Mr. Speaker, it is a pleasure to rise in the chamber to take part in one of the most basic responsibilities of Parliament, which is to discuss the authority of the Crown's government to spend its citizens' money. It has been a long time, over two years. The last budget was seven months before the last election, which seems like a lifetime ago.
It is easy to forget that in the third quarter of 2019, the Canadian economy was then teetering on the brink of recession. The economy had stopped growing in the fourth quarter of 2019 and the first quarter of 2020 was grim, even without the pandemic. Canada's debt-to-GDP ratio was rising, our triple A credit rating had been cut, and the government had already racked up $100 billion in new debt during a booming global economy. All of that was before COVID.
We were then expecting Bill Morneau's deficit targets would be significantly blown in the 2020 budget, but then the pandemic was declared and the budget was cancelled. We had to wait 13 more months for this budget.
There was no question that the government then had to support those who had been ordered, or even recommended, not to work. Businesses that were being asked or told to close needed to be supported. Massive emergency spending was necessary public policy at the time, from the moment public health orders took away people's paycheques and business revenues, yet that is not an excuse for refusing to table a budget, and it does not forgive the lack of fiscal discipline and lack of financial stewardship in this budget.
The borrowing contained in this budget staggers the imagination. Another $330 billion over the next five years, on top of the $355 billion in the last year alone, and there is no end in sight, merely a hope that this will mean, eventually, a return to a declining debt-to-GDP ratio starting next year. This anchor is one that had already been discarded before COVID and has no credibility coming from the government in this budget.
I do want to mention that I had intended to split my time with the member for Steveston—Richmond East, so I hope it is all right to bring it to your attention now, Mr. Speaker.
We have heard the government say over and over again, both before and during COVID, that deficits are all right because interest rates are so low, but Canada's accumulated debt, the majority of which is not locked in long-term, is extraordinarily vulnerable to interest rate volatility. To this, the government also responds that it expects interest rates to stay low for the foreseeable future, so there is really nothing to worry about until there is an economic recovery. Therein lies the threat to the sustainability of Canada's public finances. The sustainability of this unprecedented debt is jeopardized if interest rates rise, and yet economic recovery is precisely what will trigger interest rates to rise. Having to service such high debt at higher rates will threaten the economy all over again and eventually necessitate higher taxes or cuts to services that Canadians depend on.
This budget is claimed to contain over $105 billion in stimulus to ensure economic recovery, but that is not true. The single largest line item in the $105 billion of stimulus is actually emergency support funds for this year's continuing payments alone. In other words, more than a quarter of the so-called “stimulus” is really just emergency response spending because the government could not get its act together to protect Canadians from a third wave.
That is perhaps the biggest criticism I have about this budget. The budget does not contain what Conservatives have been asking for since last May: that the government have a plan rooted in measurable data to have a safe and permanent reopening of the economy. The very reason that this budget contains tens of billions of dollars in continued emergency COVID spending is that the government has failed to use the tools that already exist to help Canadians live safely in a COVID-19 world.
When the economy first shut down during the first wave, there was no other sensible option based on the information available to policy-makers in March 2020, but since then the government has failed to procure vaccines in time. It has failed to procure, approve and ensure the wide distribution of rapid, at-home test kits approved for screening purposes. The only meaningful and timely response that the government has had to COVID is to spend, while hoping that things will get better.
There is no question the government's vaccine procurement is a disaster. Canada is taking surplus vaccines from other countries and raiding the COVAX system for developing nations. This is because even its terribly slow delivery schedule from the manufacturers is not coming through. The inadequate health response is what is driving the dangerous levels of debt contained in this budget, and the absence of a plan that would have avoided the ravages of a third wave threatens to destroy thousands more small businesses.
I have said it before in this House many times. Small businesses are the lifeblood of our communities, they are the backbone of the Canadian economy, and the owners, workers and customers are our neighbours and our friends. These small businesses are the ones that have borne the brunt of COVID.
Yes, this budget contains extensions to the supports many small businesses need just to survive through the summer, but that is not what small businesses want. They want their customers back. They want to be open. They want to serve the needs of their communities. They want to give their own friends and neighbours their jobs back. They want to at least try to put the hopes and dreams of their business shattered by COVID back together.
Small businesses do not want to take on more debt. The average small business has already taken on $170,000 in debt since the pandemic began, and these debts threaten their recovery. Some of this debt is in the form of low or no-interest loans from government aid programs, but the majority of this debt actually comes in the form of bills that small businesses just cannot pay, things like their rent or their suppliers' invoices. These debts threaten to cascade throughout the economy and prevent recovery.
By the end of last year, 60,000 small businesses had failed, and now nearly 200,000 more are hanging by a thread. There is one particular group of small businesses that has been completely, and at this point one must even conclude deliberately, ignored by the government, and that is the small businesses that had the terrible misfortune to have opened their doors in late 2019 or early 2020. In most cases, the owners of these businesses put their life savings into their businesses and incurred significant debt to pursue a dream to open, start or reinvent a small business, but these businesses have nothing, and there is nothing in this budget that will help them.
The Minister of Small Business and her parliamentary secretary have been saying for months that new businesses will be supported, but they have done nothing. This once-in-two-years budget still ignores these businesses.
Just this weekend, I received an email from the owner of a business who opened an auto service business in Calgary in October 2019. This business cannot even acquire a CEBA loan, which is among the easiest ones to qualify for, never mind access to the other aid measures. This small business is not going to be sustained by words. It needs cash, or better still, its customers from a fully opened economy and a vaccinated population.
Between platitudes such as “we have your back”, “we will stop at nothing” and “we will continue to work for new programs for new businesses”, the government will occasionally mention it is concerned about the integrity of its programs and is making sure businesses do not suddenly materialize and take advantage of its programs. Of course nobody wants anyone to game the system, but with all the red tape in this country, it takes months to even get a building permit to start a new restaurant.
Somebody who opened in March of 2020, spending their own money and exhausting their finances long before COVID began, is left out of the programs. There are thousands of these businesses. They are in every riding. I know every MP in this House is getting emails from these kinds of businesses.
There is so much more I could say, but I will end by pointing out there are many necessary economic support measures contained in this budget, but they are necessary precisely because the government has failed so spectacularly to protect Canadians from the third wave. It would be imprudent to support a government that adds so much debt without a coherent plan to manage this debt and reduce it over time. There is just no fiscal anchor or even any credibility with the government concerning its fiscal anchors.