Madam Speaker, there are many reasons why we on this side of the House have lost confidence in the Conservative government. Some of those reasons were outlined earlier today in the speech by the Leader of the Opposition. Others will be advanced by my colleagues through the day. In that regard, I will be sharing my time with the hon. member for Notre-Dame-de-Grâce—Lachine.
For my part I want to focus specifically on the economy, on the government's ongoing economic incompetence and why it simply cannot be trusted. On the Conservative government's watch, nearly half a million full-time Canadian jobs have disappeared. Now, this country is on its way to a multi-year, multi-billion dollar string of Conservative deficits, the biggest in Canadian history. It all goes to questions of competence and trust or the lack thereof.
The Conservatives brought Canada into deficit quite unnecessarily, not because of but before any recession began. When the Liberals turned over the reigns of power in February 2006, Canada's fiscal position was the best since Confederation and at the very top of the G8 group of world leading countries. Our economy had thrived through a decade of balanced budgets and more than 3.5 million net new jobs had been created.
Transfer payments to provinces for health care and other social programs were at an all-time high. Debt and taxes were falling faster than ever before. In fact, the debt ratio had been more than cut in half. Our financial system was strong. Canada's annual surplus was running at about $13 billion per year and over five years federal financial flexibility was projected at close to $100 billion. That is what the government had to work with starting in 2006.
However, by last year, before the recession, most of that financial strength had been frittered away. It was gone because federal spending between 2006 and 2008 ballooned to unprecedented levels. It was up 18%, in other words, twice the rate of inflation before the recession. The tax base was eroded before the recession. And, all previous financial reserves, safeguards that had been put in the federal books to protect against those external nasty surprises that come along, had been eliminated before the recession.
The federal treasury stood exposed like a goalie with no pads, no stick, no face mask and no nothing, just praying that there would be no shots on goal. With the greatest of respect, that is not a competent way to proceed. It was reckless of the government to assume that the economic good times would just keep on rolling indefinitely.
The Conservatives would have been briefed by the Department of Finance that a downturn was virtually inevitable. The country had enjoyed a positive business cycle since 1993. That was the longest unbroken period of economic expansion since World War II. On the law of averages alone, it was due to come to an end. Finance officials would have warned to be prudent.
Furthermore, risks were obviously rising in the United States. The overspending American consumer had long been living beyond his or her means as reflected by massive household debt and massive U.S. budgetary and trade deficits. An unsustainable bubble was persisting in the American housing market, which if and when it collapsed, as it ultimately did, would spell big trouble for Canada.
In those circumstances, finance officials would have advised the government to avoid profligate spending, to safeguard the tax base and to maintain decent reserves in Canada's financial statements to serve as fiscal shock absorbers in the event of that inevitable downturn. However, the Conservatives chose not to follow that advice. In fact, they did the exact opposite. They overspent, eroded the tax base and eliminated the safeguards.
As a consequence, while times were still good last year, the federal government went into the hole by some $6 billion dollars and there was nothing left to cushion the blow when the recession subsequently came along.
Another source of concern about competence and trust flows from the erratic explanations that Canadians have been given about the true state of our economy and Canada's balance sheet. All through last fall, we were told that a recession was unlikely. Indeed, even to ask about the risk of recession was labelled by the Prime Minister as fearmongering or, to use another one of his words, stupid. We were told that there would definitely be no deficit.
In November, the government outlined a plan, not for stimulus but for the opposite, fiscal restraint, and it falsely claimed four more surplus budgets. However, by January that storyline was abandoned. Instead, Canada would now have two years of deficit financing, $34 billion this year and $30 billion next year. Through February, March and April, the government insisted those numbers were absolutely accurate, all on track it claimed.
However, by May the Conservatives' story had changed again. The government had miscalculated it seems by an astounding 48%. The red ink this year would be at least $50 billion, not $34 billion, and the deficit would last for four years, not just two.
This month it changed again: $50 billion became $56 billion and the timeframe stretched from four years to six years. The cumulative damage will be something worse than $170 billion in new debt overall.
Constantly changing stories do not demonstrate competence or inspire trust. Where does that leave us? It leaves us with a government that failed to see a recession was on the way, a government that ignored all of the warnings, a government that squandered Canada's fiscal security before there was a recession, a government that was wilfully blind, still denying the recession even after it arrived, and a government that first tabled a wrong-headed austerity program, not a stimulus plan. It was going in exactly the wrong direction. When it finally and belatedly admitted that a recession was here and that a stimulus plan was necessary, it was slow and clumsy in bringing it forward. Its so-called plan was completely suffocated by Conservative partisanship.
The Conservatives were preoccupied with photo opportunities, with advertising and with claiming credit, but in fact, less than 20% of what they promised has actually been delivered to date. Even their own favourite independent economists predict that by the end of this year they will not get that figure up to 30%.
Meanwhile, 486,000 full time Canadian jobs have been destroyed on the government's watch. It promised 190,000 but it lost 486,000. In the coming year, the government is now promising to find, magically or mystically, 220,000 jobs. However, the Royal bank, the TD Bank, the OECD and every other credible forecaster is predicting another 200,000 jobs will be lost. Unemployment will be near 10%.
What does the wrong-headed government now propose? It proposes a new Conservative tax on jobs. It will increase payroll taxes in the form of higher employment insurance premiums, and not just by a little bit. Higher Conservative EI premiums will become the government's fastest growing source of revenue. Its own numbers prove it. Over the next five years, it will hoist its revenue from EI premiums by a whopping 60%. Just as Canadian employers will be struggling to generate new jobs, the government will hit them and their employees with a new Conservative job killing payroll tax.
Let us think about that. This is the government that said that it would never increase any taxes. The dishonesty is breathtaking.
However, just as the Conservatives increased personal income tax rates and just as they imposed a brutal new tax on income trusts, they have broken their word on taxes time and time again.
It is not just about taxes. It is about equalization, floor-crossers in the cabinet, fixed election dates, appointing more senators than any other prime minister in Canadian history and about demeaning women and minorities as unworthy left-wing fringe groups that need to be taught a lesson.
We have no confidence in the government.
