Mr. Speaker, I appreciate the opportunity to address Bill C-15, the budget implementation act.
I will note that the hon. member opposite indicated in the introduction to his speech that this was part one of budget implementation. Therefore, we look forward to part two of the budget implementation act when that arises.
For many weeks, we in the official opposition have had many opportunities to take a look at the legislation. We have actually had a lot of opportunity to also question the Minister of Finance and the government on their fiscal plan. Unfortunately, it appears that the more we ask for clarification the less things become clear for us. That is why I would like to focus today on the aspects surrounding the credibility of the minister in delivering this budget.
This plan, or really the lack thereof, his projections, and his assertions are incredibly important to the veracity of this budget. The Minister of Finance is continuing to battle serious questions about his fiscal credibility and his lack of transparency.
We in the opposition would much rather be working with the government to make amendments to the legislation. However, we cannot support a plan for massive borrowing and massive spending when it is based on such flawed assumptions. The fundamentals of the legislation were simply not sound from the beginning.
During the committee of the whole on May 30, the Minister of Finance stated the following, “We found ourselves in a low-growth era. That is what we are facing right now.” Indeed, the Parliamentary Secretary to the Minister of Finance repeated the concept of the low growth the Liberals were handed. This simply is not the truth.
In a briefing prepared for the Minister of Finance, his own department advised him that Canada's real income per capita growth was the strongest of all G7 countries in the 2000s, compared to the weakest growth in the 1990s. It also showed that we had the healthiest middle class of our G7 cohorts. More importantly, it was proven by the OECD that income was evenly distributed during this period of time.
It is indeed concerning that the Minister of Finance and his Liberal budget appear to be so out of touch that his budget is based on a false assumption. The history and the current state of the Canadian economy are important factors, and the way in which the Liberals are characterizing it is simply incorrect. Indeed, the excessive spending that is set out in this budget is wholly inappropriate for the actual state of the economy of this country. The facts are very clear that we are not in a recession, yet the government continues to act as though we are.
During the committee of the whole, the Minister of Finance also said, “The 'Fiscal Monitor' in 2015 shows clearly in the month of March that in fact the government before us left us in a deficit. That is our starting point.”
Once again the facts do not support this claim. The evidence shows clearly that the minister was actually left with a surplus by the Conservative government and that it really is his own spending decisions that have set it off track. Our government balanced the budget in 2014-15, as we said we would, and there was a $1.9-billion surplus. The parliamentary budget office has confirmed that the 2015-16 budget was left in a surplus by our Conservative government. We have still yet to see the full extent of the Minister of Finance's March madness, but it is clear that in this spending spree he worked really hard to spend away Conservative surpluses, and he refuses to take the responsibility for this reckless spending.
Credibility is key and trust is a key as well. The current government's inability to answer simple questions asks us to question both credibility and trust.
When we look at the budget implementation bill and reflect on the testimony in the committee of the whole, we actually gave the Minister of Finance about four hours to answer some pretty basic questions about his plans, but our questions were often met with silence, and that is a very revealing indication of problems with respect to the implementation of this budget.
Revealing, as well, were our questions about the $6-billion contingency fund the minister built into the budget. During this particular exchange, the minister was actually unable to provide any details at all as to what kinds of factors were taken into consideration when determining the size of the fund. I would add that one of the witnesses before the finance committee indicated to the members of the committee that applying this contingency fund was, in essence, projecting oil to be at a price of $20 per barrel, and we know that not to be the fact.
More concerning was the fact that the minister revealed that he already had plans to spend this $6-billion contingency fund. The next day, in question period, the minister doubled down. Again, he committed to spending this $6 billion, regardless of whether it was needed, instead of returning it to taxpayers. This is not responsible and is simply not acceptable.
People could understand it if it were put in simple terms of dealing with their own credit cards. For example, a person asks for a $6,000 credit card increase but has no need and no plan as to what to buy but knows that he or she is going to buy something, the only factor being that every single last cent of that $6,000 will be spent. Even Canadians going to a bank for a loan these days are asked to explain why they need the loan, whether they are students looking to invest in their educations or young families wanting to make improvements to their homes. Any responsible institution would ask why they are applying for the loan.
Canadians also expect that when someone promises to do something, that person will follow through on the promise. The Liberals have made many promises, but those promises lack credibility. The Liberals have broken their election promises, and their out-of-control spending will end up hurting families, small business, and hard-working Canadians, because we know where this ends. It ends in the form of tax increases.
The Liberals were elected on a platform of modest deficits capped at $10 billion. They were elected on a platform of reducing the ratio of debt to GDP, with a goal of returning the budget to balance. However, almost immediately after taking power, they changed their minds. At a time when Canada is not in a recession, they have nearly tripled the deficit, admitted that they cannot control the debt to GDP ratio, and decided that balancing the budget was really not that important after all.
Not only is the minister breaking his promise, but as we know, he is suggesting that Conservatives would do well to get past this whole budget balance thing. However, the Conservatives will not simply get past the whole balanced budget thing, because we know that budgets do not balance themselves. We will continue to voice our concerns, as well as those of Canadians who want to see balanced budgets, not broken electoral promises and out-of-control spending.
We should take a closer look at some of the broken electoral promises. The Liberals have absolutely shattered their promise to small businesses to proceed with a small business tax rate reduction to 9% by 2019. While the Liberals promised to stand by this commitment during the election period, since taking power, it has become clear that small businesses are not the government's priority at all.
Budget 2016 lays out the Liberals' plan to tax small businesses at 10.5%, but they cleverly say that plans for any other small business tax cuts will be deferred. I know what the definition of “deferred” is. For the record, it is “withheld for or until a stated time”.
The finance minister indicated, when he appeared before the finance committee, that he actually has no further information about any planned date to restore this tax reduction, as promised. He refuses to own up to the fact that this tax cut has been clearly cancelled.
The president of the Canadian Federation of Independent Business, Dan Kelly, has expressed his disappointment and his shock as well. According to the CFIB, “This decision will cost small firms over $900 million more per year as of 2019”.
The parliamentary budget office, in a report from May 10, “estimates that by 2020-21, Budget 2016 changes to the small business tax rate will reduce real GDP by $300 million”, and this Canadians will really understand, “and the level of employment by about 1,240 jobs”.
Not proceeding with the planned implementation of the tax rate, in fact cancelling it, will have a long-term effect on employment in this country and on our GDP. This will clearly not help grow the Canadian economy.
We know that the Liberals will have to raise taxes to pay for all of this out-of-control spending. However, when we reflect upon it, it really is disconcerting and unfortunate that 700,000 middle-class small business owners, who employ 95% of working Canadians, were the first target of this finance minister.
When it increases taxes on job-creating small businesses, the government is discouraging success and discouraging entrepreneurship, and that has an effect on the entire country. It is not helping the middle class. It is absolutely hurting the middle class.
I, along with my constituents and the Conservative Party, have a long list of concerns about this budget. We have the ballooning deficit, with no sign in the future of what the cap will be. The Prime Minister famously gave an interview in the United States, and when he was asked how big the deficit will grow, he said he did not really have a number in mind. That is not prudent management.
We also have concerns about eligibility for old age security being lowered from 67 to 65. I have two points on that. First, it was this country's finance minister who indicated no more than three years ago that this was the right thing to do, and now he has done exactly the opposite. Second, when we actually did this in the former Conservative government, we were lauded as having the courage to do the right thing by the Secretary-General of the OECD. We joined a list of 29 out of 38 countries in the OECD proceeding down this road.
I am concerned about the fact that this budget has no plan to create jobs. There is the notion that if the Liberals sprinkle the money out into the economy, it is going to actually take root and there will be growth. The reality is that there are a lot of things that can happen between the sprinkling of the money and the creation of a job. My concern is that there is no plan to actually nurture the creation of jobs.
I am very concerned that there is no plan to promote business investment. In fact, it is quite the opposite. The government's version of promoting investment by private businesses is taxing them more, creating more regulation, and giving far greater uncertainty in decision-making within this country when it comes to the movement of our natural resources.
That does nothing to help our economy. That does nothing to help us with the commodity shock we are feeling right now in this country that is actually putting so many people and Canadians in pain, in several provinces, as a result of something that is completely out of their control.
I am very concerned that the Liberals have repealed the balanced budget legislation. There were provisions within this legislation to take into account in emergency situations. Instead, the Liberals have decided to just remove it, because they do not want to be tied to a fiscal anchor that every Canadian household can completely understand and should absolutely live to attain.
We can look at studies that have been produced by the parliamentary budget office. One that came out in January that was of most importance to me looked at household indebtedness in our country. It may be surprising to note that household indebtedness in our country is projected to rise to about 174% of debt to household income. That is a very large number. It means that Canadians are gathering in more debt. They have higher debt than they did before the recession hit in 2008-09. The government is now getting on that bandwagon and saying that debt is good, and it is going to go into debt now too, as their government. However, it is not doing it on its own behalf; it is doing it in combination with provinces that are doing the exact same thing, going into greater amounts of debt. We have households with increased debt. We have provinces really racking up the debt, especially in my province of Ontario.
By the way, Ontario is the number one sub-national government in the world in terms of the size of the debt. We are number one, Ontario. That is fantastic.
The other aspect of debt is the reality that at the end of the day, this debt actually does matter. It takes away the flexibility of a government to act when things get very difficult with respect to the economy.
The bill also targets tax credits we introduced, as the previous government, that actually helped families. One of the aspects of the fitness and arts credit I appreciated the most was the fact that it was actually recognizing Canadian families for doing something good for their children's health in the future, their mental health by taking arts and their physical health by getting involved in fitness. That incentive has been taken away by the government.
Changes to EI are of great concern.
However, the small business tax cut cancellation will, of course, have a long-term, long-run effect on our Canadian economy.
When people realized that the government had actually increased taxes on higher income earners in our country, a lot thought that should be okay and that it did not really mean a lot, because those people make so much money that it does not matter. I asked the minister's officials at the finance committee whether there had been any studies done to indicate difficulties in having a combined tax rate of over 50% when we are trying to attract to Canada world-class talent for our Canadian companies. Not a single study had been done to determine what the effect would be. That is just another example of rushing to implement parts of a platform without thinking about the total effect.
The only things the government is going to grow in the coming years are two-fold: it is going to grow our debt, and it is absolutely going to grow the size of government. Coming from Cape Breton, I can say that big government is not here to save us. Big government is not something we should be reliant upon. We should be reliant upon ourselves, our families, and our communities to ensure that we live a prosperous life and can contribute to the economy of Canada.
With all of these concerns in mind, Conservatives will not forget that Canadians voted for responsible fiscal management on election day. Those who voted for the Conservatives and NDP in both cases voted for balanced budgets. We will not forget those who voted for the Liberals either, because they voted on the basis of small, moderate deficits that would primarily go to infrastructure. That is far from what the Liberals have delivered so far.
We will hold the government accountable. We will fight for lower taxes, we will fight for a balanced budget, and we will fight to get a plan that will actually keep Canada growing and thriving.
