Bill C-29 (Historical)

Budget Implementation Act, 2016, No. 2

A second Act to implement certain provisions of the budget tabled in Parliament on March 22, 2016 and other measures

Part 1 implements certain income tax measures proposed in the March 22, 2016 budget by
(a) eliminating the eligible capital property rules and introducing a new class of depreciable property;
(b) introducing rules to prevent the avoidance of the shareholder loan rules using back-to-back arrangements;
(c) excluding derivatives from the application of the inventory valuation rules;
(d) ensuring that the return on a linked note retains the same character whether it is earned at maturity or reflected in a secondary market sale;
(e) clarifying the tax treatment of emissions allowances and eliminating the double taxation of certain free emissions allowances;
(f) introducing rules so that any accrued foreign exchange gains on a foreign currency debt will be realized when the debt becomes a parked obligation;
(g) ensuring that amounts are not inappropriately received tax-free by a policyholder as a result of a disposition of an interest in a life insurance policy;
(h) preventing the misuse of an exception in the anti-avoidance rules in the Income Tax Act for cross-border surplus-stripping transactions;
(i) indexing to inflation the maximum benefit amounts and the phase-out thresholds under the Canada child benefit, beginning in the 2020–21 benefit year;
(j) amending the anti-avoidance rules in the Income Tax Act that prevent the multiplication of access to the small business deduction and the avoidance of the business limit and the taxable capital limit;
(k) ensuring that an exchange of shares of a mutual fund corporation or investment corporation that results in the investor switching between funds will be considered for tax purposes to be a disposition at fair market value;
(l) implementing the country-by-country reporting standards recommended by the Organisation for Economic Co-operation and Development;
(m) clarifying the application of anti-avoidance rules in the Income Tax Act for back-to-back loans to multiple intermediary structures and character substitution; and
(n) introducing rules to prevent the avoidance of withholding tax on rents, royalties and similar payments using back-to-back arrangements.
Part 1 implements other income tax measures confirmed in the March 22, 2016 budget by
(a) allowing greater flexibility for recognizing charitable donations made by an individual’s former graduated rate estate;
(b) clarifying what types of investment funds are excluded from the loss restriction event rules that otherwise limit a trust’s use of certain tax attributes;
(c) ensuring that income arising in certain trusts on the death of the trust’s primary beneficiary is taxed in the trust and not in the hands of that beneficiary, subject to a joint election for certain testamentary trusts to report the income in that beneficiary’s final tax return;
(d) clarifying that the Canada Revenue Agency and the courts may increase or adjust an amount included in an assessment that is under objection or appeal at any time, provided the total amount of the assessment does not increase; and
(e) implementing the common reporting standard recommended by the Organisation for Economic Co-operation and Development for the automatic exchange of financial account information between tax authorities.
Part 1 also amends the Employment Insurance Act and various regulations to replace the term “child tax benefit” with “Canada child benefit”.
Part 2 implements certain goods and services tax and harmonized sales tax (GST/HST) measures proposed or confirmed in the March 22, 2016 budget by
(a) adding certain exported call centre services to the list of GST/HST zero-rated exports;
(b) strengthening the test for determining whether two corporations, or a partnership and a corporation, can be considered closely related;
(c) ensuring that the application of the GST/HST is unaffected by income tax amendments that convert eligible capital property into a new class of depreciable property; and
(d) clarifying that the Canada Revenue Agency and the courts may increase or adjust an amount included in an assessment that is under objection or appeal at any time, provided the total amount of the assessment does not increase.
Part 3 implements an excise measure confirmed in the March 22, 2016 budget by clarifying that the Canada Revenue Agency and the courts may increase or adjust an amount included in an assessment that is under objection or appeal at any time, provided the total amount of the assessment does not increase.
Division 1 of Part 4 amends the Employment Insurance Act to specify what does not constitute suitable employment for the purposes of certain provisions of the Act.
Division 2 of Part 4 amends the Old Age Security Act to provide that, in the case of low-income couples who have to live apart for reasons not attributable to either of them, the amount of the allowance is to be based on the income of the allowance recipient only.
Division 3 of Part 4 amends the Canada Education Savings Act to replace the term “child tax benefit” with “Canada child benefit”. It also amends that Act to change the manner in which the eligibility for the Canada Learning Bond is established, including by eliminating the national child benefit supplement as an eligibility criterion and by adding an eligibility formula based on income and number of children.
Division 4 of Part 4 amends the Canada Disability Savings Act to replace the term “child tax benefit” with “Canada child benefit”. It also amends the definition “phase-out income”.
Division 5 of Part 4 amends the Royal Canadian Mint Act to enable the Royal Canadian Mint to anticipate profit with respect to the provision of goods or services, to clarify the powers of the Royal Canadian Mint, to confirm the current and legal tender status of all non-circulation $350 coins dated between 1999 and 2006 and to remove the requirement that the directors of the Royal Canadian Mint have experience in respect of metal fabrication or production, industrial relations or a related field.
Division 6 of Part 4 amends the Financial Administration Act, the Bank of Canada Act and the Canada Mortgage and Housing Corporation Act to clarify certain powers of the Minister of Finance in relation to the sound and efficient management of federal funds and the operation of Crown corporations. It amends the Financial Administration Act to provide that the Minister of Finance may lend, by way of auction, excess funds out of the Consolidated Revenue Fund and, with the authorization of the Governor in Council, may enter into contracts and agreements of a financial nature for the purpose of managing risks related to the financial position of the Government of Canada. It also amends the Bank of Canada Act to provide that the Minister of Finance may delegate to the Bank of Canada the management of the lending of money to agent corporations. Finally, it amends the Canada Mortgage and Housing Corporation Act to provide that the Bank of Canada may act as a custodian of the financial assets of the Canada Mortgage and Housing Corporation.

Second Reading

[Todd Doherty, Conservative, Cariboo—Prince George, BC]

Mr. Speaker, perhaps my hon. colleague's memory has failed her, because clearly she did not want to mislead Canadians with her comments, but under the governance of the previous government, we cut GST from 7% to 5%. We had the best job creation and economic growth in the G7 over the decade that our Conservative government was in power.

It goes beyond that. That came at a time when the world was seeing one of the worst global recessions since the 1930s, the Great Depression, and our government did that. How did we do that? By strong fiscal management.

The government continues to talk about strong investment. I might add that the Conservatives removed 380,000 seniors from tax rolls completely. When we talk about things that have measurable impacts, our government did that over a decade of governance.

The present government is spending billions and billions of dollars. In my riding of Cariboo—Prince George, we are a resource-driven economy. Canada is a resource-driven economy, but the government has failed to renegotiate a new softwood lumber agreement. There are communities in my riding that are facing some serious times, and the budget, the bill we are debating today, does nothing to get people back to work.

It is great that the government is putting more money in EI, but Canadians need jobs. They do not want to be reliant on the government. They need jobs to be successful.

I ask my hon. colleague to show me in the budget, in the bill, where the budget will create jobs in my riding of Cariboo—Prince George, which is resource-driven. High-speed transit does nothing for my riding.

[Yasmin Ratansi, Liberal, Don Valley East, ON]

Mr. Speaker, let me remind the hon. member of a little bit of history. When our government, the Martin-Chrétien government, took over, we took over a bankrupt country. The Conservatives had left it bankrupt. We left them with a $13-billion surplus. What did they do with it? Economists called Mr. Harper the worst economic manager. GST is a regressive tax. They took boutique tax cuts without creating any jobs.

We do not need to learn any lessons from them because there they were stagnant, they were inward looking, and they put more money into advertising and in building gazebos instead of people.

[Sheila Malcolmson, NDP, Nanaimo—Ladysmith, BC]

Mr. Speaker, there are certainly measures in the budget bill that I support, that our party supports, and the community supports.

I would appreciate getting the member's feedback on some of the community-oriented disappointments that I have heard. One is the Liberal failure to reduce the small business tax cuts to 9% as they indicated in their election platform that they would. That has an impact on local spending and on job creation.

We are disappointed that there are no child care spaces created with the bill, disappointed that the value of the new child benefit tax is eroded over four years, taking a significant amount of money out of family pockets in year four, compared to the first year. There was a failure to close the stock option loophole for the wealthiest CEOs. Right from the municipalities, there was a great disappointment that the newly announced privatization bank will actually take money away from the pool that municipalities would have been able to draw directly on.

Those are all immediate impacts. They affect the environment, family, and the economy. I would like to know if the member shares my concern that the budget does not live up to those promises.

[Yasmin Ratansi, Liberal, Don Valley East, ON]

Mr. Speaker, I thank the member for her questions and for her concerns. In my riding, I have held more than 21 coffee meet and greets and town hall meetings, combined. The one thing I hear, as a business owner, as an accountant, as somebody who has been guiding businesses, is that people want investment in infrastructure. To be productive, they need rail, transportation, and the infrastructure that helps them move their goods along. They are quite happy that we have invested so much money in infrastructure. Municipalities and mayors have been very reflective and very happy with our investment money.

When we talk about child care spaces, I would remind the member opposite that, under the Martin government we had a child care agenda and it was the NDP who voted against it. In my riding alone, it would have created 25,000 child care spaces. So I think the budget is on the right track.

[Sonia Sidhu, Liberal, Brampton South, ON]

Mr. Speaker, I am rising today to speak to a bill focused on building a strong middle class that will build up our economy, Bill C-29, the budget implementation act 2016, no. 2.

Budget 2016 is a real plan to do the two things Canadians told us to do: help them and their families, and grow the economy.

I want to take a moment to compliment the finance minister and his team's work. I also want to thank his parliamentary secretary. The member for Saint-Maurice—Champlain came to Brampton last week. He is an honorary Bramptonian now. We consulted the Brampton Board of Trade and a number of economic stakeholders on important issues going forward into budget 2017.

Brampton has a lot to celebrate. There have been so many exciting developments in these past months: a long-desired university site coming to Brampton; the opening of Peel Memorial hospital in February; and other infrastructure developments, such as water and wastewater funding, which will protect Brampton against another flood situation, investment in post-secondary institutions such as Sheridan College in my riding, and Canada 150 local arts funding in order to keep our vibrant downtown an arts hub.

At the consultation we heard that these developments need to be expanded upon, and I agree. I will not stop listening to Brampton's needs as we move forward into this exciting period of growth and development for all our children.

I was pleased to hear at the event last week that many agreed with the fact that there is much ahead. I look forward to engaging in that discussion, building upon budget 2016 and these measures we are discussing today.

People in my riding have noticed we have accomplished a lot already in our first year. A number of online lists outline the things we have accomplished.

It is important for Canadians to understand that our government's plan builds upon things that strengthen the infrastructure of our system itself.

Without a strong CPP, without strong cities, without post-secondary investment, everything else suffers. Building the Canada of tomorrow means investing today, now. We as a government understand that it matters to build from the ground up and focus on people first. Brampton understands that these major developments will make our community stronger and our children's lives better.

In the last year, we took some important steps toward helping families regain the confidence they will need to drive our economy forward. We cut taxes for close to nine million Canadians. Our middle-class tax cut was the first thing we did as a government. We increased Canada student grants for students from low- and middle-income families and for part-time students. We increased monthly payments for the most in need seniors. We signed an agreement with the provinces to enhance the Canada pension plan to provide young people and future generations of workers with a stable and dignified retirement. We have also begun making major investments that will help the middle class grow and prosper today, while delivering economic growth for years to come.

This second budget implementation act proposes items that will complete the implementation of outstanding measures from the Government of Canada's first budget, growing the middle class.

We should be proud of what the House has passed. Budget 2016 puts people and families first. It introduces investments that take an essential step to growing the middle class. It is the first step of a long-term plan to restore hope and revitalize the economy for the benefit of all Canadians.

The bill we are debating today would help foster a strong Canadian economy and would enable Canadians in the middle class and those working hard to join it to keep more of their money to save, invest, and ensure economic growth.

The bill includes measures that would help families, give seniors a little more flexibility, protect consumers, and improve the quality and integrity of our country's tax system.

In budget 2016 one thing that we introduced, which is at the centre of what I notice making a real difference in Brampton South, is the new Canada child benefit. The Canada child benefit is simpler and more generous than the benefits it is replacing. It is also tax free and better targeted to help those who need it most.

The Canada child benefit will lift hundreds of thousands of children out of poverty in Canada. The cheques began to go out in July, and nine out of 10 families are now receiving more money than they did under the previous system. Families in my riding of Brampton South can use that money to make more nutritious choices for children's lunches, buy a warm coat for winter, or invest in activities like soccer or basketball.

Let me explain how this benefit will help Canadian families. Parents with children under the age of 18 will receive a maximum annual benefit of $6,400 per child under the age of six and $5,400 per child aged six through 17. Supporting this budget implementation bill would help ensure that the Canada child benefit will be indexed to inflation so that the families can count on this extra assistance today and for years to come.

This budget implementation bill would also support seniors by helping them retire in more comfort and with dignity. Canada's retirement income system has been successful in reducing poverty among seniors. However, some seniors continue to be at a heightened risk of living with low income. In particular, single seniors are nearly three times more likely to live with low income than seniors generally.

I see an unfortunate number of them in my riding. There is much more to do to help seniors living in poverty and to prevent the next wave of people who are retiring from facing this situation some day. Budget 2016 aims to help seniors retire comfortably and with dignity by making significant new investments that support them in their retirement years. In budget 2016, we repealed the provision of the Old Age Security Act that increased the age of eligibility for old age security and the guaranteed income supplement benefits from 65 to 67 years of age, and the allowance benefits from 60 to 62 years of age over the 2023 to 2029 period. Restoring the eligibility age for old age security and the guaranteed income supplement benefits to 65 will put thousands of dollars back into the pockets of Canadians as they become seniors and look to retire. That is the right thing to do.

Budget 2016 also increased the guaranteed income supplement top-up benefit by up to $947 annually for single seniors most in need, starting in July 2016. This is helping those seniors who rely almost exclusively on old age security and the guaranteed income supplement benefits and who may therefore be at risk of experiencing financial difficulties.

This measure represents an investment of over $670 million per year and will improve the financial security of about 900,000 single seniors across our nation.

In the second budget implementation bill, we are delivering on the promise we made in budget 2016 to support senior couples who face higher costs of living and are at an increased risk of poverty because they must live apart. The second budget implementation bill would amend the Old Age Security Act to make the program more flexible. When couples who are receiving the guaranteed income supplement and spouse's allowance have to live apart for reasons beyond their control, each will receive benefits based on their individual income. With respect to the income supplement and spouse's allowance, the government is improving fairness for seniors and helping them live with the dignity they deserve and need in retirement.

In conclusion, budget 2016 represents a giant step forward in our plan to put people first and deliver the help they need now, while investing for the years and decades to come.

I am so proud of these measures. They are focused on middle-class communities like Brampton South, which is a model riding where these benefits make a real difference.

We can and must do more, and we will do more. We can achieve the Canada of the future together. Therefore, I encourage all members in the House to support this bill. It is right for Canada, it is right for families, and it is right for the middle class.

[Robert Gordon Kitchen, Conservative, Souris—Moose Mountain, SK]

Mr. Speaker, I remember the days when Brampton actually was a rural part of Canada. However, the Liberals' concept of rural Canada today is a paved-over suburbia. The reality is this. I do not know whether the member was in the House when the member for Saint-Maurice—Champlain, the Parliamentary Secretary to the Minister of Finance, talked about this budget giving increased handouts. Canadians do not want handouts; they want a hand up, and they want help. They want to do that by having the government do things.

The present government campaigned on lowering small businesses taxes, which it did not do. The farmers who are in these small agriculture industries are businessmen who want to see those decreases, and they are not seeing that. I wonder what the member would say about how the Liberals will create jobs when small businesses do not have the opportunity to be economically viable?

[Sonia Sidhu, Liberal, Brampton South, ON]

Mr. Speaker, the real concern the member should be asking about is the difference between our government's approach and the previous government's approach.

In the first year, we accomplished so much for the middle class and those working to join it, such as the CCB cheques. We are focusing on the middle class. When people receive their cheques, they invest in the small businesses. When small businesses invest in our economy, it will be booming.

We are not resting on our laurels. We are continuing to work to build a Canada that works for everyone. I am proud of our government's positive, optimistic approach, as seen in the bill.

[Alexandre Boulerice, NDP, Rosemont—La Petite-Patrie, QC]

Mr. Speaker, sadly, there is nothing for small businesses in the budget. Also, everyone who makes less than $45,000 in our country is not part of the middle class.

I want to quote an interesting thing about time allocation. It is “not only preventing business and debate in this chamber, but...[it is] hurting the ability of committees to do their work”. Who said that? It was the Liberal member for Malpeque.

Another quote is that time allocation “is undemocratic and a type of abuse, as a rule, of the House of Commons”. Who said that? It was the Liberal member for Winnipeg North.

Why are the Liberals changing their minds now that they are in power?

[Sonia Sidhu, Liberal, Brampton South, ON]

Mr. Speaker, today we are focusing on Bill C-29. The budget implementation bills does a number of important things, including strengthening our tax system, indexing the CCB to inflation, improving EI, and supporting seniors.

Our government has taken real action. It is a bill the Minister of Finance and the parliamentary secretary have consulted widely on, and it is working. I am hearing a lot of positive feedback in Brampton South.

[Rodger Cuzner, Liberal, Parliamentary Secretary to the Minister of Employment]

Mr. Speaker, the benefit of being in the House for 16 years, and the anniversary is next week, is that we have seen a number of closure motions. The Conservatives talk about closure. They used it 100 times in the last Parliament.

The NDP are talking about it. I remember when David Anderson was trying to get the Kyoto agreement through the House, and the Conservatives were filibustering on its ratification. Day after day, a friend of mine, Alexa McDonough, a fellow Nova Scotian, would get up and hammer David Anderson, asking, “When are you getting it done?” and saying, “The Liberals don't want to do it. Get this done. Don't pay any attention to the Conservatives”. We called closure after about four weeks of debate. There were 13 NDP members, and only six of them showed up to vote, and the six of them voted against closure. They talk a good game, but they cannot get it done.

I want to commend the member for her speech today.

[The Assistant Deputy Speaker, Liberal, Anthony Rota]

I want to remind the hon. member not to refer to the presence of members, even it was in the past.

We are out of time. We will go over to the hon. member for Brampton South.

[Sonia Sidhu, Liberal, Brampton South, ON]

Mr. Speaker, the infrastructure bank that is under way would support affordable housing. This is also a big accomplishment of our government. It would very much help people in my riding of Brampton South. Homelessness and mental health issues in our urban areas are serious problems.

We are focusing on the middle class. The CCB cheques and strengthening the CPP for seniors are also very helpful in my riding of Brampton South.

[Garnett Genuis, Conservative, Sherwood Park—Fort Saskatchewan, AB]

Mr. Speaker, it is a pleasure for me to join this important debate on the government's fiscal update and the fiscal policy of the government in general.

To be frank, there is a lot to sink one's teeth into in terms of objections to the government's direction. I can say, having just come back from constituency week and having spoken with constituents in my riding, that people in Alberta, but I think across the country, are being hit very hard by the policies of the government.

As I think through it and talk to business leaders, I am reminded of the fact that every single tax they pay is going up. Small businesses in my riding face a higher small business tax rate as a result of the fiscal policy of the government. They face a carbon tax, a carbon tax brought in by the provincial government but which the federal government will do everything it can to prevent any subsequent provincial government from repealing.

We have the elimination of the hiring credit for small business. Bill C-26 would raise payroll taxes that individual employees as well as small businesses would pay. There is the undoing of employment insurance reforms, which would, in the long run, force up employment insurance premiums. Of course, small businesses are facing higher business tax rates in general from the provincial government and are grappling with the minimum wage hike and other changes that are happening, and there still has been no serious effort when it comes to market access for our resources.

We have a government that is hitting businesses again and again and again. The reality is that these are the job creators in our economy. These are the people whose investments and ingenuity create jobs and opportunities for our country. I just went through the list, objectively, of things that are happening to businesses in my riding, and I have to say that I find the continuing optimism and the continuing desire of business leaders in my constituency to move forward and build truly inspiring. The government should be there to try to help them succeed, not make their job more difficult when it comes to creating jobs and opportunities.

I will mention one specific thing in this fiscal update, and that is the implementation of certain regulations with respect to credit unions. There are credit unions in my constituency. The application of one-size-fits-all regulations, perhaps designed for the big banks, to every small credit union is a huge red-tape burden. Again, we have a government that is not listening, that is not paying attention to small businesses. This deals with one specific sector of the economy, credit unions, but it is another example of how the government is simply out of touch with the needs of the job creators in our economy.

Moving beyond that, I was to talk about two general points: deficit spending by the government in general and the issue of the employment insurance changes contained in this fiscal update.

The government's approach to deficit spending is, yes, to run deficits, but it is more than that. It is to undertake a policy of constant structural deficits. This is very different from the traditional arguments made for deficits. There are, I think, good arguments for running deficits in certain situations. The basis of that would be the Keynesian economic principle of counter-cyclical government spending, a government doing more spending during times of economic challenge to offset the pullback happening in the economy as a whole and then the government pulling back and running surpluses during times of economic prosperity.

The importance of this is that the government is providing that stimulus for economic activity during relatively difficult times but is still balancing its budget over the long term. It is still in a position, in the long run, to balance its budget. I think we should all accept that we have to balance the budget in the long term. We cannot constantly, over a sort of forever time horizon, spend more than we have. Eventually, the capacity to borrow will run out. There is nothing wrong with running deficits in certain situations, provided that we intend to balance the budget over the long term.

When we talk about stimulating the economy, the important thing is that it needs to be in times that are relatively less good. Of course, even during good times, there will be people who are struggling. There will be people without jobs. There will perhaps be a desire to increase growth. However, if the government always spends more than it has in good times as well as bad times, then eventually, it is going to run out.

The government talks about stimulus, but it is really abusing these arguments, because its position is not that the government can do counter-cyclical spending at certain times to stimulate the economy. Rather, its position, stated by the finance minister, is that we can just run deficits all the time. The finance minister responded to a question I asked earlier during committee of the whole about whether the government would ever balance the budget. He would not say yes to that very simple question.

If we look at what is happening in the economy, the government is constructing arguments that are entirely resistant to the evidence. If things are going well, Liberals will say it is an indication of the fact that they can spend more. When things are going poorly, they say that they need to spend more. Every situation, good or bad, every data point, in their minds, is proof that they need to constantly be spending more money. Of course, there are limits.

Although Canada has a relatively low federal debt-to-GDP ratio, our total government debt-to-GDP ratio, which includes what the Kathleen Wynne Liberals in Ontario are doing and other spending programs of provincial governments, is comparable to countries like the United States and the U.K. It is important that we look at the total debt-to-GDP ratio, because in Canada we have relatively more public services provided at the provincial level than we do federally. For the federal government to say that it has lots of room to run deficits just is not true, because it needs to look at the overall debt-to-GDP ratio.

We see in this fiscal update the government making promises to people, increasing spending, and announcing the indexing of the new child benefit program. The Liberals are just not dealing with real money, because they are making promises into the future that are not costed, and that, in the long run, they should know they will not have the capacity to do. I think it is wrong to promise people that the government is going to spend money on things it knows it does not have the capacity to. When it has this kind of policy, when it undertakes government spending and assumes that it can run deficits forever, what it leads to eventually are significant cuts. The benefit of running surpluses during relatively good times and stimulating deficits during relatively less good times is that the government is able to spend more during challenging times, whereas countries that have consistently spent more than they have find themselves during bad times also in a position where they are forced to cut spending before they go off the fiscal cliff. That is the situation of some countries in Europe. We know that this has happened. We do not want to see Canada go down this road.

Just to complete blowing a hole in this stimulus argument, if we look at government spending, it is not targeted or temporary stimulus spending. Liberals are instituting what they would like to propose as permanent new social spending. They are proposing spending that is not targeted to economic stimulus. It is permanent new promised spending, a promise they know, or should know, simply cannot be kept.

I will conclude with a few comments about employment insurance reforms. In the last government, we brought in some very sensible reforms for employment insurance. Under new rules we brought in, it was expected that individuals would be actively involved in a job search to receive benefits. That is a reasonable requirement. We worked to define suitable employment in a way that said that even if individuals could not find exactly the same job they had before, there should be a broader definition of suitable employment but also that the government should provide more help to people in terms of finding jobs. We instituted a stronger system of providing job information to people who were seeking jobs.

It is important that individuals be actively involved in a job search when they are on employment insurance, that employment insurance be a meaningful insurance system, and that it be designed to help people get back to work, not something that can be constantly relied on year after year. I think that is a sensible way of structuring the program. The government, in undoing those employment insurance reforms, is creating additional costs for small businesses as well as for individuals, because everyone has to pay into that EI fund.

Therefore, if we take away those reforms to encourage job search on the payout side of it, then we have to increase the burden on those paying into it. This has a real cost for the creation of jobs and for people who work in our country. I prefer a policy that makes it easier for people to get jobs, not one that cuts back on jobs.

This is the wrong direction for our country, and I will be voting against this.

[David Graham, Liberal, Laurentides—Labelle, QC]

Mr. Speaker, I always find it a little ironic to hear the Conservatives talk about deficits.

If we look back to the turn of the 20th century, back to 1900, the Conservatives managed to balance one budget in the 20th century, which was in 1912, and they inherited it from the Liberals. The next year they were in deficit. In 1914, we went into the First World War already in a deficit position. The next time the Conservatives balanced a budget was in 2006, when they inherited it from the Liberals. However, if we go back to Confederation, there was only one Liberal prime minister who did not post at least one balanced budget, and that one had no budgets tabled at all as he was only there for four months.

Does the member have any comments on that?

[Garnett Genuis, Conservative, Sherwood Park—Fort Saskatchewan, AB]

Mr. Speaker, I do not really see any need to go through and defend the policies of every Conservative government or oppose the policies of every Liberal government since Confederation. However, I really wish we had a prime minister and a finance minister who were more willing to align themselves with the Liberal fiscal policies that we have seen in the past. Although I would have many disagreements with some of those past Liberal governments, generally they had a much more sensible approach to fiscal policy than the current one.

What we are debating are the budget documents in front of us, which very clearly show no plan for ever returning to a balanced budget. There is even no acknowledgement that it is necessary.

Specifically to the record of the last Conservative government, one that I am very happy to defend in this respect, there was value in those stimulative deficits during the worst global financial crisis since the Great Depression. They were timely, targeted, and temporary stimulative investments. It is clear, and the parliamentary budget officer agrees, that we were back to a balanced budget, which the Liberals inherited before thoroughly destroying it, as quickly as they possibly could, in hopes of pinning their deficit on the previous government. However, we know from the parliamentary budget officer and from what the “Fiscal Monitor” has said that the current government plunged us into deficit after the Conservatives had balanced it.

It is a nuanced argument. There are times when it makes sense to run a deficit, but just because there are times when it makes sense to run a deficit does not mean that it makes sense to run deficits all the time. The Liberals think we should run deficits all the time. The Conservatives support deficits in certain situations for that targeted, stimulative approach, but we need to have a balanced budget over the long term.