fair to say that nobody could have seen the COVID pandemic coming, but it is also prudent for a government to predict that the unknown could occur. We might not have known that it was going to be this crisis, but governments must be prepared for any number of world or global events that it might be forced to respond to. Plunging the country into those deficits when times were good was therefore a foolish thing to do. Obviously, in retrospect, it was massively unhelpful, as our country had to deal with the COVID pandemic from a weakened position because of the government's policies.
I know so many of my colleagues want to speak to this very important motion, because it is affecting people's lives in such a real and practical way, so I will be splitting my time this morning to allow for more members to participate in this debate.
How did the government's deficits lead to that higher spending? Well, the government had to go out and borrow a bunch of money that it did not have, so it turned to the Bank of Canada, and the Bank of Canada made a decision to underwrite the government's deficit spending by purchasing government bonds, or IOUs. When a government has to borrow money, it writes a promise to pay the money back. That is called a bond. Normally, individuals or institutions can buy those bonds and expect to get paid the interest, and the government pays the bond back at the end of the term. However, the Bank of Canada did something a little different: It created new money right out of thin air to buy those government bonds.
It started creating five billion dollars in new currency every single week, starting in March 2020, to buy those government bonds. That new money, not backed up by new production, not backed up by economic growth and not backed up by any extra production of goods or services, washed through the system.
There could be big winners when the government creates money out of thin air. The big winners are the large financial institutions that get the money first, because they go out and gobble up assets. They buy property and commodities. They do that with the new money before everybody realizes there is a whole new influx of currency in the system. When everybody else gets that money when it eventually makes its way through the economy, prices start to go up. Those large financial institutions and wealthy investors can then sell those commodities and make money on the difference. That is why prices have gone up, and it is also why we have seen record profits at large financial institutions like the big banks.
That is why we say that the cost of government has driven up the cost of living. Literally, the government's extra spending, wasteful spending, forced the Bank of Canada to underwrite those deficits, creating that new money and causing prices to rise. That is the higher prices.
What about the smaller paycheques? Well, what the government is planning to do on January 1 is take a bigger bite out of Canadians' paycheques with an increase in paycheque taxes. Canadians are going to be forced to pay more right off the top on their paycheques, and the government is going to take part of the extra tax it collects, scoop it out of the EI fund and spend it.
We know this. We know the government's plan for the EI increase is simply going to be gobbled up by regular government spending. In fact, the extra premiums the government will collect will put the EI fund into a $10-billion surplus over the short term, and all of that will be taken by the Prime Minister to finance his pet spending projects.
Where is a big chunk of that extra money going? It is going to the interest on our national debt. The Prime Minister has racked up more debt than every single other prime minister combined, and the PBO report indicates that just the interest on our national debt, which Canadian taxpayers will be forced to pay, will double. Soon, the portion of our tax dollars that go to pay just the interest on that national debt will be higher than the amount that is spent on the Canadian Armed Forces. That is the scale we are talking about.
What is the result? Well, we have all heard the heart-wrenching stories in our ridings. We have all heard from the seniors who have had to delay their retirement and watch their life savings evaporate with inflation. Thirty year-olds are trapped in tiny, 400-square-foot apartments in our large cities or, even worse, are still living in their parents' basement because the price of homes has doubled under the Liberals. Single mothers are putting water in their children's milk so they can afford the 10% year-over-year increase in the price of groceries.
It is no wonder that people are worried. Most are lucky just to get by, but so many are falling far behind. There are people in this country who are just barely hanging on. These are our friends and neighbours, and we in the House are their servants. It is up to us to take real action to address this Liberal-caused inflation crisis.
The Conservatives are bringing forward very simple and practical solutions to help Canadians across the country. Today, the Conservatives are calling on the government to not make the situation worse. The Liberals have already done damage with higher prices. They do not need to shrink Canadians' paycheques, which is what this government is planning to do. Not only are they adding inflationary fuel on the fire with their continued plans to increase spending, but they are reducing Canadians' ability to cope with the government-caused inflation by shrinking those paycheques.
A new poll out today is just jaw-dropping: 90% of Canadians are tightening their household budgets due to inflation. Almost half, or 46%, say they are worse off now than they were at the same time last year when it comes to their own finances, which represents a 12-year high. Over half say that it is difficult to feed their household, and this number rises to seven in 10, or 68%, among those with household incomes below $50,000. Canadians cannot keep up.
As for grocery prices, I have five children and our grocery bill is big enough as it is with a few teenagers in the house. Those prices have skyrocketed, up over 10% and rising at the fastest pace in 40 years. With inflationary pressures at this rate, the government's supports do not even help the problem but contribute to it, as that extra spending is added to the amount of money the government needs to borrow, which is causing that vicious circle of higher inflation.
The average Canadian family now spends more of its income on taxes than it does on basic necessities such as food, shelter and clothing combined. By comparison, 33.5% of the average family's income went to pay taxes in 1961. Thirty-three per cent of income in 1961 went to taxes and now that number is 43%, so more is spent on taxes than food, shelter and clothing combined. It is simply jaw-dropping.
On Tuesday, the Conservatives proposed that the government should cancel its plan to triple the carbon tax. The cost of everything is set to skyrocket as the government triples the amount that it charges Canadians on home heating and fuel, with all the effects that has on literally everything else that Canadians have to buy. Groceries, lumber and household items all go up when the government raises the carbon tax by 300%.
Today, we have another practical solution: The government should get its hands off Canadians' paycheques and let Canadians keep more of their hard-earned dollars. It has already robbed Canadians of the purchasing power that they are already earning, and their existing paycheques are already devalued because of the government's inflationary policies. It is never a good time to raise taxes, but the absolute worst time to raise taxes on Canadians' paycheques is when they are already struggling so hard to get by with day-to-day goods.
I hope every member of the House supports this common-sense, practical motion to stop the government's tax hikes on Canadians' paycheques.
1591 words
All Topics
- Hear!
- Rabble!
- add
- star_border
- share
- Sep/29/22 10:58:51 a.m.
- Watch
Madam Speaker, it was interesting listening to the parliamentary secretary talk about the fact that EI and CPP were not taxes. I would refer him to his government's own website, where it clearly states, under the tax basics section, that they are, in fact, taxes. I am not sure if he is aware of that, so I wanted to make him aware of it.
Also, the member talked a lot about the ways that the government is shovelling money into the economy during a period of high inflation. Again, a basic economic principle that Liberals seem to misunderstand is that whatever the cause of inflation, and we may disagree on the cause, part of the solution is in the hands of government. One of the things that hurts inflation and makes it worse is when the government continues to pile money into the economy.
I wonder if he understands that and if he wants to do something about it.
160 words
- Hear!
- Rabble!
- add
- star_border
- share
- Sep/29/22 3:23:41 p.m.
- Watch
Mr. Speaker, it will be my absolute pleasure to split my time with the great member for Thornhill.
It an honour to be in the House today to address the affordability crisis that is gripping Canadians across our land, from coast to coast to coast, including in my great riding of Northumberland—Peterborough South.
Milton Friedman once said, “Many people want the government to protect the consumer [but the] much more urgent problem is to protect the consumer from the government.”
This is particularly true today, as the Liberal government is driving up the cost of living. For two years now, the Conservative leader has been pushing the government to put people first and to start fighting inflation. However, inflation continues to rise, at this point, over 7%. Canadians are feeling that pain.
Today, I am honoured to call on the government, along with the rest of my colleagues, to scrap its planned tax increases, including the payroll tax hikes slated for January 1, and the tax hike on gas, groceries and home heating scheduled for this April.
To give some context to the opposition motion, I think it is important to understand the relationship between the government and the economy.
A fundamental principle, which must be the bedrock of all political discussions of the economy, is the indisputable fact that wealth or prosperity is created by the businesses and workers of our communities. It is through the production of goods and the delivery of services that a country adds value to the economy. When the country increases its ability to produce goods or to deliver a service, or, in other words, enhances its productivity, that country, by definition, becomes wealthier and its people more prosperous.
A country can temporarily and artificially increase its economic performance through the printing of money or quantitative easing. However, this is always short-lived, and the consequences are nearly always worse than the initial increase in improvement in the economic times.
What happens with this government spending, is that some of it wasted, of course, but some of it hits Canadians' bank accounts. When this money hits the bank accounts, what happens to that money is that, by the time it is available to be spent, the cost of everything has increased. The illusion of the windfall is quickly taken away, and we see we are left with nothing but inflation.
The true path to a more prosperous nation, a wealthier Canada, a more successful Canada, is through productivity. In fact, enhancing productivity is really the only way that this affordability crisis will be cured. When we improve productivity, we increase real wages. We increase real profits, and we create jobs. Unfortunately, the government appears to be doing everything it can to reduce the productivity of Canadians.
There are at least three significant policy directions that the government must reverse course on if it really is serious about tackling the affordability crisis. The government must cap its spending. Excessive spending is eventually paid for either through taxation or inflation, which reduces the ability of our productive sector to make things competitively, be profitable and be prosperous. Worse yet, it continues to drive inflation.
Who ultimately pays the cost of inflation? It is not the wealthy in our communities. It is not the super rich. It is not the government. It is our workers, our workers who are going out there.
I ask members to think of the worker who is earning $50,000 a year. They are already subject to a high rate of taxation. Now, they have seen inflation eat thousands of dollars away from their real buying power. These are people who are already struggling to get by. Thomas Sowell famously wrote that inflation is one of the biggest and oldest forms of taxation.
The effect of our government's overspending is to starve the productive sector, or the private sector, of resources. Those resources are needed.
If one listens to my friends in the NDP, one will hear them say that those monies are just wasted on yachts and wealthy billionaires, and I am sure there is probably some of that. The reality is that the majority of that money is invested back into businesses.
Right now we are starving Canadian businesses of the ability to reinvest. We are dead last in the OECD in capital investment. For every dollar that the U.S. invests in capital investments, we are investing 43¢.
That is the money that is building our businesses in the future. These are the dollars that will make us competitive in the future. We are losing ground at a tremendous rate every single day. That will make our economy less productive and every worker less effective. It will impoverish our country today, as well as tomorrow.
The government must commit to no further tax increases. Tax increases, and it is simple and as plain as day, by very definition, increase costs for workers and for consumers. That will drive inflation. In fact, do not take my word for it.
Earlier this year, I had the opportunity to ask questions of the Governor of the Bank of Canada, Tiff Macklem. I asked him if the carbon tax was a driver of inflation and he unequivocally agreed. In fact, he said that it was a significant driver of inflation. I think all sides of the House would acknowledge that we are in an affordability crisis. We are at really high rate of inflation and that is making life more difficult for Canadians.
We would think the Liberal government would understand that the carbon tax at its current rate is driving inflation, so it should pause the carbon tax or maybe reduce it, but the government is taking the unthinkable action of tripling the carbon tax, which the Governor of the Bank of Canada has already said is fuelling the fire of inflation. Now it is going to triple it. It is really unthinkable.
Further, with every new tax increase, we are taking away the rewards and incentives of hard work. When entrepreneurs go out and put their whole lives on the line, risking their homes and families' futures, they need to be rewarded. When those workers work 20 out of 24 hours to ensure their families are fed at the end of the month, they should be rewarded for it, and they need to be incentivized. Because of our progressive tax systems and the clawbacks that exist in our current system, middle-class wage earners, and even low-income Canadians, are facing income tax rates of 30%, 40% or 50%. It is not fair that Canadians who are working the hardest should have to pay an exorbitant amount of taxes. This is really unconscionable.
Once again, what has been our Liberal government's response to that? It is going to increase taxes. The Liberals are going to dramatically increase the payroll taxes. This is not fair to Canadians. It also is detrimental to our economy. If we take away the rewards, the very dollars that people have worked so hard for, we reduce the incentive and the rewards for which these people have worked so hard.
Finally, we need to invest in those sectors of the economy that are extremely productive. We have a huge productivity gap. Productivity is measured by the contribution to the GDP per hour worked. Currently, Canada is at $50. Contrast that to Switzerland at $60; the United States at $65; and Ireland at $85. However, we do have sectors in the economy that are doing exceptionally well. In the oil and gas extraction sector it is at $664 per hour. To make life more affordable for Canadians, we need Canadian energy.
It is inescapable that we are all dealing with the consequences of these failed Liberal economic policies. Perhaps no problem is as pressing as food inflation. This is creating challenges for Canadians from coast to coast. According to Statistics Canada, 20% of Canadians are utilizing food banks. Life is getting more challenging for Canadians. Many are experiencing these incredibly difficult economic challenges: inflation is at near highs, rising interest rates and punitive rates of taxation. The government, however, has the opportunity to reduce people's pain, to give them some hope by cancelling their proposed and planned tax increases on gas, home heating and groceries as well as on paycheques.
It is time that the government stops blindly following its ideology and actually help Canadians by cancelling its proposed tax hikes.
1421 words
All Topics
- Hear!
- Rabble!
- add
- star_border
- share
- Sep/29/22 5:13:47 p.m.
- Watch
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?
138 words
All Topics
- Hear!
- Rabble!
- add
- star_border
- share
