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.