Thank you, Mr. Chair.
As noted, a study by the Fraser Institute has stated that this government has accumulated more debt over the past four years than any other government not in a period of recession or wartime in the history of this country.
The heavy reliance of the government on the federal debt-to-GDP ratio has our membership concerned as well. It is also misleading in the sense that it does not capture the true ratio of a jurisdiction because it does not take into account the debts of the provinces. If it did, the number would be significantly higher. Canada's total debt-to-GDP ratio is roughly around 65% to 67%. My province of Newfoundland and Labrador, for instance, would be around 85% to 90% with combined ratios.
The current pathway to a balanced budget that is projected by the Department of Finance also does not take into account harsh economic times, nor what a recession may look like. Like the Chrétien and Martin governments of the 1990s and early 2000s and the early Harper years, we must have the foresight to pay down the debt and lower our deficit. If we do not have the foresight to save during the good times, we will come to regret it in hindsight if we ever enter the bad times.
What is the outcome of our high debt? We either have to increase revenues or reduce expenditures to pay for it. Reducing expenditures in our belief as a business organization is a logical option. If government decides not to go the route of expenditure reduction, who shoulders the burden of increased revenues? It's people like our members, their customers and their employees, through higher taxes.
Can Canadians pay for this debt? A poll completed in January by MNP Ltd. showed that the number of Canadians who are $200 or less away from financial insolvency at the end of the month has jumped to 46% from 40% the previous quarter. Those Canadians are the customers of our members and of other chambers and boards of trade across the country. The answer is “No, they cannot.” Taking money out of the pockets of the taxpayers, in turn, hurts our members. Canadians will have less disposable income to shop in local stores or to see the attractions of our great province of Newfoundland and Labrador, or in turn, our great country.
Canadians and businesses are on the brink of just being able to pay what they owe and each day we seem to lose our ability to be competitive with the United States. We cannot see more red tape in this country for business. We cannot see more burdensome taxes, as implied by the tax changes suggested on page 207 of the budget.
The last time the government tried to change tax loopholes, they got it wrong. Business pays more than its fair share in taxes. With any further tax changes concerning business, we request that this committee asks the Minister of Finance if he consulted with small business and with tax professionals, and if so, what those individuals told him. The last time there were consultations, our membership—all of our accountants—told the minister that he got it wrong.
This budget and this bill are disappointing for our organization on a number of fronts. The budget itself has little to nothing, in our analysis, for business. On top of that, we see all of this new spending. Our members know that someone will have to pay for all of these deficits and all of this new spending. That will almost certainly be them and their customers.
To be clear, to give an outlook to this committee of what the majority of our members look like, they are small businesses. Roughly 90% of them are small businesses with fewer than 10 employees working for them. They are entrepreneurial businesses and innovators looking to grow, but they are becoming increasingly stifled by the taxation and red tape. As the debt grows, taxation will likely grow with it.
We respectfully request that the government move forward with the recommendations of the Senate Committee on Banking, Trade and Commerce, which are supported by chambers of commerce across the country, and implement a royal commission on taxation. As well, we request that government implement the recommendations of the internal tax committee of the St. John's Board of Trade, which are outlined in your brief, and demonstrate a short-term pathway to a balanced budget, ideally within the next two years. Not addressing our growing debt and weakening position on the world stage will ultimately hurt the best interests of Canadians.
Thank you, Mr. Chair.