Mr. Speaker, it is an opportunity today to talk about this inaptly named jobs and economic growth recovery act since it is my view that the government has had virtually nothing to do with this recovery, notwithstanding a great deal of back patting that seems to go on by those on the side opposite.
Members might have noticed a pattern over the years of the Prime Minister not being overly fond of those who contradict him, especially those who used to be his best friends.
The people at the Fraser Institute, which is well described as a right-wing think tank based in Vancouver, used to be among the Prime Minister's best friends, at least they were until recently when they were on the receiving end of the Prime Minister's wrath. Why would the Fraser Institute, which is hardly a bastion of liberal thought, be on the receiving end of the Prime Minister's wrath? Well, it produced an analysis of the recovery which showed that the stimulus moneys that the government put into the economy which ran up the debt had virtually no impact on the recovery of the nation.
I do not know whether I should admit this in public, but I read the Fraser Institute publications and sometimes I agree with them and sometimes I disagree with them. They are generally well written, fairly piffy and generally provocative. It behooves us all to read widely, even those with whom we disagree. The Fraser Institute has even from time to time been so generous as to invite me to speak at one of its functions. . I suppose from time to time it needs a token Liberal at one of these functions, but I appreciate its generosity in inviting me. I do not know whether in fact I will be invited again. I do have the tie to prove that I was at one point an invited speaker. I regularly wear it to any funeral I go to.
What is it that has actually caught the Prime Minister's wrath? I will quote from Niels Veldhuis of the Fraser Institute, the senior economist and one of the study's co-authors. He says:
Although the federal government has repeatedly claimed credit for Canada’s improved economic performance in the second half of 2009, Statistics Canada data show that government spending and investment in infrastructure had a negligible effect on the country’s improved economic growth.
Home reno tax credit's impact 'negligible'.
That is notwithstanding its popularity.
The report's authors say they're not surprised by their findings, noting that infrastructure spending takes time to work its way through the system.
“The fear now is that spending on infrastructure will occur as the economy naturally begins to grow, meaning that government will be competing with the private sector for resources, resulting in increased costs and fewer private-sector projects”, Veldhuis says.
He goes on to question the stimulative value of the renovation tax credit which was, as he says, a “popular measure”, but it had a “negligible impact” on the GDP growth in the second half of 2009.
He goes on to say that “less than a tenth of the $47.2 billion in the stimulus package was earmarked for personal income tax reductions”, which the Fraser Institute argues was a far better method for economic stimulus.
He further states:
What we see now is that the stimulus packages put in place by Canadians governments in 2009 created massive government deficits, resulting in increased in debt while contributing little to the economic turnaround.
That is what made the Prime Minister and the Minister of Finance so exercised. This self-described right-wing think tank, formerly the best buddies and soulmates of the Prime Minister and Minister of Finance, had the audacity to say that the “emperor had no clothes”. It is not a good idea to criticize the finance minister or the Prime Minister if one expects to retain the best buddy status. The institute said that the impact of the stimulus package was negligible, which really hurts coming from friends.
What we do know is that the Conservative government has run up the debt by $165 billion, $49 billion in this year alone. That is the hard, cold fact directly from its budgetary documents.
What we can say for sure is that $165 billion has been loaded onto future taxpayers instead of any kind of a realistic plan. Instead of actually dealing with the runaway freight train, that is, the expenses of the government, it has postponed decisions and will continue to postpone decisions.
The closest the government gets to a decision is the $17.5 billion so-called savings measures, money that it was going to spend but are now not proposing to spend. The biggest component of the money it was going to spend and is not now going to spend is the money for the world's poor, $4.5 billion. So $4.5 billion of the $17.5 billion, somewhere in the order of 20% to 25% of the entire package, will be loaded on people who do not vote, who cannot vote and who live in other countries. That is kind of an easy decision to make if the government really wants to show it is semi-serious about getting costs under control.
The other biggest hunk is the $6 or $7 billion for the civil servants. These are the ones who were hired to implement the jobs and growth agenda which, arguably, according to the Fraser Institute,has had a negligible impact, and they are being fired or will be fired or anticipate being fired as part of the so-called savings. Therefore, $6 or $7 billion out of the $17.5 billion will be put onto the backs of the civil servants who were actually hired to implement the plan that does not work.
Even one of the Prime Minister's former speech writers, Michael Taube, had some rather uncomfortable things to say to the Prime Minister. He repeats the material from the Fraser Institute, and states
...the 1.1% GDP growth between the second and third quarters of 2009, stimulus spending and government consumption “played a negligible role in the economic turnaround” and only accounted for 0.2%. Meanwhile, the 1% GDP growth between the third and fourth quarters was “solely responsible” due to net exports, and not stimulus spending and government consumption.
The PM also said the Fraser Institute report was “completely wrong,” and “economic theory and history is clear, governments.... So much for [the Prime Minister's]reputation as a free market champion. ... The [the Prime Minister's] I knew supported the economic theory and history models of small government, private enterprise supporters such as Milton Friedman and Friedrich Hayek. Apparently, he’s now switched over to Paul Krugman.
Interestingly, I had an opportunity to talk to Mr. Krugman and ask him whether there was a model to show that if in fact one puts x number of billion dollars into an economy whether it can be identified as actual economic growth out of the economy.
If the government is taking taxpayer money and putting it into the economy of the nation, how does it measure that there is something that comes out the other side, or does it simply just run up a debt and have no product at the end of the day?
Mr. Krugman was not entirely forthcoming as to what that model would look like. I dare say that Mr. Krugman and the Fraser Institute might actually, from both sides of the economic spectrum, be able to argue quite cogently that if one is a Keynesian person, one cannot actually measure the economic product, and from the right-wing side of the equation, whatever measurement is there is negligible and one may well have just wasted all one's money.
Mr. Taube goes on to say:
But to take distinctly un-conservative positions after his stimulus spending’s net benefit was shown to be insignificant by an important Canadian conservative think-tank isn’t a wise strategy.
Kool-aid Conservative supporters might be happy with [the Prime Minister's] mock outrage. But red meat conservatives are tired of these shenanigans.
Mr. Taube is a former speech writer for the Prime Minister.
That is what the Conservatives' friends are saying. What do they get for their analyses? Mr. Taube or the Conservative think-tank get epithets from the Prime Minister and the Minister of Finance. They call it shabby, wrong, contradictory, poorly done, et cetera. What we get are vitriolic attacks, which is what we see in this place, rather than any reasoned debate.
The Prime Minister actually had the courage of his convictions saying that he or the finance minister would table the analysis that shows that the stimulus spending impacted on the economy in a positive way, in which case we could probably put the argument to rest or, better still, let the Parliamentary Budget Officer look at it. Of course, that is not too likely since the Parliamentary Budget Officer is used to being attacked by the finance minister.
The Parliamentary Budget Officer certainly did not get any kudos from the finance minister on March 11 when he said that the plan lacked detailed information and that he disapproved of the overall characterization of the economy and would not characterize the government's methods as a prudent basis for fiscal planning. His most significant point on March 11 was that he lacked the detailed information and data that the government was using to make its projections which found their way into the budget and which subsequently found their way into the legislation that is on the floor of the House.
It is not as if the Parliamentary Budget Officer disagrees with private sector economists. He generally accepts their propositions. What he does not agree with, because he does not get the co-operation from the Minister of Finance, is how the Conservatives got from there to here. What it produces is the stuff that the Prime Minister and the Parliamentary Budget Officer agree on and the product that the finance minister produces for his budget. The Parliamentary Budget Officer is rightly asking how they got from here to there and they answer by saying that they cannot tell him. That is pretty useless because if they cannot tell him, how can there be a reasoned debate as to whether the projections are correct?
We have the Fraser Institute arguing on the far right that whatever money has been spent has had a negligible impact, a speech writer saying the same thing, Mr. Krugman saying that there is no real economic model and then we have the Parliamentary Budget Officer being frozen out of the data or the modelling that would take him from the agreed upon point, which is the consensus data put forward by the private sector economists, to the product we see in the budget.
The Parliamentary Budget Officer has been an irritation to the government and the Minister of Finance for quite a while now. In 2008 and 2009 he consistently and accurately projected shortfalls and/or surpluses earlier than the Minister of Finance. Even when the Prime Minister was predicting a surplus in 2008, which just happened to coincide with the election, by the way, the Parliamentary Budget Officer said that there would be a deficit.
What are we supposed to do with this sort of thing? In 2008 the Prime Minister said that there would not be a recession in Canada and that we would be fine so long as we did not do stupid things, such as running a deficit. Then he suggested in October that there were good buying opportunities for Canadians. In November 2008, his failed economic statement promised a surplus for the next five years. Twelve days later he was contradicted by the Bank of Canada and announced that we were in fact in a recession. In December he had run up a deficit of $20 billion to $30 billion.
From September to December, a space of 90 days, we went from a surplus prediction by the Prime Minister/Minister of Finance to a $30 billion deficit. In January it was up to $40 billion, by the summer it was up to $56 billion and I think in this budget it settles itself down to about $54 billion.
The credibility of the Prime Minister and the Minister of Finance in terms of predicting surpluses and deficits has been shot. They will not share with the Parliamentary Budget Officer the reason for their “optimism”. The Fraser Institute seems to indicate that whatever moneys have been spent are having a negligible impact.
Their own view, their own ideological base, is quite upset with them because they have squandered $165 billion in accumulated deficits. The response on the part of the Minister of Finance and the Prime Minister is to launch vicious ad hominem attacks, which is of course a pattern we have seen for quite a while.
I want to contrast that with the handling of the monetary policy by Bank of Canada governor Carney. Mr. Carney's handling of the monetary policy during the same period was, in my view, a masterful job. When we are dealing with an economy, we have the monetary on one side and the fiscal on the other side. The fiscal is what the Minister of Finance controls and the monetary is what the governor of the Bank of Canada controls.
He had a judicious eye on the economy and manipulated the interest rate to maximize the benefit to the economy. Keeping an eye on inflation and the interest rate, he intervened in the market from time to time to buy up stranded debt and to improve liquidity. At all times, he did it in a respectful manner. At all times, he came before various parliamentary committees to tell them what he was doing, how he was doing it and the result he expected.
He did not at any time attack those who disagreed with him. There were those who did disagree with him. There were those who thought his analysis of the economy was somewhat rosy at one point. Others thought he was a touch too pessimistic. Others thought it was going to go up, then it was going to go down and then it was going to go up again. I do not know how it all turns out. In all instances, the governor of the Bank of Canada kept his cool and responded respectfully to inquiries. Even when there was disagreement as to whether or not he was being too optimistic, he kept the dialogue thoughtful and respectful.
Contrast that with what we get in this place. It is kind of a scorched earth policy that comes true when we are having dialogue about what is arguably the most significant responsibility of government, which is the management of the economy. What we get here is the first and ultimately most disrespectful thing: the prorogation of Parliament. If I am the Prime Minister and I do not like what Parliament is saying about whatever it is, why not just shut down Parliament? We saw the result of that. I dare say the Prime Minister will be pretty loathe to shut down Parliament again anytime in the near future.
We get the disrespect of shutting down Canada's chief nuclear officer, Linda Keen. We get the disrespect for Peter Tinsley, the military ombudsman who brought unwelcome news about various things. We get Paul Kennedy, who was engaged in a pretty significant study with respect to the RCMP, being fired summarily. We get disrespect for Canada's diplomatic corps and Richard Colvin, who said things that were “off message”. We see the disrespect for KAIROS. These folks were engaged in human rights activities that the government thinks they should not be involved in, so they were fired at midnight after 35 years of hard work.
The list goes on and on. We saw Scott Clark, the former deputy finance minister. We saw Ed Clark, formerly an official in the Department of Finance, who had the temerity to say that we should possibly be having an adult conversation about what revenues the government actually needs to do what it needs to do.
What do they all have in common? They have the courage to say what they think. As a consequence of their courage in saying what they think, there have been malicious, ad hominem attacks.
This is a democracy chill. It is a free speech chill. Frankly, it is no way to run a country.