Madam Speaker, the test has been running for four years now, and the Liberals have been getting an F year after year after year.
Dionysius gets an A for creativity. He took one-drachma coins and stamped them with the number two, and all of a sudden he had twice as much money. However, of course, all of the workers of his city state were earning half as much in real terms because everything costs twice as much when we double the amount of currency in circulation.
Throughout the Napoleonic Wars, the exact same thing happened. The amount of silver in the average coin dropped by two-thirds during Napoleon's reign because all of the emperors and kings were trying to debase their coinage to fund their wars. Of course, their people became much poorer because their money did not go as far.
The most recent and extreme case was that of Germany in the immediate aftermath of the First World War. After the war was done, there was 10 times as much paper currency in circulation as immediately before the war. The result was hyperinflation. People needed wheelbarrows to carry their cash off to the baker to buy just one loaf of bread. If someone went to the bar to get a beer, they ordered all of their evening's drinks at once, because if they waited even a few hours, the beer would be more expensive. It was a good investment to load up a table right when they got there, immediately after work, to save a fortune on inflation.
We are told that such inflation will never happen here and that all of these things about printing money causing inflation amount to old thinking. Members should remember that history does not repeat itself, except that it is already repeating itself.
Let us start with housing prices. From December 2019, the last month before COVID started to circulate in Canada, to March 2021, the average house went from $518,000 to $716,000. This is a massive 38% increase at a time when the economy dropped by $120 billion. The economy went down, but somehow housing prices went up.
Lumber prices are up 118%. Here is a quote from a contractor: “Oh, it’s ridiculous. A 2×4 stud used to be $3.50; now they’re $9.80. A sheet of OSB plywood was $12 two years ago; now it’s $56 per sheet”.
Here is a quote from an article in the Financial Post just yesterday, entitled “Central banks and government out of touch with Main Street when it comes to rising cost of living”: “the latest Canada’s Food Price Report shows that food costs increased 2.7 per cent last year with an expected 4.5 to 6.5 per cent increase in meat, 3.5 to 5.5 per cent in bakery, and 4.5 to 6.5 per cent in vegetables this year.” As for gas prices, they have gone from 78¢ a litre to $1.18 a litre.
All of these things are rising vastly more than the Bank of Canada's target. There is something interesting about the Bank of Canada. I asked about the core rate of inflation when the governor of the bank appeared at the finance committee not so long ago. He told us not to worry about core inflation and that he only worries about CPI. Well, I will tell members something. I have a prediction: This month CPI will be way above the 2% target. I will make another prediction: The Bank of Canada will suddenly say not to worry about CPI and that they use core inflation. Whatever is lowest is the measurement they use.
Here is the consequence of all of these numbers. When governments print money, they drive up the price of two things. One is the things that the rich own. The second is the things that everyone else buys. If someone is a millionaire mansion owner, they are getting extremely rich. Their house is making a lot more money than they are. They are sitting in their rocking chair and cash is just falling out of their attic onto their head. However, if someone is a working-class person who rents in order to have a roof overhead, their rent is going up, their cost of food is going up and their cost of gas is going up. Everything they buy is going up, except their wages are not and that dream of owning a house is getting further and further away because of asset price inflation.
What we have is a government that claims it is doing all of this deficit spending to help the less fortunate, but is actually carrying out one of the largest wealth transfers from the working class to the super rich, from the have-nots to the have-yachts, in Canadian history. The solution to this is to control the spending, unleash free-market production, replace the credit card economy with a paycheque economy and restore the principle of sound money so that the dollars people earn are worth what they are supposed to be worth and so that people get ahead through their labour and effort, not through their privilege and aristocracy.