- Member of Parliament
- Liberal
- Scarborough—Guildwood
- Ontario
- Voting Attendance: 62%
- Expenses Last Quarter: $111,926.23
- Government Page
Mr. Speaker, of course it could have been tabled earlier. Whether that would have been a wise tabling, I do not really know.
This is part of an array of initiatives on the part of the Government of Canada to mitigate the complaints we are all hearing. There is not a member in this House who has not heard about the inflationary pressures on our constituents, so as part of an entire array, I think this bill is a worthy initiative. The fiscal policy is being handled as well as it can be handled, with maybe a slow start on monetary policy. I still think the Bank of Canada is moving forward on that front as well.
When taken together, the array of measures and initiatives on the part of the government writ large is an appropriate response to a worldwide phenomenon on a relatively small economy, and hopefully—
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Mr. Speaker, as members know, I have been here for a long time, some might say too long, and every government that has ever been here in that time has always said there are savings to be found over here, over there, etc. What the hon. member is describing is very difficult work. It is an ongoing process, and I do anticipate that the Minister of Finance has been doing it.
On the first part of his question, I will quote an economist, an Atkinson fellow. I better not pronounce the name or I will mess it up. She wrote, “In truth the measures are so modest, [at] only $3.2 billion”. The impact on the economy is very modest.
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Mr. Speaker, I appreciate the opportunity to speak to Bill C-30 and add my voice to this. I hope I am bringing a bit more light than heat, because I have been listening here for a while and there seems to be a lot of heat but I am not sure how much light there is in it.
I am splitting my time with my favourite colleague from Toronto—Danforth. I look forward to what she has to say and possibly look forward more to what she has to say than to what I have to say.
I also want to extend my concerns to our colleagues and the people of Nova Scotia and the Maritimes generally for what they are facing this weekend.
I cannot help but make the observation of dissonance between what this chamber, particularly on the Conservative side of things, says and the realities of climate change. How many once-in-a-lifetime events do we have to have every year before we realize that climate change is among us? We have been watching the floods in Pakistan. We have been watching the fires out in western Canada and watching California literally burn down. We express sympathy for that. We rush in as best we can to repair the damage after the fact. However, we fail to deal with the fundamental issue that is before us, which is the reality of climate change.
Therefore, the most practical solution is to apply a cost to the carbon that we all put in the air. We all put it into the air, yet we are extremely resistant to doing anything about it. I just want to make that as an observation. There is a dissonance between the way we talk about climate change and the climate emergency, and the willingness to actually make the sacrifices that are necessary in the form of some form of taxation or costing, in order to be able to mitigate the costs.
However, this is a discussion about Bill C-30. It is a bill that, it looks like, enjoys virtually unanimous support in the House. It is one of a suite of measures that the government is taking to fight inflation. I am kind of amused by that language: fighting inflation. I am sure inflation is just scared that the Government of Canada, the governments of the provinces or any government is fighting it, because inflation is what inflation is.
I have found that the members opposite are really quite elegant and eloquent in describing the problem, which is the high cost of groceries, the high cost of fuel, the high cost of rent, etc., and are very able to do that. I have heard it in my own riding. I have found that the answers that I give in my own riding do not resonate. When I say that it is partly due to Putin's war, the response of my constituents is “we do not care”. When I say it is difficulties with supply chains, my constituents say, “we do not care”. When it is having to do with various other causes, my constituents just do not care. The reality is that they want me, us, the government, to do something.
The government actually has a limited array of things that it can do to fight inflation. The first one, of course, is monetary policy. This is generally where everyone nods off who is not already asleep because monetary policy is possibly the most boring thing ever. Mr. Speaker, I appreciate your getting an extra coffee before I rose to speak.
Monetary policy is essentially run by the Government of Canada. Years ago, the government made a very wise decision to take monetary policy out of this chamber, out of the political vicissitudes of the day, according to whatever the government or the Parliament of the day thought should be done with monetary policy, so that is run independently.
Some of us can criticize the Bank of Canada, and some members of the opposition in particular seem to be very enthusiastic about criticizing the operation of monetary policy. I could even make the argument that it started to raise interest rates a little slowly. However, it certainly has done what it can do to raise interest rates and restrict the supply of money.
Doing that, however, has consequences. The consequence is that it slows economic activity, and when we slow economic activity, we create unemployment. That is not a very good outcome for any of us, really. That is the consequence of monetary policy, and it needs to be moved forward.
The previous member talked about the government of Mr. Trudeau in the seventies. I was around in the seventies and remember stagflation. Stagflation meant having the worst of both world: inflation plus a high unemployment rate. Fortunately, we are not there, and possibly we have learned something about the application of monetary policy.
That is the first instrument any government has for dealing with this. It is being executed as well as it can be executed, and there has been some impact in cooling the real estate market.
The second array of the government's abilities is fiscal policy. Notwithstanding what some might say, this government is in relatively good shape with regard to debt-to-GDP ratio. I know we ran the debt-to-GDP ratio up during the COVID era, but there are no free lunches in this world and it will need to be dealt with.
At this point, a couple of things have been done well, one of which is buying long-term debt at low interest rates, so the cost of debt, at this point at least, is limited. We also have a reasonable unemployment rate at this point, so there is full employment and a government that has its fiscal house under control, although I would not say in order. There are challenges in managing that, but still, the fiscal situation is not bad for this country.
The third element of any government's approach to inflation is programs. That is part of what we are talking about with Bill C-30 and the temporary increase in the amount of HST refund for those who qualify, which is primarily people with an income of under $40,000 a year.
In my riding, the Canada child benefit is a huge benefit. It is $100 million a year going into my riding, affecting something in the order of 8,000 of families. The money goes to the people who actually need it the most. Economists can make the argument that we are putting money into the economy and are therefore creating our own level of inflationary pressures. There is some truth to that, but if it is a choice between rent and eating, I am sure my constituents appreciate the Canada child benefit, just as they appreciate the rent subsidy, the carbon rebate and the child care program that is going forward.
These are all programs that a government can put forward. It is a reasoned response to a very difficult situation largely caused from outside the country on a relatively small economy.
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- Jun/7/22 4:22:09 p.m.
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Madam Speaker, I appreciate that question from the hon. member, because in a speech I made about a year ago, or sometime around then, I flagged that particular issue. In fact, from my own grocery shopping, I recognized that inflation was here. I actually sat down with the PBO at one point and said, “I don't understand why we are not more alarmed about inflation.” People from the Office of the PBO had an explanation that I frankly could not understand, but that said, they were still very helpful in trying to explain it to me.
The Bank of Canada had described inflation at that time as “transitory”. I think it recognized that it was on its way but did not recognize that it was possibly going to be more long-standing than it had previously anticipated, and if there is an issue to be had there, I think that is a legitimate point.
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- Jun/7/22 4:11:54 p.m.
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Madam Speaker, I find the motion actually pretty easy to vote against. Whoever wrote the motion has been quite brilliant at describing the issue, but not nearly so brilliant at describing the solution.
You might be interested in knowing, Madam Speaker, that I do all the family shopping. I also do the gas purchases and I buy materials for the house. I remember buying two-by-fours during COVID and I had to go to three stores to try to just get one two-by-four and the cost was 100% more than I paid in years previous. I agree with the description of high inflation for everyone, that gas is more expensive and that the cost of food is up. I have experienced that personally.
What the hon. members from the Conservative Party do not seem to realize is that the supply chains were pretty badly messed up during COVID. Some were out because the countries were locked down. Some were not able to produce the products they had previously. Take for instance, microchips. We could not get any microchips for anything, including a car. Again, within my experience we live in a neighbourhood where we bought a couple of cars and for a considerable period of time there were no cars on the car lot. In fact, we could buy a used car for what we paid a year or two previously for a new car. Just a simple thing like microchips has in and of itself driven up the cost of living quite dramatically.
Add to that the great resignation. People simply do not want to do the jobs that they were doing pre-COVID and that in turn has driven up the cost of labour. I took note in the Report on Business Magazine last weekend that the Royal Bank of Canada has just given a 3% increase across the board to all of its staff because it knows it has difficulty recruiting and retaining staff. We have had representations from Irving, which is building our warships. Its biggest challenge is, again, recruiting and retaining staff, even with substantive increases in salary.
Add to that the Putin war, which took supply chains that were really badly messed up by COVID and only made them more difficult. Sanctions do mean something. They mean that certain products that we are used to purchasing simply cannot be purchased any longer from the Russian-based sources. Add to that the fact that Canada is about 2% of the world's economy. We are in effect inflation takers as opposed to inflation makers. Even for products that we have in substantive quantities such as oil and gas, wheat and various other mineral products, we do not actually get to set the prices. The prices get set by places other than Canada. As I say, we are price-takers, not price makers. We are inflation takers. We are not inflation makers.
On a point of information, as much as the Conservative Party would wish to pin the inflation upon the Prime Minister, I would suggest respectfully that it is a bridge too far even for them.
What is the Conservative solution? The Conservative solution is a reduced consumption tax, and if we do that on the GST and the tax on carbon, everything will be resolved. That is possibly the worst idea ever. Any economist in Canada will say, with the notable exception of Stephen Harper, that if we want to generate government revenues we should be taxing consumption and we should be reducing the tax on labour.
Income tax is a tax on labour. Consumption tax is a tax on consumption. In effect, it is taxing the person who works hard and reducing the taxes on the person who plays hard. If we reduce the consumption tax, it is practically a guarantee that large oil and gas companies and other companies as well will backfill with price increases, and I would expect that our Conservative friends would have recognized that before drafting this motion. The consumer gets no relief. The government revenues are drained. Rich companies get richer, and the working person gets increased income tax. Hardly what one would describe as a brilliant solution.
Finally, there is carbon pricing. The most effective way to reduce carbon consumption, short of turning down the thermostat or reducing unnecessary travel, is to apply a tax to it. If, in fact, the tax is collected and applied as it should be, then, in the end, the lower-income families will actually receive rebates in the mail. In Ontario, that means $745, and in Alberta, it means something in the order of just over a thousand bucks.
There are those who say they cannot adjust. For some that is actually true. For others it is simply a lifestyle choice. However, if we are going to be serious about carbon reduction, then we have to apply this sort of tax, which has repeatedly demonstrated to be the most effective way to reduce carbon consumption.
Given that inflation is real, given that we are just 2% of the world's economy, given that we are a trading nation and highly dependent upon external trade, given that the Putin war will not end any time soon and given that inflation is well beyond the Bank of Canada target, what is a relatively small but prosperous economy to do?
We will start with some of our strengths. We have a relatively low debt-to-GDP ratio, possibly the best in the G7. It is the same thing with jobs, as we have had 115% job recovery in the post-COVID era. We have a number of products that the rest of the world wants. There are, frankly, more jobs available here than there are people to fill them. Something about over a million positions are begging for people. Again, we have heard that from various employers who are looking for people to fill positions and simply cannot find them, so we are in a relatively strong position.
Then there are some direct relief measures. The Canada child benefit in my riding is worth over $100 million per year. That is a significant relief to those constituents of mine who have children. The $10-a-day child care plan, which is just being rolled out in Ontario, will help a lot of people and it will make a significant difference in terms of the choices that those who wish to take advantage of the program have. In some instances, particularly during the earlier part of this government, we were able to reduce the tax margin for those with lower incomes and apply relief to those who actually needed it the most.
However, we should recognize that the Bank of Canada is the main player here. It has control over monetary policy. The Bank of Canada's monetary policy is independent from government, as it should be. It is possibly the worst idea in the world to have the government control monetary policy because government interests and central bank interests are not always lined up. As an example of that, I might point to Turkey, where the government of the day has taken over monetary policy. That has led to something in the order of 70% inflation. The central bank has renewed its 2% target. We need to recognize that interest rates are going to rise and possibly even dramatically rise.
Our strong monetary policy is our most effective weapon. We have a relatively decent fiscal position. We do not need to yield to the siren song of reduced consumption taxes.
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Madam Speaker, I would say that my hon. friend from Sherwood Park—Fort Saskatchewan is a little premature in his enthusiasm.
Has the hon. member thought about how much the Putin war is contributing to the rate of inflation with respect to oil, gas and commodities in multiple trillions of dollars? Has he thought about how the clogged supply chains, created largely by COVID, have contributed multiple trillions of dollars to increased prices? Has he thought about the pent-up demand created by COVID that created multiple trillions of dollars? Has he thought about the U.S. economy, which has an inflation rate considerably in excess of Canada's, and that being our major trading partner? Also—
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- Feb/3/22 5:10:45 p.m.
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- Re: Bill C-8
Madam Speaker, the hon. member described the problem with excellence, but his allocation of fault may be a little faulty. I was wondering how the hon. member thinks that the Government of Canada has much to do with the supply of microchips to make cars go. I have made the same observation that he has. Car lots are empty.
Members should know that the hon. member is quite an outstanding mechanic, and had won several awards for his work prior to being an MP. However, I am not sure that his speech is actually such an outstanding description of the issues.
Could the member tell me what the Government of Canada has to do, for instance, with the issue of supplies, or input costs, or grain or other necessities? These are just issues that are worldwide, and we are the unhappy recipients of that reality.
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- Feb/1/22 1:56:22 p.m.
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Mr. Speaker, let me say, first off, that I am splitting my time with the hon. member for Humber River—Black Creek. Whatever time I do have, I will leave for her.
This is my first opportunity to thank the people of Scarborough—Guildwood for my re-election. This will be my 24th year in the House of Commons, nine elections. Some may question the sanity of the citizens of Scarborough—Guildwood, but I am quite grateful.
I am also grateful to the small army of volunteers who have helped me over the years to be here and to represent the people of Scarborough—Guildwood. For some apparent reason they seem to think I continue to do a decent job, and I hope to continue to work for their faith.
I know it is always a dangerous thing to thank individuals, but I want to particularly recognize the work of Layla, Meena and Atik; Natasha and Mark; and Napas, all of whom worked 24-7 for the entire election period. Of course this was a pretty challenging election for all of us. We had to do things differently.
Finally, far from least, I want to thank my wife Carolyn, who has been at my side for the last 24 years, actually far more than these 24 years. She is an amazing woman with amazing accomplishments, and probably the most amazing thing of all is that she continues to love me and be married to me. I know we are all grateful for miracles.
I originally started to write out these thoughts in November, because that is when the reply to the Speech from the Throne started. Here we are six to eight weeks later. I looked over my notes the other day, and they are somewhat irrelevant at this point. In part this is because, if it is said that a week is a long time in politics, in truth two months is even longer, so I have had to do a rewrite. Indeed, the pandemic has changed everything. I want to just turn to the topic at hand and concentrate on the issues of the economy. I hope to add a little bit more light than heat, but that is not always true in this chamber.
I have noted a lot of discussion about inflation, something in the order of 4.8% last month. In the United States it is 7%. There is this endless conversation about whether we are better than the OECD average or poorer than the OECD average. The comparators become a little meaningless over time, but the reality is that this is a worldwide phenomenon. Canada, as a large trading nation where 40% of our GDP is dependent on trade, is particularly vulnerable to the economic currents outside of its borders. For the time being at least, inflation will be a reality and a preoccupation of this government and, indeed, any government.
The second point I wanted to make, assuming I have a little bit of time, is on the issue of interest rates. Currently, rates are quite low, but I was gratified to hear the Bank of Canada's governor indicate that it is going to be addressed and he is on the way to addressing that. I personally would have preferred a little action a little bit sooner, because I too was consumed with the grocery aisle indicators of inflation.
I look forward to expanding on these profound thoughts. I know my hon. colleagues will wait in their seats to hear what I have to say after question period
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