Finance Committee on May 2nd, 2023

[Jasraj Singh Hallan, Conservative, Calgary Forest Lawn, AB]

It was a simple question.

[The Chair, Liberal, Peter Fonseca]

Minister.

[Jasraj Singh Hallan, Conservative, Calgary Forest Lawn, AB]

Just a date.

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

Just to conclude on inflation, which I do think Canadians care about, it's come down from a peak of 8.1% to 4.4%. The Bank of Canada is forecasting that it will be at 3% in the summer and down to below 3% by the end of the year.

[Jasraj Singh Hallan, Conservative, Calgary Forest Lawn, AB]

The question was not about inflation; the question was about balancing the budget, which obviously the minister is avoiding, which means she has no proven plan, but is blowing through any type of fiscal restraint with her latest failed Liberal budget.

Minister, you said in the fall that the debt-to-GDP ratio is a red line that you would not cross. In budget 2023, you blew past that line for the debt-to-GDP ratio in the fall economic statement and increased it to 43.5%. Now the ratio of debt to GDP won't fall below 40% until 2027-28, when you still won't even balance your budget, in where you misled Canadians.

Considering your track record that might be optimistic. Why are you not serious about fiscal responsibility?

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

Mr. Chair, I am absolutely serious about fiscal responsibility, and I would urge Canadians and members of this committee not to be misled by overheated partisan rhetoric, and to listen to objective people we should trust.

Let me quote the Parliamentary Budget Officer, who explained to this committee, “When looking at G7 countries, Canada compares very favourably on net debt-to-GDP.” The Parliamentary Budget Officer also described, for members of this committee, a conversation he had with Moody's, which told him that Canada's deficit should, according to the PBO, make us “quite happy because by European standards that's very low.” That's an objective judgment.

[Jasraj Singh Hallan, Conservative, Calgary Forest Lawn, AB]

That's the same Parliamentary Budget Officer who said your financials are not “keeping one's powder dry” and your budget is not fiscally responsible.

I'll move on. On government spending, you said:

These are investments in our future and they will yield great dividends. In fact, in today's low-interest rate environment, not only can we afford these investments, it would be short-sighted of us not to make them.

Interest rates are high and the debt has doubled because your government has had out-of-control spending. Do you regret misleading Canadians with this statement?

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

I've already explained that, in the view of objective observers, Canada's fiscal position is strong and, indeed, enviable. I absolutely believe that—

[Jasraj Singh Hallan, Conservative, Calgary Forest Lawn, AB]

Minister, you're going to have one of the worst GDP-per-capita growths in the G7.

[The Chair, Liberal, Peter Fonseca]

MP Hallan, please, no crosstalk....

We're at the end of the time, but no crosstalk, please. I'd ask that of all members.

We are now moving over to the Liberals for six minutes.

I have MP Baker.

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

I'm sorry, Mr. Chair. I have a point of order. I'll be very quick.

[The Chair, Liberal, Peter Fonseca]

Yes, go ahead on a point of order.

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

I say this to help everyone: I'm wondering whether we want to invoke, through UC, the Wayne Easter rule, where the answer will match the length of the question. It might avoid crosstalk and allow for a more orderly meeting.

I bring that up only to be helpful.

[The Chair, Liberal, Peter Fonseca]

I think, MP Lawrence, what would avoid crosstalk is stopping with the crosstalk and allowing for.... You could pose a question—be as long as you want in the question—then allow the minister to answer that question.

Go ahead, MP Baker.

[Yvan Baker, Liberal, Etobicoke Centre, ON]

Thanks very much, Mr. Chair.

Minister, thank you for being with us here today.

Before I ask my first question, I need to say that I am incredibly disappointed by what I just heard from MP Hallan and the Conservatives. Mr. Hallan suggested that the minister had refused to appear. We knew weeks ago that the minister indicated she would be here today and available to appear. Instead of moving on, the Conservatives have spent the last 23 hours of this committee's time, which could have been used to study the budget, focus on making it better and address any concerns they have, serving Canadians.... Instead, they spent it talking about everything but what needed to be discussed, and filibustering a motion about the minister's appearance, which we already knew was going to happen. First of all, it's not true that the minister said she wasn't willing to appear. In fact, she indicated weeks ago that she was willing.

Now that the minister is here, instead of listening to what she has to say, the member across has the audacity to interrupt and heckle the minister and me. I think this shows that the Conservatives are completely uninterested in hearing what the minister has to say. This has nothing to do with having a substantive conversation about the budget and how we can improve the lives of Canadians. It has everything to do with scoring political points and obstructionism, and I think it's too bad. It's very disappointing.

Minister, I want to move to the questions I have to ask you.

First of all, I want to thank you for your continued hard work and collaboration in supporting the brave people of Ukraine. In the last budget, we earmarked $2.4 billion in support for Ukraine. I have several questions as part of that.

The first is, how does this support compare with the support included in budget 2022—the prior year's budget? What would you say to those who have concerns that the $2.4 billion is less than the over $5 billion we spent to support Ukraine in 2022? I believe Canada has been a global leader in the support of Ukraine. How does our support compare to that of peer nations?

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

Just to your preamble, Mr. Baker, I share your disappointment in the behaviour, specifically of the Conservatives. I guess none of us should be surprised, because Canada's economy is really strong.

I think that, clearly, the Conservatives simply don't want to have a substantive discussion about the strength of our economy or about Canada's outstanding performance relative to our G7 peers on all indicators—jobs, fiscal performance and growth—but I'm happy to talk about it.

I'm also really happy to talk about Ukraine. While we disagree about many things in this committee, I hope that something we can agree about here and in the House of Commons is the paramount, existential importance of the war in Ukraine. I hope that's something we can all support.

I do want to assure the Canadians who are listening that as Canadians, as a country, we can be proud of the role our country is playing in supporting the incredibly brave people of Ukraine.

When it comes to financial support, direct budget support to the government of Ukraine—which continues to function, which is paying pensions, which is rebuilding that electricity grid that gets pounded every night by Russia—Canada on a per capita basis in the G7 is contributing the most to support Ukraine. I think we should all be really proud of that.

Canada is also a world leader when it comes to our sanctions regime and our actions to seize and to confiscate assets.

I do want to thank all members of this committee, all members of the House, because it was in our budget implementation bill last spring that Canada improved our legislation, allowing us to have the world's strong asset seizure and confiscation regime. That is something other countries of the world are looking to. That is something that sanctions Russia, that deters Russia, and it is something that supports Ukraine.

[Yvan Baker, Liberal, Etobicoke Centre, ON]

Thank you, Minister.

I have about 60 seconds left, so I'll be brief in my question, and I'll give you a little bit of time to answer, if I can.

Over the last couple of weeks, as I mentioned earlier, instead of studying the budget implementation act and working to propose enhancements or improvements to the bill, the Conservatives have filibustered this committee for over 23 hours. That's limited our ability to hear from witnesses, from Canadians who can provide input on how we can improve the bill and the impact that it would have on Canadians. If the Conservatives continue to filibuster our consideration of the budget implementation act, this will delay its passage.

What has been the impact of their filibuster tactics to date, and what will they be if they continue?

You have about 30 seconds.

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

There are two things.

One, it prevents the committee from having the substantive discussions that I think everyone here as a parliamentarian wants to have and that Canadians need us to be having.

Two, it delays our ability to deliver on really important things that I think we can all agree on, like an anti-flipping tax, a tradespeople tool deduction and delivering the Canada workers benefit in advance.

Those are things we should be able to agree on, and we should be working together to get them to Canadians.

[Yvan Baker, Liberal, Etobicoke Centre, ON]

I agree. Thank you, Minister.

[The Chair, Liberal, Peter Fonseca]

Thank you, MP Baker.

Thank you, Minister.

Now we are going to hear from the Bloc.

MP Ste-Marie, go ahead, please.

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

Thank you, Mr. Chair.

Good afternoon, Minister. I have a number of questions.

The first is about businesses that have told us how concerned they are regarding measures in Bill C‑47. I'm talking about companies that run large IT servers on high-speed fibre optic networks and lease that data transfer and calculating capacity to the highest bidder.

Some of those companies' clients engage in cryptocurrency mining, whether in Canada or another country. Our understanding of Bill C‑47—and the department officials confirmed this—is that companies exporting a service such as mining would no longer be considered to be performing a commercial activity eligible for the input sales tax credit. This means that the company would have to pay the tax, hurting their competitiveness.

That applies to the whole tax, and since Quebec's sales tax is higher than Alberta's, for example, this could incentivize companies to move the activity someplace where the energy is derived from fossil fuels. Can you reassure the industry? Are there any mitigation measures? What's the solution, and where do you stand on the matter?

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

Thank you for asking such tangible and serious questions, Mr. Ste‑Marie. I very much appreciate it.

I want to assure you that my team and I are always open to continuing this discussion, because you've raised some very important issues. I won't have time to cover them all, but I will endeavour to address some of them.

You raised an excellent point about the provincial differences involved in doing business in Canada, and we need to continue that work. I think we can really support the country's economic growth by taking steps to further open up trade throughout the country.

You're right to bring up net-zero emissions. We really need to make sure we take a national approach, and that's what our government has done since the beginning. We are always open to continuing that work with you, with all the provinces, including Quebec, to ensure that the situation improves.

When it comes to your tax questions specifically, let me first say that we are prepared to continue the discussion with you directly and to give you all the details.

Regarding digitization, as you are well aware, the government is putting a lot of energy into the issue, through our international work with the Organisation for Economic Co‑operation and Development as well as through Minister Pablo Rodriguez's work to support Canadian culture.

I know I didn't cover everything you asked about, but you raised a lot of complex issues. I will yield the floor so you can continue with your questions.

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

Thank you.

We can connect later regarding the application of the GST/HST to exported services involving cryptocurrency mining activities.

I'll move on to my second question. Before you introduced Bill C‑47 in the House, Bill C‑46 was passed at all stages. That legislation doubled the GST credit and provided two billion dollars in health care funding.

The next day, we received Bill C‑47, and those same measures were in it. In the news release accompanying Bill C‑47, the government trumpets the passage of Bill C‑46 by the House. Bill C‑47 includes another two billion dollars for health care, which I support since the federal government's recently signed agreements with the provinces don't match their needs, in our view.

My understanding was that your government and your colleagues would be proposing an amendment to Bill C‑47 to remove that additional two billion dollars, so that only the two billion dollars in Bill C‑46 would be provided. Will you be making the vote on the amendment to remove the two billion dollars a confidence vote?

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

Thank you for your question.

Considering the obstructionist approach the Conservatives are taking, I would say we have reason to be very proud of proposing, and moving forward with, the grocery rebate and the investment in health care. We decided to separate these two essential measures, because our health care system and the most vulnerable need support now.

We understand what the Conservatives are doing, and that is why I want to thank every member of the House for moving these important measures forward. We did that, and it's a good thing.

[The Chair, Liberal, Peter Fonseca]

Thank you, Minister. We are well over time.