Budget 2022: Government is now 25% Bigger

On April 27, I spoke in the House of Commons about the Liberal Budget 2022.

It is a disappointing document: more deficit spending, more debt, and a lack of focus on what actually needs to be done to get Canada's economy humming again. Instead, as we've come to expect from this government, it is a lot of talk, a lot of double speak, but very thin on actions that will make a difference.

EXCERPT:

Let me address some of the nonsensical and counterproductive spending in this budget. There is a new Canada growth fund, in addition to the boondoggle that is the Canada Infrastructure Bank. It will attract the billions of dollars in private capital that we need to transform our economy at speed and scale. It will invest using a broad suite of financial instruments, including all forms of debt, equity, guarantees and specialized contracts. There is lots of debt available for investing in projects in Canada; there is lots of equity. If the government is guaranteeing returns or specializing contracts, this speaks to its basic misunderstanding of financial markets' search for clarity and transparency. It also speaks to the Liberals' predisposition to increase the risk being borne by taxpayers on projects that do not make sense.

The complete text of my speech, and the questions and answers from colleagues, is below the video.


View Greg McLean Profile

Mr. Speaker, almost three weeks ago now, I watched Canada's Minister of Finance deliver her budget speech in this place, and I listened to someone who represents the tone of the government and the doublespeak it continues to deliver to Canadians.

However, let me begin with a compliment. One of my Liberal colleagues in the House asked me just prior to the budget what should be in the budget for it to be palatable. My response was that if the budget came in below a $50-billion deficit, I would be surprised. I confess that I did expect a much larger deficit, given the government's and the Minister of Finance's predisposition to spend other people's money with no regard for the negative consequences and no foresight for what this country will need in the future. The minister's budget did not quite get over the bar. It was close, but let us accept that my expectations were very low, given what I have seen from the profligate government.

The future is always uncertain. If there is one thing the past few years have shown us, it is that the world's challenges and Canada's challenges will continue to increase. The events that challenge governments are not slowing down, as the eight billion people who inhabit this world are becoming more divided economically, politically and socially. Those events are, in fact, increasing. Natural disasters, pandemics, wars, safety and an emerging world food crisis are challenges that have not tested a Canadian government for some time.


Much like the financial meltdown of 2008, from which Canada emerged relatively unscathed thanks to good government both before the event and during the event and a doggedness to get back to balance in this country, we need to focus on the state of the country that we are leaving to those who come after us. We do not prepare for events when we are in the middle of events. We prepare ahead of time to abate the risk that events beyond our control will happen. That is the practice of risk management, and it seems lost at all levels of the government. The rot, as I see it, has taken hold through many levels, but it comes from the top.


To say that this is a government large on words and short on outcomes would be an understatement. I could say much of what is broken, but I will keep my remarks today focused on the budget and Canada's failing finances under the government.


I appreciate that all politicians bring their own background to this job when they are elected. I appreciate, as well, that the Minister of Finance is learning much on this job. However, I listened to her budget address, and I do need to point out the absolute doublespeak that filled her short speech to the House. Doublespeak is the iteration of two scenarios, both of which cannot exist together, like the so-called “having cake and eating it too”.


In Quebec, the saying is “le beurre et l'argent du beurre”.


She stated that Canada is doing very well economically and, without missing a beat, justified why Canadians need to go a further $52 billion into debt as a nation. There was a time when public officials showed responsibility and restraint when they bragged about the strength of a country's economy. Those strong economic times were opportunities to pay back debts incurred in difficult times and to prepare the country, financially and socially, for future events, which always arrive without warning.


Canada's government seems to have decided that we need to fund our military after seeing the threat of a hostile Russian autocrat invade a peaceful democratic country, yet these threats have been on our horizon for years. Funding Canada's proud military seems to be a revelation to the government. However, the funds are a drop in the bucket of what is required and their delivery is somewhat speculative and down the road.


Two years ago, the world was hit with a generational pandemic and Canada was ill prepared in so many basic ways. The foresight to have policies that allowed pharmaceutical firms to flourish here was long gone. Monumental deficit spending has become like a sugar high for the government, and the hangover is going to be massive. The results are already becoming evident: escalating inflation, asset bubbles and an inability to properly fund the basic social services that Canadians thought they had invested in, like health care and recently like day care. Now there is a scheme to buy support by funding dental care. Programs are great until we have to pay for them. The government members seem to think that problems like that belong to tomorrow's taxpayers, not today's voters.


Canada has another stimulus budget when the government says the economy needs no stimulus. It is a strange contradiction in thinking, yet someone told me that it is not really untrue if we really believe it. I hear the government members say repeatedly in the House that they will take no lessons. That is obvious, but it has to change. Here is a basic lesson, and I do not mean to sound trite: Economic stimulus causes inflation. Too much printed money pursuing the same pool of goods means the price of those goods will increase.


Exhibit one in Canada is housing. My colleagues know I will not dumb this down by pretending that Canada's housing problems are the result of one factor: inflation. How could it be? Inflation has taken root throughout the economy. The latest CPI numbers show us at an annual increase of 6.7%, a 40-year high, and house prices are increasing at three times that rate.


Let me address some further doublespeak in the speech from the Minister of Finance: “Inflation, a global phenomenon, is making things more expensive in Canada too.” This is an excuse. The minister's policies caused this outcome in Canada. She can try to blame it on the Governor of the Bank of Canada, but he is already trying to save his reputation in this regard. He is saying governments need to spend less as a first course in taming inflation, and the minister still wants to spend more.


This is supposed to be responsible government, and if it really is the minister's opinion that the fault lies with the Bank of Canada, then I will remind her that the governor reports directly to the minister. This is about accountability. The governor knows it and so should the minister. I will give another quote: “we will review and reduce government spending because that is the responsible thing to do.” Okay. Prove it.


Words are not matching actions.


Let me address the so-called fiscal anchor the minister likes to tout. Debt-to-GDP is a comparative metric but not one that speaks to fiscal accountability for governments. The minister seems to pretend that there is only one government debt in Canada, ignoring 10 provinces and three territories, or perhaps she believes that GDP can be counted twice. When I hear the minister refer to our debt-to-GDP ratio as if the provincial debts should not be included, I know she is either uninformed or misinforming Canadians.


It is a ruse. Canadians are much poorer as a country after seven years of the government. Our country's combined capital stock showed a decrease last year. Depreciation of our country's assets exceeded the amount invested in new capital here. These are metrics that matter, and the government has driven investment out of this country.


I will give another quote: “Canada has a proud tradition of fiscal responsibility. It is my duty to maintain it and I will”. Does the minister actually believe her own words? Let us acknowledge that the Prime Minister's governments this country has endured have been anything but fiscally responsible, and the saga continues with this year's projected $52.4-billion deficit in an economy supposedly close to full employment.


Let me address some of the nonsensical and counterproductive spending in this budget. There is a new Canada growth fund, in addition to the boondoggle that is the Canada Infrastructure Bank. It will attract the billions of dollars in private capital that we need to transform our economy at speed and scale. It will invest using a broad suite of financial instruments, including all forms of debt, equity, guarantees and specialized contracts. There is lots of debt available for investing in projects in Canada; there is lots of equity. If the government is guaranteeing returns or specializing contracts, this speaks to its basic misunderstanding of financial markets' search for clarity and transparency. It also speaks to the Liberals' predisposition to increase the risk being borne by taxpayers on projects that do not make sense.


I am going to close on a positive note that I heard in the speech of the Minister of Finance. She wants to “tackle the Achilles heel of the Canadian economy: productivity and innovation”, and said, “we are falling behind when it comes to economic productivity.” It is good the minister has an eye on the mess the government has made of Canada's economy. We are falling behind, and we need to address it.


This budget falls far short on this important issue, so far short that it does not even address the reason we have fallen. That is evident in the approach of the government over the past seven years. The first step the Minister of Finance could take would be to acknowledge that she has helped create this problem and start to undo some of the significant economic damage her government has visited upon Canadians over the past seven years. To solve a problem, we must first admit we have one and, indeed, admit we have caused it by our own actions.

View Mark Gerretsen Profile
Lib. (ON)
Mr. Speaker, I heard the member say earlier that there has been no success from the government: The government has been unable to demonstrate any degree of success as it relates to our economic activity and outputs.
Meanwhile, we have the fastest-growing economy in the G7. We have the lowest debt-to-GDP ratio. We are continually touted to be among the top countries, in terms of our credit rating. We have the lowest unemployment rate. We have recovered more than 100% of the jobs lost during the pandemic.
I am wondering this. Is the member using a different set of data to determine that, other than his speculation on what he anticipates is going to be happening in the future?
View Greg McLean Profile
CPC (AB)
2022-04-27 17:03
Mr. Speaker, we must be dealing with two different sets of data. I appreciate that the member is writing his own press release here.
In fact, the debt-to-GDP ratio in this country is much different from how the government explains it, because we do not include the provincial debt. I explained that in my speech. I hope the member was listening just a little, but he does not actually listen.
Another thing is regarding $52.4 billion in deficits. We used to say that if $100,000 was put in the deficit, it would buy one job. How many jobs does $52.4 billion of stimulus in the economy buy? It is 500,000 jobs. Congratulations: there is the magic number. I think that might address my colleague's question very adequately.
View Alexis Brunelle-Duceppe Profile
BQ (QC)
Mr. Speaker, I have a very simple question for my hon. colleague. Also, I would like to thank him for his speech.

We all know that the Liberals are great at talking the talk, but not so great at walking the walk. Just think the war in Ukraine. It has been 63 days, and they have yet to charter a single plane, even though they had no trouble getting one for the Aga Khan trip.
Look at what they are doing with international aid. There is not much about it in the budget, yet the Liberals see themselves as world leaders championing human rights and international aid. In the budget, however, the current amount earmarked for international aid represents 0.27% of the GDP, whereas even under Stephen Harper, it was 0.33%. The average for OECD countries is 0.42%, and the UN target is 0.7%.
I would like my colleague to talk a bit about the difference between the current government's actions and its image.
View Greg McLean Profile
CPC (AB)
2022-04-27 17:05
Mr. Speaker, I would like to thank my colleague for his question.
I agree with him. He is right in saying that we are not spending much money on international financial aid. Now there is a war on in Ukraine, and I think the government has said that it will give $500 million. That is a small share of the financial aid for the rest of the world.
View Jenny Kwan Profile
NDP (BC)
2022-04-27 17:06
Mr. Speaker, in his speech, the member actually raised the issue of housing.
As we know, Canada is faced with a housing crisis from coast to coast to coast. In the budget, there are some measures related to it. One of the pieces that I am happy to see is the change with the RCFI initiative:
Instead of ensuring that the rent is going to be above-market, which is what it was with the Liberal government's approach, in our agreement we were able to negotiate to get the government to ensure that the rent is below-market.
With that being said, one key issue to address the housing crisis is the financialization of housing. Would the member support the NDP's call for the government to put a moratorium on REITs? That would make a difference in the cost of housing.
View Greg McLean Profile
CPC (AB)
2022-04-27 17:07
Mr. Speaker, the financialization of housing is an issue, of course, across the country, but we do have investors who invest in housing. I have read that 30% of the housing stock in Canada is actually owned by investors. These are not necessarily large investors, which is what people think of when they think about the financialization of the housing market.
A lot of small investors have committed to putting money into housing. That is because there are no other areas to put money into in Canada. The Liberal government has more or less annihilated the investment market: the ability to invest in anything that has a return in Canada. If there is an opportunity to get 15% a year on an investment in housing, most smart investors will take that. I think a lot of that is coming from small investors.