Debates of May 11th, 2021

Budget Implementation Act, 2021, No. 1

[Mario Beaulieu, Bloc, La Pointe-de-l'Île, QC]

Madam Speaker, I would like to know what my colleague thinks of the fact that the government is behaving a bit like it has too much money. It is interfering in areas of provincial jurisdiction, when it is not even fulfilling its basic responsibilities, including transferring money for health from the federal taxes it collects from Quebec and the provinces. We know that all the provinces and Quebec are calling for increased health transfers.

Health care systems across the board are at a breaking point at the cost of human lives during a pandemic. Why not increase health transfers instead of interfering in Quebec's jurisdictions?

[Rosemarie Falk, Conservative, Battlefords—Lloydminster, SK]

Madam Speaker, I very much am a big advocate for respecting provincial jurisdiction. I definitely think federal government needs to act where a federal government can and provinces need to act where they need to as well.

I think this speaks to the failure of the Liberals and their plan to prepare for this pandemic and also their planning that has failed altogether going through this pandemic. What this budget fails to do is have a plan to reopen the economy. If government keeps spending the way it is, we are going to lose supports for programs such as OAS and GIS, which many Canadians rely on.

[Alexandre Boulerice, NDP, Rosemont—La Petite-Patrie, QC]

Madam Speaker, I thank my colleague for her speech. If we want to be able to have good public services for the long term, whether in health or to help the most vulnerable, like our seniors, we need to have the necessary revenues.

In that sense, there is nothing in the Liberal budget for collecting money from those who have it, in other words, companies such as Amazon, with its billions of dollars in profits, or web giants that are still not paying their taxes in Canada. We are also still not seeing a wealth tax.

Are those not things that the Conservatives would like to see in order to increase government revenues and avoid cuts in public services?

[Rosemarie Falk, Conservative, Battlefords—Lloydminster, SK]

Madam Speaker, what I would like to see is the Liberal government reduce its burdensome regulations on the oil and gas sector, which provides a lot of supports for many provinces, whether that is OAS, GIS, health care, schools and transfer payments. I would like to see the burden of the red tape and the regulations go away, so we can see increased revenue from our oil and gas sector.

[John McKay, Liberal, Scarborough—Guildwood, ON]

Mr. Speaker, people are starting to be cautiously hopeful. As vaccines roll out and we approach herd immunity, Canadians can dream, once again, of something approaching normality. What the new normal might be is, of course, anyone's guess. However, some people are starting to turn to thinking about how we are going to pay for the debts and deficits that have been necessarily incurred over the course of the last 14 months. Some 74% of Canadians are worried about the budget deficit, and it is a legitimate worry.

The government rightly injected billions of dollars into the economy. Looking at the charts in this 700-page budget, much of the money is sitting in Canadian savings accounts. I perceive that to be a good thing. Canadians have been notorious under-savers, more spenders than savers, but now, not quite so much.

Chart 22 in the budget shows that 8% of nominal GDP, year over year, has been put into savings accounts. That is a huge amount of money. It is such a huge amount of money that it will be looking for spending opportunities as we emerge from the pandemic. As it says in the budget documents, it may well become a bit of a tailwind to the economy.

However, what happens when significant excess money is released into the economy, money looking for places to be spent, generally speaking prices go up. Labour becomes more expensive, the cost of goods and services climbs and people's savings do not get them as much as before. Then we have another problem, and that is called inflation.

An article in The Globe and Mail caught my eye the other day. It was about the perceived mismatch between the consumer price index, CPI, and people's lived experience. The price of shelter rose 2.4% last year, which was consistent with the CPI of 2.2%, well within the Bank of Canada's inflationary band. Meanwhile, the average resale price of a home went up 32%. This is a mismatch between people's lived experience and the official numbers. As one commentator put it:

That leads to a cost-of-living indicator that doesn't quite reflect what consumers see and feel, and an inflation indicator that doesn't quite reflect the long-term cost of owned housing relative to other things we buy....To that point, there is a consistent mismatch between CPI inflation as Statscan measures it and how Canadians typically perceive inflation.

The article goes on in great detail as to the various means to measure inflation, a quite academic debate which I will spare the House.

However, in an online survey conducted by the Bank of Canada last year, 55% of the respondents said that 2% inflation was not a realistic representation of their experience of inflation, while 66% of respondents believed that the inflation in Canada was generally higher than 2%. All of the budgetary calculations are based upon a range of 2% to 3% inflation and a clear determination by the Bank of Canada to keep interest rates very low. The Governor of the Bank of Canada has repeated himself several times on that point.

The reason that Canadians are concerned about the size of the deficit is the fear that it will become overwhelmingly expensive to the detriment of other initiatives if inflation takes off and therefore interest rates take off. On the present consensus of numbers generated by the absolute best economists in Canada, Canada can afford a very large deficit and debt-to-GDP ratio.

Historically, we have been here before. Post-World War II, we had a debt-to-GDP ratio in the neighbourhood of 116% and, in 1995, we were named an honorary member of the Third World. At the time, we had a 67% debt to GDP. By virtue of economic expansion and some prudent measures, we were able to deal with those situations, and they were worse than what we are presently experiencing, which is a debt-to-GDP ratio around 50%, give or take, projected forward for the next five years.

However, there is a lingering doubt that the CPI does not quite get the picture right, not on housing, not on shelter, not on food, not on lumber, not on steel, not on cement. In this morning's Globe and Mail, the article entitled, “Copper hits record high”, is a commentary on the rise of the price of copper, which is used for everything, from plumbing to electricity to alternative energy as well as Chinese supply-side jitters and accommodating monetary policy, which is motivating companies to ramp up spending.

Virginia-based trader, Dennis Gartman, said, “The monetary authorities, whether it’s the Fed, the Bank of Canada, the Bank of Japan, the Bank of England, have all been extraordinarily expansionary. Copper, lead, zinc, aluminum, tin, iron ore, steel, are telling you something’s going on in the global economy.” He added, “This is inflationary, and this is more than transitory circumstances. This is secular in nature.” This is where it might end badly.

I started by talking about Canadians having massive amounts of money in their savings accounts, some of which will go to feed a pent-up demand. What will happen if Canadians go to spend their money and inflation has eroded their pandemic savings account? It will create a lot of very unhappy and upset Canadians. As the great philosopher, Wayne Gretzky, once said. one should go to “where the puck is going, not where it has been.” There are indications out there where the puck is going to inflation and if it goes to inflation, we will have yet another problem.

I commend the government on its handling of the pandemic finances thus far, but we, as Canadians, need to recognize that the inflationary pressures are there. How we handle them will largely determine how we get through this period of “normalcy”.

[Pat Kelly, Conservative, Calgary Rocky Ridge, AB]

Madam Speaker, this is the type of debate we need, where we discuss important issues before the House, and inflation and his concern about it should be duly noted.

I am very pleased to hear the member raise inflation. At finance committee, for example, the testimony from officials and members of the government, members of his caucus, has largely not shared the urgency around getting a handle on ensuring that inflation does not harm Canadians in the months and years to come. The lived experience tells Canadians that prices on the critical things they need have gone up, like heating homes, rent and the price of a home, which has gone up 30% across Canada during the pandemic. I would ask the member continue with his concern on inflation.

[John McKay, Liberal, Scarborough—Guildwood, ON]

Madam Speaker, I am glad to hear that the finance committee is actually debating this issue.

I do not profess to be a world-leading economist, but I have lived through the stagflation of the 1970s, the erosion of people's savings and the mismatch between what inflation was doing to their assets and to their income.

The issue is whether the CPI is actually measuring the right things. The argument is that the CPI measures the Canadian economy well and its inflation well during non-pandemic times, but during a pandemic, it may not be measuring quite the right things. This an interesting debate and I hope the finance committee carries on with that.

[Martin Champoux, Bloc, Drummond, QC]

Madam Speaker, I thank my colleague from Scarborough—Guildwood for his speech.

He spoke about inflation and purchasing power. Purchasing power is indeed shrinking, especially under the current circumstances. I wonder what my colleague and his party think about increasing old age security for seniors aged 75 and over.

He mentioned numerous complaints, including some from seniors, about the loss of purchasing power. Seniors aged 65 to 75 are complaining about the unfair decision to increase the pension only for seniors aged 75 and older.

What does my colleague think about this very sensitive issue?

[John McKay, Liberal, Scarborough—Guildwood, ON]

Madam Speaker, it is an issue, but the first point I would make is that if inflation does take off, it erodes everybody's purchasing power, seniors and non-seniors alike.

The second point I would like to make is that the government had to pick one age, whether it is 70, 75, even 80 or whatever, because the government's finances are not unlimited. Therefore, the choice was to support those who were the most vulnerable, and it was deemed that those people over 75 had the least flexibility in their financing and therefore needed the most support, most immediately.

[Niki Ashton, NDP, Churchill—Keewatinook Aski, MB]

Madam Speaker, as we know, there is a fair deal to look at in the budget, but one of the areas we have yet to see action on is when it comes to reinforcing the powers of the Canadian ombudsperson for responsible business enterprise. The government has failed to create an independent office with real powers to investigate abuses and redress the harms caused by Canadian companies, particularly mining companies operating abroad. This is not acceptable. We know that Canadian mining companies the world over are wreaking havoc.

How important is it for the government to step up and have the power to stop the rampant exploitation in which we see companies engage in the name of our country?

[John McKay, Liberal, Scarborough—Guildwood, ON]

Madam Speaker, I have three points. The first is that the ombudsperson is a serious person and very capable. The second is that the government did give her a decent budget. The third is that she is right; we should have the appropriate suite of powers for the ombudsperson.

[Mike Lake, Conservative, Edmonton—Wetaskiwin, AB]

Madam Speaker, what a pleasure to have the opportunity to speak to this bill for the budget implementation act. I listened carefully to the previous speaker from the Liberal Party and wanted to say a couple of things in regard to working with him. I note, with appreciation, that back in 2017, he was the only Liberal member of Parliament who broke the whip on the Canadian autism partnership and voted in support of it in 2017, along with members from all of the opposition parties. I very much appreciate him for that.

I also appreciated the member quoting Wayne Gretzky. In my previous life before I was a member of Parliament, I worked for the Edmonton Oilers for a decade, and so I very much appreciated that speech. I loved the quote that he used. One of the things that was key to Wayne Gretzky's success was practice. His father had a reputation for building a rink in their backyard and Wayne would go out for hours on end just practising. One of the keys to practising, of course, is repeating something learned from the past, which is where I will turn my comments to now.

The member said that in regards to where we are going right now that it “might end badly.” This is of great concern to members on the Conservative side and to my constituents here in Edmonton—Wetaskiwin that this might end badly.

In regard to learning from the past, I was very interested when the Liberal member for Scarborough—Guildwood said that “in 1995, we were named as an honorary member of the third world.” I listened with interest because that was where I was planning to go with my own speech. Of course, in 1995, Canada's credit rating went down under the Chrétien and Martin Liberal government of the day. We slashed spending on things like health care, social services and education. We slashed international development spending; all of those things. Our spending was the lowest that it has been in my lifetime. I am concerned that that is where we are heading right now. I am going to talk a little bit about what got us there in 1995 and the late nineties where, as the member said, we were named as an honorary member of the third world. To find out what got us to that point, we will have to go back to the Trudeau government of 1968 and the seventies.

When Pierre Trudeau and his Liberal government came to power, there was almost no debt in Canada. There was very little debt, relative to where we are right now, and that Trudeau government decided to conduct an experiment. It decided that running perpetual deficits was a good idea. It ran deficits in 14 out of the 15 years that it was in power. Of course, when the Liberals were no longer in power, interest rates were at an all-time high. There have been some comments about interest rates in some of the speeches so far. However, interest rates were not at an all-time high the entire time the Liberals were in power. When they were making decisions to run their massive deficit experiment, interest rates were much lower.

To give context, in August of 1981, interest rates were at 20.78%, which was a disaster for Canada. That was just before the equally disastrous national energy program experiment that the Trudeau government at that time ran. In August of 1971, 10 years earlier, as the government was just in its third year of power, interest rates were at 5%. By August of 1976, interest rates had risen from 5% to 9.25%, and by August of 1981 they had gone up to 20.78%. Folks who think that interest rates are just going to remain low forever maybe need a little bit of a history lesson, maybe to go back in time and take a look at what happened in the 1970s.

There was a transition of power in 1984 to the Mulroney government and the Liberals, pre-pandemic, prior to the massive deficit spending, like to point out that in previous decades the highest levels of debt were incurred under the Mulroney government. What they do not say is that the debt incurred, the deficits run up, under the Mulroney government were almost entirely interest on Pierre Trudeau's debt. The interest levels were so high that our biggest deficits in history were simply interest payments on the debt that Pierre Trudeau ran up. Of course, that bill came due and it came due more than a generation later than when the deficit started to be racked up by the Trudeau government. That debt came due in the late 1990s when, as the Liberal member for Scarborough—Guildwood pointed out, we were named as an honorary member of the third world.

I hope that we learn something today as we go down the road we are going down. We have to acknowledge that we are in a global pandemic and any government in power, any of the main parties, would be running large deficits at this point in time to deal with the challenge we are facing. The Conservative government back in 2008, 2009 and 2010 had to run fairly large deficits to deal with the global meltdown. The difference between now and then is that the Conservative government had a plan right from the start to get our budget back to balance.

We knew that we could not incur these deficits forever and that eventually, in the long-term interest of Canadians, we had to ensure we got our budget back to balance, so in 2008 we laid out a seven-year plan to get back to balance. In 2015 we got back to balance. We followed the plan to a T. I had the pleasure of serving on the cabinet committee from 2012 to 2105 that reviewed the plans of the government, ministers and departments to play their role in getting back to balance. We got back to balance by 2015 and that was the fiscal situation that the government of the day inherited.

If we look at this budget, where the government is and program spending, in 2014-15 program spending in the Conservatives' last year of government was $254 billion. Now let us look at 2019-20, pre-pandemic, before anybody knew what was going to happen. We should remember that the entire way through, Conservatives were asking the government if it was prepared for a future eventuality where the global economy was not as strong as it was. During this entire time of global strength in the economy relative to what it had been previously, rather than continue with a balanced budget and increased spending because of increased revenues that the government could then have the flexibility to spend on priorities of Canadians, it decided to rack up massive new spending. In 2014-15, program spending was $254 billion and by 2019-20, it was $349 billion, up $95 billion, 37.5%, in just five years. That is insane in terms of fiscal management. That was leading into the pandemic.

If we look at this budget, we are dealing with what we are dealing with now, but Canadians would expect to see a government that would have a plan for a post-pandemic world, for getting our finances in order and moving beyond the pandemic. In this budget, if we fast-forward to 2022-23, plans for spending after the pandemic is over, the government's projected program spending is $412 billion. We should remember that in the last year of the Harper government, it was $254 billion. Eight years later, the government plans program spending of $412 billion, an increase of over $150 billion, over 62%, in just eight years.

If we go back to the Trudeau government of the 1970s and look at the disaster its fiscal plan was for a future generation, my concern is that we are heading down that exact same path now with the current government. We need a change in direction. We need a plan from the government, even if it is a long-term plan, to get back to balance eventually so that we can again continue on the path that we were on in 2015, an upward trajectory where governments had the flexibility to spend on the priorities of Canadians.

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

Madam Speaker, can the member explain why, if the Conservatives are so against debt and deficit, it is in their platform commitment for the next election that it will take them 10 years to balance that deficit?

[Mike Lake, Conservative, Edmonton—Wetaskiwin, AB]

Madam Speaker, when we were in government we laid out a seven-year plan to get back to balance and we got back to balance slowly during that time. It should be noted that during that time we could not spend enough to satisfy the Liberal members, and we see that in this very question. We laid out a plan to get to balance over 10 years. The current Liberal government has no plan to get back to balance, but an endless plan to continue to spend money. It is interesting that it criticizes our plan to get back to balance because it does not go fast enough when we have asked the Liberal government time and again what its plan is and there is no response from it.

[Denis Trudel, Bloc, Longueuil—Saint-Hubert, QC]

Madam Speaker, my colleague seems obsessed with deficits. It is rather rich to hear him say that.

The government has still not invested in several of the main sectors that were affected by the crisis. For example, the budget does not address health transfers. The Conservatives voted against the Bloc Québécois's amendment on health transfers. The budget has nothing for seniors, other than a few crumbs in August and perhaps next year, if the Liberals are still in power.

Furthermore, Quebec is grappling with a housing crisis. The vacancy rate is low. The budget provides for a small investment, but the Federation of Canadian Municipalities was calling for a $7-billion investment to address the housing crisis.

There is no money allocated to these sectors that are vital during the pandemic. The government is not facing our current problems head-on, yet my colleague is obsessed with deficits.

How would he go about dealing with all of the serious problems that the pandemic has thrown at us?

[Mike Lake, Conservative, Edmonton—Wetaskiwin, AB]

Madam Speaker, that is a great question. I, like the member, absolutely care about those things. I care about them today and in the future. I care about them for us and seniors today, as well as for people who are not seniors now but will be in the future. I care about vulnerable Canadians. As the member might know, I have a 25-year-old son with autism. I care about what programs look like for him today, but I also care about what they are going to look like when I am not here anymore, down the road, for him. Right now, the path the current government is on is such that the spending we are doing today is going to necessarily result in a reduction under whatever government is in power down the road. We said we will have a 10-year plan, a nice long-term plan, to get back to balance, but the point of strong fiscal management is exactly the member's point, so that governments can make sure we have the money to spend on programs that are important to Canadians now and in the future.

[Alistair MacGregor, NDP, Cowichan—Malahat—Langford, BC]

Madam Speaker, I would agree with the member for Edmonton—Wetaskiwin that there are very real concerns and that often, as we go toward a path of fiscal correctness, it is working families who bear the brunt of this.

When we look at investments in things like pharmacare, which can have notable improvements on health care spending in the long run; child care, which allows more family members to enter the workforce to improve the economic lot of their families; as well as making sure the wealthy pay their fair share so the brunt is not falling on working families, I wonder about those three specific measures. So far, the Conservatives have shown a bit of an aversion toward them when we know those types of investments will have notable and beneficial impacts in the long run.

I wonder if the member can respond to that.

[Mike Lake, Conservative, Edmonton—Wetaskiwin, AB]

Madam Speaker, all of the things the member mentioned are good measures. We want Canadians to be able to have access to them, but I would point out for all members that we have to also look at the revenue side of the equation. As a member from Edmonton, from Alberta, I have to point out that we have absolutely robbed our economy of our opportunity to fund some of those things because of our disastrous pipeline policy in this country, which gives preferential treatment to oil coming in from Saudi Arabia, Nigeria, Algeria, Azerbaijan and countries like that. For example, it gives preferential treatment to that $25 billion worth of oil coming in from 2016 to today, relative to the oil coming from the Saskatchewan—

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

Resuming debate, the hon. member for Humber River—Black Creek

[Judy Sgro, Liberal, Humber River—Black Creek, ON]

Madam Speaker, I am pleased to be able to speak to budget 2021. As we heard the other day and today, our government—

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

Could I interrupt the hon. member and ask her to adjust her mike? I believe it is too close to her mouth.

[Judy Sgro, Liberal, Humber River—Black Creek, ON]

Madam Speaker, today we are talking about all of the different issues in our budget. We are talking about the future and how we will manage to get where we are going and make sure we have a strong plan to finish the battle against this terrible COVID-19. Clearly, as we have been hearing, our plan is to execute a plan to deliver one million jobs, as promised. These jobs are critical for us to have a strong recovery from this pandemic. These jobs would help make the lives of the community members I represent, and all Canadians, that much better.

The budget implementation act would deliver a plan to support the residents of my riding and all Canadians. It includes extensions and expansions of critical COVID-19 support programs for businesses and individuals. Examples of that are the wage subsidy, which has helped an enormous number of Canadians; the rent subsidy, without which so many businesses would have had to close; and, of course, the other recovery benefits we have provided.

The BIA would also implement the major policy planks of budget 2021, such as funding early learning and child care and supporting students to help them through these difficult times to find the employment they need to start their careers. It also includes a minimum wage of $15 at the federal level. It sets out a clear foundation for a greener, more inclusive and more prosperous economy, and it would make life more affordable for students by extending the moratorium on student loan payments. These are all critically important for our young people.

Ensuring large multinational companies pay their fair share is a topic of much discussion during these difficult times. We know benefits have gone to many of the companies, so as one end of the spectrum suffered tremendously, another area benefited enormously, and I believe they should contribute much more to getting us through these difficult times. This is what we promised in budget 2021, and this is exactly why we need this BIA to pass, so that the legislation delivers.

I can tell members it is a great budget for the residents I know and love in Humber River—Black Creek, and for all Canadians.

Our government values the contribution that seniors have made, and continue to make, to our communities. I miss visiting my local seniors groups. I call the presidents of these organizations as often as I can. They all want to get back to playing bingo and cards at their local community centres, some of which are now being used now to deliver the important vaccines our government has secured to protect our most vulnerable from COVID-19.

I know these seniors will see their lives get back to normal soon because of the hard work the government is doing to end this horrible pandemic. Our policies are showing positive results. For example, 25% fewer seniors live in poverty than when the Liberals took office in 2015. That is a direct result of the good work our government has undertaken, including restoring the age of eligibility for old age security and GIS to 65 years as opposed to the suggested 67 years, and increasing the GIS for the most vulnerable single seniors.

The budget implementation act proposes to increase old age security by 10% for seniors—

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

I have to interrupt the hon. member.

The hon. member for Drummond is rising on a point of order.

[Martin Champoux, Bloc, Drummond, QC]

Madam Speaker, I think my colleague's microphone might be positioned incorrectly. Perhaps she could adjust it slightly.

We can hear a lot of noise, and although the interpreters are not complaining about it, it is probably making their job more difficult.

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

We noticed the same thing.

Could the hon. member try adjusting her mike again?

It is better now.