Madam Speaker, I will be sharing my time with the member for Kootenay—Columbia.
Before I begin, I want to acknowledge a big change in your life. Since the last time I spoke to you, you have taken on $10,000 in personal debt. That is your share of the national debt incurred by the government since March. Every Canadian is another $10,000 in debt, including you, Madam Speaker.
Our deficit this year will be $380 billion. Since there are around 38 million Canadians, that means every Canadian is another $10,000 in debt, or $40,000 for a family of four. Sure, the government sent a bunch of cheques to a lot of families and businesses, but I have yet to meet a family that got $40,000 in benefits from the government.
We certainly support the benefits for people who lost their jobs and the wage subsidies and loans for small businesses. The total spent on these programs that directly support families and businesses is around $180 billion. The deficit is $380 billion, though. We are missing $200 billion. How is it possible to lose $200 billion? Perhaps we will find out later on in the debate.
Each family of four has this new debt of $40,000. If these families are listening to my speech, they can look at the benefits they have received from the government to see whether or not they add up to $40,000. In fact, most of the spending is being lost in bureaucracy and in payments to interest groups with government ties, seeing as wealthy people can afford to hire lobbyists to cash in on this massive spending.
Where does that leave us as a country? We now have a country that is much deeper in debt, where ordinary people have not been able to take advantage of most of the available programs.
Let us look at the numbers. Right now, our national debt is equal to 50% of the value of our economy. In March, it was 30%. In 1996, we had a debt crisis when Canada was almost unable to borrow money on the markets. This forced the federal government to cut tens of millions of dollars from health care and other programs.
In 1996, during this crisis, our debt represented 66.6% of our GDP. In March 2020, that percentage was 30%. Six months later, we have lost half of our breathing room, because our debt now represents 50% of our GDP. This means that in six months, we wiped out more than half of our margin of safety compared to our situation during the historic crisis we went through. This is one of the subjects that the member for Kootenay—Columbia will address in his speech.
True, the current crisis does not quite rise to the level of the one in the 1970s, but we are heading straight for that. This is just government debt. Canada has other debts in the private sector. To that must be added the debt of families, which is now greater than our total GDP, not to mention corporate debt. If we combine these three sources, our debt amounts to 384% of the GDP. This is by far a record for Canada.
Among G7 countries, this is by far the highest percentage, apart from Japan. With a debt equivalent to almost 400% of our economy, that means that an increase in effective interest rates on our economy of 1% would equal 4% of our cost savings.
Consider this. We are talking about $80 billion. Each year, for every 1% increase in the interest rate, the additional cost would be $2,000 per year for every person living in Canada—man, woman or child—or $4,000 for a family of four people.
I know a lot of families in this middle class we keep hearing about, and I do not know many in that group who would be able to pay $8,000 more in interest on their family or government debt, if interest rates went up by 1%. That is the vulnerability that threatens our families and our economy.
The government claims that personal and government borrowing can continue because interest rates are low. Will all these debts be paid off before interest rates rise? I suspect not.
Now we are presented with a plan for recovery. According to the Minister of Finance and the Governor of the Bank of Canada, it is the credit card strategy. The idea is for individuals and taxpayers to go into debt to finance the recovery. It is not realistic to rebuild an economy on debt, especially when the debt level is already the highest in our history. The only way to restart our economy is through wealth production, and the only sector capable of producing that wealth is our workers.
We need a plan to help our workers generate income to pay for their personal and family needs, but also to provide revenue to the government, to protect our social programs. That means that the governments have to approve private sector projects to build pipelines, natural gas centres, mines and other projects that would generate billions of dollars in personal and public revenue. We also need to get rid of penalties on benefits and income tax to allow people to get ahead by working. It is by working and being productive that we can pay our bills and contribute to our country, not by accumulating debt. We have to start right away. We have work to do.