Debates of May 29th, 2023

Department of Finance—Main Estimates, 2023-24

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

Mr. Chair, our debt-to-GDP ratio is coming down. It is at 43.5% and it is going to continue to come—

[The Chair, Conservative, Chris d'Entremont]

The hon. member for Northumberland—Peterborough South.

[Philip Lawrence, Conservative, Northumberland—Peterborough South, ON]

Mr. Chair, what was the debt-to-GDP ratio in 2021-22?

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

Mr. Chair, the debt-to-GDP ratio went up strongly during COVID, and that was because we had to spend significantly to support Canadians. It was the right thing to do, and we are seeing the results with a very strong job market.

[Philip Lawrence, Conservative, Northumberland—Peterborough South, ON]

Mr. Chair, during COVID, from 2021 to 2022, and then the next year, from 2022 to 2023, the debt-to-GDP ratio went up. Is that not correct?

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

Mr. Chair, the debt-to-GDP ratio went up as a result of our extraordinary COVID spending. In budget 2023, we showed a debt-to-GDP ratio in 2022-23 of 42.4%—

[The Chair, Conservative, Chris d'Entremont]

The hon. member.

[Philip Lawrence, Conservative, Northumberland—Peterborough South, ON]

Mr. Chair, it went up from 42% to 43%, which is odd because, in this very House, the Minister of Finance said, “On this point, let me be very clear. We are absolutely determined that our debt-to-GDP ratio must continue to decline and our deficits must continue to be reduced. The pandemic debt we incurred to keep Canadians safe must be paid down. This is our fiscal anchor. This is a line we will not cross.”

Why did they cross the line?

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

Mr. Chair, I would like to quote someone who is not partisan and who has been respected by all members of the House as a fiscal expert, Kevin Page, who is the former parliamentary budget officer. This is what he had to say about our budget. He said that the 2023 budget has a “credible fiscal strategy”, and that “the government's fiscal anchor of a declining ratio is maintained”. This is a declining ratio over the framework, and, I want to point out, tripling—

[The Chair, Conservative, Chris d'Entremont]

The hon. member.

[Philip Lawrence, Conservative, Northumberland—Peterborough South, ON]

Mr. Chair, speaking of parliamentary budget officers, our current Parliamentary Budget Officer said he was troubled by the lack of transparency, specifically with respect to $12 billion in unallocated funds.

Will the Minister of Finance agree to provide an allocation of that $12 billion?

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

Mr. Chair, our current Parliamentary Budget Officer also, in testimony before the finance committee, described the conversation he had with Moody's, a credit rating agency. The current PBO said that Canada's deficit should make us, and I am quoting him, “quite happy because by European standards that's very low.”

[Philip Lawrence, Conservative, Northumberland—Peterborough South, ON]

Mr. Chair, will she provide an allocation of the $12 billion unallocated in the budget?

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

Mr. Chair, our government has been assiduous in answering all questions that are presented to us by the PBO. We have—

[The Chair, Conservative, Chris d'Entremont]

The hon. member.

[Philip Lawrence, Conservative, Northumberland—Peterborough South, ON]

Mr. Chair, what has been the growth rate per capita, the GDP growth rate?

What was been the per capita GDP debt growth rate in the last 10 years?

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

Mr. Chair, I am glad to finally have a question about people, jobs and growth. Canada's GDP grew by 3.4% last year, the strongest level in the G7. In the first quarter of this year, our GDP grew by 2.5%, also the strongest in the G7.

[Philip Lawrence, Conservative, Northumberland—Peterborough South, ON]

Mr. Chair, the key number there is per capita. The growth rate is 0.8% over the last 10 years. That is the worst since the Great Depression.

We have record-high deficits. We have record-high debt. We have a slowing economy and record-low economic growth. This is very disappointing.

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

Mr. Chair, that is simply not true. Canada's deficit is forecast, this year, to be 1.4%. That is low not only by world standards; it is low also by Canadian historical standards. Our debt service charges, even in this time of high interest rates, are lower than they were for most of the Harper era.

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

Mr. Chair, this budget has disappointed us and has disappointed a lot of people. Everyone knows that the debt has exploded under the Liberals. The budget has not been balanced in the last eight years.

This is despite the fact that the minister made a nice promise in November that filled us with hope, announcing a return to balanced budgets in 2027-28. What we have seen in the budget documents is that, instead, there will be a deficit of around $14 billion in 2027-28, so there is no return to balanced budgets in sight.

My question is this. Who asked the minister to go back on her promise to return to a balanced budget?

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

Mr. Chair, I know my hon. colleague is a very experienced politician, so I know she understands that budget forecasts are not made by me or by politicians, nor are they made by Finance Canada economists like Nick Leswick.

They are made by economists in the private sector. There is a big difference between the private sector economic forecasts made in the fall and those made at the beginning of this year. That is why there was a change in the basic budget figures.

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

Mr. Chair, we are responsible before the House of Commons for the documents we table, the budgets we table. It is important, it is fundamental in our democracy.

Is the Prime Minister the one who asked the Minister of Finance to go back on her promise to return to a balanced budget?

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

Mr. Chair, I am not going to explain again how the estimates are prepared, but I will quote Kevin Page, a former parliamentary budget officer. He said that we have a credible fiscal strategy.

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

Mr. Chair, in November, she told us that there would be a return to a balanced budget in 2027-28. Four months later, she is flip-flopping and tabling a budget that says something completely different.

She is not planning a return to a balanced budget. Who asked her to go back on her decision?

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

Mr. Chair, it is important to tell Canadians the truth. After the budget was tabled, the S&P reaffirmed Canada's AAA rating. That is the reality and it is an important reality.