Mr. Speaker, it is a pleasure for me to join this important debate on the government's fiscal update and the fiscal policy of the government in general.
To be frank, there is a lot to sink one's teeth into in terms of objections to the government's direction. I can say, having just come back from constituency week and having spoken with constituents in my riding, that people in Alberta, but I think across the country, are being hit very hard by the policies of the government.
As I think through it and talk to business leaders, I am reminded of the fact that every single tax they pay is going up. Small businesses in my riding face a higher small business tax rate as a result of the fiscal policy of the government. They face a carbon tax, a carbon tax brought in by the provincial government but which the federal government will do everything it can to prevent any subsequent provincial government from repealing.
We have the elimination of the hiring credit for small business. Bill C-26 would raise payroll taxes that individual employees as well as small businesses would pay. There is the undoing of employment insurance reforms, which would, in the long run, force up employment insurance premiums. Of course, small businesses are facing higher business tax rates in general from the provincial government and are grappling with the minimum wage hike and other changes that are happening, and there still has been no serious effort when it comes to market access for our resources.
We have a government that is hitting businesses again and again and again. The reality is that these are the job creators in our economy. These are the people whose investments and ingenuity create jobs and opportunities for our country. I just went through the list, objectively, of things that are happening to businesses in my riding, and I have to say that I find the continuing optimism and the continuing desire of business leaders in my constituency to move forward and build truly inspiring. The government should be there to try to help them succeed, not make their job more difficult when it comes to creating jobs and opportunities.
I will mention one specific thing in this fiscal update, and that is the implementation of certain regulations with respect to credit unions. There are credit unions in my constituency. The application of one-size-fits-all regulations, perhaps designed for the big banks, to every small credit union is a huge red-tape burden. Again, we have a government that is not listening, that is not paying attention to small businesses. This deals with one specific sector of the economy, credit unions, but it is another example of how the government is simply out of touch with the needs of the job creators in our economy.
Moving beyond that, I was to talk about two general points: deficit spending by the government in general and the issue of the employment insurance changes contained in this fiscal update.
The government's approach to deficit spending is, yes, to run deficits, but it is more than that. It is to undertake a policy of constant structural deficits. This is very different from the traditional arguments made for deficits. There are, I think, good arguments for running deficits in certain situations. The basis of that would be the Keynesian economic principle of counter-cyclical government spending, a government doing more spending during times of economic challenge to offset the pullback happening in the economy as a whole and then the government pulling back and running surpluses during times of economic prosperity.
The importance of this is that the government is providing that stimulus for economic activity during relatively difficult times but is still balancing its budget over the long term. It is still in a position, in the long run, to balance its budget. I think we should all accept that we have to balance the budget in the long term. We cannot constantly, over a sort of forever time horizon, spend more than we have. Eventually, the capacity to borrow will run out. There is nothing wrong with running deficits in certain situations, provided that we intend to balance the budget over the long term.
When we talk about stimulating the economy, the important thing is that it needs to be in times that are relatively less good. Of course, even during good times, there will be people who are struggling. There will be people without jobs. There will perhaps be a desire to increase growth. However, if the government always spends more than it has in good times as well as bad times, then eventually, it is going to run out.
The government talks about stimulus, but it is really abusing these arguments, because its position is not that the government can do counter-cyclical spending at certain times to stimulate the economy. Rather, its position, stated by the finance minister, is that we can just run deficits all the time. The finance minister responded to a question I asked earlier during committee of the whole about whether the government would ever balance the budget. He would not say yes to that very simple question.
If we look at what is happening in the economy, the government is constructing arguments that are entirely resistant to the evidence. If things are going well, Liberals will say it is an indication of the fact that they can spend more. When things are going poorly, they say that they need to spend more. Every situation, good or bad, every data point, in their minds, is proof that they need to constantly be spending more money. Of course, there are limits.
Although Canada has a relatively low federal debt-to-GDP ratio, our total government debt-to-GDP ratio, which includes what the Kathleen Wynne Liberals in Ontario are doing and other spending programs of provincial governments, is comparable to countries like the United States and the U.K. It is important that we look at the total debt-to-GDP ratio, because in Canada we have relatively more public services provided at the provincial level than we do federally. For the federal government to say that it has lots of room to run deficits just is not true, because it needs to look at the overall debt-to-GDP ratio.
We see in this fiscal update the government making promises to people, increasing spending, and announcing the indexing of the new child benefit program. The Liberals are just not dealing with real money, because they are making promises into the future that are not costed, and that, in the long run, they should know they will not have the capacity to do. I think it is wrong to promise people that the government is going to spend money on things it knows it does not have the capacity to. When it has this kind of policy, when it undertakes government spending and assumes that it can run deficits forever, what it leads to eventually are significant cuts. The benefit of running surpluses during relatively good times and stimulating deficits during relatively less good times is that the government is able to spend more during challenging times, whereas countries that have consistently spent more than they have find themselves during bad times also in a position where they are forced to cut spending before they go off the fiscal cliff. That is the situation of some countries in Europe. We know that this has happened. We do not want to see Canada go down this road.
Just to complete blowing a hole in this stimulus argument, if we look at government spending, it is not targeted or temporary stimulus spending. Liberals are instituting what they would like to propose as permanent new social spending. They are proposing spending that is not targeted to economic stimulus. It is permanent new promised spending, a promise they know, or should know, simply cannot be kept.
I will conclude with a few comments about employment insurance reforms. In the last government, we brought in some very sensible reforms for employment insurance. Under new rules we brought in, it was expected that individuals would be actively involved in a job search to receive benefits. That is a reasonable requirement. We worked to define suitable employment in a way that said that even if individuals could not find exactly the same job they had before, there should be a broader definition of suitable employment but also that the government should provide more help to people in terms of finding jobs. We instituted a stronger system of providing job information to people who were seeking jobs.
It is important that individuals be actively involved in a job search when they are on employment insurance, that employment insurance be a meaningful insurance system, and that it be designed to help people get back to work, not something that can be constantly relied on year after year. I think that is a sensible way of structuring the program. The government, in undoing those employment insurance reforms, is creating additional costs for small businesses as well as for individuals, because everyone has to pay into that EI fund.
Therefore, if we take away those reforms to encourage job search on the payout side of it, then we have to increase the burden on those paying into it. This has a real cost for the creation of jobs and for people who work in our country. I prefer a policy that makes it easier for people to get jobs, not one that cuts back on jobs.
This is the wrong direction for our country, and I will be voting against this.