Madam Speaker, thank you for those clarifications. It is still a grey area. MPs learn something every day in the House.
Crises teach us so much because they subject our societies to pressure. They highlight our strengths and our weaknesses. However, for the past three years, we have been operating from inside a Matryoshka doll set of crises that have revealed weaknesses in both our economic structure and government action. There was the COVID‑19 crisis, lockdowns and a stalled economy.
First, let us talk about the public health crisis. The COVID‑19 crisis revealed the system's extreme fragility, aggravated by the aging population. It was primarily caused, however, by chronic federal underfunding, which has escalated since 2017 when health transfers stopped being tied to rising costs.
A better division of health care costs, including adequate and predictable federal funding, would have protected our health care system from potential collapse. Moreover, recent agreements are insufficient to stave off that threat. At best, they temporarily freeze, at an insufficient level, the federal share of health care funding, nothing more. In 10 years, Ottawa will contribute 24% of health care costs, which is the same percentage it was contributing when the current Prime Minister took office in 2015.
We know that ending the government's disengagement is not enough to rebuild the health care system. The government needs to tackle the chronic underfunding with a significant reinvestment if we have any hope of being able to deal with the coming demographic crisis. Quebec and the Canadian provinces have said it again and again while providing ample evidence to support their case, but Ottawa is missing in action. Ottawa is the one holding on to the money that Quebec and the provinces urgently need on a ongoing basis.
COVID-19 created an income crisis for individuals by forcing millions of people to stop working temporarily. It brought to light the flaws in the employment insurance system, which covers only a small portion of the contributors who lose their jobs. Because the system was inadequate, the government was forced to compensate by creating a whole host of special programs, which were often not well-thought-out, poorly targeted, ineffective and costly. However, these programs expired, as did the relaxed EI rules, which are now back to the way they were before 2020 and before COVID showed us how inadequate they were.
With the threat of a recession looming, now is the time to fix the problems with the EI system, to make it more accessible and to adapt it to non-standard jobs, which are becoming increasingly common. Ottawa is refusing to conduct this necessary, in-depth reform.
After the lockdowns, the economy reopened. This reopening of the economy also revealed its share of weaknesses. The housing shortage, caused by years of underfunding and not building enough homes, caused prices to skyrocket. Housing starts, especially for affordable rental housing and social and co-operative housing are still weak in 2023. Things need to change course and fast.
The destabilization of our manufacturing sector made us seriously dependent on foreign suppliers in globalized supply chains, whose fragility was exposed during the crisis. There again, the disruptions led to shortages and high inflation, amplified by a lack of competition, which allowed mass distribution to increase its prices at will. We need to rebuild solid supply chains immediately and improve our competition regime. It is imperative that we improve the resilience of our economy.
All these factors contributed to the increase in prices and then the successive interest rate hikes set by the central bank. We know who is suffering the most from this: people on a fixed income, such as pensioners, low-income earners who cannot cope with the increased cost of essentials, and heavily indebted households that are especially hard hit by rising interest rates, especially young families who recently purchased a home.
As if that were not enough, we are now being rocked by international crises. Aggression against Ukraine is turning Russia into an international pariah and pushing it out of trade and economic channels. That has impacted the price of commodities, oil, grains and fertilizers, all of which have skyrocketed. In addition to reminding us that we need to urgently reduce our dependency on oil, war is affecting the agricultural sector in particular, where input costs have skyrocketed. That sector urgently needs to be given the tools to survive the crisis, as well as help to adopt a more sustainable model: supply management protection, predictability, resilience to annual yield variability and disasters, ecological transition, standards reciprocity and succession planning, among other things.
Then there is China. Its economy is far more diversified than that of Russia, and a rise in tensions is likely to impact many more sectors. In particular, we are completely dependent on China's supply of components needed for high-tech goods and the electrification of transportation. These sectors need a major boost.
We already have a relative advantage because Quebec and Canada have critical mineral deposits. If we move from mining to producing batteries, as the government of Quebec is proposing, we will all have what it takes to become the engine of transportation electrification in North America and become a vital link in new and more resilient supply chains. In that area, Ottawa must align with Quebec to accelerate the rolling out of its strategy.
Finally, there are crises unfolding in slow motion. There are three crises that we can see coming. They have been anticipated and analyzed for a long time, and there is no reason for not implementing the measures needed to address them.
First of all, there are demographic changes. The aging population will put more pressure on health care services and on the public finances of Quebec and the provinces, as we know. As baby boomers retire, this will also have significant economic repercussions. Canada ranks near the bottom of OECD countries when it comes to protecting the purchasing power of retirees. There is an urgent need to preserve seniors' purchasing power to ensure that the demographic shock does not cause a major economic shock, which is why we want an increase in old age security that does not discriminate based on age.
This wave of retirements is problematic for businesses. The labour shortage could prevent us from rebuilding our supply chains if we do not take steps to address the shortage. Incentives must be provided for experienced workers who want to stay on the job. Our businesses need to step up their productivity to help them deal with the labour shortage. The temporary foreign worker program must be transferred to Quebec, which will be able to make it more efficient and bring it in line with Quebec's labour policies.
Then there is the climate crisis. Again, it has been unfolding for a long time, and we have analyzed it from every angle. However, we have been slow to act. Whether we are talking about shoreline erosion or the increase in extreme weather events, climate change will put enormous pressure on our public infrastructure. An adjustment fund is needed.
More fundamentally, we must accelerate the transition to a net-zero economy. The money invested in oil and gas must be urgently redirected to the green economy, with a focus on energy efficiency in all sectors, the electrification of transportation, which includes critical mineral processing, the transition from oil to renewable energy, and more sustainable agricultural practices.
As oil companies take advantage of international crises to rake in obscene profits, Ottawa must end all forms of subsidies, including subsidies for carbon sequestration and small nuclear power plants that are designed to produce energy to increase oil sands production. This money must be redirected to accelerating the transition.
Given the enormity of the task and the urgent need for action, the financial sector will have to participate and gradually redirect its oil investments to the green economy. Ottawa must get the banks to step up to the plate by forcing them to integrate climate risks into their investments. Tens of billions of dollars could be made available for the green transition.
There is the ongoing issue of the fiscal imbalance, which is causing major problems that are limiting the government's ability to address the many challenges it faces. There are three types of problems. First, Ottawa, which brings in more revenue than it needs to discharge its responsibilities, is not making an effort to manage its own affairs properly. The federal government is notoriously ineffective, and everything costs more than it should.
I would like to give two examples to illustrate this. It costs the federal government two and a half times more to process an EI claim than it costs the Quebec government to process a social assistance claim. It costs the federal government four times more to issue a passport than it costs the Quebec government to issue a driver's licence. Everything costs more and those are just two examples.
Then, Ottawa uses its fiscal room to interfere in areas that fall under the jurisdiction of Quebec and the provinces. This sort of interference makes the sharing of powers less clear and less sound while undermining our autonomy. Administrative duplication is not in any way efficient. All it does is promote centralization in Ottawa.
I will again give two examples. The first concerns something that happened very recently, specifically the implementation of the dental care program for children. Quebec already provides dental insurance. However, the federal government did not make any effort to harmonize programs and simply created a second program. That is completely inefficient and ends up costing twice as much. It is really outrageous, and the Bloc Québécois has spoken about that many times.
Here is a more general example. People in Quebec have to complete two tax returns when, for years, the Quebec National Assembly and the Bloc Québécois have been calling for a single tax return. That is a useless and inefficient duplication of effort.
Lastly, with regard to the fiscal imbalance, given that Ottawa tightly controls the purse strings of the governments of Quebec and the Canadian provinces, the Quebec government's ability to fully discharge its responsibilities is diminished.
The Parliamentary Budget Officer has been clear: If the trend continues, eventually, provincial governments will no longer be sustainable. They will likely collapse while the federal government's fiscal room will increase considerably. That is what the Parliamentary Budget Officer has been telling us in his fiscal sustainability report year after year.
In other words, unless the trend is reversed, we run the risk of seeing an unprecedented centralization of power in Ottawa, which will take away the Quebec people's ability to control their development according to their needs, strengths, characteristics and wishes.
In that regard, at a time when this government is choosing to contribute six times less for health care than Quebec and the provinces are asking for to fix the system, Ottawa has unprecedented fiscal room that is in excess of $80 billion, or three times the amount of the health care requests.
Let me explain. Ottawa increasingly budgets money for voted items that it fails to spend year after year. When you add up the items that were voted and the spending that was authorized but not spent last year, $41 bilion was left on the table. Let me repeat that. Some $41 billion was left on the table because it was voted or authorized but not spent. This is in addition to another $40 billion in extra fiscal room, according to the Parliamentary Budget Officer. If the federal government wanted to maintain its debt-to-GDP ratio, it could increase spending or reduce revenues by that amount.
When we talk about unprecedented centralization and the fact that the money is here, we are talking about $81 billion in one single year. That is three times the amount the provinces and Quebec were asking for to better fund health care. Ottawa said no and agreed to six times less. That is peanuts. The federal government is gradually stabilizing its share, and the money stays here. That money will be used for new programs that interfere in our jurisdictions. There is no respect for the governments of Quebec and the provinces or for the National Assembly.
It was with these important challenges in mind that the Bloc Québécois drew up its expectations for the 2023 federal budget. We presented them to the minister a few weeks ago. Considering the challenges we are facing, now is not the time for shiny new programs, which are often not within the federal government's purview anyway, nor for pre-election pandering.
Financially speaking, the way to avoid austerity is to be prudent. Economically speaking, the best way to insulate ourselves from the potential turmoil of an extraordinarily uncertain environment is to tackle the fundamental issues. In this period of uncertainty, we need to get back to the essentials. The strengths of Quebec's economy are precisely what is needed to succeed in a rapidly changing world.
Also, the way to meet the current needs of the different sectors of Quebec's economy is to finally step into the 21st century. We have an abundant supply of clean, renewable energy, especially hydroelectricity. In this area, the shift is already under way, and we are ready to move on to the next step, which is a net-zero economy.
If our forests are managed sustainably, they are renewable resources that could be one of the keys to replacing hydrocarbons. More research would allow more processing and greater generation of wealth with this resource. Our proximity agriculture has already espoused the model of the future in favour of short circuits and food security.
We need to help our farmers face the current international turmoil that is inflating input prices and we need to help them develop more sustainable practices. That is the future.
When it comes to critical minerals essential to the redevelopment of supply chains and the electrification of transportation, the only mines in operation in Canada are in our neck of the woods. We need to move from mines to batteries and become an essential link in the chain, especially when it comes to supplying North America.
Obviously, all that development needs to respect the highest environmental standards, in partnership with indigenous communities and with the agreement of local communities. It is good for the green economy, it is good for economic resilience, it is good for strategically positioning Quebec in a changing world.
Another one of Quebec's strengths is its creativity. A stagnant society struggles to cope with change. The antidote is creativity, and Quebec has that in spades. This is especially true for its arts and culture sector, so we must ensure that it maintains its vitality and influence, and the French language is the most vivid expression of that creativity. That being said, this same is true for all fields.
Yesterday's tinkerers are now working in artificial intelligence, creating the next video game, developing the next green finance instruments, working on the aeronautics industry of tomorrow. That is already the case. As Canada's technology hub, Quebec has what it takes to become silicon valley north, as long as we support our cutting-edge sectors.
Finally, there is our social model, particularly our tax and family policies. Because of them, wealth is more evenly distributed in Quebec than anywhere else on the continent. The middle class is larger in Quebec than elsewhere in Canada or the United States and, in a world that is under pressure, that guarantees a more peaceful life and social harmony. That is why it is so important to maintain the Quebec government's ability to take action, and that is why we must seriously address the fiscal imbalance that undermines that ability.
As with all of the expectations set out in the committee report we are discussing, the Bloc Québécois presented a series of requests covering many aspects of Quebec's economy. We outlined them here. They reflect the requests expressed by various sectors of Quebec society when consultations were held by all members of the Bloc Québécois. They respond to Quebec's real needs. They will help Quebec deal with all the existing crises and will make us more resilient. They will enable Quebec to embrace the future with confidence.
