Madam Speaker, it is my turn to speak to Bill C-15 and, of course, the budget.
The budget tabled on November 4 is about building a stronger and more prosperous Canada. It essentially boils down to three themes: building, protecting and empowering Canada. I will discuss these three broad themes in greater detail in a moment, but before I do, I would like to put the budget into context.
The context is that the world has changed. The world has changed in the last year or so, ever since a new administration came to power down south and implemented a trade policy that is unusual, to say the least. We are not in a situation of cyclical change where things are likely to go back to normal within a few quarters. No, we are facing a major economic shock. On top of that, this shock follows two previous events that severely disrupted the Canadian economy, specifically the global financial crisis in 2007-08 and the COVID-19 pandemic in 2020, so this is the third successive shock to hit the Canadian economy.
What has been happening for the past year or so is very serious and very grave. The shift in global trade resulting from policy changes in the United States is weakening multilateral institutions, the rule of law, and trust between economic partners. The imposition of arbitrary, unfair and illegal tariffs has a twofold impact: first, supply chains are being reconfigured, and second, many companies are learning that in order to sell to the United States, they must manufacture in the United States. This is causing many problems for all trading partners, but it is also causing problems for us, since our economies are closely intertwined. This situation is causing prices to increase across the board, fuelling inflation and creating additional problems. As has been mentioned several times, the United States accounts for 75% to 80% of our exports. It is therefore clear that we are the country most affected by these major changes.
We understand very well that this situation calls for the government to meet the moment with a strong, ambitious, massive response. That is what we have delivered in budget 2025. Ultimately, we are doing what we said we would do. We are simply implementing what we promised.
It is worth noting that what we are essentially doing is reorienting the Government of Canada's economic policy to clearly encourage investment. This is an investment budget that will increase our production capacity and help Canada transition to an economy that is less dependent on the U.S. economy. We are planning to invest about $280 billion in infrastructure and other areas, which should catalyze close to $1 trillion in total investments. That is one-third of Canada's GDP. Obviously, there are risks involved, and it is clear that this is not a given. Indeed, there is no 100% guarantee that these investments will happen. However, with the measures we are putting in place, we are confident that these investments will materialize.
In fact, we think that the biggest risk would be to take no risks at all and table a budget more in keeping with the norm. For at least the past three months, our Conservative colleagues have repeatedly floated the idea of a truly conservative budget approach. That is not our approach. What they are proposing is an austerity approach. Right now, with all the upheaval coming from outside the country, this kind of approach would certainly lead us into a very serious recession.
What we gather from our Conservative friends' statements is that their fiscal approach would most likely reduce investment by $50 billion to $60 billion. As others have already mentioned, that kind of austerity would be downright toxic, because it would weaken the economy even more at a time when it is already weak.
A number of studies have mentioned the need for fiscal restraint, but the blind austerity proposed by our Conservative colleagues would have made the situation much worse.
Is sustainability really a problem as far as Canada's fiscal policies are concerned?
Is the Canadian public debt sustainable or not sustainable? Would a deficit of $78 billion in the budget be manageable or not manageable? Would this deficit generate, as our friends maintain, massive inflation, or would it support the economy, allow us to expand the supply side of the economy and, in fact, contribute to having fewer inflationary pressures? We think it is the latter.
A deficit of $78 billion is a deficit of 2.5% of GDP. That is perfectly manageable. That is a lot less than many of our partners have, whether it is the United States or even countries in Europe. Our level of public debt is around 43% of GDP, and it would remain in that range for the next five years, which is a level of debt that is sustainable.
Members do not need to take my word for it. Members can look at the financial markets and at what is going on in the bond market. Where are the long-term bond yields? They are lower now in absolute terms than they were in 2006, when there was another government in place at that time. Therefore, our debt is sustainable. We can and we do afford it. We are able to finance that debt.
Interest payments over GDP are a lot less now than what they were in the 1990s. It seems to me that our Conservative friends appear to still be living in the 1990s. We are no longer in the 1990s. The world has changed. We are now at a point in time, in 2025, when those of us who believe that the state has an important role to play are doing it, and those of us who believe that the state should just step aside, well, they will see how that goes in countries where that is taking place. It would be making a bad situation 10 times worse if the state were to withdraw from the economy at this point.
We need to promote investment. We need to make sure that our economy is efficient and productive and that the private sector finds reasons to invest and projects to invest in. We will support that.