Members should feel free to interrupt my remarks with their applause at any time. I will be conservative in my remarks as long as they are liberal in their applause.
However, unfortunately, the current Liberal government has been too liberal with our money. Government spending has grown at a rate of about seven per cent a year, even though economic growth has only been around two and a half per cent. The combined rate of inflation and population growth has been less than three per cent. In other words, we are growing the government more than twice as fast as we need and twice as fast as we can afford.
Last year and in the years before, this Prime Minister inherited great fortune. That was nothing new to him. He inherited a multi-million-dollar trust fund and he has never had to worry about money. Luckily for him, more good fortune fell from the sky in the year 2017. In that year, the U.S. economy and the world economy were roaring. Commodity prices were up, housing markets boomed in Vancouver and Toronto and elsewhere, and interest rates were near record lows. All of this good fortune, which is out of the government's control but to its benefit, generated a windfall of $20 billion last year according to the government's own records.
I am pleased to report that our Prime Minister did the responsible thing. He saved it all for a rainy day; he put it aside in the great Canadian tradition and prepared us for difficult times ahead. I am kidding.
In fact, he blew every single penny. When he was done blowing every penny of the windfall, the increased revenue he had enjoyed, he continued his spending splurge and borrowed $20 billion more, meaning his deficit in that fiscal year was about twice what he promised it would be. This year, if we believe Finance Canada, the deficit will be three times what the Liberal platform promised. Next year, there was supposed to be no deficit at all.
Soon, in fact just two days from now, the finance minister will introduce his fall economic update. He will tell us, we hope, the size of the deficit and when this miraculous self-balancing budget will manifest itself. We have put forward a very non-partisan motion that anyone should be able to support, namely, that the government simply reveal the year that the budget will be balanced. We are not even contesting the extraordinary bonanza of spending and the massive debts and higher taxes the government has imposed on Canadians—we know that will be a central debate in the next election—but are putting all of that aside and simply asking for the government to give us the year when the budget will be balanced.
The fact that we even have to put this in a motion is rather startling, because past governments always projected the year in which budgets would be balanced. They projected many years out how big the surpluses would be and what the size the debt would be in given years down the road.
The current government has changed that practice. It has stopped concluding a medium- and long-term fiscal forecast in its budgets and fall updates. That means that Canadians are left guessing when it is that their government will stop adding debt in their name. If Finance Canada documents can be believed and the 25 years of deficits go ahead, that will add nearly half a trillion dollars of new debt to this country.
Now, it is always difficult to appreciate the urgency of tackling debt. Sometimes people think it is a theoretical problem, far away from home. In reality, it is quite simple. Deficits today mean massive tax hikes tomorrow, because the bankers and the bond holders who have lent us that money expect to have a rate of return. It would be completely unrealistic to expect that they would just donate that money out of the kindness of their hearts or park it with the Canadian government in the hope of getting it back at the same value. No, these bankers and bondholders want to collect increasing interest at increasing rates, and that is exactly what has happened.
According to the Parliamentary Budget Officer, by the year 2023, the Government of Canada will be spending nearly $40 billion on interest on the national debt. That $40 billion is a two-thirds increase over last year. It means that we will be spending more on interest on our national debt than we currently spend on health care transfers to our provinces.
That is money that working-class taxpayers will have to fork over to wealthy bankers and bondholders, people with money, because only people with money can lend government money and earn the resulting interest. These working-class families will contribute that tax money, and they will get nothing in return for it. They will simply have the comfort of knowing that some affluent lender, somewhere on Bay Street or Wall Street or in Hong Kong or some other world financial capital, is reaping a windfall because the government could not control its own spending.
That represents, by the way, a wealth transfer from the working class to the super rich, another example of the government's continual efforts to take from those with the least to give to those with the most, to take from the have-nots and give to the have-yachts.
There are three major consequences from these spiralling deficits. In the short run, deficits put upward pressure on inflation and interest rates. In other words, they raise the prices Canadians must pay for the goods and services they use, and because the government is competing with homeowners for borrowed money, the amount lenders can charge to lend that money actually goes up. Our homeowners have to pay higher interest rates in addition to higher costs, because the government is competing with them for credit.
The second consequence is that because higher debt today means higher taxes tomorrow, Canadians will feel the crunch of higher interest rates on their household debt at the same time they are experiencing it on their tax bills. As interest rates go up for the government, they will be going up for households that are facing record debt of their own. The government, on its current trajectory, will have to raise taxes on the very people who are struggling the most to make ends meet in order to pay interest on an out-of-control and unnecessarily large debt.
Third, increased debt and deficits render us vulnerable in the bad times. There will be bad times again. We know this, because history repeats itself. That is why, in the early Conservative government, we paid off about $30 billion of debt, which helped prepare Canada to have a solid financial footing when the U.S. financial system came crashing down. In that once-in-a-generation, or maybe once-in-a-century, financial crisis, Canada was the last to go into deficit and a recession and the first to come out of both among all its G7 peers. During the good times, we prepared, we stored away and we built our foundation so that when the storm struck, we were able to resists its ravages.
However, the current Prime Minister has done precisely the opposite. He has blown all our good fortune in the good times. When everything was going in his favour, when all the luck was on his side, he squandered it, every last penny. Therefore, when the next crisis comes, unless we change course, the Prime Minister will lead us into it with an unprecedented degree of weakness and a lack of readiness. That is the third consequence of having unnecessarily large debts and deficits in the good times.
The Prime Minister said that the budget would balance itself. He said he could spend, spend, spend and that the money would magically appear in the budget. He promised that the budget would be balanced by 2019, which is in about 40 days. As the official opposition, we are here to ask the government exactly when it will balance the budget.
The minister will deliver his economic statement in two days. When a government delivers this kind of statement, it usually predicts when the budget will be balanced and tells Canadians how much they can expect to be added to the national debt in the meantime.
This is a non-partisan motion. We are not even debating the content of the government's policy. We are not saying that the government is bad or good. We are simply saying that the government should be transparent and give us a date. Without this information, we cannot debate. If the government has nothing to hide, it should have no problem sharing this information.
The existing deficit has three main consequences. First, government deficits increase inflation and interest rates for consumers. They also increase the cost of living for workers, families and suburbanites.
Second, we will have to pay more interest on our national debt. According to the Parliamentary Budget Officer, in four years, we will have to pay $40 billion. That is a two-thirds increase in the interest payable. That means more money for bankers and other wealthy individuals. On the other hand, it means that ordinary people will be paying more taxes without getting any programs or services in return. The higher interest rate and the increase in the debt represent a migration of wealth from middle-class workers to the wealthy. Our government should not transfer poor people’s assets to the wealthy, but that is exactly what happens when a government is carrying too much debt.
Third, we will see more crises in the future. We do not know when, but we know that they are coming. That is why, in the past, responsible Liberal and Conservative governments decided to pay back the debt during good years in order to prepare for future difficulties.
The former Conservative government paid back $30 billion before the 2008 crisis that started in the U.S. That is why we were the last G7 country to experience a recession and post a deficit, and the first to get back on our feet.
Today, our country has an enormous deficit despite the fact that there is currently no crisis, while the Prime Minister could have taken precautions by taking advantage of a favourable situation: lower interest rates, spectacular economic growth in the United States and around the world, very strong real estate markets in Vancouver and Toronto, and an increase in the price of Canada’s various assets.
All of these factors are beyond the government's control, but the Prime Minister benefited from them. He will not, however, always have this undeserved good fortune. That is why his decision to launch us into a significant deficit during the good years was so irresponsible. That is why we are demanding that the government tell us when we will be returning to a balanced budget.
We on this side of the House stand for fiscal responsibility to prepare Canada for a rainy day, to stop the outrageous transfer of wealth from the working class and the poor to the super rich in the form of interest on debt, and to stop the government from raising the cost of living on everyday Canadians, who are already facing a cost-of-living crunch.
The first step, though, is for the government to tell the truth. To resolve any problem, one has to admit that there is a problem, and the first admission of that problem would be to tell us the day. Is it really going to be 2045 when the government returns to a balanced budget, a quarter of a century from now and half a trillion dollars later?
By the way, I should mention the bad news. That 25 years, that half trillion dollars, assumes that the government does not spend another penny in the fall update or in its pre-election budget. That would expect a degree of financial discipline the Prime Minister has not demonstrated once in his entire life, yet we have hope. We have hope that if he comes forward with the cold, hard truth that his budgetary plan is a mess and that he has broken his word to Canadians, he will awaken to the need to live within our means, just as ordinary Canadians who do not have multi-million dollar trust funds have had to do their whole lives.
We ask the Prime Minister to join, finally, for once in his life, in solidarity with those people, the people who pay the bills, and at least tell them what the situation is and when the budget will be balanced, and give us the truth so that we can restore the solid fiscal foundation upon which this country's economy has long been built and that he inherited.