Mr. Speaker, I apologize. Old habits die hard.
The headline says, “Budget shows [the Prime Minister] doesn’t know how tough it is out there on Main Street”. Another headline reads, “The Liberals' growing deficit of trust”. Another one says that, after all the hype, the Prime Minister’s “first budget fails to meet the moment”. Another says, “Once again, [the Prime Minister] doesn’t quite live up to the hype”, followed by, “When the big day came, it wasn’t quite as advertised”. Reuters writes that the Prime Minister’s “first budget falls short on vow to transform Canadian economy”. Perhaps the most devastating is by Mr. Don Drummond, who was in the Chrétien-era finance department. He co-wrote, “A ‘generational budget’ that does little but set federal spending adrift”. This basically sums up the response to the budget
If we are wondering how the last 10 years have gone, we only have to look at the budget itself. The government writes in its own budget, on page 53, “If Canada’s productivity growth had matched the U.S. from 2017 to 2023, the median income of a family with one child would be nearly $11,000 higher.” This is in the government's own publication. It is an absolutely damning account of how things have been under the Liberal government. I am shocked this made it to print and that the Liberals would admit how badly it has been going for the government.
The last 10 years have been difficult. We are trying to get over the hangover of former prime minister Trudeau. This budget completes a number of reversals of former prime minister Trudeau's legacy. The digital services tax is gone. The luxury tax is gone. The underused housing tax is gone. The capital gains tax is gone.
The Liberals have flipped completely on stablecoins and bitcoin in this budget. Before, they made that a political football and put us behind the eight ball. When the leader of the official opposition said that Canada should be the fintech capital of the world, the government made it a political issue and instead set fintech innovation back in this country. Now, it is saying it wants to be part of the fintech revolution. It is now saying it might get rid of the emissions cap. Of course, now it is cancelling what it calls the “divisive” carbon tax. I am sorry, but the government cannot get a medal just for reversing the damage it has done.
All this talk in the budget is about economic activity that might not even occur. The superdeduction they are hanging their hat on is only about a couple of hundred million dollars more a year of stimulus than what is already there. They should have adopted the Conservative idea, which was to provide capital gains relief for Canadians or Canadian businesses when they sell an asset, if they reinvest that asset in Canada.
Even the government’s very overhyped GST cut for first-time homebuyers is only going to help a couple of thousand home purchasers a year. It could have adopted the Conservative idea, which was to cut the GST off all homes built in the year. This would help a far greater number of people and promote homebuilding in this country.
Let us remember that the government said it was going to get a lot of productive investments through SDTC and the green energy revolution. It said that we would see more productivity in electric vehicles, vaccine production facilities and ventilators that never even ended up being built. The Prime Minister is setting himself up to have a serious credibility problem. He supported the carbon tax all along the way and even disagreed with former prime minister Trudeau when they took the carbon tax off home heating in Atlantic Canada. It did not matter, anyway. He ended up cancelling the carbon tax just a few months later. Then, he called it “divisive” and said it made life more unaffordable when, before, the narrative about the carbon tax was that we were all better off having it, at the end of the month.
The Prime Minister wrote a book on climate change, saying that every decision in government had to be viewed through the climate prism. Now he does not really seem to talk about that very much. During the campaign, the Prime Minister said that China represented the greatest security threat to Canada, and now he says that China represents a new opportunity for Canada. Which one is it? Is China a security threat, or is it there for integration? The Prime Minister is himself showing that we simply cannot trust what he says, but the proof will be in the pudding.
One of my favourite high school teachers, a wonderful man named Mr. Cercone, said that it does not matter how much one makes but how much one spends. The bottom line is that people can be wealthy if they watch their expenditures, but the results of this fiscal plan are absolutely devastating for future generations. We used to spend about six cents of every dollar on interest payments on the national debt. That is now projected to more than double to 13¢ of every dollar. That will be about $76 billion of money going to bondholders and bankers instead of paying for social services. Even the IMF, which the government loves to trot out because it loves multilateral institutions, says that for the amount of money a government spends on interest on the debt, there is a corresponding decline in the amount of money that is spent on social services.
The government is also borrowing record amounts of money in the bond markets each year. Why does that matter? That matters for two reasons. One is that it always borrows on the short term, which means it has to roll this debt over year after year. This means the government is very sensitive to interest rate increases, and the Bank of Canada has warned now that 40% of the purchasers of government debt are actually hedge funds, which rely on buying and selling major government debts from all over the world and trading them immediately. If that system does not continue to work as it is working, we will see yields spike in Canada. That means higher interest rates, and higher interest rates mean higher debt service costs.
We are already spending more on servicing the debt than we send to the provinces for health care every year. We are spending more on servicing our debt than the government takes in from the GST every year. The GST that Canadians pay every day on every purchase they make, whether it is buying a car, items at a grocery store, clothing for some kids or basically anything, that amount of money for GST on every receipt we see does not even cover the interest payments on the national debt.
It is for these reasons that Conservatives cannot support the budget. The finance minister now has a new fiscal anchor, and I am willing to bet the fiscal anchor of deficit-to-GDP will be broken, because he is already close to breaking the fiscal anchor he set for himself in the budget two days ago.