Evidence of meeting #66 for Finance in the 44th Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was going.
A video is available from Parliament.
Conservative
Philip Lawrence Conservative Northumberland—Peterborough South, ON
Thank you.
I would thank the member for his good-faith discussions with me off committee time here, but I think we do need additional time. I would agree with the member's offer to suspend and come back on Monday, when we can further discuss this motion.
Conservative
Liberal
Liberal
Liberal
Terry Beech Liberal Burnaby North—Seymour, BC
Where this currently stands, just to open the kimono to everybody who might be watching this, is that there's some procedural stuff that's involved, and some of my members might even be confused.
Thank you for your advice too, Daniel.
Basically what is happening is that there is a disagreement. I put this motion on the floor. Certainly the government wants to proceed with the FES. Because, I believe, we have the support of a majority of members around around the table, the only way the Conservatives would be able to stop us from moving forward using this method would be to filibuster at this committee.
I am trying to respect everyone's time and all members of Parliament so that we don't have to go through that show. We can simply suspend with things the way they are, with the Conservatives holding the floor, and we can go have some chats.
Liberal
Terry Beech Liberal Burnaby North—Seymour, BC
It's probably a unanimous consent thing, I would imagine.
Liberal
The Chair Liberal Peter Fonseca
I've heard the members loud and clear. We will suspend.
[The meeting was suspended at 6:27 p.m., Wednesday, November 2]
[The meeting resumed at 3:32 p.m., Monday, November 14]
Liberal
The Chair Liberal Peter Fonseca
I call this meeting to order.
This is the continuation of meeting number 66 of the House of Commons Standing Committee on Finance. The committee is meeting today to discuss future business.
Today's meeting is taking place in a hybrid format, pursuant to the House order of June 23, 2022. Members are attending in person in the room and remotely using the Zoom application.
I'd like to make a few comments for the benefit of the witnesses and members.
Please wait until I recognize you by name before speaking. For those participating by video conference, click on the microphone icon to activate your mike and please mute yourself when you're not speaking.
For interpretation for those on Zoom, you have the choice at the bottom of your screen of either the floor, English or French. For those in the room, you can use the earpiece and select the desired channel.
I'll remind you that all comments should be addressed through the chair. For members in the room, if you wish to speak, please raise your hand. For members on Zoom, please use the “raise hand” function. The clerk and I will manage the speaking order as best as we can. We appreciate your patience and understanding in this regard.
When we suspended, Parliamentary Secretary Beech had the floor and his hand is now raised.
Mr. Beech.
Liberal
Terry Beech Liberal Burnaby North—Seymour, BC
Thank you, Mr. Chair.
Hello, members. It's great to see everyone.
I thought it would be good for us to recap where we currently are, given where we left off in our last session.
We were disagreeing on the path forward for future business of the committee. The Conservatives had advised us that they were willing to filibuster to prevent the study of the fall economic statement. We decided to suspend so that further conversations could take place over the constituency week.
I'm not going to get into the details of those conversations out of respect for the confidence of all of my fellow professionals around this table, but I do think it would be valuable and probably productive if I could highlight where I think we fell short on our side. I don't actually think we're that far apart.
The biggest thing for us is not receiving certainty in being able to study the fall economic statement in a timely manner to make sure that its measures can be implemented to benefit Canadians. Those are measures like permanently eliminating interest on student loans and implementing the recovery dividend. Other measures are in there; I'm not going to go through all of them, but generically they are about growing the economy, making life more affordable and trying to keep our country on a viable and responsible fiscal track.
If we can find a way to close this gap—I think there is still a way—we can meet the needs of all negotiating partners at the table. I am somewhat saddened that we weren't able to do it over the constituency week, but maybe I can put on my “Adam Chambers socks” and find a path here in the room.
I would reiterate to my friends across the way that I have a track record, whether it be with the member for Carleton, the member for Abbotsford, the member from Central Okanagan—Similkameen—Nicola—I hope I got that right; apologies to Mr. Albas if I got that wrong—and of course the member for Calgary Forest Lawn. I think we can still find a path and I am confident that we can find it today.
It might not be the exact way that negotiating members would be happy with, but if we zoom out and think about the working of this committee between now and Christmas, I think there's still an opportunity for a merry Christmas for everyone. That is my hope for what we can accomplish today.
Thank you, Mr. Chair.
Liberal
The Chair Liberal Peter Fonseca
Thank you, Parliamentary Secretary Beech.
I did start a list here. We have MP Baker up next. Then it is MP Dzerowicz, MP Lawrence and then MP Morantz after that.
MP Baker.
Liberal
Yvan Baker Liberal Etobicoke Centre, ON
Thank you, Mr. Chair.
It's good to see members after the constituency week. I hope everyone had a good constituency week in their ridings.
I think this is a really important issue that we're debating right now. I think, as we're all aware, there are a number of important components in this bill with a number of important deliverables for folks. I think it's important that they be delivered to folks in a timely way.
I'm thinking of things like the permanent elimination of student loans. I'm thinking about a range of home affordability measures—for example, the creation of a new tax-free first home savings account, a doubling of the first-time home buyers' tax credit, and ensuring that property flippers pay their fair share. These are the kinds of things I hear about all the time, especially the property-flipping, from folks in my community.
Another piece that I think is important is enhancing the Canada workers benefit to ensure that payments are delivered quarterly for low and medium-income Canadians. I think there are a lot of people around this table who are really concerned about the inflation that Canadians are struggling with and the cost of living, especially for the low and medium-income Canadians. This is an example of something that I think is really important.
I think that, in light of what's happening with the rising cost of living that people are facing and in light of the measures that are in this bill and the impact these could have on folks, we have to take it upon ourselves to study this legislation in an expeditious manner. I think that's what our constituents would expect of us.
It was my hope that we would adopt the motion at our last meeting so that we could hear today from officials on Bill C-32. Unfortunately, we're not able to do that. To be frank, given that we haven't gotten to that place yet, I'm just concerned about our ability to study this in a timely manner. Ultimately, if we don't do that, then we're not going to get the supports to the people who need them in the time frame in which they need them.
I'm, therefore, proposing the following amendment: that after the words “be invited to appear with her officials on the bill”, we delete the word “and” and add the following after the words “in the committee's full study of the bill”. It would read:
and, should the bill be referred to the committee by Thursday, November 24, 2022: a. Clause-by-clause study of the bill commence no later than Wednesday, November 30, 2022; b. Amendments to the bill be submitted by 5:00 PM EST Thursday, November 24, 2022; c. and that the committee immediately proceeds to this study and hear from officials from the Department of Finance.
I'm happy to circulate the language to members of the committee, but in the end, the purpose of this proposed amendment, really, is to ensure that we study this bill in an expeditious manner and deliver the help to folks who need it in an expeditious manner and on the timelines they would expect us to.
Liberal
Liberal
Liberal
The Chair Liberal Peter Fonseca
Okay. As a friendly amendment....
I have MP Lawrence, MP Morantz and MP Blaikie.
Conservative
Philip Lawrence Conservative Northumberland—Peterborough South, ON
Thank you, Mr. Chair, and to members of the committee.
I think a little bit of process needs to be understood here. As the normal operation of the way that Parliament works, first of all, bills are debated in the House of Commons. We don't even know exactly what the bill will be before us or the form it will take. It can be amended in the House of Commons. Presupposing a prestudy beforehand I think is premature at best, and reckless is perhaps is a better word for that. I think it's very much the position of our party that we want to have a full understanding of the legislation before we consider studying it.
As I said, the form of it could dramatically change. We're in a minority Parliament. Certainly, large amendments could be made. Studying it now just doesn't make any sense. I also think it's important that we look at the context this bill is being dropped into. We're at a seven-year record of disappointing economic results after disappointing economic results. In fact, I would dare say that the fiscal update could really be called the failure update.
Considering this is a document created by a Liberal government, in that document it says that we are going to have high interest rates, we're going to have continued high inflation, and it even projects potentially a recession coming forward. In the downside analysis it has two negative quarters, which is the technical definition of a recession. When we look at that and we look at the track record, quite frankly, of this government of not being transparent and not being open with Canada, I don't think it necessitates a filibuster but rather a discussion of the issues given the lack of transparency.
If we go through the failures of this government to be transparent, whether we start with the Aga Khan, when the Prime MInister took an illegal vacation.... He was actually found guilty by the Ethics Commissioner of illegally accepting a vacation. Then we continue on to this story of lack of transparency in a government that was supposed to be open to a fault. We go on and we look at the SNC-Lavalin affair, where we saw an Attorney General, a Minister of Justice, who by her own words felt pressure to interfere in an investigation. These are sacrosanct principles that this government is continuing to just wave over and push over.
You'll have to forgive me, members, Mr. Chair, if I'm going to insist on transparency and accountability. We are His Majesty's loyal opposition. Our job is not to be an audience, not to simply clap and applaud failure after failure after failure, but it is to be in opposition and we're going to insist on the principles of democracy being upheld. There's no doubt that some members on the other side, some of the Liberal members, will object to the fact that they are being held to account. It doesn't feel good, especially when you look at their tremendous record of failure.
Then we move from the SNC-Lavalin to the WE Charity scandal. This was incredible. During a time when our country was facing a crisis the government was looking to give nearly a billion dollars to an organization that had given members of the Prime Minister's family hundreds of thousands of dollars. Once again, I'm sure that this government would have loved to have just passed that legislation through and for the opposition just to be an audience and we would have just all looked the other way on this organization with its troubled history and its funding of the Trudeau family. They would have loved for us just to not do what we're supposed to do and not do our proper due diligence as members of Parliament, which of course, includes doing the appropriate studies at the appropriate times.
A prestudy is by no means the regular way this House operates. I, myself, have a private member's bill that just completed the second voting. We'll have our second hour of debate. We'll have our vote on Wednesday. But I don't get to have that debated at the foreign affairs committee until it's been dutifully passed, which is the way this is meant to operate.
As I said, there can be amendments in the House, and that debate can also inform the committee as it goes forward, so simply looking the other way is not how Conservatives want to operate. We want to properly investigate and have a proper debate. Let's look at the track record. Quite frankly, this Liberal government has not earned our trust. They continue to let Canadians down, whether we look at SNC-Lavalin, the WE scandal or the Aga Khan, and now we understand that the Prime Minister had a $6,000 hotel room—a $6,000 hotel room—at a time when Canadians are struggling just to get by.
Quite frankly, when we look at what's in a lot of this fall economic update, this isn't what the folks in my riding are asking for: the single moms who are having struggles just to get by, or the farmers who perhaps are facing restrictions on key ingredients of what they need to make their farms work, whether it be fertilizer.... On what they are looking for when they come to me, they don't talk to me about a 2% tax on share buybacks. That's not what they come to me to talk about.
Even students, who I'm sure would.... Interest on student loans is an issue, but that's not what they're coming to talk to me about. What they're coming to talk to me about is that unlike every other generation that preceded them, they can't afford a house. There are so many folks living in their basements, there are students going to food banks and there are larger economic issues. The reality is that unless we get the inflation beast under control, whatever good this government may attempt to do will simply be eroded or eliminated by inflation.
Let's look at the impact inflation is having on Canadians, on middle-income Canadians. This government came to office pledging to do everything they could do for the middle class and those attempting to join the middle class, and all that the middle class has seen over these past seven years is their economic ability, their economic strength, eroded, corroded, reduced and even eliminated. For the average Canadian, when we look at an inflation rate, whether it be 6%, 7% or 8%, that's eroding their purchasing power. If you're earning $60,000 a year, you are losing thousands of dollars at 8%, thousands of dollars for buying what you need. That's on top of the fact that taxes already take more from a Canadian than food, shelter and transportation combined.
The NDP love to talk about greed, but they fail to mention government greed, and the government actually has seen higher revenues during this inflation period. They've seen bigger increases in revenue than Loblaws or any oil company. It is government greed, but we don't hear about that. Even with these massive amounts of inflation taxes that are coming in to fill the coffers, this government wants more. They need more. Government greed is insatiable.
In this fall economic statement, they're actually going to increase spending by $6 billion—$6 billion in just this year—and on top of that, depending on how you calculate it, over the next five years there may be an addition $23 billion to $53 billion. The formula that's brought us high inflation, high interest rates and low economic growth is tax-and-spend government. What does this fall economic statement propose? It's more tax-and-spend government. The definition of insanity is doing the same thing over and over again and expecting different results, yet that is a path that this government has chosen to continue on.
Given the fact that we are now in the seventh year of economic failure, on the litany-of-failure statement that came out this fall, yes, perhaps we do want to pause and actually study it, do our jobs and go by the appropriate process, which is to have it debated in the House. Hopefully, we also want to have a debate that is both engaging while civil, that calls out different provisions that perhaps can improve this document.
I myself was in the House on the initial introduction and heard many interesting comments. Even though the NDP have sworn their allegiance, of course, if you listen to their speeches, you would never know that. There were some quite brutal critiques of the fall economic statement by the NDP, despite the fact that they are going to vote for it.
I think they know, as we certainly recognize, that people are suffering. It's a real affordability crisis. When I go to my local grocery store or I stop at a local cattle auction or I go down the street to the local Tim Hortons, or even just listening to the radio as I drive in to Ottawa, I do not hear people clamouring for the capitalization of our corporations that will come from a 2% tax on share buybacks.
I do hear people struggling to pay for their Disney+ subscriptions. However, the deputy leader says they should simply cancel that. The deputy leader must not have been around children and seen the benefit of a Disney+ video and the challenges of parents going through COVID-19 and beyond.
When we look at the fall economic statement, we have that.... We just don't have many measures that will impact Canadians going forward in addressing the affordability crisis.
A couple of things that would be extremely helpful would be a reduction, a pause, or even elimination of the carbon tax. The carbon tax, of course, raises the cost of everything. This is by design. This is why the Liberals can't back off from this ledge that they're on. It's their sort of principle policy, what they have accomplished in seven years. It's that, and maybe the legalization of pot. Those are the two things that they can point to.
The fact is, the carbon tax is having a dramatic point.
We all agree, and I'm on the record many, many times—despite people spreading misinformation about us otherwise—that I believe that climate change is real and it is a real threat. What I don't believe, and what the commissioner of the environment said at public accounts when I was there, is that it has had an impact on achieving our emission targets. In fact, we have not hit one target amendment, right? We can't simply tax our way to economic growth, and we can't simply tax our way out of climate change. It just doesn't work that way.
The carbon tax is designed to incent people to have behaviours that reduce their carbon input, but the reality is that some of these behaviours can't be changed. The government likes to demonize polluters. The way this carbon tax works is that they don't attack the big corporations, they attack the little guys. They attack the single moms trying to get their kids to school. They attack the farmers trying to grow their fields. They attack all of the hard-working Canadians who are just trying to do their jobs.
Quite frankly, for someone earning $30,000 a year, buying a $100,000 Tesla, like some of the members of Parliament I've seen do drive around, is not an option for them. Today's equivalent of “Let them eat cake” is “Let them buy an electric car.” It is simply not affordable for many Canadians.
Even if you were a diehard believer in the carbon tax and that the carbon tax will get us to where we want, a little bit of acknowledgement, a little less of being tone deaf to where we are in the economy, a little bit of pragmatism, a little step away from ideology would say, “Okay, gas prices are already going through the roof, so the idea behind the carbon tax is to send a price signal to buy other things.”
Well, you know what? The market has already done that. This government's failure to make use of our national oil and gas resources has already done that. We don't need to add insult to injury. The price signal is high enough. Ask any of my constituents. At $2 a litre, that point signal has gotten across....
Maybe we moderate it a bit and say, okay, let's give a pause—just a pause—and once prices go down, we need to keep that price signal up. We need to make sure that gas, groceries and home heating continue to stay high, because that is evidently the objective of the Liberal government, but right now, it's already high enough. Let's give Canadians a break on that price signal that is driving Canadians to literally not be able to eat this winter and not be able to heat their homes.
Many Canadians heat with oil. I'm sure many Canadians would love to install a geothermal heat pump, but that costs tens of thousands of dollars. Someone earning $60,000 or $70,000 a year knows that half of that is going to the government, and then they're paying their mortgage and the interest rates have just gone up. They don't have money to get to the end of the month, much less embark on investing in a home renovation that can cost, I believe, $40,000 or $50,000 to get geothermal or to invest in solar panels on their house to help them to heat their homes that way. They simply do not have the money.
Canadians can only give so much money to these Liberals. They keep asking for more and more and more. They are absolutely relentless in their insatiable demand and need for money. The greed is palpable.
Another way they could have given Canadians a break in the fall economic statement would have been to reduce the payroll tax. One of the bits of misinformation that unfortunately floats around out there is that, somehow, by reducing the payroll taxes, EI benefits or the CPP will be reduced. That's not true. The reality is that they're overfunded, and a portion of them is already going to general coffers, which is going to feed Liberal greed.
On the Liberal greed and the fever for more and more money, what we've seen is payroll taxes increase year after year. In fact, over the seven years, someone earning the massive amount of $65,000 a year has seen a payroll increase of $750.
Overall, I'm troubled by this government's belief that the money should go to Ottawa and then come back to Canadians. Whether it is through their planned carbon tax rebate for farmers or their various other rebate programs, step one is always having that money come to Ottawa. What we saw back in the Martin days was that they honestly believed that if Canadians were given control of their own money, they'd spend it on beer and popcorn, and we've seen it again with the deputy leader. This is the latest incarnation of it with Disney+.
The reality is I would trust any one of my constituents over anyone in Ottawa to spend their money. People in my riding and Canadians across this land are more than capable of handling and spending their own money. They don't need it to go to Ottawa.
Do you know what happens sometimes, Mr. Chair? You wouldn't believe this. Money comes to Ottawa and it stays here. It doesn't go back out to the people.
We have heard Liberal after Liberal saying to Canadians that the carbon tax is revenue-neutral. That is simply not true. Ten per cent of it stays with government. Even the 90% is very unbalanced in where it goes out, so in my riding of Northumberland—Peterborough South, the people in Cobourg and Port Hope, and even more so the people in Cramahe, Campbellford and Brighton don't have access to the public transport that many individuals in many other ridings would have.
Quite frankly, they have no other option, so that price signal that's meant to drive them to find a less carbon-intensive alternative has the opposite impact on them, because they are already struggling to get by. While an electric vehicle might have been possible for them if they had saved all their pennies, continued to work hard and made great decisions, the government is taking an extra $750 in payroll on someone making just $65,000 a year. The government is taking the carbon tax and tripling it. The tax rates are unbelievable.
We're also facing a labour shortage. What's this government's response? “Well, we're going to disincentivize work.”
If we have senior who is receiving GIS, they're going to face a dollar-for-dollar clawback on their GIS on top of that. Once they earn the huge amount of $14,000, they are going to start paying income tax. In addition to that, they're paying GST. Granted, they'll get some of that back in the rebate. They'll pay property tax, provincial sales tax and provincial income tax. You'll say, “Well, that's not federal.” That's not the way most Canadians see it. They see the government as one entity, and the government continues to take more and more. I'll say this part: At least in my province, Ontario, the Ford government has been willing to reduce or pause the gas tax. If you won't reduce or even pause the carbon tax....
How about we do this? Why don't we do what the two largest opposition parties—the NDP and Conservative Party—have been calling for, and eliminate the GST? Let's eliminate the GST on gasoline and home heating oil. The GST is driving up the cost of home heating and fuel. Unlike the carbon tax—as my NDP colleagues will point out—it affects people from coast to coast to coast. Remove the HST, at least on a temporary basis. You could reduce that.
Do you know there's no other country in the G7 that hasn't reduced fuel taxes in some way? We are the only outlier out there. Like I said, government revenues overfloweth, because of inflation. They are literally taking money. Do you know where that money comes from? The wealthy in our society have seen their million-dollar houses go up in worth to $2 million. In some cases, they've seen their stocks appreciate in value. Now, even that's coming down.
Who's really hurting are the people who are the most vulnerable in our community: seniors on fixed incomes and those at the lower end of the economic spectrum. If, in fact, you're earning $200,000 a year and see your costs go up by 10%, it's not a good thing, but you still get to eat. If you're earning $30,000 a year and see your costs of living go up by 10%, that very well means you're watering down your children's milk and going to the food bank. In one month alone, in Canada, we saw 1.5 million Canadians go to the food bank. That's a staggering number. A third of those were children. That's 500,000 children. In one month, 500,000 children went to food banks.
It's the inflation. That's the elephant in the room the fall economic statement fails to address. In fact, their projection has it magically decreasing to 3.5%. There's no rhyme, reason or explanation for why it reduces, other than it makes their numbers look better. What if inflation continues to increase? That, combined with two-quarters of economic decline—which it actually calls for, on the downside—is something called “stagflation”.
Do you know when we last had stagflation? It was when Pierre Elliott Trudeau was the prime minister. He brought this up. He and Jimmy Carter created this term. They created these left-leaning policies. They lead to the same thing, over and over again. You cannot tax and spend yourself to prosperity. It just doesn't work that way. In fact, the great Winston Churchill referred to taxing yourself into prosperity like stepping in a bucket, grabbing the handle, and trying to pull yourself up by the bucket. It just doesn't work that way.
What else would we like to have seen in the fall economic statement? They're projecting—like I said—a potential recession. You would expect something in there to encourage economic growth. I continue not to see anything that inspires economic growth. Economic growth is the magic elixir that will heal many economic problems. When we have strong economic growth, we are able to cover many of our other economic issues and challenges.
You would expect, if the government is saying, “Caution, guys—red and yellow lights ahead; we have a potential recession coming,” which, in their downside projection, they predict....
Interestingly, on their normal projection or the projection of what they would have expected, they have one quarter in negative and one quarter at 0.0. It's almost as if they were hedging their homework a little bit, Mr. Chair. In their main projection they didn't call for a recession. It's funny. It wasn't 0.1. It wasn't minus 0.1. It wasn't minus 0.2. It was zero. It's the lowest you could possibly get on a projection without projecting a recession, which is a little bit interesting.
Getting back to my point with respect to economic growth, if in fact the statement and the projections are correct—and many private-sector economists have said much the same, which is that we can expect an economic slowdown, if not a full-on recession—you would expect to see economic growth.
From our side of the table, what you might expect would be some targeted tax cuts—some targeted tax relief—to inspire business owners to take risks and to invest in the economy to buffer this result. It's the Keynesian philosophy. If you know you're coming into a recession, you reduce taxes.
My friends to the left of me would no doubt call for greater spending to buffer against this future economic slowdown. We didn't really see any of this. It was such a strange contradiction to hear the NDP speeches on this. They were condemning it and saying that it's terrible and then came out immediately saying they're going to vote for it. It just was such an odd contradiction. I'm sure their caucus meetings are pretty interesting, given the fact that there's such a dissonance between their voting and their comments, both public and otherwise.
Maybe one thing we could work on in this committee, if the NDP is serious about it, would be pausing the GST on fuel and home heating. Perhaps if they were serious about helping Canadians, they would join us in doing that.
As I've said—and I'll continue to talk about it for as long as I have to—the reality is that Conservatives will stand up for the principles of democracy, accountability and transparency. We simply won't rubber-stamp legislation because of this government.
We would do this regardless because my obligation is not to any member of this committee, not to the Liberal government and not even to my party. It's to Canadians. Canadians—the people of Northumberland—Peterborough South—sent me here not just to rubber-stamp legislation, but to do my job, follow the parliamentary procedure and make sure we have a hearing and a discussion.
These are billions of dollars. To come out and say that on November 30 we're going forward no matter what is not how democracy works. Maybe in some governments in this world that would pass muster, but not here in Canada and not with the Conservatives as the official opposition. We'll continue to hold this Liberal government to account.
With that, I'll take a brief respite from my remarks here.
Liberal
The Chair Liberal Peter Fonseca
Thank you, MP Lawrence.
I now have MP Morantz, MP Blaikie and then MP Dzerowicz.
Conservative
Marty Morantz Conservative Charleswood—St. James—Assiniboia—Headingley, MB
Thank you, Mr. Chair.
When I first saw that this motion had come up for consideration, it was quite confusing. I'm part of the class of 2019, so I've spent half that time, or close to it, Zooming in, but in my understanding, from the time I have been here, legislation has a process that it follows. It gets introduced, it gets debated in the House and then it gets voted on to go to committee.
Now, I guess the trouble I'm having with this motion is the fact that we have not, in the House, voted to send this Bill C‑32 to committee, so I'm not quite sure why we're having this motion. In fact, it is somewhat offensive in this sense. Canadians have voted in two elections, one in 2019 and the unnecessary election in 2021, which both brought forward minority Parliaments. They voted—both those elections cost hundreds of millions of dollars—and they sent us here to consider legislation.
I think they would have a lot of trouble understanding why this committee would presuppose that Bill C‑32 would actually pass in the House. I think that's the underlying message of this motion. You're asking the committee to study something which is not been sent to committee by the House.
I find it quite unusual. It's not following proper process to try to bring this motion to committee before a vote has been taken place.
I want to give a real-life example of this. Many of you are familiar with my private member's bill, Bill C-256. Many of the Liberals are. I spoke to many of them about Bill C‑256. Some of them are here today in this committee meeting.
Bill C‑256 was what was called the “supporting Canadian charities act” and was designed to build on existing law that would give a waiver of the capital gains tax to private shares and real estate similar to what currently goes on with publicly traded securities. Now, for example, if you want to make a contribution of your publicly traded stock to, in the Winnipeg context, say, the Canadian Museum for Human Rights, you can do that, and you'll get a tax receipt for the full amount of the contribution and you'll get a waiver of our capital gains tax. That's been the law of the land for over 20 years. My bill wanted to expand that to the sale proceeds of private shares and real estate.
Now, the reason I'm bringing it up is that I went through all the proper processes. I had the bill drafted, I introduced it into the House, we had our first hour of debate and we had our second hour of debate. I spent months talking to colleagues and all parties of this House, from the Green Party to the NDP to the Bloc, to the Liberals, in trying to gather support for this bill.
I did all the things that we are supposed to do as legislators to bring my legislation forward. Then, after the second hour of debate, it was brought up for a vote. This is not sour grapes, this is fair enough, and I accept the will of Parliament, but Parliament did not vote to send Bill C‑256 to committee. In fact, it would have come to this committee had it passed.
Looking back on it now, if this is the way things are to be, the next time I bring up a private member's bill, I'm going to bring a motion to the finance committee every time, and I would encourage every member to do that. Just bring a motion and have it considered by committee before the House even votes on it. Why bother with inconveniences like a vote in the House of Commons? Let's just skip that step altogether, bring it to committee and consider it here.
What would have happened, I wonder, if I had done that and this committee had agreed to hear Bill C‑256 before the vote in the House? What if we had agreed to have a study about it and we had spent weeks doing clause-by-clause, hearing from witnesses from the various charities across the country, hearing from tax accountants who could give us advice on the bill and hearing from the public service, who could give us advice on the bill? What if we had done that in advance of the vote in the House?
You know what would have happened, Mr. Chair. We would have wasted a pile of time.
I don't think the underlying flaw with this motion, Mr. Beech's motion, is that it presupposes the will of Parliament. It's asking to study a piece of legislation that we have not voted on to send to committee, and that is a fundamental flaw.
Now, I do want to talk a little bit about some of my experience on this committee. Some of you may remember that I was on this committee in my first year here, and then I went over to the foreign affairs committee. The year I was there, we were able to talk to the governors of the bank. The outgoing governor, Mr. Poloz, was here, and the incoming governor, Mr. Macklem, was here. This was in May and June of 2020. I had rounds with both of them. The funny thing is that I look back on those rounds quite often now because they are very interesting.
The round with Governor Poloz went something like this. Don't you think that this program of quantitative easing that you're engaged in of increasing the money supply might trigger inflation, and that inflation might trigger an increase in interest rates? I gave him historical examples, for example, what happened in the Weimar Republic after World War I, when the Government of Germany started printing money in order to fund war reparations and hyperinflation took hold, in fact, and people were literally going to the markets with wheelbarrows full of cash, not knowing how much things were going cost.
Do you know what Mr. Poloz's response was to whether it would cause inflation or interest rate hikes? He said no, that we were in such a deep hole that parliamentarians should be concerned about deflation, that it would be the worst thing that could happen. He said that we were not going to have inflation and that interest rates, if they went up one day, would be a nice problem to have.
You guys go back and listen to that tape. That's exactly what he said. It's a very interesting conversation.
Do you know what? A month later, Governor Macklem came, and I asked him the same thing. I asked if this program of quantitative easing that he was embarking on was going to have some effect, that increasing the money supply from $1.8 trillion to $2.3 trillion, almost 25%, might have an effect on the cost of goods in our economy. Well, do you know what he said? He said no and that we were in such a deep hole that they were not worried about inflation, that it wasn't going to happen and that they were not worried about interest rates going up. He said that, if interest rates went up, and maybe they would, that would be a good problem to have.
These guys both said that.
Fast-forward to today, when interest rates have gone up from the basis point of a 0.25% overnight rate to 3.75% in about six months. People's mortgage payments have quadrupled on top of the tripling of the carbon tax. People's mortgage payments are literally quadrupling almost overnight.
Now fast-forward to today. What are these same folks saying? We have Mark Carney saying that he thinks that Bank of Canada went too far and that they should have curtailed its quantitative easing program sooner. We have Deputy Governor Beaudry, who is at the bank as we speak, saying similar things. Even Governor Macklem is saying these things now. It is quite concerning that this has all gone on.
I'll just add one other thing. I want to talk about Prime Minister Paul Martin for a second. Before Paul Martin was prime minister, when he was finance minister in 1995, he brought down what was the most draconian budget in the history of this country. If you aren't familiar with it, I would urge you to go back and read about it. What he did was he cut transfer payments. He cut transfers to provinces for health and education. Can you imagine a government today trying to do that? He did it. Why did he do it? That's a rhetorical question, because I have the floor, so please don't answer it.
Why did he do it? Why did he cut transfers to the provinces? Did he just wake up one morning and think that this would be a good idea, that maybe we would balance the budget a little more quickly? Did he do it because he wanted to? Well, no. We know he didn't do it because he wanted to; he did it because he was forced to.
Why was he forced to? It's because big government spending had forced up interest rates in the 1990s to 6% or 7%, debt service had become a massive proportion—does any of this sound familiar?
Don't answer that. It's a rhetorical question, as well.
Government deficits, debts, had grown, interest rates had gone up and debt servicing was a massive part of the government's financial obligations, just like it's becoming now. The conservative estimate, which I think comes out of the fall economic update, is that next year the debt service will be $40 billion, up from $23 billion, almost doubled and almost as much as the health transfer.
But that's not exactly why he did it. Do you know why he did it? He was forced to. He was forced to because the bond rating agencies downgraded Canada. The Wall Street Journal or the Washington Post—one of those papers—called Canada an economic basket case on the verge of being third world status, which was the terminology they used back in that day.
Paul Martin didn't do it because he wanted to, because it made him happy to do it, he did it because he was forced to. I worry a lot—and I've talked about this before in my speeches in the House—that we are heading down a similar path. I cautioned about it in the past because I lived through the years of high interest rates.
Mr. Chair, I'm going to go off topic just for a second if you'll bear with me. When I bought my first place back in 1989 in Winnipeg—it was a condo in Osborne Village—it cost $86,000. I had a $75,000 mortgage with TD Bank. Do you know what my interest rate was? It was 12.75%. It was a first mortgage. That was a good rate. That was a very good rate to get. I was lucky to get it.
We are heading down a very dangerous path and this statement does the two things that are going to make it even worse. It's just bad medicine. It's bad medicine for the economy. What are those two things? They're increasing spending by at least $20 billion over the next five years, and they're increasing taxes. They're increasing taxes on Canadians through the paycheck taxes.
My pet peeve is the excise tax. They actually want to charge more—6% or 7% more—for a beer. That's sacrilege in Canada. Leave the beer alone. Let people have their beer. That's what they want to do. They think that's the solution.
Now they want to tax share buybacks. What I find interesting about that is that when they brought in the TOSI rules one of the things they changed was they said, if you're going to keep income in your company that you're not using for business purposes—what they called passive income—we're going to increase the tax rate to your nominal tax rate, and essentially what you would pay if it was considered to be personal income. The interest that you earned, or the dividends you earned, on the passive income inside a company, that was going to be taxed at a higher rate.
Why did they do that? It's because they wanted that money out of the company and in the economy doing something. That was the tax policy reason for it and so business people all over the country started to shed their passive investments and remove them from their company so that they could reduce the tax burden that the government had suddenly imposed on them. I say suddenly because that's exactly what happened. There was no consultation around that at all.
Now, fast forward to three years later and they bring in a policy, ironically, that's designed to do the exact opposite when it comes to publicly traded companies. The purpose of a 2% tax on the share buybacks is to force companies to keep their passive income inside their companies. Companies, whether they're privately held or publicly held, are not being treated the same.
You're saying to privately held Canadian corporations, no, you can't have passive income in your company. You're going to pay a penalty for that. They say to publicly traded companies, no, you've got to keep that money in your company because you might need it to expand your operations.
Government shouldn't be telling publicly traded companies what they need to spend their money on. That is an intrusion of the state that should never, ever happen. These companies should be able to decide on their own whether they need that capital in their company or not, but that's a whole other story.
So I am disappointed. That would be a kind word to express my feelings about this fall economic update, but, more than that, about the underlying procedural unfairness of this motion to presuppose the will of the House, to assume that the NDP is actually going to vote with the government when it comes up for a vote at second reading.
They haven't stood up and done that yet. They might not. Maybe some of them will finally see the light and realize the error of their ways, see how they've gone down the wrong path with this government. The fact of the matter is that we don't know. This motion assumes that this is in fact the case, and that's just wrong. It's wrong, but if this motion actually passes, I'm going to be doing this all the time. I'm going to bring motions on my private member's bill. I think we should all consider bringing motions on bills we're interested in to have pre-studies on them before they pass the House. Why not?
We're doing it here. I guess things have changed around here.
So with that, I am very, very concerned about this change in process, which I think can have only a deleterious effect on how we consider...by the way it also presupposes that when we're debating a bill in the House, it doesn't matter. I hear that all too often about time allocation. Time after time after time, the government cuts off debate in the House. “Those MPs—they couldn't possibly have anything useful to say. Let's get it to committee where there can be a real discussion about it.” It doesn't matter. Why are we spending billions and billions and billions of dollars on this place? Why are we spending billions of dollars renovating the Centre Block when time after time after time the Liberal government basically says it doesn't matter? It doesn't matter. MPs don't need to speak in the House on this. Let's send it to committee before it even passes, before you even know what the will of elected officials is. Let's send it to committee before the votes even happen. That's just not right.
So with that, I think I have made my point. I'm going to cede my time and the floor at this point, Mr. Chair, but I would ask to be put back on the speaking list just because I may have other important revelations that will be of the utmost importance for consideration here at this committee today.
Liberal
The Chair Liberal Peter Fonseca
Thank you, Mr. Morantz.
Now we have MP Blaikie, MP Dzerowicz, MP Wagantall and then MP Lawrence.
Daniel Blaikie NDP Elmwood—Transcona, MB
Thank you very much for that, Mr. Chair.
I want to come back to the issue at hand, which is how the committee is going to conduct its business over the next several weeks.
However, I thought I might start just by sharing some observations about things that have been said around the table today. I note that one member in particular expressed concern about wasting time, and I'm wondering if people who are watching at home or who will consult the record at some point in the future will feel that we've done a good job of taking to heart any meaningful concern about wasting time. It was my frustration at the end of the last meeting that we didn't come up with a plan for what to do at this meeting, and it's an ongoing frustration that we're sitting around the table blowing off steam, which is not an illegitimate thing to do around Parliament Hill, but it has its time and its place. I'd rather be blowing off steam in the context of a productive study of something and not on a kind of open-ended conversation about what we're going to put on the agenda for subsequent meetings. It seems to me that that's not the level at which we should have intractable disputes around this table.
I'll start by signalling that and saying that I'm anxious for us to come to some kind of conclusion on what the path forward is going to be for the committee because I think we'll be doing more productive work, which will include an exploration of many of the same questions that members have been exploring here today, if we're doing it in the context of a proper study. I note that some members said that the legislation isn't out of the House. That's certainly true. They say that they don't feel ready to undertake a study. I would say, given the number of comments made about the content of the fall economic statement and the legislation that's already been tabled in the House, it seems to me that members around this table are in a pretty good position to start talking about the content of the bill. In fact, they are talking about the content of the bill. My question is this: Why can't we just do that in the context of a study of the bill? Then it would actually count towards our formal study and the conclusions that we will ultimately draw, whatever they may be, about the legislation. We could be doing that, and not only could we be doing that in the context of a formal study, but we could do that with the benefit of having people at the table other than just ourselves, whether those are Department of Finance officials or whether they're stakeholders from Canadian society who have legitimate concerns about the content of the bill. I think we'd be having a better conversation if their input was part and parcel of what we are doing here today, and it could have been if we had come to some kind of agreement sooner about how we want to proceed with the study of the bill.
I accept the frustration that certain members have about the idea of a prestudy. I don't think it's a great habit, but I'll say that, in my experience around this table in this Parliament, we have often been short on time. It has often been a complaint later by the same folks who exhibit reticence to have prestudies that we don't have enough time for fulsome study.
Just so that there aren't any misconceptions, I'm talking specifically about the Conservatives here who don't let debate collapse on certain bills. Then when it comes to committee, we engage in these kinds of long, drawn-out conversations about what we're going to study or whether we're going to study it or whatever, and then there are usually certain deadlines. I would say, particularly when it comes to government legislation around a budget or a fall economic statement, there are market-moving things in those bills that are going to have real consequences. I would say in the case of this bill that we're talking about the pandemic dividend, an increase in the corporate tax rate for financial institutions and the elimination of interest on student loans. Those are things that ought to be in place for the next tax year, and there's a limited amount of time. We're beginning a five-week clock within which that legislation has to be passed or it won't be in place for the following year. Not only will it not be in place for January 1 of the following year, it also won't be in place until well into the next year because Parliament won't sit until the last Monday in January—that's when it will start up again.
So, there is a reasonable time frame there. I think that it behooves committee members to be concerned about it, and that means certain things for the passage of the bill through committee, so it make sense for us to start studying it now.
Here's a little procedural advice for members around the table: It's impossible to amend the content of a bill at second reading, so the concern that somehow the bill could change, not only radically but even just minutely, is unfounded. I hope members will receive that as information about the parliamentary process. There are three types of amendments that you can move at second reading. You can have a hoist amendment, you can have a reasoned amendment and you can have a motion of instruction at committee. Those are the three kinds. None of them change the content of the bill, which was previewed in the ways and means motion on the Friday following the economic statement.
Members who aren't sure where the NDP stands on that will know that we voted in favour of that ways and means motion, which contained an almost identical version of the bill. You have to get approval of the ways and means motion in order to be able to table the legislation. We voted for the ways and means motion. It contained substantially the content of the legislation. Members can expect that the legislation will find its way to this committee table, one way or the other, with the support of the NDP.
To certain members, that appears to be a contradiction. I don't think so at all. It is not a contradiction to support things that you don't think go far enough, or that don't contain things that if you had your own druthers would be in there, when you think there are other good reasons to support it. There are some things we're supporting in there. New Democrats support the share buyback. We support the pandemic dividend. In fact, that was one of the items that was in the supply and confidence agreement. We felt that it was very important that financial institutions that benefited substantially from public funds during the pandemic, something that the Conservative leader loves to talk about, should be made to pay some of that money back. That's what the pandemic dividend is about.
I have been shocked, frankly, at the silence of the Conservative leader on an initiative that is meant to take that very same public money he likes to complain about out of the pockets of financial institutions and deliver it back to Canadians. It's not so that it can go to government largesse—there are real concerns about largesse when it comes to this government—but so that it can go to fund things like the GST rebate. That had all-party support, I might add, and was something for which New Democrats were fighting for a long time. It wasn't clear when Bill C-30 was initially tabled that Conservatives would support it. They finally did, and I appreciate that. That was a good thing. But we also believe you need to have money to pay for it.
I hear Conservatives talk about government getting a lot of money and government largesse. Other times they talk about the fact that the government still has a large deficit and a huge debt. Well, where do you think paying down the deficit is going to come from if it ain't going to come from revenue?
When we're talking about things like the pandemic dividend that directly target the people who got away with more money than they should have in order to bring it back into government coffers that don't have a balanced budget, that's called tackling a problem. It's not called largesse. It's not called socialism. It's not called whatever other kinds of propagandist terms people would like to use. It's good policy. It's about actually figuring out a way to solve the problem instead of trying to complain your way into government without actually proposing any real solutions.
That's why we're willing to support this legislation. It's because we think there are things in there that will actually make a difference. We recognize that this support has to be timely in order for it to make a difference to Canadians, which is why I'm willing to put aside my normal reservations about prestudies and get on with it. I'd like to hear from other people across the country about what they think about that legislation and see if there are opportunities to make it better, with enough time to actually make it better, instead of just complaining more about how we didn't have time to make it better. That's a responsibility of members of this committee in order to be able to get on with it.
With all due respect, it's not the same as private members' bills, which are important. I support a lot of the private members' business coming to this table. But it's not as though, because we're going to engage in a prestudy for a major government bill that involves one of their two basic financial documents for the year, all of a sudden Pandora's box is going to get opened up and we should be prestudying every piece of legislation that comes through the House. It's a different kind of bill with a different kind of consequence and a different kind of timetable.
That's why I'm prepared to support a prestudy at the table. I'm also prepared to do it in a way that offers Conservatives some of what they said they want around this table, including a prompt return to the study of Bill C-241 after we have concluded this business. I do think it's important that this table takes private members' business seriously and does so in the right way. I'm happy to add that to the mix if it means we can get some agreement. I think that would be a very good thing.
I also note that the Conservatives have a motion—it may not yet be formally on notice, but it has been talked about at this table—with respect to inviting the finance minister again and the Governor of the Bank of Canada. I have expressed my willingness to support that. I think that's a good thing.
But this meeting is a meeting where we could have been doing some of that stuff, and I am frustrated that we're having another meeting and we're all chit-chatting about the many things we'd like to do around this table and not doing any of it.
Let's figure out how we move forward. If there's a way to include in the motion returning promptly to Bill C-241, if there is a way to have an agreement that will deal promptly with the motion that the Conservative finance critic has put forward at some point and then scheduling a time to deal with that, that's great, but let's create a package that allows us to have a plan for the next nine meetings that we have between now and Christmas so that we're actually doing work and we're getting these things done.
There is enough time for people to get enough things done that matter to them that I think we can work this out, but we're going to have to do better than we've done today, or we're going to burn another meeting on Wednesday, and all the more the shame. It will be hard to take people seriously when they're complaining about how fast things are moving and how little time they've had when we've burned up two meetings talking about how to schedule meetings. It's ridiculous.
That's where I'm at. Those are standing offers. I hope that people around the table will take me up on them and that we'll find a resolution today so that we can do real work on Wednesday, because I tell you, if I show up on Wednesday and we're doing more of this, my mood is going to continue to degenerate, and it ain't going to be fun, not for me and not for anybody else.
Liberal
Julie Dzerowicz Liberal Davenport, ON
Thank you, Mr. Chair.
I just want to say I agree with just about everything that Mr. Blaikie just said. I would rather be spending this meeting actually hearing from witnesses about the fall economic statement. I absolutely agree that we always have a shortage of time in the House, so we always have to really think about how we're spending our time. I want to say a huge thanks to Mr. Blaikie for putting forward his thoughts.
This isn't me trying to stroke your ego or anything; I genuinely appreciate your comments.
I'll be making a few comments as well, and if people feel that we could take a break for a few minutes and maybe try to find some sort of resolution, I would love to do that.
I'm going to start off by agreeing that we put forward a serious fall economic statement. My colleague Yvan Baker has mentioned a number of things that are included in it, whether around the student loans or additional initiatives to help Canadians to buy their first home, or paying the Canada worker benefit more frequently. I'm also a very big supporter of the two per cent tax on shared buybacks. Our business investment in Canada is abysmal; it's about 50% of where the U.S. is at. The C.D. Howe Institute has written about this. They're literally screaming from the top of their lungs to say we have to do more to encourage business investment. Ten years of having historically low interest rates has not produced more investment and research and innovation, and it's done nothing for our wage increases across this country. The fall economic statement has proposed some good measures, and I think those deserve a hearing and a serious consideration.
Another thing that's really important for me is immigration levels. There is a section in the fall economic statement that says:
To support the processing and settlement of new permanent residents to Canada as part of the 2023-25 Immigration Levels Plan the government has committed $1.6 billion over six years and $315 million ongoing in new funding.
I'll tell you, we have a massive labour shortage. I know that we're all talking about the economy slowing down. This is happening not just in Canada but around the world. But I'll tell you, I was listening to a few economists and they were saying that 10 years ago we would have one in seven retirees, so seven workers for every one retiree. We are now at one retiree for every three workers. If we want to continue to have a healthy social welfare system in this country—with child care, health care, EI and pensions—we need to make sure we are replenishing our workforce, and having additional dollars for immigration is a key part of that strategy and an important segment of the fall economic statement.
I also agree with what Mr. Blaikie has said. While it's not something that I think we should get used to, my understanding is that last year at around this time, in 2021—and I was on the finance committee then—we actually did the same thing we're doing right now. We voted on the ways and means motion for the fall economic statement. We started with the prestudies, and that was something, because at that time the Conservatives had encouraged us and said that they wanted to hear from witnesses as soon as possible, and that's exactly what we want to do right now. There is no desire to circumvent any process, to not be transparent, to do any bait and switch, or not to follow some sort of a democratic process.
We're short on time. We are very anxious to try to get as many supports out to Canadians as soon as possible. We've just given 11 million Canadians a doubling of their GST credit. We are trying to finalize—and hopefully the Senate will do it soon—the dental care benefit as well as the housing benefit. Then hopefully the fall economic statement will pass and there will be additional supports for Canadians. We know life is tough for Canadians right now, and we know they need these additional supports. These are targeted, measured, smart supports that have been suggested in the fall economic statement, and the only way we can know whether or not these are good ideas, whether this is a good plan, is if we get to the prestudies, get some witnesses in, and have them provide some feedback on this.
There are a lot of other things I could say about some of the unfortunate comments from the Conservatives.
The Liberals, and I would say our government in general, have supported the middle class right from when we were first elected in 2015, from implementing the Canada child benefit, to lowering the taxes on the middle class to increasing the OAS and the GIS. I could go on and on, but there have been a number of measures. The Conservatives, every single time, did not support those measures. We say it in the House of Commons all the time. We say it in question period all the time. It bears repeating for those who are listening here and who don't usually listen to question period.
I think I'll end here. I think Mr. Blaikie was mentioning that there's some openness in terms of let's get going on the fall economic statement. Then there could be some consideration around moving forward on Bill C-241, as well as moving forward on hearing from our Deputy Prime Minister and Minister of Finance and from the bank governor.
I'd also say to you that we have pre-budget consultations that I think we also have to make sure we are moving forward on. We do have another budget that's coming up in the spring. We have, I believe, around 700 people who have put in submissions. I know many have asked to sit before us, to stand before us or to speak before us, and I think it's important for us to try to make sure we find some time. That won't happen before Christmas. This is just to say that there are a lot of things fighting for our time.
I 100% agree with Mr. Blaikie, and anyone else around the table who agrees with this, that we should just get going and find a way forward.
Mr. Chair, that's the end of my comments for now.
Liberal
The Chair Liberal Peter Fonseca
Thank you, MP Dzerowicz.
As you mentioned at the end, just to be cognizant of time—and I know MP Blaikie brought it up—we have 45 minutes, folks. That's what we have here.
I have MP Wagantall up now, and then MP Lawrence.