Madam Speaker, I note that members are debating the motion in front of us, which is that this House take note that, while Canada is starting to recover from the global economic recession, the recovery is tentative and uncertain. The number one priority of Canadians remains jobs and economic growth, now and for the future.
I think the government has done a good job of managing the economy through the global recession of the last 18 months. I do not think anybody in the House anticipated the shock to the economy we saw in September 2008. I remember the election well. I remember reading stories about the collapse in credit markets south of the border and how it spread around the world. I remember thinking that I was living through a once in a lifetime moment that would have repercussions down the road.
At the time I remember thinking that September 2008 really marked the end of the post-war era. It marked the end of an era of growth and prosperity that people in the western world had seen since the second world war. Really, it marked the beginning of a new era, the fallout from which people around the world have not quite fully begun to understand, the shift in markets, demand, consumer growth and the like. I think people are still trying to see their way through it. In that context, the Government of Canada has done a very good job of steering our economy through the worst of this downturn.
If one looks at the events that transpired that fall and the following spring, the government's actions, in coordination with the Bank of Canada, ensured that the Canadian economy not only weathered the storm better than most but that Canada would emerge from the recession in a much stronger position than almost any other major OECD economy.
The result of the government's plan was Canada's economic action plan, a suite of measures that people have often seen throughout the country, things like the home renovation tax credit, enhancements to the working income tax benefit, accelerated capital cost allowances for those manufacturers that wish to purchase equipment, and infrastructure stimulus projects: one cannot drive or go anywhere in Canada without seeing billboards advertising one project or another that has been started because of stimulus funds.
There is a $2 billion knowledge infrastructure program for Canadian universities and colleges, the first in many years. There is help for the unemployed through the extension of employment insurance benefits by five weeks. There are enhancements to the work share program, allowing workers to share their time with other workers, industries, and companies that have been affected by the downturn. In southern Ontario there was the creation of the new federal economic development agency for southern Ontario, and some moneys have already flowed to cities like Guelph and to areas like Wellington County and Halton region to help manufacturers in those areas.
Finally, behind the scenes there is help through the Canadian Lenders Assurance Facility, which really helped to free up the credit markets and ensured that Canadian banks continued to lend and provide lines of credit, credit cards, mortgages and the like. So I think the government's action was swift, effective, and the results have shown evidence of that.
The results speak for themselves. In the fourth quarter of 2009 GDP growth was 5% in Canada, far better than what most people and many major bank economists expected. Canada's banks are strong and well capitalized. In fact, the World Economic Forum rated Canada number one out of all countries around the world in terms of the soundness of the Canadian banking system.
Canada's unemployment numbers, while they are high and have increased substantially in the last year-and-a-half, putting many Canadian families out of work and workers in difficult positions, are still much lower than that south of the border. Some of the recent job creation numbers are encouraging in terms of the direction in which Canada is going.
The final point that needs to be noted is that going into the recession the government's balance sheet was incredibly strong, thanks to our government's efforts and the previous government's efforts to ensure that Canada had substantial surpluses; and that coming out of the recession, Canada's balance sheet will remain strong. While our debt to GDP ratio will no doubt increase over the next number of years, the fact is Canada's deficit as a percentage of the economy is much lower than in the United Kingdom, the United States, Japan, and many other OECD countries.
Coming out of this recession we will have increased our national debt; however, it will still remain far lower as a percentage of overall economy than most other major economies in the world. I think the government has have managed to steer through this recession in a very capable and prudent way.
The motion also indicates that the recovery is still uncertain and tentative. The government faces the very difficult job of reducing our deficits and ensuring that our national debt is not increased in a dangerous way.
Parliamentarians need to understand that it is important that Canadian households not increase their debt in an unsustainable way. We often focus on the issues of our federal debt and our federal balance sheet, but we also need to be worried, because we affect federal policy levers as does the Bank of Canada, about the ever increasing rise in Canadian household debt.
I applaud the Minister of Finance in his recent move of some weeks ago to further strengthen the requirements for taking out a mortgage. There is a growing concern about the levels of debt that both governments in Canada and households have taken on.
This afternoon we will hear what the Government of Canada intends to do about the debt and the deficits that we have incurred in the last year and what we intend to do about those deficits and that debt in the next number of years. As parliamentarians we also need to be aware that we have the policy levers to ensure that Canadian households do not unduly take on too much debt.
In the most recent debt management report from the Government of Canada for the fiscal year ending 2008-09, the market debt of the government was about $500 billion and the accumulated deficit of the government was also about $500 billion. Well, household debt in Canada is now almost triple that amount. If we look at the most recent daily from Statistics Canada for the third quarter of last year, it indicates that household debt has now risen to $1.4 trillion, three times the amount of our national debt. That has driven up the debt to GDP ratio, so to speak, for households to 145%, what Statistics Canada calls debt to income ratio.
The Minister of Finance has been very prudent and very balanced in ensuring that the policy levers are in place to ensure that households do not unduly take on too much debt. I think Canadian households need to ensure that they do not take on too much debt.
We need to continue to monitor the situation in the next 12 months, and if housing prices accelerate unreasonably in the next 12 months the government needs to take additional measures to ensure that we are not entering into dangerous territory there.
To conclude, I think that our government has done an excellent job managing the economy through the last 18 months. The government now has the difficult task of continuing the stimulus program for the next 12 months while at the same time laying down the road map for how it is going to tackle these debts and deficits.
I encourage the government to continue the prudence it has shown with the policies it has put in place to manage household debt. I would also encourage all parliamentarians to be aware of this issue and to keep an eye on it as the next 12 or so months unfold.