Mr. Speaker, I rise this morning to speak to budget 2013.
I have to say that, based on the Conservatives' fanfare as they released part of the budget in the days leading up to yesterday, I was expecting great things from budget 2013.
After all, we were led to believe that this budget would help address Canada's skills gap: 260,000 jobs without people; 1.3 million people without jobs. We were told that the skills gap was the most pressing issue of our time and that new investments would form the cornerstone of this budget.
Reports said that the Prime Minister was mad as hell about Canada's training programs and that he would not take it anymore. However, when we finally had a chance to see the budget, it did not even come close to this hype.
Not only is there no new money for training, the government is actually freezing its training budget at 2007 levels. What has happened since 2007? The economy went into a recession, from which the Canadian labour market has yet to recover, and inflation over the last six years has driven prices up by 10%, so a dollar today simply does not go as far as it did in 2007.
What we have now is an even greater need for training programs to get Canadians back to work, but the government is actually providing fewer resources than before. In the lead up to the budget, the Conservatives identified the correct problem, but in the budget they failed to provide an adequate solution.
If the Prime Minister was mad as hell before the budget, he must be absolutely furious today, because the measures in budget 2013 will not improve training in Canada. With less money for training than before, a 10% cut, when we factor in inflation, simply will not get the job done. It simply will not be enough to satisfy someone who is actually concerned about Canada's skills gap.
I imagine that if the Prime Minister had been serious about this, he would have accepted the premiers' invitation to sit down with them in Halifax.
Perhaps what is really irking the Prime Minister is the fact that he has not been able to take credit for Canada's training programs. Maybe that is why he did not sit down with the premiers in Halifax to talk about the economy. Imagine, the premiers asked the Prime Minister to sit down with them last autumn to discuss the economy at their premiers' meeting in Halifax, and the Prime Minister said no, that he did not have to do that.
Budget 2013 actually helps the Prime Minister's real objective, and that is to stamp the economic action plan logo on every training program in Canada. However, the Conservatives should not be preoccupied simply with ensuring that the federal government gets all of the credit. They should be focusing on helping Canadians get jobs. On that point, budget 2013 fails.
The budget attaches new strings to the training funds that require matching provincial money. Cash-strapped provinces simply may not be able to afford it. British Columbia has said that it was alarmed at the change. Alberta is not sure even if it can afford to participate in the program.
The Quebec Minister of Finance, Nicolas Marceau, said, “—this is a direct attack on Quebec. It is economic sabotage.”
Clearly, these proposed changes in budget 2013 require a greater level of co-operation between the federal government and the provinces, but the Conservatives have got off to a very bad start.
When it comes to training, what the Conservatives have delivered is not an economic action plan. It is an economic inaction plan. In terms of Infrastructure, this is another area where budget 2013 does not live up to the hype.
There is a national consensus that we must do more to invest in our communities. Some say that there is $160 billion infrastructure deficit. We have known for years that the government's infrastructure plan from budget 2007 would expire in 2014, and we were led to believe that budget 2013 would deliver significant new money to help Canadian cities and communities invest in infrastructure.
Not only does budget 2013 fail to deliver the goods, the Conservatives are actually cutting new infrastructure funding in order to balance the budget by 2015. Starting in 2014, the Conservatives will cut new funding for provincial and municipal infrastructure by almost $2 billion a year, compared to what was actually already in budget 2007.
New money under the building Canada fund drops from $1.7 billion in 2013 to a paltry $210 million for each year until the budget is supposedly balanced. On top of that, the Conservatives are playing a shell game with infrastructure. They are taking infrastructure money from budget 2007 that they have failed to yet get out the door and are spreading it over the next five years and trying to call it new money. It is another example of the Conservatives economic inaction plan.
We were told that the budget would focus on manufacturing. This is an area where the Conservatives have a dismal record. In fact, Canada's manufacturing sector has hemorrhaged jobs, an astounding 350,000 net jobs lost since the Conservatives took office in 2006. Clearly, the status quo is not working.
What does budget 2013 do? The cornerstone of the budget's plan for this sector is another two-year extension of the temporary accelerated capital cost allowance. This is the third time the government has extended this program for exactly two years.
The private sector has been asking for a five-year extension so it can plan ahead for long-term capital investments and make strategic investments based on the long term, not on the availability of government funds. Instead the Conservatives are only prepared to offer more of the same.
Whether it is training, infrastructure or manufacturing, budget 2013 just does not live up to the Conservative hype.
In terms of the deficit, this is a budget that back loads its investments at the end of this decade and then projects a surplus in 2015 that is no bigger than a rounding error. The Conservatives are basing their budget surplus on rosy revenue projections and cuts to new funding for infrastructure. This is more false advertising. Again, the Conservatives economic inaction plan is full of it.
The Conservatives' plan promises jobs, growth and long-term prosperity. What does it actually deliver? On the jobs front, the percentage of Canadians with paid work is still lower than it was in 2008. Canada's labour market still has not recovered from the recession.
It is even harder for young Canadians to find work. The employment rate today for young people is more than five points worse than prior to the recession. More Canadians in their late twenties are stuck living at home than before. In the late 1990s, one in five Canadians in their late twenties was still living at home with parents. Today, it is one in three. Young Canadians simply cannot afford to move out. Their incomes have dropped since 2008. They are being squeezed between being underemployed or unemployed and having to pay crippling levels of student debt.
Lost in yesterday's budget coverage was the release of a TD Bank report on student loans. According to this report, student debt in Canada now stands at almost a trillion dollars. It is the second-highest source of debt in Canada next to home mortgages. The 90-plus day delinquency rate on student loans is at an all time high. The Government of Canada has been writing off hundreds of millions in Canada student loans over the last few years.
Too many young Canadians are losing hope. We run the risk of creating a lost generation of youth who are burdened with high debt and have no useful work experience.
Young Canadians, their parents and their grandparents are looking to the government for a concrete strategy to create new opportunities for young Canadians. Instead of delivering a real plan to help our youth, budget 2013 focuses its so-called job opportunities for youth plan on more government advertising. Under this so-called youth jobs plan, the Conservatives are taking $19 million from existing programs and reallocating that money to advertising, as though the solution to the country's job crisis for young Canadians is more economic action plan ads on TV.
Budget 2013 also places Canadian jobs at risk by continuing to hike job-killing EI premiums. In fact, the average Canadian worker will pay an extra $50 in EI premiums next year and his or her employer will face even higher increases.
With measures like these, no wonder budget 2013 assumes that Canada's unemployment rate in 2014 and 2015 will in fact go even higher than previously predicted.
The Conservatives also talk about growth and long-term prosperity. Well, the budget assumes that Canada's economy will actually slow down. In fact, the government had to reduce its growth projections for this year by more than a full percentage point.
It seems the only growth taking place in the Canadian economy right now is the growth in household debt. This does not bode well for the long-term prosperity of middle-class Canadians. Canadian families now owe a record $1.67 for every $1.00 of annual income. This level of personal debt is higher than American families were carrying prior to the crash.
Meanwhile, median household incomes have flatlined over the last four years. Canadian families may have bigger mortgages today, but they are in no better position to pay them. In fact, a growing number of Canadians are now struggling to pay their mortgages, even at low rates. They are petrified as to what will happen when rates go up. Making matters worse, housing prices are starting to soften.
For many Canadians, their home is not simply a place where they live, it is also part of their retirement plan. The experts say that Canadian home prices are now over-valued, and the Minister of Finance is partly to blame. It was the finance minister, with his risky mortgage scheme in budget 2006, that brought U.S.-style 40-year mortgages with no down payments to Canada. That scheme made 40-year mortgages the norm in Canada, it drove up housing prices and it helped to create a housing bubble.
