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Results: 121 - 129 of 129
View Colin Carrie Profile
CPC (ON)
View Colin Carrie Profile
2021-04-26 17:12 [p.6195]
Madam Speaker, the member did give some solutions and when we talk about the budget, it is really important. One of the things I am hearing from economists is that this budget has an extra $100 billion of stimulus in it that the economy may not need right now, especially with the Americans' spending. I am worried about the quantitative easing, the stimulus and the concern about inflation.
I remember when friends of mine who graduated just four years earlier than I did paid $100,000 less for a home. Could he comment on this extra amount of stimulus and the idea of hyperinflation?
View Brad Vis Profile
CPC (BC)
Madam Speaker, I am not an economist, so I am not going to go very deep into the quantitative easing program, but I do know that we are seeing record inflation as it relates to housing. We need to get that under control, and that starts with the Government of Canada getting its spending under control and putting forward a reasonable pathway to balance budgets to protect the long-term interests of Canadians. The member's grandchildren, my children—
View Pierre Poilievre Profile
CPC (ON)
View Pierre Poilievre Profile
2021-04-20 16:19 [p.5882]
Madam Speaker, the test has been running for four years now, and the Liberals have been getting an F year after year after year.
Dionysius gets an A for creativity. He took one-drachma coins and stamped them with the number two, and all of a sudden he had twice as much money. However, of course, all of the workers of his city state were earning half as much in real terms because everything costs twice as much when we double the amount of currency in circulation.
Throughout the Napoleonic Wars, the exact same thing happened. The amount of silver in the average coin dropped by two-thirds during Napoleon's reign because all of the emperors and kings were trying to debase their coinage to fund their wars. Of course, their people became much poorer because their money did not go as far.
The most recent and extreme case was that of Germany in the immediate aftermath of the First World War. After the war was done, there was 10 times as much paper currency in circulation as immediately before the war. The result was hyperinflation. People needed wheelbarrows to carry their cash off to the baker to buy just one loaf of bread. If someone went to the bar to get a beer, they ordered all of their evening's drinks at once, because if they waited even a few hours, the beer would be more expensive. It was a good investment to load up a table right when they got there, immediately after work, to save a fortune on inflation.
We are told that such inflation will never happen here and that all of these things about printing money causing inflation amount to old thinking. Members should remember that history does not repeat itself, except that it is already repeating itself.
Let us start with housing prices. From December 2019, the last month before COVID started to circulate in Canada, to March 2021, the average house went from $518,000 to $716,000. This is a massive 38% increase at a time when the economy dropped by $120 billion. The economy went down, but somehow housing prices went up.
Lumber prices are up 118%. Here is a quote from a contractor: “Oh, it’s ridiculous. A 2×4 stud used to be $3.50; now they’re $9.80. A sheet of OSB plywood was $12 two years ago; now it’s $56 per sheet”.
Here is a quote from an article in the Financial Post just yesterday, entitled “Central banks and government out of touch with Main Street when it comes to rising cost of living”: “the latest Canada’s Food Price Report shows that food costs increased 2.7 per cent last year with an expected 4.5 to 6.5 per cent increase in meat, 3.5 to 5.5 per cent in bakery, and 4.5 to 6.5 per cent in vegetables this year.” As for gas prices, they have gone from 78¢ a litre to $1.18 a litre.
All of these things are rising vastly more than the Bank of Canada's target. There is something interesting about the Bank of Canada. I asked about the core rate of inflation when the governor of the bank appeared at the finance committee not so long ago. He told us not to worry about core inflation and that he only worries about CPI. Well, I will tell members something. I have a prediction: This month CPI will be way above the 2% target. I will make another prediction: The Bank of Canada will suddenly say not to worry about CPI and that they use core inflation. Whatever is lowest is the measurement they use.
Here is the consequence of all of these numbers. When governments print money, they drive up the price of two things. One is the things that the rich own. The second is the things that everyone else buys. If someone is a millionaire mansion owner, they are getting extremely rich. Their house is making a lot more money than they are. They are sitting in their rocking chair and cash is just falling out of their attic onto their head. However, if someone is a working-class person who rents in order to have a roof overhead, their rent is going up, their cost of food is going up and their cost of gas is going up. Everything they buy is going up, except their wages are not and that dream of owning a house is getting further and further away because of asset price inflation.
What we have is a government that claims it is doing all of this deficit spending to help the less fortunate, but is actually carrying out one of the largest wealth transfers from the working class to the super rich, from the have-nots to the have-yachts, in Canadian history. The solution to this is to control the spending, unleash free-market production, replace the credit card economy with a paycheque economy and restore the principle of sound money so that the dollars people earn are worth what they are supposed to be worth and so that people get ahead through their labour and effort, not through their privilege and aristocracy.
View Ed Fast Profile
CPC (BC)
View Ed Fast Profile
2021-04-12 12:42
In short, the six parts of the Bill C-14 fall economic statement effectively introduce, modify and improve programs that the government brought forward and that we as the official opposition are fully supportive of. Of course, like all things Liberal, there is always a catch. In this case it is part 7 of the bill. As my colleague from Winnipeg has just mentioned, the Prime Minister is asking Parliament to approve a historic, massive increase in the debt ceiling, in other words, the line of credit that the government has available to it. The government wants to increase that by $663 billion, almost one-quarter of a trillion dollars. That is massive.
Before any parliamentarian should ever provide their support to that kind of an increase, they should be asking what this borrowing capacity is going to be used for. We have to consider this in the context of the fact that the Liberal government has been chastised by the Parliamentary Budget Officer for not being transparent in its spending endeavours. Every time it brings forward a spending bill, it refuses to explain to Canadians exactly how that money will be deployed. Parliamentarians do not have the ability to exercise proper scrutiny and oversight. The PBO identified that and said that the government is not transparent.
Why should we trust the government when it now says it wants another $663 billion? I was at committee when we were asking questions of the Minister of Finance. We expressly asked her to please tell us what this additional $663 billion is needed for and where it will be deployed. All she did was refer Canadians to one chart in the fall economic statement. She said to go and look at that, all Canadians have that available. Most Canadians are not going to go looking for the fall economic statement to find the one chart that actually did not show where she was spending the money. It simply showed how much money she was asking to borrow. We deserve better as a country.
Another thing is signalled in this fall economic statement and that is a $100-billion stimulus fund that the Minister of Finance has suggested might be required for Canada to get through the pandemic. Again, at committee, we asked very expressly if she could tell us what this stimulus fund is all about. She talks about $100 billion, asks us to trust her and so far she had been unwilling to provide any transparency on where that money might be deployed. Now she had an opportunity. She would not tell us. Would that money go into productivity-enhancing investments like hard infrastructure? Was it going to go into soft infrastructure? She would not say. She made vague references to guardrails, supposed rules that she was going to put in place to ensure that there were triggers that would allow it to slowly ease this money into our economy. The problem is that the economists have all pointed out that she has been so vague about what those guardrails are all about that it is impossible for anyone to exercise any kind of oversight over this $100 billion of additional spending. Those same economists have also sounded a precautionary note.
The government's $100 billion stimulus must take into account inflationary pressures. When we pump $100 billion into the economy in a short period of time, it means there are more dollars chasing the same number of goods, and that could lead to inflationary pressures. When the central bank, the Bank of Canada, senses that there are inflationary pressures, it increases interest rates.
If Canadians across the country knew right now that there was a significant risk of interest rate increases, a lot of them would be panicking, because they got into this incredibly expensive housing market upon the condition that interest rates would stay low. However, if we pump more and more stimulus into the economy, that will stoke the fires of inflation, and it gets worse.
Economists have also warned the government and the finance minister that the government needs to take note of the massive stimulus that the American government is pumping into its economy. It is a $1.9 trillion stimulus plan into the American economy. Layered on top of that is a $2.3 trillion infrastructure plan, which adds even more stimulus to the economy. When that economy starts being stimulated, that sloshes over the border into Canada. It impacts economic growth, but it can overheat economic growth and again stoke inflationary pressures.
Layered on top of all that is something that is counterintuitive. Even though we have come through the worst pandemic in our lifetime, the worst economic crisis in my lifetime, we have a situation where we have record amounts of savings on both the household side and the corporate side in Canada, savings that are eventually going to be pumped back into our economy, injected as stimulus. Therefore, when we add all this stimulus together, the government has to be very wary of adding another $100 billion to that.
This is an unprecedented crisis, but Canadians want hope and they want confidence for the future. They want to know that the Prime Minister and the finance minister have a plan to safely reopen our economy. That includes safely reopening our common border with the United States, because we have somewhere in the order of $2 billion in trade crossing our border every single day. The U.S. is by far our largest trade partner. Therefore, I encourage the government, as it is moving toward tabling a budget, its first budget in over two years, to ensure that the budget includes a clear plan going forward to safely reopen our economy, and that will require Canadians to be properly vaccinated.
What is the plan? The current plan has been a bit of a boondoggle. I think Canadians are understanding that. We need a plan to safely reopen our economy to get Canadians back to work, to help small businesses get back up on their feet and to manage this massive new debt that the government has incurred on Canadians' behalf. There has to be a management plan, which includes strong fiscal anchors, rules and guidelines by which the government will be guided as we emerge from the pandemic and struggle to get a grip on this massive financial obligation with which we will burden future generations of Canadians.
We are fully supportive of parts 1 through 6 of the bill. It is part 7, the massive increase in borrowing, we cannot support, especially when the minister has been unable or unwilling to explain how that additional borrowing capacity, some $663 billion, will be deployed going forward.
Canadians are fair, reasonable, generous people. All they are looking for is ethical and competent leadership, transparent leadership, to help them emerge from this crisis. So far, they have not been getting it, and they deserve better.
View Garnett Genuis Profile
CPC (AB)
Madam Speaker, I have two quick questions for the member.
First of all, I was interested by the question he asked in question period with respect to monetary policy. In 1974, when the Bank of Canada changed its policy, the inflation rate was at 11%. Is he concerned that the policy he was advocating for in question period might lead to increased inflation? There is a lot of worry about the potential for long-run inflation already as a result of current government policy.
My second question is about housing. I heard him speak about housing. I know he tabled the petition on that earlier today as well. It seems to me that one of the key issues around cost of housing is housing supply. We can make all kinds of regulations and requirements, but if we do not increase the supply, the cost is going to continue to be very high. We could consider policies that incentivize an increase in housing supply as a way of trying to address housing availability and affordability. Does the member have ideas or a plan on what could be done in that respect?
View Paul Manly Profile
GP (BC)
View Paul Manly Profile
2021-04-12 17:46 [p.5450]
Madam Speaker, in the past, the Bank of Canada managed inflation, particularly during those years, 1938 to 1974, by limiting the supply of money. It limits the supply of money that is created now through our fractional reserve system. It can be done. We just need to have policy built around that.
In terms of housing, what is happening in the housing market is that we need more affordable housing built. Companies are not building affordable housing. They are building market-rate housing, and so much affordable housing right now is being flipped into market-rate housing. We see investors coming into the market, buying up older housing stock that was affordable. Now that housing stock is being rented out at higher rates and where there is no rent control, so they can just increase—
View Pierre Poilievre Profile
CPC (ON)
View Pierre Poilievre Profile
2020-12-11 13:20 [p.3353]
Madam Speaker, the member for Leeds—Grenville—Thousand Islands and Rideau Lakes has risen and stated his case, the report is public and the information is before Parliament. Canadians can render their own decision.
I, too, add my voice those who thank him for showing up here and making his case in person. I know that must not have been an easy thing to do, but it takes courage. I thank him for carrying out his duty to hold government accountable and to the highest standard of ethics.
That being said, the controversy is about the disclosure of financial assets, so I would not be parting very far from the subject at hand if I were to talk about the government's non-disclosure of its financial assets. If we are going to require a Liberal MP, or any MP, to disclose assets and therefore interests, surely the assets that belong to the Canadian people should be equally disclosed.
The subject here is ethics and transparency, so I turn the House's attention to the hundreds of billions of dollars's worth of assets that are owned by the Canadian people but for which we have not experienced adequate transparency. The government spent $80 billion without giving serious transparency to the Parliamentary Budget Officer, and further to that, the Bank of Canada has purchased 400 billion dollars' worth of assets without disclosing all of the financial implications, the costs, the buyers and the sellers for which those transactions occurred.
This represents a monstrous transfer of wealth. Since the crisis began in March, the bank has begun purchasing financial assets, mostly government bonds. This has driven up the value of those assets and therefore the wealth of the people who hold them. It has been noted in the House that the 15 wealthiest billionaires in Canada have seen their net worth rise by over 30% since the pandemic began, and that cannot just be pandemic profiteering, because many of these billionaires have assets in fields that have not done well during the pandemic.
What has caused these assets to inflate in value? The answer is that whenever the government, through its central bank, prints 400 billion dollars' worth of money and pumps it into the financial assets of the system, those who have assets become wealthier. That would be just wonderful if there were no consequences for anyone else. However, the historical experience is that when governments print money to pay their bills, which is effectively what the government is doing here, eventually it raises the cost of living for everyone else.
The bank claims it is technically not printing money. Well, the data that is available tells exactly the opposite story. In fact, the number of banknotes in circulation, which are the $5, $10 and $20 bills that one can purchase things with, is up 8%, even at a time when people are using less paper cash than ever before. This is the largest percentage increase since the mid-1980s.
M1 money supply is up 17%, even while the economy shrinks, and when the supply of money exceeds the production of goods and services, eventually, though not immediately, we experience inflation. It is a phenomenon, the Governor of the Bank of Canada admitted to me before the finance committee, that falls heaviest on the shoulders of the poorest people. Why is that? It is because they deal disproportionately in cash. Whereas the wealthy can protect themselves from inflation by shovelling their money into assets that inflate in value, the poor deal mostly in cash and therefore have their very limited net worth eaten away.
Here we have a monstrous policy of transferring wealth from wage-earners to asset-holders, from the working class to the wealthy. The Prime Minister should know this, because when he was asked his definition of rich versus middle class, he said the middle class are the people who live off wages and the rich are those who live off assets. Here we have a policy that is specifically designed to transfer wealth from those who earn wages to those who earn capital gains through their assets.
There is no doubt that this phenomenon will lead to a greater concentration of wealth, that the wealthiest 1% who own the most expensive and luxurious real estate and have in their portfolios the most stocks and bonds and other financial instruments will continue to see their net worth expand, having done nothing, by the way, to deserve that expanded net worth. It is not because they invented a new product or delivered a new service; it is simply because they sat back in their rocking chairs, while the Governor of the Bank of Canada and the banking system that it creates pumped air into those very same assets.
Members should try talking to a young person who is attempting to buy a house these days. The asset inflation of real property has put that out of reach. Whereas the wealthy who are already landed and in possession of luxurious real estate properties become wealthier and wealthier still. Here we are debating the disclosures of one member's personal assets and I cannot get the Bank of Canada to give me information about the amount it paid and what it got for its purchases of these assets.
One of the very interesting things about how this all works is that the Bank of Canada is the financial agent of the government. Therefore, when the government runs these huge deficits, it raises the money by selling bonds into the marketplace to investors. However, with this new program of printing money and purchasing assets, the bank is now buying back the very same bonds that it sells out. It sells a bond to a wealthy investor to raise money for the Prime Minister to spend and then, sometimes in the same week or month, purchases the same bond right back from the same investor.
I have asked the Bank of Canada officials if there have been cases where the bank sells a bond and then buys it back at a higher price, thereby profiting the investors at the expense of the taxpayer-owned bank. In other words, the investor gets rich by arbitraging the difference between the price at which he or she purchased the bond from our central bank and the price for which the bank bought it right back.
The bank will not tell me that this is happening, but when we are talking about $400 billion worth of transactions, that is bigger than the normal program spending of the Government of Canada for a year. It is twice as much as the governments of Canada spend on health care, to put it into perspective. It is an absolutely enormous sum of money, yet the bank will not release information on who is profiting and at whose expense.
Therefore, I asked the finance minister and she said that I should ask the Bank of Canada. I did ask the Bank of Canada and it will not give me the numbers.
Therefore, we have in the House of Commons MPs who are squabbling. The NDP is squabbling over a $6 billion wealth tax. The Liberals are bragging that they brought in a new tax on stock options that will raise $50 million. We are talking about $400 billion here that the central bank is playing with, many orders of magnitude larger in sum and consequence than the chicken scratch that Liberals and New Democrats are fighting over.
They always tell us they are so worried that the rich are getting richer, but when our central bank, which is supposed to be accountable to us and whose $5 million in shares are held in the name of the finance minister, pumps $400 billion into financial markets and enriches the wealthy and powerful at the expense of the working-class wage earner, we hear nothing but silence from the social justice warriors on the other side of the House of Commons. They are just fine seeing the wealth gap get bigger as long as government gets bigger along with it.
We, on this side of the House, believe in financial transparency and in merit-driven wealth rather than crony capitalism. We call on the House to demand greater accountability and transparency from our central bank and from our government, because this money is Canadians' money and we are their voice.
View Pierre Poilievre Profile
CPC (ON)
View Pierre Poilievre Profile
2020-07-20 12:50 [p.2588]
Madam Speaker, when the government first rolled out programming in response to the COVID-19 shutdown, the programming was filled with the old classic rule that no good deed goes unpunished. The government created an income support program for workers, but ripped it away the second those same workers earned more than $1,000, punishing their good deeds of working hard and earning money. It created a wage subsidy, but then tore it away as soon as a business was able to recover more than 70% of its pre-COVID revenue, again punishing a business for the crime of recuperating revenue and rebuilding the economy.
We warned early on that these anti-work, anti-earnings disincentives would penalize the very people who were working hard to put our economy back on its feet in the post-closure period. The government ignored our concerns and delayed. In the meantime, countless workers and business owners have faced the impossible dilemma of whether or not they should go back to earning what they did before the pandemic began.
Members could judge these people, who are out in the world facing that dilemma, but before they do, I ask them to think of, for example, a waitress whose employer may go bankrupt because of the enormous revenue loss that he has experienced during the shutdown. If she goes back and begins earning $1,200, and he then goes under, she will lose her job and she will have lost her CERB. In other words, she will have no income at all, and the government will have imposed this penalty upon her for having worked too hard, having exerted too much effort to rebuild her finances and support her employer and her community.
Up until now, the same went for businesses that committed the offence of regaining lost revenues. If they were down less than 30%, that is to say that they had recovered more than 70% of their pre-COVID revenue, they would lose the wage subsidy. For many of them, the extra revenue was worth less than the wage subsidy. In which case, the perfectly rational and, in many cases, necessary decision for them was to suppress their revenues in order to qualify for the very assistance that would keep them alive and allow them to employ their workers.
Finally, the government has come forward with a proposal to address that disincentive of the wage subsidy. Unfortunately, what we see in this proposal is a cobweb of complexity. I will break down just how complex it will be and how bewildering it will become for the business owners who are trying to make sense of it all.
First, we see there are now effectively four periods that remain until the subsidy is phased out altogether. In each of those four periods, the rate of subsidy is different than it is in the others. Then there are the three scenarios that apply to those four periods. The first scenario is for businesses that have lost less than 50% of their revenue, in which case they are entitled to the base subsidy. Then there is the second scenario for businesses that are down more than 50%, in which case they are eligible for both the base subsidy and the top-up. Then there is the third scenario for businesses with employees who are furloughed or “on leave”, in which case there is yet another different rate of compensation paid through the subsidy. Do not even get me started on businesses that have both furloughed and non-furloughed employees.
If we just take the basic permutations and combinations that I have mentioned, over the next four months, businesses could face 15, 20 or 30 different rates of wage subsidy. They will somehow understand these with the help of very expensive accountants and consultants as they try to go forward and make business decisions. This complexity will no doubt impose massive new costs, unpredictability and uncertainty on the very people who are struggling just to open their doors. They are already facing a whole series of public safety rules imposed by their municipalities, rules that are themselves hard to follow, burdensome and costly to implement. Now they will have to plow through an already complicated system of taxation in order to make sense of an even more complicated system of subsidies.
In numerous conversations with the minister, we put forward proposals that could have made this simple. Why could the government, for example, not have expanded the Canada emergency business account to lend businesses their prior month's revenue loss, and then forgive repayment on 75% of whatever they spent on wages out of that amount? That could be the wage subsidy with no complexity, and it would not be a disincentive. It would be scaled to revenue loss, easy to administer and available at someone's local bank.
Of course that was not the option that the government chose. No, instead it had to come up with the most complicated system possible. The only two sectors that will experience any benefit from that complexity are the accountants and tax lawyers, who will be paid to implement and make sense of it all. Although I suspect many of them will have to hire Ph.D.s in astrophysics in order to make sense of some of the finer details of this particular proposal.
Simpler proposals are better, and simplification should always be the goal of government policy so we know exactly what we are trying to accomplish, and the beneficiaries know how to accomplish it. Therefore, we as Conservatives call on the government to look for ways to simplify the implementation of this.
We also call on the government to signal to the Canada Revenue Agency to be as reasonable as possible in its enforcement and in the subsequent cases of accidental and incidental errors that are inevitably going to be the result of small businesses tripping over many of the tripwires found in this complex proposal.
All that being said, at the very least we can give the government some credit for belatedly realizing the necessity to remove the penalties on businesses that are recovering their revenues while trying to employ their workers.
Now let us turn our attention to those very same workers. Under the current Canada emergency response benefit, workers who earn $999 can keep the $2,000 CERB, but if they earn $1,001, they lose that same benefit. In other words, they are taking one step forward in order to be pushed two steps back. No one would make the decision to earn $1,000 in order to lose $2,000. The effective tax rate on such a person would be 200%. That is a major and unacceptable penalty for work. It is also a problem with an obvious solution.
I see here the member for Haldimand—Norfolk, who was once the employment minister and helped to bring in a solution to the same problem under the employment insurance program. She, in the previous Harper government, helped to bring in the working while on a claim system, which allowed people on EI to go out and get a job and lose only 50 cents of their EI for every dollar they earned. That means that they would always be 50 cents better off for each of those dollars earned. That should be the basic principle of our tax-and-transfer system. People should always be better off when they work more, earn more or take on one more shift.
Our party has very meticulously assembled a proposal for the government that would solve this anti-work problem and give our working-class people the rewards they deserve for going back to their jobs and taking on as many shifts as they possibly can. Our proposal is simple and it is this. For those earning less than $1,000, nothing would change. They would still get their $2,000 CERB. However, for those earning more than $1,000, any dollar earned over $1,000 would result in losing only 50 cents of their CERB.
Of course, all of this could be reconciled at tax time. The government already has records of people's earnings because employers submit the payroll remittances. The government knows exactly what people earn and when they earn it. It would be very easy to use the highly sophisticated CRA software, which could automatically calculate all of this, and people's final amounts could be reconciled at tax time on their returns.
Therefore, we put forward this proposal, which would allow all workers to be better off when they go out into the workforce and get themselves another dollar. It would mean that people would only lose their CERB gradually as they earn between $1,000 and $6,000, so that every day in every way workers who contribute to their employer, get businesses back on their feet, serve local customers, pay taxes and contribute to the economy are rewarded for doing so.
The Parliamentary Budget Officer has said that our proposal would be affordable and that it would be a minor cost. I frankly believe that when the behavioural changes that would result from it are taken into account, the government will be net better off as a result of rewarding rather than punishing work.
This is, of course, a problem that most left-wing governments have. They do not believe that there is any limit to the amount of taxation they can impose upon people. They do not understand the impact that incentives have on human and economic behaviour. That is why we see ever larger tax rates, which punish people for exerting themselves and for contributing to their employers, and which take away from risk-takers, entrepreneurs and working-class people.
We on this side of the House believe in restoring the value of work and rewarding exertion, because work is the only thing that generates the product of our nation. We know that no matter what government program we create, we cannot replace the prodigious output of our 20 million Canadian workers and the 1.2 million businesses that employ them. No government program can ever do that. The only way to recharge our economy and to replenish our wealth from the enormous costs we have incurred and the debts we have mounted is to get our workers and our businesses firing on all cylinders once again.
Beyond just fixing the problems and the penalties in these programs, we also need to unleash the power of free enterprise across our economy. There are parts of the economy that the government began shutting down years before COVID-19. One example of that is the energy sector. The government imposed a shutdown on the energy sector by blocking three pipelines and a major northern Alberta mine well before the COVID-19 pandemic ever appeared. It can now begin to reverse those anti-development policies.
It can, for example, look at the inventory of $20 billion of resource projects that await federal approval, and it can expedite decisions on them now so that billions of dollars of privately funded economic activity can begin without any cost to Canadian taxpayers. This includes a massive $14-billion pipeline and an LNG plant in the Saguenay region of Quebec. It includes smaller pipeline projects and mines right across the country. These projects have already been delayed too long. If the government really wanted a stimulus, a free-market, privately funded stimulus that would reduce debt rather than adding to it, now would be the time to expedite those exact same projects.
Now would be the time to begin to draw the lines of a future energy corridor connecting east coast refineries with western petroleum, opening the door to the sale and transmission of electricity from the prodigious hydro dams of Quebec to energy-starved communities in provinces across the country.
Now would be the time to put an end to the insanity of selling our energy, not just oil and gas but also hydroelectricity, at massive discounts to our American neighbours to the south while we pay premiums for that same energy here in our very own country.
Now would be the time to go through our tax system, page by page, and start tearing out all of the penalties we impose on businesses that produce wealth and the workers who generate it.
Now would be the time to eliminate the enormous delays that are involved in building anything in the country. It takes three times longer to get a warehouse approved for construction in Canada than it does in the United States of America.
That is just one example of why so much capital has left our country for our southern neighbours and for many other economies around the world.
As a country, we went into this crisis weak. We had 0.3% unemployment, higher unemployment in fact than all other G7 countries, except for France and Italy, whose socialist policies our government was working hard to emulate. We went in with growth that was roughly half of that in the United States of America, with half our population $200 away from insolvency, and bankruptcies and insolvencies skyrocketing in the latter months of the year 2019.
We went in with a $29-billion deficit, before the very first case of COVID-19 was discovered in the country. We went in with the second-highest level of debt in the G7 when we take public and private debt combined. Only Japan has higher combined public-private debt than Canada did in 2018, at 356% of GDP, and now that number has grown further.
We now have a government that is adding $343 billion of debt this year, money it believes literally can be created out of thin air, that we can simply count on the Bank of Canada, through keystrokes, to generate this currency out of nothing. The Bank of Canada has created a half a trillion dollars since March and used that money to buy bonds, mostly government bonds. In other words, our governments across the country are currently being financed by fake currency that is literally pulled out of thin air. The Prime Minister thinks that can go on forever, as though he invented the idea of turning on the printing presses to pay for a government.
We know that for thousands of years emperors, kings and others have tried to pay their bills by creating currency from nothing. Whether they clipped coins so that the gold in them could go a little further, whether they took drachmas and wrote “2” where there once was “1”, whether they more recently cranked up the printing presses and pumped out cash until inflation was skyrocketing, the result, in the long run, is always the same: When you create money from nothing, that money begins to be worth nothing.
We are not there yet, but we must plan for the day when, eventually, there are too many dollars chasing too few goods. When that happens, the value of the dollar will decline. This will be wonderful news for the very rich of course, because their assets will inflate in value and they will become richer still. However, it will be terrible news for the wage-earning blue-collar people of the country whose wages will be devalued, who will be earning less money for every hour they put in.
That brings us back to my very first point, that we in this country should always reward and never punish work, that we should unbridle the power of the labourer and the entrepreneur to join hands in the production of wealth, to finance the lifestyle and the economy that our country deserves to pay for our national programs, our national defence, our social safety net and for a quality of life that we in a country like Canada have become accustomed to and that we should only exceed in the days ahead.
I appreciate the opportunity to address this issue. We stand ready to work with the Liberals to improve these policies, to correct their faulty ways and to make our country better yet.
View Gabriel Ste-Marie Profile
BQ (QC)
View Gabriel Ste-Marie Profile
2020-03-09 12:05 [p.1778]
Madam Speaker, before I begin, I would like to inform you that I will be sharing my time with my esteemed colleague, the member for Laurentides—Labelle. It is an honour for me to start things off.
On a more serious note, the global economy is in bad shape. The New York and Toronto stock exchanges both temporarily suspended trading this morning because stock prices were plummeting too quickly, as we also saw when the European stock exchanges closed. This is very worrisome, and it can be attributed to the panic created by the oil crash, which in turn can be attributed to the threat currently facing the global economy because of the coronavirus. I would add that even before those two events that caused stock markets to plummet, the global economy was beginning to show signs of a downturn. It was clearly already struggling.
According to widely reported statistics, global growth was pretty weak in 2019 at 2.9%. It is generally understood that when growth is at 2.5% or less, there is a serious risk of global recession. Things are not going well. Europe is also struggling, as it was even before the problems related to the coronavirus arose. The same is true in Asia, especially in Japan, China and other countries in the region.
In North America, the situation is not as bad, but growth is weak and, since the global economy is interconnected, the risks are real. We often get the impression that economic crises, no matter how big or small, happen roughly every 10 years. In fact, the last one was in 2008-09.
The global economy is struggling and now it is sustaining external shocks that we could not see coming, like the coronavirus, the plunge in oil prices and the resulting repercussions. The coronavirus is creating fear, which has crippled tourism all around the world. Some large regions, for example in Italy or China, the epicentre of the coronavirus outbreak, are under quarantine. We can expect an additional slowdown and, since both local and global economies are interconnected, these shocks are likely to have adverse effects on all economic sectors.
If the economy were on a strong footing, then this shock would be temporary and the economy would return to normal growth after a few months. However, as I was just saying, there are already signs of a serious economic slowdown. The current situation might be bad enough to have a serious impact on the economy and plunge us into that phase of the economic cycle we call “recession”.
The problems of the tourism industry, the quarantines and the reduction in personal expenditures could result in the classic scenario of a decline in demand that would possibly trigger an economic crisis. I am certain that our colleague could tell us more about Keynesian analysis and possible solutions later today. I will be there because it will be very interesting, and I invite all my colleagues to come and listen to him.
In his analysis of the current situation, renowned economist Kenneth Rogoff, from Harvard, is introducing a new element by suggesting that there could also be a risk of a supply shock as the coronavirus could cause a downturn in supply. The global economy is so interconnected and supply chains so diversified that a quarantine in a given region, such as China, could slow production of a component used in the manufacture of cars, transportation equipment or other goods. A single missing link could halt and even paralyze the entire production chain in a given economic sector. This possibility is worrisome and the economist Rogoff has more to say.
The Chinese economy is now twice as big as it was during the SARS crisis in 2003. Every segment of the economy is in massive debt. Individuals, businesses and local governments all rely on income coming in regularly to be able to make payments, since they are all over-indebted and over-leveraged. This becomes very worrisome if a zone is quarantined. Individuals, businesses and municipalities will no longer be able to make their payments, which could cause a cash crisis. Everyone knows that China plays a big role in the international economy. This situation is very worrisome.
The economy could slow down because of a drop in demand and also a drop in supply. Basic economic theory tells us that a drop in supply can cause a drop in production, leading to an increase in prices and inflation rates. This is particularly worrisome because the potential inflation could make the traditional methods we rely on to recover from recessions less effective.
The reason inflation has been so low over the past few years is that the primary goal of most central banks is to keep inflation within a target range of 1% to 3%. I would add that it is also due to increased trade worldwide. All this interconnectedness has lowered production costs in every sector, which could explain why inflation has not gone up. However, if the coronavirus sets off a panic and countries start closing their borders, the gains from increased international trade could drop off, leading to an inflation problem.
As I mentioned earlier, the global economy was starting to show signs of slowing down, and we are now facing two problems, namely the coronavirus and the oil crash. Let us hope this is only temporary. However, it is extremely important that governments around the world take concrete steps to help us recover as fast as possible. These problems are so serious that they could mark the beginning of a crisis, and that is deeply troubling.
Naturally, the government will have to make use of its traditional tools. We have seen the Bank of Canada, which operates independently of the government, cut its policy rate. There is also public spending. The parliamentary secretary told us earlier that it is important for Canada to maintain a world-class health care system.
Canada's health care system belongs first and foremost to Quebec and the provinces. It falls under provincial jurisdiction. The federal government's role is to provide adequate funding for the health care system in accordance with its previous commitments, but we are seeing exactly the opposite. I would like to remind members that Quebec's former finance minister, who was a member of the Liberal Party, accused this government of engaging in predatory federalism because it is not honouring its commitment to provide better funding for health care. That really says a lot. There is still no social housing agreement between Quebec and Ottawa. Money for infrastructure is not being disbursed. These fundamental tools would be useful in dealing with current problems, but the government is making the process more difficult than it needs to be. Things are not moving as fast as we would like.
No short-term solution is very effective in boosting supply in an economic downturn. The crisis is an excellent opportunity to move toward the economy of the future. The parliamentary secretary was talking about a transition economy. In my opinion, the government really needs to get on that and stop insisting on remaining in the last century's economy. The price of oil has just dropped. It does not make any sense that the oil industry is receiving more government support than any other industry. We are talking about over $20 billion with cost overruns. That is what was announced just over a year ago. The government is stuck in the past. We need to diversify the economy, and Quebec has everything it takes to succeed in the transition economy.
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