Evidence of meeting #5 for Finance in the 43rd Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was economy.
A video is available from Parliament.
Liberal
Mona Fortier Liberal Ottawa—Vanier, ON
As mentioned in the economic and fiscal update statement, in the long term it will continue to fall.
Liberal
Conservative
Pierre Poilievre Conservative Carleton, ON
I know what it is. I just wanted to know if it's up or down, this year in particular.
Conservative
Conservative
Pierre Poilievre Conservative Carleton, ON
That is true.
Is the government committed to reduce the debt-to-GDP ratio every year for the next four years? I know that was a platform commitment, but looking at the fall economic update, I see the debt-to-GDP ratio actually increased this year. Also, the next several years of the fiscal plan have the debt-to-GDP ratio on the verge of increasing, and that's before any election spending promises are budgeted for.
Given that there are these promises outstanding, Minister, do you expect that you as a government will be able to keep the commitment to lower the debt-to-GDP ratio every year you're in office?
Liberal
Mona Fortier Liberal Ottawa—Vanier, ON
In 2015, after years of austerity and cuts, the economy was slowing down. People were feeling it, especially those whose real needs didn't line up with aggressive plans to eliminate the deficit, such as people living in poverty, indigenous peoples, women, young people, racialized people and our most vulnerable seniors. In the face of increasing global uncertainty, Canada's economy remains strong. Since 2015, we have invested in Canadians, helping raise 900,000 people out of poverty and adding a million new jobs to the economy.
As our first order of business, we are lowering taxes for the middle class and people working hard to join it. We also want to make sure that, by continuing to govern, we maintain four key principles for the implementation of our fiscal plan. We'll continue to reduce the government's debt as a function of our economy, continue to build confidence in Canada's economy by preserving a AAA credit rating, and continue to invest in people and things that give people a better quality of life. For the fourth guiding principle, we will preserve fiscal firepower in the event that we need to respond to an economic downturn.
Liberal
The Chair Liberal Wayne Easter
Mr. Poilievre, you can have a final short question. We're a little over, but the minister has had a little more time than you, so we'll give you a little more.
Conservative
Pierre Poilievre Conservative Carleton, ON
Thank you, Chair.
Can I confirm from your answer that I did hear you reiterate the commitment to reduce the debt-to-GDP ratio? Is it still the government's commitment that the debt-to-GDP ratio will drop every one of the next years over the financial planning period?
Liberal
Mona Fortier Liberal Ottawa—Vanier, ON
As I mentioned, by the four guiding principles, the first one is to continue to reduce the government's debt as a function of our economy in the long term.
Liberal
The Chair Liberal Wayne Easter
Thank you both.
Mr. Fragiskatos, and then we'll come back over here if we need another name.
Liberal
Peter Fragiskatos Liberal London North Centre, ON
Mr. Poilievre and his party are suddenly very interested in debt-to-GDP ratios. I wonder if you could tell me, or if the officials would have the information, what the debt-to-GDP ratio for Canada was in the 1980s and into the early 1990s.
Liberal
Liberal
Deputy Minister, Department of Finance
In the 1980s, if one were to start from just prior to the 1981-82 recession, which was a significant one, the debt-to-GDP ratio was about 29%. The effect of the recession was to push it up significantly to about 45% by 1985-86. In the subsequent years, it continued to increase, peaking just before the 1995 budget at about 70%.
Liberal
Peter Fragiskatos Liberal London North Centre, ON
Thank goodness for Mr. Chrétien and Mr. Martin, but I won't be partisan.
If I could move on, in my friend's questioning, although he didn't go directly down that path but he has elsewhere, whether at previous committee meetings or in the House of Commons, he talked about the need to be fiscally responsible, which in the Conservative lexicon usually means austerity. We've heard from a few witnesses this week on this idea of austerity. They may not use the word, but it's the implication of what they're talking about.
Minister, we've had a few witnesses talk about the apparent need, from their perspective, to vastly reduce spending, program spending and service spending. Of course, the other implication of it is that we should move towards a balanced budget as quickly as possible, in budget 2020 in fact, to balance the budget immediately or as quickly as we can.
You've done consultations. Even though you're new to the role, you have done consultations throughout. I know in my own community of London, Ontario, you came and did a consultation. You've done many of these. What are your views on what the consequences would be for everyday people if we moved towards immediately balancing the budget? How would everyday people feel that?
Liberal
Mona Fortier Liberal Ottawa—Vanier, ON
Thank you for mentioning that I was in London during the pre-budget consultation tour. I had the opportunity to meet with many stakeholders, and as much as people are feeling the squeeze in their day-to-day lives, they do want us to continue to invest, but in a responsible way. That's where we have an important role of having a balanced approach in our investments and in our spending.
The good news is that we do have a good economic record at this time. We have the best balance sheet in the G7. We have...well, actually...Canadians have created over a million jobs since 2015, and our unemployment rate is the lowest in 40 years.
The other thing is that we have to continue to make sure not only that we have a balanced approach but that we continue to invest in Canadians and also make sure we fight climate change, for example.
Liberal
Peter Fragiskatos Liberal London North Centre, ON
I wanted to ask you that, Minister, not to cut you off—