- Member of Parliament
- Member of the panel of chairs for the legislative committees
- Conservative
- Wellington—Halton Hills
- Ontario
- Voting Attendance: 65%
- Expenses Last Quarter: $120,269.09
- Government Page
- Oct/20/22 3:36:46 p.m.
- Watch
Madam Speaker, I will be splitting my time with the member for Louis-Saint-Laurent.
The government is completely out of touch, and I do not say that lightly. There is a crisis unfolding in rural parts of our country, in Ontario, Nova Scotia, New Brunswick, Prince Edward Island and Newfoundland, a real crisis, a crisis the government is ignoring.
Here is the crisis. Ten per cent of Canadians heat their home with heating oil or with propane. That is 3.8 million Canadians. About a million and a half households in our country heat their homes during the cold Canadian winters with heating oil or with propane. That is a third of Canadians living in Atlantic Canada. That is over a million people living in the province of Ontario. They heat their homes with oil or propane, and the vast majority of them heat with oil.
What many people do not realize, and what the government certainly does not realize, is that these Canadians are in dire straits. They are facing a crisis this winter. The one out of 10 Canadians who relies on heating oil or on propane is going to be bankrupted by the cost of heating his or her home this winter, and here is why.
Traditionally, 90% of Canadians heat with heat other than heating oil or propane. They either use natural gas or some form of alternative. However, here is the reality for those 10% of Canadians who use heating oil or propane.
For a house that is heated with natural gas, for every dollar of heat that house uses in natural gas, for that same house located in an area where there is only heating oil or propane, it costs three dollars, three times the amount, to heat with propane and it costs four dollars to heat with heating oil, or four times the amount.
These figures I give to the House are before the global energy crisis that has hit global economies over the last year or so. This winter the figures now facing the 10% of our fellow citizens who heat with propane or heating oil are truly frightening and that is why this is a crisis. I went on the website yesterday of West Nova Fuels of Nova Scotia, and I will quote from its website:
[O]n average a typical house with four people in it should burn about three to four tanks of oil in a year to heat your home and hot water, about 2800 litres of oil.
That is now much it takes to heat a typical home in rural Ontario and rural Atlantic Canada: 2,800 litres.
I went on the website of a company called Crescent Oil in rural southern Ontario that services much of rural southwestern Ontario with heating oil. Its current price for the cost of a litre of that heating oil is $2. Some areas of rural Ontario and rural Canada have even higher per-litre costs for heating oil. Canadians will understand that if they are told that number two heating oil is diesel. That is what furnace oil heating oil is.
If people have driven around in Ontario in the last week or so, they will see that the price of diesel fuel is at record high levels because of shortages of distillates and other heavy crudes, and it is selling for about $2.35 a litre now in Ontario. Therefore, it is no coincidence that heating oil, which is diesel, is selling for $2 a litre. That is $2 a litre for 2,800 litres over a winter. That is $5,600 to heat a typical home in rural Ontario or rural Atlantic Canada. That is before the carbon tax and the HST.
There is a carbon tax of roughly 13¢ a litre on that heating oil. There is HST not just on the base cost of the heating oil, but also on the carbon tax, so that $5,600 it is going to cost to heat one's home this winter in rural Ontario or rural Atlantic Canada actually is closer to $6,739, of which $375 is the carbon tax.
The government's rebates do not cover these costs. A typical four-person family, mom, dad and two kids, living in these rural areas, heating with heating oil and driving to work in a two-income family and putting 25,000 kilometres a year on each vehicle, because there is no public transit in rural areas, which is the very nature of living in a rural area, will consume about 5,000 litres of gasoline in a year.
As well, in Ontario there is an 11¢ a litre carbon tax on that gasoline. That means someone who is paying about $550 a year in carbon taxes for commuting, and add to that the $375 they have paid on their heating oil to keep their home at a minimal temperature of about 19°C or 20°C, is looking at $925 a year in carbon taxes just on commuting and heating. That is not to mention all the carbon taxes that are embedded on shipping, groceries and other costs. The climate rebate of $204.88 a quarter, for a total of $819.52, does not cover the cost.
Out of the government's own admission, and we heard it from the previous member, two out of 10 households in this country do not get more back from the rebate than they pay in carbon taxes. The government is ignoring those households and ignoring the crisis facing these households. It is ignoring the astronomical skyrocketing costs it will take to keep one's house warm in rural Ontario and rural Atlantic Canada this winter.
The argument that this is somehow working as part of a plan to reduce emissions to combat climate change is bunk. Here is the proof. Liberals have not met a single target. They came to office saying that they were going to meet Copenhagen. We blew through that without meeting that target. They said that they are now on track to meet Paris, which is total baloney.
Emissions have been rising under the Liberal government. In 2016, the first full year the government was in office, emissions were 715 megatonnes. In 2019, the last year before the pandemic for which we have data, emissions rose to 738 megatonnes. Now, they dropped in 2020, but shutting down the economy is no way to combat climate change and reduce emissions.
I will go out on a limb here. I believe that in 2022, Canada's emissions will blow through that 738 megatonne level to a record high for the government. Do not take it from me; take it from Bloomberg. I was reading the news this morning and I came across an article Bloomberg just published today entitled “[The Prime Minister] Defends Canada's Minuscule Climate Progress”, with the subheading, “A bevy of climate policies championed by Canadian Prime Minister Justin Trudeau have not yet translated into steep pollution cuts in the country.”
I want to quote from that article—
1193 words
All Topics
- Hear!
- Rabble!
- add
- star_border
- share
- Dec/9/21 12:27:16 p.m.
- Watch
Madam Speaker, the government's failure to properly oversee and regulate Canada's banking system and its failure to properly manage fiscal policy are the two reasons Canadian families are struggling with skyrocketing housing prices and why Canadian families are burdened with record high levels of household indebtedness. The government is also putting the stability of our financial system at risk. It is mispricing risk, leading to the misallocation of capital toward residential real estate. As David Rosenberg has said, Canada's economy is overly reliant on “credit, cannabis and condos”.
The average house price in this country has skyrocketed over the six years the government has been in power. According to The Canadian Real Estate Association, the actual benchmark price for a home in this country has gone from $430,000 in November 2015, when the government was appointed to office, to $726,000 in October of this year, the last month for which we have data. This is a massive increase of 77% over the last six years. That is an annual compounded rate of increase of about 10% per annum, far ahead of the nominal growth of GDP. It is putting the cost of housing out of reach for many young families and individuals looking to get a start to their lives.
The average house price for a single detached home in Toronto is now $1.8 million. It is $2.9 million in Vancouver. In Fergus and Elora, two small towns in the rural area of my riding of Wellington—Halton Hills, the typical house price has trebled in the last five years. It has gone from approximately $325,000 in 2015 to $950,000 in 2020.
These prices are way, way above the long-term average of three and a half times household income. Prices in many Canadian communities are now eight, nine and 10 times household income. We are an outlier among advanced economies of the OECD. In fact, our housing prices are some of the most expensive in the world.
As housing prices have skyrocketed, so too has household debt. Mortgage debt makes up the vast majority of household debt. Mortgage debt comprises two-thirds of overall household debt, and the remaining one-third of household debt is closely tied to real estate in facilities such has HELOCs and other forms of credit.
In 2016, the first full year the government was in office, household debt stood at $1.9 trillion. Today, it is $2.6 trillion, an increase of almost 40% and an annual compounded rate of increase of almost 6%, far ahead of the nominal rate of increase of our GDP. That amount of household debt is reflected in the fact that household debt as a percentage of household income has also increased since the government took office. It now stands at 173%.
The government has allowed this to happen. We have a housing crisis in this country, and it is because of the government's failure to properly oversee and regulate the banking system and its failure to properly manage fiscal policy.
The government has had plenty of warning about this problem. Before I get into who has warned the government about it, let me tell members one of the unintended consequences of these skyrocketing housing prices and skyrocketing levels of household indebtedness.
Small to medium-sized enterprises have found it difficult to get financing. Canada has low levels of business investment relative to many of our economic peers. This low level of business investment is one reason for our low productivity growth rates. This low productivity growth rate is of particular concern because it is the only long-run determinate of wealth and prosperity.
These two challenges, namely the challenge of skyrocketing household debt and the difficulty many small and medium-sized businesses have in getting financing to make investments in plant capital and equipment, are two sides of the same coin. The government needs to take a hard look at the macroeconomic policies it has put in place, which have made life less affordable for Canadian families, and the policies that are making it difficult for businesses to invest, grow and create jobs.
The government is ultimately responsible for the regulation of our banking sector through the Office of the Superintendent of Financial Institutions. It is also responsible for mortgage financing through the Canada Mortgage and Housing Corporation, tax expenditures, government programs and Finance Canada. It has allowed mortgage credit to grow at unsustainable levels. Its responsibility is to oversee mortgage credit through OSFI and CMHC.
The IMF has warned Canada repeatedly over the last number of years about its oversight of housing finance. In addition, the IMF found, through its studies, that government intervention in housing finance exacerbated house price swings and amplified mortgage credit growth in advanced economies in the years before the global financial crisis. Moreover, the IMF's studies also concluded that government participation did not provide a cushion against economic crises, and countries with greater government involvement in mortgage financing experienced deeper house price declines.
In a 2011 analysis, the IMF concluded, “rapid mortgage credit growth and strong house price increases go hand in hand.” It added, “government participation in housing finance exacerbated house price swings and amplified mortgage credit growth during the run-up to the recent crisis, particularly in advanced economies.” It concluded by saying, “Countries with more government involvement also experienced deeper house price declines.”
The officials at Finance Canada and CMHC have warned the government. For example, last year in September, officials at Finance Canada discussed forcing private mortgage insurers to tighten eligibility rules, but left CMHC to try to manage the risk in mortgage credit markets on its own. Evan Siddall, the CMHC CEO at the time, said, “We had that conversation and you’ll have to pose the question to [the government] as to why it didn’t happen.” In reference to the rejection of the tightening of the rules to reduce risks, he added, “The minister of finance could have done it.”
OSFI itself has warned about skyrocketing levels of mortgage credit and mortgage credit growth, but when it proposed higher mortgage stress test levels in 2018, otherwise known as the B-20 guideline, the Minister of Finance opposed the rule. In March of last year, when OSFI announced changes to capital requirements for Canada's systemically important banks, the government did not ensure that additional liquidity, measured in the hundreds of billions of dollars, would not exacerbate the growth in mortgage credit. As a result, household debt, primarily mortgage credit, has jumped 4% in the last year, picking up sharply in the middle of last year, after the March 2020 changes that OSFI had introduced.
The Governor of the Bank of Canada, Tiff Macklem, warned earlier this year that Canadian households were taking on too much debt. In other words, the governor was warning the government that it is not using the tools it has at hand to properly regulate mortgage credit growth in this country.
Canadian families are finding it harder to make ends meet. They are being squeezed by the increasing cost of living and by the cost of housing. This is due to the government's failure to properly oversee and regulate Canada's banking sector and properly manage fiscal policy.
1234 words
- Hear!
- Rabble!
- add
- star_border
- share
- menumenu
- notificationsnotifications
- home
- mailmail
- searchsearch
