Finance Committee on Dec. 9th, 2021

[Adam Chambers, Conservative, Simcoe North, ON]

Thank you.

To be clear, we're being asked to further extend a benefit from a program for which we don't have details on how effective it has been. We're also being asked to extend additional benefits for individuals through a process of which we are unable to ascertain how effective it's been in detecting fraud or ineligibility.

I have a fairly simple question. What was the GDP growth rate in Q2 of this year? Because we like to talk about the Q3 GDP, as I've heard you mention a number of times....

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

I sure do.

Of course in Q2, GDP did contract. That was to do with the very necessary lockdown in the second quarter to contain a surge in COVID. I think we are all familiar with the measures that were taken, including in the province that I represent as a member of Parliament for Toronto, Ontario. Those lockdowns did impose—

[The Chair, Liberal, Peter Fonseca]

Excuse me.

Member, you have a minute and 15 seconds.

[Adam Chambers, Conservative, Simcoe North, ON]

That's wonderful. Thank you.

That was one of the largest contractions we've actually seen in quite some time. As a new member, I appreciate, Minister, your providing some feedback and lessons to new members about irresponsible political posturing and caution about talking down the market, but since I used to advise a minister of finance, I would perhaps offer some advice.

We can cherry-pick stats to show how good or how bad some things are, and if we're intent on comparing the record of response to economic crisis, post-2008, which you seem to talk down, Canada led the G7 in growth. We led the G7 in unemployment for most of those years. We also had very low inflation.

If you compare that to some of the stats today, we've spent as much and more than most other countries, we lag our peers in growth and we have the second-highest inflation in the G7, so I think we need to understand that we can cherry-pick stats that show a particular narrative. I would maybe just caution against that.

Thank you.

[The Chair, Liberal, Peter Fonseca]

That's your time.

We're now moving to the Liberals, with Ms. Dzerowicz for five minutes.

[Julie Dzerowicz, Liberal, Davenport, ON]

Thank you so much, Mr. Chair.

Before I ask my next question to the Deputy Prime Minister and Minister of Finance, I want to make a couple of statements because deflation seems to be a bit of a topic today.

If I recall correctly—because I was part of all of the meetings as COVID started—a number of economists indicated that deflation could be an issue, but no one could know because the pandemic was so unprecedented. I wanted that on the record.

I also wanted to indicate that a lot of concern was raised by a number of our witnesses last year that the suite of supports we offered would be stronger and more effective than what was offered in 2008 under the Harper government. There was a strong desire to make sure that we tied workers more closely to their jobs and their employers, and that the supports would be generous enough to provide a strong foundation from which companies would be able to pivot as our economy tries to come out of COVID.

I also want to put on the record that former Bank of Canada Governor Poloz did indicate that government spending—and I think this was just over the last week or two, on November 28—and stimulus are not to blame for increased inflation. I just want to make sure that we continue to counter the false narrative that the Conservatives are proposing.

Deputy Prime Minister and Minister of Finance, we've been talking quite a bit about Canada's economic future, and you have been an absolutely ardent champion of national child care. We often talk quite a bit about the social good that comes from such a program, but I wonder if you could elaborate on the positive economic impacts of such a program that we're trying to put into place.

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

Of course, I could.

We put in place our plan to bring in universal, affordable, high-quality child care because we knew that it was a powerful driver of economic growth. That's not a theory. That is based on the experience of Quebec. What we've seen in Quebec is that putting in place affordable, high-quality early learning and child care has hugely increased the labour force participation rate, particularly of mothers of children who are three and younger. Before child care was introduced in Quebec, it had one of the lowest rates in Canada. Now it has the highest, and that has delivered economic growth.

Actually, I spoke with Madame Marois to get some advice from her because she was the minister who put this into place. She said something really interesting to me, which was that the initial genesis of the program in Quebec—which has been such an inspiration for us now across the country—was actually economic. It was because there were great concerns about Quebec's structural economic growth capacity, and child care was seen as a way of building that. I see the Quebec members of Parliament nodding their heads.

It's nice when, with hindsight, you can look back on a decision you made and see that it is even more appropriate. I think all of us know that a challenge we're facing in many parts of the country is with the labour force. Early learning and child care is a really powerful, structural, long-term way of increasing Canada's labour force. It's a very important driver of jobs and growth.

[Julie Dzerowicz, Liberal, Davenport, ON]

Thank you.

I think I have a minute left, so I'll ask you a quick question. One of the key measures you have put into place as part of this bill is that, if a publicly listed corporation chooses to increase executive pay while receiving government support, the wage subsidy would be clawed back.

Could you explain why it was important for you to do so?

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

Yes, for sure.

I'm going to say that members of this committee from many parties contributed to our appreciation that this was important to do, and I want to thank members, obviously from the Liberal caucus but from other parties too, for working on that.

These measures were initially put in place in an emergency to provide support for the economy to prevent economic scarring. We understood as time went on that it was important that the measures do what they were intended to do, which was to support workers—

[The Chair, Liberal, Peter Fonseca]

Thank you, Minister.

That's your time, Ms. Dzerowicz.

This will be our fourth round, and the Conservatives have the floor.

Mr. Poilievre, go ahead for five minutes.

[Pierre Poilievre, Conservative, Carleton, ON]

I'm going to let Mr. Chambers....

[The Chair, Liberal, Peter Fonseca]

Mr. Chambers, go ahead for five minutes.

[Adam Chambers, Conservative, Simcoe North, ON]

Thank you. I'll use the first part of the time.

My honourable colleague just asked who could have predicted inflation. Actually, I have hot-off-the-press inflation warnings from May 12, 2020; June 11, 2020; June 16, 2020; June 18, 2020; July 20, 2020; November 26, December 3, December 7 and December 1, all in 2020; and April 20, April 27, April 29, May 6, May 11 and June 22 in 2021. Those warnings were from my honourable colleague Mr. Poilievre, so I'll perhaps turn the floor back to Mr. Poilievre.

[Pierre Poilievre, Conservative, Carleton, ON]

I thank Ms. Dzerowicz for asking the question. We, over here, actually answer questions, so we were happy to provide you with that answer.

Of course, this minister has been trying to convince Canadians that prices would drop. Up until last week, that was her official position. Last week she finally acknowledged that we have inflation in Canada, but today she said not to worry about that because the stock market has gone up. Of course, the stock market goes up whenever governments flood the economy with cash. They create asset bubbles whereby the very rich get much richer, but then the very poor end up having to pay more as those dollars trickle down. It's one of the reasons why trickle-down economics never works, because it never trickles down. It stays with the rich at the very top. Then the people who do all the work on the ground end up paying the bills.

It's interesting. The Prime Minister was once asked what is middle class and what is rich. He said that middle class folks live off their incomes, whereas rich folks live off their assets. The minister comes here today and says that things are great because those who live off their assets have watched those assets inflate in value by 20%. She even marvelled at how the stock market had gone up so much, even though the economy is smaller today than it was before COVID.

We have a smaller economy but a much larger stock market, so if the folks who own all the stocks are significantly wealthier when the overall output of the economy is slightly down, that means there is less for everyone else. What we see here again is a government that is taking from the have-nots to give to the have-gots. Sure, if you're floating around on your yacht right now, if you're planning to get back to—

[Sophie Chatel, Liberal, Pontiac, QC]

A point of order, Mr. Chair.

I'm new to the committee, but we have to discuss Bill C‑2, and I'm having trouble seeing the connection between what Mr. Poilievre said and what we have to decide in committee.

[The Chair, Liberal, Peter Fonseca]

Thank you, Madame Chatel.

Mr. Poilievre, perhaps you can get to your question, and hopefully it will be relevant to Bill C-2.

[Pierre Poilievre, Conservative, Carleton, ON]

Bill C-2 proposes another $7 billion of inflation, so it is very relevant.

I just find it incredibly insulting that the day that a report comes out showing that it's going to cost an extra $1,000 for average families to feed themselves, the government comes here and says, “Well, don't worry. The stock market is up.” Frankly, the middle class folks who are walking down grocery aisles not able to buy nutritious food because it's too expensive can't afford stocks right now. Their concern is putting food on the table.

A 30-year-old called me from my community of Greely a couple of weeks back to say that he's still living in his parents' basement because he can't afford a townhouse, even though he has the same job that his mother—

[Julie Dzerowicz, Liberal, Davenport, ON]

On a point of order, Mr. Chair, I'm very sorry to interrupt the video clip of Mr. Poilievre, but does he have a question?

[The Chair, Liberal, Peter Fonseca]

Mr. Poilievre, do you have a question? If you can get to the question, you have less than a minute left of your time.

[Pierre Poilievre, Conservative, Carleton, ON]

I have a constituent who called me and said he has the same job his mother had, but while she was able, happily, to buy a bungalow on a half-acre lot in south Ottawa with that, he can't even afford a townhouse today. It's great that the minister's friends who attend the Davos conference have seen their stock portfolios balloon after she's pumped all this cash into the economy, but the working-class kids of our country are saying that their lives are worse off than their parents' lives. I asked her if we had a stable housing market, and she couldn't even answer that question. There are millions of young people asking that.

She likes to quote The Economist. Well, The Economist says that we, along with two other countries, have a housing bubble so big it could lead to a crash on the scale of the 2008 crisis, but will the minister finally start standing up for the people who do the work in this country?

[The Chair, Liberal, Peter Fonseca]

Mr. Poilievre, that is your time.

We are moving to the Liberals now with Mr. Baker for five minutes.

[Pierre Poilievre, Conservative, Carleton, ON]

There's no answer.

[Yvan Baker, Liberal, Etobicoke Centre, ON]

Thank you, Mr. Chair.

I have an important question for you, Minister, but before I get to that, I can't help but respond to something that I heard here a moment ago. Even though we know—and we know from global economists and from world leaders on the right and on the left—that inflation is a global problem faced by countries around the world, Monsieur Poilievre says that excessive government spending has caused inflation in Canada.

[Pierre Poilievre, Conservative, Carleton, ON]

On a point of order, Mr. Chair, the member is quoting me. I was saying Larry Summers has said government deficits are causing inflation. That is the minister's own economic source.

[The Chair, Liberal, Peter Fonseca]

Mr. Poilievre, it's the member's time.

Mr. Baker, you have the floor.