Madam Speaker, I am very pleased to rise to speak to the budget implementation act, 2016, No. 2.
For people who might be watching or listening, a brief summary of the process may be helpful in terms of why we are here and what we are debating.
In the spring, the Liberals presented their first budget. The actual implementation comes in two phases. There was Bill C-15, the Budget Implementation Act, 2016, No. 1, which of course was passed last spring. Now we are implementing the next phase of the budget. It is known as the budget implementation act, 2016, No. 2. These are the technical measures to move the budget into law.
The Liberals always used to talk about the Conservatives and the omnibus nature of our legislation. I am not going to call this omnibus, although we can see that it has many different features. It is necessary, sometimes, to move a budget into law that impacts lots of different pieces of legislation. The Liberals called it omnibus. I just call it good governance and how a budget is actually put into action.
Part 1 is a number of income tax measures. Part 2 focuses on the goods and services tax, the harmonized sales tax, and some commitments made there. Part 3 focuses on the excise tax. Part 4 has a number of different pieces, including the Employment Insurance Act, the Old Age Security Act, the Canada Education Savings Act, the Canada Disability Savings Act, the Financial Consumer Protection Framework, the Royal Canadian Mint Act, and funds management, etcetera. What we can see is a broad piece of legislation impacting many acts of Parliament. It is not called omnibus. It really is just a government doing its business.
Before I talk about my concerns about this particular budget and the budget implementation bill, not all is bad. There are perhaps one or two features that I actually think are reasonable.
We all know of lower-income senior citizen couples who are perhaps separated. Perhaps one needs additional care and has to go into a home. Their benefits are still calculated as a couple. I think it is reasonable to say that if a couple is separated and someone has to go into a home, they now have double the living expenses, so the calculation of the GIS and OAS will not be impacted.
I want to note that there are one or two pieces that I think are reasonable.
More importantly, I think the budget is a disaster for Canada and overall is totally unsupportable.
I remember very fondly when I had the privilege of serving on the finance committee when Canada entered the global recession. The late hon. Jim Flaherty was our finance minister. He was also named the best finance minister in Canada.
It was a global crisis at the time. It was a catastrophe. We were very concerned. Leaders across of the world had many sleepless nights because of the global recession. I can remember that the hon. Jim Flaherty came up with a plan. He articulated that plan to Canadians. He said what he was going to do over a number of years. Not only did he articulate the plan, he executed the plan, and he executed the plan in almost exactly the way he said he would when he first announced that we were going to have to take extraordinary measures to deal with the global recession.
It is important to say that it was a plan. It was articulated to Canadians, it was executed, and the results speak for themselves.
Up to about 2008-09, things were moving along very well. About $30 million or $40 million was paid back on the debt, then we were struck by the global recession.
The plan at the time was a number of years of deficit spending. The reason I am going over this is to contrast the current plan of the Liberals with the plan we had back then. It was deficit spending to deal with an extraordinary situation, but it was declining deficit spending, starting at approximately $55 billion, and over five years getting back to surplus. That was the plan. It was seen as short term. We needed an infusion to get the wheels going when the systems were failing around us.
Canada can be incredibly proud of having the stimulus. I would say to the Liberals that it was truly infrastructure stimulus. It got out the door fast. It was something that actually gave a jolt to the economy. We did not make mistakes and create deficits because of calculation errors.
Jim Flaherty also knew that once we opened the taps of government spending, it becomes incredibly difficult to turn those taps off. Any of us who lived through the 1990s, when we were in an absolutely horrendous position, realize that turning off those taps is very painful. It was very painful for the provinces. They saw health care transfers come down. There was a lot of pain and effort to get our finances back into a reasonable condition. That was a lesson we recognized.
The late hon. Jim Flaherty would have been incredibly proud to know that he achieved his plan. He did not live long enough to see the results. There are some lessons the Liberal government needs to take from that exercise.
It is also important to note that for 2015-16, the parliamentary budget officer recently confirmed that had it not been for the Liberal spending spree once it took office in October and November, we would have had a $2.9 billion surplus.
Different times require different remedies. Canada came through the global recession. None of our banks failed. We had a short-term stimulus for the economy, we had the best job creation record in the G7, and we moved into a bit of a steady state.
Yes, we have slow growth, but we are not in a recession. That is critical to remember. Slow growth is not a recession, and a different remedy is required economically. The Liberals seem to feel that it needs the kind of jolt we had during the global recession. We need a different remedy to deal with the slow-growth situation we are in, as opposed to the catastrophe we faced with the global recession.
I want to talk about how the Liberals believe they need to craft a budget. In the last year we heard that the budget would balance itself and the economy would grow from the heart out. Nothing could be further from the truth. The budget will not balance itself, and the economy is not going to grow from the heart out. It takes a lot of work and a lot of specific policies to ensure that the government does its part in creating an environment for the economy to grow, and balancing a budget requires some spending discipline. That is something we have not been seeing.
I talked about how we had a plan and that it was not a structural deficit but stimulus spending. It was roads and bridges and different investments that created short-term jobs.
What we are creating with the policies of this new government is a structural deficit that is growing and growing and is going to be more concerning as time goes on.
First, on the middle-class tax cut the Liberals so proudly talk about, they miscalculated by a couple of billion dollars. It was going to be revenue neutral. What the rich pay, the middle-class was going to benefit from, but they missed by a billion or two in the structural deficit.
It was a difficult decision to move the age of eligibility for old age security from 65 to 67. Canadians are living longer, and that is what a lot of other countries are doing. A number of countries in the world have moved the eligibility age for old age security from 65 to 67, because times are different. People are living a lot longer. This was something that would create a sustainable structure for old age security. The Liberals have obliterated that. It is now back to age 65. They have not taken into account the huge structural deficit that will be created with that.
The Liberals talk very proudly about their child care benefit. However, they did not index it. They have learned from the parliamentary budget officer that in a few years it will not be as good as the program we had in place. Therefore, they are indexing it through this budget implementation act. However, the cost of indexing it is $4.2 billion over five years. We have not heard what they are doing to create that revenue, so that will also become part of this structural deficit.
During the election, the Liberals claimed they had to run a small deficit of $10 billion because we had a sluggish economy. It was $30 billion, give or take, when they presented the budget. We will see what the minister has to say next week about this whole economic forecast. I hope I can be optimistic, but I am worried about that $30 billion deficit increasing. What we have is a deficit that continues to grow. There is no plan to create a fiscal anchor to bring it back to balance. They speak of the debt-to-GDP ratio, but have no anchor. Rather, they have a horrific spending problem.
At the same time, the middle class appears to be the touchstone word that we hear from the Liberals. To be frank, instead of growing the middle class, the Liberals are breaking it. They are creating an environment that is very difficult for businesses to thrive in.
Another broken promise is with respect to small business, which is the foundation of our economy. It is critical for employment and the revenues that come into government. The Liberals made a promise, reversed it, and now the small business tax has gone up.
During the election, every party committed to a low small business tax, because we recognized that what the government did not take in, the businesses would put into growing their business and increasing their payroll. Therefore, we felt that supporting small business with low taxes would be fundamentally important for the economy. The Liberals backtracked on that promise.
The next thing the Liberals did to small business owners was cook up a deal with respect to the Canada pension plan. Not only has small business had its tax raised, but it will cost an additional $2,000 a year for every employee: $1,000 paid by the employer and $1,000 by the employee. That might not sound like a lot, but for a new business with 20 employees that is struggling to make payroll, $20,000 can make a huge difference as to what it does and how it deals with its business. A number of these measures are creating some significant issues for the middle class.
I need to make a quick comment with respect to rural communities. Again, rural communities are incredibly important. We do not have a softwood lumber agreement signed. We are concerned about these good-paying, middle-class jobs, which keep the fabric of our rural communities alive. It will be an especially important issue for British Columbia. There does not seem to be any concern at all for rural communities.
Today, our colleague who represents Vegreville, which is a small community of 1,000 people, made reference to the fact that 200 immigration jobs would be moved to Edmonton. That will potentially destroy that community. It will have a huge impact.
The minister justified that by suggesting there were economies of scale. It does not take much to recognize that the commercial rates in Edmonton are going to be a whole lot different from the commercial rates in a small town. I really doubt that the business model is going to have that much impact. In the meanwhile, what they are doing is destroying a small town, and those who choose to move to Edmonton, all of a sudden, are going to face huge challenges because housing prices are extremely different.
We have talked about the middle class. I really do not think the middle class is benefiting from this particular budget. We certainly know that our small businesses are not benefiting from the budget. We certainly know the additional complications that are being created around environmental assessment processes, which are really causing pause. I heard from an investor from Korea who was looking at making significant investments in our country, but who is now backing away. He was saying there's now no certainty, that they do not know what the environmental assessment process will look like and how the carbon tax will fit in. People are looking at Canada and saying that maybe their money would be better spent in another place.
What the government does not realize is that money is mobile and for people to invest in Canada, they need to have confidence in Canada, but the changing landscape with government processes is really creating some challenges. They need to have certainty. They need to know what the process is. They need to know how long the process is.
Yesterday, we had a pretty powerful discussion about the indigenous child welfare system. The fact was brought up that during the first 100 days in office, the Prime Minister committed to spending billions of dollars in other countries. I am not sure those billions are really creating a positive impact in Canada. I do agree that we need to do our part to help address some of the challenges facing other countries. However, when we have in Canada some aboriginal communities facing underfunding of their child welfare services, that is a problem.
In conclusion, the government has time to take pause. It is not too late. But please, before you create this structural deficit, those the government says it is helping, the children, are the ones who are going to have pay it back.
