Debates of May 29th, 2023

Department of Finance—Main Estimates, 2023-24

[Dominique Vien, Conservative, Bellechasse—Les Etchemins—Lévis, QC]

Mr. Chair, when does the Minister of Finance plan to table a balanced budget?

[Chrystia Freeland, Liberal, University—Rosedale, ON]

Mr. Chair, our target is economic growth and good jobs for Canadians. We have proven that with job growth—

[The Chair, Conservative, Chris d'Entremont]

The hon. member for Bellechasse—Les Etchemins—Lévis.

[Dominique Vien, Conservative, Bellechasse—Les Etchemins—Lévis, QC]

Mr. Chair, people have jobs, but they are struggling to make ends meet.

Who asked her to go back on her position and her decision?

[Chrystia Freeland, Liberal, University—Rosedale, ON]

Mr. Chair, once again, it is important to tell Canadians the truth. The truth is that Canada has the smallest deficit of all G7 countries.

[Dominique Vien, Conservative, Bellechasse—Les Etchemins—Lévis, QC]

Mr. Chair, can the minister tell us the cost to service Canada's debt, meaning how much it is costing Canadians to pay for the deficits she presented?

[Chrystia Freeland, Liberal, University—Rosedale, ON]

Mr. Chair, David Dodge, a former governor of the Bank of Canada, proposed an important way to think about the debt—

[The Chair, Conservative, Chris d'Entremont]

The hon. member for Bellechasse—Les Etchemins—Lévis.

[Dominique Vien, Conservative, Bellechasse—Les Etchemins—Lévis, QC]

Mr. Chair, I will repeat my question: How much does it cost to service the debt?

The Minister of Finance should be able to answer the question. That is basic.

[Chrystia Freeland, Liberal, University—Rosedale, ON]

Mr. Chair, he said that the cost of servicing the debt should be no more than 10% of revenues. We are at that point.

When he was prime minister, Mr. Harper was paying more than that to service the debt.

[Rachel Bendayan, Liberal, Parliamentary Secretary to the Minister of Tourism and Associate Minister of Finance]

Mr. Chair, I am pleased to participate in this committee of the whole very late this evening.

I would like to start by saying that, over the past year, Canada has had the strongest economic growth in the G7 and that the growth of our economy in the first two months of this year exceeded experts' expectations. Today, some 900,000 more Canadians are working than at the beginning of the pandemic. That includes approximately 150,000 more Quebeckers with jobs and good paycheques.

Right now, the unemployment rate in Canada is 5%, which is very close to the country's all-time low. With a rate of close to 4.1%, Quebec is leading the way with the lowest unemployment rate in the entire country.

Against the backdrop of these economic factors, budget 2023, which our government tabled in March, came at a very important time. The budget sets out new targeted inflation relief measures for the most vulnerable Canadians.

We also implemented a new dental care plan that will benefit up to nine million Canadians. The federal government also made a major investment of nearly $200 billion to help save our health care system, which is under severe pressure. Thanks to the leadership of our Prime Minister and our government, we managed to sign that health agreement with all of the provinces, including Quebec.

The budget also contains transformative investments to build tomorrow's clean economy, fight climate change and create new opportunities for Canadian workers and businesses. It is a responsible fiscal plan that will help Canada maintain the lowest deficit and the lowest net debt-to-GDP ratio of any G7 country.

I would like to state the obvious. This spending is necessary. It is necessary not only to ensure the long-term growth and prosperity of our economy but also the quality of life that Canadians want and deserve. Our health care system is on the brink. We cannot put a price on access to health care in this country. It seems that all parties in this House, even the Conservatives, have agreed that the federal government should invest these sums that were provided in our budget in our health care system.

We cannot be blind to the changes in the global economy, or to the U.S. Inflation Reduction Act and the measures put in place by the Biden administration to attract green investments to the United States. Canada needed to and did respond. Like the experts have pointed out, these are investments in inflation relief for the most vulnerable, saving our health care system and building the economy of the future, which are targeted and will not meaningfully add to inflation.

In previous debates, I have already talked about the importance of tackling the climate crisis and highlighted our government's investments to accelerate our green transition. Now I would like to talk a little more about housing. This is the other issue I hear about when I am out and about in Quebec. Everyone should have a safe place to live, but for too many Canadians, the dream of owning a home is becoming increasingly out of reach.

As rental prices continue to rise across the country, this situation is undermining the financial stability of an entire generation. My riding, Outremont, is certainly no exception to this trend. Over the past four years, the average rent for a two-bedroom apartment in Montreal has risen by 26%, while the number of available units, especially affordable units, remains too low. The lack of affordable housing is having an impact on the Canadian economy.

Without more homes in our communities, it is hard for businesses to attract the people they need for the labour market. When people spend too much of their income on housing, they obviously have less money to spend in the small businesses in our neighbourhoods and in our local economies. That is why our government is tackling the housing crisis head-on.

That is also why I have been pulling out all the stops to have more new affordable housing built in Outremont. Of the many programs that make up our national housing strategy, I would like to specifically mention the rapid housing initiative. This is an innovative program based on a partnership with the provinces and municipalities to rapidly build new housing or acquire existing buildings and convert them to housing. It is a flexible program that responds to needs on the ground.

In my riding of Outremont, we have just unveiled a great project led by the Old Brewery mission under this program. Over 30 new housing units have been created on Parc Avenue in a former hotel. It is incredible. I had the opportunity to visit last week.

We were also able to inaugurate a new co-op at the MIL Campus in Montreal, once again in Outremont. That is nearly one hundred very affordable units next to a new Université de Montréal campus. As UDM rector Daniel Jutras so aptly put it, “We're building a university-focussed neighbourhood at the cutting edge of sustainable development, but also, and this is very important, a people-focussed neighbourhood. A place to meet, a place to live, a place of social diversity.” This is indeed a transformative project for the area.

I also realize that the Bank of Canada's interest rate increase had a direct impact on the housing crisis we are all experiencing. The higher interest rates make it harder for some people to pay their mortgage, especially if they have a variable rate mortgage, which is the case for nearly half of Canadians who currently have a mortgage.

Our government is taking measures to protect Canadian homeowners from rising rates and a possible correction of the housing market. That is why, this spring, the Financial Consumer Agency of Canada launched public consultations into a proposed guideline on existing mortgages for individuals in exceptional circumstances. This guideline states the agency's expectations of financial institutions to help consumers who are vulnerable to payment defaults on their mortgage because of exceptional circumstances, such as the combined effects of high household debt, the rapid increase of interest rates and the rising cost of living. This will help ensure that Canadians get fair and equitable access to relief measures without having to pay unnecessary penalties, excessive bank fees or interest charges, which will help more people deal with the high interest rates.

The government also committed to introducing a tax-free first home savings account, a new registered plan to give prospective first-time homebuyers the ability to save up to $40,000 on a tax-free basis. Like an RRSP, contributions are tax deductible, and withdrawals to purchase a first home are non-taxable, like a TFSA, so it is the best of both: tax-free in, tax-free out.

Budget 2023, delivered on this commitment, and financial institutions across Canada have been able to offer this tax-free first home savings account to Canadians as of April 1 of this past year.

I would also like to note that the budget implementation act that is currently before Parliament proposes to tax assignment sales to crack down on house flipping to help ensure homes are used for Canadian families to live in and not as a speculative financial asset class.

These measures are just part of our ongoing efforts to support Canadians with their most pressing needs, while also investing in the future of our economy.

With the Chair's permission, I also have a number of questions more specific to the two ministers who are here in committee of the whole with us.

I would like to, through you, ask if in the last few years Canadian consumers, and this is the case at least to my mind, have increasingly found themselves having to navigate the pains and, quite frankly, the financial burden of paying undisclosed junk fees? I use that term colloquially. They are hidden fees that obscure the true cost of products and services and potentially really undermine trust in various businesses.

For example, there are often instances of exorbitant roaming charges that the telecommunications industry uses. There are also the unexpected baggage fees in the aviation sector. These hidden charges not only increase the financial strain on Canadian consumers, but also create a climate of mistrust in the economy.

Given this growing concern that I have heard from my constituents, I wonder if the Minister of Tourism and Associate Minister of Finance could explain what measures the government is considering to increase transparency, safeguard consumer rights and ensure that the advertised pricing actually reflects what Canadians have to pay.

[Randy Boissonnault, Liberal, Minister of Tourism and Associate Minister of Finance]

Mr. Chair, let me say that we know that junk fees are predatory and they are hidden fees that Canadians see on their phone bills, services and concert tickets. It is particularly galling in the tourism industry when we see these hidden fees come up for visitors. That is why our government is taking action to crack down on junk fees, including unexpected hidden and additional fees, to continue to ensure that businesses are transparent with prices and to make life more affordable for Canadians.

In budget 2023, we announced our government's intention to work with regulatory agencies, provinces and territories to reduce junk fees for Canadians. This could include higher telecom roaming charges, event and concert fees, and other charges that we simply do not want to see Canadians be charged for anymore. That is budget 2023 working to make life more affordable for Canadians.

[Rachel Bendayan, Liberal, Outremont, QC]

Mr. Chair, I have another question.

Quebec is a leader in fighting climate change and producing clean energy. Quebec's per capita CO2 emissions are 50% lower than the Canadian average. In fact, Quebec is the province with the lowest emissions per capita in all of North America. We are very proud of that.

One of the main reasons for Quebec's success is our abundant hydroelectric power, which covers almost all of Quebec's electricity needs. In order to maintain that position, we need to continue to invest in the production of clean energy. After the budget was tabled and our clean investment tax credit was introduced, the Quebec finance minister said that this was an extremely worthwhile measure for us in Quebec.

Can the Minister of Finance tell us how this tax credit will support Quebec's efforts to build the economy of the future and combat climate change?

[Chrystia Freeland, Liberal, Deputy Prime Minister and Minister of Finance]

Mr. Chair, I thank my colleague for her very important question.

She is obviously right. The fact that Canada's electricity is green is a major advantage in terms of investments.

Today, we produce 83% of our electricity with renewable energy, but we need to produce more green electricity. We are talking about it with investors. It is a priority. That is why our budget really focused on this very important objective.

As I said, investors agree that with the investments in this budget, Canada is truly the most attractive place for investments in the clean economy.

[Rachel Bendayan, Liberal, Outremont, QC]

Mr. Chair, picking up on my last question with respect to Canada's electricity grid, I will say it is one of the cleanest in the world. We have been hard at work as a government. In the past year, we have seen many companies bringing historic investments to our shores like Honda, GM, Stellantis, Rio Tinto, Volkswagen and I could go on. These are huge opportunities for our country.

Can the Minister of Finance expand on how budget 2023 builds on these historic developments and investments in our country? How will it continue to ensure that Canada remains a global leader in the market for clean technology manufacturing? It is a market that the International Energy Agency estimates will be worth about $650 billion U.S. by 2030.

[Chrystia Freeland, Liberal, University—Rosedale, ON]

Mr. Chair, it is with our $120-billion clean economy plan.

[Chris Warkentin, Conservative, Grande Prairie—Mackenzie, AB]

Mr. Chair, on a point of order, on May 4, the Speaker asked me to withdraw a comment. I would like to withdraw it and apologize for any inconvenience that I caused the Speaker.

[The Chair, Conservative, Chris d'Entremont]

I thank the member for that.

The hon. member for Kingston and the Islands.

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

Mr. Chair, on a point of order, although I think we are all excited to see this apology come, we are technically in committee of the whole. Would that not have to happen during a regular sitting of Parliament?

[The Chair, Conservative, Chris d'Entremont]

It is acceptable during this session as well. Let us put it this way. It is really good to see the member.

The hon. member for Thornhill.

[Melissa Lantsman, Conservative, Thornhill, ON]

Mr. Chair, I am going to split my time three ways.

I thank the minister for coming.

The minister agrees that deficits fuel inflation. She said so. How much will the $60 billion that she just spent increase inflation over five years?

[Chrystia Freeland, Liberal, Deputy Prime Minister and Minister of Finance]

Mr. Chair, actually, that is not exactly what I said. I know that we need to invest in our economic capacity. However, I believe that fiscal responsibility is important. That is why I am so glad that S&P reaffirmed our AAA rating after I tabled the budget.

[Melissa Lantsman, Conservative, Thornhill, ON]

Mr. Chair, this is a simple question. Of the $60 billion that the minister just spent in her budget, how much will inflation increase over five years? I want just a number.

[Chrystia Freeland, Liberal, University—Rosedale, ON]

Mr. Chair, the fact is that inflation is coming down in Canada. Inflation was at 8.1% in June and was 4.4% in April, and the Bank of Canada forecasts that it will be 3% this summer.

[Melissa Lantsman, Conservative, Thornhill, ON]

Mr. Chair, the minister knows that inflation went up last month after she tabled her budget. She has been briefed on this number. There are officials sitting in front of her. I will give her a moment to ask her officials what the number is. How much will inflation go up as a result of the $60 billion that she spent in the last budget?