Hon. Tony Loffreda: Will Senator Marshall take a question? Thank you for your speech, always very insightful.

Would you not agree that a common first step for every corporation and investment is the acquisition of shares, and this is exactly what’s going on here? We’re acquiring $2 billion in shares for a Crown corporation, a subsidiary that is wholly owned by Canada Development Investment Corporation at this time, and after the acquisition of shares, we will put a CEO and a board of directors in place, we will put the structure in place. There is a technical backgrounder that is very detailed as to the objectives and values.

As I mentioned in my speech, in my experience — I was saying 20 years of auditing, and I always think I’m 40, but I’m 60, and 1984 is a long time ago — the top challenge with mergers and acquisitions was integrating the acquisition, getting the values: Do they have our values? Our values will be different.

This is a new Crown corporation. We’re acquiring the shares. We have a clean slate, as I said in my speech, and going forward, we can build on it, get the right CEO and board of governors. Wouldn’t you agree with that? Wouldn’t you agree that a common first step is the acquisition of shares? How else could it be done?

Hon. Tony Loffreda moved second reading of Bill C-32, An Act to implement certain provisions of the fall economic statement tabled in Parliament on November 3, 2022 and certain provisions of the budget tabled in Parliament on April 7, 2022.

He said: Honourable senators, I rise today at second reading to speak to Bill C-32, fall economic statement implementation act, 2022. I am honoured to serve as sponsor of this important piece of legislation that includes measures announced in the Fall Economic Statement dated November 3 as well as other previously announced measures from Budget 2022.

[Translation]

Before I address some of the important measures in the bill, I’d like to begin by saying a few words of thanks.

First, I’d like to thank Senator Gold and Minister Freeland for their confidence in allowing me to serve as the Senate sponsor of this bill. I also thank them for all the support they’ve given me and my office.

Second, a big thank you to our colleagues on the Standing Senate Committee on National Finance, ably chaired by the Saint-Léonard sensation, Senator Mockler. We began our pre-study of Bill C-32 on November 22, and since then we’ve held eight meetings, received more than 50 witnesses and a dozen briefs, and sat for close to 15 hours.

Third, I want to thank the Standing Senate Committee on Indigenous Peoples for its assessment of Division 3 of Part 4 of Bill C-32, which I’ll touch on briefly today. I intend to give it more coverage in my speech at third reading.

[English]

As all honourable senators know, Bill C-32 contains 172 pages, 4 parts and 29 separate measures. I will go through them all today — no, I’m just kidding.

The first 21 measures are found in Part 1 and make changes to the Income Tax Act. There are many good measures in the bill that will help families and individuals cope with the increasing cost of living. Other measures are mostly technical in nature or consequential.

For everyone’s sake and sanity, I will not address every single measure in the bill. After all, I only have 45 minutes. It’s in these moments I wish I was the Leader of the Opposition with unlimited speaking time.

Rather, I will focus my remarks on what I consider are key measures in Bill C-32 that have the greatest potential in helping Canadians weather the inflationary storm we are going through right now, especially as we learn to live with COVID.

I will end my remarks by offering a few thoughts on the economy and inflation in general.

The dream of home ownership is becoming increasingly unaffordable for too many young families and middle-class Canadians, which is why a suite of measures appear in Bill C-32 that target home affordability. They include the anti-flipping rule, the new Tax-Free First Home Savings Account, the homebuyers’ tax credit and the Multigenerational Home Renovation Tax Credit.

The new anti-flipping rule will help ensure profits from flipping homes are taxed as business income if the seller held the property for less than 12 months. Exceptions would apply for individuals who sell their home due to certain life circumstances like death, disability, divorce or a new job, for example. This would ensure that investors flipping houses just for the sake of making a profit pay their fair share, in turn helping reduce housing prices for Canadians who want to buy a property to live in. The government expects this measure will affect about 3,300 taxpayers per year and increase its tax revenue by about $15 million annually.

With the new Tax-Free First Home Savings Account, the government wants to help Canadians who are struggling to make a down payment by encouraging them to save for a home by giving prospective first-time home buyers the ability to contribute up to $8,000 per year on a tax-free basis, with a lifetime limit of $40,000. The government is working with the Canada Revenue Agency and financial institutions to develop the necessary systems to administer this new account. Regardless of when in 2023 the FHSA is set up, Canadians will be able to contribute the full yearly amount of $8,000.

In Budget 2022, the government also proposed to double the First-Time Home Buyers’ Tax Credit from $5,000 to $10,000. Measure (j) in Bill C-32 seeks to implement this promise, which is expected to cost the government approximately $775 million over 6 years, and it should benefit approximately 200,000 individuals per year.

In response to a question from Senator Boehm on this tax credit, officials told us that the tax credit is a flat rate, instead of a flexible credit adjusted based on regional differences, because it will be easier for the CRA to administer. In the end, it was a policy decision by the government.

Measure (l), the Multigenerational Home Renovation Tax Credit, also was first announced in Budget 2022. It seeks to implement a refundable tax credit for eligible expenses to create a secondary unit to permit an eligible person, either a senior or an adult with a disability, to live with a qualifying relation. The value of the credit would be 15% of the lesser of eligible expenses and $50,000, for maximum support of $7,500. This tax credit is for a secondary unit or a self-contained dwelling unit with a private entrance.

For home renovations or alterations, individuals have access to the home accessibility tax credit.

While it doesn’t directly address housing affordability, I would be remiss if I didn’t mention the government’s decision to help students by including a measure in Bill C-32 that permanently eliminates interest accruals on Canada Student Loans and Canada Apprentice Loans.

Beginning in 2023-24, approximately 1.2 million borrowers annually will benefit from this measure. Of the Canada Student Loan recipients in 2020-21, about 61% were women, 6% were Indigenous students and 5% had a permanent disability. The average borrower will save approximately $410 per year in interest thanks to this measure. It is a $2.7 billion investment over the next five years and $556.3 million annually thereafter.

[Translation]

I want to clarify that the government also took into account the fact that Quebec, just like the Northwest Territories and Nunavut, manages its own loan program. Nevertheless, the government has set aside the necessary funds to make this measure available to new graduates in those three jurisdictions.

I wanted to mention this measure for students in the context of my comments on housing affordability because I think it can also help new graduates and tradespeople entering the job market save a little more money for their future home by taking advantage of the new Tax-Free First Home Savings Account.

The measures in the bill won’t solve Canada’s housing problem, but they should make it easier for people to become property owners. As the Canadian Real Estate Association told us, we should concentrate on increasing the available housing stock and on housing innovation.

[English]

As I mentioned earlier, there are 21 measures in Bill C-32 that make changes to the Income Tax Act. Four of those measures related directly to housing affordability.

Now, I would like to shift our attention to five other measures that will amend the Income Tax Act.

First, through measure (d), the government is introducing a new 30% Critical Mineral Exploration Tax Credit for certain minerals to support the green transition and clean technologies. These minerals are used in the production of batteries and permanent magnets, both of which are used in zero-emission vehicles. The anticipated cost of this measure is about $360 million over the next six years.

Canada can, and must, play a dominant role in the global supply chain of these essential minerals. That point was reaffirmed last week when the government published its Canadian Critical Minerals Strategy and recognized that “predictable and efficient regulatory regimes are a prerequisite for Canada’s economic competitiveness” and committed to “making efforts to streamline project assessments and permits.” This is additional good news for the mining industry, which I certainly welcome.

We were told in committee that NRCan helped develop the list of 15 minerals on the eligibility list for the tax credit. In committee, Senator Duncan voiced her support for this measure.

In response to her question about unintended consequences of this measure and regional bias, we were reminded that this is not a regional development measure. As a former banker, it will surprise no one that measures (e) and (f) have generated much commentary from my former banking colleagues.

The first measure, known as the Canada Recovery Dividend, or CRD, proposes a one-time 15% tax on banks and life insurer groups. The tax is payable on the average of 2020 and 2021 taxable income, and there is a $1 billion exemption, which would need to be split between the members of a related group. Banks and insurance companies have five years to pay, starting in 2022. The government explained that Canada’s major financial institutions made significant profits during the pandemic and recovered faster than other parts of our economy — in part due to the federal pandemic supports for people and businesses that helped de-risk their balance sheets.

The government is also introducing an additional permanent tax of 1.5% on the taxable income of banks and life insurers above $100 million. This measure was first introduced in Budget 2022.

When the Canadian Bankers Association appeared before our committee on December 6, they argued that an “efficient tax system is one that is neutral” and that it:

. . . encourages growth and innovation by letting investors, savers and employees make choices driven by where they can get the best return for their capital, labour or knowledge rather than by tax considerations.

While I appreciate the CBA’s position and agree in principle, I also believe that our banks, the bedrock of our economy, have been profitable during the pandemic and can afford to help support Canada’s broader recovery, provided, of course, that this new tax on banks doesn’t trickle down to its clients. These two measures combined, according to the government, should add about $6.3 billion over the next six years.

Third, the government is proposing to require that certain trusts provide additional information on an annual basis to the Canada Revenue Agency. This measure was first announced in Budget 2018.

Since then, the government has consulted widely and is now proposing this amendment, which is intended to help the CRA acquire sufficient information in order to determine taxpayers’ tax liabilities and to effectively counter aggressive tax avoidance as well as tax evasion, money laundering and other criminal activities.

This measure has raised concerns regarding solicitor-client privilege by the Canadian Bar Association and the Federation of Law Societies of Canada, despite the Charter Statement issued by the Minister of Justice. When she appeared before our committee last week, I asked Minister Freeland to reassure us that the measure is constitutional and that no amendments are needed in response to those concerns. She assured us that she is “very confident” that the measure is constitutional. As she said:

We think that we have struck the right balance. We are confident that there is no requirement to disclose solicitor‑client privileged information under this measure.

I will be happy to take questions on this issue later, but I do want to mention that I will speak more in depth on this matter during my third reading speech on Thursday, assuming the National Finance Committee adopts the bill tomorrow morning.

The fourth income tax-related measure I want to speak to is the change to the preferential tax rate for small businesses, provided via the small business deduction. Budget 2022 proposed to phase out access to the small business deduction more gradually, with access to be fully phased out when the combined taxable capital employed in Canada of a Canadian-controlled private corporation and its associated corporations reaches $50 million rather than the current threshold of $15 million. The cost of this measure to government revenues is expected to be $835 million between 2022-23 and 2027-28. It would allow businesses more capital to innovate, increase productivity, hire more staff or increase wages.

This measure was welcomed by both the Canadian Chamber of Commerce and the Canadian Federation of Independent Business, or CFIB, who appeared before us on November 29. Dan Kelly, President and CEO of the CFIB, told our committee that, “Two thirds of Canadian small firms are still facing additional COVID debt that they didn’t have before the pandemic. . . .” That amounts to $110,000 on average. We also learned that 17% of small businesses are at risk of permanent closure due to the damage they have taken on over the course of the past couple of years. Thankfully, and hopefully, some 8,000 businesses should likely benefit from this preferential tax rate, and that number should grow over time. The C.D. Howe Institute also supports this measure and feels it will encourage business growth.

The fifth and final measure I want to address is the increase to the disbursement quota for charities from 3.5% to 5% for investment assets exceeding $1 million. Based on available data, approximately 4,000 charities report holding over $1 million in property not used for charitable activities. I certainly welcome this change. Senators may recall I addressed this issue in the chamber last spring with Senator Gold and called for such an increase. The new rate is expected to increase expenditures on charitable programs and better ensure the timely disbursement of tax-assisted funds towards charitable purposes while allowing for reasonable asset growth.

Mr. Bruce MacDonald, President and CEO of Imagine Canada, told our committee that:

Raising the DQ may allow for more funds to flow to underserved and under-financed communities that have historically received far less funding from philanthropic foundations.

He also reminded us that total foundation assets had “. . . tripled from 2008 to 2019, going from $39.5 billion to $116 billion Canadian dollars.” He went on to say that:

Even the most conservative estimates show that approximately $200 million of new spending will be released when the disbursement quota is raised to 5% . . . .

In committee, when I asked officials why the disbursement quota is not going even higher, we were told that:

. . . increasing it to 7% or 10% increases expenditures in the short term but could have a detrimental effect on the ability of foundations to fund charitable programs over the long term.

We were also reminded that foundations were receiving interest and investment income to the tune of about 5% annually, and that number rises to 7% when the total returns or realized gains on investments are included.

Although I would have initially welcomed a steeper increase, I think the 5% is a good outcome based on the explanation we were provided in committee. It is also the rate in the United States. It will be important to monitor the impact of this measure on the sector. I have no doubt Senator Omidvar, who we all know is a champion and strong advocate for the charitable sector, welcomes this change. Also, the timing couldn’t be better since Canadians are increasingly relying on charities to meet basic needs such as food, clothing and shelter. A recent Ipsos poll from last month showed that 22% of Canadians plan on making use of charitable services, an 8% surge over a similar poll from January.

This was only an overview of five of the measures contained in Part 1 of the bill that amends the Income Tax Act. I felt these were some of the most important amendments in the bill. Quickly, I will simply mention the other measures in this part, including the phasing out of flow-through shares for oil, gas and coal activities, various tax avoidance measures, interest coupon stripping and support for business investments in air-source heat pumps.

While I support the amendments to the Income Tax Act proposed in Bill C-32, I also want to put on the record that tax policy in Canada has become increasingly more complex and convoluted. The latest edition of the act has 3,356 pages. As our National Finance Committee reported last June, highly technical amendments to the Income Tax Act further complicate the entirety of the act and make it seriously difficult for Canadians, including tax experts, to understand how changes affect them. The changes proposed in Bill C-32 are no different.

As we said at the time, we are concerned about the lack of a comprehensive review of the entire Income Tax Act. Colleagues, consider this: In November 2017, the Income Tax Act had 3,129 pages. Just five years later, the act has increased by over 200 pages. The original Income War Tax Act, adopted in 1917, only had 11 pages and was meant to be temporary. In 1944, the Income Tax Act as we know it today was adopted by Parliament and became a permanent fixture in our lives. That act had 88 pages, and 75 years later, it’s well over 3,000 pages — “the good old days,” some might say.

[Translation]

Many of the measures in Bill C-32 are designed to stimulate and inject capital into the economy as we recover from the pandemic, move toward a lower-carbon economy and compete for much-needed investment.

One of the centrepieces of the bill is the forthcoming Canada growth fund, which can be found in Division 1 of Part 4. Canada’s economic prosperity has traditionally depended on natural resources. The industrial base needs to be significantly transformed if the country is to meet its climate goals and in order to ensure long-term prosperity for Canadians.

Announced in Budget 2022, the Canada growth fund will attract substantial private sector investment in Canadian companies and projects in order to help transform Canada’s economy and seize opportunities to achieve net zero. This will help reduce Canada’s greenhouse gas emissions and create good jobs here at home.

[English]

The measure in Bill C-32 authorizes the Minister of Finance to acquire non-voting shares in an amount of up to $2 billion in a new Crown corporation that will be incorporated to administer the Canada growth fund and to requisition the amount for the acquisition of those shares from the Consolidated Revenue Fund. The amount will provide an initial capitalization for the Canada growth fund to make initial investments and to provide funding for start-up costs.

A lot has been said about this measure, and there is some uncertainty or discomfort about the fund, which is why I would like to take a few minutes to provide a bit more context. The fund is intended to be a new arm’s-length, government-owned investment fund that has yet to be incorporated. The initial $2 billion that appears in Bill C-32 will go towards the fund and help set it up as a wholly owned subsidiary of the Canada Development Investment Corporation, or CDEV. We expect that to happen as soon as possible and that the fund will begin making and attracting investments soon.

Officials before our committee explained that the Canada growth fund was announced in response to the American Inflation Reduction Act to help Canada compete internationally for capital investment. Minister Freeland also stressed that point when she appeared before us, which explains why the government is seeking these funds to start getting money out the door as soon as possible.

It is the intention of the government to introduce legislation in 2023 to establish the permanent structure for the Canada growth fund. I invite senators and the public to consult the technical backgrounder on the Canada growth fund that the government released last month. It’s a very detailed, technical backgrounder and will answer many of your questions. It sets out the governance details of the fund, including its implementation, mandate, operations, financial instruments, investment approaches, performance metrics and transparency and accountability frameworks.

When the fund was first announced last spring, it came with a $15 billion investment, so parliamentarians should also anticipate additional funding requests through future appropriations. In other words, parliamentarians should expect to review and vote on legislation that will create the permanent governance structure of the fund that will seek additional funding.

When Minister Freeland appeared before us last week, I asked her to provide our committee with additional information with respect to the Canada growth fund. As I explained to her at the time, there is a bit of uneasiness among senators in signing off on this initial sum of $2 billion when the governance structure and operational requirements are not yet established. She reminded us of the importance of having a mix of policies in our toolkit to accelerate our green transition and stimulate our economy. She explained that the fund is intended to de-risk private-sector investments in new technologies on a project-by-project basis, to create the jobs of the future and to reduce GHG emissions.

[Translation]

Minister Freeland also told us, in response to a question from Senator Gignac, that the government quickly understood three things earlier this year. She stated:

 . . . first, the green transition is essential and urgent for Canada; second, the green transition will cost a lot and we will need additional funds; and third, government funding won’t be enough. The government will have to create the conditions to attract private capital. That’s what we understood in the spring, and that’s why we created this fund.

I agree with the minister. I believe that the Canada growth fund is an important, timely measure and I’m confident it will succeed in attracting the necessary investments to help us achieve our objectives for a green transition.

For example, our committee received as witnesses representatives from chambers of commerce, small business, the hydrogen and fuel cell sector, the labour sector and the energy storage sector, and they all welcomed the creation of the fund. In fact, the representative from the Canadian Hydrogen and Fuel Cell Association urged the government not to delay implementation of the Canada growth fund and to avoid the mistakes of the Canada Infrastructure Bank, which, according to some, took a while to get off the ground.

We need investment now.

[English]

I understand the hesitancy of some senators in approving such a measure without a permanent structure in place. However, I agree with both the minister and many stakeholders that Canada cannot afford to lose capital investments to our neighbours to the south. We need to compete and we need to create an environment that encourages growth, productivity and new and innovative technologies. Time is of the essence.

I’m looking at Senator Marshall now. I have no doubt she will have a thing or two — or even three — to say about the Canada growth fund, but at this time I will simply end by saying that I commit to monitoring the implementation and activities of the Canada growth fund as it begins its work. I know many, including Senator Marshall, will put pressure on the government so the corporate structure is established as quickly as possible and that the values and objectives listed in the technical backgrounder are honoured. I certainly heard some of the concerns raised in committee and in the media, and I commit to following the progression of this very important initiative.

The Canada growth fund is all about attracting foreign investments to green our economy. But helping foreign nations is also part of Canada’s DNA, which is why the government is proposing to make amendments to the Bretton Woods and Related Agreements Act. For those who may be unfamiliar with Bretton Woods, this act gives the Minister of Finance the authority to provide financial assistance to a foreign state if the Governor-in-Council is of the opinion that it is in the national interest to do so.

Currently, the maximum amount Canada can give to any one state is US$2.5 billion, and US$5 billion in respect to all foreign states. Since the beginning of Russia’s illegal invasion of Ukraine, Canada has already disbursed C$2 billion in direct financial assistance to Ukraine and committed an additional C$500 million through the issuance of a Ukraine Sovereignty Bond.

Two simple changes are being proposed in Bill C-32. First, the maximum amounts have never been increased since the establishment of the act in 1998. The government is proposing to increase the amounts to $7 billion and $14 billion, which more or less accounts for 25 years of inflation. The second amendment changes the currency in the act from U.S. to Canadian dollars. I want to make it clear that no funds are being allocated with this measure. The government is simply asking to lift the ceiling on support that Canada can offer.

The final section of the bill I want to address is Division 3 of Part 4, which deals with the First Nations Land Management Act, which was first adopted in 1999 and ratified the Framework Agreement of 1996 relating to First Nation land governance outside the Indian Act.

The proposed legislation appearing in Bill C-32 will eliminate duplication in the act and create clarity for all partners involved. It’s a First Nation-led, co-developed initiative that would replace the First Nations Land Management Act with more concise legislation. It would continue ratification of the nation-to-nation Framework Agreement and better support this agreement as the central authority through which First Nations transition away from the application of the 44 lands-related sections of the Indian Act.

It’s worth pointing out that at a special meeting of First Nations signatories to the Framework Agreement, a resolution on the proposed bill — what we have before us today — was presented and received unanimous support from First Nation signatories.

Our Indigenous Peoples Committee reviewed this section of the bill and reported back to the chamber on December 5.

Much has already been said about this section of the bill last week. Senators McCallum, Patterson and Francis, who all serve on the committee, shared with us their concerns with respect to the submission provided by the Manitoba Keewatinowi Okimakanak, or MKO, and their request for some amendments related to law enforcement on their lands.

I will not say too much on the matter today. Rather, I will address the matter more fully later this week at third reading. However, if I might, I will simply put on the record some of the comments shared with us from the Lands Advisory Board and the First Nations Land Management Resource Centre.

In a letter dated December 9, Chief Robert Louie, Chair of the Board, confirms that they are “generally supportive of MKO’s position and efforts on First Nation Law enforcement,” but they are not able to support any amendment to the act for the following reasons:

We do not have the approval of the signatories to the Framework Agreements to make any changes to the FAFNLMA wording . . . . Amendments to the Act would create an inconsistency with the guiding Framework Agreement document, which is to say there is nothing in the Agreement now that addresses or refers to the RCMP or Public Prosecutions legislation.

Chief Louie adds that the Lands Advisory Board hopes to continue to support and work with MKO and is:

. . . proposing to continue its joint work on enforcement with Provinces and the Federal government and to continue to obtain its direction from signatory First Nations regarding any appropriate changes to the Framework Agreement.

As Chief Louie writes — and I agree:

. . . granting amendments to the FAFNLMA before seeking First Nation approval is counterproductive to the mutual respect and nation to nation relationship we have worked so hard to build and maintain since the signing of the Framework Agreement in 1996.

I will have more to say on this at third reading.

It would be unlike me to speak to an economic bill without offering a few comments of my own on the current state of our economy.

The Fall Economic Statement was an opportunity for the government to provide Canadians with a mid-year update on the country’s economic growth and the state of its finances. The statement also included the government’s outlook for revenues, program expenses and long-term economic projections.

Like most countries, Canada’s reaction to the pandemic was quick, early and swift. The government provided individuals, families and businesses with the necessary financial support to make ends meet. Despite extraordinary spending measures, Canada is coming out of the pandemic in a relatively good position.

I’ve been working with numbers for most of my life and I can assure you that you can make numbers say what they want. It’s all a matter of perspective, of comparison and of the way one may spin things. As an independent senator, I truly believe that Canada’s economy is faring better than most countries. I agree that we are not out of the woods yet, and there is still a lot of work to be done, but I’m hopeful we are on the right path.

As we all know, Canada’s economy is now 103% the size that it was before the pandemic. Our economic growth so far this year has been the strongest, and our net debt-to-GDP ratio is the lowest among G7 countries. The unemployment rate is 5.1%, and inflation is slowly coming down after peaking in June, thanks, in part, to lower gasoline prices and to the Bank of Canada’s monetary policy.

Last week, the bank increased the interest rate by another 50 basis points, to 4.25% — the seventh rate hike of the year — to lower inflation and bring it back down to its target rate. As the bank stated on the day of the announcement:

. . . Governing Council will be considering whether the policy interest rate needs to rise further to bring supply and demand back into balance and return inflation to target.

The bank is resolute in its “commitment to achieving the 2% inflation target and restoring price stability for Canadians.”

Of course, inflation is a major issue in Canada, but it’s not the only metric we should use to evaluate our economic position and the health of our economy. For example, among our G7 counterparts, only France and Japan have lower inflation rates than Canada. Canada’s jobs recovery has also outperformed most of its G7 peers and surpassed expectations.

In my humble opinion, the Fall Economic Statement was prudent, focused and not overly expensive. Yes, there are some major-ticket items that are necessitating significant sums of money in Bill C-32, but overall, the bill is expected to generate revenues and not increase deficits. This is good news, in my view.

At my request, I asked Minister Freeland’s office to provide us with a costing breakdown of all the measures contained in Bill C-32. I was pleased to see that between 2022-23 and 2027-28 the government is expecting net revenues of over $4 billion with Bill C-32. These revenues are attributed in good part to the Canada recovery dividend and the additional tax on banks and life insurers.

Some have argued that measures in this bill, in addition to the measures in the two Cost of Living Relief bills we adopted this fall, will further increase inflation and continue to put financial pressure on our economy and on the pocketbooks of Canadians. I would respectfully disagree. Other prominent Canadians agree with me.

Yves Giroux, the Parliamentary Budget Officer, or PBO, looked at the inflationary impact of Minister Freeland’s announcement in September, and he found that it will have a minimal impact on inflation. He believes it might be a 0.01% increase. This is from our PBO.

Mr. Giroux’s predecessor and Parliament’s very first PBO, Kevin Page, appeared before our Banking Committee on December 1, and we asked him about inflation. It was nice to see him. In response to a great question from Senator Gignac, Mr. Page briefly addressed the Fall Economic Statement, and submitted that there was a modest amount of measures in the statement, but he didn’t see it as inflationary. As he said — and I would agree — “Even if we have inflation, we still have to retool the Canadian economy so we reduce our emissions.”

The government made it clear in its Fall Economic Statement:

We are providing targeted inflation relief, because that is the right thing to do.

But we cannot support every single Canadian in the way we did with emergency measures at the height of the pandemic.

To do so would force the Bank of Canada to raise interest rates even higher. It would make life more expensive, for everyone, for longer.

So as the central bank fights inflation, we will not make its job harder.

I agree with this statement, while recognizing that lower‑income and moderate-income Canadians — and some of the most marginalized individuals in our communities — need the government’s help.

Furthermore, I was pleased to read in the news that Minister Freeland recently told her cabinet colleagues that if they want money for new programs in the next federal budget, they will have to provide at least 25% of new operating costs requested from money within their own departments — for example, by considering trimming expenses, or cutting some programs.

I very much welcome this initiative. If Canadians are expected to live within their means, Canadians also expect their government to try to do the same.

As Minister Freeland told us in this chamber in October, Canadians are cutting back on costs right now, and the government needs to do that, too.

Honourable senators, I am happy to report that I have reached the section in my speech that says in bold letters, “Conclusion.”

Senator Loffreda: Would you not agree that something as important as the Canada growth fund, which in the technical backgrounder you did read, and I’m sure you read it three times, as I did, so I’m not questioning that — and good job on your speech, by the way — but wouldn’t you agree that the right way to go about it is to start a new Crown corporation and not include it in, as I mentioned in my speech, like the Canada Infrastructure Bank, where the values and the objectives of an existing corporation are totally different from this Canada growth fund, which has clear objectives?

As you’ve seen in the technical backgrounder and in the Fall Economic Statement, there are clear objectives. It is clear as to what the government intends to do with this growth fund, what the objectives are and where the money will be invested. This is $2 billion to buy shares; the CEO will come next, then the board of directors, and the investments will come afterwards.

Would you not agree that the best way to do it is to have a new slate when it comes to technology especially, because equipment and technology become obsolete very quickly?

Going forward, would you not agree that a clean slate is the best way to go? Create a new corporation, and the purchase of shares is the first common step of creating any corporation. Would you not agree with that?