Debates of Jan. 25th, 2021

Criminal Code

[Arif Virani, Liberal, Parliamentary Secretary to the Minister of Justice and Attorney General of Canada]

Madam Speaker, happy new year to you and to all my colleagues joining us virtually from around the country. It is a pleasure to see everyone and to reconnect in this format.

I am pleased to speak today on Bill C-238, which was introduced by the member for Markham—Unionville in February of last year and would propose to amend the Criminal Code, as we have heard throughout the discussions this morning.

First of all, I applaud the laudable objective of curbing illegal gun activity and I appreciate that the sponsor sees these measures as important for targeting organized criminal activity. Violence through firearms poses a real and significant public safety risk to many communities, including those that have experienced mass shootings. Nevertheless, I am of the view that this bill should not be supported, and I will explain why.

The government has repeatedly acknowledged that gun violence and gun crime is an increasing problem in Canadian society that needs to be addressed with a comprehensive strategy. This was recently reiterated in the Speech from the Throne in September of 2020. That is why the mandate letters of the Minister of Justice and the Minister of Public Safety have committed to the implementation of a robust set of firearms amendments, including the imposition of stronger penalties for gun smuggling. It is also why the government has already taken concrete steps to curb firearms violence, including the May 1, 2020, prohibition on military-style assault rifles with a two-year Criminal Code amnesty and a buyback program.

On May 1, 2020, the government delivered on its commitment regarding military-style assault weapons by implementing a regulation banning 1,500 models of assault-style firearms that pose a significant threat to public safety and are not necessary for hunting or sport shooting.

The government also issued an order to give law-abiding firearms owners a two-year amnesty period to protect them from criminal liability while they take steps to comply with the act. By so doing, the government was clear: It took measures to enhance public safety while reducing unnecessary risk for the public. As part of these measures, the government also sought to guarantee that law-abiding firearms owners would not be punished.

I strongly believe that this balanced and comprehensive approach is preferable to the narrower approach proposed by the bill. The illegal firearms market in Canada is primarily supplied by smuggled firearms or firearms stolen from private residents or commercial establishments. Given its proximity to Canada, the United States is the primary source of firearms for Canada, particularly handguns smuggled into Canada. The majority of illegal firearms in the U.S. originate in the U.S., but may occasionally come from other countries, such as Canada.

Reducing firearms smuggling into Canada is a key part in the fight to reduce access to illegal firearms in this country. Smuggled firearms that make their way into communities are a serious public safety issue and can be used to commit serious offences tied to organized crime. Bill C-238 proposes to increase the maximum penalty and the mandatory minimum penalty of imprisonment for the possession of a smuggled firearm, prohibited weapon or other object. Bill C-238 would also impose a reverse onus on an accused in an application for judicial interim release, more commonly known as bail, when the accused is charged with the possession of a smuggled weapon. This means that unless the accused can demonstrate why their pretrial detention was not justified, they would remain in custody pending trial.

While the objectives of the private member's bill are well intentioned in that they propose to address firearms crime among other things, the government does not support the bill, as it raises serious legal and policy concerns, some of which have been addressed by earlier speakers. Given the scope of the offence, I am very concerned that the increased mandatory minimum penalties would lead to significant charter scrutiny, but just as important, mandatory minimum penalties generally produce system inefficiencies and delays in the criminal justice system. They are also known to have disproportionately negative impacts on indigenous peoples, Black and other visible minority Canadians, something that should be of key concern to all parliamentarians as we confront and seek to address the systemic racism that is pernicious in the criminal justice system.

In addition, the reverse onus would be novel in the current bail regime and would treat accused persons charged with the same offence differently, depending on how the possessed firearm was illegally obtained.

The government has been in the process of considering these important issues for quite some time. In October of 2018, the Minister of Public Safety began a series of consultations with Canadians on the issue of handguns and assault-style firearms. The consultations included eight in-person round tables with 77 stakeholders' written submissions, and almost 135,000 Canadians responded to an online questionnaire. The summary report published on April 11, 2019, indicated that Canadians believe that a comprehensive and multi-faceted approach is needed to combat firearms violence in Canada. Of note, firearms smuggling and border security were identified as among the most prominent concerns of Canadians.

The government has comprehensively set out a path forward to address gun violence, including banning assault-style firearms, providing an amnesty period and a firearms buy-back program, and working with provinces and territories to give municipalities the ability to further restrict or ban handguns. The government has taken other measures, such as the establishment of reporting legislation or a type of red alert to make it easier to remove firearms from people who pose a danger to themselves or others, and measures to combat gun smuggling and trafficking.

Recently, in the Speech from the Throne of September 23, 2020, the government reiterated its commitment to combat firearms smuggling.

When the Minister of Public Safety announced the ban, he also announced that the government would be introducing other measures to keep firearms out of the hands of criminals, including increasing safe storage requirements and strengthening the law around firearms smuggling and trafficking. The government has made funding of up to $327 million available over five years through the initiative to take action against gun and gang violence, combat gun-related violence and gang activities, including by supporting law enforcement in community-led projects focused on prevention.

It is my understanding that more than $200 million is now flowing directly to the provinces and territories to target initiatives that best meet the unique needs of individual communities to advance efforts in the areas of prevention, gang exit, outreach and awareness training, as well as enhanced intelligence sharing and law enforcement capacity. With the funding allocations, jurisdictions have made investments to support new law enforcement activities, including specialized training and education initiatives and improving data collection and information sharing.

As far as reducing gun violence is concerned, the government knows that a comprehensive approach must also include measures to remove from the market guns that present the biggest danger to public safety, as well as a combination of measures on the criminal use of firearms, including preventive measures and law enforcement, as well as harsher sentences.

Although the laudable objectives of this bill may be well-intentioned, I remain of the view that a more comprehensive approach, with the benefit of parliamentary review and debate in both Houses, would be the more appropriate course of action. I urge all members, therefore, to oppose this bill.

[Bob Saroya, Conservative, Markham—Unionville, ON]

Madam Speaker, it is good to be back and to see all members here.

I rise today to urge my colleagues to support my private member's bill, Bill C-238, an act to amend the Criminal Code with regard to possession of unlawfully imported firearms, a bill that would put the criminals using smuggled guns behind bars for longer and make communities safer by raising the standards on dangerous criminals being released on bail.

This is a bill that all GTA residents need and have been calling for. The numbers do not lie. Since 2015, gun violence has grown in Toronto. In 2018, there were record high numbers of deaths. In 2019, there were record high numbers of shootings.

The year 2020 should have been different, as COVID-19 forced people to work from home, and millions of GTA residents changed their routines. The active nightlife, festivals and events were all cancelled. Once very busy streets were now ghost towns. However, that did not stop the violence at all. In 2020, even with a worldwide pandemic, there were over 450 shootings and 40 deaths.

Gun violence has become all too common in places that used to be considered safe. The stories of people waking up to gunshots or being called about loved ones' deaths are heartbreaking. Those people have been promised action but have not seen any results.

I believe the Liberal government has approached this issue in the wrong way. It has focused on gun bans. For its plan to work, violent criminals would have to suddenly start following the law. We know that criminals are not getting a licence to buy firearms that would require taking a course and having a background check. Criminals are buying smuggled guns, just like they are buying smuggled drugs. A gun ban would do little, if anything, to stop them.

The former chief of police of Toronto stated that 82% of handguns used in crimes are smuggled in from the United States. The Ontario solicitor general put the numbers at 84%. More recently, Peel Regional Police reported that 74% of the guns they seized were from south of the border.

The problem is not just smuggled guns; it is also about how we treat criminals who are caught with these guns. The truth is that when they are arrested, they are released on bail within days. They can have a smuggled gun back in their possession within hours.

We need to target the criminals using these guns. Criminals need to know that the use of smuggled guns is a serious offence and that they will do real time behind bars if they are caught. As I have said before, there is no excuse for criminals to have these weapons. If someone has a smuggled gun, they are a real threat to public safety. When they are arrested, neighbours do not want them to get out on bail. The former chief of police reported that criminals getting arrested and being released on bail is far too common.

No one bill will stop the gun violence in Canada, but Bill C-238 is an excellent first step to making my riding of Markham—Unionville and all Canadians safer. I encourage every member to vote for this bill. It would keep dangerous criminals off the streets and save lives. If there are any concerns regarding Bill C-238, they can best be handled in committee.

[The Assistant Deputy Speaker (Mrs. Alexandra Mendès), Liberal, Alexandra Mendes]

The question is on the motion.

If a member of a recognized party present in the House wishes to request a recorded division, or that the motion be adopted on division, I invite them to rise and so indicate to the Chair.

[Bob Saroya, Conservative, Markham—Unionville, ON]

Madam Speaker, I request a recorded vote.

[The Assistant Deputy Speaker (Mrs. Alexandra Mendès), Liberal, Alexandra Mendes]

To the order made earlier, the division stands deferred until Wednesday, January 27, at the expiry of the time provided for oral questions.

Economic Statement Implementation Act, 2020

[Deb Schulte, Liberal, for the Deputy Prime Minister and Minister of Finance]

moved that Bill C-14, An Act to implement certain provisions of the economic statement tabled in Parliament on November 30, 2020 and other measures, be now read a second time and referred to a committee.

[Julie Dzerowicz, Liberal, Davenport, ON]

Madam Speaker, happy new year to all my colleagues in the House and everybody who is participating in this hybrid Parliament today.

I will be splitting my time with my hon. colleague from Kingston and the Islands, and I understand that I will need unanimous consent to be able to do this.

[The Assistant Deputy Speaker (Mrs. Alexandra Mendès), Liberal, Alexandra Mendes]

This being a hybrid sitting of the House, for the sake of clarity I will only ask those who are opposed to the request to express their disagreement.

There is unanimous consent. Accordingly, the House has heard the terms of the motion and, there being no dissenting voice, I declare the motion carried.

[Julie Dzerowicz, Liberal, Davenport, ON]

Madam Speaker, I am pleased to speak on behalf of the residents of my riding of Davenport, whom I am honoured and blessed to represent in this venerable House on Bill C-14.

I will be speaking specifically to some of the important measures that are included in Bill C-14, an act to implement certain provisions of the economic statement tabled in Parliament on November 30, 2020 and other measures.

Since the onset of COVID-19, the Government of Canada has remained steadfast in its commitment to do whatever it takes to protect the health and safety of Canadians and to help Canadian businesses weather the storm. The recently tabled fall economic statement outlined the government's actions to date and proposed new measures to support Canadians through the COVID-19 pandemic. These investments are a down payment on a growth plan of roughly three to four per cent of GDP, or between $70 billion and $100 billion over three years, to jump-start Canada's economy once the virus is under control.

Bill C-14 is an important step in the government's plan. It would urgently move forward with measures from the fall economic statement that would provide immediate assistance to families with young children, students and businesses, and measures that would help protect the health and safety of Canadians.

For example, the bill would ensure that Canadians whose Canada emergency response benefit claim has been delayed could receive the income support that they are eligible for after the end of this year. This bill would also amend the Food and Drugs Act to help prevent and alleviate future drug shortages by allowing the government to make regulations to require that pertinent information on potential shortages and activities related to food, drugs and other items be provided to the Minister of Health, when necessary.

The fall economic statement also moves forward with a plan to set new national standards for long-term care, in recognition of the tragic deaths from COVID-19 that we saw in the spring, in the fall and right now. It seeks to establish a $1 billion safe long-term care fund that would help provinces and territories protect seniors and our most vulnerable. In particular, Bill C-14 would provide funding of up to $505.7 million over the coming months to support long-term care facilities, including funding to prevent the spread of COVID-19 infection, outbreaks and deaths in supportive-care facilities.

Our federal government also recognizes that the emotional and mental health effects of the pandemic on Canadians will continue as we face the second wave and public health measures continue to be in place. Indeed, half of Canadians report that their mental health has worsened during COVID-19. Bill C-14 would provide funding to improve vital access to virtual care and mental health tools. This would include important investments to bolster distress centres and provide further support for the Wellness Together Canada portal, which connects Canadians to peer-support workers, social workers, psychologists and other professionals to help address mental health and substance use issues. These investments would help ensure that Canadians have the mental health support they need when they need it the most.

In addition to the $505.7 million for long-term care, this bill would provide funding of up to $395.6 million to support a range of initiatives to help Canadians cope during the pandemic and to continue our fight against the virus, including the following: mental health and substance use programming, innovative approaches to COVID-19 testing, virtual care and mental health tools, medical research, treatments and therapeutics, vaccine funding and development, border and travel measures, and isolation sites.

As the members of the House know well, the spring saw many challenges, as everything shut down across the country to reduce the spread of the virus. Suddenly, kids were out of school, day cares were closed and many families with young children had to find temporary alternatives to their regular child-care arrangements. These challenges often meant higher, unanticipated costs for Canadian families with children.

Our federal government is committed to helping the many families who have been struggling with a wide range of expenses as a result, from providing care to buying tools for at-home learning, such as books and computers, and often more costly temporary child-care arrangements.

That is why the federal government is proposing, through Bill C-14, to provide immediate relief for low- and middle-income families with young children who are entitled to the Canada child benefit or CCB. For these families, we are proposing to provide up to $1,200 in 2021 for each child under the age of six. This would represent an almost 20% increase over the existing maximum annual CCB payment and would have a meaningful impact on families in need of this support during the pandemic.

This support would automatically be delivered to families who are entitled to the CCB, and have a net income at or below $120,000, through four tax-free payments of $300. Families entitled to the CCB who have a net income above $120,000 would receive four tax-free payments of $150, for a total benefit of $600. The first of these payments would be made within a week or two of the passage of Bill C-14, as I understand, with subsequent payments occurring in April, July and October of 2021.

This temporary assistance would directly benefit about 1.6 million families and about 2.1 million children during a period when families are still grappling with the financial impacts they are facing as a result of this pandemic.

We must also recognize how young people continue to suffer from economic impacts due to COVID-19. When the pandemic struck, many students had to leave school. Internships and summer jobs became scarce as Canadians did the right thing and stayed at home. The government is working to ensure that the pandemic does not derail the futures of students. We are determined to take a number of measures to help youth continue in their careers and in their schools.

In addition to proposed measures from the fall economic statement that would provide more opportunities for young people to gain work experience, our government is also proposing support to ease the financial burden on recent graduates. This important measure, which has received praise from the Canadian Alliance of Student Associations, would bring $329.4 million in relief to up to 1.4 million Canadians who are looking for work or are in the early stages of their careers.

It would also help graduates from low- and middle-income families, who tend to have higher overall debt levels, as well as recent graduates with disabilities, given that 37% of borrowers who identified as a person with disabilities participated in the repayment assistance plan of the Canada student loans program in 2017-18.

In conclusion, it is clear that Canadians need our support to weather the storm as we continue to fight against COVID-19. That is why I implore all hon. members to join me in swiftly passing Bill C-14 to enable the government to move forward with implementing these important measures from the fall economic statement, to protect the health and safety of Canadians, to support students and recent graduates, and to help families with young children in need.

[Mark Gerretsen, Liberal, Kingston and the Islands, ON]

Madam Speaker, the hon. member referred specifically to something. She said that what the government has been making over almost the last year has been “a down payment on a growth plan”.

That is so telling. There were two choices at the beginning of this. It was about investing in Canadians and giving them the supports and tools they needed to get through this pandemic so we could come out in a better position than if we had not. The alternative was to essentially let everybody fend for themselves.

Can the member comment as to how she thinks things would have been had the government not taken these very important steps to invest in Canadians? How much better off will we be as a result of this work?

[Julie Dzerowicz, Liberal, Davenport, ON]

Madam Speaker, when we are introducing these bills and big spending packages, sometimes it is easy, in the way we speak, to forget that COVID-19 is still strong in this country and we are still battling it very strongly.

The number one thing we need to keep doing is to continue to fight the COVID-19 pandemic. In fighting this pandemic, we need to ensure there is enough support for our long-term care facilities, enough support for our families, enough support for our youth, enough support within Health Canada and all the different regions, and enough support for our businesses. We are not going to be able to move forward into a strong economic recovery otherwise. If we did not spend this investment, we would not be able to move forward and restart our economy in a successful way.

[Peter Julian, NDP, New Westminster—Burnaby, BC]

Madam Speaker, I rise on a point of order. The raise hand function on Zoom, with the updated software, does not appear to work. I have been attempting to intervene. I think a number of other members have as well. Therefore, that needs to be fixed.

I would have liked to ask the hon. member a question.

[The Assistant Deputy Speaker (Mrs. Alexandra Mendès), Liberal, Alexandra Mendes]

The hon. member is correct because I did not see any raised hands.

The hon. member for New Westminster—Burnaby.

[Peter Julian, NDP, New Westminster—Burnaby, BC]

Madam Speaker, I wish the hon. member a happy new year.

The provisions in Bill C-14, as the hon. member mentioned, provide about $100 a month for lower-income families of support for children, yet we know the average costs now for programs for early childhood education run about $2,000 a month.

My question is very simple. Why are the supports so small for families that are really struggling to make ends meet through this pandemic? Why has the government not actually put into place recommendations that have come from child care advocates across the country to invest vigorously and robustly $2 billion into helping to build the foundation for a national child care system?

[Julie Dzerowicz, Liberal, Davenport, ON]

Madam Speaker, I also want to wish the hon. member a happy new year.

I think the hon. member knows that we have spent almost $400 billion in supports to help not only Canadian families and workers, but also businesses through this pandemic. The measure that he is referring to is with regard to the additional dollars we are providing, totalling up to $1,200 for each child under the age of six, for the next year. It represents a 20% increase over the maximum annual CCB payment. This is to provide some additional support.

If I can go through the $381 billion we have already spent and the amount of money we have set aside for child care to support families in a number of different ways, the government has shown time and time again that we will step up when we need to. We will be there for families. We will have the backs of families. If this is not enough, then we will come back with even more funding and more supports as time goes on.

[Mark Gerretsen, Liberal, Kingston and the Islands, ON]

Madam Speaker, I really hope we can get the issue in Zoom resolved as soon as possible so members have the opportunity to raise their hands virtually.

It is great to be back in the House after our recess. We have important work to continue to do on behalf of Canadians. I am very much looking forward to being part of that. It is good to see my colleagues again, in person and virtually.

My remarks today touch primarily on three issues: long-term care, child care supports for Canadians and the supports we have seen to provincial and territorial partners throughout this pandemic as well as what we should anticipate from this government moving forward.

First, I want to acknowledge the fact this has been a very difficult year for Canadians right across the country. Indeed, it is going to be difficult throughout the winter as well. People are making tough decisions right now about what they need to do to get through this pandemic. To understand and know that we are all in this together and that their federal government is there to support them I think is reassuring for many Canadians.

As we get through this, I really hope we quickly see things start to get better now that we can see the light at the end of the tunnel, with the vaccines being distributed not just in our country but indeed throughout the world.

I want to talk about long-term care and other supportive care facilities and how this government has been responding to that.

We know the majority of people who had fallen quite ill and passed away as a result of COVID-19 were residents of long-term care facilities. One of the most alarming issues for me when I started to see data coming out of these facilities back in the spring, summer and into the fall was the disconnect between the different levels of long-term care facilities and how successful they were at containing the virus.

We have discovered in Ontario that there are three different levels of long-term care facilities: those owned by municipalities, and in Ontario each municipality is required to own at least one long-term care facility; not-for-profit long-term care facilities; and for-profit facilities. Those that were owned by municipalities did a much better job of containing COVID. Those that were not-for-profit long-term care facilities did almost as good as the municipalities. Unfortunately the for-profit long-term care facilities seemed to have the most fatalities and number of outbreaks and, as a result, saw the most strain. That is not to say that all for-profit long-term care facilities are going to experience these larger problems. Many out there have done things very effectively and should be complimented on that. However, many, unfortunately, were not as successful. Therefore, we have to get to the root of why that happened and why there are gaps, in particular, in the standards of care for our most vulnerable.

Since the beginning, this government has worked with the provinces and territories to fight the outbreaks in long-term care homes. For example, it helped provide PPE, contact tracing and direct assistance through the Canadian Red Cross. Despite the fact long-term care facilities are regulated by the provinces, the federal government acknowledged it had a lead role to play in helping the provinces get through it.

Therefore, the government proposed investments in the fall economic statement, such as: $1 billion allocated to establish a safe long-term care fund that will help provinces and territories protect people in long-term care and support infection, prevention and control; $6 million over two years to the Canadian Foundation for Healthcare Improvement to expand its long-term care initiative; $1 million to engage with third parties to help identify resources to conduct readiness assessments in long-term care facilities and facilitate training on infection, prevention and control; and $2.4 million over three years for Health Canada to increase its capacity to be able to support and undertake policy initiatives, as was the commitment in the Speech from the Throne.

In the Speech from the Throne, the government indicated that it wanted to move toward developing national standards when it came to long-term care. This is not to say that the federal government wants to impede on the jurisdiction of provinces, but as with other legislation, like the building code, the federal government sees a role in helping to establish some of those objectives and standards that exist so they can be adopted across the country if provinces and territories see the need to adopt them. As we have seen with the national building code, most provinces have adopted it. My understanding is that only two provinces in the country, Ontario and Quebec, have their own building codes. Therefore, national standards, although not to be imposed upon provinces, can be there for provinces to use as a resource in order to establish best practices.

The other item I will talk about, as I indicated earlier, is with respect to early childhood learning and child care. We know that this pandemic has created very difficult and challenging times for child care providers. Indeed, their jobs are much more difficult than they were before. It has made the work of over 200,000 early childhood educators and child care workers across the country uncertain. People are uncertain about their jobs and what the child care system will look like moving forward. Now is the time to make long-term, sustained investments so every Canadian family has access to affordable, high-quality child care for their children.

In the fall economic statement, a first step laid the groundwork for a Canada-wide child care system in partnership with our provinces and territories, which ultimately take the lead on this very important issue. Also being proposed are investments in 2021-22 of $420 million for provinces and territories to attract and retain early childhood educators. There is a growing need for childhood educators. There is uncertainty. The government sees a role in providing that certainty and ensuring that Canadians who are interested in early childhood education see that there will be work for them as we come through this pandemic.

Finally, I want to talk about the supports for provinces and territories. Quite a bit has been said over the last year about supports. I am extremely proud to be part of a government that has been there for Canadians through supporting our provinces, but it has not ended and it will not end yet. For 2020-21, $85 billion of support has been provided to provinces and territories throughout the country, and there is more to come.

What is being proposed with respect to the fiscal stabilization program is indexing the payment of $60 per capita, which was set out in 1987, to a total economic growth per person of $170 per person, which is nearly triple. The capital continues to grow with economic growth per person in future years. The higher cap will apply to claims for 2019-20 and onward.

This federal government has been there for Canadians directly through programs like the CERB and various other programs throughout this pandemic. It has been there to support provinces and territories by giving them the resources they need to successfully take care of Canadians. Indeed, it is there to ensure they can help develop policy to make a better Canada, a Canada that has quality of life moving forward. As we come out of this, we need to learn from things such as what has been happening in long-term care facilities to ensure we develop policies that will improve the quality of life for everybody.

[Tamara Jansen, Conservative, Cloverdale—Langley City, BC]

Madam Speaker, the hon. member mentioned that for-profit care centres were a big problem. Here in my city, just down the street from me, there was a for-profit care centre that actually had to disallow public health care workers from coming in because they were only given two sets of gloves and two masks for a full month. They had no PPE.

I would like to understand how he can blame for-profit care centres when PPE was nowhere near available.

[Mark Gerretsen, Liberal, Kingston and the Islands, ON]

Madam Speaker, what I said, and I am sure the member was listening very closely to my comments, was that at least in Ontario, in the way the data is coming out, people were more likely to die as a result of COVID-19 in a for-profit facility compared with a municipally run or not-for-profit facility. Then I qualified that by saying this was not the case for all for-profit facilities, but is a trend within them.

My intention was not to try to attack one particular sector in long-term care, but rather to identify, using data, where the problems are so we can use that information to develop good policy to improve the quality of life for Canadians.

[Julie Vignola, Bloc, Beauport—Limoilou, QC]

Madam Speaker, I thank my colleague for his speech.

He talked about seniors, families and workers, among other things. My question is on students, who are suffering during the pandemic from a mental health and financial perspective.

The bill would suspend interest on Canadian student loans. Since Quebec administers its own loans and bursaries program, I wonder if what is being suggested here includes a compensatory transfer to Quebec on a per capita basis for post-secondary students.

[Mark Gerretsen, Liberal, Kingston and the Islands, ON]

Madam Speaker, I am a member for Ontario, and in Ontario students primarily tap into OSAP, the Ontario secondary loan program, and they can also get a federal component of that. What we are referring to in this document is just the federal component of it, not the provincial part of it.

The member raises a good question and a good point, and this is something that I think should come up in the finance committee when the fall economic statement is delivered so its members can discuss it and make sure we are giving the best opportunity for students and young people to be successful. At the end of the day, we are all depending on that and we all want to see students successful. Making sure they have the tools and resources from the government to do that is to everybody's benefit.

[Peter Julian, NDP, New Westminster—Burnaby, BC]

Madam Speaker, I wish the member a happy new year.

He spoke at quite some length about early childhood education and child care, but there is a problem with the bill. The government is building up the fall economic statement and saying it is moving to put into place early childhood education. We know it requires an investment of $2 billion this year to set that foundation, yet the government did not do that. At the same time, it is providing about $100 a month per child to lower-income families, but we know those families are paying $2,000 a month for early childhood education and child care.

At a time when families are struggling and really trying to have the wherewithal to take care of a myriad of things, including keeping a roof over their heads and putting food on the table, the government, through a variety of federal institutions, provided $750 billion to Canada's big banks this year in liquidity supports.

How does that jibe with this critical need to put in place national child care? Why is the government spending $750 billion to support Canada's banks and not providing supports to Canadian families?

[Mark Gerretsen, Liberal, Kingston and the Islands, ON]

Madam Speaker, I know the hon. member asked this question of my colleague as well. She indicated that there are many different supports going out to Canadians, and if we look at one in isolation, it is not going to be helpful.

To the member's point, when it comes to child care, it is about working with our provincial and territorial partners. These have to be collaborative solutions. We are not going to do it all on our own. We need to work with them, and that is what I talked about in my speech.

[Pierre Poilievre, Conservative, Carleton, ON]

Madam Speaker, if this pandemic has taught us anything, it is to be prepared for the unexpected, to anticipate risks before they metastasize so that we can protect ourselves and secure our future.

Today, I rise in the House of Commons to draw the attention of members to a growing risk of danger to our families, our businesses and our entire country. It is the risk of the $8.6 trillion of household, corporate and government debt that is quickly accumulating on the shoulders of Canadians. This amount equals 387% of our GDP, a record ratio that is higher than the ratios in many countries that have in the past experienced devastating debt crises.

Before our eyes glaze over, though, I want to remind members that a debt crisis is not just something that bankers and financial analysts talk about in the Report on Business from The Globe and Mail or on BNN. Research by reputable academic institutions shows that in the case of a financial crisis, house prices can drop by a third; stock markets, meaning people's savings, can drop by half; the economy can drop by 9%; and unemployment can rise seven percentage points.

Here is the human toll of that. The University of Calgary published a study recently showing that there is a two percentage point increase in suicides for every one percentage point increase in unemployment. Imagine the human cost of 7% unemployment. More data is now showing an inextricable link between opioid abuse and unemployment. Depression and homelessness result from these types of crises.

What is the nature of the risk? How serious is it? How likely are we to face it? We have to look to history. In their now-legendary book This Time is Different, Harvard economists Carmen Reinhart and Professor Ken Rogoff wrote about what they call eight centuries of folly. They studied debt crises in 66 countries across five continents. As they write in their opening, “Each time, the experts have chimed, ‘this time is different’—claiming that the old rules of valuation no longer apply and that the new situation bears little similarity to past disasters.” With this breakthrough study, they found definitively that experts are wrong.

They lay out five standard leading indicators for a forthcoming financial crisis. I will go through them very quickly: first, falling economic output; second, a large debt buildup; third, rising household leverage; fourth, asset inflation; and fifth, large current account deficits. Do these five standard leading indicators apply to us?

Let us start with the first one: falling output. Last year, in 2020, our GDP dropped 5.5%, blowing a more than $100 billion hole in our economy. That is a massive reduction in our economy, and it means that we have $100 billion less to service our debts. On the first test, from This Time is Different, we do have falling economic output. It does not matter who is to blame. It does not matter that it was COVID that caused it. What matters is the math, and the math does not lie.

Let us move on to the second standard leading indicator: debt buildup. The amount of debt that a country can shoulder depends on the income that it produces to service that debt. According to the great Canadian economist John Kenneth Galbraith, “All crises have involved debt that, in one fashion or another, has become dangerously out of scale in relation to the underlying means of payment.” That underlying means of payment, of course, is GDP, so let us look at the size of our debt and how much it has grown.

Since the beginning of 2015, our total debt, public and private, has gone from $6.1 trillion to $8.5 trillion, a nearly 40% increase in our debt. During that time, our GDP has only grown by 13%.

In other words, our debt levels are growing almost three times as fast as our GDP, the underlying means of payment. We have now reached a level of debt to GDP of 387%, as I said earlier, but I did not tell you that it is an all-time record and nearly twice the size of the typical ratio over the last 60 years in Canada.

Here is some more staggering information: The debt-to-GDP ratio of Greece when it had its massive sovereign debt crisis 10 years ago was 330%. In the United States, during the great financial crisis that came out of the mortgage bubble, their debt was 375% of GDP. In other words, our debt levels in Canada today are higher than they were in the United States and Greece when they massive, iconic and devastating debt crises in the recent past. Therefore, we need now to pay heed as to why we think we can avoid the same thing. The only difference between them then and us now is that interest rates are low, but they will not stay that way forever.

What is the composition of our debt? Where does it come from? The answer is threefold: it is government, corporate and household debt.

Let us start with government debt. This year for the first time on record, Statistics Canada shows that the gross debt of all levels of government in Canada is bigger than the GDP. It just exceeded 100%, 100.3%, to be precise, in the third quarter of 2020. That has never happened before. Our debt levels are higher than they were in the 1990s when we had our own miniature near default of the federal government. That time it was 92%, so our debt levels are higher than ever before when it comes to government.

Before the government rises to claim that we have the lowest debt in the G7, as a share of GDP, that is just wrong. The only reason that Finance Canada calculates it that way is that uses the assets of the CPP and the QPP to deduct from our overall net debt level without using the corresponding liabilities those funds must pay. As a result, if one were to ignore that and look at our gross debt, we have higher debt levels than both Germany and, I believe, France in the G7. That means we do not have the lowest debt levels in the G7 and cannot be worry-free and fool ourselves that our sustained buildup of government debt is not a problem.

This year has seen a spectacular and never-before-seen increase in that debt. Our fiscal deficit is $381 billion. That is almost seven times bigger than the previous all-time average and equals 17% of our GDP. Let us put that into perspective.

In World War I, our deficit-to-GDP ratio was 8%. In the Great Depression, it was 6%. In the great global recession it was 4%. In other words, our deficit as a share of the economy and adjusted for inflation is currently twice what it was at its peak in World War I, three times what it was at its peak in the Great Depression and four times what it was in the great global recession. Only in the Second World War was it bigger, and our ancestors, when they came back from the war, immediately began repaying that debt, running the biggest surpluses ever in 1947, and then increasing the size of our economy elevenfold in the two-and-a-half decades that followed, which allowed them to pay it off quickly. Nobody is suggesting that we will come anywhere near to those kinds of surpluses or growth rates in the post-COVID era, which means that our debt situation is arguably more ominous for the country than it was even back then. Thus, on that criterion, the second standard leading indicator of a sustained buildup of debt, Canada meets that criterion as well.

We move on to household debt levels. Canada has the highest level of household debt as a ratio of disposable income in the G7. In fact, recently, our level of household debt grew to bigger than the entire Canadian economy, again setting records. These ratios mean that our households are carrying more debt than our economy can reasonably be expected to support.

According to the president and CEO of CMHC, “Canadians are among world leaders in household debt. Pre-COVID, the ratio of ... debt to GDP for Canada was at 99 per cent.... These ratios are well in excess of the 80 per cent threshold above which the Bank of International Settlements has shown that national debt intensifies the drag on GDP growth.” In other words, an international body like the Bank for International Settlements says that countries should not go above 80%, and yet pre-COVID we were at nearly 100%. Since that time, debt levels have risen even higher.

That is the third criterion for a forthcoming debt crisis, rising household leverage. Now we move onto the next one, which is asset inflation.

In Canada today, the assets that Canadians own in the country are worth 17 times the size of the Canadian economy. The historic average is 12 times. In other words, our asset values are quickly outpacing our economy. That cannot go on for long, because, of course, assets can only be purchased out of the income generated in the economy. Those assets break down into two parts: financial assets and real estate assets, more or less.

With financial assets, we look at the S&P/TSX, the broadest index in the country. Until a few years ago, the market value of that index had never exceeded the size of our economy. It was always smaller than GDP. That changed in the last 24 months, and has suddenly rocketed up to 120%, according to Rosenberg Research, a leading economic research firm. That one index is now worth 120% of GDP. That has never happened before. The companies in that index need to generate their profits from the economy, and therefore the value of the stocks on the index cannot get completely out of touch with the ability of the economy to generate income and support those stock prices.

Then we move on to real estate, where prices are up $65,000 this year. Can members imagine that in a year when our economy has lost over $100 billion in economic output and hundreds of thousands of people have lost their paycheques and been forced into their homes that somehow we found all of this money to buy real estate? In fact, from the beginning of 2019 to mid-2020, the inflation of our assets in this country has been worth more than our entire economy. There has been $2.7 trillion of asset inflation in an economy worth just over $2 trillion. That would be like someone making more money every year from the appreciation of their house than the salary they take home from work.

It would be nice if it could happen forever and we could simply float on a bubble up to prosperity, but we know that in the end our assets are only worth what we can afford to pay for them. Can Canadians afford the real estate they have right now? Members can ask RBC and the CMHC. The CMHC says that for a home to be affordable for a family, the family should not have to spend more than 30% of its income on housing. According to RBC, the average right now is 50%. That means that for the average person to afford the average house, 20 percentage points more from their family budgets has to go to housing. That is with record low interest rates. When rates rise, those payments will only become more expensive.

Do we have asset inflation in Canada? We have it like we have perhaps never seen before. Asset inflation is the fourth leading indicator of a forthcoming debt crisis.

This brings us to the final leading indicator that these Harvard economists developed through studying 800 years of history of debt crises, which is current account deficits.

To oversimplify this for the purpose of saving us some time, current account deficits are basically the amounts someone buys in excess of what they sell. In essence, Canada buys imports and sells exports. The truth is that we buy a lot more from the rest of the world than we sell to it.

Since 2015 to the present, Canada has run current account deficits of approximately $300 billion. In other words, we bought $300 billion more from the world than we sold to it, and we borrowed to make up the difference. How else would we do it? If we buy more than we are selling, there are only two ways to do it: we drain our savings or we rack up debt. We have been doing a little of both, but most of all, we have been adding debt. The result is that we are taking on more and more obligations for our prior consumption.

I would like to say that all of this debt has been used to invest in productive assets like factories, software, patents and other things that will generate income to pay off that debt, but the evidence shows that the overwhelming preponderance of the new debt has been going to immediate consumption. In fact, data from after the government's programs came in, programs that I believe were meritorious and had to happen, showed that much of the money leaked out of the country because, as Canadians, we were all buying or importing things from abroad more than we were producing and sending abroad. That means that last year we were again running a large trade deficit and adding to our overall debt load in the process.

In the months of April and May 2020, Canadians borrowed an extra $80 billion from foreigners according to David Dodge, who published a recent piece on this for the Public Policy Forum. He specifically asked how long it will be possible for Canadians, for our country, to borrow from the world in order to buy from the world before the world gets tired of lending us money. The bottom line is that we have a large and consistent current account deficit, the second largest in the G7, second only to Japan's. That is an unavoidable problem that we will need to confront because the world is not going to view our economy as a charity case. The lenders of the world will expect to be paid interest on all of the debt that we carry forward.

In fact, the only way to pay off that debt is to generate powerful incomes. Unfortunately, since 2012, Canada has exported more investment than it has brought in by a net amount of $800 billion. In other words, we are sending our investment to productive assets in other parts of the world while they are sending us debt. They get factories, software, patents or pipelines, and we get large-scale debt. That is the fifth measurement of whether or not a debt crisis will strike, and we can say definitively that with our $300 billion in current account deficits the last five years, Canada indeed meets this standard leading indicator that is necessary to trigger a debt crisis.

There are five indicators and we check every single box. What can we do about it? The answer is that we need to unleash the power of our productive economy to clear the way for job creation.

This is red tape week. Let us eliminate the red tape that prevents businesses from hiring. Let us approve large-scale projects like the Teck Frontier mine in Alberta, or the LNG facility in Saguenay. These are tens of billions of dollars in economic activity. Let us make this the fastest place in the world to get a construction permit. Right now we rank 34th out of 35 OECD nations on that. Let us be the fastest place to build a factory or build a pipeline or some other economic infrastructure that pays wages and can reimburse our debts and support our prosperity. Let us change the tax and regulatory rules that get in the way of first nation communities trying to develop commerce and resources on their reserves. Let us remove the penalties for low-income people to get off social assistance so that they can get back to work. Let us allow our newcomers as immigrants use their qualifications by giving them permits to work in fields they are qualified in, like the professions and the trades. Let us replace what has become a credit card economy with a paycheque economy, and in that way alone, we will secure our future.

[Paul Lefebvre, Liberal, Parliamentary Secretary to the Minister of Natural Resources]

Happy new year, Madam Speaker. I am happy to be back in the House.

I want to thank my colleague from Carleton for his lesson on the economy and on debt financing. It is quite clear from the tenet of what he is proposing or certainly saying that the situation we are in is untenable. Certainly in all the investments we made in Canadians in the past year, there was a choice to be made. On this side of the House, we decided to invest in Canadians, and he is deriding us for accumulating debt.

I want the member for Carleton to comment on the fact that we have invested too much in Canadians. Why did we accumulate debt? It was to help Canadians weather this storm and weather the worst pandemic we have faced as a nation during our lifetimes.

The government has brought forward a lot of programs, including the CERB, the wage subsidy, the rent subsidy, the mortgage deferral payments, the support for indigenous communities, the CEBA loans, the regional relief and recovery fund, and the billions of dollars of transfers provided to the provinces to ensure the health and safety of Canadians. Which program would he have not brought forward?

[The Assistant Deputy Speaker (Mrs. Alexandra Mendès), Liberal, Alexandra Mendes]

Before I return the floor to the hon. member for Carleton, I would like to talk to those members who have raised the question of the hand function that does not appear to be working in Zoom. We have asked the staff to work toward resolving the issue.

As an interim solution, I would suggest that members who wish to ask a question during questions and comments turn on their cameras and physically raise their hands. The table officers will keep a list of those who wish to intervene.

I would also ask members who do not wish to speak to turn off their cameras, to make it easier to identify those who do wish to speak. I thank hon. members for their co-operation.

The hon. member for Carleton.