Mr. Speaker, today I begin my speech with an admission that I was wrong. When the finance minister presented his budget in the spring and said he was going to add $113 billion in new debt, I thought that not even this profligate group of overspenders could achieve something so monumental as that. I went out and said they were simply trying to inflate the numbers so they could come back later and say that it was not as bad as they had said, that they had beaten their outrageously terrible expectations. Today, I admit I was wrong. Not only are they adding every bit as much debt as they said they would, but they are adding even more.
I am here today to talk about the enormous debt and the higher taxes they are burdening Canadians with. However, before I do, let me address the logic on which they base all of that debt and spending. That logic is that if we borrow enough and tax enough, we can use the money raised to stimulate enough economic activity that they will be able to pay it all back from. To paraphrase Winston Churchill, trying to borrow and tax our way to prosperity is like trying to lift ourselves into the air by standing in a bucket and pulling up on the handle. Every bit of force upward on the handle is matched by increasing force downward on the bottom of the bucket. As a result, we do not get anywhere, even though we expend all kinds of energy doing it. That energy of course is represented by the monetary value of all the taxes and debt the government is adding to the burden of Canadians.
Let us review the facts. In the last election, the Liberals promised $26 billion worth of deficits over their mandate. Today's numbers show that the total debt accumulated over their mandate will be more like $143 billion. They are not tripling their deficit projections. They are actually quintupling the amount of deficit they promised they would burden Canadians with during the last election.
They said the annual deficit would be $10 billion. We now know it will be $30 billion. They said in the budget that there would be a $6 billion contingency fund. Remember, the budget was only in spring. They added a $6 billion contingency in spring, and in fall, they have already blown it. In fact, they have eliminated that contingency for the rest of their mandate. Let me quote from the former parliamentary budget officer. Kevin Page said just today, “We lost the contingency…. Now it’s gone, we spent it. And we have this $130 billion of additional debt”. A government creates a contingency and blows it within six months.
Finally, they said their budget would be balanced within the mandate, that there would be small, short-term deficits in the early days of a Liberal government, but by the time Canadians go back to the polls in 2019 they would have a balanced budget. Now we have a document before us today, presented by the finance minister, which does not even promise to balance the budget, ever. There is not even a target date to return to balanced budgets. The furthest date out for which we have any numbers is 2021-22. In that year, they are still projecting a $14.6 billion deficit. That is what they project now, without any additional spending they will add in the next five budgets. Does anyone believe that in the next five budgets, the next four budgets, the next three budgets, the Liberal government will add no new spending at all? If the Liberals did not add any new spending, the best we could hope for is that in 2022 we would still have a $14 billion deficit. That is the track they have put us on, and for what?
They told us that all of this spending was going to stimulate the economy, that all the money would go into our neighbourhoods and communities, and that people would spend more and build more and hire more and there would be more growth and more hiring. What has happened?
According to these documents, growth is actually down since this deficit spending binge began. In the last year, since the Prime Minister took office, we have not seen the creation of one net new full-time job. In fact, it is worse than that: 6,000 fewer people are working full-time than when the Prime Minister took office. There are 20,000 fewer manufacturing jobs, despite a low dollar. That runs against the expectations of everyone: the Bank of Canada, the finance minister himself. I even believed that despite the government's policies, a low dollar would mean a resurgence in manufacturing, but 20,000 fewer people work in that sector today. That does not even touch on the 40,000 fewer jobs in our energy sector.
The blue collar working family in this country is being clobbered right now. They have been devastated, despite the fact that we have a government that claims that its deficit spending is specifically designed to create jobs for those very people.
We have added more debt. The Liberal government has increased taxes on the people who create jobs, and the Liberals are spending money they do not have on things that we do not need. The result is that fewer people in Canada are working than when they took office.
They will claim that it is not their fault, that it is all external factors that led to these terrible outcomes. Well, they cannot blame it on the previous government, because the numbers I am citing are all numbers that come from the year in which the current government has been in power. Nor can they say that it was just the trajectory of things when they took office. According to the parliamentary budget officer's report, the last five years of the previous Conservative government saw an average annual net increase in jobs of 200,000, and almost 100% of them were full-time.
We have seen about 100,000 jobs created in the last year, and 100% of those are part-time. As I said at the outset, there has not been a single net new full-time job created in the country since the Prime Minister took office.
They cannot blame it on a faulty trajectory, where things were headed in a bad direction and the Liberals inherited it and are trying their best to turn it around. In fact, the trajectory was in the opposite direction. There had been over one million net new jobs created in the last six years of the previous Harper government, and under the current government, there has been no full-time job growth. Nor can he say that it is just the way things are going around the world. The trend line of Canada's job growth is worse than in the United States, the G7, and the OECD, according to the parliamentary budget officer's recent report. As a nation, we are underperforming compared to our peer group over the last year. Job creation was chugging along up until the Prime Minister took office, and then it slammed straight into a brick wall.
However, I do not want to be strictly negative, because I believe that there is nothing wrong with Canada that cannot be cured by what is right with Canada. What is right with Canada? Our entrepreneurs are right with Canada. They are the ones we know will generate the jobs Canadians need. Scotiabank came out with a report just two weeks ago demonstrating that basically all the job growth Canada saw in the previous half decade was from small and medium-size enterprises. How can we empower them to further create opportunities for our people?
First, we can honour our commitments to them. The previous government announced reductions in the small business income tax rate. The Liberal Party said it was a great idea. They were going to put it in their platform. When they took office, they cancelled those tax cuts. There is still time to do the right thing, get back on track, and reenact those tax reductions so that our job creators have more money with which they can hire.
Second, we can lower the cost of hiring. How can we do that? We can cancel planned increases to payroll taxes. Payroll taxes by definition are an increased cost in hiring.
In fact, a briefing note supplied to the finance minister when he was in the development phase of his planned CPP payroll tax increase said that such an increase would do two things. One, it would make it more expensive to hire, and two, it would make it less rewarding to work, and the combined impact of these things would lead to less employment. It makes sense. Tax hiring and work, and there is less hiring and work.
The positive corollary of that is that if we cut taxes on work and hiring, there is more work and more hiring. That is what we propose the government do.
There is still time, before all these new payroll taxes kick in, to cancel them and proceed with reductions in employment insurance premiums, which had been budgeted by the previous government. It was a major reduction from about $1.80 on $100 earned to $1.40, which is a very large reduction. It is a 20% reduction in the EI payroll tax. That reduction would help small businesses afford a larger payroll. More of their money would be dedicated to paying wages for hard-working people and less would be for paying government. I think we all agree that working-class employees are more deserving of that money than are the voracious appetites of government.
Cutting payroll taxes is a second hopeful idea we can pursue to empower our entrepreneurs to hire more.
Third, we can continue to reduce red tape. Under the previous government, we brought in something called the red tape reduction action plan. That found that there were 400,000 rules the federal government alone was imposing on small business. Let us imagine that. We eliminated 80,000 of those rules. We systematically got them out of the way working with business groups, like the Canadian Federation of Independent Business.
We relieved much of the federal paper burden, but there is still more work to be done. I pledge to work with the government to do it. Let us all commit to relieving businesses of the burden of paperwork so that they can spend all their time creating jobs and delivering the best possible products at the lowest price to Canadian customers.
Those are the things we can do to empower our small-business job creators, who we know are going to supply the jobs that young people, the impoverished, and disabled workers are going to benefit from in the future.
In addition to small business, we can change our tax and benefit systems across this country to make work pay. In various jurisdictions of this country, if people leave social assistance to get a job, they are actually worse off. They end up paying more in tax and losing more in clawbacks than they gain in wages. It is, in effect, having a tax rate of over 100%.
The NDP leader said that it was legalized theft for wealthy Canadians to pay more than 50% of their income in taxes. Frankly, I believe that no one should pay more than 50% in taxes, but most of all, we should never accept the idea that a disabled person or an impoverished person would lose more than 100% of what they gained from working. That is an effective tax rate of over 100%. It means that people are better off financially if they do not work, yet that is the case for literally thousands of people across this country, depending on their particular jurisdiction. The combined burden of federal and provincial clawbacks and taxes punishes work and makes it impossible for people to escape from the poverty trap governments set for them.
I think we, all of us, need to put aside any differences we might have in party line or level of government to solve this problem once and for all. We are currently studying this very problem at the human resources committee as part of an overall study on poverty. Our principle objective there should be to find ways to make work pay.
Finally, another hopeful idea that would help create more employment is to stop spending money we do not have. We know that increased debt only drives away investment, because it creates an impression of fiscal difficulty, and it signals not only to Canadians but to the world that there will be higher taxes down the road.
Everyone knows that debt today means taxes tomorrow. Whatever we borrow, we have to pay back, plus interest, so why spend money we do not have? Doing so is not only fiscally irresponsible, it is cruel. Every dollar we spend that we do not have will have to be taken away from a much-needed program or taxed away from a deserving worker or small business person down the road.
Let us get our spending under control. Return to the balanced budget we had just a year ago so that we can lead the world again as a beacon of fiscal responsibility and investors from around the world can come to create jobs and opportunity for our people.
At the end of the day, we have to recognize that government cannot give people anything without first taking it away. There is no free money. There is no money tree. There is no source of dollars the government has that no one else has. It only gets money from the people who work hard and pay taxes.
At the end of the day, these are the people for whom we should work and fight every single day in this House of Commons. They are the people who pay the bills, who take care of their families, and who build our communities. If we leave a dollar in their pockets, they do more and better with it than politicians and bureaucrats could ever do.
I take that message of hope, of opportunity, of free enterprise to our friends across the way in the government and ask them to embrace these ideas, which we know work and which we know can make our country stronger and better for the future.