Mr. Speaker, it is a pleasure for me to speak tonight to the budget implementation act and in general to the budget policy of the government.
I thought what I would do tonight is speak to some of the specific debate we are having around budget measures and the fiscal policies of the government. At the same time, I will set that in a sort of philosophical context. I will talk a bit about what a Conservative vision of economic policy is and what the fixed principles and values of that approach is rooted in. I will then work that into some of the particulars of the policy debate we are having tonight.
A discussion of economic policy has to start with a commitment to justice. After all, it is not purely a discussion when we talk about budgets but rather what is just with respect to government policy. By just, I mean what is due. Justice is the virtue of doing that which is due to others and government policy should be informed by that.
There are a number of different principles and applications of justice of course, such as justice to whom. Are we talking about giving to another that which is due? I want to talk about some of those particulars as I work through my speech.
One of the issues we speak about often in the context of justice is the question of intergenerational justice; that is how we as the present generation gives that which is due to the next generation. This is a fundamental question of justice. We can choose to enjoy as much as possible for ourselves the goods of our society and leave as little as possible for the next generation or we can govern ourselves with an eye to preserve as much as possible for the next generation to give them the same or a better life, a better set of opportunities. That is a question of intergenerational justice, one that is fundamental.
Maybe another way of thinking about that is sustainability. Is our fiscal environment, our institutions or other aspects of our society sustainable in the sense that we are preserving them and setting them up so they are passed on in a similar or better condition to the next generation?
Conservatives, in thinking about the issue of intergenerational justice, will often reflect on the work of a great English philosopher and parliamentarian, Edmund Burke. He talked about the fragility of society, how we received society from our ancestors, and we ought to preserve it with prudence and with caution as we pass it on to the next generation.
This is why Conservatives who follow Edmund Burke are instinctively skeptical of extreme proposals for revolution. Sometimes we perceive proposals from Liberals and New Democrats as saying that we should radically reorder and change the way we do things. Conservatives are often a voice of caution in those situations, saying that while we support change, we want to ensure we are always preserve the benefits of society that we received from our ancestors and that we pass them on to the next generation, again out of a concern for fundamental justice. We preserve traditions and we are prudent in recognizing what we owe to the future.
It is my sincere belief that the present approach to budgeting is a great betrayal of that principle of intergenerational justice. The rhetoric from the government is that we have to spend and invest, but we have to spend now and we have to spend far more than we are taking in.
The inevitable consequence of spending more than we have today is that subsequent generations will have to pay more in tax to pay the interest on the expenditures that we enjoy now, and not even to pay off our present expenditures. I do not understand how anyone could get out of the fairly simple logic of that argument.
If we spend money today, it has to be paid off at some point in the future. The government will come back at this argument in various ways. For instance, It will say that these expenditures are actually stimulative, that deficit spending creates economic growth which then benefits everybody else in the long term.
The economic logic of that comes from John Maynard Keynes, who talked about stimulative spending during economic downtimes, which then has to be balanced out during good years. There has always been a recognition, even among economists who have favoured a stimulative approach to fiscal policy, that governments still have to pay that off at certain times. Maybe the argument goes that a government runs deficits during bad years and then it pays it off during good years. However, the idea of running deficits constantly is not a recognizable economic theory that has been advanced by serious economic thinkers.
Eventually, a government does have to pay it off, and eventually the next generation or the one after it will have to pay the price for the excesses of the present. It is bad economics to think a government can run perpetual deficits, but it is also a violation of the great principle of intergenerational justice.
I think Canadians get this intuitively, by the way, because in the last election, the Prime Minister was able to sell to 39% of Canadians a deficit spending proposal, albeit a very limited one. He said that his government would run deficits for three years, deficits that would not exceed $10 billion, and then the government would balance the budget in the fourth year. We are coming up to that fourth year and are nowhere near a balanced budget.
The Liberals were able to sell that because Canadians thought it was a limited approach to deficit spending. After the election, the government totally betrayed the commitment it made previously. Now it does not have a plan to ever balance the budget.
I note that every province in this country that runs a deficit has a timeline for getting out of that deficit. This is the only finance minister in the country who does not have a timeline for that deficit.
This is a violation of the principle of intergenerational justice. My kids are going to have to work harder and pay more in taxes, which they will not enjoy in services back from the government, because our generation has chosen this present government that is spending more than it has. I would submit that is fundamentally unjust.
Our alternative approach, which emphasizes balanced budgets, is sustainable in the long term, and allows us to make investments in social programs that we know will be able to continue, and it ensures that whatever we do within the framework of a balanced budget, we will be able to sustain and provide a continuing level of opportunity in social programs to the next generation.
In every case, in Canada and elsewhere, when a government has persistent deficit spending, eventually the party ends. Eventually, someone in the future has to do the hard work of cutting back, and has to endure the loss of services and increase in taxes associated with an inevitable reckoning. I would submit that it is not just, right, or moral to ask my kids and other kids to pay for what we are not willing to pay for in the present.
In pursuit of an economic policy that is just, we seek intergenerational justice, respect for the next generation, and sustainable fiscal policies that do not involve perpetual deficits.
There is another argument that the government often brings up in this case. It talks about the debt-to-GDP ratio and says that it is maintaining that ratio relatively consistently over time.
First of all, Canadians should be concerned about the overall debt-to-GDP ratio because, although our federal debt-to-GDP ratio is relatively lower than many other countries', our total government debt-to-GDP ratio is comparable to those countries'. Since far more services are provided in this country at a sub-national level than in most other countries, as we are more decentralized as a federation than many of our partners, it is important to compare apples to apples when talking about the debt-to-GDP ratio and look at total government debt-to-GDP in Canada as compared to other countries. Unfortunately, in that comparison, Canada is certainly right there in the rest of the pack in terms of this challenge.
The other thing I would say about the debt-to-GDP ratio is that it is a measure of the debt that we could plausibly carry. However, it does not change the fact that the debt still has to be paid off. With a higher GDP, a government can carry more debt, but it still has to pay it off and it still has to pay interest on it in the meantime, and that is still an injustice to the next generation.
Our party believes that we need a sustainable fiscal policy, one that does include, and I am sure this will come up in questions, running deficits during periods of major economic downturns, or periods of national crisis and disaster. That is precisely what we did. However, at the same time, we had a long-term sustainable fiscal policy that was stimulative for those periods and paid off debt outside of those periods. The government seems to believe that debt and deficits should be run in perpetuity, and that is certainly a policy that we very strongly disagree with.
Another element of justice in the context of the budget is justice for taxpayers. Taxpayers who work hard and have to pay part of their hard-earned income to the government have certain legitimate expectations about the spirit in which their money should be spent. They have an expectation that it will be spent on things that are in the public interest and that relate to their interests, not their own personal immediate interests necessarily, but that are reflective of the interests of the population as a whole, such that taxation is more than just a means of well-connected insiders accessing the public largesse. That is the ideal, that taxes be collected with the public interest goal in mind.
Unfortunately, we see so many elements of spending in this budget and other government budget documents that are really disconnected from any rational calculation of the public interest. Rather, they are clearly reflective of the fact that the government wants to use public dollars to reward well-connected insiders, to reward their friends, and establish relationships they perceive to be in their interest.
I will give one example of this. It is something that clearly and obviously goes against the principle of justice for taxpayers. It is something called the Asian Infrastructure Investment Bank. Hundreds of millions of Canadian taxpayer dollars are going to fund a bank that builds infrastructure in Asia, headquartered in Beijing, and controlled by the Chinese government as an instrument of its foreign policy. We are putting up hundreds of millions of dollars for Canada to be a voting member of this organization, but in reality to control something around less than one per cent of the shares.
In any event, we are talking about hundreds of millions of dollars being put into this infrastructure bank, and the only argument the government can come up with for giving money overseas to this instrument of Chinese foreign policy is that it will create opportunities for Canadian companies to be able to get contracts through this bank. Allegedly Canadian participation in the infrastructure bank means that Canadians companies could now join in projects they would not have been able to join before.
However, that is not true. I have visited the headquarters of the Asian Infrastructure Investment Bank in Beijing and officials told us that they have a totally open staffing and procurement policy, which means that Canadian companies could participate in these contracts and would have an equal opportunity to bid on these projects in any event. The only justification the government has for this is simply not correct.
The government in Beijing obviously wants other countries to put their money into this as a tool of their foreign policy, and it is maybe a way of getting a nice pat on the back from someone for doing it, but this is a case of grievous injustice to taxpayers who would rather see their money spent at home on things that are reflective of their understanding of the Canadian public interest, of the common good here rather than advancing the PRC's foreign policy goals.
There are many aspects of this. There is corporate welfare through programs like the supercluster program. How is it just for taxpayers that small business owners and the middle class and those working hard to join it have to pay taxes to the government, which are then used to subsidize already very successful, well-connected businesses? That is fundamentally unjust to those less well-connected taxpayers.
Taxes are not supposed to be a reward for rent seekers. They are not supposed to be a reward for those who invest in having close relationships with those in power in order to realize some benefit from them, or what economists would call rent seekers. Taxes are supposed to advance the public interest. Unfortunately, in this government, there are many examples of the Liberals using money in an ineffective way that really rewards their friends instead of being connected to the public interest.
Other elements of justice that should inform a rational and effective fiscal policy is that include a concern for social equality expressed through equality of opportunity and policies that encourage self-reliance. Our view is that the best way to ensure justice for all and equality of opportunity is to cut the taxes of those who need those tax cuts the most. If we look at the record of the previous Conservative government and the taxes we cut, tax relief was always targeted to those who were struggling, those who needed that tax relief the most.
I hear a member laughing over there. I invite her to ask a question in questions and comments and identify a tax that we cut that benefited primarily or exclusively the wealthy. I do not think I will hear that question, because there were none. The tax cuts by the previous government included cutting the GST and the lowest marginal rate of the small business tax rate. Yes, we cut the business tax rate, and that benefits all Canadians. Our approach was not to exercise corporate welfare but rather to cut taxes for businesses that would encourage economic growth, and thereby benefit the employees and customers. We did not impose punitive taxes on Canadians like the current government is doing, for example, with its carbon tax.
We have challenged the Liberals on the issue of the carbon tax from multiple angles. Of course, there is the fact that they will not even give us the information about how much the carbon tax is going to impact the average Canadian. However, I want to talk specifically about it in terms of justice and social equality.
The thing with the carbon tax is that it is designed to create an incentive for people to change their behaviour. It is a punitive approach to creating that incentive. It says to people that if they do not change their behaviour, they will have to pay a higher tax. There are some people who might be able to afford the investment of changing their behaviour. Yes, they can afford to retrofit their home. They can afford to move closer to the city. However, the problem is that there are also many Canadians who cannot respond to that punitive approach, because they simply cannot afford to make those kinds of behavioural changes. There could be an alternative way of helping people who I think want to do their part for the environment, but who cannot respond to the stick. They might respond better to a carrot. In any event, they cannot respond to the punitive approach of a carbon tax.
A carbon tax would tax home heating fuel, and gas for those who cannot necessarily afford electric hybrid cars. The carbon tax really is a tax that hits those who can least afford to pay it.
There is an alternative approach when it comes to the environment. One only has to look at the previous government's environmental record. It was to be the first government in Canadian history under which emissions went down, or up by less in every single province compared to the previous government. To members who are laughing and shaking their heads, I look forward to their questions, because if you look at the numbers, it is very clear that that is the real record on the environment of the previous government.
How did we achieve those reductions? We had binding sector-by-sector regulations and we gave Canadians incentives that involved rewards. We gave things like a home retrofit tax credit, instead of punishing people for not making certain environmental decisions. We gave them a tax credit, which gave them the means to make investments they probably would want to make anyway, such as making their homes more energy efficient. We moved forward with things like the transit tax credit, which the current government, in fact, got rid of.
It is clear that there are two different visions of the economy, and ours, on many scores, is a more just approach to the economy. That is why we propose it as an alternative to the government's budget.