Mr. Speaker, New Democrats believe in open and progressive trade. We believe in negotiating new market access for our exporters to unlock good jobs here in Canada. We believe in promoting value-added industries to raise standards of living and create benefits for all Canadians and across all sectors.
Canada is a wealthy country and a trading nation. We have maintained strong trade balances for decades, yet this story has changed under the Conservative government.
On February 11, I asked the Minister of International Trade to explain to Canadians why his trade policies were failing to reverse Canada's troubling numbers on trade. I was referring to news that Canada's trade deficit had widened to $1.7 billion in December 2013, worse than that forecasted by economic experts, and that Canada's monthly merchandise trade deficit was now more than two years old. That deficit was big enough in that fiscal quarter to knock a full percentage point off of Canada's GDP.
Since then, Statistics Canada has announced that Canada's current account deficit has increased to $16 billion in the fourth quarter of 2013, and our current account deficit for 2013 now totals $61 billion. Our current account has been in deficit now for five straight consecutive years.
When the Conservatives came to power in 2006, they inherited a current account surplus of some $26 billion. Today we have a current account deficit of some $61 billion. That is an $85-billion swing in seven years. That is a $12-billion loss in our current account performance for each and every year that the Conservatives have been in power.
Worse, our trade woes are entirely sectoral. In a written statement about Canada's trade deficit made last November, BMO chief economist Doug Porter said, “there is energy (doing just fine) and there is everything else (doing anything but fine)”. In 2013, Canadian energy exports saw a $63-billion surplus, while everything else in Canada's economic basket saw a $73-billion deficit.
Canadians are rightly proud of our energy sector, but a modern, well-diversified economy needs to be firing on all of its cylinders, not just one. The Conservatives want Canadians to trust them when they tell us that they understand the economy. If they do understand economics, Conservatives should admit that these statistics are bad news for a sustainable and prosperous Canadian economy.
As Conservatives should know, a country that runs a sustained current account deficit is building liabilities with the rest of the world, and eventually those liabilities need to paid back.
According to senior IMF officials, “whether a country should run a current account deficit depends on the extent of its foreign liabilities (its external debt) and on whether the borrowing will finance investment with a higher marginal product than the interest rate...the country has to pay on its foreign liabilities”.
Let us think about this for a minute. Canada's foreign debt has never been higher than it is now under the Conservative government. As evidenced by our export performance that I mentioned earlier, the Conservative legacy for Canada amounts to putting all of Canada's economic eggs in a narrow basket.
Canada's productivity has slumped by almost 2% since the Conservatives came to power in 2006. It is also the case that while fluctuations in the current account are tolerable, a chronic sustained current account deficit hurts our economy. According to IMF analysis, these are not the conditions under which a government can justify long-term current account deficits.
It makes one wonder what happens if commodity prices or production drops in Canada's energy sector. With massive Conservative-induced government debt, productivity weakness, and no significant export growth in other sectors, Canada's current account deficit is a problem that the government simply cannot continue to ignore.
That is why our Bank of Canada has singled out Canada's poor export performance as a major cause of Canada's slow growth and lack of well-paying, full-time jobs.
Any investment planner in Canada would advise Canadians to do three things: diversify, diversify, diversify, and deal with chronic deficit.
How can the Conservatives continue to justify their massive current account deficits year after year after year?