Mr. Speaker, I rise today to address one allegation sometimes made against the Liberal government and other far left governments around the world that I think is false. Some have accused governments like these of really having it in for the rich, for wanting to get tough on people who have a lot of money, and unfairly so.
Even Winston Churchill once said, “The inherent vice of capitalism is the unequal sharing of blessings. The inherent virtue of Socialism is the equal sharing of miseries.” I want to say that in this case, this very rare case, even the great Winston Churchill was wrong. Socialism and big government policies do not equally spread around the miseries to everyone. No, they spread them around in a way that is better described in George Orwell's Animal Farm. They spread them around in a manner that is equal, but equal in a special way, equal in that everyone is equal, but some are more equal than others.
The Liberal government, a government that subscribes to, to put it generously, social democratic policies, socialist policies, does not disparage those who have lots of money. Rather, it has a different view of how money should be distributed. While we on this side believe in the free market, which distributes wealth based on merit, the Liberals believe that wealth should be distributed by government, that people should be allowed to get wealthy as long as they do so through the government.
In a government-directed economy, people get rich by having the best lobbyists. In a free market economy, people get ahead by having the best product or service. We have seen this borne out.
Strategas research, a company out of the United States, did a carefully calculated correlation between the money spent on lobbying in Washington and the amount of government spending in Washington. It found that as government becomes a larger share of the U.S. economy, the number of dollars companies spend on lobbying goes up almost on a one for one basis. Why? It is because business goes where the money is, and if all the money is in the government, it invests in getting that money. It invests in getting a return by purchasing political power. When the government decides who gets what, those with money buy power and then transform that power into yet more money.
What are some of the ways one can do this? One can, for example, hire a lobbyist to get a subsidy. Company X spends $10 million on lobbying and gets a $400-million interest-free loan, a pretty good return on investment. That is how one gets a return on investment in a government-directed economy. One purchases political power and then hopes that this political power results in more money.
In a free market economy, one invests in creating a better product or service that improves other people's lives, which they buy voluntarily with their own money, and then one gets a return by making somebody else's life better. In a free market economy based on voluntary exchange, the only way to get ahead is by offering something to someone that is worth more than it cost.
Let me give some practical examples of where our friends across the way have been extremely generous to the rich, contrary to allegations that they are hard on the rich, allegations that, in fairness and in a spirit of nonpartisanship, I seek to dispel here on the floor of the House of Commons.
First, a $400-million interest-free loan was given to Bombardier, which, if it is ever paid back, will be done so on the most generous terms. Bombardier is controlled by a billionaire family that had 53% of the votes at a shareholder meeting, even though the family has a minority of the shares. They have multiple voting shares. That company could have raised more money by issuing more stock, but what would have happened then? The majority control of the billionaire Bombardier-Beaudoin family would have been diluted, and they would have lost their majority and thus their control of the company.
The Liberals bailed out the billionaires and saved their control of that company so they could continue to make decisions and pay themselves exorbitant salaries, even when they have bad results. In fact, after the government kicked in this money, the executives of the company, some of them billionaires, paid themselves a 50% increase in compensation, all while laying off 14,000 people. We now know that many of the jobs to be created in the future are going to be south of the border, and the control of the intellectual property will be in the hands of Europeans. There was no Canadian public interest in this move, it was all about helping this billionaire family.
Therefore, it is not true, and I reject the allegation against the party opposite that it is tough on the rich. That is unfair, and I reject it, and I will stand up against those who disparage the government in that way.
Then, there is the infrastructure bank. Municipalities across the country have become smart about these construction companies. For years, these companies would come in, place a bid, promise to build a bridge or a road for a certain price, and then, after they got the contract, they would come back and say, “Oops, sorry, it's going to cost a lot more than we thought and you'll have to pay us more.”
Municipalities have said that they are not doing that anymore. From now on, they are paying on a fixed price contract. It must be built for the price agreed upon and, if it goes over, the construction company will have to pay for it. That has bred discipline into the process of procurement. The government wants to take away that discipline, with loans and loan guarantees backed up by taxpayers, which will protect investors when they participate in infrastructure megaprojects. If they build a monstrous bridge, a transit project, or something else, and the project goes over budget or its revenues fall short, then that company will use the loan guarantee provided by this multi-billion dollar taxpayer-backed bank to protect them. Taxpayers get all the risk and investors get all the profit.
This whole scheme was cooked up at the Shangri-La Hotel, one of the swankiest places in Toronto. The heads of investment firms, worth literally hundreds of billions of dollars, met with ministers of this government, in secret, to craft all the terms. They decided how Canadian tax dollars would be spent. There were no consultations on this with taxpayers, the people who have to pay for it. Those who would benefit were at the table writing the policy for the government. That consultation, and the generous way with which the government carried it out, proves once again that the allegation against the government for having it in for the rich and being hard on the wealthy is absolutely false. I again dispel that false allegation.
Now we have the Asian infrastructure bank. This is a half-a-billion dollar contribution from Canadian taxpayers to a foreign bank to build infrastructure in other parts of the world. All of us at times have supported foreign aid for the world's poor, but this is not intended to help the world's poor, it is meant to help the world's rich. Wealthy investors who build pipelines—which would never get approved here in Canada—or other infrastructure in other parts of the world, would have their investments protected by $100 billion of tax money from around the world. Therefore, if those project do not meet their financial expectations, that is fine, because taxpayers from around the world will have to pick up the tab for the incompetent decisions of international investors. That is more welfare for the wealthy. In this case, it is the foreign wealthy, those who are not even in Canada.
We cannot say that this has anything to do with promoting trade links. In fact, the principal government participating in this Asian infrastructure bank, in China, has said that the purpose of the bank is to re-establish the Silk Road, the trading route from China westward, away from Canada. Therefore, the infrastructure that would be built could not possibly facilitate commerce with Canadians, because we are on the wrong side of the world to benefit from any of it. Again, the government has cozied up with the world's wealthy elite in order to provide taxpayer-funded benefits to those who have the most.
To move on to other decisions here at home, the government has decided that it is going to raise taxes. It claims it will only affect the wealthy. However, it seems that it affects everyone but the wealthy. The Fraser Institute calculated that 87% of middle-class taxpayers are paying more in tax since the government took office, on average $800 more.
We found in the first annual financial report from Finance Canada since the government's policies were implemented that the wealthiest Canadians actually paid less in the 2016-17 tax year, because they were able to successfully move their money around and avoid the tax increases that the government imposed on people.
This brings me to the conduct and judgment of the Minister of Finance. We have learned that he was one of the individuals who moved his income in order to avoid paying the taxes that he was imposing on others. He sold his shares in Morneau Shepell on November 30, 2015, which was almost a month before his own tax increases took effect. By selling his shares at that time, he paid capital gains tax under the lower rate, rather than waiting an extra five or six weeks and paying the higher rates that he said were so fair.
Putting aside whether the minister acted ethically in that matter, on principle he should have led by example. If he believed that Canadians should pay higher taxes and that people like him should pay more, why could he not have waited five weeks to make that $10-million sale, realize his capital gains in the 2016 year, and pay the same higher taxes that he applied to everyone else? He was very careful to make sure that those taxes would not apply to him.
On the same point, the Minister of Finance has huffed and puffed and said it is so unfair of us to ask him questions about his shares. However, in any public company, a corporate executive could be asked those kinds of questions at a board meeting or at an annual meeting of shareholders. In fact, corporate executives are required to publicly disclose the shares they buy and sell. If they sell them at a time that is near the release of earnings report, for example, there are lots of red flags raised, and lots of questions that they are accountable for answering.
For the minister to suggest that it is somehow unreasonable for Her Majesty's loyal opposition to demand that he explain the timing of the sale of shares that he made in the immediate lead-up to the tabling of tax documents on the floor of the House of Commons is a little rich, quite literally, coming from him.
Let me talk to both the hypocrisy of his conduct and his judgment. In the corporate world, they have something called “blackouts”. Typically, officers and directors of public companies try to avoid selling shares in the immediate lead-up to the release of earnings results. Even in cases where those results are anticipated accurately, even if the guidance issued by the company at the beginning of the quarter turns out to be accurate at the end of quarter, even if all the analysts correctly predict the earnings per share that will be released at the end of the quarter, and even if there is nothing unexpected that comes out in those earning results, it is not good form for a CEO, or another executive, to sell shares a week before those results are released. It is better form for that executive to wait until three or four business days after the earning results are released, to have no doubt that everyone had exactly the same information when they sold their shares.
The minister admitted on the floor of the House of Commons yesterday that some of the contents of the document he tabled on December 7, 2015 were confidential, that it was kept tight within a small group in Finance Canada, that those materials were sensitive and therefore could not be shared around. If that were the case, then surely he ought not to be trading on the stock market seven or eight days before the public release of that document. He should have had the competence and the judgment to avoid the real, or perhaps just perceptual, problems that go along with that conduct. These are exactly the kinds of questions and criticisms that the opposition is expected to raise, and it would be political malpractice for us not to raise them.
Furthermore, there are places around the world where such questions are not asked of the leaders, where leaders can say, “That's out of bounds. You can't ask me that. It's none of your business.” There are places like that. They are the most miserable places to live on planet earth. I am so proud to live in a country where we have the ability to ask these kinds of questions. It is our job on this side of the House of Commons to ensure that the government is always acting in the public interest, and not in the private interest of any individual.
Going back to the point of hypocrisy, the Prime Minister and the finance minister have been crying a lot of crocodile tears about the questions they face over their own financial decisions, the amount of tax they have paid, and the way they have protected their own family fortunes.
These are the questions that they invited when, over the last three years, they have engaged in a bloody-minded campaign of class warfare. They went out and started attacking people, including in their own words, “wealthy doctors” and others, who use “fancy accounting scheme”, “a privileged few” who were avoiding “paying their fair share”. They implied that there was a group of people who were getting ahead and not paying enough, and they disparaged those people. Now the Prime Minister and the finance minister expect everyone to have sympathy for them because people are asking questions about their finances.
When they single out a group of honest, hard-working, law-abiding Canadians, and attack them for following the rules and working hard and succeeding, then people are going to ask questions as to whether they live up to their own standards. That is exactly what we have been doing.
To conclude, the government has no problem supporting the wealthy and the privileged. In fact, the government has been very, very generous to that group of people. However, we on this side of the House of Commons will continue to stand on the side of merit, free enterprise, and an economy that allows anyone who is prepared to work hard, to be smart and industrious, to get ahead while making the lives of other people better at the same time.