Finance Committee on Dec. 3rd, 2020

[Thomas Saras, President and Chief Executive Officer, National Ethnic Press and Media Council of Canada]

Ethnic media is vital to the integration of new Canadians into our society, and many immigrants rely on ethnic media as their source of news. For many, ethnic media is their only form of information. COVID-19 has shown the importance of having a strong ethnic press. Despite the purchasing power of minority communities, it can be difficult for advertisers to put together a comprehensive ad campaign that touches ethnic media in several languages.

Unlike large English and French chains such as Postmedia, Torstar and Quebecor, which can be syndicated across several papers, websites and platforms, ethnic media has to be engaged one outlet at a time. Ethnic media has been transitioning to digital and new revenue streams, but there must be assistance so that ethnic media has enough runway to retool their organizations for their news space, particularly since print revenue is drying up and digital revenue is not replacing it on a dollar-for-dollar basis.

In budget 2018, the government put out $50 million to help the media. That was for five years, which means $10 million per year. From that $10 million, the ethnic press received only $600,000. The problem is that we have 900 outlets in Canada from coast to coast. The $600,000 that we received was enough only to give a very small portion to only 53 outlets. We received about 270 applications. You understand how difficult it was to deal with that and cut someone without any reason, because we didn't have the funds.

This is the only reason I am appearing today, to ask if it's possible at least for the ethnic media to get a one-time amount of at least $7 million in order to be accurate and help our members who are serving almost 40% of all Canadians.

At this point, I want to bring to your attention that the ethnic media has faced profound revenue loss, and cutbacks have already taken place. In fact, 42% of the workforce has been laid off, and without further assistance a further 21% will be cut. The ethnic media has seen revenue declining by 62%. In fact, right now, at this point, I can assure you that revenue has been cut 100%. Those outlets that continue printing are printing only because the publisher can pay the amounts they need in order to continue. More revenue decreases will soon be seen. The 62% loss includes all members, and the numbers are propped up by monthly publications with pre-sales. Actually, for publications, from the equation revenues are down 71%.

Pandemic relief efforts have had little impact on the ethnic press. Of our members, 89% knew about the Canada emergency wage subsidy, and 68% do not qualify. While 93% of members were aware of the Canada emergency business account, 76% of them do not qualify. A top-up of aid to publishers, the Canada periodical fund, was announced for those who received it in 2019, but 84% of members do not receive aid to publishers and don't qualify to get that amount.

Government aid has not reached most ethnic press outlets. Of our members, 73% reported that the Government of Canada has not placed ads with their publication; 84% reported that their provincial government has not taken ads; 84% reported that they have received no ad spending from municipalities; and 92% reported that no ads were placed by a different public organization.

The outlook is bleak for ethnic media: 51% of outlets will close within the next six months; 62% indicated that without significant intervention they would close up within a year; 33% said they could hang on for fewer than another three months; 80% said they will need to halt publication within six months; 11% indicated they could go another 365 days without targeted aid before they'd need to close. Under the present circumstances, 34% simply did not know how long they would be able to survive.

[The Chair, Liberal, Wayne Easter]

Mr. Saras, I'll have to get you to quickly wrap up. The figures are traumatic, but could we get to your request? We're tight on time.

[Thomas Saras]

We do believe that we need $7 million from the government immediately to sustain the majority of the ethnic press—at least those who are serving newcomers to Canada. They depend 100% on the ethnic press. This is a must.

There's something else. From the $10 million, instead of $600,000, I believe it would be fair if we receive at least $1.5 million to $2 million.

[The Chair, Liberal, Wayne Easter]

Okay.

Thank you. We have your brief. We can refer to it to clarify those points.

[Thomas Saras]

Thank you.

[The Chair, Liberal, Wayne Easter]

Turning to Oxfam Canada, we have Ms. Kate Higgins, interim executive director.

Ms. Higgins, go ahead.

[Kate Higgins, Interim Executive Director, Oxfam Canada]

Thank you for the opportunity to present Oxfam Canada's recommendations for Canada's next federal budget to you today.

At Oxfam Canada, we put women's rights and gender justice at the heart of everything we do in our work here in Canada and in our work with some of the poorest communities around the world. We know that COVID-19 knows no borders and does not discriminate. But we also know that in a world marked by extreme inequality, the health, social and economic fallout of this pandemic has hit some harder than others. Here in Canada, and indeed around the world, it is women, particularly those on the margins, who have been disproportionately affected.

Many women have faced a triple duty of home schooling, child and elder care, and paid work during this pandemic, leaving them absolutely exhausted. Women make up 70% of all pandemic-related job losses in Canada. Many women have lost their jobs and are struggling to get back into the labour market due to important care responsibilities they have. Women's labour force participation has fallen to 55% in Canada, the lowest in 30 years. Indeed, experts have dubbed the economic downturn we face a “she-cession”.

Today, I want to share with you three recommendations for budget 2021. These are recommendations that seek to provide solutions to the very real crisis we currently face, but they also lay the foundations for a feminist economic transformation to tackle long-standing inequalities in Canada and around the world.

First, the federal government must invest in the care sector. If this pandemic has shone the light on one thing, it is the essential role that care work plays in our lives, our society and our economy. Canada's recovery plan must value women's paid and unpaid work and must expand and protect jobs in the care sector. Investing in more and better care places for children, for the sick and for the elderly will mean that women currently caring for family members will be able to enter the workforce and we can start to reverse the shockingly low labour force participation rate I mentioned earlier.

In addition, the care sector workforce—child care workers, those brave people working in long-term care homes, and health workers on the front lines—is predominately female. Investment in the care sector has the potential to generate hundreds of thousands of jobs for women, a significant increase in government revenue, and a huge boost long-term to Canada's GDP. We welcomed the commitment to building a publicly funded national child care system in this Monday's fall economic update. This is a step in the right direction.

We call on the government to allocate $2 billion for early learning and child care in budget 2021, and an increase of $2 billion each year after that to publicly fund a child care system in partnership with the provinces, territories and indigenous governments. Transfers to the provinces should include measurable targets in accessibility, affordability, quality and inclusiveness.

The second area where federal government action is urgently needed is in social protection and decent working conditions for women. It is striking how many jobs that have been deemed essential during this pandemic—carers, cashiers, caterers, cleaners, clerical staff—are jobs that are low-paid and lack benefits such as sick leave. Black, indigenous and racialized women, including recent immigrants, are overrepresented in these jobs.

Many women in low-paid precarious employment have difficulty accessing employment insurance when they most need it. We are calling on the government to expand women's access to employment insurance by modernizing key gaps in the existing EI system. We need to adopt best practices from the CERB delivery to turn EI into a more agile delivery mechanism that gets benefits out quickly, expands access to be more aligned with the reality of Canada's labour market, requires lower thresholds for access, and increases benefits to meet income adequacy standards.

Finally, COVID-19 knows no borders, and Canada's response to the pandemic should be truly global in nature. Through our international assistance, Canada should invest an additional $2 billion in COVID-19 interventions that focus on feminist programming, supporting sexual and reproductive health and rights, combatting gender-based violence, investing in the care sector and supporting women's and feminist movements. In the longer term, we should fast-track implementation of Canada's feminist international assistance policy, doubling our international assistance envelope from $6.2 billion to $12.4 billion over five years.

By playing to our strengths and focusing our international assistance on feminist interventions, Canada can show critical global leadership in defending and sustaining important gains on gender equality that are threatened by the pandemic.

Thank you again so much for the opportunity to speak with you today.

[The Chair, Liberal, Wayne Easter]

Thank you very much, Ms. Higgins.

We'll turn now to Jeffrey Booth, entrepreneur and author.

Mr. Booth, you're on.

[Jeffrey Booth, Entrepreneur and Author, As an Individual]

Thank you.

I want to thank the finance committee for inviting me to speak to you again.

On my last invite to this committee, I explained that, as outlined in my book, an economic policy that requires inflation is incompatible with exponentially advancing technology. They are opposite forces. Entrepreneurs using technology are trying to deliver more value for less to society, which equals deflation, whilst inflation is moving in the opposite direction. While it is easy to get fooled looking backwards, most of the technology gains are in front of us, which means getting more for less—deflation—is a completely natural process that embraces human innovation in the free market.

In other words, policy that is unmanipulated allows an abundance gain from technological progress to be broadly distributed to society instead of concentrated. By failing to recognize the root problem and instead dealing with symptoms, policy-makers become unknowing participants in a game that will have disastrous consequences for us all. I'll try to illustrate what's happening through a simple game.

In the game of Monopoly, once enough properties are owned by a single player, renters can't afford to pay their rents and are therefore forced into bankruptcy. The game ends. For those of you who have played, you will notice how systems work. Once you have an early advantage, the game becomes easier. You have the rents to acquire more properties and add more houses and hotels. A positive feedback loop is created, concentrating wealth. You might also notice that the wealth in the game might be due to luck. Landing on the right squares early in the game gives you a massive advantage—right place, right time. Conversely, missing out on acquiring those assets early creates a negative feedback loop, which also reinforces itself. The poor become poorer until they become insolvent, as they move around the game board paying higher and higher rents.

Fortunately, it's just a game. The game ends. Somebody gets bragging rights. All are given a fresh chance to win when the game begins anew, with everyone being equal. But what would happen if the same positive and negative feedback loops happened in life, with the winners acquiring more because they had the assets first, concentrating their wealth and enjoying privileged access to the best of education, medical and other services?

For the sake of argument, let's imagine in this life game that there was this giant force—let's call it a central bank—that required inflation and therefore wouldn't let prices fall, which only concentrated wealth faster and wouldn't allow a reset of the game where new players had a chance. How long would the losers of the game play the game when they realize that the game was rigged against them? What if they couldn't pay their rent, education or food with the game continuing to get worse? What if the game wouldn't end for them? What would those people do? More importantly, if you were them, what would you do?

I would suggest you might do one of three things. Number one, you might listen to and elect leaders who tell you they will give you free money. The irony of that free money is that it comes at a huge cost in perpetuating the system of inequality. The debt is too big to ever be paid back with higher taxes. That free money must come through the printing of money and higher inflation. Inflation is the worst tax of all for society. It's a hidden tax. It's levied upon society's most vulnerable because they don't have the assets that rise with inflation and they don't know better. Inflation is a process by which the purchasing power of their real wages and savings gets destroyed.

Two, you might rise up against the winners and burn the game to the ground. I think you're seeing this all over the world.

Three, you might play a new game, one where your money couldn't be confiscated by inflationary policies. That's what you're seeing with the rise of Bitcoin today.

The societal consequence of changing the rules of the game to stop the natural clearing function of markets and lock new players out is concentrating wealth and power, and in doing so it is making the world ever more dangerous. The consequences are very predictable. The crazy thing is that the same thing the central banks and governments are trying so hard to prevent—prices falling naturally because of exponentially advancing technology—might be the best game we ever played.

My message is non-partisan. I fully comprehend the severity of the choices the policy-makers on both sides of the aisle are grappling with in trying to save the system while only making the problem worse. These are difficult choices with no easy answers, but instead of platitudes, I do believe Canadians deserve the truth with respect to something so important as their money: where it comes from and why the manipulation of money is a requirement of the existing system.

Manipulation of money has consequences. Those consequences are far more severe than the monetary theorist policy-makers seem to realize. Technology's progress has changed the rules. Ignoring that structural change by printing money is coming at a great cost to our society, our environment and our children. On the current path, it will get much worse.

For the sake of all Canadians, I encourage the government to investigate this more deeply. There is a much better path, one that's congruent with where human innovation and technological progress are taking us, a path that will lead to broad-based abundance.

Thank you.

[The Chair, Liberal, Wayne Easter]

Thank you very much, Mr. Booth.

We'll turn to Jack Mintz, president's fellow at the School of Public Policy, University of Calgary.

Mr. Mintz, we could at least touch elbows last time. We can't even do that today.

The floor is yours.

[Dr. Jack Mintz, President's Fellow, School of Public Policy, University of Calgary, As an Individual]

You can hear me now, right?

[The Chair, Liberal, Wayne Easter]

Yes, we can hear you now. You'll have to go a little slower than normal, Jack, due to the translation.

[Dr. Jack Mintz]

Thank you very much.

Thank you for the invitation from the House of Commons finance committee to appear again. I hope you won't be disappointed.

One of the important trends mentioned in the fiscal update that deserve more attention is the effect of the pandemic on structural unemployment. On page 52, we see that temporary unemployment has fallen dramatically but permanent unemployment is gaining ground. With labour force exits, we now have a roughly 3.5% decline in employment since February 2020. Over one million workers are unemployed or are working at less than 50% of normal hours. In fact, 90% of the latter category are working zero hours but are not counted as unemployed in part due to the wage subsidy that keeps workers attached to their companies.

Structural unemployment reflects the pandemic's supply shock as people were told to stay home. Supply shock has led to a steep loss in jobs and hours worked in certain sectors, especially in hospitality, travel, retail and commercial real estate. After the pandemic is no longer with us, probably in 2022, many workers will not be able to go back to their original employers in certain sectors, in part reflecting long-term changes in consumer and business behaviour. This type of unemployment is different from cyclical unemployment when jobs disappear in a recession but come back in a boom stimulated by demand. Even if the government tries to prop up demand through stimulus programs, it won't help those who no longer have skills for new employment. Structural unemployment is one issue.

The other is labour productivity, which has been virtually flat since 2015, prior to the pandemic. It is well accepted that countries with high levels of labour productivity tend to also have higher personal incomes per capita. Labour productivity is particularly important since the output generated per hour of work provides income available to pay wages, taxes and other income to Canadians. Our social programs are not affordable if our productivity performance lags.

One of the leading factors affecting productivity is investment. It enables businesses to adopt the latest vintages of capital, typically reflecting innovative ideas being adopted in business practices. Non-residential, public and private capital formation in Canada has declined by 12% from 2014 to 2019. While the biggest decline has been in mining and oil and gas with 53%, investment per worker in other industries fell by 10%. Even intellectual property product investments have declined by 10%, with per capita pharmaceutical research and development dropping by half since 2007.

If we're going to build back better, we will need to address both structural unemployment arising from the pandemic and productivity investment problems that were already in place before the pandemic. In the immediate term, while COVID still haunts us, we have focused on helping businesses keep workers through wage subsidy programs, similarly adopted by seven other OECD countries. While there have been good reasons to keep workers attached to their companies, we should recognize that the wage subsidy is biased against capital-intensive industries, an issue partly addressed by the rental subsidy program.

Other countries have taken on other short-term policies that also help business investment besides the deferral of corporate tax payments; 28 OECD countries, including Canada, have provided deferrals. These policies include investment or research and development tax credits or enhanced deductions, 14 countries; accelerated depreciation, five countries—although we introduced that in 2018; and capital subsidies, nine countries.

Besides deferrals, the most frequently used corporate tax policy, among 18 countries, was to enhance the use of corporate tax losses by extending periods for carrying back or carrying forward losses, lowering limits on loss utilization or, in a few cases, providing some refundability. These policies were sensible, in that carrying back losses gave more cash to past profitable companies; loss companies cannot use carrybacks. On a longer-term basis, enhanced tax loss utilization provides a more neutral treatment for start-up companies compared to established companies and has reduced the tax penalty on risk.

Canada was one of the few countries not to use the corporate tax or other policies to support companies with capital investment directly during the pandemic. This should not continue in the recovery period, since our investment performance must be improved to spur both innovation and growth.

The update, surprisingly, had little to say about private investment, even though it is so important. As we have seen with this pandemic, it is the private sector that delivers technology, vaccines and even groceries to people. Government programs should enable, and not obstruct, private investment.

Let me provide some policy examples.

The federal government should have a greater focus on regulatory reform to spur investment. For example, policies such as pharmaceutical drug price controls are hurting Canada’s capacity to develop its own drugs and vaccines.

Another one is the following. The time taken to obtain project permits for infrastructure is one of the slowest amongst OECD countries. Even the recently amended regime for resource regulatory approvals has failed to shorten the time taken for a pipeline approval, such as in the case of the $2.3-billion Nova Gas Transmission Ltd. project, which was unduly delayed by a year.

The federal government should also be taking a stronger leadership role in achieving an internal economic union in Canada. Current interprovincial obstacles to trade and even regionally based federal tax, regulatory and employment policies undermine the free flow of capital and labour in Canada. The cost of internal trade barriers alone is estimated to be 4% of GDP.

[The Chair, Liberal, Wayne Easter]

Jack, could you sum up fairly quickly, please?

[Dr. Jack Mintz]

Actually, I'm pretty well done.

[The Chair, Liberal, Wayne Easter]

Okay.

[Dr. Jack Mintz]

I'll just mention one more, and that is the following. We should make sure that any social policies do not increase our already high marginal tax rates on the working poor due to income-tested programs. This discourages work, education and training, even if the resulting income is taxed more heavily.

I could go on at length. However, I'll stop here and take questions later.

[The Chair, Liberal, Wayne Easter]

Thank you, Mr. Mintz. I hate cutting people off, but it's my job, I guess, today.

We'll turn to Mr. Rocha, president of 4 Pillars Consulting Group Inc.

Mr. Rocha, go ahead.

[Reg Rocha, President, 4 Pillars Consulting Group Inc.]

Thank you, Mr. Chair and committee members, for having me here today to represent 4 Pillars Consulting Group.

Thank you for giving us this opportunity.

4 Pillars Consulting Group is a franchise network of small business owners who provide debt consulting, financial education and credit rehabilitation services to those facing insolvency. We have been in business for 20 years, with 50 offices located throughout Canada. Over our long history, we've assisted tens of thousands of Canadians to navigate the complexities of the insolvency system as they face crushing debt loads. We support them through their unique situations by providing debt relief and recovery solutions.

We appreciate that this committee has been taking testimony for months now on the post-pandemic economic recovery. You're more than aware of the statistics, and many have expressed concerns for the pre-pandemic rise in debt levels being held by Canadian households. Today I want to focus my remarks on what these statistics look like on the ground for the tens of thousands of clients we serve.

The people who come through our doors every day are often overwhelmed, ashamed and without hope. Overwhelming debt negatively affects a person's mental health, family stability and productivity. I have a deep concern for this moment Canadians currently find themselves in, but our concern has been growing for many years.

Canada's Bankruptcy and Insolvency Act is intended to provide honest Canadian debtors with the right to a fresh start, the right to deal with and move beyond overwhelming debt. What we have observed, however, is that the legislation and the system that supports it have some significant systemic challenges that make their fresh start far from certain.

Given that the recovery of our national economy will require Canadians to achieve a sustainable and solid financial footing, our main recommendation to this committee is to undertake a thorough review of the Bankruptcy and Insolvency Act from the viewpoint of the debtors. In particular, I have three areas of focus that I believe require your consideration.

Number one is the debtor's right to an equal playing field. The current system is preferentially weighted towards the creditor. Banks have extensive resources and a mandate to make money for shareholders. They have considerable ability to access legal and financial advice on how to pursue claims against debtors.

The Office of the Superintendent of Bankruptcy is charged with being a fair, transparent arbitrator between creditors and debtors. The agents of the OSB, licensed insolvency trustees, are presently the only entity prescribed by federal law to administer proposals and bankruptcies under the BIA. However, trustees are compensated by the size of the debt settlement debtors pay back to creditors. The trustee is also not responsible for the financial rehabilitation of the debtor. In our credit-driven society, debtors are the little guy, but unlike in Canada's judicial system, there is presently no entity assigned to be a sole advocate for the debtor.

Number two is the debtor's right to make informed financial choices. The ability to make informed choices is fundamental to the right of choice. Within our current regulated debt and insolvency system, no one is really responsible for the crucial step that 4 Pillars has come to call “aftercare”. Right now, insolvent debtors are required to take two mandatory counselling sessions that are administered by the trustee. In practice, this aspect of the legislation acts more as a punishment than as a support, and statistics show that it is not driving the desired results, as the recidivism rate continues to increase.

Number three is that we have very limited data on debtor behaviour, and what we do have is held by different entities and jurisdictions. If we do not collect the data that allows us to understand the various root causes of how Canadians come to carry excessive debt, we will be unable to design effective interventions. In addition, we have limited ability to forecast or insulate Canadians against the kinds of economic shocks we are now experiencing.

The Canadian Debtors Association, of which 4 Pillars is a member, advocates for debtors. As we all attest, access to credit is now a necessary part of our lives. Like 4 Pillars, the Canadian Debtors Association is also expressing the need for an overhaul of the BIA. Recently, some of its board members have been in touch with some of you to discuss ways to have a review at the parliamentary level.

4 Pillars believes the debate must shift towards a more debtor-focused approach. Should the sky-high debt loads that we're seeing today become tomorrow's insolvency crisis, then putting debtors at the centre of the solution is the only way forward.

In closing, please allow me to offer our support. We have experience and knowledge to contribute to this work and do not feel it is for the public sector to shoulder this burden alone. We look forward to the opportunity to work with you to improve Canada's consumer debtor outcomes.

Thank you.

[The Chair, Liberal, Wayne Easter]

Thank you very much, Mr. Rocha.

Our last panellist will be Mr. Cross, from the Macdonald-Laurier Institute.

Philip, the floor is yours. You've been here lots of times.

[Philip Cross, Senior Fellow, Macdonald-Laurier Institute]

Thank you. I hope I've unmuted myself successfully.

I would like to start by recognizing Paul Rochon’s admirable service as deputy minister of finance for six years in the most trying of circumstances.

The fall economic statement suffers from cognitive dissonance, or what George Orwell in 1984 called “doublethink”, since it requires believing two contradictory ideas at the same time. On the one hand, its projections of government spending and deficits paint a picture of few long-term effects from the pandemic. At the same time, this benign long-term outlook is based on the assumption that interest rates stay low due to subpar growth for years to come.

Despite the pandemic’s unprecedented shock, government finances are forecast to essentially return to where they started. After doubling this year, the total government spending as a share of GDP in 2025 falls to 14.5%, slightly below where it started in 2019, despite a near doubling of debt in the intervening years. Government revenues are projected to rise about half a percentage point of GDP. As a result, the federal deficit as a share of GDP in 2025 is projected to be only marginally higher than it was in 2019.

However, this forecast of the negligible impact of soaring cumulative debt on annual deficits assumes that interest rates stay at record low levels and that higher government spending is temporary. The bond market says unequivocally that economic activity will remain subdued for a prolonged period. The fall statement does recognize that the pandemic lowers our potential GDP by $50 billion by 2025, yet despite slower potential growth and an aging population, government spending magically is not affected.

While markets have priced in an extended period of low interest rates, the fall statement ignores the effect on our financial and pension systems. Clearly, low interest rates have a significant impact. Most pensions are based on actuarial assumptions of real interest rates of 2% to 3% over the longer term, much higher than they have been for years.

The December 2019 fiscal update from the Department of Finance acknowledged the negative impact of the lower interest rates on its own employee pension plan. That update revised up the deficit partly because of “increased expenses related to actuarial revaluation of employee pensions”, totalling $33.4 billion over the next five years. This is only one of the many distortions caused by ultra-low interest rates, yet there is no discussion of the impact of lower interest rates on the viability and the risk-taking of pension plans.

The fiscal update acknowledges other ways that this recession differs from any seen before and has lasting consequences. It shows, on page 52—which Jack also was drawn to—the rising share of permanent layoffs in unemployment as the initial shock of the pandemic wears off. Jack has already covered that, but what I'll say is that the essence is that temporary layoffs accounted for 86% of the unemployed in April, and by October unemployment fell by more than half, but the share of permanent unemployment rose to 74%.

These data give an idea that the recovery inevitably was going to slow in the fall and winter as the rapid recovery of industries that easily adapted to social distancing gave way to the much harder case of other industries largely shut down as long as the virus circulates.

The document whitewashes policy errors made early in the pandemic as it attempts to repackage measures clearly intended for short-term relief as long-term stimulus. Canada is running the largest government deficit in the G20 because Canada enhanced household incomes more than any other nation. Much of Canada’s extraordinary increase reflected that benefits were poorly targeted, including 27% going to households that earned over $100,000, according to the Fraser Institute.

Not surprisingly, much of this money ended up being saved. However, rather than acknowledging that income support was excessive and poorly targeted, the fiscal statement labels these savings as “preloaded stimulus” and claims that “unleashing these savings will be a key element” of the recovery, as if that was the plan all along. This improvised rationale—it cannot be dignified as a plan—is problematic.

Still, the worst damage from the pandemic may well be on how we think and talk about the economy. Recall the uproar in 2015 over preliminary estimates of GDP falling 0.1% and 0.2% because of the oil price shock. This sent much of the commentariat of this country into a frenzy about whether the economy was in recession and led some to insist that we needed to run deficits to lift growth at least temporarily back into positive territory.

Today we are dealing with declines in real GDP literally 89 to 177 times greater, but the same word, “recession”, is used as if the two episodes are equivalent. The only blessing of this pandemic may be that we will be inoculated for years against allowing trivial movements in GDP or jobs to dictate policy.

Words count, and for a lot. Recessions in the 1950s and 1960s were frequent, mostly inventory cycles, but usually did not result in job losses. After the 1974 recession, the public and policy-makers began to associate recessions with major losses of incomes and jobs and, increasingly, did everything possible to delay them. The result was twofold. One was a chronic overuse of stimulus that lowers long-term growth and, ironically, makes the economy more vulnerable to recessions. The other was that recessions became severe once-a-decade events, often involving financial crises that also significantly dampen long-term growth.

Similarly, the increase from a $39-billion to a $381-billion deficit has been made banal in public parlance by sheer repetition. Before 2020, a deficit of even $100 billion was unimaginable, but now many shrug as if it has become the norm. Instead of treating a $39-billion deficit as unusually large, the fall statement holds it up as a satisfactory goal to pursue.

The unrelenting focus on monetary and fiscal short-term stimulus to the economy has been at the expense of ignoring the negative long-term impacts on potential growth. It is little wonder that economists increasingly call slow growth the “new normal”.

Thank you.

[The Chair, Liberal, Wayne Easter]

Thank you very much, Mr. Cross.

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

I have a point of order, Mr. Chair.

We've organized something so that we can go through to 6:15. Mr. Poilievre has accepted taking the second two-and-a-half-minute NDP round.

[The Chair, Liberal, Wayne Easter]

We'll do that. Thank you, both, for coming up with that.

Let's get right to questions. I have on my list Mr. Kelly, Ms. Dzerowicz and Mr. Fraser splitting, then Mr. Ste-Marie and Mr. Julian. After that, it's Mr. Poilievre and Mr. McLeod.

Mr. Kelly, the floor is yours.

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

I think I'll actually split my time, then. If I am going to go first, I'll split my time with Mr. Poilievre. I know he needs to get in on this.

I will start with Mr. Bewick. Thank you very much for the presentation.

We have 13 provincial and territorial leaders who agreed that fairness demanded that Alberta receive a one-time retroactive stabilization payment. The announcement ignored this unique moment, where 13 provincial and territorial leaders agreed—not that they should get more money, but that fairness demanded one province receive it.

Could you comment on the stabilization announcement?