Mr. Speaker, it is a great honour to rise today in support of Motion No. 315 by the member for Kings—Hants, in which he quite properly raises the issue of income inequality, a growing inequality in this country and others in the OECD.
This country is blessed to have some very able civil servants, none more able than Mark Carney, the Governor of the Bank of Canada. When he was asked about what he thought about the Occupy Wall Street movement, he did not lapse into bankerspeak. He did not lapse into the mumbo-jumbo that passes for rarefied conversation among bankers and to which very few are admitted as privileged conversationalists. Rather, he said what he thought. He said that the movement actually has a point that there is growing inequality among people, particularly in the U.S.
I do not particularly care to isolate or point to the United States, because what is true there is also true here, but the U.S. operates on a much larger scale than we do. Indeed, the Occupy Wall Street movement pointed to an income inequality that is far more exaggerated there, I would say, than here. Some of the executives on Wall Street have incomes and wealth comparable to the GDPs of small countries, but with a dubious contribution to actual wealth generation. In many instances, it is just moving money around in various circles with no corollary whereby actual wealth is increased.
In Canada we are developing a similar problem. Article after article talks about the difference between Main Street and Bay Street, but both the left and the right of the political spectrum are aware of the problem. I do not often quote David Frum, but he had the issue quite well nailed when he stated:
Equality in itself never can be or should be a conservative goal. But inequality taken to extremes can overwhelm conservative ideals of self-reliance, limited government and national unity. It can delegitimize commerce and business and invite destructive protectionism and overregulation. Inequality, in short, is a conservative issue too.
For those who think that tax cuts or market deregulation are the be-all and end-all both in industrial policy and in addressing the issues of income inequality, I would encourage them to read Mr. Frum's thoughts in his article on this matter. Those, of course, on the Liberal side see social equality as a goal in and of itself. Regardless of where one finds oneself on the political spectrum, if Mark Carney says we have a problem, then we have a problem.
Lack of opportunity leads to a sense of hopelessness and a withdrawal from the basic grease that makes society function. If it can be observed that people do not participate in NGOs, charities or various social functions, et cetera—and that has been observed in the literature—then the core of our social fabric starts to fray.
This, in turn, leads to some forms of anti-social behaviour, not necessarily among those who do not participate; increased criminality, which is a draw on the resources of the state for security; and other forms of cost. In other words, costs go up, cohesion goes down and frustration runs rampant.
The policy-thinkers on both left and right recognize the importance of designing policies that respond to these issues. To carry on with my theme of our being blessed with very able civil servants, I will quote the deputy governor of the Bank of Canada, Tiff Macklem:
Markets work better than anything else. They have proven over time to be the best generator of prosperity. But markets need to be guided by sound policy frameworks with clear rules that must be enforced with consistency and transparency. Effective inflation control, combined with well-regulated financial systems, are critical ingredients to sustained economic growth and shared prosperity.
The forces of globalization and technological change that have propelled global growth and driven rising inequality within many countries are not likely to abate. We need to harness these sources of growth while increasing opportunity for all our citizens.
That is not exactly what one would expect from a deputy governor of the Bank of Canada. It is an insight into the fact that not all of the people can hoard the wealth.
I would point to, as well, this month's Atlantic Monthly, which has a discussion about the issues of capital ratios. I know that will put a lot of people to sleep, and my colleague from Kings—Hants is snoring as we speak.
The issue is: In the great recession, what precipitated that? Was it capital ratios or was it incentives? The author argues in the article that we had the wrong incentives, particularly in the United States, but not so much here. However, we had the wrong incentives.
The capital ratios, how much capital we have to keep compared to how much money we are lending, were not all that different from historical norms. However, we had the wrong incentives.
The wrong incentives were essentially greed incentives. People who are brokers have to do the churn because their income is based upon the churn. People who are CEOs have to make that quarterly dividend or they are out the door. The market has a responsibility and so also do governments.
It is not as if the governments, and by that I mean both Liberal and Conservative governments, have been unaware of this issue. I remember when I was in finance, we worked on the working income tax benefit. It was probably one of the most intellectually intriguing but also intellectually challenging issues. I remember sitting around the finance table, trying to grapple with this as we would try to move it into the budget.
I am pleased to see that in fact the momentum of that initiative has gone forward with the current government. The universal child tax benefit was another issue dealt with. Again, it is an attempt to recognize not only the benefit of bringing children into the world and the costs of raising those children but also the social inequality that comes from parenting. The Canadian child tax benefit, as well, is a less subtle way of dealing with that issue.
As I finish, I want to urge all members to support the hon. member for Kings—Hants in his quest or attempt to address issues of income inequality. I think it is a worthy motion. I think it is a thoughtful motion. I think it would be worthwhile to refer it to the finance committee and report it back to this House.