It could very well have been. That's some excellent detective work, Mr. Chair.
We have Canadians who are gainfully employed and who have done all the right things. It used to be that society had a deal with young people, and the deal went something like this: You either go to school or go right to working hard. You get some type of trade or ability to increase your economic value. You work hard. You make the right decisions. You make those sacrifices. You take on that student debt, if you're a student. You go out there, as a young person, and many work 50, 60, 70 or 80 hours to develop their trade or their profession. We know it's hard, and we know it's stressful. Not every boss is a great boss. We know the challenges that you will face, but here's the deal. If you're willing to make those sacrifices, if you're willing to work hard and if you're willing to put your work first and really give everything you can to a trade, a profession or a job, you will have rewards at the end of it. You'll be able to afford a house. You'll be able to raise a family. You'll be able to, maybe, take a vacation once a year.
That deal, according to one witness testimony, is broken. The deal is broken. Young people are working as hard as ever. They are making the right decisions. They are doing the best they can, but they're still ending up in their parents' basement because they can't afford a house. A down payment for housing...the cost of housing is through the roof.
We have a huge gap between the number of houses that are being built and what we need. Housing starts are nowhere near what we need to support the great people of Canada. We need to get rid of the gatekeepers, and we need to get housing built here in Canada. We are leaving many young people with the inability to get their house.
Housing prices—after a momentary dip, when interest rates were skyrocketing—have started to climb again. To get a reasonable house anywhere in an urban centre—or even in the rural areas, where I live—it's up near a million dollars, if not more than a million dollars. It used to be that a million dollars would buy you a mansion. Unfortunately, now, a million dollars buys just a normal house.
On down payments, if you want to put 10% down on a $1-million house, that's $100,000. We go back to that individual who's earning $50,000, $60,000 or $70,000. It's hard to stretch the paycheque just to make ends meet with that income these days, much less come up with an extra $100,000. Some studies have shown that it will take young people five, 10, 20 or 50 years to come up with just the down payment, and then they have to make their payments.
We already had inflation, which was high, and actually just ticked up again in the latest inflation report, and then we add interest rates. We have the cost of food increasing. We have the cost of heating increasing, and then we have the cost of housing.
The interesting part is that the government actually has a solution. It could, right now, if it wanted to, bring down inflation by 10%. That's not me saying that. That's Tiff Macklem, the Governor of the Bank of Canada. He said that 0.4% of the inflation was the carbon tax. At 4% inflation or thereabouts, where we are, we would be able to reduce inflation by 10%. I think that would be a pretty huge accomplishment. All they have to do is walk in and say, “You know what? We're eliminating, or even just pausing, the carbon tax until inflation is under control. Until we have it within the desired range, we will eliminate the carbon tax.” It would be an immediate solution overnight.
As I said, that's not me saying that it would reduce inflation. That's Tiff Macklem, the Governor of the Bank of Canada, who, once again, has been generous with his time. We don't always agree with his responses, but at least he has always been willing to come to our committee and talk about the situation.
Unfortunately, Minister Freeland has not. She has declined three invitations. She did come for an hour—I have to be fair about that—but we had asked her for two hours. She did stay a little bit extra. We appreciated that, but there are just so many witnesses. I'm sure that all these members share, as I do...the individuals who would want to come and testify before our committee.
What I would like to hear is with respect to some discussion of this government's war on work. We see effective tax rates that are increasing, higher and higher. Effective tax rates are over 50% for many low-income Canadians. As the C.D. Howe report said, marginal effective tax rates are often higher for low-income people and lower for high-income people, which would seem to be, out of fairness' sake, not the right direction for our country.
As I've said in the past in the House of Commons, I can't imagine how difficult it would be for an individual who has decided to return to work, whether they have children or whether they are a senior coming back to work, getting that first paycheque and seeing that through the marginal effective tax rate they're keeping less than 50% of what they earned. Imagine how dejecting it would be for someone who had worked a hard job, done the hard work and made all the right decisions to then have the government say, “Thanks. We're keeping more than half.”
We need to hear the testimony of these individuals. We need to hear about the marginal effective tax rates and explain what that means. I raised this issue in the House of Commons in question period. I brought the idea that many Canadians, low-income Canadians, are actually paying a marginal effective tax rate of over 50%. It was responded to with jeers of disbelief, if I might put it politely, on the other side. Clearly, there needs to be some education, because this is not me saying this. Eminent think tanks like the C.D. Howe Institute and the Fraser Institute have discussed this a number of times.
So I sit here in disbelief and await the hypocrisy we'll get from the other side when they are in opposition and they start raising the issues of democracy. I remember all the cries of the NDP about time allocation and closure and the need for democracy. That seems to have all faded away. It's pretty much inexplicable that anyone would think that 10 hours of witness testimony would be sufficient and that the Deputy Prime Minister and Minister of Finance would only have to testify for an hour.
Democracy, I believe, demands that people have their voice, especially when this is not a small matter. This is a critical time. From Philip Cross we heard that we have the lowest rate of growth per GDP since the Great Depression. The cause of that is no doubt this government's inflation-fuelling deficit spending. What does this government decide to do? Well, there's more inflation-fuelling deficit spending. Even just since the introduction of the budget we've seen an increase in inflation. Sure, people say, “Well, the budget isn't in effect yet,” but of course markets and individuals act as much on expectations as they do on reality, so perhaps we already see the market baking into the inflation that this government will create here.
When we look at the importance of this budget, $490 billion is going to go out the door, and we're going to see an additional $60 billion in new spending, $40 billion in net new spending. We have what at best, I guess, you could call forecasts in which the government claims they will be reducing expenditures at some point in the future, but, by the way, those don't come into place until 2027 or 2028. Also, there are no plans as to how those reductions will be achieved. This would be, I think, fertile ground on which to hear expert witness testimony about how the savings could be generated and whether they're even viable or feasible at all.
When we look at this process, it's literally just 10 more hours of witness testimony that we want to hear. We have, in my opinion, some of the best and brightest minds from around the world who come to testify before us in the finance committee. Oftentimes, our panels are around five individuals representing a number of organizations, which represents to me about 50 individuals or so. That's 50 new perspectives that could be provided to this debate and to this discussion. We'll continue to have that discussion and that debate over witnesses to underscore the fact that there's a need to hear from these brilliant individuals.
Normally, some of the smartest women and men across our country are invited to these committee hearings, and surely they could add value. I don't understand how the Liberals could think that these individuals would not provide value to our committee, but obviously that's the case. Maybe, as I said, the concern is that they don't want to hear more from the food bank saying that this situation is terrifying, that people are asking for MAID because the situation is so bad, or that this is the worst economic time since the Great Depression. Maybe that's what the Liberals are afraid of hearing. For my part, I certainly would want to hear more testimony.
I believe that one of the areas we need to focus on is reducing the marginal effective tax rate for low-income Canadians. It simply is not right that high-income earners are paying less than low-income earners in terms of marginal effective tax rates.
With the chair's indulgence, I would like to share with you some highlights. I'm hoping MP Beech is okay with this. This is a table from “Commentary No. 632”. The heading is “Participation Tax Rates for a Stay-at-Home...Parent Contemplating Taking on Paid Work, by Province and by Number of Children”, so this is if someone wants to return to the workforce.
If you live in the great province of Newfoundland and Labrador and you have one child, your participation tax rate, which is the tax rate you'll face if you're a stay-at-home parent and you want to return to the workforce, is 38%. If you have two children, it is 46%. If you have three children, it is 54%. If we go to the great province of New Brunswick, the situation gets even worse: for one child, it's 42%; for two children, it's 49%; and for three children, it's 56%.
In the beautiful province of Quebec—La Belle Province—you'll see that with one child, your participation tax rate is 53%. This is from the C.D. Howe report. For two children, it's 60%, and for three children, it's 66%. That is incredibly high. If you are living in the wonderful, beautiful, fantastic province of Quebec and you're a mom or dad of three and you've been staying at home with the kids and now you want to return to work, you're going to keep 44¢ on every dollar. That doesn't include the costs of the carbon tax, HST and property tax. All of those government intrusions are in addition to this.
In my own province of Ontario, you'll see that the numbers are these: for one child, 40%; for two children, 54%; and for three children, 59%.
Now, what's really disappointing.... Maybe even stronger language such as “disturbing” could be referenced. My first example is that the first parent's income is $45,000 and the second parent gets a job for $20,000. Just to be clear, the first parent is already making $45,000. The stay-at-home parent now wants to return to work, and they want to make $20,000 a year. Those would be the effects.
The disturbing fact is in looking at higher income levels. Say the first parent's income is $120,000 and we're going to have the stay-at-home dad or mom come back to the workforce to make $50,000. Remember that in the first scenario the numbers were 38%, 46% and 54%. That's the low-income scenario. In the high-income scenario, it's 33%, 35% and 37%, in the great province of Newfoundland and Labrador. That's a shocking number. What a disincentive to work it is when the government is taking more than 50¢ on every dollar.
Let's go back to the beautiful province of Quebec. Once again, the first parent's income is $45,000. The second parent says they're ready to go back to the workforce and they're going to make $20,000 a year. In Quebec, that individual would face tax rates of 53%, 60% and 66%. If the first parent who's working outside the home right now is making $120,000 and the second parent who wants to return to the workforce is expecting to make $50,000, those numbers drop from 53% to 37%, from 60% to 40%, and from 66% to 45%.
This is clearly an inequity in the tax system. It is a disincentive, and it's discouragement. It's the appropriation of money from the most vulnerable in our communities, from those who quite frankly are doing all of the right things. Like all Canadians, they're incredibly hard-working and are getting back to work and making investments to get that great job, and then the government is saying, “Thank you very much; we're going to take more than 50¢ on the dollar.”
It's heightening an economic challenge that we have on the macro scale of things as well. We heard testimony on tourism and hospitality from Ms. Grynol, and I think she said that the pre-eminent challenge that hotels and other tourist-related businesses are facing is labour shortage. Perhaps that's not shocking, given the barriers that this government is putting in the way of people working—the disincentives they're putting in place.
A great relief valve to the labour shortage would be the return to work of seniors who have retired and who may want to return to work, whether it's out of necessity or just wanting to make sure that they have additional security, or maybe they want to do something extra for their grandchildren. Low-income seniors are often facing marginal effective tax rates of over 50%. Not only is it incredibly unfair to our lowest-income workers—many of them seniors, many of them parents—but it's also hurting our economy.
In my own riding, in the town of Cobourg, one of the hoteliers told me that they have overwhelming demand. Their challenge is that they simply don't have the labour, so they cannot sell out all of their rooms because they don't have the support people necessary to run the hotel.
Mr. Chair, could you tell me who's next on the speaking list?