Hon. Leo Housakos: Senator Loffreda, will you take a couple of questions?

Senator Loffreda: Always my pleasure to take your questions, Senator Housakos.

Senator Housakos: Will the senator take another question?

Senator Loffreda: Yes.

Hon. Leo Housakos: Government leader, I have frequently risen through the years to ask you, and your predecessor, regarding Minister Mélanie Joly’s electoral commitments in a number of elections and, actually, even in writing. She has committed in writing and promised the Canadian-Armenian community — on many occasions — to open up an embassy in Armenia. Despite the fact that your predecessor Senator Harder once said to me that electoral promises are not the basis upon which a government determines where they open up an embassy, in September, with great fanfare, we saw Prime Minister Trudeau, with great enthusiasm, announce to the community that he would be opening up an embassy in Armenia. Yet, just a couple of weeks ago, in the middle of the night, with a lot less fanfare and a lot less enthusiasm, the department announced that it won’t be an ambassador, and it won’t be an embassy; it will be a consul. There is a big difference.

Government leader, can you explain to us why is it that Prime Minister Trudeau continues to backtrack on promises made to the Canadian-Armenian community?

Senator Housakos: I appreciate that, government leader. I want to remind this chamber that in September when the Prime Minister made the announcement, it was on the day commemorating Armenia’s independence, and celebrating the thirtieth anniversary of diplomatic relations between Canada and Armenia. The Prime Minister, again with great fanfare, talked about how we need to strengthen people-to-people relationships, diplomatic relationships, economic relationships and so on and so forth between our two countries. But, again, we see that, when it counts, the Prime Minister says one thing and does another.

We see a pattern with this Trudeau government where their priority seems to be in making grand announcements and running victory laps — rather than taking action and getting things done. My question is very simple: Can we get a commitment from the government that they will honour their ongoing electoral promise and open up an embassy — and stop putting on a show and take action?

Senator Housakos: Thank you, Senator Loffreda, for expressing very eloquently the government’s point of view as independently as you might have done. I will, independently of course, ask some questions on behalf of taxpayers in this country — starting with the fact that we saw the Auditor General put out a report very recently calling into question $27.4 billion of COVID spending that you allotted the government. Of course, we participated in getting a lot of that COVID spending out the door very quickly. Clearly now, the Auditor General has questioned the transparency of a lot of that spending.

What in this bill — what mechanisms — and what action has the government taken to make sure that a lot of the programs you just highlighted, and a lot of the new spending that will be taking place, will have better checks and balances than, clearly, the previous couple of budgets that we approved?

Senator Loffreda: Thank you for the question, Senator Housakos. It’s very relevant as, in my previous life, I was an auditor — way back more than 20 years. I started in 1984. How many years is that? I lost count. It’s 38 years, right? So it’s over 20 years.

But I think what does matter here is there are a lot of measures that are there for tax avoidance. A lot of measures are there to show that fiscal responsibility is imperative. I think the government is showing that.

You are right; the Auditor General did state that there has been a lot of COVID spending that has been distributed that must be recovered. We have to recover those funds, so we have to put measures in place to adequately look over as to how they could be recovered.

But this bill — Bill C-32 — is basically the Fall Economic Statement. It’s going forward. It’s putting in measures of tax avoidance, updating the Income Tax Act and looking at ways that we could go against tax avoidance. I’m fully in support of these measures in the bill. Hopefully, in the future, we will have additional measures that will be productive, and go against the unnecessary COVID spending that did occur.

Senator Housakos: Senator, of course, in the budget you talked about the Canada growth fund. Well, I can tell you that the only thing we have seen, over the last few years, that has been growing is — number one — deficits in this country because we’ve seen this government run deficits year after year. We have seen growth in the debt. We have a historic debt right now in this country — thanks, of course, in large part to successive budgets this government has passed.

Of course, as a former auditor yourself and a banker, you must be very concerned right now that, over the last couple of years, we’re spending significantly more to service the debt than we did a couple of years ago. As interest rates continue to climb, in large part because of inflationary policies — and as you have seen in this particular bill as well, you talk about stimulants. You talk about injection of funds which, in effect, are increasing taxes. You talked about a program where you’re taxing banks and insurance companies, and somehow the government makes it look like they are taxing the rich, but the truth of the matter is that will be passed on as well to Canadian consumers through higher insurance premiums, banking fees and so on and so forth.

Are you concerned that we are not doing enough to bring spending down, and to control the debt and deficit — and, as a result, as interest rates are growing, curb the interest we’re paying on the national debt?

Senator Loffreda: Senator Housakos, there is always a concern. If I take a look at the last financial statement — as you know, I love the numbers — our debt stands at $1.134 trillion as of March 31, 2022. The federal debt-to-GDP ratio was 45.5% — down from 47.5% in the previous year. As reported by the International Monetary Fund, or IMF, Canada’s total government net debt-to-GDP ratio, which includes the net debt of the federal, provincial, territorial and local governments, as well as the net assets held in the Canada Pension Plan and the Quebec Pension Plan, stood at 33.2% in 2021. This is the lowest among the group of G7 countries, which the IMF expects recorded an average net debt of 101.2% of GDP the same year.

Obviously, interest rates are increasing. Like I said, this bill brings in net revenues. But to return to the Canada growth fund, because that’s the more relevant question here in this bill — in our committee, there was worry, or concern, about the permanent structure not being in place; the $2 billion is for the purchase of non-voting shares. But in my experience with many technology companies, the largest challenge to an acquisition was the integration.

In this case, the Canada growth fund — and I would always ask the technology companies, “Why are you merging, or why are we acquiring the company? Why don’t we have a clean slate or a blank sheet?” Because technology evolves so quickly that the equipment is obsolete; the ideas are obsolete. So it’s important to have a clean slate, move it forward, come up with creative new ideas and get the proper CEO and proper board in place.

The Canada growth fund, in this situation, is the right decision. It’s going forward. The technical backgrounder says it all.

I’m comfortable that the $2 billion is a fine investment. It’s to keep up with our major trading partner, the U.S., and many countries around the world. I have the list here of all the countries that have invested around the world. We’re just investing a portion of that. If we look around the world, the European Union has invested €26.2 billion, the Netherlands has invested €13 billion, France has invested €7 billion and Australia has invested $10 billion.

So I think that $2 billion for the Canada growth fund for start‑up costs to put it together with a clean slate and technology is important because the infrastructure is obsolete. At times, it’s important to start with a clean slate, a clean sheet of paper and the results are much better.

Like I said, the financial statement is here. I could spend 10 minutes going through it. But what is important is that we are in a better financial position than other G7 countries. We rank at the top of the list in many aspects of many measures and metrics. Inflation is not the only metric to measure economic prosperity. Other measures do so, such as job growth and job creation. There are 1 million job vacancies in Canada, and there are 1 million people not working in Canada. It’s important to bring solutions in this chamber and to look at solutions.

I’m comfortable with the bill. Thank you for your question.