Madam Speaker, I will be splitting my time with the member for Charlesbourg—Haute-Saint-Charles.
Let us go back 10 years ago, to 2014. On April 30, 2014, The New York Times published an article entitled “Life in Canada, Home of the World’s Most Affluent Middle Class.” The article stated that “median income in Canada appears to have surpassed median income in the United States, based on more than three decades of international income surveys analyzed”. That was in April 2014.
We can then fast-forward almost a decade, to 2022, when the current government had been in power for six years. On April 8 of that year, in 2022, the Minister of Finance delivered her budget, budget 2022, and in that budget, the government published a chart on page 25 entitled “Average Potential Annual Growth in Real GDP per capita, Selected OECD Countries, 2020-2060”. In this chart, Canada is dead last.
I do not know who put that chart in the government's budget. I suspect it was not the minister's exempt staffers, and I suspect it was not the minister herself. I suspect it was Finance Canada officials, who put it in the budget to demonstrate how much trouble Canada's economy was in after six years of the government's fiscal and economic management.
That chart, where Canada was dead last in projected per capita GDP growth in selected OECD economies from 2020 to 2060, was an indictment at that time of the government's economic policies. Despite that chart being in the budget, and despite a number of people commenting on that chart, the government failed to heed the principles of good budgeting and fiscal management.
It failed to heed the principles outlined by former Liberal finance minister Paul Martin in his budget speech of 1996. I am going to quote from that budget speech because I think it is instructive for the House, and the government should heed the lessons. It reads:
Here are our principles. First, governments created the deficit burden and so governments must resolve it first by focusing in their own backyards by getting spending down, not by getting taxes up.
Second, our fiscal strategy will be worth nothing if at the end of the day we have not provided hope for jobs [and growth]. We must focus on getting growth up at the same time as we strive to get spending down.
Third, we must be frugal in everything we do. Waste in government is simply not tolerable.
Fourth, we must forever put aside the old notion that new government programs require additional spending. They do not. What they do require is the will to shutdown what does not work and focus on what can. That is why a central thrust of our effort is reallocation. Whether on the spending side or on the revenue side, every initiative in this budget reflects a shift from lower to higher priority areas.
Finally, we must always be fair and compassionate. It is the most vulnerable whose voices are often the least strong. We must never let the need to be frugal become an excuse to stop being fair.
That was finance minister Paul Martin in the 1996 budget speech he delivered in the House, outlining the principles for responsible budgeting that the current government has utterly failed to heed. Because the government failed to heed the warning on page 25 of budget 2022's document and the warnings of former finance minister Paul Martin, the economy continued to falter.
A year later, on April 17, 2023, Jonathan Deslauriers and Robert Gagné at the Centre for Productivity and Prosperity at the Walter J. Somers Foundation did an analysis of Canada's living standards. Here is what they concluded:
In 1981, Canadians enjoyed a $3,000 higher per capita standard of living than the major Western economies (adjusted for inflation and currency fluctuations). Forty years later, Canada was $5,000 below that same average. If the trajectory continues, the gap will be nearly $18,000 by 2060. Canada’s Department of Finance has also reported these alarming projections.
According to their analysis, on the current track the government has put Canada on, we will go from having the sixth-highest living standard in the leading OECD 19 economies in 1981 to dropping to 15th place. All the while, our closest trading partner and ally, the United States, ranks at third place, with the third-highest standard of living in the group.
Subsequent to that analysis in Policy Options, many, many other experts rang the alarm bell about Canada's faltering economy, people like the former governor of the Bank of Canada David Dodge, the former Liberal finance minister John Manley and former policy and budget director to former finance minister Bill Morneau, Robert Asselin. However, despite all the warnings coming from experts across the country in academia and in political and policy circles, the government failed to heed the warnings.
This year, the senior deputy governor of the Bank of Canada, Carolyn Rogers, added to these warnings. With respect to Canada's economy, on March 26 she noted that productivity improved in the U.S. economy coming out of the pandemic, but that this had not happened in Canada. It was quite the opposite. She noted that Canada's productivity is unchanged from where it was seven years ago. In fact, she issued this very stark warning: “You know those signs that say ‘In an emergency, break the glass’? Well, it's time to break the glass.”
This is very strong language coming from a central banker. Canada's central bank is saying publicly that we are in an economic emergency. It is using the word “emergency”. It is saying that Canada is falling behind other countries because of weak business investment, a lack of competition and a failure to integrate new immigrants into the workforce, all of which are responsibilities of the government.
A couple of months later, on May 6, 2024, the Financial Times of London did an analysis titled “A warning from the breakdown nations”. Here is what its analysis concluded:
Take Canada first. Widely admired for how it weathered the global financial crisis of 2008, it missed the boat when the world moved on, driven by big tech instead of commodities. Canada’s per capita GDP has been shrinking 0.4 per cent a year since 2020—the worst rate for any developed economy in the top 50. New investment and job growth is being driven mainly by the government.
Private-sector action is confined largely to the property market, which does little for productivity and prosperity. Many young people can’t afford to buy in one of the world’s most expensive housing markets. Pressed to name a digital success, Canadians cite Shopify—but the online store is the only tech name among the country’s 10 largest companies, and its shares are trading at half their 2021 peak.
That is the end of its analysis.
On September 30, The Economist published an analysis titled “Why is Canada's economy falling behind America's? The country was slightly richer than Montana in 2019. Now it is just poorer than Alabama.” A couple of weeks later, The Economist also published a very harsh, I would say, but accurate assessment of the Prime Minister.
I will just finish by saying this: The government has put Canada in a very poor position, and it is unable to meet the challenges of the new administration south of the border.