Debates of May 22nd, 2018

Department of Finance—Main Estimates, 2018-19

[Bill Morneau, Liberal, Toronto Centre, ON]

Mr. Chair, we will continue to manage to reduce the amount of debt as a function of GDP. While we see other countries taking a different approach, we believe that is the prudent approach for Canada.

[Steven MacKinnon, Liberal, Parliamentary Secretary to the Minister of Public Services and Procurement]

Mr. Chair, I am hoping we can take a break from adventures in prosecution and talk a bit to Canadians tonight about some things they care about: things like pensions; things like health care; things like infrastructure; and what I intend to spend a lot of time in my remarks talking about, which is skills training. Skills training is so important.

Last week, I visited Compétences Outaouais. The Des Draveurs school board, which represents most of the students and the school system in my riding, does an excellent job of managing Compétences Outaouais. I visited all the classes, including hairdressing, welding, information technology, and building maintenance classes. Whatever the profession or occupation, Compétences Outaouais is there. I spoke to students and to teachers, who told me that they have never seen such a tight labour market where the demand for their students and graduates was so high.

We have a very good situation in Canada. Frankly, having spent a long time either observing or participating in government and politics, I never thought we would have this problem of periodic and episodic labour shortages. We have it throughout Quebec. We have it across the country. It is a looming big demographic challenge for our country. Some may describe it as the challenge of the age. I do not think the member for Carleton would describe it as the challenge for the age; he is too busy asking the finance minister, with his valuable time, to read to him from page 47 of the budget document. However, tonight I would like to spend a bit of this House's time to talk about the future.

I am pleased to speak to how the government is investing to ensure that Canadians have the skills they need to succeed in the economy of tomorrow.

The world is changing more rapidly than ever before, and our economy is rapidly changing too. New opportunities and new technologies are engines of growth that transform our workforce.

Last week, I spent time in Montreal with a well-known academic in Montreal's university community. He told me that every profession would be affected in the next five to 10 years, whether because of artificial intelligence or simply because work and the nature of work are changing.

We need to be on the leading edge. In Canada, we need to find our way of adding value, always being resourceful, and always knowing what is coming. However, first we have to prepare our young people. We need to get young people in Gatineau and the rest of Canada used to the labour market. We need to give them a taste of the adventure of work and the opportunities that work and a career can offer.

Fortunately, we have a government that is aware of this situation and that is determined to lead the way and take advantage of opportunities in the interest of all Canadians. To make the most of these new opportunities, we need to unite our efforts and ensure that Canadians have the skills they need to succeed in a changing economy.

That is not what we are hearing from the other side of the House. They are not focused on the big picture. They are not thinking about the future. They are not thinking about our young people. They are not thinking about the challenges presented by the changing world and the challenges that the careers of tomorrow will pose for all Canadians.

It makes good economic sense to ensure that young Canadians are able to get good, well-paid jobs and have rewarding and meaningful careers.

One important way we can help young Canadians transition into the workforce is to assist them in finding a summer job. I have no doubt that most of the members here had summer jobs when they were younger. The valuable experience we gained in those first jobs often provided a stepping stone to a full-time job and a successful career later in life.

A summer job gives all students the ability to perhaps pay for their studies, to acquire experience, and to know what it means to have a routine and keep a job after their studies.

That is why, starting in budget 2016, the government supported 35,000 additional summer jobs. These really were additional jobs under the youth employment strategy's Canada summer jobs program. In our last budget, we committed an additional $448.5 million over five years to the youth employment strategy across Canada starting in 2018-19. This funding will make it possible to double the number of Canada summer jobs placements in 2019-20 and allocate additional resources for a modernized youth employment strategy in the following years.

That is what we call a good investment. However, we need to go further. We need to give our youth and labour market analysts the ability to know and, in a way, to predict the future. As that university student told me last week, the nature of work itself is changing. The needs of the labour market are changing. Things are going well today. We even have a labour shortage problem—and it is a problem.

We need to look to the future to figure out where we should be. In this day and age, it can be hard to distinguish between real information and fake information, some of which we heard this evening. When people choose a career path and are looking for work, it can be hard to separate fact from fiction. We need better information. Better information leads to better outcomes. That is why the Government of Canada invested in a digital platform to provide the accurate and up-to-date information Canadians need to make informed career decisions. The government is investing $27.5 million over five years starting this year, and $5.5 million per year ongoing, from Employment and Social Development Canada's existing resources to support an education and labour market longitudinal linkage platform.

I am happy to say that this platform will be housed within Statistics Canada, which is also doing very good work on the census and the long-form questionnaire that we brought back thanks to the Minister of Finance.

As I indicated, since 2016 we have had great job growth in this country, with 600,000 jobs, almost all of them full-time jobs. The unemployment rate has never been lower in 40 years. Salaries, as we found out last week, are increasing at the fastest rhythm that they have in over five years. This is an economy that is on the right track. It is one that we cannot keep our eyes off, for all the reasons that I have indicated.

We have to continue to work as we do with our provincial partners and continue to increase our co-operation and partnership with them as we transfer money for labour market training and labour market programs. That is especially true in Quebec, but it is true all across Canada. We need solid partnerships there. We need solid partnerships with professional organizations and others.

We need to keep our focus on skills training as we continue to work on infrastructure and continue to work on increasing pension benefits for Canadians, but we are decidedly on the right track.

We are decidedly on the right track. Our plan is working. Canada is doing well. Our economy is strong, and we have the Minister of Finance and our government to thank for that.

[The Chair, Conservative, Bruce Stanton]

It is time for questions for the minister.

[Steven MacKinnon, Liberal, Gatineau, QC]

Mr. Chair, I am afraid I am going to change the subject rather abruptly and turn a bit to the other important involvement of our finance minister. Thanks to some of his predecessors, such as Mr. Martin, our incredible presence on the global stage, and our incredibly important presence at global institutions like the G20, which I know Mr. Martin had a lot to do with, and also the IMF, the World Bank, and others, our finance minister continues to make sure that Canada's voice is heard. He is a leader at those gatherings and forums, and I know that all Canadians look with no small amount of pride as our Minister of Finance participates confidently and with the support of Canadians in all of those global forums.

Evolving global market conditions, in particular the effect of increasing U.S. policy rates and a rising U.S. dollar, have left some emerging markets adversely impacted, unfortunately. Among the more vulnerable emerging market economies has been one of our OAS partners, Argentina, which has been hit particularly hard by recent selling pressures in the market. The Argentine government announced on May 8 that it was seeking financial assistance from the IMF in order to quell market pressures. Therefore, I ask my colleague, the minister, if the Government of Canada supports ongoing discussions with the IMF on a financing arrangement to help the Argentine government navigate through this bout of market volatility.

[Bill Morneau, Liberal, Minister of Finance]

Mr. Chair, I think it is quite important that we address this issue and address it publicly. We know that the decision that was taken by Argentina to approach the IMF has taken a significant amount of political courage. It is a country that has been working to get itself into a better economic position after some years of significant economic challenge. I can say that from Canada's perspective, we welcome the measures the Argentine government has undertaken over the last two and a half years to support the economic recovery in its country, to transform its economy, and to rebuild transparency and efficiency in its government. These were all important measures for Argentina and the Argentinian people.

We support the ongoing discussions with the IMF on a financing arrangement to backstop efforts to strengthen the Argentine economy. That is something, in our role as a supporter of the IMF, that we think is important to get on the record. We hope that these discussions between the IMF and Argentina can be both quick and successful, and enable it to continue on its path to improving its economic progress.

[Steven MacKinnon, Liberal, Gatineau, QC]

Mr. Chair, I know the minister will continue to brilliantly represent Canada as it has its voice heard on all of these global stages.

As I have finished my speech, I want to go back to provincial transfers. We know that this is one of the main ways that Canada has invested in skills training for adults, and in training in general as well. These payments are made to the provinces in order to provide skills training. Quebec has a certain autonomy in this area, but all the provinces enjoy a certain autonomy.

It is obvious to me that we will not be spending much time discussing the real issues facing Canadians listening to us.

Can the minister talk about the importance of our partnership with the provinces and territories, government transfers, and the increases in amounts allocated for skills training? How does he see this evolving over time?

[Bill Morneau, Liberal, Toronto Centre, ON]

Mr. Chair, that is an extremely important question. Given that our economy is changing because of artificial intelligence and future automation, the nature of work will change drastically. Jobs will be different in the future. This means that we need training now to meet the needs of our economy. It is crucial that people have the opportunity to succeed in the future. That is why we are working with the provinces and territories. We have added money for training. We will continue with our approach of considering how we can quickly evolve with the changes in the economy. Training is at the centre of our approach.

[Gérard Deltell, Conservative, Louis-Saint-Laurent, QC]

Mr. Chair, I am pleased to take part in this exercise. It is a first for me. It is quite nice to be able to speak directly with the Minister of Finance.

First, I want to compliment the Minister of Finance on his French. It is always good to be able to speak both official languages and to do so as elegantly as the Minister of Finance does. I am talking about style, because in terms of content, we have major differences.

It has been almost 31 months since the current government was elected and the Minister of Finance was sworn in. Let us not forget that these people were elected on the following electoral promise, found on page 76 of the Liberal Party's electoral platform: “With the Liberal plan, the federal government will have a modest short-term deficit [for the first three years]”. Then, it concludes by saying, “return Canada to a balanced budget in 2019/20”.

That was a promise. In reality, the deficit is three times bigger than planned, and he has no idea when we will return to a balanced budget.

Earlier, the Minister of Finance was proud to say that he was ready to sign a copy of his budget. Is he ready to sign his electoral platform?

[Bill Morneau, Liberal, Toronto Centre, ON]

Mr. Chair, I would like to begin with a word of thanks. It is important to have a good relationship between parties.

We explained that investing in Canadians was our first priority. That is clear. We have made investments and created jobs across Canada. We are in a very good position.

We know that it is possible to make investments and be fiscally responsible while lowering the debt-to-GDP ratio every year at budget time. That is our approach, and it is good for Canadians.

[Gérard Deltell, Conservative, Louis-Saint-Laurent, QC]

Mr. Chair, those were some nice words, and the minister's French was great, but this is not why the minister was elected. The Minister of Finance was elected on promises of small deficits and a return to a balanced budget in 2019. Ultimately, the deficit is three times bigger than expected, and he has no idea when we will return to a balanced budget.

What does a promise mean to the Minister of Finance?

[Bill Morneau, Liberal, Toronto Centre, ON]

Mr. Chair, as I said, we made some major promises. Canadians clearly want good jobs so that they can support their families. We have helped them make that happen.

We must invest to grow the economy, and that is what we did. We are now in an excellent fiscal position, which means that the debt-to-GDP ratio will go down. We are strong enough to meet the challenges of the future.

[Gérard Deltell, Conservative, Louis-Saint-Laurent, QC]

Mr. Chair, it is too bad that the minister turned down my suggestion to sign his electoral platform. It is too bad that the minister is unable to explain his broken election promise to Canadians.

When will the government return to a balanced budget? On what date?

[Bill Morneau, Liberal, Toronto Centre, ON]

Mr. Speaker, it is always important to consider our country's position in the global context. We have the lowest debt-to-GDP ratio in the G7. Not only is our ratio the lowest, but it is also about one-third of the average ratio of the other G7 countries. We are in a great position.

When managing an economy, we must consider the challenges of the future, our situation, and our track record. This is exactly what we did. Our debt level is very low, and we are strong for the future.

[Gérard Deltell, Conservative, Louis-Saint-Laurent, QC]

Mr. Chair, the Minister of Finance knows full well that he inherited that situation when he became the finance minister. Our government left the house in order. Our country had the best debt-to-GDP ratio in the G7 when Canadians decided to make a change.

My question is this. Since the finance minister had a successful career on Bay Street, has he ever met a company head, an entrepreneur, or a manager who said they had no idea when they would balance their budget, as he is doing now?

[Bill Morneau, Liberal, Toronto Centre, ON]

Mr. Chair, what I can say is that, in 2005-06, there was a $13.2-billion surplus, but after that the Harper government did things very differently. It ran a deficit for a number of years. When we took office, there was a very high level of unemployment and a $1-billion deficit in the first year. That was the situation left by the Harper government. Our level of growth was very low. Now, we are in exactly the opposite situation. We are in a good position in terms of employment and economic growth, and our debt is dropping every year.

[Gérard Deltell, Conservative, Louis-Saint-Laurent, QC]

Mr. Chair, that is the Bay Street baron's selective memory at work. Surely he knew, back when he was the Bay Street baron, that there was a global economic crisis. Luckily, the Conservatives were in power at the time, and the Conservatives managed the Canadian economy properly. Our legacy was the strongest in the G7. We are not ashamed of that. I will reiterate my question for the Minister of Finance, whose management career on Bay Street was brilliant. I am being completely sincere when I say that. He was a baron of Canadian industry. Kudos to him.

Can he tell me if, during his career, he ever heard someone in charge of a business say they had no idea when their business would be in the black? Did he hear that even once in his career?

[Bill Morneau, Liberal, Toronto Centre, ON]

Mr. Speaker, when I was in business, I invested. I made big investments to grow my company. It worked out very well. When I started, our revenue was around $20 million. During my last year with the company, our revenue was around $500 million. That happened because we invested to grow our company. That is exactly what we want to do for our country. We want to invest in creating more jobs and making things better. It is really working. That is exactly where we are at. Our debt-to-GDP ratio is on the way down, our record is strong, and our growth rate is good for Canada and Canadians.

[Gérard Deltell, Conservative, Louis-Saint-Laurent, QC]

Mr. Chair, when the minister was in business, when he was the champion of Bay Street, did he ever leave a deficit as massive as the one he is leaving now as Minister of Finance? Could he tell us whether he left his company with a deficit and no idea when it would be able to balance its books, just as Canadian taxpayers have no idea when they will see a balanced budget?

[Bill Morneau, Liberal, Toronto Centre, ON]

Mr. Chair, there are always differences between the private sector and the public sector. What I can say is that I invested in the future, just as we are doing for Canadians. In that respect, my approach is the same. The question is, is it working? Clearly, it is, because we are doing well. It is true that the global economy is doing well, but last year, in 2017, we had the fastest growth in the G7, which means we were doing better than the rest of the G7. Our investments created a good situation for Canadians. Now, we can look ahead to the future with greater resilience.

[Gérard Deltell, Conservative, Louis-Saint-Laurent, QC]

Mr. Chair, the minister claims investments are going great, but I have a reality check for him and for Canadians. Over the past 31 months, since the Liberal Party took the reins of government and the Minister of Finance was appointed, Canadian investments in the United States have risen by 66%. American investments in Canada, on the other hand, have dropped by 50%.

Are things really going that well, minister?

[Bill Morneau, Liberal, Toronto Centre, ON]

Mr. Chair, these are the facts. In 2017, business investment in Canada rose by 8% over the previous year. That increase signalled an improvement in our situation. That is a fact. It is true that we can always do better, but we had more business investment in 2017 than the previous year.

[Gérard Deltell, Conservative, Louis-Saint-Laurent, QC]

Mr. Chair, the reality is that Canadian investors realize that investing in Canada is less profitable than investing in the United States. The Americans realize this also. That is why, and I will repeat the figures that they seem to have forgotten, Canadian investments in the United States have increased by 66% since the Liberals came to power whereas U.S. investments in Canada have declined by 50%. A little earlier, his parliamentary secretary boasted that his government is doing the opposite of other administrations, which are lowering personal and corporate taxes; without saying so, he was speaking of the United States.

Is the Minister of Finance prepared to say that he is ready to lower taxes and the burden on business to help Canadian investors rather than sending Canada's money elsewhere?

[Bill Morneau, Liberal, Toronto Centre, ON]

Mr. Chair, we know it is very important to listen and to think about our country's competitiveness. We have already lowered taxes for SMEs. The SME tax rate was lowered on January 1, 2018, and it will be lowered again on January 1, 2019. Now we are going to listen to what companies across Canada have to say about the changes happening in the United States, so that we can stay competitive in the future. I will be listening to them so I can find a way to keep us competitive in the future. However, at the same time, I will be making sure there is something besides taxes to guarantee that Canada stays competitive. We are going to consider every situation important for ensuring our future.

[Gérard Deltell, Conservative, Louis-Saint-Laurent, QC]

Mr. Chair, I think that is the reason the minister increased pension costs for businesses, among other things, and abolished the investment tax credits our government had implemented.

Does he think the right approach is to increase costs and abolish investment tax credits for companies?

[Bill Morneau, Liberal, Toronto Centre, ON]

Mr. Chair, the corporate tax rate in Canada is the same as it was before we came into office. It is 15% for large companies but lower for SMEs, because we lowered their tax rate. It will continue to be lowered until it reaches 9% federally. I do not understand the question. The facts on Canadian businesses are there.