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Decentralized Democracy

House Hansard - 129

44th Parl. 1st Sess.
November 17, 2022 10:00AM
Context: House Hansard - 129 - Nov/17/22
Mr. Daniel Blaikie (Elmwood—Transcona, NDP)
  • Nov/17/22 11:54:46 a.m.
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  • Re: Bill C-32 
Mr. Speaker, last week, I spoke a bit about the shortcomings of the government's economic statement. Today, I will speak about a particular measure found in Bill C-32 that I think is very important, because it is a matter of justice in the current economy. I am referring to the Canada recovery dividend. We know that at the start of the pandemic, the big banks and financial institutions received a lot of support from the government. However, in light of the consequences of the pandemic and how well those same financial institutions performed during the pandemic, we can see that they did not need that assistance, or at least not as much as they were offered. The amount of assistance they got may even have put added pressure on the housing market. Over the course of the pandemic, we saw financial institutions get a lot of liquidity support very quickly. We can see, if we look at their record of performance over the pandemic, that this help really was not necessary or certainly not to the extent it was delivered to them, because they made record profits. When most Canadians were worried about losing their homes and experiencing a significant decrease in their own household revenue, financial institutions were making even more profit than they did before the pandemic began. There is some evidence, sometimes it is exaggerated to some extent, that this help did increase inflationary pressure within the housing market. There are other important factors, when we look at the housing market, that are driving that inflation. If we look only at the assistance that was provided to financial institutions and banks during the pandemic, we miss a very important part of the story about inflation in housing, which was happening at breakneck speed even before the pandemic. I do not want to minimize the impact of that, but at the same time, if we exaggerate that impact, we do not put ourselves in a good position to address the real structural challenges within the housing market that preceded the pandemic and continue even today. One measure in the bill that is really important from a point of view of addressing that problem, which is also a problem of fundamental economic justice, is the pandemic recovery dividend. This is about assessing a one-time tax on the profits of banks and financial institutions in excess of one billion dollars. Before anyone freaks out about how this is a tax and that it will hurt the economy and everything else, it is only being applied to banks and financial institutions just on their profits over a billion dollars. I think most Canadian business owners, if they are listening, would think that if they had a year where they had revenue over a billion dollars to tax at an exceptionable rate, that would be a pretty good year. If banks and financial institutions want to object that some kind of unfairness is going on, that is a sign of how out of touch they are with the real lives of Canadians and the people they are supposed to serve. I would also say that any politician in this place who wants to pretend that somehow this is an unfair tax, some kind of horrible socialism or some act of tyranny, is likewise out of touch. I will talk a bit in a moment about how some of these measures, like the permanent increase on the corporate tax rate, are well warranted, and certain measures like the pandemic recovery dividend ought to be expanded to other industries through a windfall tax. What has surprised me about the debate around the pandemic dividend is that I have not heard that term out of the mouth of a Conservative in the debate so far. It could just be that I missed it, so I apologize to any Conservative member who did talk about it. However, I have listened to a number of Conservative speeches now and it certainly is not a common theme. I find it strange that the Conservatives are not talking about it, because for a long time all their leader wanted to talk about was the role big financial institutions were playing in jacking up the prices in the housing market, because they had received too much accumulated capital from government during the pandemic, as he said. Here is a measure that would actually address, specifically, undoing the harm that the leader of the Conservative Party has made the key plank of his leadership campaign, and now a central plank of his party's strategy in critiquing the government, and he has nothing to say about it. This is an example of doing something to go after gatekeepers in the financial industry, who are jacking up prices for Canadian working families that are thinking about getting their first home or are trying to figure out getting another home to move to, if they cannot afford their current home, and all the chaos we know is happening for Canadians within the housing market. This is a way of rectifying that and helping to pay for certain things. The Conservatives often ask where we will get the money to pay for this, that money does not grow on trees. It does for the big banks and financial institutions apparently. The leader of the Conservative Party is willing to talk about that as a problem, but when we get to talking about solutions, suddenly we cannot find him. Maybe he is under his desk right now or hanging out in the lobby. I do not know where he is but he is not talking about a potential solution. This is at least a beginning, to say that a perversion of the pandemic was that these large banks and financial institutions, which already make a ton of money, made even more money. Assessing a one-time 15% tax on that extra profit above $1 billion, and this is not a low threshold by any measure, is a perfectly reasonable way of trying to get some of the money that we need to pay for things, like the doubling of the GST tax credit, when people are trying to figure out if inflation will mean they cannot buy food for their families or cannot make rent. The banks and financial institutions are not going to miss that extra money. They may on their balance sheets, and I am sure they will shed a few tears around the boardroom table. I wish them well in their journey for catharsis, but I do not think it is a reason not to do it. They have the money to spare and that money is very much needed to accomplish things for Canadians, who really are in dire straits. They cannot just worry about whether they will post $2 billion in profit or $1.85 billion in profit in their next shareholder report at the end of the quarter. This is a significant reason why New Democrats are supporting Bill C-32. We think that it is about time we start talking about the people who are making incredible money in this moment of extraordinary challenge for Canadians. Where we think the government has fallen short on this, and we have talked about this a lot on many opportunities, is that outside of financial institutions and banks, other companies are doing very well and posting record profits. We have talked about Loblaws. This is an example within the grocery world where companies are making huge profits. We know that oil and gas companies are making huge profits in this moment when Canadians are struggling with the rising cost of energy. Those profits would not be growing if they were only increasing their prices to account for their increase in costs. They are not only passing the cost onto consumers, which would mean their profits would stay the same, all things being equal. They are raising prices that go above and beyond the increase in cost. That is how they are achieving record profits in a time of serious strife. That is why we believe there should be a windfall tax, like the pandemic dividend, along the same structure, that applies to oil and gas companies, grocery retailers and big box stores, which also did very well during the pandemic while mom and pop businesses struggled because they could not offer the same level of service to people in extraordinary times. This has meant that some of those businesses have closed their doors and they are not necessarily coming back. There has been a permanent structural change in certain industries that has favoured larger companies. It makes sense that they would pay more tax on that extraordinary profit. I am thankful for the opportunity to highlight what I think is a central issue with respect to Bill C-32, one that has not received enough attention to date.
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Context: House Hansard - 129 - Nov/17/22
Mr. Pat Kelly
  • Nov/17/22 4:52:06 p.m.
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  • Re: Bill C-32 
Madam Speaker, it pains me to so thoroughly disagree with my friend from Saint John—Rothesay. I thank him for putting on a tie and participating in the debate today, but he is completely wrong. The financial crisis that existed when the Conservatives were in office was at the time the greatest financial crash since the Great Depression. Canada came out of that firing on all cylinders with the strongest economy in the G7. They did not resort to quantitative easing and printing funny money like so many other countries did, and like the Liberal government is doing now. We will take no lessons from the Liberal government on financial management.
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