Debates of May 30th, 2016

Finance — Main Estimates 2016-17

[Bill Morneau, Liberal, Toronto Centre, ON]

Madam Chair, I am pleased to answer the question on the Canada pension plan. It is a subject that we believe is critically important. We recognize that Canadians have not been saving enough over the last number of years, that while there are many Canadians who are on track to a successful retirement, an increasing number of Canadians are not.

That is the reason that we are focused on how we can enhance the Canada pension plan. That is a co-operative effort with provinces and something we are working toward as we speak, trying to find a solution that will enable us to improve the Canada pension plan for the next generation. Should we be successful in that regard and I am certainly looking forward to being successful, we do hope that Canadians will save more money together with their employers so that they can find themselves in a better situation.

In my estimation, that will help the small employers and large employers to retain their employees for longer time periods because they will know that they have greater security in the future, which will allow them to focus on the present, do a better job for their employers, enhance productivity, and in the long run, actually improve our country's economic health.

[Ron Liepert, Conservative, Calgary Signal Hill, AB]

Madam Chair, I want to talk a bit about the debt that the budget is going to leave future generations of Canadians. We all know there was a promise in the election campaign by the now Prime Minister that we would run a $10-billion deficit and it would be used to build infrastructure. We now have a situation where the government is putting us $30 billion in debt as a result of the budget and that the $10 billion in infrastructure that was promised by the Prime Minister is now spread over two years.

I would like the finance minister to explain how the numbers do not add up. How can we go into debt to the point of $30 billion when only $10 billion of that is infrastructure money that is going to be spread over the next two years?

[Bill Morneau, Liberal, Toronto Centre, ON]

Madam Chair, I would like to start by talking about debt that was left us by the previous government, the tens and tens of billion dollars worth of debt that was left us. We find ourselves in the situation where Canada is significantly more indebted today than it was when the previous government took power. I will remind the member that the Conservatives started off with a surplus left to them by the previous Liberal government. They quickly eroded that surplus and turned it into a deficit. At the same time, they also brought us into the lowest growth era that we have seen in decades.

Therefore, here is what we have from them. We have a significant increase in debt with nothing to show for it other than the lowest growth rate in eight decades. That is an unfortunate reality and that is what we face right now in terms of what we are trying to do. That position has led us to say that we need to make significant investments in the future, which is exactly what we have embarked on doing. There will be more details coming later this year.

[Ron Liepert, Conservative, Calgary Signal Hill, AB]

Madam Chair, he still did not answer the question about infrastructure spending. I also want to remind the minister that the surplus that was left when the Conservative government took office was because the previous Liberal government cut transfer payments to the provinces to the bone.

I want to ask the minister if he has the same kind of plans to cut the health transfer payments below the current plan levels?

[Bill Morneau, Liberal, Toronto Centre, ON]

Madam Chair, we are pleased to announce that this year, in this budget plan, we will be having the largest amounts of transfers to provinces in health in the history of our country, over $36 billion. That is an important measure.

That, of course, includes the amount that we are transferring to the territories, as well. That is an important measure.

We do recognize that we will need to work together with the provinces to enhance our economic growth, but a foundation for that is to ensure that they are in a good position in their health care budgets.

[Ron Liepert, Conservative, Calgary Signal Hill, AB]

Madam Chair, I would like to remind the minister that the reason the transfer payments are the highest ever is because the previous Conservative government raised them to the highest level.

The members can clap for that particular minister's comments, but what they are really doing is endorsing what the previous Conservative government has done over the last 10 years.

I would like to ask the minister—

[The Deputy Chair, NDP, Carol Hughes]

In order to hear a response to that, there is 15 seconds left.

[Ron Liepert, Conservative, Calgary Signal Hill, AB]

Madam Chair, I would like to ask the minister if he has any forecast for implementing all the recommendations of the Truth and Reconciliation Commission.

[Bill Morneau, Liberal, Toronto Centre, ON]

Madam Chair, I would like to reiterate what I said in the last response, which is this budget year, budget year 2016-17, will have the largest ever transfers to provinces for health.

[Julie Dabrusin, Liberal, Toronto—Danforth, ON]

Madam Chair, it is my pleasure to address the committee of the whole regarding the initiatives of the department of finance. I intend to speak for about 10 minutes and leave five minutes or so for questions.

I am going to tell you about two pressing concerns for the residents of Toronto—Danforth. The first is income inequality, and the second is the different effects that poverty has on women and men and how the government is working to address those major concerns.

When I was back in my riding during our various constituency weeks this spring, I had the opportunity to knock on doors and visit community centres in all of the neighbourhoods that make up Toronto—Danforth.

Our government tabled budget 2016 back on March 22. Since that time, I have been having conversations about the work that we are doing here. I have been speaking to people about how we are legislating in Ottawa to help Canadians lead prosperous, healthy lives.

As part of my constituency work, I visited some buildings, social housing projects, and apartments rented to people with low incomes. I met families that can barely make ends meet because of the high cost of living in Toronto. Many of them have just arrived in Canada and are learning a new language and culture, different from those they grew up with in their home country. Many of them have children, but some of them live alone. These Canadians are having a hard time. They are living in poverty and do not have many of the things that we take for granted because they cannot afford them.

Large and important community groups and organizations are working in my riding to help the less fortunate improve their situation. For example, the St. John the Compassionate Mission provides food and programs to many people in difficulty. The bakery next door employs people who would otherwise be marginalized and unable to work.

There is also the Eastview Neighbourhood Community Centre, which offers family drop-in programming, after-school activities for children, and extensive newcomer orientation services.

WoodGreen Community Services also has a large presence in our community. They do important work helping people find affordable housing, get jobs, or improve their employability through various training programs. They even run a special program for single, female-led families who are having a hard time finding a place to live and a job. This program puts women through college, while housing them and helping them care for their children.

I would also like to mention the innovative and award-winning Classroom Connections, which is headquartered in my riding. This organization develops educational programming for schools and youth across the country. It has designed resources for indigenous youth to help reach out to them and provide them with skills training.

Another organization that works toward helping alleviate some of the gender inequalities that are inherent in poverty is Newcomer Women's Services Toronto. Based in Toronto—Danforth, this important organization has been providing help to newcomer women for more than 30 years. It is there to provide employment, skills development, and settlement services for women. This empowering place is an important initiative that helps address the challenges women in particular face.

Similarly, the Massey Centre helps pregnant and parenting adolescents. This centre, which is located in Toronto—Danforth, helps vulnerable young mothers who are looking for the emotional, social, and economic help they need to raise their babies. The centre recognizes that young mothers face serious challenges, and it focuses on making women autonomous and independent by offering high school courses and helping them learn other skills.

The Canada child benefit will have a direct impact on these young mothers.

Our government's Canada child benefit is one tool we would use to fight poverty and income inequality. This simple tax-free benefit would be directly targeted toward low- and middle-income families. Many of the families getting this benefit would see an average increase in child benefits of almost $2,300 in the 2016-2017 benefit year. The hope and aspiration is that the Canada child benefit would help lift some 300,000 children out of poverty this year alone.

Nine out of 10 families will receive more money with the Canada child benefit than they are currently receiving.

Since this money does not come in the form of a tax credit, for which they must first spend money in order to benefit, every family that receives a benefit will be able to take advantage of it.

The Canada child benefit is an example of this government's commitment to families in need. I believe it represents one of the most important strategic innovations made in years.

It is, in short, a game changer.

Seniors and older Canadians suffer from income inequality in disproportionately large numbers. When older Canadians leave the workforce, they often find themselves living in poverty. I know this from the time I have spent meeting these seniors across my riding. I have been to teas, luncheons, and other events at seniors homes, churches, and community centres. At these important events, I have met older Canadians who tell me about their lives and the challenges they face.

Going door to door, I met many seniors living alone who have a hard time paying for their apartment or home. It is a challenge to find jobs for seniors. Well Seasoned Productions is an initiative in my riding. This entertainment company produces plays in which the actors and industry professionals are aged 50 and over. The group gives jobs to older artists and presents Canadian stories celebrating the contribution of Canadian seniors.

Our government's approach to helping seniors, although perhaps not as dramatic as that undertaken by Well Seasoned Productions, is important. Recognizing that seniors sometimes are forced to live alone and that many of those single seniors are women, our government has committed to spending $3.4 billion over five years to lift low-income single seniors out of poverty. This would be accomplished through a significant increase to the guaranteed income supplement top-up benefits.

As of July of this year, the guaranteed income supplement can increase by up to $947 a year. This increase will help the seniors who are already just receiving old age security and the guaranteed income supplement. Based on the discussions I have had in my riding, these seniors are the ones most likely to live in poverty. This investment will help protect them from economic hardship.

To conclude, I want to highlight how these initiatives would have an important gendered impact. As I have already said, the most impoverished single seniors tend to be women. They would get a direct benefit from these important changes.

Furthermore, although we know that the shape and size of families with children varies widely, there are nevertheless many female-led single-parent families in my riding and across Canada. The Canada child benefit is one very direct way that we could help these families and these women avoid economic marginalization.

I am very grateful for the opportunity to speak here today, and I am very pleased to be able to ask the Minister of Finance some questions.

I would now like to ask my first question.

Could the minister walk this committee through the plans to provide more funding for affordable housing and the retrofits to existing affordable housing units?

This is a big issue in my riding, because we have many people who are in need of affordable housing. Toronto housing costs are quite expensive, as members know. This is an issue that has been forcing many people in my riding to find solutions, and they are looking to us for guidance as to how to find these solutions. What are we doing to provide affordable housing?

[Bill Morneau, Liberal, Minister of Finance]

Madam Chair, I would like to start by thanking the hon. member for her comments and for her question.

In budget 2016, we identified the issue around affordable housing as a critically important one for Canada and for Canadians across the country. We identified the fact that we wanted to make a significant investment in social infrastructure. We recognized that the infrastructure, in particular around housing, is critical.

Therefore, we laid out $3.4 billion in an infrastructure plan for affordable housing across the country. We know that will improve the situation for Canadians who are struggling to get into housing. We are going to start with retrofitting and renovating existing housing units and move forward with the building of new units, which can really make a difference for those people who are under-housed in our communities.

[Julie Dabrusin, Liberal, Toronto—Danforth, ON]

Madam Chair, my next question is about infrastructure, because that is something that comes up time and time again when I have discussions with people in my riding. There is a feeling that infrastructure has been crumbling in our city. I keep hearing that people want to see further investment to help build our country again.

I would like to know from the Minister of Finance what the effect would be of the government's infrastructure investments on Canadian families and our environment. Perhaps he could provide us with some guidance as to what he sees as the impact of our infrastructure investments.

[Bill Morneau, Liberal, Toronto Centre, ON]

Madam Chair, the investment in infrastructure is a critically important part of our plan. We recognize it is important today to get people to work, but most important to ensure we have the kind of country that provides the opportunity for people to be successful tomorrow. It is important for people to get to and from their places of work on time, as well as to get back home to see their families; for people to have the kind of affordable housing they need; for people to actually have clean water, because we need to have waste water systems that work.

These are the reasons we put a significant focus on infrastructure spending in mass transit, social issues, and waste water systems, which can make a real difference for families and Canadians in the future.

[Julie Dabrusin, Liberal, Toronto—Danforth, ON]

Madam Chair, that is very important for people in my riding. I really appreciate that answer, because infrastructure has become one of the key issues I hear about day in and day out.

However, people are also looking at Canada on a more global scale. Perhaps the Minister of Finance could assist in telling us what we are doing to bring Canada back. What are we doing to bring Canada back economically in terms of innovation? What are we doing to build a future and show that Canada is a very strong country?

[Bill Morneau, Liberal, Toronto Centre, ON]

Madam Chair, we believe it is critically important that Canada play a very strong role in the global economy as well as a very strong role as a member of the global community. We know that can start with many actions, but we decided to make the very first one bringing in a significant number of Syrian refugees, recognizing the enormous challenge refugees place on other countries in the world and knowing Canada needed to be a part of that. Therefore we brought in 25,000 Syrian refugees.

As part of the global community, we also recognize that Canada is a very desirable country, a place where people want to come; so we have made a commitment to invite 300,000 immigrants into our country this year, putting us at the forefront of efforts to allow people into our country in the global community.

We are also working together with G7 and G20 countries on both taxation issues and economic issues to make sure we can have a leadership place around the world in ensuring that we have a global financial infrastructure that works, that allows us to ensure we can play a leadership role in that regard as well.

[Ziad Aboultaif, Conservative, Edmonton Manning, AB]

Madam Chair, again I would like to remind you that the minister should be confined to three minutes of questions, answers, and remarks, as per the Standing Orders of this House.

The appointment of this finance minister marks the end of fiscal prudence and a new era of reckless spending and borrowing. When he went to the voters in the election, his party did not promise open-ended spending. Voters did not give him a blank cheque and a mandate to spend as much as he wants, for as long as he wants, on whatever he wants.

The finance minister and his party promised that their spending would be constrained and governed by a clear set of fiscal anchors. They made those promises on the campaign trail. They wrote them into their platform. They were reiterated in the finance minister's mandate letter when he was appointed.

Since he seems to have forgotten his mandate from the voters and the Prime Minister, allow me to remind him of what he was instructed in his mandate letter. It states:

In particular, I will expect you to work with your colleagues and through established legislative, regulatory, and Cabinet processes, including our first Budget, to deliver on your top priorities.

What were those top priorities that he was supposed to deliver on and include in his first budget? The number one priority in his mandate letter was as follows:

Ensure that our fiscal plan is sustainable by meeting our fiscal anchors of balancing the budget in 2019/20 and continuing to reduce the federal debt-to-GDP ratio throughout our mandate.

Apparently, those campaign promises and that mandate letter were not worth the paper they were written on, because the finance minister went straight to work on a plan that will do the exact opposite. He is operating each of these fiscal anchors, and he has completely abandoned any semblance of a sustainable fiscal plan. He started spending right away, booking billions of dollars into the 2015-16 fiscal year. He went to work writing a budget that will raise the debt-to-GDP ratio this year, not lower it. He immediately gave up on his responsibility to balance the budget. He is now planning for multi-billion dollar, open-ended borrowing every year for the next five years, with no end in sight.

The government is repealing Canada's Federal Balanced Budget Act, which would have required it to give a clear rationale for its borrowing and present a plan to bring a balanced budget. It is replacing it with nothing. Even the IMF raised concerns about this in its report on Canada last month. It knows it is dangerous when a country has no fiscal anchor.

The government is wasting Canada's fiscal advantage and saddling the taxpayers of this country and their children with over $100 billion in new debt. This is at a time when we are not in a recession and when the economy is growing. This is a time when provincial debt is skyrocketing and global financial markets remain volatile. Such an approach is completely irresponsible. He is weakening Canada's ability to deal with a major economic crisis or shock, and he continues to justify his spending on a series of arguments that are completely out of line with the facts. Even worse, he does not even seem to care.

I have some questions for the finance minister about his reckless approach to managing the finances of our country.

The minister and his government like to blame the economy for the fact that they are borrowing four times more than they planned over the next four years. How does the minister explain the fact that the PBO's recent budget analysis found that spending increases, not revenue decreases, are responsible for more than two-thirds of the projected deficits over the next two years?

[Bill Morneau, Liberal, Toronto Centre, ON]

Madam Chair, I would like to start by acknowledging that the member opposite is new to the House, like I am, so he may not have witnessed what reckless spending truly is. Reckless spending is spending on gazebos in trying to improve the economy. What we saw from the previous government was tens of billions of dollars in spending with the lowest growth that we have seen in eight decades. Our approach is different.

Since the member opposite wanted to have some quotes about what goes on internationally, I should start by mentioning the Financial Times.

I believe the way that it works is that I have as much time to respond as the questioner had for the question.

[The Deputy Chair, NDP, Carol Hughes]

The member did indicate that he was going to be posing a question, so it is from the time that he mentions he is going to pose a question. It is not from the time that he began his speech. It all depends on how it went. I did get some clarification from the clerks, and it is from the time that he said he was going to pose the question, which is what he ended up doing.

[Bill Morneau, Liberal, Toronto Centre, ON]

Madam Chair, so after I make a speech, at the end I will answer his question?

[The Deputy Chair, NDP, Carol Hughes]

You cannot have the same duration as the speech, but you can answer the question briefly, because the time is clicking by. It took the member about a minute to ask the question, so that is the amount of time you will have.

[Bill Morneau, Liberal, Toronto Centre, ON]

Madam Chair, the member opposite mentioned the IMF. It is worth stopping for a minute to say that the IMF, more than any other institution, strongly supports our approach to fiscal measures to make a difference in our growth.

I was with Christine Lagarde at the IMF meetings. I was at the G20 and G7 meetings with her. On each and every occasion at those meetings, she mentioned the measures that Canada was taking as the kind of measures we should be taking with respect to a low-growth environment.

We have been clear that we do want fiscal sustainability. We are focused on lowering our net debt-to-GDP ratio over the course of our mandate. We will do that while improving the growth rate in our economy for Canadians.

[Ziad Aboultaif, Conservative, Edmonton Manning, AB]

Madam Chair, surprisingly, we are finding another side of the story, and that side of the story does not really work with what we have in our hands. We are told that we should not worry about this borrowing because the minister's friends at the IMF think he is doing a great job. The minister does not think we need balanced budget laws either.

I was surprised when the IMF said last month, in its review of the Canadian economic situation, that it is important to know that any stimulus package should be accompanied by a credible, medium-term consolidated plan. The current balanced budget rules should be replaced by a new fiscal rule that is transparent, easy to communicate, and sufficiently flexible to avoid global cyclicality. Apparently relying on indicators of debt to GDP, the government's current preference is not good enough.

Will the minister listen to his friends at the IMF and introduce a credible framework to discipline his spending?

[Bill Morneau, Liberal, Toronto Centre, ON]

Madam Chair, I would ask that we actually pay attention to the time.

It is important when reading a report to read the entire report. The idea that we can read part of something and understand the conclusions is entirely erroneous.

In reading the IMF report, the member would come to the conclusion that any reasonable person would come to, and that is that we are taking the fiscal measures that are recommended by the IMF and the OECD in ensuring we can do something that will make a measurable difference on our growth.

We are moving forward on that plan with prudence, with a fiscal anchor that can make a real difference by ensuring that our net debt to GDP will go down over time. This is the right thing for Canada. It is the right thing for Canadians. It is going to deal with the low growth bequeathed to us by the previous government.

[Ziad Aboultaif, Conservative, Edmonton Manning, AB]

Madam Chair, I thank the minister for mentioning that. As he is claiming, we are only reading some part of the story and not the whole story. We get used to that actually, coming in the House all the time. I would appreciate if the minister could tell us when he feels he should give us some details so we can understand fiscal responsibilities and fiscal numbers properly, so we can at least have a great conversation.

Apparently the IMF is concerned about other actions taken by the government. It has been calling on governments with aging populations to raise the retirement age. That is a fact. It is happening in Europe, and I am sure the minister knows that. How does the minister square this recommendation with his recent move to lower the eligibility age of old age security? In his book, he told Canadians how good such things would be, which the PBO said would add seven years to the time it takes to pay off Canada's federal debt. I would appreciate the minister's input on this, and some good answers, please.

[Bill Morneau, Liberal, Toronto Centre, ON]

Madam Chair, I am pleased to confirm that all the answers I am giving I think are good. In particular around retirement issues, I have spent many years on this issue, and our goals are to ensure that we have retirement dignity for Canadians. We know that Canadians are all different. They have different situations. We know that for many Canadians, being able to retire at the age of 65 is something that we need. We know for Canadians who work in physical labour jobs, it is very difficult for them to work longer than that age. It is for this reason that we were very concerned when the previous government arbitrarily raised the old age security age from 65 to 67 for all Canadians, taking away an important benefit, especially for lower-income Canadians.

We are trying to deal with that issue by putting in place, not only measures around old age security that can help them, but also measures around guaranteed income supplements. It can help the most impoverished seniors. As well, and importantly, an enhancement to the Canada pension plan would deal with the under-saving of this generation and the next generation by improving that plan to help Canadians retire in dignity.