44th Parl. 1st Sess.
June 21, 2023 02:00PM
- Jun/21/23 2:21:15 p.m.
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Mr. Speaker, after eight years of Liberal scandals and ethics issues, there is a laundry list of wasteful spending growing by the day: $27 million in bonuses for federal housing bureaucrats as housing costs double and the building of new homes is dropping; $116 million in consulting fees to the Prime Minister's buddies at McKinsey; $210 million to the Asian Infrastructure Investment Bank, which we will never see again after the Liberals have admitted the bank is being controlled by Beijing; and $54 million for the arrive scam app. How can we forget the stunning $4.6 billion in COVID program abuse that the Liberals could not be bothered to recover?
After eight years, the wasteful spending has added to endless Liberal deficits and painful inflation, and now to skyrocketing interest and mortgage rates for Canadians who are struggling to get by.
Conservatives will bring down inflation, get spending under control and scrap the Liberal tax hikes punishing Canadians. After all, it is just common sense. Let us bring it home.
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- Jun/21/23 5:20:18 p.m.
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moved:
That, given that, (i) Liberal budget 2023 adds more than $60 billion in new spending — that is $4,200 per family, (ii) inflation in Canada increased following the introduction of $60 billion in new Liberal spending, (iii) following the increase in Canada's inflation, interest rates were increased to 4.75%, (iv) the IMF warns that Canada is the country most at risk of a massive mortgage default, (v) average mortgage payments are up 122% since the Liberal Prime Minister took office, (vi) Canadian households have the most debt as a share of GDP of any country in the G7, (vii) the solution is to eliminate the deficits, balance the budgets in order to bring down inflation and interest rates, the House call on the government to table a plan to return to balanced budgets.
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- Jun/21/23 5:37:32 p.m.
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Madam Speaker, of course, when we talk about what affects the power of Canadians paycheques, it is not just a matter of talking about taxation, because outsized price increases by corporations also affect the power of Canadians' paycheques. We have seen record profits by grocery companies and by oil and gas companies, which are raising their prices far more than the increase in the input costs they have seen. Just today, it was reported that Canada Bread Company pleaded guilty to price fixing with Weston Foods, in a scandal that goes back to even before the pandemic. We know Canadians are very concerned about unjustified price hikes during the pandemic, which some economists have said are responsible for up to 25% of inflation.
Therefore, why does the leader of the Conservative Party never address the question of corporate greed when he talks about inflation?
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- Jun/21/23 5:50:20 p.m.
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Madam Speaker, there are often peculiar components to the Conservatives' motions. The motion itself is interesting. It reads well. The Conservatives are asking for a plan and the Bloc Québécois agrees with that.
The disappointing part is that the motion is based on premises or whereases that are slightly sensationalist and off-topic. The Conservatives know it too.
Inflation and interest rates result from international forces. We can call out this government all day long—we could help the Conservatives call it out on a lot of things—but these factors are international.
It would have been nice if the content and premises had been based on the reality of the situation.
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- Jun/21/23 5:51:16 p.m.
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Madam Speaker, there is a perfect correlation in the fact that all governments that ran greater deficits ended up with higher inflation.
Something that we do not hear bandied around any more, although we used to in the beginning, is the modern monetary theory, this whole new proposition that we can spend our way out of a pandemic, out of a major problem, and that budgets would balance themselves. There was new thinking, although money has been around for thousands of years, that we could just keep spending and there would be no consequences. Well, the consequences are here and they are very real, and Canadians see them every single day.
This motion that we have is perfect, because it talks about going back to the table to return to balanced budgets. We have identified so clearly that Canadians know—
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- Jun/21/23 6:03:43 p.m.
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Madam Speaker, I really appreciate having another opportunity to address Canada's current fiscal situation.
We have the lowest deficit in the G7. We have the lowest net debt-to-GDP ratio in the G7. That is what has allowed us to focus our investments in this budget on securing health care, with $196 billion invested over the next 10 years; investing in the future with sustainable jobs; investing in the clean economy; and of course investing in affordability.
There is global inflation, and while inflation in Canada has come down from 8.1% to 4.4% and is now likely, as forecast by the Bank of Canada, to hit 3% by the summer and 2% by next year, we need to make sure that Canadians who need our support are receiving that support. We have invested in very targeted measures to make sure that the most vulnerable Canadians who need support the most get it through these hard times, while we position Canada as a country, as a whole, to thrive going forward.
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- Jun/21/23 6:37:56 p.m.
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Madam Speaker, I will follow up on the fine speech by my colleague, who let the cat out of the bag: We will be voting in favour of this motion. The arguments contained in the motion, and I think that he elaborated on them, are obviously not to our liking. However, we agree with the conclusion: that “the House call on the government to table a plan to return to balanced budgets”.
When it comes to inflation and interest rates, things can get quite complicated. What better way to simplify issues than with populism and things that seem obvious to everyone, when they are actually not?
Why do we have inflation? Some will say that inflation is caused by government spending. I want to sound a note of caution, however. Inflation happens if the government spends money and if it creates deficits. Some people will therefore be tempted to say that deficits lead to inflation. That is not necessarily true. This is what is known in economics as the crowding-out effect, a term we do not often hear. It means that government deficits might not result in inflation because there is a crowding-out effect, meaning consumers save money to make up for the government deficit. The result is that there is no impact on inflation. The crowding-out effect may mean that there might be an impact on interest rates, however.
Why am I saying this? I am saying it because the thing is not so easy to understand. We could spend a long time discussing economic theories. Furthermore, some theories clash. Keynesianism is different from classical or neo-liberal economics, and so on. We have to be careful to avoid simplistic analyses or we run the risk of ignoring real solutions.
Is government spending to blame for the deficit? Is the Government of Canada responsible for global inflation? Did it ride around on a scooter, waving its arms, saying it was going to send us money and create inflation, before running away like Batman and Robin? The answer is no.
I just spelled it out in simple terms. The government is not to blame. The fault lies with the global pandemic, and with the fact that governments were forced to spend like never before in history. I never saw anything like it before. Governments were spending money hand over fist, like it was going out of style.
That is the reality. Faced with an extraordinary situation, we came up with what we believed were the best solutions at the time. That is why we have inflation. I have the figures. Inflation rose to 6.8% in 2022 and fell to 4.4% in June 2023. We can therefore agree that inflation was mainly caused by a pandemic.
Why is that? It is because we have economists who are monetarists. Monetarists believe that inflation is caused by printing money and that abundance reduces value. The more money is printed, the less that money is worth. This means that the value of money is eroded by inflation. That is the view of monetarists. A lot of people agree with this.
That is why it is the Bank of Canada that finds solutions to Canada's inflation. Our colleague, the leader of the official opposition, believes that it has fangs and prowls around at night, but in reality, the Bank of Canada is one of the most renowned banks in the world. When we travel abroad, for example to universities, we only have to mention the Bank of Canada and the audience applauds for half an hour. It is unbelievable. It is so renowned that the English decided that they wanted the Governor of the Bank of Canada for themselves. It is a little like Bedard in the world of hockey. He was that sought after.
I am just talking, but if members want to read something that is well done, they should read the Bank of Canada Review. It is well done. When they finish their university degree in economics, good economists often end up at the Bank of Canada—except for me, because I escaped. I was in the washroom when the recruiters came by. Some say that they are crazy, but they really do know their stuff. It is a renowned bank.
In 1991, they said that the only way to fight inflation effectively is to tweak interest rates. Starting in 1991, the Bank of Canada was the second bank, after New Zealand, to say that it would adjust interest rates to keep inflation between 1% and 3%. That worked beautifully until the pandemic hit. It was going so well. We were a model for the world. Now, with the increases, what did they do? They were forced to raise interest rates. It is a bit complicated.
When a government adjusts monetary policy and plays with interest rates, it takes 18 months for it to have an impact on the economy and 24 months for it to have an impact on inflation. This requires projecting two years in advance before starting to play with things. That is the reality. It is not easy.
Having said that, we could all go for a beer and tell ourselves that there is no point in us being here because the Bank of Canada manages inflation. Wait a minute. That is not true. There are things that the government can do.
First, the government can introduce well-defined policies. If wages are very high and workers are scarce, then perhaps workers could be found if the government offered tax exemptions to older people who want to go back to work. Is that complicated? A guy with glasses and a computer can do that.
No, the government would rather use the stick. They bleed dry seniors between the ages of 65 and 75 and hope that once they are at the end of their rope, they will surely want to go to work. No, that is not how to create jobs and ensure that these people can go to work.
Let us talk about housing. There is a lack of housing. It is a matter of supply and demand. We need more supply. The government needs to invest in housing. That is the smart way to fight inflation.
As for oil, we have been ripped off by shameless increases in the price of oil. Perhaps it is because we should be doing something other than burning oil. Perhaps we should be investing in the energy transition of oil companies.
With regard to productivity, we have to increase worker productivity without making more widgets. If we make more widgets, then there are more widgets on the market and the value of widgets will drop. This is not complicated.
People are wondering where I stand because I have not talked about it yet. The last part of the motion reads, “the House call on the government to table a plan to return to balanced budgets.” I would like to emphasize two things. We need restraint, not austerity. The government must stop wasting, stop encroaching on the jurisdictions of Quebec and the provinces, stop proposing one-size-fits-all measures, and stop giving money to oil companies because doing so is wrong. It has to get smart about its spending. That does not mean embracing austerity. Most of all, it must not achieve these things on the backs of Quebec and the provinces, or else services to the public will be disrupted. Most public services are delivered by Quebec and the provinces. The government must not try to rebalance its budget by cutting back on health transfers to the provinces like Jean Chrétien and Paul Martin did in the past. That must not happen.
There is something called the fiscal imbalance, which proves beyond a reasonable doubt that the needs are in Quebec City and in the provinces, and that the money is in Ottawa. This means that, even if the government remains virtually static, it will be so drowning in money thanks to the taxes it collects and the fact that it has few areas of responsibility that 40 years from now, in addition to not having a deficit, it will no longer have any debt, and some provinces will not even be solvent. They will be forced to start from scratch under another name. I do not know if they will, but they will no longer be solvent. There is a problem somewhere.
Some think that a plan to return to a balanced budget means austerity measures. That should not be the case. There is no reason why it should be, for the reasons I outlined. This government must become responsible in how it spends money. No one can claim that it is an example. I understand that the country has weathered the COVID‑19 pandemic, but after returning to normal, no one can say that it has been rigorous and intelligent in its spending choices.
I just mentioned some ways in which the government could have done better. Some people spoke earlier about how the government provides its services. Let us just say there is a lot of room for improvement. To impose a plan would make this government more serious, less frivolous and less careless.
The government needs to make do with the amount of money it has available. It must be intelligent. It must not cut transfers to the provinces, because they are the ones who deliver the most important services to the public. It must be preventive with regard to inflation, which is currently eroding the purchasing power of those least well-off. As I said, this government needs to have targeted, intelligent spending to protect people in need. Doubling the GST tax credit was the right thing to do. I applaud that. However, we also need to fight inflation intelligently, not in a populist way.
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- Jun/21/23 6:52:06 p.m.
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Madam Speaker, I thank the member for La Prairie for his speech and enthusiasm. I want to ask him this. The Conservatives say that today's motion is their plan for fighting inflation. However, in the past, the Conservative leader presented a plan to fight inflation based in part on the use of cryptocurrency. I do not see any reference to cryptocurrency in this motion. I am wondering why the Conservatives removed this very important pillar from their plan. Could the member for La Prairie comment on that?
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- Jun/21/23 6:52:50 p.m.
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Madam Speaker, I certainly do not support cryptocurrency, which creates inflation.
I would like to highlight an important point that I did not previously mention. Introducing a plan to return to balanced budgets will have an impact on the economy and inflation by changing expectations about inflation. Inflation feeds itself. Forecasting inflation is enough to create it and to throw us in an inflationary spiral. Proposing a plan to balance the budget will lower expectations of inflation occurring. This curbs salary increases, which in turn limits inflation.
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- Jun/21/23 6:53:36 p.m.
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Madam Speaker, I am indeed pleased to rise tonight to speak to the motion that is before us and to say, on behalf of New Democrats, that we do not intend to support this motion, the reason being that New Democrats simply do not believe that one can have a credible plan to fight inflation without addressing the role that outsized price increases by corporations play in contributing to inflation. Not only is there not a plan, but there is not even a mention of the ways in which outsized price increases by corporations are hurting Canadians in the pocketbook. We have heard from economists who have said that as much as 25% of the inflation that Canadians have experienced over the last two years is attributable to those very same corporate price increases.
We have seen it in the oil and gas sector, where there have been record profits and, in fact, an increase in extraction. We heard at the finance committee, not that long ago, that, in Canada, we are taking out record numbers of barrels of oil and gas every day in this country. Why is it that this can be happening alongside real economic strife in places like Alberta, where that oil and gas work is happening? It is because we have also seen a significant decrease in the level of employment, due to automation and other advances in technology within the oil fields. We are seeing a decoupling of profitability in the oil and gas sector and employment in the oil and gas sector, which is what really matters for Canadians when it comes to ensuring that the wealth generated through the extraction of our natural resources actually goes to Canadian working-class families.
While that can look good in terms of productivity numbers for the industry, depending on how it runs the numbers and depending on its purpose, whether it is reporting to shareholders or whether it is reporting to this place while seeking more subsidies, it is nevertheless the case that, even as the industry continues to extract more, Canadians are benefiting less. That is true from the workers' point of the view and the industry's point of view, but it is also true from the point of view of Canadian consumers because, as those same oil and gas companies that are employing fewer people, even as they take more oil and gas out of the ground, are doing that, they are also raising prices well above the increase in the cost of their inputs. In fact, some of their input costs are going down as they employ fewer Canadians in decent, unionized positions with good-paying wages.
That explains how they can be logging record profits, and by record profits, I mean more profit in a single year than the oil and gas industry has ever seen in the history of the country. One would not know that to listen to Conservatives in this place, who say that the oil and gas industry is not doing well. It is very hard to believe that an industry is not doing well when it is producing a record amount of product and it is achieving the highest amount of profit it has ever seen in the history of the country, while charging Canadians higher prices than it ever has before. As much as we hear about the carbon tax, and there is no question that the carbon tax does increase the purchase price of oil and gas, just the simple price increases, the input cost increases that those companies have been experiencing, are more than what the carbon tax is. Do we hear a word from Conservatives about unjustified price hikes by the oil and gas companies, and what that means for Canadians and their pocketbook? No, we do not. That is why this is a party that simply does not have a credible plan to fight inflation.
I think there are two different approaches one can take to trying to fight inflation, and I think they mark a significant philosophical difference between the Conservative Party and, ultimately, I would argue, the Liberal government, as well as New Democrats. On the one hand, one can try to increase people's disposable income. We see that through proposals to eliminate the carbon tax and reduce taxes generally. What I find passing strange is that, with respect to providing income support to the poorest Canadians, we know, when they see an increase in their income, that extra money is going to go only to continuing to pay their rent in the same place where they have already been paying rent, or to buy the same groceries they had been buying before but are no longer able to. That is not inflationary money in the economy. That is not driving inflation. Supporting people to be able to still put a meal on the table and pay their rent is not inflationary spending.
That is why I am very proud that New Democrats, two times now, have pushed the government to double the GST rebate. We know it is going to households that really need a lot of help in a really difficult time, when they are struggling to afford their rent and they are struggling to afford their food, but it will help in a way that does not cause further inflation, despite what the leader of the Conservatives says. The odd thing is that, when he advocates broad-based tax cuts, like eliminating the carbon tax, he has nothing to say about the inflationary impact of returning that money to households, not just the poorest households, which can be done through mechanisms like a higher GST rebate, but also higher-income households.
If the leader of the Conservatives wants to talk about how more money in the economy is going to lead to higher inflation, it is a strange admission. That is not even to mention that the real driver of certain kinds of inflation, when we talk about spending, or what would be if corporations actually spent it in the Canadian economy, which too often they do not, is the corporate taxes that the Conservatives and Liberals have often advocated. That is why there is actually a great meeting of the minds between Liberals and Conservatives when it comes to tax policy. It is why they have worked together, from the year 2000 to now, to lower the corporate tax rate from 28% to 15%. What does that mean? It means more spending in the economy, which, if we listen to the leader of the Conservatives, automatically means more inflation.
The Conservatives do not talk about how lowering corporate taxes can contribute to inflation. To the extent that it does not, it is because that money leaves the country and actually does not get spent. That is the point that Jim Flaherty, the former Conservative finance minister under Stephen Harper, made before he passed: they had lowered the corporate tax rate, and that was meant to increase business investment and raise productivity. However, as many Conservative members are fond of pointing out, Canada's productivity numbers are not what they should be, and it is not because corporate Canada has not had vast amounts of capital in waiting to make those business investments in order to raise productivity. It is because the companies prefer to either pay it out to their shareholders here in Canada or scuttle that money away into tax havens through agreements that successive Liberal and Conservative governments have made in order to make it easier for that profit to shift out of the country without those corporations ever paying their dues and helping to fund a number of things that are really important in helping Canadians get by in this difficult time.
Broad-based tax relief is one way to say we are fighting inflation. I think some of the hazards the leader of the Conservative Party likes to point out about other things, like income support, apply equally to broad-based tax relief at a time like this. We should be conscious of that when we are evaluating proposals for tax decreases. It does not mean that New Democrats oppose all tax decreases. In fact, we were very vocal about the excise tax and our feeling that it was inappropriate for the excise tax to have an automatic escalator, first of all, and that the exceptional increase in the excise tax this year, because of inflation, was not acceptable. We worked with opposition parties to oppose that, and, ultimately, although the government did not bring it down to zero, it dramatically reduced the excise tax increase with the budget implementation act.
The other way to combat inflation, which, for my money, is more effective, is to try to control the price of things Canadians cannot do without. What do I mean by that? I mean bringing down the cost of child care, because that puts money back in Canadians' pockets. It makes it easier for Canadians who want to work in order to support their family to be able to leave the home and do that work. We all know that this disproportionately affects women who want to have a career. They can do that because they can now access child care at a price that makes it so they do not work simply to pay for child care instead of contributing to the other meaningful expenses of a household.
With respect to a pharmacare program, we need to mobilize the power of bulk purchasing across the country and bring down the price of prescription drugs considerably. There have been so many studies done on pharmacare, going back decades. All of them conclude that, by having one federal program, we could significantly reduce the amount Canadians pay for prescription drugs. There is no question about it. It is why pharmaceutical companies hate the idea. It is why they have spent so much money lobbying the government to stop it. Unfortunately, they have done that far too successfully, and it is why New Democrats are here to continue pushing and to provide the political will to drown out the lobbying efforts of the pharmaceutical industry, because we know that, through good public policy, we can reduce the amount Canadians pay for drugs. That ensures not only that they get extra income, but also that corporations cannot just take that income by raising their prices, which is what has been happening in the oil and gas industry.
It is what has been happening in the grocery industry. If people want proof of that, they need look no further than today's news, where Canada Bread Company has admitted to price fixing with Weston Foods. The company paid a $50-million fine after having pleaded guilty. What about the other companies that were involved in that, and what about Canadians who have been looking at food prices over the last two years? People know very well that many companies have been raising their prices over and above the additional cost to the companies, whether it is for oil and gas to heat their home or it is for their groceries. I think we all have a legitimate suspicion that Canadians have not been treated fairly by corporate Canada.
With respect to creating more disposable income, Conservatives love to say that if the government taxes corporations, they are just going to pass that on to the consumer. If it cuts Canadians' taxes, corporations are just going to raise their prices. Does that mean we are stuck and that there is no hope and no way forward? No, it does not, because through good public policy we can reduce the cost of child care in a way that means people cannot just up the price, because we are regulating the fees and we are providing subsidy to make sure the organizations offering child care are not doing it at an exorbitant price. It is why New Democrats have a very clear and stated preference for non-profit delivery in child care, because we think that once we incorporate that profit motive, we are exposing Canadians to the very same greedy taking that we have seen in the oil and gas sector, in the grocery sector and elsewhere. That is the way. If we can control the cost of something that people cannot do without, that puts more money back in people's pockets in such a way that it cannot just be taken back out again.
It is why I supported the Manitoba Public Utilities Board, for instance, which has been very successful, over decades, in regulating the price of auto insurance and Manitoba Hydro. Interestingly, it is a body that the current Conservative Government of Manitoba has been trying to wreck, and to impede from doing its job of looking closely at requested price hikes by these crown corporations. It is ironic, given that one would think it would be the Conservatives most of all who would want a hawkish oversight agency to be looking at crown corporations and ensuring fair pricing. However, in fact, they are undermining the Public Utilities Board. I think it is important. We could actually use something like that nationally for the price of oil and gas, to ensure that when Canadians are going to the pumps or when they are heating their home, they can be assured that they are getting a fair shake on the price, and that the fact that it is the long weekend would not dictate whether they have a hole in their budget at the end of the month.
It is why dental support is important. With dental insurance, we can ensure that people are getting a service which they otherwise would not get at all. We know that, too often, because of people's socio-economic status, they have not been able to access dental care. For those who have been able to pay, this means they are going to be able to get more service without simply seeing corresponding hikes in prices.
New Democrats have a very settled opinion on what the way to fight inflation is: through good public policy and public investment so Canadians are working together and co-operating to provide the essentials of life and create more room for disposable income in their household budgets, instead of simply cutting taxes for everyone. Cutting taxes for everyone disproportionately benefits the most wealthy and then makes it harder to provide services for everyone, and it runs all the same risks of inflationary pressure on the economy that the leader of the Conservative Party is so concerned about when it involves public funds.
Here is another way in which that matters, and another way in which there is a very close resemblance between, for instance, the housing policy of the Liberal government and the housing policy of the Conservative Party. Neither one is willing to call out the role of corporate greed in housing. The leader of the Conservatives sometimes, maybe, kind of makes a passing allusion to it but is quick to say that somehow it is the fault of government. The housing market is working exactly how it was set up to work in the mid-1990s, with the blessing of Liberals and Conservatives. They decided they wanted to make it more of a financial market. They wanted a commodity-based approach to housing. That has been working. The national housing strategy, frankly, has been largely a joke in terms of increasing supply for affordable housing, and it has done nothing to impede the kind of harmful investment behaviour we see in the market.
The Conservatives are not proposing to do anything about that. The idea that, by simply balancing the government's books, we are going to see a significant change in the housing market or houses becoming more affordable is a joke. That is not how this is going to go. There are very deep pockets that do not rely on anything the government does in order to be able to spend in the real estate economy, acquire houses and acquire apartment blocks.
Where is the leader of the Conservatives when we talk about the travesty of buildings like Lions Manor on Portage Avenue in Winnipeg, which used to provide affordable housing? It has just been acquired, not with government money, but by a giant corporate landlord that came in, bought the building and is evicting the tenants. One does not have a serious strategy to fix the problem of housing in Canada if one cannot criticize the corporate sector and the role that it is playing in jacking up the price of housing. It cannot be done. It is not serious.
Then we look at things that the previous Conservative government did to put money in the pockets of corporate Canada, never mind the corporate tax decreases, which were substantial. The Conservatives sold the plans for the CANDU reactor, which was world-leading technology. They love to talk about nuclear, but do members know that they sold that to SNC-Lavalin for pennies on the dollar? It was $75 million, but it came with a bunch of tax benefits and other things. I think they sold it for a final net cost of about $15 million. I do not know what it costs to build a CANDU reactor, but I know that it is measured in billions and not millions to get the intellectual property behind that. Before the Harper government, it actually belonged to Canadians, so that when somebody decided to build a nuclear reactor on the CANDU model anywhere in the world, Canadians could benefit. I think that is a real travesty. It is just an example of how the Conservatives are no better than the Liberals when it comes to stuffing the pockets of corporate Canada at the expense of Canadians.
I am mindful of a leader who does actually have so many policy similarities to the Liberal government. I could go on about that. I recall that, in the fall of 2021, when the leader of the Conservative Party was their finance critic, we were having a debate about the mandate of the Bank of Canada. Its mandate is to fight inflation, and it has been for a long time; it is to keep inflation at a 2% target.
We talked about what the impact of maintaining that mandate would have on Canadians if we saw higher interest rates. We said that if that was the only thing the Bank of Canada was going to do, it would jeopardize strong employment by raising interest rates to get inflation under control. It would put Canadians in jeopardy of losing their homes by raising interest rates in order to combat inflation, instead of having a more nuanced mandate, as many central banks around the world do. They keep an eye on strong employment and the effect of rising interest rates on the ability of folks to stay in their homes and to keep making payments on their mortgages.
The current leader of the Conservative Party was very clear at that time. He wanted the mandate to stay narrowly on the 2% inflation target; that was it. What did the Liberals do? They acquiesced. I was on a panel with them, shot out in the foyer, at the time. I remember, because when I said that actually the Liberals had done everything he said he wanted them to do, he mused about legal action against me for having shown the very direct link between the Liberal Party's actions and the Conservative Party's advice. I said that it would be a bad day for Canadians if we did experience inflation, because the Bank of Canada would raise interest rates and put them out of their homes.
Let us not pretend that the leader of the Conservative Party has not played a very important role in keeping the Bank of Canada on a mandate that is causing these increased interest rate hikes. It is not the only thing, but the fact that it does not have a more nuanced mandate is a product of his advice and the actions of the Liberal Party. Canadians are not benefiting from the kind of nuance that has been built into other central banks' mandates.
That is why I stand here today to say that there are more ways to fight inflation than what the Conservatives have put in here. In fact, what they have put in here goes squarely against New Democrats' approach to fighting inflation. New Democrats' approach has everything to do with putting money back in the pockets of Canadians but doing it by ensuring that all the things that they have to buy, such as child care, prescription drugs, dental care, housing, are actually brought down, instead of what we see in the motion today. That is just to cut those programs in order to balance the government's books.
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- Jun/21/23 7:13:51 p.m.
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Mr. Speaker, it is always a pleasure to listen to the member speak. I know he has a good command of these issues, and he is respected for his work on the finance committee in particular.
I do agree very strongly with his take on how to combat inflation, when he says that the approach should be to focus on those things that people cannot do without, such as dental care and child care. I am glad to see that the government, with the support of the NDP, has moved in that direction. We see the benefit to thousands of Canadians who are being supported along the way in both of those areas.
I do want more clarity on something. I do not ask this in a combative way; I am simply interested in the NDP's position. The member raised the issue of corporate income tax. He seemed to suggest that the NDP position would be to raise those rates back up to close to 30%. What is the position of the NDP on that specific matter? I hear some, not many, New Democrats who have a very pro-business view; sometimes they present themselves in that way, and one would expect a championing of a lower rate of tax. However, I did not hear that from this member.
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- Jun/21/23 7:17:10 p.m.
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Mr. Speaker, I will not do that today, but we have been very clear that the day may come.
We heard a Liberal member talking before about inflation and the hardship that Canadians are experiencing because of that. Any time they talk about this, they start listing the things that the NDP made them do, including the GST rebate, dental care, action on child care and pharmacare. The discriminating factor is that as long as we can continue to push the Liberal government into doing things to benefit Canadians in this difficult time, things that I firmly believe they would not be doing with a majority, we will continue to support the ongoing work of this Parliament as opposed to another one.
The day will come when this Parliament ends. What we are doing now is setting up Canadians to get some meaningful relief from inflation in a way that companies cannot simply take back without price increases. I think we are paving the way for a strong majority New Democratic government in Canada.
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- Jun/21/23 7:40:26 p.m.
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Madam Speaker, I rise in this place today to speak to the opposition motion put forward by the Conservatives to address the cost of living crisis facing Canadians. This is a crisis that the government has done nothing to fix. In fact, it is the Liberals' inflationary policies that created the crisis in the first place.
What has their response been? They have continued to run high deficits, pushing inflation to 40-year record highs. The Prime Minister excused this reckless spending by claiming that interest rates were at record lows and would remain there for many years to come. Now we have record debt, record inflation, and interest rates that have continued to rise despite the Prime Minister's prediction. This is causing pain for Canadians across the country, as their household budgets are being stretched thinner and thinner under the Liberal tax-and-spend plan. While Canadians are struggling, the government continues to increase taxes, making the essentials more expensive.
The Liberals have been persistent in their misinformed statements that the carbon tax is a net positive for Canadians. The Parliamentary Budget Officer's reports on the two carbon taxes have rejected this notion. The first carbon tax the government introduced will end up costing Canadians up to 41¢ per litre of gas. The added second carbon tax will cost another 17¢ per litre. Adding GST, this comes to 61¢ per litre. This will cost Saskatchewan families an extra $2,840 each year, but some Canadian families will pay up to $4,000 for the combined Liberal carbon taxes in other parts of the country.
This is a slap in the face to Saskatchewanians and Canadians. The carbon taxes have only made life more expensive for Canadians and have cost them more money for no results. The carbon taxes were never an environmental plan; they were a tax plan to fuel government spending.
Even while Canadians are struggling, the government cannot show fiscal restraint. It has no respect for taxpayers, as it continues to ramp up its inflationary spending. When the Prime Minister formed government, the national debt was $612.3 billion. By the end of this fiscal year, the federal debt is projected to reach $1.22 trillion. This means the Prime Minister has doubled the national debt in just eight years.
The national debt will break down to $81,000 per household in Canada. Additionally, debt-servicing costs have been growing just as fast as the government's deficits. This fiscal year, it is projected that the cost to service the national debt will be $43.9 billion. This cost is quickly approaching the amount of money given to the provinces through health transfers.
Canadians are deeply concerned about the economic policies of our country, except, it would seem, those sitting on the government benches. Most Canadians do not have a trust fund to fall back on, so they need to be careful with their money. The government needs to start demonstrating respect for hard-working Canadians by being good stewards of the public purse.
Without a plan to eliminate the deficits and balance the budget, inflation and interest rates will continue to rise and hurt Canadian families across the country even more. The Liberals have not put forward a plan to do this. Instead, they poured more gasoline on their inflationary fire by adding more than $60 billion in new spending. That is $4,200 per Canadian family. This spending is driving up deficits and consequently increasing inflation.
The Bank of Canada, which was widely predicted to lower interest rates, instead raised them from 4.5% to 4.75% following the tabling of the Liberals' budget. That is why the Conservatives are now calling on the government, through this opposition motion, to return to balanced budgets and give Canadians a break.
Now we are receiving warnings from the International Monetary Fund that Canada is the country most at risk of massive mortgage defaults. Across Canada, average mortgage payments have increased by 122% since the Prime Minister took office. Despite this warning, we see no plan from the government to get inflation under control to avoid a potential mortgage default crisis. Instead, the Liberals are burying their heads in the sand, leaving Canadians to their own devices as they spend away their future. This is not sustainable and is pushing Canadians closer to the edge.
Canadian households now have the most debt as a share of GDP of any country in the G7. This is not a record we want to hold. There is a solution. The Liberals must eliminate the deficits and balance the budget in order to bring down inflation and interest rates. I know this may not be easy for them, as they seem to know only one economic policy, which is to raise taxes and print money, but the fact is that if the Liberals were to put together a plan to return to balanced budgets and eliminate deficits, lower inflation and interest rates would follow. However, this is not something they can wait to do. We are already at a crisis point.
Just last month, the food bank in Saskatoon held a food drive, as the usage of food banks has reached a new record of 24,000 people a month. Across Canada, there are 1.5 million more people using food banks on a monthly basis, not to mention that one in five Canadians is skipping at least one meal a day because they cannot afford to eat. This is because food price inflation is also at a 40-year high. “Canada's Food Price Report 2023” has predicted that a family of four will spend up to $1,065 more on food this year. With many Canadians struggling paycheque to paycheque, the rising cost of food is breaking their banks.
The dream of home ownership is also fading fast. When the Liberal government took power, Canadians spent 39% of their paycheques on their monthly housing payments. Now they spend 62% of their paycheques. This is reflected by the growth of average rental and mortgage costs. Mortgage payments have doubled, from $1,400 per month to over $3,100 a month. Rent across Canada has doubled, from $1,172 to $2,153 for a two-bedroom apartment, and it has more than doubled in Canada's largest cities. This is why we must get interest rates under control.
For years, the Conservatives have warned the Liberal government that its out-of-control spending has consequences and hurts Canadians across the country. However, it responded with the infamous quote from the Prime Minister that budgets will balance themselves. We are now eight years into the government's tenure and have seen the effects of the Prime Minister's so-called self-balancing budgets. It has been a disaster for Canadians.
According to an article last month from the Financial Post and the Macdonald-Laurier Institute, over 10 years, real GDP per capita growth has been at its lowest since the 1930s. The article states, “This extended period of slow growth has widened the gap between per capita growth in the United States and Canada, demonstrating that the causes of our slumping growth are domestic, not external.” The Liberals can no longer blame external factors for their own failures. The economic troubles our country now finds itself in are a result of the failed economic policies of the government.
In conclusion, I think it is in the best interests of every Canadian that this House call on the government to rein in its spending. It is time for the government to show the fiscal restraint that was promised by the Minister of Finance prior to the introduction of her latest budget. Instead of cancelling Disney+, let us cancel the deficits, axe the taxes and balance the budget.
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- Jun/21/23 8:57:33 p.m.
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Madam Speaker, could my valued colleague from Renfrew—Nipissing—Pembroke just remind Canadians why a carbon tax is a tax on everything, why 61¢ a litre for the cost of fuel is going to make life even more unaffordable? Would she remind them that the policies of the current government are a disaster for inflation and that we need to get back to balanced budgets?
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- Jun/21/23 9:25:44 p.m.
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Mr. Speaker, the member talked about getting help to people, but what has the government done? When it comes to seniors, the government increased the OAS by 10%, but only for those who are over 75. It created two tiers of seniors. The Liberals decided to neglect those seniors who are between 65 and 75. This is despite the fact that over a third of women over 65 are living in poverty. That is actually shameful in a country like this. The PBO costed out expanding it to include those seniors who are between 65 and 75, and it would cost $1.4 billion. Guess how much that is. It is a half-point increase in corporate tax.
What did the Liberals decide to do? They decided to choose corporate welfare instead of taking care of seniors, leaving the third of women who are over 65 hung out to dry. The GST rebate that people are going to see in July is to help just with inflation and groceries, never mind this increase that is needed. When will the government decide to increase corporate taxes to take care of those who need help the most, including seniors over 65, women and single women, one-third of whom are living in poverty in this country? It is unacceptable, and it is an injustice.
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- Jun/21/23 9:37:53 p.m.
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Mr. Speaker, I appreciate the compliment. I know everybody is waiting with bated breath to hear what I have to say next. I will try not to disappoint.
The fact of the matter is the IMF is now urging Canada to bring a debt anchor and to keep fiscal policy tight. What does that mean, keeping fiscal policy tight? It means moving toward balanced budgets, not just relying on what they might call fiscal guardrails or reducing debt-to-GDP ratios, but actually having a hard fiscal anchor. This is the IMF talking, not me. A hard fiscal anchor. What they mean is a plan to get back to balanced budgets.
The Bank of Canada, to its credit, has been engaged in a policy of fiscal tightening, trying to reduce the money supply and raising interest rates, trying to grapple with the scourge of inflation. The problem is that the fiscal policy of the Government of Canada is running counter to that.
We have loose fiscal policy in this country, meaning that billions and billions of dollars are still going out the door of the budget this year. It was $495 billion, almost half a trillion dollars. Mr. Speaker, I know you have been here for a while, and I know you know that is a lot of money. It is way more than it was even in 2019.
We have a real issue in this country, and I think we need to bridge the gap. We need the government and its coalition partners to take this concept seriously, go back to the drawing board and at least come back with a plan. That is all this motion asks for, not to balance the budget tomorrow or at two o'clock this morning when we are voting on the appropriations, but to come back soon with a plan, just like they had for 2027, to bring the budget back into balance.
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- Jun/21/23 9:39:54 p.m.
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Mr. Speaker, we often hear from the other side that the price on carbon is fuelling inflation. However, I look at reports of the Bank of Canada Governor Tiff Macklem's appearance before the finance committee in February.
I will quote a newspaper article. In terms of the impact of the price on carbon on inflation, he said that, “prescribed annual increases to the price on carbon add about 0.1 percentage points to headline inflation.” That is not very much. Also, “He added later that scrapping the carbon tax completely would reduce inflation by half a percentage point in the year that it was done, but would not have any impact on inflation in future years.”
The idea of always coming back to the price on carbon as the culprit contributing to inflation is a bit misleading, really. It does not reflect the thoughts of the Bank of Canada's governor.
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- Jun/21/23 9:41:20 p.m.
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Mr. Speaker, my colleague talked about a plan to return to balanced budgets. We agree that governments need to be able to plan ahead. It is only right for us to be able to see a plan.
My colleague is worried about inflation. Pensioners on fixed incomes and seniors are struggling to make ends meet. Does he not think that instead of giving $20 billion in subsidies to oil companies that made $220 billion in profits in 2022, we should take some of that money and increase old age pensions and ensure that our seniors can live better?
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- Jun/21/23 9:54:31 p.m.
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Mr. Speaker, through you, I would like to ask the member opposite some questions.
First, I thank him for that very fact-filled discourse. He spoke authoritatively on a number of fronts, and I would just like to check some of those facts.
He started off by saying that we were running bigger and bigger deficits every year. In 2021, the deficit was $328 billion; in 2022, it was $90 billion; and it is projected to be $40 billion this year. Could he reconcile his statement with these facts?
Second, he said that we do not know where this is all going to end, and it is true, we do not; the future is always uncertain. However, the Bank of Canada expects inflation to come down below 3% by the end of the summer and interest rates to follow in decline.
Third, he said that printing money was the cause of inflation. I understand that this is one economic theory, and it is the economic theory that the Conservatives follow. However, many economists have said that, in fact, the war in Ukraine and the COVID pandemic have been the causes of inflation worldwide.
Could you comment on a few of those apparent contradictions to what you said?
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