Debates of June 21st, 2023

Opposition Motion—Balanced Budget

[Terry Beech, Liberal, Parliamentary Secretary to the Deputy Prime Minister and Minister of Finance]

Madam Speaker, I will be splitting my time with the member for Kingston and the Islands.

It is a pleasure to rise to discuss Canada's current fiscal position, our independent monetary policy, the current economic context and the 2023 budget, as well as to highlight a number of measures that are making life more affordable for Canadians while building a sustainable economy that works well for all Canadians.

This week, the International Monetary Fund reaffirmed not only that Canada enjoys the lowest deficit in the G7, but that this advantage continues for each and every year through its projected horizon. It said, “Canada is a strong fiscal performer”, with an enviable job market and a strong labour participation rate, which have been bolstered by the government’s investments in a Canada-wide early learning and child care system.

The IMF went on to note the resilience of Canada’s financial system in the face of recent global financial challenges, pointing specifically to Canada’s robust regulatory framework and contingency tools to safeguard federally regulated financial institutions, as well as insurance deposits. The IMF praised Canada’s progress in strengthening our anti-money laundering and anti-terrorist financing frameworks. It also noted our government’s efforts to increase housing supply and to address housing affordability challenges, including with the housing accelerator fund, which provides incentives for municipalities to bolster the housing supply even further.

At the end of March, our government released budget 2023, our made-in-Canada plan for a strong middle class, an affordable economy and a healthy future. It comes at an important moment for our economy.

As we have seen, Canada’s economy has made a remarkable recovery from the COVID recession. There are 890,000 more Canadians working today than when COVID first began. In the first four months of 2023 alone, the Canadian economy has added nearly a quarter of a million jobs. We have now recovered 128% of jobs lost during the first months of the pandemic, while the United States has only recovered 117%. Also, universal child care has increased the labour participation rate for Canadian women to a record high of 85.7%, showing the success of that policy, and our unemployment rate remains close to all-time historic lows.

Global inflation, while still too high, has fallen in Canada from its peak of 8.1% last June to 4.4% last month, and the Bank of Canada predicts it will be 3% by this summer and 2% by the end of 2024. Canada’s inflation rate also remains below that of our economic peers. Inflation in the U.K. is almost double, at 8.7%; the OECD average is at 7.4%; the EU is at 6.1%; and the G7 is at 5.4%. We can see that at 4.4% we are way below those.

Since February, the average wage for Canadians has grown by more than 5%, meaning that paycheques are now outpacing inflation. That means more money in the pockets of Canadians after a hard day’s work.

Canada had the strongest economic growth in the G7 over the course of 2022, and that is projected to continue through to 2024. Also, in April, S&P reiterated our AAA credit rating, and we have the lowest deficit-to-GDP ratio and the lowest net debt-to-GDP ratio in the G7, lower than other major AAA-rated economies, such as the Netherlands and Australia.

It is this remarkably strong economic foundation that underpinned the investments we made in our 2023 budget. Unlike the Conservatives, we believe our commitment to invest $196 billion to improve Canada’s health care system over the next 10 years is a prudent investment to make, especially in a context where we are exiting the greatest global health emergency we have faced in more than 100 years. We also think it is prudent to invest in fighting climate change and to develop the net-zero technologies that our world will demand as we continue to confront the increasing costs of previous inaction on reducing emissions.

If investments in health care and the clean economy are the first two pillars of the budget, the third is our government’s focus on affordability. Let us not forget that our government reduced our debt-to-GDP ratio every single year before the pandemic. This allowed us to support Canadians and Canadian businesses through the pandemic, and it is what allows us to invest in making life more affordable for Canadians today.

While inflation is coming down, I think we can all agree that it is still too high and is making it difficult for many Canadians to make ends meet and put nutritious food on the table. That is why budget 2023 introduced a grocery benefit that will help support 11 million Canadian families, including more than 50% of seniors. It will be delivered by cheque or direct deposit on July 5, so Canadians should watch for that over the next two weeks. We also secured a deal to reduce interchange fees for credit card-accepting businesses. This will save small businesses more than $1 billion over the next five years.

At the same time, we are looking to reduce additional fees and charges for Canadians. This includes fees on their cellphone bills, event and concert fees, excessive baggage fees and unjustified shipping and freight costs. We are also cracking down on predatory lending. We are reducing the criminal interest rate from 47% to 35% and imposing a cap on payday loans.

We are also supporting low-income Canadians by introducing automatic tax filing so that individuals can get access to the benefits they are entitled to. For some families, this will mean tens of thousands of dollars that they might not otherwise receive.

Students are receiving better access to student loans with increased student grants. The average student is likely to save $3,000 as a result of our government's eliminating interest on student loans. This will help young workers and apprentices get the start they need when they are looking to first enter the workforce. I have not even mentioned dental care, which will benefit nine million Canadians, as well as our investment in creating high-paying sustainable jobs that will benefit generations to come.

These investments build on significant investments that our government has made to support Canadians since first being elected in 2015. Child care costs, for example, have been reduced by 50%, with $10-a-day child care on track to being fully implemented by 2026. Child care on its own used to be the same amount as a mortgage payment. A family with two children is now saving over $20,000 a year in many cases.

We have increased old age security and have worked with premiers to increase the average value of pension payments going forward. We have reduced taxes for the middle class while increasing them on the top 1%. We have also increased the amount everyone can earn before paying any federal income tax at all and have reduced taxes for small businesses not once but twice.

Of course, let us not forget the Canada child benefit. This benefit, like many of the programs I have already referred to, is indexed to inflation and supports more than 3.5 million families. This means that as the cost of living rises, so will the benefit that Canadian families receive. On its own, the Canada child benefit has helped to lift hundreds of thousands of children out of poverty, and combined, these measures have lifted more than 2.7 million Canadians out of poverty, demonstrating that Canada’s first poverty reduction strategy is having a significant impact.

Finally, our enhanced workers benefit is supporting 4.2 million Canadian workers with higher paycheques. We have ensured, for the first time, that our investment incentives include measures to support workers with fair wages and benefits.

All of this together is happening because we believe that confident countries like Canada do well when they invest in themselves and when we invest in our people.

These are challenging times, but Canada is in an enviable position to be able to support Canadians who need it the most in a responsible and targeted way while ensuring that global inflation continues to decline in Canada. At the same time, we are securing health care and retirement security for the next generation while creating high-paying sustainable jobs for this generation.

There is obviously more work to do, more work to do on housing, more work to do on climate change and more work to do on affordability. Canadians are up to this challenge, and we are well positioned as a country to address those things. I hope that all members of this House will work together to bring forward the best Canadian ideas from right across the country, and that we will work to implement those ideas and positive solutions through the fall and through to budget 2024.

[Gérard Deltell, Conservative, Louis-Saint-Laurent, QC]

Madam Speaker, we are talking about taxation, the budget, the management of public funds and, most importantly, how we are going to manage the money that Canadians give us through their taxes.

Just seven months ago, the Deputy Prime Minister and Minister of Finance tabled an economic update and gave the following warning. She said that we needed to control spending and avoid deficits because deficits throw fuel on the inflationary fire. Those were the exact words used by the Minister of Finance. Now, here we are seven months later and she has completely changed her tune after getting a slap on the wrist from Liberal supporters who said that they wanted more deficits and that there was no problem.

How can the member explain the fact that, just seven months ago, the Deputy Prime Minister was saying that we should not run deficits, that we should control spending and that there was a plan to balance the budget, but now all of that has gone out the window.

[Terry Beech, Liberal, Burnaby North—Seymour, BC]

Madam Speaker, I really appreciate having another opportunity to address Canada's current fiscal situation.

We have the lowest deficit in the G7. We have the lowest net debt-to-GDP ratio in the G7. That is what has allowed us to focus our investments in this budget on securing health care, with $196 billion invested over the next 10 years; investing in the future with sustainable jobs; investing in the clean economy; and of course investing in affordability.

There is global inflation, and while inflation in Canada has come down from 8.1% to 4.4% and is now likely, as forecast by the Bank of Canada, to hit 3% by the summer and 2% by next year, we need to make sure that Canadians who need our support are receiving that support. We have invested in very targeted measures to make sure that the most vulnerable Canadians who need support the most get it through these hard times, while we position Canada as a country, as a whole, to thrive going forward.

[Bonita Zarrillo, NDP, Port Moody—Coquitlam, BC]

Madam Speaker, the member and I are neighbours; we share a border. Today in our local newspaper, one of the headlines said that rents are unaffordable for 40% of Coquitlam renters. While the Conservatives continue to try to deny children dental care, the NDP is working on solutions to get people in homes and stay in homes.

One thing that is happening in B.C. is a housing acquisition fund. The B.C. government has put forward a housing acquisition fund that would allow the province to work with not-for-profits and co-op housing to maintain housing in our communities. I wonder if the member can talk about whether the federal government is going to come forward with a housing acquisition fund, as has been requested over and over again by the member for Vancouver East.

[Terry Beech, Liberal, Burnaby North—Seymour, BC]

Madam Speaker, I would like to start by thanking the member for her petition today. It is an issue that I have spent a lot of time on as well. I expect our issues are similar because we are neighbours. I also want to thank her for bringing up investments in housing.

I had an opportunity to meet with mayors and councillors from across British Columbia at the UBCM Housing Summit, where we were all working together to find solutions to make rents and housing more affordable. Part of the discussion was about reviewing what the federal government has done. We have to remember that the federal government had been essentially out of housing for almost 30 years. That was until we created the national housing strategy, an investment of over $80 billion going to a number of different things. That particular summit gave me the opportunity to review how that money has been invested. Some 39% of it that has been invested in projects across the country and 61% is still unallocated.

The investments in British Columbia on their own in the last six years already amount to more funding than the B.C. government has suggested it will put forward over the next 10 years, and we are continuing to invest on top of that. B.C. is a good partner. B.C. municipalities are a good partner. However, we can only get affordable housing if the federal government, the provincial governments, the municipal governments and indigenous governments all work together, and that is exactly what I propose we all do.

[Marty Morantz, Conservative, Charleswood—St. James—Assiniboia—Headingley, MB]

Madam Speaker, I noted that when the member was talking about the IMF, he was cherry-picking points from the IMF's report that strengthened his case. I have a chart in front of me of housing market risk indicators. It says, “Economies with high household debt and more floating-rate loans have greater exposure to higher mortgage payments, and a heightened risk of defaults.” Then it lists a number of countries. Do members know which country is rated as having the highest risk of all of them? It is Canada. I wonder if the member could explain why.

[Terry Beech, Liberal, Burnaby North—Seymour, BC]

Madam Speaker, it is good to bring up the stress test measures that were brought up in 2018. We had historically low interest rates, and we were concerned Canadians might not be able to afford their mortgage payments if there was a sudden increase from historically low rates. We put that in place. What was the Conservatives' response? Not only did they speak against the stress test, but they actually suggested in the election that came after that we should extend amortization rates. They wanted Canadians to take on more debt and wanted to, in that action, increase housing prices at the same time.

[Mark Gerretsen, Liberal, Parliamentary Secretary to the Leader of the Government in the House of Commons (Senate)]

Madam Speaker, I rise today to speak to the opposition motion that has been put before the House.

I will start by saying that I am concerned about the rhetoric in the preamble. However, the motion and the result clause is fairly short. It talks about a balanced budget and committing to a balanced budget immediately.

I found this very interesting because I asked the member for Bay of Quinte how many times Conservatives introduced balanced budgets in the House, and I even gave him the answer. It was three times in the last 30 years that Conservatives have introduced balanced budgets in the House, under Brian Mulroney and Stephen Harper. There was a grand total of 20 budgets introduced, and three were balanced.

Do members know when they came? The first came in 2006-07. This was on the heels of Paul Martin's surplus, which was a $13-billion surplus. Stephen Harper axed that the next year, and in 2007-08, the surplus was only $9.6 billion. After that, he started to run deficits immediately. He blew away that surplus that Paul Martin had left for him and started running deficits immediately. Then, of course, there is the famous balancing of the budget in 2014-15, when Stephen Harper slashed veterans services and sold off GM shares at bargain prices just so that he get himself in a position on paper that he was bringing in a surplus because he felt he needed to do that to solidify his base that was demanding it.

However, rather than dwell on the fact that Conservatives have done this historically, at least in recent history, I think we have to ask ourselves something: Why do governments run deficits?

There are two reasons. A government can run a deficit, one, because it is expecting the taxpayer to pay more to make up that deficit and plans to charge or tax them more or, two, because it is investing. The whole idea behind investing is assuming that a government will get something in return for that investment. When governments are running deficits to invest in Canadians, they are doing it with the expectation that something is going to come out on other end to grow our economy. When we grow our economy, people are better off and there is more wealth in our economy.

What about population growth? We are growing at historic rates. We are just past 40 million people in Canada. When we continue to grow in such a fashion, we need to make new investments, and we are seeing it on the other side through the growth, which is why Canada is continually rated to have one of the best credit ratings in the developed world. That is why we have such a low debt-to-GDP ratio, which is what people really need to focus on. However, I know that it is not intuitive for people to want to focus on that, especially when Canadians are managing a household budget, and they cannot look at it the same way, but the reality is that we have to look at our debt in relation to our GDP.

As our GDP continues to grow, if we are spending less than that growth, we have a net benefit at the end of the day, which is essentially what we see when we bring forward these budgets that are investing in Canadians. Quite frankly, that is something that Brian Mulroney understood. It is something that Stephen Harper understood, and it is something that former Liberals, such as Paul Martin and Jean Chrétien, understood.

They understood that, if we invest in Canadians and actually use the money to invest in Canadians when running those deficits, we will get to a place eventually where Paul Martin got to, which was a $13-billion surplus, and a surplus the year after that as well. We will get to those places naturally. The point is that we can get to that place by investing in Canadians because we see the economic growth, see the opportunities, see people being better off and see the debt-to-GDP ratio. We see the debt specifically as it relates per capita to the lowest among the G7, as we are hearing.

There is one thing we should be concerned about, and I rightfully share it with so many other people. It is the debt level each household is experiencing right now in Canada, but we have to ask ourselves why. Why is that? Is there something unique about Canada and our spending habits that puts us in that position? It has a lot to do, I would suggest, with the age of our population.

In the G7, Canada has one of the youngest populations. These are people who are buying new homes and investing for the first time. These are people who do not have the retirement savings that other G7 countries have. Am I excusing anything? I am not. I am saying that we have to be mindful of this and we have to be vigilant in the approach and ensure Canadians do not put themselves into situations they do not want to be in.

I stress that there is a reason for the circumstances we are in, but regardless of all of this, Canada still puts itself in a position of being among the best in the G7, as it relates to the lowest debt-to-GDP ratio and the lowest deficit-to-GDP ratio, and I think it is very important that, as we reflect on this, we consider that.

I have brought these up on a number of occasions recently, and I want to talk about them again. They are the recent comments made by former prime minister Brian Mulroney on the job this government has been doing. I mean no disrespect to any living Liberal prime ministers, but I have not even heard a former Liberal prime minister speak this highly of the current government.

Brian Mulroney said, “I have learned over the years that history is unconcerned with the trivia and the trash of rumours and gossip floating around Parliament Hill. History is only concerned with the big ticket items that have shaped the future of Canada”. The article continues, “He said [the current Prime Minister] and the premiers 'conducted themselves as well as anybody else in the world' in dealing with COVID, something Mulroney called 'the greatest challenge that any prime minister has dealt with...in 156 years.'”

We have heard Conservatives tell us many times in the past how we failed the country on NAFTA, but here is what the architect of NAFTA, the Prime Minister who was the lead at the time and negotiated the original NAFTA deal, had to say about the job this government did. The article describes, “On NAFTA, Mulroney said that he saw first-hand how the current Prime Minister made 'big decisions at crucial moments' and won 'a significant victory for Canada'. He said, 'It's due to the leadership that we saw from the government of Canada'”. That is Brian Mulroney, a former Conservative prime minister, absolutely praising the work this government did in relation to keeping our economy in a good position when we had to renegotiate NAFTA.

I remember the member for Regina—Qu'Appelle at the time standing up in question period demanding the government capitulate to Donald Trump's demands, but we did not. The government stood firm. Our finance minister negotiated this, and we got a better deal at the end of the day. Brian Mulroney will even tell us that. Also, we can look at the various other things that have occurred.

I know that my time is running to an end. I think that once again we have an opposition motion in front of us that is troubling. I am getting tired of challenging the Conservatives day in and day out, but here we are. It is the last one. Hopefully when we return in the fall, we will have motions with perhaps a little more substantive measures to them than what we are seeing now.

[Cheryl Gallant, Conservative, Renfrew—Nipissing—Pembroke, ON]

Madam Speaker, the member was discussing the population growth to 40 million. In my riding, we have close to 60,000 people without a family doctor and a problem we have never had before, which is homelessness. I am wondering how his government can call it a success, when it is not balancing the needs of the newcomers and existing population with the inflow. It has to regulate it.

How does the government plan to do this so that, when newcomers arrive in Canada, they have what they are expecting, which is a place to live and a way to be cared for health-wise?

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

Madam Speaker, I can assure the member that homelessness did, and always has, existed in her riding. It is nothing new. Maybe she is just realizing it now, but I can assure her that homelessness in her riding is most likely something that is not unique.

What I would say is that we have an obligation to support Canadians in the best way that we can. We have seen the various different measures that have come forward, whether it is the grocery rebate, the housing top-up or child care. We have brought countless measures into this place to help Canadians.

I hope the member realizes that the Conservative motion put forward today calls on us to balance the budget, which means that a number of those measures would have to be eliminated. The Conservatives have yet to tell us which measures it would be. I certainly would like to know because I am sure that would impact those who are homeless in her community.

[Gabriel Ste-Marie, Bloc, Joliette, QC]

Madam Speaker, for a skilled worker wanting to work in Quebec, the wait time is 20 months. Whoever needs a passport might as well bring a lawn chair to the Service Canada offices because that is where they might end up taking their vacation. Whoever has a passport and by some misfortune has been shortchanged by the airline, after waiting forever at the airport because the flight was cancelled or a suitcase was lost, then it takes a year and a half to get compensation if the claim is successful. Whoever loses their job and wants to get EI benefits from the fund they contributed to for years better have a six-month emergency fund because that is how long it can take to get the first cheque. Clearly, this government is no champion when it comes to providing services to the public.

Does my colleague think that a cabinet shuffle this summer will fix all that?

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

Madam Speaker, I have no idea what that had to do with the motion we are debating today. That sounded more like just a Bloc Québécois list of grievances that he wanted to express to the House.

We are committed to helping Canadians where they need those supports. That is why we have rolled out countless measures in the last number of months and years, and why we will continue to do that.

[Charlie Angus, NDP, Timmins—James Bay, ON]

Madam Speaker, I have seen many extraordinary stunts in the House.

Perhaps one of the most spectacular was by the member in Stornoway, who has benefited from 20 years of free dental care and now has a 19-room mansion paid for by the taxpayers, as well as chefs and groundskeepers. He came into the House and said that he was going to stand and speak until the budget was changed. Then he ran out of gas three hours later. Now, the Conservatives want us to stay into the late night, until the budget is changed, all to deny children and seniors dental care.

I want to ask my hon. colleague a question because he has been accused of rhetorical hot air at times, but I would say that maybe that was just elevated temperature and talk. Why does the member think that the member in Stornoway could not sustain himself in his attack on dental care for seniors, running out of speed after a mere three hours? What does that say about his ability to drive the Conservative agenda anywhere, except maybe into the ruts?

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

Madam Speaker, that is an excellent question.

The member for Carleton, the Leader of the Opposition, came into the House and said that he had sent out fundraising emails about how he would filibuster forever or until he got what he wanted. Then he came in here and talked for about three and a half hours. That was it.

I have seen him filibuster for closer to 20 hours, since I have been in this House. To me, it just says that the member for Carleton is really losing steam. He does not have that spunk he used to have. This is really going to translate into how he is able to sympathize—

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

It is time to resume debate.

The hon. member for Joliette.

[Gabriel Ste-Marie, Bloc, Joliette, QC]

Madam Speaker, my colleagues are applauding me because I am announcing that I will be sharing my time with the member for La Prairie, who is also my esteemed House leader.

Populism is proposing simplistic solutions to complex problems in order to pander to the population's most basic instincts. Today's motion is a good example of that. After giving an accurate picture of inflation, household debt and the housing crisis, the Conservatives are saying that the solution is simply to eliminate deficits. I guess that housing prices will then magically drop and households will have less debt. That is populist rhetoric.

Beyond the rhetoric, the motion asks only one thing, which is that “the House call on the government to table a plan to return to balanced budgets.” That is what we are voting on today, and the Bloc Québécois wholeheartedly supports that, because governing involves planning and forecasting. Bringing forward a plan to return to balanced budgets is the least that we can do. Had the motion called for approval of the rhetoric of the Conservatives or the Liberals, the Bloc Québécois would vote against it in either case.

Canada is going through a tough time right now. On the one hand, a spendthrift and unserious Prime Minister is spending lavishly on one-size-fits-all programs to promote his ideology rather than to meet immediate and real needs, including in areas that are outside federal jurisdiction. On the other hand, the populist and somewhat mean-spirited Conservative leader is proposing nothing except to get rid of the Liberals. His sound bites serve as economic policy, and his vision of the economy and the environment is stuck in the 20th century, the century of oil.

Between the two, there is the Bloc Québécois, which proposes tangible measures. It proposes flexible and targeted programs to meet people's real needs. These are much less costly and more effective programs than the current one-size-fits-all initiatives. It proposes to bring some order to how the government operates to end waste and the chronic inability to manage properly. This is all related to my question.

The Bloc proposes to end interference by having a government that uses its flexibility to address matters within its jurisdiction rather than increasing initiatives in areas that are not its responsibility. The Bloc proposes to end support for oil companies and shift that money to programs specifically designed to transition to renewable energy rather than remaining trapped any longer in the 20th century of oil.

The Bloc proposes a federal government that stops spreading itself too thin and focuses on its fundamental responsibilities, which are the following: stopping the erosion of purchasing power, especially for seniors; providing a level of health transfers that ensures the sustainability of public services; creating a Marshall plan for the construction of social and community housing; and ensuring we have employment insurance that works.

In short, we are proposing a real plan to balance the budget, which will strengthen the core responsibilities of the government and avoid the full-scale austerity that could risk plunging the economy into a recession. A plan to return to a balanced budget is necessary, especially since the government is increasing its initiatives in areas that are not within its jurisdiction, which causes tensions, boondoggles and costly duplication of efforts.

A study by the Centre of Excellence on the Canadian Federation, a research group at the Institute for Research on Public Policy, analyzed federal spending since 2015 and came to the following devastating conclusion on June 7, saying, “the current Liberal government has used federal funds to seek provincial engagement with its own social policy priorities....the current trend is toward a more directive and less collaborative use of the spending power....Partnership seems to be conditional on a province accepting the federal government's policy vision.”

A plan to re-establish balance is also a way to put an end to federal paternalism that uses its spending to impose its own political choices on Quebec.

Things have also been mismanaged. Every time Ottawa touches something, it ends up costing too much. Ley us take the gun registry fiasco. They spent $2 billion to maintain a list. At that price, Quebec could not afford to keep a registry of vehicle license plates. Managing employment insurance costs two and a half times more than managing social assistance. Ottawa's management of passport files costs four times as much as Quebec's management of drivers' licences.

That is another product of fiscal imbalance. Since Ottawa is collecting more taxes than it needs to meet its responsibilities, it does not need to be a good manager of public funds.

For the Bloc Québécois, a plan to re-establish balance means putting an end to waste. There is a way to manage the state a little more rigorously. That rigour will make it possible to avoid the austerity the Conservatives are inviting us to accept today in their speeches.

Historically, the biggest driver of price volatility has been oil prices. The best way to protect against this is to move to the post-oil period as soon as possible. Already, 98% of Quebec's electricity comes from renewable sources and is immune to oil prices. Oil and gas account for only 13% of home energy consumption. The rest is electricity or firewood. These are all energy sources that are not affected by oil prices.

The Quebec fleet is the most electrified in Canada. The network of charging stations in Quebec is the most developed. The price gap between electric vehicles and gas-powered vehicles is constantly shrinking. The sale of personal gas-powered vehicles will be banned in Quebec as of 2035.

We need to accelerate this shift. The best and cheapest way to do that is to redirect the money currently earmarked for modernizing the oil industry to clean energy. In the post-oil world, Quebec has everything it needs to be the most prosperous society on the planet.

Since the government has not taken any budgetary or legislative measures to address the sources of inflation, it is the Bank of Canada that has had to act with the monetary tool it has at its disposal: rising interest rates. Yet there are things the government could have done.

In order to provide relief for pensioners on a fixed income, the government should have increased old age security. The government increased OAS only for those aged 75 and up, leaving those between the ages of 65 and 74 to fend for themselves.

As we know, according to OECD estimates, the net pension replacement rate was 50.7% of pre-retirement income in Canada. In other words, the transition to retirement means a major drop in the average standard of living for Canadians and Quebeckers.

The average net pension replacement rate for OECD countries was 57.6% and the EU average was 63%, so Canada has a poor record in this regard, lagging far behind Italy, India, France and Denmark. We are doing only slightly better than the U.S., where inequality is skyrocketing. We need to take action. We need to better protect the standard of living of our seniors.

To reduce pressure on the cost of housing, the government needs to increase the supply of social and community housing. The current funding will not make up for two decades of underfunding and the resulting housing shortage.

To limit price increases on consumer goods, we need to improve competition laws. Last December, the Governor of the Bank of Canada told the Standing Committee on Finance that concentration in the food distribution sector and the lack of competition had led to the prices hikes we saw, which resulted in significantly higher profits for that sector, on the backs of consumers.

The competition regime needs to be reformed, particularly to slow down the trend towards concentration and the abuse of dominance that naturally ensues.

In the face of rising household debt, we need to regulate credit card fees, which are the costliest form of debt for heavily indebted households. The government's announcement in the last budget that it trusted credit card issuers to set and maintain reasonable fees is woefully inadequate.

In the face of supply chain problems, we need to make it easier to increase local production; support investments that help boost productivity to counter the adverse effects of higher interest rates on investments in production equipment; address the labour shortage, which is getting in the way of adjusting the supply to meet demand; encourage seniors to keep working by not penalizing them with GIS clawbacks; and make it easier to use temporary foreign workers in professions where there is a labour shortage by transferring management of the program to Quebec City, which is already doing the impact assessments that the federal government is asking business owners to do.

Those are some of the measures the government could take to address both the cause and effects of inflation.

Lastly, let us not forget the importance of seriously addressing the use of tax havens by major banks, multinationals, web giants and the wealthy. It is high time that this grossly unfair loophole was closed. It is immoral and we must make it illegal.

[Marty Morantz, Conservative, Charleswood—St. James—Assiniboia—Headingley, MB]

Madam Speaker, I very much enjoy working with my colleague from the Bloc at the finance committee. I find him to be an articulate and thoughtful member of the committee.

Our motion is basically to call on the government to balance budgets. I will note that, during the 2015 campaign, the Prime Minister promised he would balance the budget by 2019. Just recently, in the fall economic statement, the government had projected a surplus in the 2027-28 year. It quickly reneged on that in this budget on March 28.

Could the member share his thoughts on how anyone can believe anything the government says when it comes to balancing budgets?

[Gabriel Ste-Marie, Bloc, Joliette, QC]

Madam Speaker, a few years ago, the pandemic happened and the economy shut down. The House was unanimous in stating that we needed to implement protective measures and safeguards. That came at the cost of significant debt. There was a consensus in the House about that.

Since then, the spending has continued, however, and that is concerning. What concerns the Bloc Québécois in particular is the interference in areas under the jurisdiction of Quebec and the provinces. That really is not warranted.

I, too, want to salute my hon. colleague. It is a pleasure to work constructively with him at the finance committee.

[Peter Fragiskatos, Liberal, Parliamentary Secretary to the Minister of National Revenue]

Madam Speaker, I have a great deal of respect for my colleague.

We have worked together before on the finance committee, and he has been an excellent colleague.

I would like to ask him a question.

In terms of the balancing of the budget, does the Bloc Québécois believe in a balanced budget, and what would it do to get to that point if the Bloc members do indeed believe in balancing?

[Gabriel Ste-Marie, Bloc, Joliette, QC]

Madam Speaker, I thank and commend the Parliamentary Secretary to the Minister of National Revenue. It was an immense pleasure and privilege to work with him at the Standing Committee on Finance. He is doing great work in his new job.

We do not agree with every argument presented in the motion. What we find there is disingenuous. The motion asks that “the House call on the government to table a plan to return to balanced budgets” without specifying a date.

To us, governing means being responsible and presenting projections. We support this desire for transparency.

I will offer some solutions to my colleague, since he works in the revenue department. In the fight against the use of tax havens, there is a lot of money to be recovered. That is something that would help in returning to balanced budgets.

[Heather McPherson, NDP, Edmonton Strathcona, AB]

Madam Speaker, I thank my colleague for his speech. I found it very interesting.

While Alberta's oil and gas companies were making record profits, workers were being laid off. This year alone, 14,000 workers in Alberta have been let go.

Does my colleague think that one way to balance the budget would be to stop subsidizing highly profitable companies and to introduce a windfall tax?

[Gabriel Ste-Marie, Bloc, Joliette, QC]

Madam Speaker, I would like to thank the hon. member for her question, which she asked in French. I congratulate her. It means a great deal to me.

The problem is being stuck in the 20th century with a 20th-century economy. The money going to prop up the oil industry should be used for the transition. We must not let workers in Alberta down. We must support them in transitioning to the sectors of the future.

I am convinced that if all the support that is currently being provided, including a large part of the $80 billion that has been announced, were used in a smart way to develop the economy of tomorrow with Alberta's valuable workers, we would be able to succeed with flying colours.

[Alain Therrien, Bloc, La Prairie, QC]

Madam Speaker, I will follow up on the fine speech by my colleague, who let the cat out of the bag: We will be voting in favour of this motion. The arguments contained in the motion, and I think that he elaborated on them, are obviously not to our liking. However, we agree with the conclusion: that “the House call on the government to table a plan to return to balanced budgets”.

When it comes to inflation and interest rates, things can get quite complicated. What better way to simplify issues than with populism and things that seem obvious to everyone, when they are actually not?

Why do we have inflation? Some will say that inflation is caused by government spending. I want to sound a note of caution, however. Inflation happens if the government spends money and if it creates deficits. Some people will therefore be tempted to say that deficits lead to inflation. That is not necessarily true. This is what is known in economics as the crowding-out effect, a term we do not often hear. It means that government deficits might not result in inflation because there is a crowding-out effect, meaning consumers save money to make up for the government deficit. The result is that there is no impact on inflation. The crowding-out effect may mean that there might be an impact on interest rates, however.

Why am I saying this? I am saying it because the thing is not so easy to understand. We could spend a long time discussing economic theories. Furthermore, some theories clash. Keynesianism is different from classical or neo-liberal economics, and so on. We have to be careful to avoid simplistic analyses or we run the risk of ignoring real solutions.

Is government spending to blame for the deficit? Is the Government of Canada responsible for global inflation? Did it ride around on a scooter, waving its arms, saying it was going to send us money and create inflation, before running away like Batman and Robin? The answer is no.

I just spelled it out in simple terms. The government is not to blame. The fault lies with the global pandemic, and with the fact that governments were forced to spend like never before in history. I never saw anything like it before. Governments were spending money hand over fist, like it was going out of style.

That is the reality. Faced with an extraordinary situation, we came up with what we believed were the best solutions at the time. That is why we have inflation. I have the figures. Inflation rose to 6.8% in 2022 and fell to 4.4% in June 2023. We can therefore agree that inflation was mainly caused by a pandemic.

Why is that? It is because we have economists who are monetarists. Monetarists believe that inflation is caused by printing money and that abundance reduces value. The more money is printed, the less that money is worth. This means that the value of money is eroded by inflation. That is the view of monetarists. A lot of people agree with this.

That is why it is the Bank of Canada that finds solutions to Canada's inflation. Our colleague, the leader of the official opposition, believes that it has fangs and prowls around at night, but in reality, the Bank of Canada is one of the most renowned banks in the world. When we travel abroad, for example to universities, we only have to mention the Bank of Canada and the audience applauds for half an hour. It is unbelievable. It is so renowned that the English decided that they wanted the Governor of the Bank of Canada for themselves. It is a little like Bedard in the world of hockey. He was that sought after.

I am just talking, but if members want to read something that is well done, they should read the Bank of Canada Review. It is well done. When they finish their university degree in economics, good economists often end up at the Bank of Canada—except for me, because I escaped. I was in the washroom when the recruiters came by. Some say that they are crazy, but they really do know their stuff. It is a renowned bank.

In 1991, they said that the only way to fight inflation effectively is to tweak interest rates. Starting in 1991, the Bank of Canada was the second bank, after New Zealand, to say that it would adjust interest rates to keep inflation between 1% and 3%. That worked beautifully until the pandemic hit. It was going so well. We were a model for the world. Now, with the increases, what did they do? They were forced to raise interest rates. It is a bit complicated.

When a government adjusts monetary policy and plays with interest rates, it takes 18 months for it to have an impact on the economy and 24 months for it to have an impact on inflation. This requires projecting two years in advance before starting to play with things. That is the reality. It is not easy.

Having said that, we could all go for a beer and tell ourselves that there is no point in us being here because the Bank of Canada manages inflation. Wait a minute. That is not true. There are things that the government can do.

First, the government can introduce well-defined policies. If wages are very high and workers are scarce, then perhaps workers could be found if the government offered tax exemptions to older people who want to go back to work. Is that complicated? A guy with glasses and a computer can do that.

No, the government would rather use the stick. They bleed dry seniors between the ages of 65 and 75 and hope that once they are at the end of their rope, they will surely want to go to work. No, that is not how to create jobs and ensure that these people can go to work.

Let us talk about housing. There is a lack of housing. It is a matter of supply and demand. We need more supply. The government needs to invest in housing. That is the smart way to fight inflation.

As for oil, we have been ripped off by shameless increases in the price of oil. Perhaps it is because we should be doing something other than burning oil. Perhaps we should be investing in the energy transition of oil companies.

With regard to productivity, we have to increase worker productivity without making more widgets. If we make more widgets, then there are more widgets on the market and the value of widgets will drop. This is not complicated.

People are wondering where I stand because I have not talked about it yet. The last part of the motion reads, “the House call on the government to table a plan to return to balanced budgets.” I would like to emphasize two things. We need restraint, not austerity. The government must stop wasting, stop encroaching on the jurisdictions of Quebec and the provinces, stop proposing one-size-fits-all measures, and stop giving money to oil companies because doing so is wrong. It has to get smart about its spending. That does not mean embracing austerity. Most of all, it must not achieve these things on the backs of Quebec and the provinces, or else services to the public will be disrupted. Most public services are delivered by Quebec and the provinces. The government must not try to rebalance its budget by cutting back on health transfers to the provinces like Jean Chrétien and Paul Martin did in the past. That must not happen.

There is something called the fiscal imbalance, which proves beyond a reasonable doubt that the needs are in Quebec City and in the provinces, and that the money is in Ottawa. This means that, even if the government remains virtually static, it will be so drowning in money thanks to the taxes it collects and the fact that it has few areas of responsibility that 40 years from now, in addition to not having a deficit, it will no longer have any debt, and some provinces will not even be solvent. They will be forced to start from scratch under another name. I do not know if they will, but they will no longer be solvent. There is a problem somewhere.

Some think that a plan to return to a balanced budget means austerity measures. That should not be the case. There is no reason why it should be, for the reasons I outlined. This government must become responsible in how it spends money. No one can claim that it is an example. I understand that the country has weathered the COVID‑19 pandemic, but after returning to normal, no one can say that it has been rigorous and intelligent in its spending choices.

I just mentioned some ways in which the government could have done better. Some people spoke earlier about how the government provides its services. Let us just say there is a lot of room for improvement. To impose a plan would make this government more serious, less frivolous and less careless.

The government needs to make do with the amount of money it has available. It must be intelligent. It must not cut transfers to the provinces, because they are the ones who deliver the most important services to the public. It must be preventive with regard to inflation, which is currently eroding the purchasing power of those least well-off. As I said, this government needs to have targeted, intelligent spending to protect people in need. Doubling the GST tax credit was the right thing to do. I applaud that. However, we also need to fight inflation intelligently, not in a populist way.

[Joël Godin, Conservative, Portneuf—Jacques-Cartier, QC]

Madam Speaker, I really enjoyed the speech by my colleague from La Prairie. I can easily imagine that he would be a favourite teacher of his students. He is an economist and I can only agree with him. I would like him to tell us, the opposition parties, things we might not understand.

Here it is the month of June and the House is about to adjourn for the summer. We spent all spring being told that we were mistaken. I would like to hear my colleague explain to me what motivated the government's attitude when it said that its plan was working. If we look at the dashboard, Canada cuts a sad figure on the global stage. I would like my colleague to talk about that.

[Alain Therrien, Bloc, La Prairie, QC]

Madam Speaker, I commend my colleague, and I thank him for his question and his compliments, as well. We have the right to accept them. I am not criticizing. I am answering my colleague's question. I think that the hallmark of this government is that it is short-sighted. We saw it with the Chinese interference. The government is going along, but it is not always easy to get on the best path to improve the situation of the community in Quebec and Canada.

That is what we are also seeing with the policies that this government adopts. It chooses the easy way out. There is a reason for the dental care plan. Tax credits and subsidies for oil companies are easy. People want them. There is no problem. That is the old way of doing things. When I suggest ways of motivating retirees to return to the labour market, it is not a short-sighted policy. Social and affordable housing are not short-term policies. In economics, we call working on productivity a long-term policy. It takes vision.

This government often makes me think of a pirate that has a patch over both eyes, not just one.