Finance Committee on March 21st, 2024

[Joanne Thompson, Liberal, St. John's East, NL]

I was trying to get another question in, but that's fine, thank you.

[The Chair, Liberal, Peter Fonseca]

Your time is done.

We're off to MP Ste-Marie, please.

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

Minister, the Journal de Montréal published an article today whose title is "A 44% increase in companies facing bankruptcy in Quebec". The article begins with the following sentence:

The need to repay Ottawa's emergency COVID loans is the straw that breaks the camel's back for many entrepreneurs, who have been opting instead to just shut down.

A little further along in the article, it says:

Most worrisome is the fact that the number of companies facing bankruptcy in Quebec has increased by 44% over the past year, with just under 3,000 companies declaring bankruptcy in 2023.

This was predictable, Minister. Some solutions were put forward. What do you have to suggest?

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

Thank you for your question.

Our government understands the importance of small and medium-sized enterprises, which are central to our economy and our communities. That's we why we were so proud to be able to support them by means of a $49 billion program. It was significant and essential support. In fact, over 80% of businesses paid back their loans. I would therefore like to thank all of those that did so. It amounted to $20,000 of interest-free support from Canada's federal government. Once again, it made a difference. They deserved it and it helped thousands of companies across the country survive the pandemic.

The good news now is that those companies that had trouble paying back their loans still have a loan from the federal government, at an interest rate of only 5%, which is very low compared to loans from private commercial institutions. Small and medium-sized enterprises don't have to repay their federal government loan until the end of 2026. That gives them more time. All they need to pay for the time being is the interest, which is very low, particularly compared to loans from private lenders.

[The Chair, Liberal, Peter Fonseca]

Thank you, MP Ste-Marie.

Now we'll have questions from MP Blaikie.

[Daniel Blaikie, NDP, Elmwood—Transcona, MB]

Thank you very much.

I know there are certainly revenue ideas that New Democrats support that the government does not. There are revenue items in Bill C-59. I think whenever we're talking about the government books, it's important to talk not just about the spending side, but also about the revenue side.

I wonder if you'd like to take a moment to highlight some of the revenue measures that are here and some of the principles you think underlie those particular revenue items. That might help inform future decisions about government increasing its revenue from those.

We're witnessing a time with giant corporate profits—record corporate profits. Certainly New Democrats feel it's appropriate that some of that profit be brought back into the system and invested back into people.

What are some of the principles underlying these revenue items that may encourage government to go further and ensure that corporate Canada is paying its fair share?

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

This is not something I anticipated today, but I feel that Premier Kinew is in the room with us already. I really do.

In my first conversation with him, he talked to me about how the economic horse has to pull the social cart. He said that he really supported the fiscal guideposts that we laid out in the fall economic statement. He shares our government's belief that a government that believes in supporting people and building up the social welfare net is also a government that needs to believe in economic growth and fiscal responsibility.

I know this is the path he has set Manitoba on. I look forward to working together with the Province of Manitoba and Progressives across the country to do things that help the economy grow and allow us to be fiscally responsible, because that's what allows us to support Canadians.

I really want to start with that and say how important it is.

I agree with you. If we want to support Canadians in a fiscally responsible way, we need two things. One is economic growth. That's why—and here I'm setting aside the ritualized jousting—I would say to our Conservative colleagues, please, gentlemen, get on board and support these investment tax credits. They really are measures that every single person we care about will benefit from.

I am hearing from the oil and gas sector in Alberta that they want these tax credits to be passed urgently. Surely that is something Liberals and Conservatives can agree we need to do. The tax credits are an important part of this fiscally responsible approach because they allow us to drive investment, drive growth and create jobs.

The revenue side is also really important. That's why, in our work together, we have been part of putting in revenue-raising measures like our luxury tax and the COVID dividend, which we asked the financial institutions that benefited from our support during COVID to pay to support the budget.

Those are important measures. I agree with you.

[The Chair, Liberal, Peter Fonseca]

Thank you, MP Blaikie.

Now we're off to MP Lawrence, please.

[Philip Lawrence, Conservative, Northumberland—Peterborough South, ON]

Thank you, Mr. Chair.

Thank you, Minister, for being here.

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

Are we back to the ritualized jousting?

[Some hon. members]

Oh, oh!

[Philip Lawrence, Conservative, Northumberland—Peterborough South, ON]

You should trademark that, honest to goodness. That's great.

I would like to talk about GDP per capita. I think it's important that we come to an agreement or that there's factual clarity with respect to what the PBO has recently told us regarding the rebate versus the carbon tax. This will be a bit of ritualized jousting unless we can come to an agreement, which I'm hopeful we can.

In a recent report from the PBO that I'm looking at right now, he says that In every one of the provinces where the backstop applies, there is a net economic loss for families. Can you agree with that?

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

With true goodwill—and I do enjoy our conversations—I think you and I probably disagree on a price on pollution, or at least we disagree on it today. The thing I would point out to you and your colleagues is that you guys ran in 2021 on a carbon price. I read out the quote from your platform to Mr. Hallan. You said there was going to be a carbon price that increases to $50 a tonne and that's “on a path” to $170 a tonne.

Please enlighten me, but I think the reason you said it is that you understood in that campaign that Canada needs a credible environmental plan—

[Philip Lawrence, Conservative, Northumberland—Peterborough South, ON]

Thank you—

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

—and a credible plan on climate to attract investment. We are doing a great job in attracting investment to Ontario, working with the Ford government. There's VW, Stellantis—

[Philip Lawrence, Conservative, Northumberland—Peterborough South, ON]

Thank you, Minister.

I would just like to provide a bit of commentary. The OECD predicts us to be last in capital investment over the next 40 years.

I just want to go through this, because I think it is important that we have factual clarity on it. The PBO tells us that the average family in Alberta will pay $2,943 in carbon tax. Could you please tell us what the average rebate will be for that family?

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

You mentioned the OECD, so I can't resist pointing out that, according to the OECD, in the first six months of last year, of 2023, Canada had the highest per capita foreign investment of any country in the G7 or G20 and the third-highest total sum of foreign investment. That is impressive. That is thanks to our collaborative work with the Government of Ontario—

[Philip Lawrence, Conservative, Northumberland—Peterborough South, ON]

Thank you—

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

—and it is thanks to the fact that we have a climate plan. Investors are demanding that.

[Philip Lawrence, Conservative, Northumberland—Peterborough South, ON]

Thank you very much.

What would be the rebate?

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

For our province—Ontario families—it's $1,120. For Alberta families, it's $1,800 this year.

[Philip Lawrence, Conservative, Northumberland—Peterborough South, ON]

Okay. For Alberta, they'll get a rebate of $1,800, but they're going to pay $2,943. For our province, the beautiful province of Ontario, they're going to get a rebate of.... What did you say? I have $1,047. Is it $1,100?

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

I have $1,120.

[Philip Lawrence, Conservative, Northumberland—Peterborough South, ON]

The amount they're paying is $1,674. Factually, Canadians are at a net loss because of the carbon tax. That's the PBO; that's not us. I just want to get that clarity.

I now want to move on to our GDP per capita, which I think is a pretty important issue.

This paper shows the GDP per capita. The blue line is the United States over the last decade or so. The red line is Canada. You can see a gap appearing around 2014 and 2015, and it's quite a large gap. That's incredibly important, because it underpins the economic well-being of every Canadian. This gap is expanding. Could you please tell Canadians why they are getting poorer while Americans are getting richer?

[Yvan Baker, Liberal, Etobicoke Centre, ON]

On a point of order, Chair, I'm not sure if the rules here are the same as in the House, but my understanding is that in the House we're not allowed to use props. I just want to ask if you could rule on that.