Finance Committee on Nov. 28th, 2022

[The Chair, Liberal, Peter Fonseca]

Go ahead, MP Lawrence.

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

Thank you.

Thank you, Minister, for appearing today. We look forward to seeing you on a quarterly basis.

The Globe and Mail also had another comment from Andrew Coyne's piece. He said, “What is the point of issuing forecasts that bear no resemblance to reality? I'll tell you the point: deception.” Budget after budget, he said, we've seen failures of this government to hit its projections.

In the spirit of that comment and the question, will this government commit today—yes or no—to no further deficit spending other than what's predicted in the fall economic statement?

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

Let me just say that the principal way in which the figures in the fall economic statement differed from the fiscal forecast we put forward in the budget in April was to show a better performance by Canada: higher revenues, lower spending, lower deficits and a lower debt-to-GDP ratio. I would not call that “deception”. I would characterize that as a strong performance by Canadians and the fact that our government's decision to invest in Canadians and support them during the COVID recession is working.

[The Chair, Liberal, Peter Fonseca]

Thank you, MP Lawrence. That's the time.

Now we're moving to the Liberals—

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

Mr. Chair, on a point of order, everyone gets flexibility except the Conservatives. Daniel Blaikie was over by 40 seconds—

[The Chair, Liberal, Peter Fonseca]

Actually, MP Lawrence, I've been taking time throughout. That was actually five minutes and 40 seconds that we had. We went well over time, actually.

We're moving to the Liberals and MP Dzerowicz for five minutes, please.

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

On that point of order, I think Mr. Lawrence may be suggesting that he would like to see the Easter protocol resurrected.

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

Yes.

[Voices]

Oh, oh!

[The Chair, Liberal, Peter Fonseca]

We're off to MP Dzerowicz for five minutes, please.

[Julie Dzerowicz, Liberal, Davenport, ON]

Thank you, Mr. Chair.

I want to say thank you to you, Minister, for being with us today to speak to Bill C-32.

I appreciated that you spoke about immigration and the importance of immigrants to Canada's economy in our society. As you know, I've been a passionate advocate for immigrants and for more immigration, given that I truly believe that's key to Canada's future economic growth and prosperity. In my riding of Davenport, immigration is also important, not least because 45% of my riding are first-generation immigrants, and also because many of the businesses in my riding are really having a hard time filling jobs and finding talent that will allow them to grow their businesses.

Can you speak to what the federal government has done on immigration and how the fall economic statement, Bill C-32, continues to build on that work?

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

Yes. I am very familiar, Ms. Dzerowicz, with your riding because our ridings neighbour each other. It is a wonderful, vibrant community that is lucky to be home to many new Canadians.

I do think that a strength of our country is that, notwithstanding the very legitimate and significant partisan differences that we are hearing today, we do have a strong national consensus in support of immigration. As a Canadian, as a citizen, as a person, I really believe that immigration enriches our country culturally and socially. As finance minister, I am absolutely convinced of the way that immigration and our country's openness to immigration is a tremendous economic strength. That has been the case throughout Canada's history. It is particularly the case today when western industrialized societies, including our own, are experiencing a real demographic challenge that manifests itself in labour shortages.

I think it would be fair to say that there is no industrialized country in the world as open to immigrants as Canada is. That is a huge economic strength. It gives us huge advantages when it comes to meeting the demographic challenge. If I could, for a moment, speak to everyone here and to all Canadians.... I think we can't take our success hitherto in welcoming immigrants for granted. As a country, we need to understand how much our well-being and prosperity have been based on being a society that welcomes immigrants, and we need to always think about how to maintain that.

Some of the housing measures in this bill are really important in that regard. We're a growing country. We need to build homes for new Canadians, and we need to be sure that Canadians already here have a place to live, too.

[Julie Dzerowicz, Liberal, Davenport, ON]

Thank you very much.

I believe there's also $1.6 billion that's been allocated to help support the new immigration levels anticipated in the coming years, as well as some additional dollars to clear up some of the backlogs. I want to say thank you for that because I think it's important for all the reasons you've mentioned.

I want to turn quickly to business investment. Despite our low corporate income taxes and educated workforce, Canada continues to see low business investment. I find it particularly troubling. You mention in the preface of the fall economic statement that we're in a time of great transformation “comparable in scale only to the Industrial Revolution”.

What exists in the fall economic statement that will attract business investment here in Canada, and why do you think it's necessary?

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

That reference in the fall economic statement carried on a theme that we made very forcefully in the budget. This is that....

Look, Canada is amazing. I don't think there is a better country in the world. I know there's not a better country in the world, and I know there is no country better placed to navigate the challenges that the global economy is throwing at all of us. That being said, we also need to be honest about where we can do better. Economically, the area where Canada can and must do better is in productivity and business investment.

We put forward in the budget and elaborated on in the fall economic statement two really important tools to improve productivity and business investment. These are the Canada growth fund and the innovation agency. I am really excited that we've been able to move quickly to get them in place. They are going to help make Canada prosperous and help us accomplish the green transition.

[The Chair, Liberal, Peter Fonseca]

Thank you, MP Dzerowicz.

Now we'll go to the Bloc.

MP Ste-Marie, you have two and a half minutes, please.

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

Thank you, Mr. Chair.

Many environmental groups are concerned by the rollout of small modular nuclear reactors. Although nuclear energy emits very little carbon, it raises enormous problems regarding nuclear waste management and the risk of incidents. Canada barely avoided disaster at Chalk River on two occasions in the 1950s. Consider as well the sad episodes in Ukraine and, more recently, in Japan. Accidents happen.

There's a new technology, managed by private business, that uses trucks to transport radioactive waste. Judging from the concerns of environmental groups, it presents major risks. Why has your government chosen to include it in its green economy strategy?

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

Thank you for that fair and important question.

You and I may agree on many issues, but possibly not on nuclear energy.

I understand Canadians' concerns, but I'm convinced that nuclear energy has to be part of our green transition. Energy needs and demand are so great that nuclear energy will be essential. Canada is fortunate to be a global leader in nuclear energy and to have the technological capacity to develop it. Here in Canada, we also have the natural resources that enable us to promote a nuclear industry.

Knowing that the concerns are there, I think we have to have strict inspections, measures and regulations. I also think that, if we really believe the green transition is necessary, the nuclear sector must be part of Canada's energy solution.

When I discuss this issue with France, our French counterparts agree with us. This is one of the reasons why Europe's energy crisis hasn't hit France as hard as other European countries.

[The Chair, Liberal, Peter Fonseca]

Thank you, Mr. Ste‑Marie.

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

Thank you.

[The Chair, Liberal, Peter Fonseca]

Thank you, MP Ste-Marie.

We're now going to the NDP with MP Blaikie for two and a half minutes, please.

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

Thank you, Mr. Chair.

I want to juxtapose two records. On the one hand, Loblaws is making a million dollars a day more in profit than in its historical banner year. It's not a million dollars in profit every day. It's a million more dollars in profit against its most profitable year to date.

We also have a position where more Canadians than ever are using food banks. In that context, your government has chosen to limit its Canada recovery dividend, or windfall tax, which is the term others might use for that, only to the financial sector, when we've seen some other international jurisdictions apply windfall taxes on a more broad base, and despite the fact that you have a working partner in Parliament that would be willing to work with you in order to implement a wider windfall tax.

On what principle has the government decided not to take a wider approach to applying a windfall tax, when we know there are businesses making a lot of extra profit on the very essentials that Canadians are having a harder time affording?

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

Thank you for the question, which is an important one. The Department of Finance has devoted a lot of thought to this. I'll start by reiterating what we discussed earlier: Our government does believe in tax fairness, and we think that in Canada everyone needs to pay their fair share.

When it comes to the specific principle and the specific question around the COVID recovery dividend and which sectors it should be levied on, we were careful and disciplined in that thought process. It's very important, from our perspective, that for a windfall tax like that there be a clear logical intellectual justification, an intellectual justification and a fact-based justification.

When it comes to the COVID recovery dividend, the justification was as follows. When COVID hit Canada, when we shut down our country's economy as a result, the government undertook emergency economic action. We basically put a floor under the whole Canadian economy, and all Canadians paid for that. There was a particular sector that benefited from that government action, a particular sector of the economy, and that was the financial sector. It would have suffered significantly had the government not acted, had we not stopped the COVID recession in its tracks.

For that reason, we believed it was economically rational and justified to put in place the COVID recovery dividend. That was our rationale. I think it is robust and it stands up. I believe very strongly in tax fairness. Part of tax fairness, from my perspective, is that we have to be really careful when it comes to tax policy to ensure there is a clear, sound justification for new taxes, particularly one-off taxes that are levied.

[The Chair, Liberal, Peter Fonseca]

Thank you, MP Blaikie.

We now go to the Conservatives and MP Morantz, please, for five minutes.

[Marty Morantz, Conservative, Charleswood—St. James—Assiniboia—Headingley, MB]

Thank you, Mr. Chair.

Minister, in the fall economic statement, there was $14.2 billion in spending that was categorized as unannounced spending. There were no specific details about what it was for. It's an awfully large sum of money to budget for.

You don't need to answer this question here, but I'm wondering if you could table with the committee a detailed breakdown of what that spending is for.

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

In the fall economic statement, we put forward very clear and detailed assessments of what the government has spent so far, some revenues going forward and expenditures going forward. We also believe it makes sense to try to look around corners and to look ahead, and make some provisions for spending that we see Canada may be undertaking going forward.

It's important to be transparent with Canadians about that.