Mr. Speaker, I will begin by saying that I will be sharing my time with my colleague, the member for Windsor—Tecumseh.
We are debating a Conservative opposition motion, which I am pleased to comment on given my role as the NDP's finance critic.
The motion states:
That the House: (a) thank the independent non-partisan officials from the Department of Finance for their hard work and evidence-based analysis;
We totally agree with that.
The motion continues as follows:
[That the House:] (b) acknowledge their most recent Fiscal Monitor which informed Members and Canadians that, for the period from April to November 2015 of the 2015-2016 fiscal year, the previous government posted a budgetary surplus of $1.0 billion; and
We agree with that. That is what the “Fiscal Monitor” says. We could even add our congratulations to the team at the “Fiscal Monitor” for all the work it has accomplished, and not just for the most recent issue.
Finally, the rest of the motion states:
[That the House:] (c) concur in its conclusions and express its confidence in the Deputy Minister and his team.
We have no problem with that either because that is what the “Fiscal Monitor” says. The report is prepared by the Department of Finance, and we have no trouble believing that in November 2015, there was a surplus of $1 billion.
I might as well propose an amendment asking the House to recognize that the sun is yellow, the grass is green, and the sky is blue, because those are facts one would be hard-pressed to deny.
I feel like we are kind of wasting the House's time today by talking about something that we all agree on. We have missed a good opportunity to debate issues that really matter to Canadians on their behalf.
However, since I have speaking time, I would like to talk about how the Conservatives got that number. There may have been a $1-billion surplus in November 2015, but there is no guarantee that there will still be a surplus at the end of the 2015-16 fiscal year. Actually, knowing whether we will have a surplus or a deficit at that point is pretty important.
We should also remember that the government posted a surplus in November 2011 because it sold at a loss the shares in General Motors that it had purchased in order to help save the auto industry. We spoke out against this sale at the time.
The government in power at the time sold 73.4 million shares for $3.3 billion. A portion of that was obviously recorded in each part of the fiscal year. It was recorded as income from the sale of shares, and only the sale of shares, putting the Conservative government not in the red, but in the black, and it was solely this exercise that made it possible.
We could add that the government continued to dip into the employment insurance fund, which was supposed to be used to help unemployed workers who needed it. It was also included in the final report on the government's consolidated revenue fund. The employment insurance surplus was used to put the government in an overall surplus.
Notwithstanding the issue of employment insurance, the sale of GM shares is the one and only reason why there is, or at least there was in November 2015, a budget surplus on the books.
However, the shares were sold at a loss. The sale was condemned not only by the opposition parties, but also by a number of financial analysts for being made at the wrong time.
I am referring to comments by financial analysts such as John Stephenson, who was the president and CEO of Stephenson & Company Capital Management.
He said:
If you look at GM, it’s grossly undervalued relative to other global automakers.... I think you could easily squeeze out another $6 to $7 per share in the next 12 months or so, so you’re leaving a fair bit of money on the table if you believe that.
In its rush to claim a balanced budget for 2015-16, the government at the time sold our GM shares at a loss, even though it had apparently been advised to wait, hold on to these shares, and sell them at a book value that was beneficial to the government.
In order to break even on the purchase and sale of the GM shares, the government would have had to sell the shares for $4 billion in total, in Canadian dollars, of course.
The sale totalled $3.3 billion. At the end of the day, the government ended up with a net loss. The shares were sold at a loss, and the whole thing was nothing but an attempt to balance the budget in their last year for purely political reasons. The budget was balanced in November 2015, but it may not remain balanced at the end of the fiscal year in March 2016.
In addition, the Auditor General issued a report in November 2014 regarding the sale of the GM shares and, especially, the GM bailout. He said that the government was lax in requiring accountability for how the amounts were spent and how the money was used to bail out GM and also Chrysler. I will not go over the entire report, but there was one thing in particular that blew me away at the time and still does. I am talking about the $4 billion that the federal government gave GM to save or strengthen the GM pension plan. GM used $1 billion to save or strengthen the U.S. pension plan. This means that $1 billion of Canadian money went straight to the United States. There was no oversight at all by the government, no call for accountability.
As a result, the Conservatives are trying to win political points with a motion like this one. It is ill-advised, but we cannot help but agree with it, since it sets out some fairly obvious facts. The truth is that the motion is an attempt to draw attention away from the government's mismanagement of the GM and Chrysler bailout, its failure to require accountability, and the political decision it made later to quickly sell shares in order to artificially balance the budget, as we can still see on the books today.
Does that mean that the current Liberal government is off the hook? Not really, because the Liberals will have a serious challenge to face with the upcoming budget. During the 2015 election campaign, the Liberals promised to run deficits. Many Canadians think that those deficits will be incurred only for infrastructure, but that is not the case.
The Liberals promised deficits of approximately $25 billion over the next four years, with a return to a balanced budget in the fourth year. That is completely unrealistic, given the way things are now, the economic and fiscal update, and particularly the parliamentary budget officer's December 2015 report. When we take those things into account, the Liberal government is currently facing an accumulated deficit of $55 billion at the end of four years, including an $11-billion deficit in the fourth year, because of the promises it made and the current economic climate. That could happen if the Liberals keep their election promises, and it reflects the fiscal framework they presented during the election campaign.
I want to say that during the election campaign, the Liberals themselves probably promised too much in relation to Canada's fiscal capacity. At that time, we were extremely cautious with our forecasts, because we knew that the Canadian economy might be facing a struggle. That is why we wanted to be careful about what we promised. That is not what the Liberals did during the election campaign. They were elected based on all the changes they promised to Canadians, so now Canadians want to see some results, including the reversal of the Conservative reforms to employment insurance, as promised, or the reopening of certain things that were closed by the Conservatives. One example would be the marine radio communications centres. The Minister of National Revenue, who is also the member for Gaspésie—Les Îles-de-la-Madeleine, promised to reopen the marine communications and traffic services centre in Rivière-au-Renard, which does not appear to be one of her government's priorities.
We are taking notes. Obviously, we are going to be watching closely and we will carefully study the Liberal government's upcoming budget. We will be here to make sure that the government keeps the promises on which it was elected, because many of those promises were similar to promises and commitments that we had also made. I can assure the House that we will be here to hold the Liberals to account when the promises that got them here are not honoured.