- Member of Parliament
- Liberal
- Scarborough—Guildwood
- Ontario
- Voting Attendance: 62%
- Expenses Last Quarter: $111,926.23
- Government Page
Mr. Speaker, this is my first opportunity to speak in the year of Our Lord 2024.
Some hon. members: Oh, oh!
Hon. John McKay: Mr. Speaker, I hope members sort out among themselves just what the apology is for, given that memories seem to be somewhat short here.
I am rather hoping that I can bring a bit more light than heat to this debate. I propose to divide my remarks into three parts. The first part is to actually refer to the fall economic statement. I know that is a novel idea. The second part is to canvass why Canadians are pessimistic about the economy. Then, in an aside, I will compare that to why Americans are pessimistic about their economy.
With that, there is no doubt a disconnect between the economic metrics and how Canadians are feeling about their general state of welfare. If we open the fall economic statement, the first chart shows that Canada is number one in the G7 for real GDP growth. If I said that at the front door of some member of my constituency, they would probably close the door on me. Maybe they would be polite, and maybe they would not. Nevertheless, those are the facts. Our peer nations are not experiencing economic growth at the rate that Canada is experiencing economic growth, and I would contrast that to the concerns Canadians have about their economic welfare and ask them if they would prefer to be at the bottom of the G7 growth spectrum.
The second chart has to do with foreign investment. It appears that foreign investors have a great deal of confidence in Canada's prospects, as we are third in the world, and probably second, since the United States necessarily attracts by far the most investment.
The third chart is with respect to the budgetary balance projections for G7 nations. As Sir John A. Macdonald used to say, “Don't compare me to the Almighty. Compare me to the alternative.” The alternatives are Germany, Japan, the U.K., Italy, France and the U.S. We are number one in terms of budgetary projections. For all the harping, whining and complaining we hear in this chamber about the management of the fiscal framework, Canada is number one, and dramatically ahead of our neighbour to the south.
The fourth chart is on consumer price inflation, which has fallen over the course of the last 12 months by about four points, a significant drop in inflation.
Only economists could possibly be interested in some of these other charts. They are very difficult to convey to folks. I sometimes wonder why they put these charts into these economic statements, but they do.
In real GDP growth in G7 economies from Q1 of 2022 to Q2 of 2023, Canada is again number one in economic growth.
On employment and the change in employment, again, Canada is number one, way ahead of all the other nations. In fact, Japan and the U.K. have experienced negative employment growth since 2020.
I appreciate that trying to convince people, based on charts, about Canada's management of the fiscal framework, the monetary policy and the economy generally is somewhat of a challenge, and I have probably already lost the chamber. Having said that, it is a necessary setting in order to address the concerns Canadians have about their own economic well-being. I would just make the point over again about whether Canadians would prefer this government and this Parliament to address their concerns from a different position in the charts I have just mentioned. Would they like to be last in economic growth? Would they like to have challenges with employment? This is the environment in which we operate, and I think it is a necessary corrective to some of the conversation I have heard today.
If we ask what the concerns of Canadians are, economic uncertainty is their number one concern, along with income inequality, housing affordability, job market challenges, high household debts, climate change and environmental concerns, and global economic trends.
I put the economic uncertainties in the context of global events. We have had a Ukrainian war, the Middle Eastern war and instability in Asia-Pacific. These concerns are of great significance to Canada, particularly as Canada is a trading nation; a great deal of our GDP depends on trade. We have yet to see how the rerouting of ships in the Suez Canal area is going to affect Canadian prospects; it is necessarily going to be an added cost to the cost of goods and services in this country. We have yet to see that play through, but it is a dispute that Canadians are internalizing and recognizing, and I expect that the result will be an increase in commodity prices.
Income inequality is a serious concern, and I have to say that, over the course of this government, there have been a number of really innovative initiatives on addressing income inequality. The first, and one of the most significant in my riding, is the Canada child benefit. Because I have a relatively impoverished riding with quite a number of children, that means something in the order of $100 million a year into my riding alone. If it is not the number one riding in Canada, then I think it is one of the higher-ranked ridings for the receipt of the Canada child benefit. It is similar with the Canada workers benefit and the child care initiative. These are all concerns that have been internalized by Canadians and create anxiety, but the address by the government is well placed in terms of addressing issues of income inequality.
Finally, before you open the trap door and make me disappear, Mr. Speaker, I thought it would be interesting to compare what Americans' concerns are as opposed to ours. A number of the concerns are clearly shared: income inequality, stagnant wages, job insecurity and cost of living. One is student loan debt. We recollect that President Biden tried to do something about it, but Congress has defeated him on that. Furthermore, Americans are deeply disturbed by their health care costs, even with Obamacare. There is also political polarization and policy uncertainty. We cannot turn on a television without commentary on the almost intractable policy and partisan contrast. Those last three things are not challenges that this country faces thus far, thank goodness, but they do cause a level of anxiety. Moreover, we somewhat reflect the concerns of Americans here with respect to our own economic uncertainty.
The reconciliation between the metrics of this economy and how people are feeling about their own personal economy is the challenge of this government and this Parliament, and it will continue to vex us all. The government has taken a number of initiatives, such as the housing initiatives, that can ameliorate the immediate effects.
Therefore, I encourage colleagues to support this bill, recognizing fully that they are hearing the same thing that we are hearing at the door: Canadians are concerned about their own personal situation.
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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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- 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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- May/12/22 4:26:02 p.m.
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Madam Speaker, I want to pick up on one of the member's latter points, which was that the Russian economy is largely oil and gas, and that is it: It is an unimportant economy. It is about the same size as Canada's, with a population of 145 million people. The Chinese economy, on the other hand, is very integrated. It is integrated into the world system, and very much more dependent upon various trade routes and supply chains.
In the member's view, is the threat of conflict greater with China or greater with Russia?
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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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Madam Speaker, I want to go to the central, core point that the government is apparently entirely responsible for the inflationary aspect of our current economy.
An hon. member: Hear, hear!
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