Finance Committee on May 25th, 2023

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

Thank you, Mr. Chair.

I would be happy to respond to that, Daniel. This is a great discussion, and it's one that I'd love to have with you at committee or over—

[Terry Beech, Liberal, Burnaby North—Seymour, BC]

I have a point of order, Mr. Chair, on the relevance to the motion we're currently debating.

[The Chair, Liberal, Peter Fonseca]

We have a point of order from PS Beech, again on relevance, MP Lawrence.

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

I was just discussing with Mr. Blaikie. Granted, the chair gave Mr. Blaikie some wide latitude, but I did not object, nor did any of the members object. I thought it reasonable that you may grant equal latitude to me to respond.

If that's not the case, I'm happy to talk about other issues.

[Yvan Baker, Liberal, Etobicoke Centre, ON]

I have a point of order, Chair, on that same point of order.

Mr. Chair, you've given Mr. Lawrence and his colleagues a lot of latitude over the 27 hours they've been filibustering this committee and blocking the bill from moving forward.

I think it's important for the record that Mr. Lawrence appreciates he's been given that latitude and it's important that he speak to the motion at hand.

[The Chair, Liberal, Peter Fonseca]

We would like to hear you speak to your motion, MP Lawrence. That's where you should focus, within whatever scope you feel touches on that motion. We have given you a lot of latitude and we continue to do so.

The floor is MP Lawrence's.

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

I have a point of order, Mr. Chair.

Because it's a Zoom meeting, the last couple of times that MP Baker spoke, I wasn't able to see him. In the first instance, you said his name, but in the last instance, you didn't, so I wasn't quite sure who it was.

I'm not sure why his camera isn't going on or if he's even in the room.

[The Chair, Liberal, Peter Fonseca]

Thank you, MP Morantz.

I don't say if people are in the room or not, but it's was MP Baker's point of order and he has made that, so it's over to MP Lawrence.

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

On that point of order, is it not within the standing rules that, certainly when speaking, we have to have our cameras on?

[The Chair, Liberal, Peter Fonseca]

Yes. The cameras do their best to catch....

MP Baker has those Hollywood looks. Of course, we want him on camera all the time.

MP Baker, why don't you say something and we'll have you on camera? I know the members at home would love to see you.

[Yvan Baker, Liberal, Etobicoke Centre, ON]

My point of order was just to remind Mr. Lawrence that he's been given a lot of latitude in the past, and he has colleagues who have been given a lot of latitude over the past 27 hours.

I think it's important that he, out of respect for the members of the committee and out of respect for the viewers at home and to this committee, speak to the issue at hand, which is the motion that he introduced.

[The Chair, Liberal, Peter Fonseca]

Thank you, MP Baker.

It's over to MP Lawrence.

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

Thank you. I'll wait until you put yourself on mute.

First, to the bipartisan agreement on an issue, I too believe that Mr. Baker has Hollywood good looks. I would agree with the chair on that. You can clip that and put that in the latest Liberal ad, if you wish.

With respect to that, I have to respond, if just briefly, with respect to latitude, as if power comes from the chair or from this Liberal government. It does not. You guys are not my boss. The Canadian people and the people of Northumberland are who I get my marching orders from. They're who I get instructions from. It's not from the Liberal government. My power does not come from you. It comes from the people. I am here as their representative, and I owe no one an apology for speaking for them.

I will continue to speak truth to power for as long as I am able. You can count on that.

We were talking about it, and I also would ask that the chair or the clerk cite anywhere in the rules that says a speaker cannot read from, revise or look at a report when asking questions or giving testimony. I'll give you the answer. It's not there. There is no rule or authority that says I cannot read from a report. If you can find a precedent otherwise, I will be happy to stand down. Until then, I will cite the report.

In the province of Alberta, when a first parent's income is $45,000 and the second parent's is—

[Terry Beech, Liberal, Burnaby North—Seymour, BC]

On a point of order, Mr. Chair, the power itself actually comes from the Standing Orders, which come from the rules that are collectively made by members of Parliament on how we're going to agree to operate as a Parliament, and in those Standing Orders it does say that when you're speaking to a motion, what you say has to be relevant.

[The Chair, Liberal, Peter Fonseca]

Thank you, PS Beech.

Could you just stay relevant to your motion, please, MP Lawrence?

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

That's perfect.

If we were able to have witness testimony, they would say something to the effect that, in Alberta, if a parent earns an income of $45,000 and a second parent expects to make $20,000, with one child, individuals will experience a marginal effective tax rate of 41%. If they have two children, that is 51%, and with three it is 59%.

Let me be clear in terms of responding to something from Mr. Blaikie. Conservatives are not calling for a reduction in the child care benefit. In fact, we were the parents of this idea and we continue to support it.

What we are against is that Canadians, especially low-income Canadians, are having to give up 50¢, 60¢, 70¢ or even 80¢ on the dollar. There are a number of solutions to this, and I'm more than happy to talk to Mr. Blaikie, who is a very intelligent, very thoughtful man—and he can clip that—and to have that discussion with him, but the first step in solving a problem is acknowledging there is a problem. It is one of my driving causes to get more and more Canadians, particularly those who are on the left side of the spectrum, to acknowledge that this is a problem, that for a mom who wants to return to the workforce, paying a participation effective rate of 53% is a problem.

We can discuss and we can debate, and that's what Parliament is for. That's what expert witness testimony is for, but we have to acknowledge that this is problem, that it is not right that a mom who wants to rejoin the workforce is only going to be able to keep 47¢ on the dollar.

There are yet other Canadians who might be keeping as little as 30¢ or 20¢ on the dollar. We have to acknowledge that this is a disincentive to work. This is eroding and corroding Canada's work ethic. Canadians no longer feel as though hard work pays off. I have heard that over and over again. That is what we're getting at.

I'm more than happy, if Mr. Blaikie wants to go on the road with me, to have a debate about this and how we can fix it. I'm more than happy to do that, but the first step is acknowledging that there is a problem, and there is a big problem.

In Alberta it's 41¢, 51¢ and 59¢. Then look at this for a single—

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

I have just a quick point of order on that point. In terms of going on the road, I had hoped to go on the road for pre-budget consultations, but we weren't able to do that because the Conservatives disallowed the travel. Does that mean that next fall we can actually go across the country for pre-budget consultations and the Conservatives won't get in the way of that?

That would be our road show, Phil.

[The Chair, Liberal, Peter Fonseca]

Just on that point of order—and thank you, MP Blaikie, but it's not a point of order—what I can tell the members is that we do have to go before the Liaison Committee next week, I believe, to look at approval for those budgets, but I'd like to hear, of course, what MP Lawrence may have to say on this.

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

Thank you very much.

I would be willing to do it out of my own pocket and not put the taxpayers on the hook. As a good Conservative, I would offer to shave the deficit or debt by that little bit, and it would be well worth it to travel with Mr. Blaikie, whom I respect and enjoy.

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

I don't own a vineyard.

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

It's a small vineyard. I'll put that on the record there. Anyone who owns a vineyard, including expert witnesses who have testified, would know that this is a loss leader and nothing more than that.

Thank you very much for that, Mr. Blaikie. I am not political royalty like him. That was very forward, but thank you very much for that interjection.

What I was saying is that—and this, actually, is a great sort of segue to it—those who earn more are paying less. When we look at a first parent's income of $120,000 and a second's expecting to make $50,000, it drops with one child from 41% to 33%, with two children from 51% to 35%, and with three children from 59% to 38%. That is the challenge. I would hope it would be the principle of all parties at this finance committee, and of all MPs, that those who earn more pay more, and that those who earn less pay less. I think that's only good tax policy and only makes sense. That's not the way that the marginal effective tax rate is working.

There are solutions other than simply reducing the benefit, as Mr. Blaikie brought up. There are other ways we can work at that. There is reducing the rate of clawback. There is increasing exemptions. There are a number of ways that this could be approached in particular so that those low-income earners are not penalized for going back to work. If you're only keeping 60¢ of every dollar, once you put in the other expenses that are, of course, associated with work—whether those be longer-term expenses like training or education, or shorter-term expenses like transportation, or even having to get a meal outside of your home and the expenses that are involved in that—it can quickly erode any type of benefit, meaning it doesn't pay to work in Canada.

There are multiple principles of tax policy that are violated. First, of course, is the fact that we are disincentivizing work, which tax policy should seek never to do. Second, those with more should pay more, and those with less should pay less. In this scenario, we have those who are earning more paying less and those who are earning less paying more. Like I said, I am more than willing to discuss the solutions to this, but the first step is saying that this is a substantial problem and, I believe, a root cause of a number of issues with the Canadian economy.

When we look forward and look at this $490-billion debacle of a budget.... I did hear some frustration from my Liberal colleagues that we're not getting this package out the door quickly enough. Well, we're also not saddling generations with additional debt and deficit more quickly. They said that the debt is now closing in on $1.3 trillion with additional spending of $60 billion on the way and with no plan to get back to a balanced budget.

With an increasing debt-to-GDP ratio, this does not make financial sense, so excuse Conservatives if, as opposition members, we're not hammering the accelerator to drive over the cliff. We want to have financial sustainability. We want to have a pay-as-you-go system, meaning that if there's a priority that demands more money, great. Let's find the savings somewhere else from a priority that doesn't need that money. If everything's a priority, nothing's a priority. That is the reality of management. There are tough decisions that have to be made—there's no doubt about that—but that's what the Liberals get paid for: to make those tough decisions. Instead, they just continue to saddle Canadians with more and more debt and deficit, which continue to grow. They just continue to look the other way. They did have, somewhat, a moment of reflection and thought in the fall economic statement when they, at least on paper, put forward a plan back to a balanced budget.

As to whether that would ever happen or not, clearly their track record would say otherwise. However, the challenge is that, in this recent budget, they completely departed from that. The balanced budget they forecast has completely evaporated. It's gone. We don't know where it went, but it's completely gone.

What changed in those six months?

From what I saw, the economic forecast was similar, in that most private sector economists were calling for a potential slowdown in the Canadian economy. That was eminently foreseeable. The expenditures were eminently forecastable—if that's a word. Now we've gone to $60 billion in additional spending. It's just absolutely wild how they can depart from that six months into their mandate. They can go from having a balanced budget in the forecast to having no balanced budget and to actually going up in their debt-to-GDP ratio. It is just wild how their forecasts can be that far off.

It makes one wonder what the next forecast will look like. This is the same government that told us that the budget will balance itself. I guess that type of economic dreaming—I'll put it charitably—has not changed. It is unfortunate that we can't get a reliable forecast going forward, as Canadian business depends on that. We need to know that when a government makes a forecast.... Certainly, there are unforseen events. No one would blame them for changing their forecast after COVID hit, but when the economy moves pretty much as predicted by most private sector economists.... They thought the Canadian economy would slow down, and the Canadian economy slowed down. They thought that some of the supply chain issues would resolve themselves, and they have.

For whatever reason, the debt and deficit just exploded in this projection. I can tell you for what reason. It's because the government decided to go on a $60-billion bonanza of spending of money allotted for more failed projects, such as the Infrastructure Bank. Last I heard, at least, it had not been able to build a single project.

Perhaps this isn't surprising given this Liberal government's record of failed economic growth, debt, deficits, high inflation, high interest, unaffordable housing—the list goes on—and also high food bank usage, where the testimony was truly startling with respect to the expenditures going forward there. The individuals, the experts, talked about food bank usage and the fact that one in 20 folks in Mississauga has to use a food bank. The food bank from the chair's riding used the word “terrifying” to describe the situation on the ground.

You would think that hearing some of these remarks might cause a bit of pause. Let's perhaps hear more. Let's investigate more. Let's do some consultation with other experts. Instead, this government's brazen response is to just double down: Let's get this through quicker and let's get higher deficits, higher debt, higher inflation, higher interest, lower economic growth, less innovation and less productivity. That's all that this government's eight years of a failed economic record has produced: economic failure after economic failure.

Millions of Canadians, unfortunately, are struggling with poverty. They are faced with extreme challenges. I believe we have a commitment to do everything we can to lift these individuals out of poverty. Putting in place such barriers as the incredibly high marginal effective tax rate is not helpful. It's not beneficial. It's actually extremely challenging for these individuals.

When you're earning $30,000 a year, the likelihood is that your paycheque is not going far enough. You may be spending as much as 100% of your after-tax income on housing, which leaves you zero disposable income and zero dollars for food. This is extremely challenging. The response to this is that, when you earn that extra dollar, and you get to that $30,000, you get that $32,000 or you get to that $35,000, going forward, the government takes half of that back.

That is just so troubling. We are disincentivizing work. We are actively corroding and eroding the rewards for work. We are punishing Canadians for doing the right thing. We're punishing Canadians who are working hard trying to make a few extra dollars, maybe to get by at the end of the month or maybe to make sure they have enough money to fill their grocery carts. Instead, we are taking more and more money from them.

As I said, most importantly, it's hurting the most vulnerable in our community, but it's also hurting our economy. We're dealing with a labour shortage and at the same time we're disincentivizing work. We need to get as many hands on deck as possible. We need to make work pay again. Quite frankly, the marginal effective tax rate, as it is right now, is a huge barrier to individuals working. We need to make sure that Canadians have the ability and are rewarded for the great work they do.

When we look at some of these issues, we can talk about what else experts could have come in here to talk about. They certainly could have talked about, if they looked through some of the issues that were up for discussion, the impact of the GST/HST rebate. In fact, some of the testimony was on what is euphemistically referred to as the “grocery rebate”, which is really just a doubling of the GST/HST rebate, for the record. They could have talked about how inadequate that is. When food costs are going up by $500, $700 or $1,000, depending on which metric you look at, the $250 won't even begin to pay the increasing fees of the groceries. Another issue they could have talked about is the air travel security issue and the costs that would be associated with that.

One issue that I would really like to hear about is money laundering and the funding of illicit acts. We have a real challenge in Canada, and we're a little bit behind the eight ball. In fact, I think we're a lot behind the eight ball. I think we have nearly all parties in agreement that we have to do better with respect to our money laundering legislation and our legislation prohibiting the financing of illicit acts and illegal flows of money. That area I would really like to hear about.

Another issue would be the Bank of Canada negative equity. “Negative equity” is a great euphemism. Negative equity means losing money, for all the viewers out there. The Bank of Canada for the first time in its history is losing money. I would have loved to hear witness testimony about the impact of that on the Canadian financial system—how sustainable that is and how much taxpayers are paying to bail out the Bank of Canada.

We would have loved to hear more details about the Canada innovation corporation act. Details are extremely scant on that, and it would have been great to hear witness testimony about it.

An area of particular interest to me is economic sanctions. I have a private member's bill, Bill C-281, that deals with economic sanctions, particularly the Magnitsky sanctions. The bill seeks to give Parliament the ability to ask for a report if the government is unwilling to sanction individuals or groups of individuals with respect to the Magnitsky act.

We saw a flurry of instances initially, when the act was passed, of the government utilizing the Magnitsky act. However, there have been very few since. My private member's bill would seek to enable a committee to have parliamentary oversight of the lack of sanctions, which I think would be incredibly interesting and transparent. I would have loved to hear Bill Browder or some of the other expert with respect to the Magnitsky sanctions in order to get a better idea of what's going on.

There's an interesting small part, in division 13, on the CRA data for CPP analysis. This is evidently just a sharing of information between departments, which requires legislative oversight. I would love to hear from some data experts on that, especially given the fact that the government has not done the best job of always stewarding the information. Of course, the CRA had a number of near breaches, I guess you would say, where information could have been exposed that caused outages and shortages with respect to their website. I think this is an area that merits substantial study.

All these areas ought to be clear, and it would be interesting to get some witness testimony on them.

I would love to hear more about the citizenship applications. This is obviously incredibly important. My office has been getting lots and lots of calls, emails and in-person visits about how the immigration system is failing Canadians and failing newcomers as they come to our great country. They increase our diversity, our work ethic and our intelligence. We're bringing incredibly intelligent hard-working people from all over the world. They come to join our country and make Canada their home, but unfortunately they're increasingly having a negative experience with the immigration system and finding it very cumbersome and difficult to manoeuver.

Interswitching is a really interesting topic. We did have one individual from Pulse Canada, I believe, who talked a bit about interswitching. From everything I have seen, this seems like a smart thing to do. In fact, under the Harper government interswitching was allowed, and then, unfortunately, the Trudeau government cancelled that project. Now I guess they're bringing it back as a pilot project. It would have been great to hear from both sides of the argument, both from railways and from the cargo shippers, as to the pluses and minuses.

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

I have just a quick point of order on that, Mr. Chair.

Mr. Lawrence may not be aware, but we did in fact have CN, CP and the Railway Association of Canada testify at committee when we were hearing from witnesses last week, which I know he followed very closely given his concern over hearing witness testimony on the bill.

[The Chair, Liberal, Peter Fonseca]

Thank you, MP Blaikie, for that point of order.

I think it is correct, MP Lawrence, that they were before us as witnesses.

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

Yes, 100%. I apologize. I misspoke. I meant additional testimony.

My apologies, Mr. Blaikie. Thank you for the correction.

I would like to have heard some additional testimony about interswitching. I know this cause is near and dear to the member's heart. I think some additional testimony would have been great. I believe some additional work could be done on that section as well, which would be interesting.

Also, I think more discussion on airlines and the changes with respect to the complaint system would be extremely valuable. I'm sure more individuals and more groups would have been happy to come before us to discuss the provisions of that act.

I'm always interested in hearing what the good folks at CBSA are doing. I would have enjoyed hearing from some stakeholders or having some Canadians come forward about the impact of our modernization initiative and how that's going to work. We all, obviously, saw the nightmare that was our transportation system over last Christmas and some of the breakdowns at Pearson airport. We saw significant wait times.

Airports are often the first places that people see when they come to a country. That might be all they see if they are just transiting in and our of a country. It's critical that we make a great first impression. That person may eventually consider joining our country and becoming a newcomer, or consider opening a business or making a capital investment. What type of impression are we making when they have to wait in line for hours and hours while they get their bags off, they transfer or they get a new flight because their flight has been cancelled?

To me, as I said, this is an area where we make a first impression. We don't know who might be coming through those doors. It might be a person who would revolutionize artificial intelligence. Maybe they'd choose to come to Canada. Maybe it's a person who goes on to be a champion for human rights. We should be rolling out the red carpet for people who want to come to visit our land as a tourist or come here as a newcomer. We should make sure that every Canadian and every person who comes to Canada has a great experience when they walk into Canadian airports. Unfortunately, we certainly have not always had that.

We then see, in part 4, a number of different provisions with respect to the National Research Council, the Patent Act and royal titles. We would have enjoyed some conversations about that area as well.

Part 4, division 32, is the Canada growth fund. I would like some more details from some of our experts on whether it will achieve its objectives. As I've said clearly on the record, I believe the federal government has to stop inhibiting growth and start putting in policies that instead promote growth. I would love to hear that going forward.

Part 4, division 36, is the clean fuel regulations fund. I want to hear more about the carbon tax part two, and specifically what it might cost. Of course, we heard from the Parliamentary Budget Officer that it will cost Canadians thousands of dollars. I would love to have a greater discussion of that going forward.

Then there's the EI appeal board. Perhaps that's some inside baseball chat, but I think having some expert testimony on that would be valuable as well. I would love to hear from some university professors who have studied that and who have some thoughts on it.

We need to continue to have great discussions and dialogue about this budget. I'm so disappointed that we couldn't come to a collaborative agreement where we would meet, talk and have really.... As I said, from the outset, the Conservatives really wanted two things. One was two hours of the Minister of Finance's time, which she steadfastly refused. She did grace us with her presence for an hour and 25 or 30 minutes; however, we still didn't get the two hours. The Conservatives then asked for 20 hours of testimony, and we didn't get that either. These were not outrageous requests.

We will continue to discuss and debate these amendments and these issues, and we'll continue to have extreme disappointment in the way that these Liberals have stewarded this economy. As we've heard, this is the worst economy since the Great Depression, as Philip Cross has said. We have a doubling of food bank usage. We have one in 20 folks in Mississauga using the food bank.

These are difficult economic times, and these are in the short term. The long-term economic measures may be even worse, with us being near the bottom on productivity and near the bottom on capital investment in the OECD. Our economic growth is forecast to be among the worst going forward in the OECD.

I appeal to you again, Chair. Maybe we could get unanimous consent to move back a couple of days to allow for 10 hours of testimony. That might be one meeting. As I said, I'm very thankful to the clerks. They do make miracles happen, and I'm hopeful that those miracles will happen again.

Mr. Chair, how long do we have resources for today?

[The Chair, Liberal, Peter Fonseca]

MP Lawrence, we have resources well into the evening.