Madam Speaker, I will be sharing my time with one of my colleagues. I would like to respond to what the parliamentary secretary said in his speech about what Paul Martin did.
Paul Martin did work to limit banking deregulation. He also balanced the budget in the 1990s. However, we must not forget that he did so mainly on the backs of the provinces by making major cuts to health, post-secondary education and social assistance transfers. It is important to point that out for any Canadians who might be watching at home.
The major issue that we should be focusing on right now is whether the Liberals will keep their promise and eliminate their so-called small deficits by 2019. Of course, the Conservatives are opposed to deficits and they are particularly upset about the fact that the deficits in question are bigger than expected. Meanwhile, the Liberals are saying that they ran those deficits as an investment. Both parties are wrong. Here is why.
The Liberals did indeed promise to run small deficits of $3 billion per year. There is no question about that. They also said that they would pay off those deficits by 2019, but they will not be able to do so. The Conservatives are right about that. Where the Conservatives are mistaken is in saying that balancing the budget is the fundamental issue on which Canada's economy completely depends.
I spoke about the work the Liberals did to balance the budget in the 1990s. It came at a great cost, but the price was paid and the budget was balanced. Then, the Conservatives took office and accumulated deficits for seven or eight years before finally eliminating them prior to the 2015 election, so I do not think that the Conservatives are in any position to lecture the Liberals about balancing the budget. When they are in opposition, the Conservatives say that deficits are the worst thing a government can do, but then when they are in office, they say it is completely acceptable to run a deficit as long as there is a good reason for doing so.
This is very similar to what is happening in the U.S. Let us go back to the 1990s when the Democrats were in power under Bill Clinton. What happened? They balanced the budget in a way that made vulnerable people suffer more, which we can debate at length. However, the result was achieved; they balanced the budget.
What happened after that? George Bush was elected. The Republicans dominated the executive in the House for eight years and budget deficits ballooned. At that point, I remember Dick Cheney, who was vice-president, being asked a question about the importance of deficits, and he said that it was not important at all.
Therefore, on both sides of the border, when the Conservatives are in government, they do not care about deficits. They will find any justification to go into deficit. However, when they are in opposition, they blame the government for having deficits. It makes no sense or it makes sense in the political game.
Deficits can be a good thing for the economy if we are able to ensure that we get a good rate of return for these deficits, the same way as a business will contract a loan to invest and grow. That is acceptable.
We wonder what the Liberal government is doing with these deficits. Taking a Keynesian perspective, as governments often do, deficits are accumulated to grow the economy, but only to the extent that the government can eventually balance the budget. We believe that a government should be able to balance the budget over an economic cycle. In other words, if the economy is doing well, the government takes the opportunity to reduce public debt somewhat. If the economy is not doing well, the government will have leeway to invest.
The problem is that that is not what the government is doing. It is accumulating deficits of $10 billion, $15 billion and $20 billion at a time when the economy is doing well. The economy is doing well, but not because of the deficits that have been incurred or investments that have been made. My constituents tell me that they are seeing $15-billion deficits, but no investments for the middle class. Most importantly, they are not seeing investments in infrastructure, because there is not much more being invested than there was five, six or seven years ago.
People can see the difference. The money is going to places that are not that productive.
We can see through what the Liberals are doing. Instead of investing directly in infrastructure the way they used to do, they decided to create the infrastructure bank, where they put some cash and some guarantees and then asked the private sector to invest, which is fine. I like the private sector to invest and I like the government to invest as well.
We were told that the government placed $35 billion in the infrastructure bank, about $15 billion of which are actually money and the rest are guarantees. We have asked the private sector to invest $185 billion. We can be sure that the private sector will want a return on its investment. We can also be sure that the private sector will be calling the shots, not the government.
The Liberal solution is to invest in infrastructure, but we have seen very little of it. Since the bank was developed, since people were put in place, since a bureaucracy was put in place to make those investments, the only thing the government has been able to do so far is to provide a loan to Caisse de dépôt et placement for the light train project in Montreal. That is all.
I would like to get back to the matter at hand and whether the House should demand that the Liberal government tell us when the budget will be balanced. It would be interesting to know what the Liberals have in mind, because they are refusing to answer the question. I have to say I am concerned about that. It would also be nice if the Liberals explained how their investments are growing the Canadian economy. How can they justify investing more while things are going well economically, when they should be taking advantage of this opportunity to prepare for an economic downturn when things will be harder? That would probably be more productive and show greater foresight.
My Conservative friends are demanding that the government say when it will balance the budget. I would like to know how they can justify saying one thing when they are the opposition and the exact opposite when they are the government. For eight years, they kept telling us that having a deficit was fine, that the government had to save the auto industry, that it had to invest to save jobs. Now the Liberals are saying the same thing, but that is not sitting well with the Conservatives.
The issue we are debating today is more political than economic. It is a political issue because we have two sides playing a political game. From an economic standpoint, I think it would be interesting that Conservatives understand the need for deficits, which are not evil as such if the money is well invested.
In a similar way, income tax reductions are not the panacea which will cure everything, including the common cold. It is more a matter of common sense than dogma. That is what we are asking for on this side of the House. When Conservatives are in government, they immediately cut taxes, no matter what the financial situation is.
In fact, a large part of the accumulated deficit even before the recession came from the GST and corporate income tax cuts. We went from a balanced budget to a deficit, which was already quite large before the financial crisis and which was amplified by it. Do these tax cuts really create jobs? Do they really increase productivity? While corporations benefited from a massive reduction in income tax, their assets grew substantially. Their dead money in the bank increased exponentially, at about the same rate as the money was coming in thanks to these tax cuts.
I totally agree that we must debate the economy in this House. I want to have a debate on the economy here, but let us do it in a way that really addresses the concerns of the population. People increasingly have a hard time making ends meet each month. They have a hard time seeing any point to the government or to the programs it is implementing. We must address these concerns before debating zero deficit as if it was a fundamental goal to be reached no matter what, before any other goal.
On that note, I will be happy to answer questions from my colleagues.
