Mr. Speaker, it gives me no pleasure to rise in the House today and begin my remarks only hours after the terrible news of our flatlined economic growth in Canada. For the second quarter in a row, Canada's annualized growth has been 0.4%. On a quarter over quarter basis, it is 0.1%.
To put this into perspective, U.S. economic growth in the most recent quarter was 3.2%. Canada's economic growth in the same period was 0.4%. Our economic growth is now declining on a per capita basis. That is to say, our economy is growing more slowly than our population. The result is that more people are sharing in a smaller pie. That means per person, Canadians are now falling behind.
It just became known that Canada suffered the biggest decline in its ranking for competitiveness on the world stage. This should not surprise us. As the government has become more and more costly, the productive sectors of our economy are bearing a bigger and bigger burden.
The problem in the Liberal mindset is that the Liberals as politicians do not realize that whatever they add to the economy, they must first subtract.
Let us start with the deficit.
The government is taking about $20 billion a year out of the economy through government borrowing, and $20 billion of borrowed money does not come out of thin year. It is often a fallacy of thinking that politicians add to economic activity when they borrow cash out of the economy by simply throwing it back into the economy where they got it from.
In reality what they do when they borrow that money out of the economy is subtract it from otherwise productive investments that individuals and businesses would have made in the open and private sector economy, but instead were able to earn interest on by lending to the government. This is called the crowding out effect. It is nothing new. It is well known and it is based on general reasoning.
If we accept that government is able to fashion cash out of thin air, and it is not, then we must also accept that the money the government borrows out of the economy subtracts from economic growth. For the government members, who I see are in a haze of bewilderment at the poor economic numbers with which they are just now becoming acquainted, I will explain to them why their deficits are failing to generate economic growth.
The reason is that the Liberals are subtracting before they are adding. They are taking away before they are giving back. The transaction that happens when one takes away only to give back engenders a whole series of inefficiencies, where instead of dollars being allocated by consumers and investors, they are allocated by incompetent politicians. That is the nature of government directed economics.
Then there is taxation. The government has raised taxes on workers and businesses since taking office.
Let us start with workers. The average Canadian middle-class family is paying $800 more in income tax than it was before the government took office. That is in addition to the increase in fuel taxes through the carbon tax and payroll taxes through increased CPP premiums. All of those tax increases compound to squeeze the average Canadian family's ability to buy and invest in the private and productive economy.
Businesses are also facing increased costs. The government has increased taxes on small family businesses, and four different tax increases come to mind.
First, there are new tax penalties for family-owned businesses that share the work and earnings of their companies with family members.
Second, there are new penalties for small businesses that save within their companies. They risk losing their small business tax deduction if they have more than $50,000 a year in investment income. Naturally, this penalty causes small business owners to withdraw their investments for fear that they will be punished for earning too much return on those investments.
Third, Canada pension plan premiums have gone up, which increase the cost to the entrepreneur of hiring and employing workers. As a result, businesses have already made it clear that they are going to have to either lay people off or cut wages to compensate for the increased governmental taxation costs.
Finally, the carbon tax has made it more expensive for small businesses to operate. Heat, transportation and the functioning of factories all become more expensive as the price of fuels go up. Our farmers face new costs for all the off-farm transportation energy costs they consume. Those costs are not exempt from the carbon tax and therefore our farmers pay more.
All these costs compound on the backs of entrepreneurs and workers and are part of the reason our economy is grinding to a halt.
The government believes that it can tax and borrow its way to prosperity. Churchill examined the logic of that when he compared those who believed they could tax and borrow to prosperity to a man who believed he could fly if he got inside a bucket and pulled up as hard as possible on the handle to lift himself into the sky. What government forgets is that as much as it pulls up on the handle, it is pressing down twice as hard with its feet. In other words, the downward pressure is much more powerful than the upward pull, and that is what we are witnessing today.
The government will try, along with help from Liberal-minded commentators, to suggest that the fact our economy is no longer growing is not the Prime Minister's fault; it is part of a global phenomenon. Unfortunately, that does not bear out with the facts. Right next door, in the United States, the growth is 3.2%, a spectacular growth rate. The Americans are our biggest trading partner, responsible for 75% of our exports. If import and export are combined, the United States is equal to about 40% of our GDP. We have a $2-trillion economy and an $800-billion trading relationship with the U.S.
Therefore, the biggest global influence on economic growth in Canada is from the U.S., and that economy is growing. In fact, its economy is roaring strong.
In other words, it is not possible for the Prime Minister to externalize his failures by blaming some global phenomenon. That global phenomenon does not seem to have affected our neighbours south of the border. In fact, the global economy over the last three years has been exceptionally strong, recovering for the first time since the great global recession of 2008-09. It is Canada that is falling behind the global trend with the appalling numbers we see today.
How do we get back on track? The answer is to get government off the backs and out of the way of Canadian workers and entrepreneurs; to lower the tax burden to make work pay so workers keep more of what they earn; to remove tax increases on small businesses that are the engine of our economy; and to clear the way for large multi-billion dollar energy resource projects to go ahead, financed by the private sector, without the obstruction of government.
That is the vision of the Conservative leader. He believes we should get the government out of the way so workers and entrepreneurs can invest, grow and get ahead. It has been done before and it can be done again. That is the Conservative plan. Now let us make it happen.