SoVote

Decentralized Democracy

House Hansard - 272

44th Parl. 1st Sess.
January 31, 2024 02:00PM
Context: House Hansard - 272 - Jan/31/24
Mr. Angelo Iacono (Alfred-Pellan, Lib.)
  • Jan/31/24 3:10:44 p.m.
  • Watch
Mr. Speaker, affordability is a major concern for all Canadians. To support them and ensure that help is available, the Minister of Finance presented the fall economic statement. Can the Prime Minister remind the House of the important measures contained in the fall economic statement and why the House needs to adopt them quickly?
54 words
  • Hear!
  • Rabble!
  • star_border
Context: House Hansard - 272 - Jan/31/24
Mr. Greg McLean (Calgary Centre, CPC)
  • Jan/31/24 6:37:38 p.m.
  • Watch
Madam Speaker, once again, I am rising in the House not only on behalf of the residents of Calgary Centre but also on behalf of Canada's finance industry and others who are lamenting the disastrous course our country is on as we dither away our national advantages. Finding better economic solutions for Canadians is what I seek to do as a representative in the House. It is a focus. It builds on career expertise. It is part of my party's fundamental path forward to fix these budgets. However, in order to fix the budgets, the budgets have to want to be fixed, to put it lightly. Here I am again looking at a brick of legislative changes, along with a self-congratulating narrative about all the great outcomes Canada is experiencing, but not so much. The bromides that came with the minister's speech on this latest tumble into economic irrelevance might play well for ostriches, but for anyone paying attention, there is actually very bad economic news. I do not want to spend a whole speech on the nonsense pats on the back the Minister of Finance delivers in her own performance review, but I would be remiss in not publicly rebuking at least some of the financial fiction that she uses to build a case that Canada is somehow doing well economically, all while real GDP is down and GDP per capita is down. The minister seems to like the debt-to-GDP measure, and her target not to be exceeded over two years ago now was 40%. Although this number alone was much higher than it has been in years, that number becomes less relevant with each budget cycle that runs that ratio higher. Again in this fall economic statement, it will be up to 42.7% in the near future. That ratio, by the way, is irrelevant for anything but comparison purposes with other countries that are going broke. The minister and her government colleagues seem to like to even change that metric so that it suits their ends and looks good comparatively. How do they do this? I am sure with ample support from a litany of bureaucrats, they add back the holdings in Canada's pension plans to their net debt numbers: the CPP, the Canada pension plan; and the QPP, the Québec pension plan. That is a total of about $700 billion. None of that belongs to the government. It is managed at arm's length for the benefit of Canadians. Taking a $1.3-trillion debt, federal only, and taking away more than half that debt from the pockets of Canadian retirees is a nice trick calculation. There is always an offsetting rule in finance. If the government uses Canadians' retirement savings to offset its own debt, that leaves a liability owed to Canadians that would be unfulfilled. That $700 billion is not a free pool of funds to address growing government debt. It belongs to Canadians who have contributed and who are counting on those funds for their retirement. What we find out from Canadians very quickly is that, if they find out their governments are trying to mess with their retirement savings, they are offside. This year, the government is again increasing the amount that Canadians need to give from their paycheques to the CPP, an effective increase in a payroll tax. This is not the only way the government is changing the availability of pensions. In this fall economic statement, the government is changing the way pensions are allowed to operate. There are a couple of very important changes to pension oversight. Pensions will now be overseen by the Office of the Superintendent of Financial Institutions, or OSFI, as we call it. That is a federal regulatory body designed to ensure that Canada's banks are operating with the interests of the Canadian financial system and financial consumers in mind. Why? OSFI is overseeing a move to be the government's agency in charge of moving our country's financial system to a new norm of green finance, otherwise known as “sustainable finance”. I have seen a lot of finance in my career on both sides of transactions, investor and agent. All of these moves toward green finance and sustainable finance are just ways of altering who gets paid from whom, as in who the taxpayer is subsidizing to make money. The Minister of Finance openly states in this fall economic statement that Canada is a leader in green finance, a leader in subverting financial math, like the outcome changes if the math is just tweaked a bit. There is no secret math that makes this work. There are only payers and payees; those who get the funds and those who give the funds. The government has been relentless in doling out funds for industrial strategy, but the equation does not change, and the irreversible law in finance is always “follow the money”. The money flows right into the pockets of the government's friends. This needs to end. We need to fix these budgets. Our job here is to fix these budgets. Let me give an example, because my colleagues across the way will want it, of what actual sustainable finance is. I will refer to a company in Calgary called Enbridge. It is a very good company on sustainable finance. It sets metrics for how it is actually going to perform for its investors' aims, and that allowed it to reduce its cost of capital by about 25 basis points. That means if it hit a number of metrics along the way, including DEI, which is diversity, equity and inclusion, in its board, in its makeup and in everything else the investors are looking for, the investors in that bond were willing to accept 25 basis points less than the market rate in order to be there. That is what we call sustainable finance. Enbridge is a Canadian leader in that sustainable finance mechanism. It has nothing to do with equity. It has to do with market debt and getting a bit of a premium there, a bit of a discount to the investors, about how they can actually participate and move the needle, but those funds are few and far between. Enbridge has been very good at making sure it meets those requirements and serves that market well. I want to talk about in this budget, as opposed to just criticisms, the Canada growth fund. It is an element, as we know, in the fall economic statement: $15 billion new dollars. There is no organization, no way of actually saying what its mandate is, and nothing that compels it to do anything outside of pooling $15 billion of funds and spending it on behalf of the government. What will it do exactly? It will not do what the Canada Infrastructure Bank does. I heard my colleague across the way complaining about our position, that we are going to do away with the Canada Infrastructure Bank. It is not a secret; he called it a secret agenda. It will not do what the strategic investment fund does, with billions of dollars going out to chosen industrial strategies that are accomplishing who knows what in the long run. It will not do what the layers and layers of government support to fudge economic numbers do to push into new economic opportunities in which we have, as Canadians, no economic advantage and are following other countries that have much more expertise in this sector. Let us pretend Canada's economic advantage currently is not real and move to a fiction that we have a different economic advantage. Let us spend, so far, $135 billion in the effort. Let us go back to the Canada growth fund; $7 billion of that $15 billion is being allocated toward carbon contracts for difference, the new subsidy du jour. I do not know if any of the bodies on that side of the House even understand how that works, but let me try and explain. Contracts for difference hail from the financial world. They help to hedge against volatile prices, e.g. for shares or commodities. The seller and the buyer agree on a strike price for a certain product at a certain time. If the agreed price is below the market price at that time, the buyer has to pay the seller the difference between the agreed price and the market price. If the market price is higher than the strike price, the opposite happens: the seller has to pay the difference to the buyer. So this instrument is a good way of alleviating [some of] the risks of investing. Unfortunately, it has many risks associated with it as well, and those risks have been detailed in many jurisdictions. Such socialized subsidies could lead to short- and long-term distortions, reducing the effectiveness of the price signal as an operational and investment decision driver. In energy and emissions markets, market participants can already use the available short- and long-term trading patterns, but additional support for low-carbon technologies is already granted through several instruments aiming to mobilize funding. I will reiterate that the government has numerous instruments along the way, all of which are failing Canadians and making it much more expensive to do things in Canada. What is the accomplishment? The accomplishment is moving our industries offshore and making Canada less competitive on the world stage.
1584 words
  • Hear!
  • Rabble!
  • star_border