John McKay

[Committees of the House, June 22nd, 2022]

Mr. Speaker, I have the honour to present to the House, in both official languages, the second report of the Standing Committee on National Defence entitled “Modernizing Recruitment and Retention in the Canadian Armed Forces”.

Pursuant to Standing Order 109, the committee requests that the government table a comprehensive response to this report.

While I am on my feet, may I wish you and your family a restful and recuperative summer.

[Criminal Code, June 20th, 2022]

Madam Speaker, the member comes from the general GTA area, as do I. He and I have been through a number of elections. As chair of the public safety committee, I listened to endless testimony about guns. I have yet to hear a coherent reason why anyone in Guelph or anyone in Scarborough—Guildwood needs to own a handgun or an assault rifle. If he could elucidate that core point, maybe we could get somewhere with this legislation.

[Committees of the House, June 16th, 2022]

Mr. Speaker, I have the honour to table, in both official languages, the first report of the Standing Committee on National Defence, entitled “An Interim Report on the Defence of Canada in a Rapidly Changing Threat Environment”.

This is the first report of the defence committee, and it certainly will not be the last report on the rapidly changing threat environment. We started the report prior to February 24 and, of course, finished it off. However, this is an ongoing thing that the committee will maintain in its mandate and be seized with.

I want to comment as well that the members of the committee worked extremely hard to put this together. There was a lot of frustration about cancellations and votes, etc., to the point where it became very difficult to conduct proper committee hearings and all the work that goes into them. I just want to make that point because it is getting extremely frustrating, to the point of dysfunctionality of committees.

Pursuant to Standing Order 109, the committee requests that the government table a comprehensive response to this report.

[Business of Supply, June 7th, 2022]

Madam Speaker, I am shocked.

The federal government is already taxing those who are making excess profits. There is an excess profits tax built right into the system, so I am not quite sure what the hon. member is driving at, but those companies that are making extraordinary incomes will receive an excess profits tax allocation when they file their returns.

[Business of Supply, June 7th, 2022]

Madam Speaker, in saying “a false solution to a real problem”, the hon. member described it better than I did, and I think he is right.

With respect to the revenues, yes, inflation has that effect of giving the revenues a temporary boost, but it is a temporary boost, because once we get the revenues in, the bills start arriving as well, so the costs of running a government are actually going to be much greater because there is necessarily going to be wage inflation, which is essentially what government is.

As to spending the revenues that are coming in, I would not go for that kind of an idea immediately. There have been various relief elements, particularly for seniors, that have been distributed over the last couple of years.

[Business of Supply, June 7th, 2022]

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.

[Business of Supply, June 7th, 2022]

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.

[Committees of the House, June 1st, 2022]

Madam Speaker, I want to share an experience with the hon. member about NATO. I was travelling with John Manley, the then foreign affairs minister. Our itinerary was London, Paris, Riga and Berlin. When we were in Riga, the President of Latvia came into the room and she harangued John and me for 20 minutes about getting into NATO. This was in September 2001. She did not want anything else. She just wanted into NATO, because she saw NATO as her best security guarantee against the Russians. We went to Germany and, to John's credit, he put the Latvian question to the Germans. They had the same question: “What about the Russians?”

Is the hon. member prepared to assert her judgment about the utility of NATO against the President of Latvia's judgment about the utility of NATO?

[Committees of the House, June 1st, 2022]

Madam Speaker, it is always the youth who pay the price for wars. Most of the generals are older and the people who are getting killed are frequently younger people. Boy, that was blindingly obvious in the prison in Vilnius, but also in the member's experience as well.

On peace, order and good government, I do not know where we are on that. It is a worthwhile initiative. One cannot separate diplomacy, aid and military abilities. It needs to be a team Canada approach in all matters. I would like to think we are making some progress on that, but I do not always know that we are.

[Committees of the House, June 1st, 2022]

Madam Speaker, my hon. colleague is right. It is not a particularly attractive building, but I was not going to use the word “ugly”.

She is also right in the sense that we are not listening. We did not listen in 2008. We did not listen in 2014, and we have been slow to listen in 2022. It is not as if Vladimir Putin does not signal what he is going to do. He tells us what he is going to do. It is blindingly obvious that, if he is successful in Ukraine, then the Baltic nations are next.