Madam Speaker, the new Liberal government promised greater transparency, economic responsibility, and growth for the middle class. While these are laudable goals that those on the Conservative benches certainly share, budget 2016 falls far short of these aspirations.
Despite aiming to boost GDP growth, budget 2016 introduces measures which are either unrelated to growth or actually hinder growth. Despite its self-described goal of growing the middle class, budget 2016's deficits form a burden upon the middle class. Despite claiming to promote accountability, budget 2016 is built of broken promises.
Let me begin with the effect of the deficit on Canada's debt-to-GDP ratio.
During the 2015 campaign, among a litany of other promises, the Liberals offered to run a modest deficit while lowering Canada's debt-to-GDP ratio. The deficit has since ballooned from the surplus that the Conservatives left and has gone right through the promised so-called modest deficit of only $10 billion. Meanwhile, the debt-to-GDP ratio has risen to a projected 32.5% in 2016.
This brings me to two more broken promises.
Contrary to its promise to return to surplus by the end of its mandate, the government is projecting deficits right through 2020. Not only does this break the promise of an eventual surplus, it breaks the promise to run modest deficits of only $10 billion. Every single year in the government's term, it projects a deficit of well over $10 billion.
While calculating the deficit, the Liberals appear to have deliberately understated GDP growth estimates by $40 billion. By setting such a low baseline against which to measure future progress, the government is engaging in financial trickery. Even the Parliamentary Budget Office, the non-partisan fiscal watchdog, disagrees with the government's projection as unrealistically low.
Instead of being transparent and easy to understand, the Liberals have set an unrealistically low starting point, perhaps in order to claim greater success than the real economic numbers support. That is confusing and deceptive. It also gives the Liberals a chance to direct higher-than-expected revenues right back into spending, instead of using them to reduce the deficit or pay down federal debt.
This number-fudging is mere political posturing. This is not prudent planning, and it is certainly not evidence-based policy.
This raises yet another broken promise, the promise for infrastructure spending.
When campaigning, the Liberals offered to run a $10-billion deficit to pay for infrastructure to stimulate greater economic growth. Indeed, this was the principal promise of the platform upon which the Liberals were elected.
Canadians could be forgiven for thinking that this promise actually meant $10 billion worth of spending on infrastructure, not a mere $3.4 billion over five years to be spent upon productive measures such public transit, which we would support. The rest of the deficit is going to various other Liberal priorities.
Not only is the spending on actual infrastructure lower than promised, but the premise of kick-starting sluggish growth has now been undermined as well.
Although the economy contracted in the first half of 2015, it grew more than the market expected in the second half of the year. The dip in early 2015 was due more to the collapse in commodity prices than to sluggish fundamentals.
Despite the government's hope, social infrastructure spending in Canada will not counteract the challenges faced in the resource sector. In contrast, not killing or stalling pipeline projects such as northern gateway and energy east would actually benefit Canada and grow our GDP. Instead, the Liberals introduced a moratorium on tanker traffic on northern British Columbia's coast, thus blocking northern gateway, which was approved under the previous Conservative government.
The Liberals are also moving the goalposts on the energy east approval process. Not only does this not improve Canada's GDP; it actually deters new investment by creating uncertainty, which is exacerbated by the Prime Minister's remarks whenever he travels outside Canada.
Speaking of promised measures that do not grow GDP, the government plans to spend $5 billion over five years on so-called green infrastructure. Other so-called green initiatives, such as working toward a national carbon tax, will directly harm GDP.
Conservatives have been warning for years that a tax on carbon dioxide emissions is a tax on everything.
Canada's long-term energy needs are not addressed by pushing for carbon taxes and subsidizing unreliable renewables such as wind and solar, which require 100% redundancy for cloudy and calm days. A prosperous and sustainable economy requires abundant, clean, and inexpensive energy.
I would like to remind the government that pipelines are infrastructure too. Indeed, they are the best kind of infrastructure. They produce many well-paying and highly skilled jobs, they are financed by private money, and they address a pressing need in both the short and the long term.
If the government wants to kick-start more economic growth, I encourage it to facilitate these pipeline projects without further delay.
I will move on to another means of stimulating the economy. One of the best ways to grow GDP is to encourage small and medium-sized enterprises to expand. One of the best ways of attracting new small and medium-sized enterprises and encouraging existing ones is through reasonable corporate tax rates.
The government says that it understands this, but it is not acting on it. On page 254 of the budget, the government acknowledges that corporate tax cuts produce the strongest economic growth in the long term, yet the Liberals are breaking another campaign promise, their promise to lower the small business tax rate to 9%.
It is fundamentally dishonest for a party to promise a deficit to fund infrastructure in order to boost GDP and then direct most of its new spending to unrelated measures, all the while taking steps that actually impair growth.
Such dishonesty puts the lie to another Liberal promise, that of more open, accountable, and transparent government. The new Liberal government repeatedly boasts of its plan to be open and transparent. However, it is taking steps that directly contradict this lofty aim.
Upon taking office, the government immediately stopped enforcing the First Nations Financial Transparency Act. Canada's indigenous peoples receive much in the way of federal funding, but they no longer have a legal claim to information on how their chiefs and councils spend it.
The Liberals plan to spend just over $2 billion on social infrastructure in indigenous communities with no accountability to the residents. My Conservative colleagues and I recognize that there are many issues in indigenous communities that the government can and should address, such as the boil water advisories, which are a national disgrace. We support tackling such problems, but we also know that fixing a problem today with no accountability for tomorrow means fixing it again in the future.
I will continue to an issue of vital importance for Canada's democratic future.
On page 209 of the budget, the government has set aside $10.7 million over four years for outreach and awareness regarding electoral reform, but there is no money for a referendum. Shall we expect funds for a referendum in a future budget, or is the government planning to change the way Canadians select their representatives without directly asking them? Open and transparent government demands putting such a pivotal question to the voters.
I will move on to one last point about transparency.
The Liberals made several commitments in their 2015 election platform that will cost a great deal to implement, but those commitments have not been included in this budget. How are Canadians to know what their government plans to spend when it comes to implementing all of the recommendations of the recent Truth and Reconciliation Commission without having calculated the cost? How can Canadians know what the deficit or surplus will be in the coming years when the government is faced with negotiating a new health accord with high-taxing, high-spending provinces?
Will the government reduce spending to accommodate these new expenses? Will it saddle future generations with higher taxes by borrowing to fund them, or will these be just be additional broken promises?
To conclude, budget 2016 demonstrates one deception after another. It demonstrates that the government misled Canadians in the 2015 election campaign on the purpose of running a deficit, the course such a deficit would take, the effect of a deficit on Canada's debt-to-GDP ratio, the efficacy of the measures the deficit was incurred to fund, and the commitment to openness and transparency. Budget 2016 is a budget built of broken promises.
