Debates of May 22nd, 2018

Department of Finance—Main Estimates, 2018-19

[Pierre Poilievre, Conservative, Carleton, ON]

Mr. Chair, if Premier Horgan's delays to the Trans Mountain pipeline cause losses, who will pay for those losses?

[Bill Morneau, Liberal, Minister of Finance]

Mr. Chair, I am happy to say that we believe the Trans Mountain pipeline expansion is in Canada's best interest. We believe this project is one that creates economic benefit for the country and is also a commercially viable project. We have said that we will find a way to make this project move forward in a commercial way that will allow for those 15,000 jobs and allow us to get international prices for the resources we have in this country.

[Pierre Poilievre, Conservative, Carleton, ON]

Mr. Chair, if Premier Horgan causes losses for the pipeline, who will pay for those losses?

[Bill Morneau, Liberal, Toronto Centre, ON]

Mr. Chair, what we can say is that we recognize that the government that was in office before we came to power was absolutely unable to get a pipeline built that would go to international markets. We are going to find a way to do that, and do it in a way—

[The Chair, Conservative, Bruce Stanton]

The hon. member for Carleton.

[Pierre Poilievre, Conservative, Carleton, ON]

Mr. Chair, if Premier Horgan blocks or delays the pipeline, leading to new costs, who will absorb those costs?

[Bill Morneau, Liberal, Toronto Centre, ON]

Mr. Chair, as we have said, we believe this project can be done through a private sector actor, through a commercial actor. We will make sure that we find an approach that creates the benefits we seek, and to do that in a way that is absolutely going to create the advantages in a commercially acceptable approach.

[Pierre Poilievre, Conservative, Carleton, ON]

Mr. Chair, the finance minister says that if there are any losses resulting from Premier Horgan he will indemnify those losses. In that case, who would pay?

[Bill Morneau, Liberal, Toronto Centre, ON]

Mr. Chair, indemnifications are used fairly regularly in business transactions between commercial actors. We believe that the approach we can take here is one that can be commercially viable, finding a way to create an indemnification that would allow this project to go forward, thereby creating the benefit for Canadians we want to create.

[Pierre Poilievre, Conservative, Carleton, ON]

Mr. Chair, has the finance minister discussed the Trans Mountain pipeline with any official at the Canada Pension Plan Investment Board or any of its employees?

[Bill Morneau, Liberal, Toronto Centre, ON]

Mr. Chair, I am not going to go into discussions with the proponent or any other discussions going on, whether they are happening or not. That is something we are doing privately at this time.

[Pierre Poilievre, Conservative, Carleton, ON]

Mr. Chair, the finance minister has slipped into the back of his 500-plus page omnibus budget a provision that would allow accused white collar criminals charged with bribery, fraud, insider trading, and other offences to have all charges dropped by merely signing something called a “deferred prosecution agreement”. This amends the Criminal Code.

Why does the finance minister think it is appropriate to amend the Criminal Code through a budget bill?

[Bill Morneau, Liberal, Toronto Centre, ON]

Mr. Chair, we have put forward a budget, and of course in the budget there are things about how we can make sure our economy works well. That is the function of this budget. What we have said is that we believe that our approach to deferred prosecution agreements will enable us to pursue an approach that is functioning and doing well in other economies, one that will result in more effective continuation of business success by companies once they have paid their dues to society.

[Pierre Poilievre, Conservative, Carleton, ON]

Mr. Chair, how much will taxpayers spend on interest on the federal debt this year?

[Bill Morneau, Liberal, Toronto Centre, ON]

Mr. Chair, as this House will know, we put forward a plan each year to best manage the finances of the country, and that includes our treasury function. We issue new debt each year, and that debt is issued in order to seek the best available approach to laddering our debt, to protect, and also to pay the appropriate amount of—

[The Chair, Conservative, Bruce Stanton]

The hon. member for Carleton.

[Pierre Poilievre, Conservative, Carleton, ON]

Mr. Chair, the answer is $26 billion, at least according to the government's budget. His planning horizon goes to 2022-23. That is the farthest out it goes. In that year, how much will the government be spending on interest on debt?

[Bill Morneau, Liberal, Toronto Centre, ON]

Mr. Chair, I believe the member is asking me to recite from the budget a number that was in the document. I would be happy to do that. The number is, in fact, a projection. I believe that $33.1 billion is the number he was seeking, which he can seek himself in his private time as well on page 319 of the budget, “Equality and Growth”. I would actually be happy to sign one of these books for him.

[Pierre Poilievre, Conservative, Carleton, ON]

Mr. Chair, I wonder if he would also be willing to sign for me a copy of the Parliamentary Budget Officer's report, which says it will actually be $39 billion, a massive increase in debt servicing costs. In fact, that is more than we now spend on health care.

Does the finance minister have any concerns that his plan will see Canada spend more on interest on the national debt than the federal government currently spends on health care transfers?

[Bill Morneau, Liberal, Toronto Centre, ON]

Mr. Chair, we believe it is important for us to come to a fiscally responsible way to manage the Canadian budget. We have made investments that have led to a very strong economic position. We have done that in a fiscally responsible way. We will continue to do that. We will drive to a lower amount of debt as a function of our GDP. Notwithstanding the $150 billion of debt put on by Stephen Harper's government, we believe we can continue to manage that down in a responsible way.

[Pierre Poilievre, Conservative, Carleton, ON]

Mr. Chair, the minister is so unconcerned about the level of debt he is piling up that he did not even know how much interest we are paying this year and had to resort to help from his officials. He did not know how much we will be spending at the end of his planning horizon and now does not even seem concerned that we are going to be spending more on debt interest in that year than we now spend on health care as a government.

That higher debt interest means higher taxes for Canadians. The finance minister has already raised taxes on middle-class Canadians, 80% of whom pay more income tax than they did when he took office. How much extra tax will he have to impose to finance interest on the national debt over the course of his plan?

[Bill Morneau, Liberal, Toronto Centre, ON]

Mr. Chair, the facts are wholly incorrect there. The fact is that nine million Canadians actually pay less taxes than they did before we came into office. The fact is that nine out of 10 Canadian families have significantly more. There is $2,300 more on average for families as a result of the Canada child benefit.

I understand that the member opposite does not want to announce the fact that we have reduced taxes, but that is actually the fact. We will continue to manage our economy in a way that creates the kind of robust growth and job opportunities that we have seen, and allows us to do so in a fiscally responsible way, reducing our debt as a function of GDP over the course of our planning horizon.

[Pierre Poilievre, Conservative, Carleton, ON]

Mr. Chair, the Brookings Institution estimates that a deficit of 1% of GDP drives up interest rates by approximately 0.6%. That might seem like a small amount, but actually is a very big cost to someone who has, say, a $300,000 mortgage. It is over $1,000 in extra interest payments for or that family every single year.

The finance minister, with his borrowing binge, is competing with Canadian borrowers when he runs these deficits and putting upward pressure on interest rates. Does he at all worry that his spending binge could contribute to higher interest rates and, therefore, higher costs for Canadians trying to own a home?

[Bill Morneau, Liberal, Toronto Centre, ON]

Mr. Chair, I know this is inconvenient for the member opposite, but the kind of investments that we have made have created the lowest unemployment rate since 1976. Canadians appreciate that we have been in a strong growth position, with the fastest growth among G7 countries. These are very positive positions that our country and individuals are in. We have been able to do that while continuing to reduce our debt as a function of GDP. The fact that we are in a positive economic situation is good for Canadians, and we will try to manage the risks in a prudent way as a result of that positive situation.

[Pierre Poilievre, Conservative, Carleton, ON]

Mr. Chair, fixed mortgage rates are linked to government bond rates. Does the finance department have any information on how much the government's existing deficits contribute to increasing mortgage interest costs for Canadians trying to afford a home?