Finance Committee on March 11th, 2021

[An hon. member]

But—

[Chrystia Freeland, Liberal, University—Rosedale, ON]

Did you want to respond, Mr. McLeod?

[Michael McLeod, Liberal, Northwest Territories, NT]

No, keep going.

[Chrystia Freeland, Liberal, University—Rosedale, ON]

Okay.

Mr. McLeod, I was also going to say that you're quite right. We have been working closely with the governments of the Northwest Territories, Yukon and Nunavut, and have increased their borrowing authorities at the territorial level. They have put in important measures to fight COVID, and we've supported them in that.

Part of Bill C-14, as we have been discussing, is an increase in the federal government's borrowing authority. We legislated our government that every three years we would publicly and transparently review our borrowing limit. That three-year timeline is up, and that's why we have now come to Parliament and this committee to say that we need to increase the borrowing authority limit so that the government has the space to continue fighting COVID.

[The Chair, Liberal, Wayne Easter]

Do you have a very quick question, Michael?

[Michael McLeod, Liberal, Northwest Territories, NT]

Yes. I think the minister is aware that the different regions of the country are emerging from the pandemic at different rates. I'd like to know how the government is giving the necessary resources to regional development agencies so that they can meet the changing needs of local economies across this country.

[Chrystia Freeland, Liberal, University—Rosedale, ON]

That's another great question.

Bill C-14 includes an additional $206.7 million for the RDAs precisely to meet that need.

[The Chair, Liberal, Wayne Easter]

Thank you.

I know we'll soon be running out of time, so it will be two minutes to Mr. Ste-Marie, two minutes to Mr. Julian, four minutes to Mr. Falk, and four to Ms. Koutrakis.

Mr. Ste-Marie.

[Gabriel Ste-Marie, Bloc, Joliette, QC]

Thank you, Mr. Chair.

Madam Minister, there is currently a debate among economists about the recovery plans. I'll stick to the bare essentials to keep my question short.

On the one hand, Lawrence Summers and Olivier Blanchard say that we need to be careful and stop stimulating the economy to prevent any risk of inflation and interest rate increases. On the other, Paul Krugman and Kenneth Rogoff argue that the recovery plan is essential to stimulate the economy and that there is no likelihood of inflation or higher interest rates, at least not in the short or medium term.

From your standpoint on the Canadian economy, what's your position on budget policy and how it relates to the recovery plan?

[Chrystia Freeland, Liberal, University—Rosedale, ON]

That's an excellent question, Mr. Ste-Marie.

I have spoken directly with Mr. Summers and Ms. Yellen, who have been participating in the debate.

My view is that the debate needs to address another question as well. It's not only a matter of government spending, but also a question of what is covered by this spending. As an economist, you know very well that an expenditure that is an investment in the country's economic capacity is very different from an expenditure that does not constitute such an investment.

As for the level of spending for Canada, I must say that one of the first questions we look at is whether it will add to the country's capacity for economic growth, and if so, whether it will create jobs.

[Gabriel Ste-Marie, Bloc, Joliette, QC]

Thank you.

[The Chair, Liberal, Wayne Easter]

Thank you, both.

Mr. Julian, you have two minutes.

[Peter Julian, NDP, New Westminster—Burnaby, BC]

Thanks, Mr. Chair.

Page 126 of the fall economic statement, annex 1, forecasts significant cuts in program expenses, starting the next fiscal year on April 1. Other countries have looked to address the issue of pandemic spending by putting wealth taxes in place or by increasing the corporate tax. We've seen those announcements, yet in the fall economic statement, no measure puts in place a wealth tax or addresses the endemic pandemic profiteering that we are seeing. However, we know that Canadians are going through misery in so many cases and need investments that will continue through the next fiscal year.

I'm perplexed by this approach. We have other countries putting in place wealth taxes, excess profit taxes, looking to address overseas tax havens and raising the corporate tax rate. In the fall economic statement, in Bill C-14, there's no reference to that in any meaningful way.

Are you looking to change direction in the budget so that those investments can be put into place and in doing so, will you heed the call for tax fairness that so many people have raised across the country, ensuring that the immense profiteering we've seen during this pandemic is addressed with the billionaires and the banks that have received so much in profit and so much increase in wealth having to pay their fair share?

[Chrystia Freeland, Liberal, University—Rosedale, ON]

I'm going to offer two responses.

When it comes to our thinking about the budget, our overarching priority is jobs and growth. More than 600,000 Canadians who had a job before the pandemic don't have one today. That's a tragedy for each person and for their families. I wake up in the morning and I think about how we can get those jobs back. The answer in my view is economic growth.

When it comes to taxation, I would disagree with you in characterizing the measures announced in the fall economic statement as being not weighty. We will levy a tax on the international digital giants, and there is real momentum at the OECD to get this done. The Biden administration has created an opportunity to get this done at the multilateral level. That is huge. That is transformative for the international tax framework, and our government is very involved in this.

Finally, because I see our chair moving around in his seat a little, when it comes to overseas tax havens and tax avoidance, I very much agree with you. At a time when so many Canadians have suffered, we have to have zero tolerance for tax avoidance and tax evasion, and our government is committed to that and to strengthening those rules.

[The Chair, Liberal, Wayne Easter]

Okay. Thank you, both.

We'll go to Mr. Falk for four minutes and then to Ms. Koutrakis.

[Ted Falk, Conservative, Provencher, MB]

Thank you, Mr. Easter.

I asked the minister my question during QP so I'm going to cede my time to Mr. Kelly.

[The Chair, Liberal, Wayne Easter]

Okay.

[Pat Kelly, Conservative, Calgary Rocky Ridge, AB]

Yes, and I'll probably give Tamara a chance too.

Minister, are businesses that opened in March 2020 eligible for the highly affected sectors credit availability program?

[Chrystia Freeland, Liberal, University—Rosedale, ON]

If what you're getting at, Mr. Kelly, is the question of newly formed businesses not being able to get access to all government programs, you're quite right that they're not.

There has been a real effort to strike a balance between having integrity of programs by not creating incentives for people to create vehicles to receive government support, and supporting businesses. This is substantive. I believe we need to support newly created businesses, not only with HASCAP but with the rent subsidy, with wage support, and I would like you guys to help me do that.

[Pat Kelly, Conservative, Calgary Rocky Ridge, AB]

Thank you. I appreciate your candour. That was the first time any minister in this government has given a straight answer to that question, which has been asked repeatedly since last spring.

With that I will let Ms. Jansen ask a question.

[The Chair, Liberal, Wayne Easter]

Ms. Jansen, you have a fair bit of time. You have three minutes.

[Tamara Jansen, Conservative, Cloverdale—Langley City, BC]

Thank you.

Ms. Freeland, Canadian women entrepreneurs want to know why you waited until Monday to announce a special panel to deal with this disastrous “she-cession”. Did you actually delay until International Women's Day so you could make a big announcement?

[Chrystia Freeland, Liberal, University—Rosedale, ON]

Ms. Jansen, I'm very glad to have you mention the creation of our task force on women in the economy. We are going to have our first meeting this week. I am really looking forward to it.

I'm glad to hear you talk about the she-cession. Women are one of the groups that have been the hardest hit by this COVID recession, and we're committed to supporting them.

[Tamara Jansen, Conservative, Cloverdale—Langley City, BC]

You're saying that you have not had a single meeting yet. This has been going on for months and months. That just blows my mind.

These women—and I'm thinking especially of independent travel advisers, whom I've been meeting with constantly—are barely hanging on. They're desperate for a concrete plan. They need people to be allowed to travel again.

Under what conditions will you finally open the border? Will it be when Canadians are 50% vaccinated?

[Chrystia Freeland, Liberal, University—Rosedale, ON]

There are a bunch of questions jammed in together there.

Let me just say that, absolutely, I have been holding many meetings and conversations with women entrepreneurs and with women economists. Our government is putting support for women at the centre of our economic policy and our fight against COVID.

When it comes to the border and travel, our priority is and needs to be protecting the health and safety of Canadians. That is what we are doing right now. If other parties disagree with that, then I think it's important for other parties to be open with Canadians that this is their position.