Mr. Speaker, it is an honour to rise again and continue my remarks on the cover-up budget 2019. When I stood at the outset of this debate on Monday, I said that I would be delighted to cede the floor at any time if only a member of the government, speaking with the authority of the Prime Minister, would enter this chamber and say definitively that the government was prepared to have a full ethics committee investigation into the SNC-Lavalin corruption scandal and subsequent cover-up.
I said that the investigation would have to include sworn testimony from all of those alleged to have interfered with former attorney general's role in the matter of SNC-Lavalin. I told the House that I would cede the floor immediately upon receiving such a binding offer and that Conservative members would accept it and an investigation would go ahead.
Allow me to provide some background to the House as to why I made that original offer. Members will recall the origins of this scandal happened in the budget of 2018, when the finance minister presented an omnibus bill to implement his budget measures and buried within it was an amendment to the Criminal Code creating a new mechanism to offer deals to accused corporate criminals that would allow them to avoid criminal prosecution for such serious offences as bribery, fraud and corruption.
At the time, members of the finance committee were astonished to find such a measure contained in a budget bill. It is extremely unusual for budget legislation to amend the Criminal Code. In fact, it may even be unprecedented.
The Liberal member for Hull—Aylmer said that he did not think it was right. The chairman of the committee, an ardent, partisan and committed Liberal, said that the measure did not belong in a budget bill. The Liberal member for Hull—Aylmer made further comment based on his reading of the Criminal Code amendment that the finance minister had put in the budget bill. He said, “if I steal $10, I'm in trouble, but if I steal $10 million, I can work this out.”
What struck us in that moment was this question. Who was asking for this? I remember looking over at the member from the Okanagan, a Conservative who has been listening carefully today. He raised the concern that this should not be included in a budget bill. He believed it should be separate legislation that carefully studied the widely known consequences before it became law.
However, the government was determined to push ahead, with as little scrutiny as humanly possible. We all went home late that night with the mystery of who was driving this agenda.
When we go out to our communities, all of us talk to people about their concerns. We hear people say that they are worried about the cost of living, or health care wait times for their families and or safety in their streets. No matter the topic, we hear about it.
However, none of us heard that there was a need to amend the Criminal Code so that corporate criminals could get let off without conviction. That has never come up at any of the events I have attended, the hundreds if not thousands of them, since I was elected almost a decade and a half ago.
Somebody had to be driving this agenda, somebody powerful and influential enough to convince both the Prime Minister and the finance minister that such a Criminal Code amendment was needed.
A nagging part of me wondered whether the former attorney general did not like this Criminal Code amendment, as she would have normally been the person to introduce it. At the time, she was also the justice minister. While she was bound by cabinet solidarity and was thereby required to publicly support initiatives that the cabinet had decided upon, it was extremely unusual for her not to be the sponsoring minister for legislation changing the Criminal Code, a statute for which the justice minister has the carriage.
However, the bill passed and it became law. It would not be until February of this year that we would find out who was driving the train on the bill. An explosive headline on the front page, above the fold, in The Global and Mail, said that the Prime Minister and his team had pressured the former attorney general, by then moved out of her position, to grant SNC-Lavalin a settlement to avoid criminal prosecution.
Then it all made sense. The late-night session, the massive, 500-page bill, the tiny Criminal Code amendment tucked away at the very end, rushed through with no time to discuss. We now knew where it all came from. SNC-Lavalin, a powerful, Liberal-linked corporation had given over $100,000 in illegal donations to the Liberal Party, funnelled through the production of false invoices, phoney bonuses and deceptive receipts through employees into the Liberal Party coffers. That same SNC-Lavalin had successfully convinced the government to change the law allowing for a settlement so that companies accused of serious white-collar crime could evade prosecution altogether.
There is a problem with the plan though. It started with a very accomplished director of public prosecutions. The bill requires that the top prosecutor agree that a company is entitled to that special deal in order for it to go ahead. She read the act, even as the Liberals had written it when they introduced it, and concluded that the company was not eligible. It did not qualify. Why? Because the crimes were too serious, because it did not report its own crimes, because the participants were at the highest level of the executive management of the company and because the company had done absolutely nothing to compensate the victims of the alleged $130 million of theft.
These victims are among the poorest people in the world. The company is alleged to have stolen their money. It is a pretty miserable way to make a living, stealing from they poor. Fortunately, it is also an illegal way to make a living, at least we thought so. However, the Prime Minister attempted to apply political pressure, The Globe and Mail reported, to let this company off without prosecution despite that fact.
What happened? The Prime Minister denied it all. He said that the story was false, full stop, end of story. Therefore, Bob Fife and Steve Chase, the reporters who wrote it, got it all wrong and must have made it all up. That was the Prime Minister's story, and on we were to move. However, it turned out it was not false.
The Prime Minister would go out days later and say that the proof that the story was false was the continued presence of the former attorney general in his cabinet, then as veterans affairs minister. He said that her presence spoke for itself. Well, she could not stomach that anymore, so she resigned, and her resignation spoke for itself.
The Prime Minister then began to make up a new story that, yes, he had pressured the former attorney general but that it was okay. There was nothing wrong with a little pressure.
However, because of relentless public pressure, the Prime Minister was forced to allow the former attorney general to testify before the justice committee where she laid out a spectacular chronology of political interference at the highest level, including the personal interference of the Prime Minister himself. He denied, denied, denied.
Then the evidence arrived, demonstrating that in fact he and his top members had participated in pressuring and interfering with the former attorney general. She provided text messages, written journal entries and finally an audio recording in order to demonstrate that everything she had said was true. Therefore, the Prime Minister's story had to change again. He went out into the world and said that the former attorney general, according to the Prime Minister's minions, was just angry because she lost her dream job.
That is supposedly the reason why she not want to continue working with the Prime Minister, the reason why she made all of this up, and the only reason why she came forward about the political interference in the system. She was angry about having lost her dream job.
Supposedly it was bitterness, not principles or facts, that motivated her to come forward about the Prime Minister's political interference.
We heard the Liberals' personal attacks. For example, former deputy prime minister Sheila Copps talked about the former attorney general's indigenous roots. Others accused her of being a difficult woman. Yes, she was difficult. We are happy that she was difficult. When a prime minister tries to interfere with the justice system, I hope that the attorney general would be difficult. It is a good idea to be difficult when a prime minister is trying to corrupt the justice system.
The Prime Minister therefore had to change his story again. He rose to say that this was about jobs. He interfered in the justice system but it was to save jobs and the company's headquarters. It was easy enough to learn via the Internet that the company had no plans to move its headquarters. In fact, the company has an agreement with the Caisse de dépôt et placement du Québec, the major pension fund, that requires the company to keep its headquarters in Montreal for another six years in exchange for a $1.5-billion loan. It is therefore impossible for the company to move its headquarters, contrary to what the Prime Minister and his team claimed.
Furthermore, the company had just signed a 20-year lease for its building in Montreal. Companies do not sign 20-year leases if they are thinking of moving. The company had just announced plans to renovate to accommodate its employees. It would not have taken on that kind of expense if it were planning to move. That means suggesting the head office was going to be moved was a lie. The Prime Minister also said that 9,000 jobs would have disappeared if he had not interfered in the justice system.
His best friend and former principal secretary said that the Prime Minister was very emotional and that he felt he had to interfere in the system to save those 9,000 jobs. The Green Party leader asked Gerald Butts if he had any proof at all that 9,000 jobs would disappear if the trial went ahead. He said he had no specific proof. All that interference took place over a period of four months. There was a campaign that included at least 20 attempts to make contact to save those 9,000 jobs, yet the Prime Minister's principal secretary and best friend said he had no specific proof those 9,000 jobs were at risk. The Clerk of the Privy Council was asked if he had any reports showing that 9,000 jobs were going to disappear. The answer was no. At a press conference, the Prime Minister was asked if he had any proof that 9,000 jobs would disappear if the trial went ahead. The answer was no.
The company's CEO stated that he never threatened to move the headquarters or to eliminate 9,000 jobs. In any case, this never made sense. Construction projects must go ahead in their respective locations. For example, SNC-Lavalin was awarded a rail project here in Ottawa. You cannot build 14 kilometres of rail in China or London and then have a helicopter drop it in place in Canada's capital. It was therefore impossible that these jobs would be moved. SNC-Lavalin has $52 billion in construction projects in Canada and they have to be carried out here.
Thus, for contractual and practical reasons, these jobs cannot be moved. This lie was repeated over and over by the most senior members of the Prime Minister's Office. It is one thing to interfere in the judicial system to prevent a case from going to trial, but it is even more serious to lie about it. In my view, lying to an attorney general in order to prevent a criminal trial is a Criminal Code violation. Section 139 clearly states that anyone who attempts to obstruct or defeat the course of justice is guilty of an indictable offence. Today, the Prime Minister no longer talks about jobs because this excuse has been discredited. Everyone knows that it is a fabrication. His story has changed again.
Lastly, the Prime Minister told us that the former attorney general should have let him know that his interference in SNC-Lavalin's criminal case was a problem for her, but she never did. However, in her testimony before the Standing Committee on Justice and Human Rights, she said that she had looked him in the eye and asked him if he was politically interfering with her role as the attorney general, and that she had told him she would strongly advise against it.
Yesterday in the House of Commons, the Prime Minister admitted that she had told him that. In doing so, he contradicted himself in front of all Canadians, because he had previously claimed the attorney general never raised any problems with his interference. His story changed yet again. When two people contradict each other and it is not clear which one to believe, the person who is telling the truth is often the one who does not change their story.
The person who keeps changing their story is usually the one who is not telling the truth. What I have shown in my hours and hours of speaking during this debate is that the Prime Minister has constantly changed his story. He changed his story more often than he changes his flashy socks. Meanwhile, the former attorney general did not change her story. The former attorney general said one thing about each fact. She let all Canadians see text messages and excerpts from her personal diary, and she let them hear a recording of a conversation from December. All of the facts set out in those documents bolster the testimony she gave before the Standing Committee on Justice and Human Rights.
This matter is not behind us. What lies ahead?
First, people who are still in the Prime Minister's Office interfered to help the company. These people were meeting with SNC-Lavalin for months. We should know what they did and why.
Second, we need to figure out whether the Prime Minister lied to Canadians about this matter.
Third, we need to know what the Prime Minister and his current Attorney General will do in the future. There is a lot of evidence showing that they are both open to or even set on giving SNC-Lavalin an agreement. This agreement could help the company avoid a criminal trial. If this is going to happen, we should know, especially before the election. We may not get an answer, and the trial could continue after the election.
If the Prime Minister is re-elected, I predict that a special deal will be signed before Christmas. This would allow SNC-Lavalin to skirt justice on the fraud reported by law enforcement. Before they go to the polls, Canadians should know whether this agreement will happen if the Prime Minister is re-elected.
All these questions could be answered if members of the Liberal Party attend the meeting of the Standing Committee on Access to Information, Privacy and Ethics next Tuesday. That is when we will decide whether to move forward with an investigation.
As I just said, I will sit down as soon as a Liberal member tells me that the Liberals will vote in favour of an investigation. There is no reason for the Prime Minister to refuse such an investigation. If he has nothing to hide, it will be easy and there will be no problem. Canadians will see that he is just as perfect as he claims to be. However, if there are secrets, then I have some advice for him. He should let those secrets out now instead of trying to save them for later. Secrets are a heavy burden.
Every day that he tries to hide his secrets, the burden gets heavier.
Canadians have the right to know what happened. They also have the right to know what the Prime Minister and his Attorney General are going to do in the future.
The choice is simple. The current Conservative leader said that he will not interfere in the judicial system if elected. A Conservative government will not reverse a prosecutor's decision on how a trial should proceed.
I know we are captivated by this scandal and the cover-up budget that has attempted to distract us from it. The two are not entirely unrelated. In fact, they are related for two specific reasons.
First, the government thought it could distract from this scandal by simply spraying around an extra $41 billion in government spending, almost all of it paid for by deficits in the short run. This is what I call the Liberal three-step: step one, massive scandal; step two, massive deficit spending to distract from the scandal; step three, massive tax increases to pay for it all after the election.
In that sense, these two issues are linked. The scandal is what convinced the government it needed to blow billions of dollars out the door, right before the election, and get everyone thinking and talking about something else.
However, there is a second reason they are linked. The reason companies increasingly think they can get ahead through their connections to this government is that the Prime Minister's philosophy is one of state economic control. He believes in an ever-growing government.
We were told that whenever politicians on the far left decide to grow government, it is to replace greed with some government-directed altruism. We on all sides of the spectrum agree there is a human desire to improve one's lot, to have more and better tomorrow than we have today. In its benign form, we call it ambition; in excess, we call it greed. Whatever word we use, it is part of human nature.
In a recent speech, socialist Senator Elizabeth Warren described it this way: “In reality, billionaire investors and wealthy shareholders in powerful companies often have exactly three goals: maximize profits, maximize profits, maximize profits.”
Egalitarian socialism proposes to abolish this impulse from human nature altogether so that all the money goes to the government. In this way, everyone equally owns the government and everyone is equally rich or poor and no one really moves backward or forward relative to the pack—or so we are told.
Ironically, both socialists and Conservatives have accepted that this is what happens when government gets big enough. The former celebrate equal outcomes, the latter decry the lack of incentive to work and produce industry, which will be the result from government trying to eliminate any form of competition between people.
Famously, Churchill once said, “The inherent vice of capitalism is the unequal sharing of blessings. The inherent virtue of Socialism is the equal sharing of miseries.” However, is that what happens? Can socialism really expand government to control all the wealth so that it is shared equally by everyone? Can it grow so big that it can replace human nature itself? If so, we must accept the belief that the state can literally banish personal ambition and avarice from human DNA.
Can government grow so large that it not only replaces the private sector but replaces human nature altogether? If so, are we the only species whose very nature governments can alter, or can the state change other creatures as well, so that flies no longer feast on honey, nor ravens on the carrion of dead gazelles, nor fish such as pike on floating garbage, nor the greedy client from the lords of the state? We need to answer “yes” to believe that socialism is capable of changing self-seeking human desires.
The alternative explanation, the alternative theory, comes from the great Nobel Prize-winning economist James Buchanan. He developed something called “public choice theory”, which he called “politics without the romance”. To quote The Wall Street Journal, “Buchanan described it as the application of the profit motive to government: 'It presupposes that if there is value to be gained through politics, persons will invest resources in efforts to capture this value.'
In the market, profit-seekers invest in commercial enterprises to gain wealth, but in government-controlled economics, the profit-seeker invests in political influence to gain wealth.
Buchanan wrote:
However, when the governmental machinery directly uses almost one-third of the national product, when special interest groups clearly recognize the “profits” to be made through political action, and when a substantial proportion of all legislation exerts measurably differential effects on the separate groups of the population, an economic theory can be of great help in pointing toward some means through which these conflicting interests may be ultimately reconciled.
People act rationally in a market economy, investing in order to get a return. Dr. Buchanan found that government-controlled economies have exactly the same type of calculated trade-offs. People invest in politics in order to get rich. In fact, the only thing that changes is the way one gets rich.
The way one gets rich in a government economy is by winning the favour of the political decision-makers who allocate the resources. Instead of selling things that people agree to buy, one buys the politicians who control the money. If all the money is in the great vault of the state, profiteers work at buying or renting the keys to that vault. They donate to politicians who give them subsidies. They offer luxurious vacations to prime ministers in exchange for grants to their foundations. They hire lobbyists to convince governments to shut down their competitors with more regulation and tariffs.
Buchanan wrote:
The individual who seeks short-run pleasures through his consumption of modern “luxury” items sold in the market is precisely the same individual who will seek partisan advantage through political action.
In the book Welfare for the Well-to-Do, economist Gordon Tullock put it this way: “Today the individual who works hard and thinks carefully in order to make money in the market will also work hard and think carefully in order to use the government to increase his wealth. Thus, we should anticipate that effort and ingenuity would be put into using the government for gain, and if we look at the real world, we do indeed see such activities.”
Therefore, the larger the government becomes, the more we can expect profit-seekers to turn their money into power and to turn that power back into yet more money.
We see this here in Canada. In 2017, there were 23,000 lobbying interactions with designated public office holders in the federal government, a 79% increase in just three years, which just happened to coincide with a 20% increase in government spending.
Guess what? The two fastest-growing sectors in the economy now are government and lobbying, which are two sectors that grow hand in hand.
South of the border is no different. The American company called Strategas Research Partners produced a fascinating graph showing the correlation between the amount of money American business spends on lobbyists and the share of the U.S. federal government as a part of the GDP. It showed that as the U.S. government in Washington gets bigger, so does the amount of money U.S. companies spend on lobbying that government. In 2000, federal spending in the U.S. was about 19% of GDP and there was about two billion dollars' worth of lobbying. By 2009, a decade later, government spending had grown to 25% of GDP, almost a third bigger, and real lobbying had nearly doubled in inflation-adjusted terms to $4 billion. With more money in the government in Washington, there is more money spent on lobbyists to get that money from Washington.
It looks like Elizabeth Warren was right: Corporations seek profit, profit, profit. What she did not tell us is that they are just as capable of seeking that profit from big government.
It makes sense. When government decides who gets what, business buys a bigger share of government. Who wins when that happens? Of course it is those with money. They can hire the best lobbyists, promise future jobs to politicians, make donations and schmooze the officials.
The working class, by contrast, can afford none of these things. They are too busy trying to keep their heads above water and raise their kids and take them to hockey and soccer. They do not have the financial means to hire lobbyists and accumulate and leverage political influence.
Let me give an example of the payoff.
Bombardier invested in lobbyists and got a $400-million interest-free loan from the current Liberal government. This is how it worked: The government gave Bombardier the $400-million interest-free loan so the company did not have to raise the money in equity markets. That was so important, because the billionaire Bombardier-Beaudoin family wanted to remain the majority controllers of the company. The family owned 53%. If it had sold more shares, it would have diluted its interest below a majority control and would no longer have been in charge of the family business. Less than 50% meant that it would no longer choose management and would not get to pass the business as a family heirloom from one person to another.
What did Canadian taxpayers get for this corporate welfare? It was not very much. It turns out the company moved its jobs to South Carolina and sold the IP to Europe, but left the bill with Canadian taxpayers. The only winners were the billionaires.
Yes, the lady bagging groceries at the corner store had to pay higher taxes to fund a bailout to a billionaire feudal family that was in charge of this company only because of their political connections to this government.
We can look elsewhere. Private equity funds and investment bankers have invested in lobbyists, and guess what they got? They got a $15-billion infrastructure bank to protect their investments in infrastructure and megaprojects. If a banker asked us for a thousand bucks, we would say, “What for?” The Liberal government is asking for basically $1,000 from every Canadian family in order to set up this infrastructure bank.
What is it for? Let us go through the possible explanations of what it could possibly be for.
The first is that it would fund infrastructure, but private banks, capital markets, pension funds and private equity enterprises already bankroll billions of dollars of infrastructure projects, and they will invest $2 trillion more worldwide, if we believe the estimates in the government's own fall economic update. With so much private money already invested in infrastructure, the last thing we should need is another government bank to provide more. That cannot be the reason.
Perhaps we need the new bank to bridge those private dollars into public projects such as mass transit, yet here again the government's own fall economic update indicates that those investments are already happening without the bank and cited the $2-billion Canada Line. This was the biggest public transit project in Canadian history, and it daily moves 120,000 passengers from Vancouver's downtown, suburbs and airport. It exists through investments from large private sector and commercial interests. As an example, Caisse de dépôt et placement du Québec invests in that Vancouver project. Quebec pensioners help build mass transit for British Columbians, whose transit fares in turn help pay Quebec pensioners.
All that happened without an infrastructure bank, just as the privatization of Highway 407 happened without an infrastructure bank and just as the privatization of the Canadian National Railway happened without a government-owned infrastructure bank.
What is this bank for? I keep knocking down the possible explanations, but we do have one. The Canadian Electricity Association made a submission at the House of Commons transport committee on how the bank should work, and this is what it said: “Also important is the inclusion of de-risking mechanisms such as loan guarantees....”
Bingo. There is the reason. In one sentence the power companies explained the real purpose of the bank: taxpayer-funded guarantees to protect investors from losses.
The government bill that creates the infrastructure bank uses the term “loan guarantee” 14 times. The power companies are on to something. Their submission uses the terms “de-risking”, “de-risk” or “reduce risk” about five times. The prefix “de-” implies that the bank can delete the risk, just like a magician can make a grenade disappear. If one has a grenade, there is a chance it could explode, but this de-risking magic can make it just vanish into thin air.
Wrong. It does not disappear. It just takes the grenade from the company and puts it in the lap of Mr. and Mrs. Taxpayer. It does not de-risk; it relocates the risk. Now we know why the government needs an infrastructure bank.
Years ago, institutional investors could get taxpayer-funded returns from sleepy government bonds, but interest rates have been so low for so long that the only way to make real money is to invest in riskier ventures—such as building power plants, for example.
As a J.P. Morgan Asset Management report indicated, merchant power generation pays 14% to 20% returns, but here is the problem: Its risk category is high. Cost overruns, revenue shortfalls, construction delays and labour disputes can cause major losses unless...unless there is a new government bank that agrees to take all that risk off the government's back.
Currently, governments force builders to cover cost overruns on construction projects through fixed-price contracts, and they force those companies to buy bankruptcy insurance to keep projects on budget if the contractor goes under. I know this personally, because we had an essential piece of infrastructure under construction, a bridge connecting east and west Ottawa deep in the south end of the city, and the builder went broke. The good news was all the risk was on the company's back and the company had to hire a bonding company to take over the project if the major proponent went under. In other words, the taxpayer did not pay for cost overruns, and while there was a delay, the people who pay their bills every day, the taxpayers of Canada, did not pay the price. The company did and the bonding company did.
But that is not the case with the new infrastructure bank. Testifying before the House of Commons transport committee, the top public servant responsible for the bank described the tool as existing for “underwriting sophisticated, highly complex projects”.
The word “underwriting” comes from 17th century London insurers, who would literally write their names under a list of cargo on board a shipping vessel. If the ship sank, so did the underwriter's money.
Taxpayers could sink billions of dollars by underwriting infrastructure projects with this new bank.
Guess who is involved in the Infrastructure Bank. It is a three-letter word: SNC. The bank, though it has a well-paid CEO and fancy offices in Toronto, which, by the way, do not comply with the Official Languages Act, has only one project to its name, and of course, SNC-Lavalin is right in the middle of it. There is no surprise there.
Now, it is easy to imagine why SNC-Lavalin and other wealthy investment bankers and private equity fund managers would want this arrangement, but what is not clear is why a government, elected by taxpayers, would agree. At closed-door meetings in Davos, New York and Toronto, and in direct talks with officials, the most powerful financial interests on Earth have directed the Liberal government on how the bank should work. It is the golden rule of the Liberal government: Those who have the gold make the rules. Their rules are simple. They get the rewards; taxpayers get the risk.
Now that we know what and who the bank is for, those who will pay the price must fight to stop it.
It is not just the Infrastructure Bank. Some technology companies have invested in lobbyists, and they have been able to secure brand new billion-dollar corporate welfare funds called “superclusters”.
Here in Ontario, at the provincial level, we saw the worst kinds of these self-licking ice-cream cones, where a commercial interest pays a lobbyists, which influences a politician to pay the commercial interest, and the commercial interest uses some of that money to pay the lobbyist to influence the politician, and on and on it goes. It is a self-licking ice-cream cone, and it has never been so big and so sumptuous as it is under the Liberal government.
Actually, that is not fair. There was the Ontario government under Kathleen Wynne and Dalton McGuinty.
Wait a second. Someone yelled, “What about the Harper government?”
I want to point something out. There was something like 70% less lobbying around this place, according to the registry, when Harper was in charge and the size of government was shrinking. The one place that went out of business was Hy's Steakhouse. Do members think that is a coincidence?
God bless the good people who worked there. They were wonderful people. However, it was a hangout for lobbyists and power brokers. Is it not fascinating that it was right in the middle of the Harper tenure that the place became so tired and so sleepy and so uninhabited that it no longer could afford to pay its bills. These kinds of places are popping up all over Ottawa now, because the good times for the lobbyists and the insiders are rolling like they have not in years.
We know where the Liberal government gets its lessons. In Ontario, we learned that the largest corporate donor to the Ontario Liberal Party gave the party $480,000, in exchange for which it got $160 million in government handouts. What a return on investment, my friends. John Pierpont Morgan, the Rockefellers, and Warren Buffett could not dream of getting that kind of return on investment. It was $480,000 turned into $160 million in corporate welfare.
Then there is the Green Energy Act, a deliberate government decision to pay 80¢ cents for a kilowatt hour of solar electricity that is worth 3¢. The province has already forced consumers to overpay by $37 billion to buy unneeded, unreliable and overpriced electricity from well-connected power companies. That is why hydro prices have risen by 100% in just over a decade.
Who wins and who loses? Remember that when government gets big, it is supposed to be really tough on the rich and good for the poor, we are told. Who won in this? The rich power companies made off with massive profits, because the government forced people to overpay them for their unneeded power. Who lost? The poorest people lost. Electricity is a larger share of their household budgets than it is for the rich. The Ontario Association of Food Banks called it “energy poverty”. In one year, 60,000 people had their power cut for failure to pay.
When the Ontario attorney general looked at it, she predicted another $133 billion in overpayments between now and 2032 because of the Liberal government's Green Energy Act. That is a total of $170 billion the government is forcing Ontario consumers to overpay above market prices throughout a 25-year period, making it literally the single biggest wealth transfer from the working poor to the super-rich in the history of Canada. Never has any government, in my lifetime, taken so much from so many to give to so few. All this followed countless donations and third-party advertising from the very companies that got all the electricity contracts.
We see examples of big socialist governments using the power of the state to take from the poor and the working class and give to the rich and powerful all the time. Now we have something called the clean fuel standard. It sounds very similar to the Green Energy Act. What would it do? It would actually have nothing to do with clean fuel, unlike the name. All it would do is require those who sell gasoline to pay credits to well-connected people who would be able to sell those credits for supposedly green things that are happening in some other places in the world. Of course, there would be all kinds of greasy middlemen who would grab one piece after another of that action as it went flying by.
What the Wynne Liberals did to electricity bills, the Liberal government will do to gas bills. Gasoline is a much bigger share of a family budget for a poor family than for a rich family, so it would be yet another disgusting wealth transfer from the poor to the rich.
Macaulay, the great poet, warned of this. He wrote, in one of his great poems:
Where as you shed the honey, the buzzing flies will crowd;
Where as you fling the carrion, the raven's croak is loud;
Where as down Tiber garbage floats, the greedy pike you see;
And where so ever such lord is found, such client still will be
It is funny that he chose flies on honey as his example, because flies do not make honey. They consume honey, the same way the parasitical interests that profit from big government do not make any of the wealth they consume, but they sure are fantastic at consuming it.
It is bees that make honey, and it is interesting that bees make honey in a process that is very similar to transactions in a free market economy. Bees do this in a mutually beneficial exchange between plant and insect. The plant provides the nectar, which the bee transforms into honey, and the bee pollinates the plant so that it can reproduce. That is the very nature of the free market transaction, where both participants always win. We know they win, because they are voluntarily participating in it.
These are the fundamental truths of the two different approaches to an economic transaction. Every transaction, every single one in the free market, is voluntary. Every transaction done by the government is done by force. Even when the government spends on worthy causes that we all support, such as the military, for example, it does so through the forceful collection of taxes. As government expands, force expands. As free markets expand, free choice expands.
We understand that this is the only distinction between the two systems. We realize that almost everything we have been taught to the contrary is wrong. Therefore, when Elizabeth Warren and socialists like that warn us that “those powerful companies search out new prey, moving up and down their own food chain”, she is making allusions to the law of the jungle.
It is in the government-run economy, based on force and the power of the state, that the strong can use their money and power to prey on the weak. By contrast, in a system where every exchange is voluntary, based on the consent of both participants, such as in a free market, it is impossible for anyone to prey on anyone else. No business in a free market can force the poor person to work for it or buy its products. That person only does so when he or she voluntarily agrees.
Let me use the example of the Apple store. Apple has been said to be the most powerful company on planet Earth, with a market capitalization of almost a trillion dollars, depending on the fluctuations of the stock market. If a boy whose net worth is $1,000 from mowing lawns throughout the summer walks into an Apple store, some of our socialist friends would ask how this could possibly be a fair transaction. On the one hand, we have a company worth a trillion dollars, and on the other, a young boy worth just $1,000. In other words, one is literally a billion times bigger than the other. How could they possibly exchange in a free negotiation?
The answer is that when he walks into that store, he is literally just as powerful as the company, because it cannot get his $1,000 unless it offers him something that is more valuable to him than the money he has to pay to get it. In that sense, it has to obsess over making his life better. It is the only system where one must make someone else better off to be better off itself.
Let us presume that Apple took a different approach and decided to try to get rich from a government subsidy. Would that boy be equal to the company? Would the two then be on a level playing field? Of course not. The company could hire lobbyists, make donations, cozy up to politicians, have articles placed in newspapers or run advertising to get a government subsidy at the expense of that young taxpayer whose net worth is only $1,000. In that sense, the company would be far more powerful than that young person. That is the law of the jungle, not the free market.
Any relationship based on force favours the strong over the weak. We know this from the most simple and elemental facts of life. If I have an apple and want an orange, and someone has an orange and wants an apple, we trade, and we are both better off, because each has something more valuable than we had before, even though between us, we just have an apple and an orange. That is the miraculous power of the free market economy. It is a voluntary exchange of work for wages, product for payment and investment for interest. These voluntary exchanges happen literally trillions of times every day in the free market parts of the world, and every time they do, both participants are made better off.
If members think this is just theory, they can look at the facts. Dr. M.G. Quibria, a Princeton-trained economist, compared the poverty rate to the size of the government in 40 different developing countries. For each increase in the size of government as a share of GDP, the percentage of people living on less than $1.90 a day increased by an average of 41%.
In other words, bigger governments, even in the developing parts of the world, lead to more poverty. This is in spite of the fact we are constantly told that some countries are poor because the state is not big enough, is not doing enough and is not spending enough. The data shows precisely the opposite.
What is true in the developing world is also true in the developed world. Dr. Tanzi, a Harvard-trained former IMF policy director, conducted similar research on developed countries. He found that countries where government is less than 40% of GDP have significantly better outcomes on the UN development index than countries where the government represents more than 50% of GDP.
The two best-ranked Asian countries on the human development index are Singapore and Hong Kong, countries with no natural resources. They actually have to import their own water. They live on land masses that are a fraction the size of the city of Ottawa, with multiple times the number of people. Despite this, they have the highest standard of living compared to any country in the Asian world.
Our critics will point out quickly that these countries have housing crises. Our critics forget, of course, that this is because they are the most densely populated places in the world. However, I will point out that while housing in these countries is extremely expensive, it is basically the only thing the government controls. Inside those countries, we can see the difference between the immense power of the free market to improve people's lives and the constraints that heavy-handed, excessive government imposes.
Apart from that exception, those countries demonstrate that even though they have governments representing less than 20% of GDP, they have incomes that are equal to or superior to those in countries around the world that have had far longer to develop and far more natural resources with which to do it.
The reality is that the free market system has generated more wealth than any other system ever contemplated. However, unfortunately it has had one failing. Those of us who advocate for this system have allowed the other side, those who believe in expanding the force and control of the state, to steal key words.
I am here today to take them back. Let us start with the word “empathy”. The free enterprise not only allows empathy but requires it. The only way to make a profit in this system is to offer something that is more valuable to people than what they have to pay to get it.
There is no one more empathetic than the entrepreneur to his customer, because he knows that when that customer comes into his shop, he needs to do everything in his power to make that customer happy. That is not something any politician across the way can claim, because at the end of the day they make their living and grow their operation by the forceful collection of taxes.
The reason businesses and entrepreneurs in the free market system have to be so empathetic to their customers is that they have to sell their customers things through a voluntary transaction. Empathy means seeing through another person's eyes. There is a trick to sales: If you want to sell what John Smith buys, you have to see through John Smith's eyes. That is the oldest expression in sales.
Let us take back another word. Another word that those on the socialist side have expropriated is “diversity”. Liberals believe in anything but diversity. They want government control to snuff out diversity. They just kicked two women members out of their caucus because they were speaking up and their voices brought too much diversity for the government to handle.
The greatest thing about the free market is that it is in a constant state of mutation to accommodate every diverse and particular need. I flew from Ottawa to Toronto recently with a constituent whose 80-person company has made a business of helping companies do billing and marketing in Braille and large print, with no government subsidy, all because businesses want access to the visually impaired market.
Compare that to the inflexible and lumbering government school system under the previous Liberal governments and most governments, which cannot provide basic IBI treatment for autistic children despite billions of dollars of money spent.
Let us take another example. Let us take back the other word, “tolerance”. Tolerance exists in a place and in a system called the free market, which ruthlessly punishes the bigoted employer. No system more ruthlessly punishes bigotry in an employer than one that makes that employer pay a price for turning down the best employee because of irrelevant characteristics such as race, gender and sexual orientation. The free market ensures that there is always a built-in incentive, an imperfect one, but an incentive nonetheless, to promote and hire based on merit and to treat every customer in the best possible way.
Yes, we need strong civil rights protections in law, but at the same time we also need to recognize that the greatest protector of all of our services is when we have entrepreneurial free enterprise competition that requires entrepreneurs to reach out and serve both workers and customers.
Here is the ultimate difference between the two systems. We can have a free market where businesses get ahead by having the best product, not a government economy where they get ahead by having the best lobbyists. We can have a market where entrepreneurs make money by pleasing customers, not a government economic system where they get by on pleasing politicians or government officials. We can have a market where the underdog gets the same chance as the fat cat and the challenger the same opportunity as the incumbent. We can all advance based on meritocracy, not aristocracy.
I would conclude today that if the Prime Minister had not decided that government had to be at the centre of every economic decision, maybe SNC-Lavalin and others like it would not think the way to get ahead is by relentlessly lobbying for special breaks and deals.
We on this side of the House of Commons will replace this centralized, government-controlled system of crony capitalism and corporatism with a new free market agenda that will allow everyone to get ahead on their own merit, a system where everybody can get ahead and move forward, a system that puts people before government.
I move:
That the motion be amended by deleting all the words after the word “That” and substituting the following:
“the House reject the budget since it is an attempt to bury the SNC-Lavalin scandal under tens of billions of dollars of brand new spending, for which Canadians will pay through higher taxes if the government is re-elected.”