Bill C-47

Budget Implementation Act, 2023, No. 1

An Act to implement certain provisions of the budget tabled in Parliament on March 28, 2023

Part 1 implements certain measures in respect of the Income Tax Act and the Income Tax Regulations by
(a) enabling the Canada Revenue Agency (CRA) to use electronic certification of tax and information returns and requiring taxpayers to file electronically in certain circumstances;
(b) doubling the maximum deduction for tradespeople’s tools from $500 to $1,000;
(c) providing that any gain on the disposition of a right to acquire Canadian housing property within a one-year period of its acquisition is treated as business income;
(d) excluding from a taxpayer’s income certain benefits for Canadian Forces members, veterans and their spouses or common-law partners;
(e) exempting from taxation any income earned by the Band Class Settlement Trust in accordance with section 24.05 of the Settlement Agreement entered into on January 18, 2023 relating to the attendance of day scholars at residential schools;
(f) providing an additional payment of the Goods and Services Tax/Harmonized Sales Tax (GST/HST) credit equal to double the amount of the regular January 2023 payment;
(g) providing for automatic, quarterly advance payments of the Canada Workers Benefit;
(h) allowing divorced and separated spouses to open joint Registered Educational Savings Plans and increasing educational assistance amounts under those plans;
(i) extending, by ‚three years, the ability of a qualifying family member to be the plan holder of an individual’s Registered Disability Savings Plan and expanding the definition of “qualifying family member” to include a sister or a brother of the individual;
(j) allowing defined contribution registered pension plans to correct contribution errors and requiring that the contributions or refunds are reported to the CRA for the purpose of correcting the RRSP deduction limit;
(k) modifying reporting requirements in respect of reportable transactions, introducing reporting requirements for notifiable transactions and providing reporting requirements with respect to uncertain tax treatments, as well as extending the reassessment periods applicable to those transactions and creating or modifying penalties for non-compliance with those requirements;
(l) allowing the CRA to share taxpayer information for the purposes of the Canadian Dental Care Plan;
(m) expanding the definition of “dividend rental arrangement” to include “specified hedging transactions” carried out in whole or in part by registered securities dealers;
(n) implementing the Model Reporting Rules for Digital Platforms developed by the Organisation for Economic Co-operation and Development;
(o) requiring annual reporting by financial institutions of the fair market value of registered retirement savings plans and registered retirement income funds;
(p) expanding the permissible borrowing by defined benefit pension plans; and
(q) implementing a number of technical amendments to correct mistakes or inconsistencies and to better align the law with its intended policy objectives.
It also makes related and consequential amendments to the Excise Tax Act , the Tax Rebate Discounting Act , the Air Travellers Security Charge Act , the Excise Act, 2001 , Part 1 of the Greenhouse Gas Pollution Pricing Act and the Electronic Filing and Provision of Information (GST/HST) Regulations .
Part 2 implements certain measures in respect of the Excise Tax Act and a related text by
(a) clarifying that the international transportation of money benefits from Goods and Services Tax/Harmonized Sales Tax (GST/HST) relief and other special rules in the same manner as a service of internationally transporting other kinds of freight;
(b) permitting a pension entity, in specific circumstances, to claim the pension entity rebate or an input tax credit, or to make the pension entity rebate election, after the end of the two-year limitation period;
(c) specifying that cryptoasset mining is generally not considered a supply for GST/HST purposes; and
(d) ensuring that payment card clearing services are excluded from the definition “financial service” under the GST/HST legislation.
Part 3 amends the Excise Act , the Excise Act, 2001 and the Air Travellers Security Charge Act in order to implement two measures.
Division 1 of Part 3 amends the Excise Act and the Excise Act, 2001 in order to temporarily cap the inflation adjustment for excise duties on beer, spirits and wine at two per cent, for one year only, as of April 1, 2023.
Division 2 of Part 3 amends the Air Travellers Security Charge Act to increase the air travellers security charge that is applicable to air travel that includes a chargeable emplanement after April 2024 and for which any payment is made after April 2024.
Part 4 enacts and amends several Acts in order to implement various measures.
Division 1 of Part 4 amends the Bank Act to strengthen the regime for dealing with complaints against banks and authorized foreign banks by, among other things, providing for the designation of a not-for-profit body corporate to be the sole external complaints body. It also makes consequential amendments to the Financial Consumer Agency of Canada Act and related amendments to the Financial Consumer Protection Framework Regulations .
Division 2 of Part 4 amends the Pension Benefits Standards Act, 1985 to, among other things, provide for variable life benefits under a defined contribution provision of a pension plan and amends the Pooled Registered Pension Plans Act to, among other things, provide for variable life payments under pooled registered pension plans. It also makes a consequential amendment to the Canadian Human Rights Act .
Division 3 of Part 4 contains measures that are related to money laundering and to digital assets and other measures.
Subdivision A of Division 3 amends the Proceeds of Crime (Money Laundering) and Terrorist Financing Act to, among other things,
(a) require persons or entities referred to in section 5 of that Act to report to the Financial Transactions and Reports Analysis Centre of Canada information that is related to a disclosure made under the Special Economic Measures Act or the Justice for Victims of Corrupt Foreign Officials Act (Sergei Magnitsky Law) ;
(b) strengthen the registration framework for persons or entities referred in paragraphs 5(h) and (h.1) of the Proceeds of Crime (Money Laundering) and Terrorist Financing Act , which are often referred to as money services businesses;
(c) create two new offences relating to persons or entities who engage in activities for which they are not registered under that Act and the structuring of financial transactions undertaken to avoid reporting obligations under that Act, as well as a new offence relating to reprisals by employers against employees who fulfill obligations under that Act;
(d) facilitate the sharing, between the Minister of Finance, the Office of the Superintendent of Financial Institutions and the Financial Transactions and Reports Analysis Centre of Canada, of information that relates to their respective mandates; and
(e) authorize the Minister of Finance to issue directives to persons and entities referred in section 5 of that Act in respect of risks relating to the financing of threats to the security of Canada.
Subdivision A also amends the Budget Implementation Act, 2021, No. 1 in relation to the Proceeds of Crime (Money Laundering) and Terrorist Financing Act .
Subdivision B of Division 3 amends the Criminal Code to provide for a new warrant authorizing a peace officer or other person named in the warrant to search for and seize digital assets, including virtual currency, as well as to expand the list of offences on the basis of which an examination of information obtained by the Minister of National Revenue under various tax statutes may be authorized. The subdivision also makes related amendments to other Acts.
Division 4 of Part 4 amends the Customs Tariff to extend the expiry date of the General Preferential Tariff and Least Developed Country Tariff to December 31, 2034 and to create a new General Preferential Tariff Plus tariff treatment that will expire on the same date. The Division also aligns direct shipment requirements for tariff treatments under that Act with those that apply to free trade agreements.
Division 5 of Part 4 amends the Customs Tariff to remove Belarus and Russia from the List of Countries entitled to Most-Favoured-Nation tariff treatment.
Division 6 of Part 4 allows the Bank of Canada to apply, despite sections 27 and 27.1 of the Bank of Canada Act , any of its ascertained surplus to its retained earnings until its retained earnings are equal to zero or the ascertained surplus applied to its retained earnings is equal to the losses it incurred from the purchase of securities as part of the Government of Canada Bond Purchase Program.
Division 7 of Part 4 enacts the Canada Innovation Corporation Act . That Act continues the Canada Innovation Corporation, which was established under another Act, as a parent Crown corporation, sets out the Corporation’s purpose to maximize business investment in research and development across all sectors of the economy and in all regions of Canada to promote innovation-driven economic growth and includes transitional provisions. The Division also makes consequential and related amendments to other Acts.
Division 8 of Part 4 amends the Federal-Provincial Fiscal Arrangements Act to authorize additional payments to the provinces and territories.
Division 9 of Part 4 amends the Federal-Provincial Fiscal Arrangements Act to renew the authority to make Equalization and Territorial Formula Financing payments for another five-year period beginning on April 1, 2024 and makes a technical change to improve the accuracy of the programs. It also makes a technical change to the calculation of fiscal stabilization payments. Finally, it provides for the publication of the details of all amounts authorized to be paid under that Act.
Division 10 of Part 4 amends the Special Economic Measures Act , the Proceeds of Crime (Money Laundering) and Terrorist Financing Act and the Justice for Victims of Corrupt Foreign Officials Act (Sergei Magnitsky Law) to strengthen Canada’s ability to take economic measures against certain persons.
Division 11 of Part 4 amends the Privileges and Immunities (North Atlantic Treaty Organisation) Act to, among other things, enable the Paris Protocol to be implemented in Canada.
Division 12 of Part 4 amends the Service Fees Act to, among other things, clarify the definition “fee”, exempt certain fees from the application of that Act, make certain exceptions in that Act applicable only with the approval of the President of the Treasury Board, make certain changes to the annual adjustment provisions and provide authority for the President of the Treasury Board to amend the regulations made under section 22 of that Act by taking into account the factors established by regulations.
It also amends section 25.1 of the Canadian Food Inspection Agency Act to provide for the application of sections 16 to 18 of the Service Fees Act to low-materiality fees, within the meaning of the Service Fees Act , that are fixed under section 24 or 25 of the Canadian Food Inspection Agency Act .
Division 13 of Part 4 amends the Canada Pension Plan to allow the Minister of National Revenue to make available information to the Minister of Employment and Social Development that is necessary for the purpose of policy analysis, research or evaluation related to the administration of that Act.
Division 14 of Part 4 amends the Department of Employment and Social Development Act to grant the Minister of Employment and Social Development the authority to collect and use Social Insurance Numbers for the purposes of administering or enforcing any Act, program or activity in respect of which the administration or enforcement is the responsibility of the Minister.
Division 15 of Part 4 amends the Canada Labour Code in respect of leave related to the death or disappearance of a child to, among other things, increase the maximum length of that leave from 104 weeks to 156 weeks and to repeal paragraph 206.5(4)(b) of that Act.
Division 16 of Part 4 amends the Immigration and Refugee Protection Act to provide that a claim for refugee protection made by a person inside Canada must be made in person and, with regard to a claim made by the person other than at a port of entry, that the Minister of Citizenship and Immigration may specify the documents and information to be provided and the form and manner in which they are to be provided.
Division 17 of Part 4 amends the Immigration and Refugee Protection Act to clarify that the Minister of Citizenship and Immigration may give instructions in respect of an application to sponsor a person who applies for a visa as a Convention refugee, within the meaning of that Act, or as a person in similar circumstances.
Division 18 of Part 4 amends the College of Immigration and Citizenship Consultants Act to, among other things,
(a) provide that the College of Immigration and Citizenship Consultants may seek an order authorizing it to administer the property of any licensee of the College who is not able to perform their activities as an immigration and citizenship consultant;
(b) extend immunity against proceedings for damages to directors, employees and agents and mandataries of the College, among others;
(c) authorize the College to enter into information-sharing agreements or arrangements with any entity, including federal or provincial government institutions; and
(d) expand the areas in respect of which the Governor in Council may authorize the College to make by-laws.
The Division also makes related amendments to the Citizenship Act and the Immigration and Refugee Protection Act to clarify that any person who is the subject of a notice of violation issued under either of those Acts has the right to request a review of the notice or the administrative monetary penalty set out in the notice.
Division 19 of Part 4 amends the Citizenship Act to, among other things,
(a) grant the Minister responsible for the administration and enforcement of that Act the power to collect biometric information from persons who make an application under that Act — and to use, verify, retain and disclose that information — in accordance with the regulations;
(b) authorize that Minister to administer and enforce that Act using electronic means, including by using an automated system; and
(c) grant that Minister the power to make regulations requiring persons who make an application or who provide documents, information or evidence under that Act to do so using electronic means.
Division 20 of Part 4 amends the Yukon Act to authorize the Minister of Northern Affairs to take any measures on certain public real property that the Minister considers necessary to prevent, counteract, mitigate or remedy any adverse effect on persons, property or the environment.
Subdivision A of Division 21 of Part 4 amends the Marine Liability Act to, among other things,
(a) increase the maximum liability for certain claims involving a ship of less than 300 gross tonnage;
(b) establish the maximum liability for claims involving air cushion vehicles;
(c) remove all references to the Hamburg Rules;
(d) extend the application of the International Convention on Civil Liability for Bunker Oil Pollution Damage, 2001 to non-seagoing vessels;
(e) provide for public notice requirements relating to the constitution of limitation funds under that Act;
(f) clarify that the owner of a ship is liable for economic loss related to fishing, hunting, trapping or harvesting suffered by an Indigenous group, community or people or suffered by a member of such a group, community or people; and
(g) expand the compensation regime of the Ship-source Oil Pollution Fund to include certain future losses.
Subdivision B of Division 21 amends the Canada Shipping Act, 2001 to, among other things,
(a) expand the application of Part 1 of that Act in relation to certain pleasure craft;
(b) expand the exemption powers of the Minister of Transport and the Minister of Fisheries and Oceans;
(c) allow the owner of a Canadian vessel to enter into an arrangement with a qualified person under which that person is the authorized representative of the vessel;
(d) give the Marine Technical Review Board jurisdiction to make decisions on applications for exemptions from interim orders;
(e) authorize the Governor in Council to incorporate by reference in certain regulations material that the Minister of Transport produces;
(f) broaden the Governor in Council’s power respecting fees, charges, costs or expenses to be paid in relation to the administration and enforcement of matters under that Act for which the Minister of Transport is responsible;
(g) increase the maximum amount of fines for certain offences;
(h) provide authority, in certain circumstances, for the Chief Registrar to refuse to issue a certificate of registry and for the Minister of Transport to refuse to issue a pleasure craft licence;
(i) authorize the Governor in Council to make regulations respecting emergency services;
(j) authorize the Minister of Transport to, among other things,
(i) direct a master or crew member to cease operations,
(ii) authorize the Deputy Minister of Transport to make interim orders in response to risks to marine safety or to the marine environment, and
(iii) direct a port authority or a person in charge of a port authority or place to authorize vessels to proceed to a place selected by the Minister; and
(k) permit designating as violations the contravention of certain provisions of Parts 5 and 10 of that Act and the regulations made under those Parts.
The Subdivision also makes a related amendment to the Oil Tanker Moratorium Act .
Subdivision C of Division 21 amends the Wrecked, Abandoned or Hazardous Vessels Act to, among other things, establish the Vessel Remediation Fund in the accounts of Canada and provide the Minister of Fisheries and Oceans with certain powers in relation to the detention of vessels.
Division 22 of Part 4 amends the Canada Transportation Act to, among other things,
(a) allow the Governor in Council to require air carriers to publish information respecting their performance on their Internet site;
(b) permit the sharing of information to ensure the proper functioning of the national transportation system or to increase its efficiency, while ensuring the confidentiality of that information;
(c) allow the Minister of Transport to require certain persons to provide certain information to the Minister if the Minister is of the opinion that there exists an unusual and significant disruption to the effective continued operation of the national transportation system;
(d) establish a new zone in Manitoba, Saskatchewan and Alberta, in which any interswitching that occurs is subject to the rate determined by the Canadian Transportation Agency, for a period of 18 months; and
(e) broaden the scope of the administrative monetary penalties scheme.
Division 23 of Part 4 amends the Canada Transportation Act to, among other things,
(a) broaden the authority of the Canadian Transportation Agency to set fees and charges to recover its costs;
(b) replace the current process for resolving air travel complaints with a more streamlined process designed to result in more timely decisions;
(c) impose a greater burden of proof on air carriers where it is presumed that compensation is payable to a complainant unless the air carrier proves the contrary;
(d) require air carriers to establish an internal process for dealing with air travel claims;
(e) modify the Agency’s regulation-making powers with respect to air carriers’ obligations towards passengers; and
(f) enhance the Agency’s enforcement powers with respect to the air transportation sector.
Division 24 of Part 4 amends the Customs Act to, among other things,
(a) allow a person arriving in Canada to present themselves to the Canada Border Services Agency by a means of telecommunication, if that manner of presenting is made available at the customs office at which they are presenting themselves; and
(b) subject to the regulations, require that the operator of a commercial aircraft arriving in Canada ensure that baggage on board the aircraft is transported without delay to the nearest international baggage area.
The Division also makes a related amendment to the Quarantine Act .
Division 25 of Part 4 amends the National Research Council Act to, among other things, provide that the National Research Council of Canada may procure goods and services, including goods and services relating to construction and to research-related digital and information technology. It also establishes a new Procurement Oversight Board.
Division 26 of Part 4 amends the Patent Act to, among other things,
(a) authorize the Commissioner of Patents to grant an additional term for a patent if certain conditions are met;
(b) authorize the Governor in Council to make regulations respecting the number of days that is to be subtracted in determining the duration of an additional term; and
(c) authorize the Commissioner of Patents and the Federal Court to shorten the duration of an additional term if the duration as previously determined is longer than is authorized.
Division 27 of Part 4 amends the Food and Drugs Act to extend measures regarding therapeutic products to natural health products in order to, among other things,
(a) strengthen the safety oversight of natural health products throughout their life cycle; and
(b) promote greater confidence in the oversight of natural health products by increasing transparency.
Division 28 of Part 4 amends the Food and Drugs Act to, among other things, prohibit
(a) the sale of a cosmetic unless its safety can be established without relying on data derived from a test conducted on an animal that could cause pain, suffering or injury, whether physical or mental, to the animal, subject to certain exceptions;
(b) the conduct of a test on an animal that could cause pain, suffering or injury, whether physical or mental, to the animal if the purpose of the test is to meet a legislative requirement that relates to cosmetics; and
(c) deceptive or misleading claims, on the label of or in an advertisement for a cosmetic, with respect to testing on animals.
Division 29 of Part 4 enacts the Dental Care Measures Act .
Division 30 of Part 4 amends subsection 41(1) of the Canada Post Corporation Act , in response to the decision in R. v. Gorman , to limit the Canada Post Corporation’s authority to open mail other than letters.
Division 31 of Part 4 expresses the assent of the Parliament of Canada to the issuing by His Majesty of a Royal Proclamation under the Great Seal of Canada establishing for Canada the applicable Royal Style and Titles.
Division 32 of Part 4 amends the Public Sector Pension Investment Board Act to provide that the Public Sector Pension Investment Board may incorporate a subsidiary for the purpose of providing investment management services to the Canada Growth Fund Inc. It also amends the Fall Economic Statement Implementation Act, 2022 to increase the amount that may be paid out of the Consolidated Revenue Fund on the requisition of the Minister of Finance for the acquisition of shares of the Canada Growth Fund Inc. and to provide that the Canada Growth Fund Inc. is not an agent of His Majesty in right of Canada.
Division 33 of Part 4 amends the Office of the Superintendent of Financial Institutions Act , the Trust and Loan Companies Act , the Bank Act and the Insurance Companies Act to, among other things,
(a) expand the mandate of the Office of the Superintendent of Financial Institutions to include the supervision of federal financial institutions in order to determine whether they have adequate policies and procedures to protect themselves against threats to their integrity or security; and
(b) expand the Superintendent of Financial Institutions’ powers to issue directions to, and to take control of, a federal financial institution in certain circumstances.
It also makes a consequential amendment to the Winding-up and Restructuring Act .
Division 34 of Part 4 amends the Criminal Code to, among other things, lower the criminal rate of interest calculated in respect of an agreement or arrangement and to express that rate as an annual percentage rate. It also authorizes the Governor in Council, by regulation, to fix a limit on the total cost of borrowing under a payday loan agreement. Finally, it provides for transitional provisions.
Division 35 of Part 4 amends the Employment Insurance Act to extend, until October 26, 2024, the increase in the maximum number of weeks for which benefits may be paid in a benefit period to certain seasonal workers.
Division 36 of Part 4 amends the Canadian Environmental Protection Act, 1999 to, among other things,
(a) establish an account in the accounts of Canada to be called the Environmental Economic Instruments Fund, for the purpose of administering amounts received as contributions to certain funding programs under the responsibility of the Minister of the Environment; and
(b) replace references to “tradeable units” with references to “compliance units”.
It also makes consequential amendments to the Canada Emission Reduction Incentives Agency Act .
Division 37 of Part 4 amends the Canada Deposit Insurance Corporation Act to clarify that the Canada Deposit Insurance Corporation may administer any contract related to deposit insurance entered into by the Minister of Finance and to allow the Minister to increase the deposit insurance coverage limit until April 30, 2024.
Division 38 of Part 4 amends the Department of Employment and Social Development Act to, among other things,
(a) establish the Employment Insurance Board of Appeal to hear appeals of decisions made under the Employment Insurance Act instead of the Employment Insurance Section of the General Division of the Social Security Tribunal; and
(b) eliminate the requirement for leave to appeal decisions relating to the Employment Insurance Act to the Appeal Division of the Tribunal.
It also makes consequential amendments to other Acts.
Division 39 of Part 4 amends the Canada Elections Act to provide for a national, uniform, exclusive and complete regime applicable to registered parties and eligible parties respecting their collection, use, disclosure, retention and disposal of personal information.

Budget Implementation Act, 2023, No. 1

[Pierre Poilievre, Conservative, Carleton, ON]

Madam Speaker, as I was pointing out, this practice of so-called quantitative easing was not invented in Canada. In fact, it started long ago in Japan, which caused a massive gap to appear between the rich and the poor, because the Japanese government printed cash, inflated asset values, left the working class behind and inflated the wealth of the super-rich. This led to a long-standing slump in Japanese economic growth, because investors no longer had to invest in productive assets that would generate wealth for the Japanese economy. Rather, they could just sit on their property, their stocks or their bonds and allow the Japanese central bank to inflate the values. The Americans then replicated this idea of quantitative easing in the U.S. financial crisis. The result was a disaster. It was a decade of very slow economic growth.

Furthermore, there was a major expansion in the gap between rich and poor. While the working class in America was losing its jobs to automation and outsourcing, it was not enjoying any of the lower prices that those competitive forces should have provided because the central bank was neutralizing cost savings by inflating the cost of living by printing cash. We saw a massive explosion in the wealth of Wall Street and Silicon Valley, while the working poor in industrial states, such as Pennsylvania, Ohio and others, found themselves more and more disenfranchised. Their wages were going down, yet their prices were going up. They looked around and saw incompetent CEOs and other financial sector insiders, the same ones who had caused the U.S. financial crisis, not going to jail where they belonged. Rather, they were getting richer and richer. Therefore, the working poor came to believe that the system had ultimately been rigged against them.

Now I bring this to the present, because the government claims that because all central banks were engaging in quantitative easing, we had to do it as well. The American federal reserve is our big, friendly neighbour to the south. The argument goes that if it does something, we have to do it too. However, that is provably false. In the 2008-09 financial crisis, the American government printed cash to buy government debt. They did something called quantitative easing. In Canada, we did not do that. Our government signalled to the central bank that it would not be authorized to participate in fiscal policy by printing cash to buy government bonds. Yes, we ran small, temporary deficits to get through that financial crisis, but we did it by borrowing real money, not by printing cash. That is why we rebounded faster than the Americans did. We had lower unemployment. We were the last in and the first out of the recession, and we never had inflation above 4%. We were back to our inflation target in a year. This proves that we did not need to do what the Americans did, just as our mothers taught us. Just because our friends are jumping off a bridge, does not mean we should do the same.

We know that the Swiss did not print cash during the COVID crisis. Rather, they used real money; when they ran deficits, they borrowed real money. They quickly returned to a balanced budget, and the result was the lowest unemployment, the lowest interest rates and the lowest inflation. This was despite the fact that their European neighbours all had massive inflation crises because their central bank on that continent had behaved differently.

All these experiences were laboratories to demonstrate the folly of the government's actions. I called this folly out on the floor of the House of Commons as early as the fall of 2020, when all that cash was moving into our economy and already beginning to inflate the cost of living. Core inflation was already rising and starting to break above the 2% target, yet they continued when it was clear that there was—

[The Assistant Deputy Speaker, Carol Hughes]

I have a point of order.

The hon. Minister of Seniors.

The House resumed consideration of the motion that Bill C-47, An Act to implement certain provisions of the budget tabled in Parliament on March 28, 2023, be read the third time and passed.

[Pierre Poilievre, Conservative, Leader of the Opposition]

Madam Speaker, now that we know what worked and what did not work, we have to understand the consequences of the fact that the government took the wrong path. I do not need to go on at any length about the ravages of inflation. We have all heard the stories. We can all tell heartbreaking stories.

I see a member right now looking at emails on his phone from people who cannot pay their bills. I see a member across the way saying that our member for Barrie—Innisfil is in trouble for looking at an email from a constituent. He should be looking at those emails. Maybe that member would benefit if she looked at emails from her constituents as well. I understand that, if she were to do so, it would be a great burden on her personal guilt to learn of the single mothers who are skipping meals, the families who are now defaulting on their loans from a 16% year over year increase and the number of Canadians who are missing their mortgage payments. She could take a moment to look into the eyes of the 37-year-old who has been working all his adult life and still cannot afford a home. She could talk to the farmer who borrowed so he could expand his farming operation under the government's promise that the interest rates would be low for long. If she looked at their emails, then maybe she would be less arrogant in supporting the very inflationary policies that have caused all this misery. Maybe, if the Liberals would listen to the people who pay the bills in this country, just for once, we would not be in the mess we are in right now.

This was all so predictable. The great Nobel Prize laureate and economist Milton Friedman said, “Inflation is taxation without legislation.” He also said, “Inflation is always and everywhere a monetary phenomenon in the sense that it is and can be produced only by a more rapid increase in the quantity of money than in output.” In Friedman's view, central bankers try to avoid their last big mistake. Every time there is a threat that the economy will contract, they overstimulate it by printing too much money. This results in a rising roller coaster of inflation, with each high and low being higher than the preceding one. Rapid increases in the quantity of money produce inflation. So said the greatest expert on monetary economics in the history of the world, as recognized by the Nobel Committee.

Thomas Sowell, one of the greatest economists ever, said that “inflation is a way to take people's wealth from them without having to openly raise taxes. It is the most universal tax of all.” He said that the first lesson of economics is scarcity. That is, “there is never enough of anything to satisfy all those who want it. Meanwhile, the first lesson of politics is to disregard the first lesson of economics.”

The great Hayek said, “With government in control of monetary policy, the chief threat in this field has become inflation. Governments everywhere and at all times have been the chief cause of the depreciation of the currency. Though there have been occasional prolonged falls in the value of metallic money, the major inflations of the past have been the result of governments either diminishing the coin or issuing excessive quantities of paper money.” He also said, “A great many of the activities which governments have universally undertaken in this field and which fall within the limits described, are those which facilitate the acquisition of reliable knowledge about the facts of general significance. The most important function of this kind is the provision of a reliable and efficient monetary system.” That is something the government has failed to provide.

Furthermore, the great French philosopher Frédéric Bastiat said, “Money serves only to facilitate the transmission of these useful things from one to another.... When legislators, having ruined men by war and taxes, persevere in their idea, they say to themselves, ‘If the people suffer, it is because there is not enough money. We must make [more].’”

The tactic the Prime Minister deployed was nothing creative or new. It has been the tactic of emperors, kings, presidents, prime ministers, and incompetent and self-indulgent leaders. When they run out of other people's money, they create more cash.

I think of the story of Henry VIII, who spent lavishly and without restraint on himself, spoiled his court and, of course, ran out of money. However, there was a difficulty in creating cash in his time. That was because the British pound was actually a pound of silver. When people ran out of silver, they ran out of the ability to make money. Henry VIII had a silver coin. How could he create cash when he had no more silver left? He had already spent it all. What did he do? He had his smelters melt it down and remint it with copper on the inside and a tiny layer of silver on the outside. Then he could multiply the number of coins almost without limit.

I know members are anxious to hear the rest of the story.

[The Assistant Deputy Speaker, Carol Hughes]

I know members may be very interested, but I do not think they should be chatting at this point or trying to answer some of the questions that the Leader of the Opposition is asking during his speech. It is not quite time. I would remind members to afford the speaker the respect he deserves.

Aside from the person who has the floor, I would ask members to please be quiet. If they are having a hard time doing that because they are sitting together, I can do what teachers do and separate them.

The hon. leader of the official opposition.

[Pierre Poilievre, Conservative, Carleton, ON]

Madam Speaker, I know they are just excited to hear the rest of the story and that is why they are having troubling containing themselves.

What was Henry VIII to do? He used copper on the inside of his coins and silver on the outside to multiply the coins without limit. There was only one problem, and that is that he put his big, ugly, fat mug on the front of the coin facing outward. He wanted everyone to see him straight on. That meant his nose protruded. His nose would rub on the inside of pockets, and that silver would rub off and then everyone would see the red nose. Every time an Englishman pulled out a coin and saw a silver coin with a big, ugly red nose in the middle of it, they knew they had been robbed of the real purchasing power of their money and that Old Coppernose had stolen from them again.

By the way, the money supply in that period increased by 80%. Guess how much prices went up in the same time period: They went up 80%, but he was not the most creative.

[An hon. member]

He knows.

[Pierre Poilievre, Conservative, Carleton, ON]

Madam Speaker, the House leader knows. He is the most ambitious student in the lecture hall today. In fact, he knows he could give the lecture. He knows more about it than I do. The great House leader of the Conservative Party is here today.

Henry VIII, despite the creativity of his copper coins, was not the most creative at all. I would say that Dionysius was even more creative in generating new cash. Let me tell members about Dionysius, and then that member can tell me about Diocletian afterward.

Dionysius was a Greek ruler of the island of Sicily. Yes, the Greeks at one time ruled Sicily. I know it is now Italian. Members do not need to tell me that, but back then it was Greek. Dionysius could not control his spending either, just like Henry VIII. He would run out of money, so he sent his men out to take all of the jewellery off the statues of the gods so he could sell them off, saying that they were merely loans that had come from the gods above.

When those riches ran out as well, Dionysius had to resort to other tactics. This is what he did. He took all of the coins he had collected, which were called drachmas. That is the Greek word for what we would call a dollar. Every coin was one drachma. He said he had a simple answer and just marked a “two” in place of the “one”. All of a sudden they could have twice as many drachmas.

I hesitate to share this story in front of the Prime Minister, because I do worry he might simply turn every loonie into a toonie and every toonie into four. If we run out of money, we can always create more. To the Liberal friends across the way, please do not tell this story to the Prime Minister. I thank them very much. We have a bargain. This is a strict secret. By the way, those listening out there are sworn to secrecy as well. Do not tell the Prime Minister. We do not want to give him any ideas.

The result of course was that all of the working people on the island effectively had a real cut in their purchasing power of 50%. Yes, they had the same number of drachmas but half as many coins, so each drachma would buy half of what it did. He literally cut the wages of the people in half, but he was able to spend those coins before the inflation set in. In other words, he was able to enjoy the newly created riches for the brief instant in time they lasted before inflation melted them away, and then it was the people who lost the purchasing power.

So it is with so-called quantitative easing. It is always the bankers and the government insiders who touch the new money first and, therefore, enjoy the riches most splendidly. The working class only get those dollars when they trickle down from the top and they no longer have their purchasing power. That is why we must, and when I am Prime Minister we will, once and for all put an end to trickle-down economics. It does not work. It never works. I will never allow it.

We know the creation of cash has caused the inflation that exists, the massive poverty, the misery and the feeling of brokenness across the land. The tent cities, all of that, are the result of what the government has caused through the creation of cash, but I am here today to warn of a much graver and insidious risk still ahead of us.

This is where I rely on Churchill's second method of foretelling the future, and that is the cyclical method: Look at what has happened in the past to predict the cycles of the future. We know that this is not the first time governments have created cash or run up massive debts. We need to understand where it leads after the inflation cycle is gone, and what can often come next.

Here, today, I rely on the wisdom of the Stoics. The author of Stoicism, the modern author of Stoicism, Ryan Holiday, wrote of the “premeditation of evils”, a Stoic exercise of imagining things that could go wrong or be taken away from us. As Seneca would say, the unexpected blows of fortune fall heaviest and most painfully, which is why the wise man thinks about them in advance.

I regret that I have to think about these unfortunate and possible blows of fortune that are coming our way.

I have a question for us. If someone had a time bomb ticking away under their home, what would they do about it? Well, if the person did not know it was there, they would not do anything at all because they would have no reason to respond. Assuming that the person survived its detonation, they would have to scramble to rebuild their life.

We know what it is like to be struck by unexpected blows. We have seen them: the attacks of 9/11, the COVID pandemic, of course the U.S. financial crisis, all things that were little foreseen and little foretold. As a result, we all had to scramble to respond to what we did not prepare for.

Why is it that western nations have such difficulty foretelling the dangers that are coming? In recent decades, we have been breathtakingly unprepared for terrorist attacks, natural disasters, mortgage crises and al Qaeda. All of these things were words that were unknown until, all of a sudden, they struck.

I quote again from Ryan Holiday that it is impossible to prepare for or prevent something you're unaware of, yet in each of these recent crises, the warning signs were there if we had looked for them. If we only listened to the ticking time bomb, we could have found that bomb and defused it before it detonated, saving the world untold misery.

Now a new danger gathers in this country. It is the growing probability of a debt crisis. Here is the simple math. When governments and their people amass a total stock of debt that is three times bigger than the size of their economy, they become predisposed to experiencing massive debt crises. I regret to report to the House of Commons—

[The Assistant Deputy Speaker, Carol Hughes]

There is some feedback from the government's side. I would ask them to please be respectful and to be quiet.

The hon. leader of the official opposition.

[Pierre Poilievre, Conservative, Carleton, ON]

Madam Speaker, I regret to inform the House that, while history shows that countries where the debt is more than three times the size of the economy have a strong propensity toward debt crises, according to S&P, Canada's total public and private debt is now 474% of GDP. That includes government debt, household debt, business debt and financial sector debt combined. This makes us the second most indebted country, relative to GDP, of any country in the G7, with only Japan being worse.

I spent a lot of time when I was the shadow minister of finance studying debt crises, and there is a phenomenal book called Big Debt Crises, written by Ray Dalio, the single most successful hedge fund manager in the history of the world. In it, he quantifies the precursors to debt crises. He put together the 48 biggest debt crises that have happened in modern world history, and he put together a chart of the debt-to-GDP ratios of all of those countries. I will list off some of the crises that might come to mind.

There was the Greek debt crisis that happened roughly just over a decade ago in Europe. That crisis then spread to Spain, Portugal and other European countries. There was the U.S. financial crisis, which was ultimately a mortgage debt crisis. There are the examples of the Argentinian debt crises of 1998 and 2001. I could go on.

In putting together all 48 of these biggest debt crises, he recreated the debt-to-GDP ratios that all of these countries had, public and private debt as a share of GDP, and I took the liberty of taking Canada's current debt-to-GDP ratio and putting it in that list. What did I find? Our current debt-to-GDP ratio is bigger than all of those other crisis countries except for two. In other words, there were 46 countries on this earth that had massive financial meltdowns with significantly smaller debt levels relative to the size of their economy than we have here today.

The question is why we have, up until now, not had a full-scale meltdown. The answer is obvious. It is because we have had such inordinately and artificially low interest rates. Even today, as rates rise, much of the debt that is in the current stock of the country is still locked in at lower rates, but that is not a permanent phenomenon. In other words, every passing day, somebody's mortgage comes up for renewal, and the artificially low rate they had up until then renews at a much higher rate. This is the fundamental risk we have. The same goes for government debt. Some of it is locked in at lower earlier rates, but governments have mortgages.

Bonds are just mortgages. They are just varied terms. Some of these mortgages are 90 days. Some of them are 30 years. Most of them are somewhere in between, but all of them at some point come up to renewal, and when they renew they do so at the rates that are present when the renewal occurs. Slowly but surely, that is happening already.

Where do we manifest the higher rates? Ironically, it is in the Bank of Canada itself, because the bank purchased government debts and government bonds when rates were low, and is therefore collecting a small yield on those debts. The bank purchased those debts by depositing money in the central bank's accounts of financial institutions, which sold the bonds back to the bank.

Those deposits are receiving the policy rate of interest that the central bank pays out, which is now 4.75%. In other words, the Bank of Canada has bought government bonds that pay out 0.6% and paid for them with deposits that it now has to pay out 4.75% on, so our central bank is losing money every single day. In fact, the central bank, were it not backed up by the government, would be bankrupt today, because its liabilities are worth so much more than its assets. This is a very unusual situation, but it is a precursor for what everyone else is facing.

I ask this: What happens in the year 2026 when all of the mega mortgages that people took out five years before at artificially low rates with artificially high home prices all come up for renewal, and the rates are three or four times higher than the families had been paying up until that time? All of a sudden, we are going to have hundreds of thousands of people renewing their mortgages at the same time at an increase of interest rates of 3% or 4%. That is not a three or four percentage point increase. That is a 300% increase, because four is actually 300% higher than one. The artificially low rates then create a multiplying effect when they collide with new and real higher rates.

Imagine then that there are hundreds of thousands of people who can no longer afford their monthly payments because they have gone up by $1,600 a month, and the average family only has $200 extra in their bank accounts. They are now paying $15,000 or $16,000 more per year in interest on their mortgages, all at the same time. What will they all think to do? They will sell. What else are they going to do? They cannot afford their homes anymore, and they cannot pay for them, so what will they do? They will sell when everyone else is selling and then, all of a sudden, there is a fire sale.

Furthermore, who is going to be around to buy? Are other people going to be able to pay 5% or 6% mortgages on million-dollar homes? Of course not. Therefore, there will be a preponderance of sellers without buyers to match then. Then what happens? House prices—

[Kevin Lamoureux, Liberal, Winnipeg North, MB]

It is a huge assumption. There is no guarantee—

[Pierre Poilievre, Conservative, Carleton, ON]

There is no guarantee.

[The Assistant Deputy Speaker, Carol Hughes]

I would ask the hon. parliamentary secretary to hold off until it is time for questions and comments. There is still a little while until then, so I would ask him to be patient.

The hon. Leader of the Opposition.

[Pierre Poilievre, Conservative, Carleton, ON]

Madam Speaker, that was an unusually helpful comment from the member across the way. He says that there is no guarantee that interest rates will be that high when people are up for renewal. There is no guarantee that I will get into a car accident, so why should I wear a seat belt? There is no guarantee that the plane cannot land itself, so why could the pilot not just have a nap while the flight is in course? There is no guarantee that I will die if the parachute does not open, so why do I not just forget to pull the cord? That is the kind of logic we get from the other side. It is so ridiculous, and we wonder why we are in such a mess.

There is no guarantee that the house will get robbed, so why bother locking the doors, right? There is no guarantee I will get into a car accident, so why buy insurance, right? Why would we mitigate against any risk because there is no guarantee that risk will manifest itself into any mal, right? That is exactly the kind of mentality that is getting us into this trouble. He is saying that because there is no guarantee that things will go wrong, we should do nothing to protect against it going wrong.

[An hon. member]

What would you do?