Tamara Kronis

“Mr. Speaker, I appreciate having the opportunity to rise today to speak to this very sobering issue. I will be splitting my time with the wonderful new member from Long Range Mountains, who is a fantastic member in this place and brings a lot of expertise. I am happy to share my time with her. Also, I want to say hi to Susan, who might be watching at home, who typically watches many of these speeches. I thank and appreciate her for all the support and the friends at Cornerstone. We are talking about a recession. We might be down by 0.1% or up by 0.1%, but the truth is that the economy is not doing very well, regardless of whether the government suggests that we are not in a recession or that, as some people like to say, it is just a technical recession. In fact, according to Sean Speer, editor-at-large at The Hub, all of this is a bit of silly semantics: “The real questions are: how much does the economy suck, how long has it sucked, why does it suck, and what are the different ideas to stop it from sucking.” We have a productivity crisis in this country, and everybody knows it. The Prime Minister has even acknowledged it. I think the Prime Minister was elected in part because of his résumé, but it appears, over a year into his term, that his economic agenda and plan are not working. It is even a bit hard to determine what his economic plan and agenda are. If it is to attack productivity, one cannot connect very many of his economic announcements to actually making the big reforms and changes we need to the economy in this country to get it going. Of course, President Trump’s tariffs weigh on our economy, but we saw serious economic trouble before anyone had heard of President Trump. The Bank of Canada has called it a productivity emergency. Senior deputy governor Carolyn Rogers declared it “an emergency”, a “time to break the glass”. If it is true that we are in this economic crisis of productivity, the Prime Minister’s agenda is not addressing it. He is saying we have moved at speeds faster than ever before, but we have not seen fundamental reforms. There has been no serious competition reform, tax reform or regulatory reform. In fact, when it comes to those three items, we could classify the Prime Minister not as a bold actor but as one who supports the status quo. He is the status quo man. He is not willing to take on the banks, the airlines, the telecoms or the other oligopolies that we need to take on to enhance the productivity of our country. He must move faster. On competition, we should radically attack the profit pools of our financial institutions, in particular the banks, by introducing more competition to deliver lower prices to Canadians. If we want to send a message to the United States, let us do it through CANZUK. If British Airways wants to fly a plane between Toronto and Vancouver or Toronto and Halifax, why do we not let them and invite any airline in the CANZUK countries to do so? On taxes, we should immediately move to reduce capital gains on those businesses and individuals who reinvest in Canada and in Canadian companies. We need a tax reform package to lower taxes, business and personal, and significantly reduce complexity. On regulation, we need service standards for permitting. We need to pre-approve projects in areas of the country, which means they can be done faster. We should be working more closely with indigenous leaders across the country to identify and pre-approve projects, to de-risk them, in order to free up and attract private capital. If the Prime Minister was serious about building a pipeline, he would have already started his consultations with indigenous groups. We risk allowing this valuable time to go by without making the difficult decisions. Instead, we get announcements, speeches and bureaucracies, such as the Major Projects Office, which, by the way, in and of itself is an admission that the regulatory process does not work. We have the build Canada office, and then the sovereign wealth fund, which will be funded, of course, with debt. Now I would like to turn, for the reminder of my comments, to a specific risk that I think is growing and that the government should be paying more attention to. The Prime Minister’s fiscal plan for this country is putting us at serious risk. By doubling the size of the deficits of PM Trudeau, the Prime Minister is threatening the fiscal stability of our country. If we get into economic challenges around the world, we will be less able to deal with them. We are borrowing record amounts of debt this year and in the next two years. This year we will borrow $510 billion in the market, then we have to borrow $594 billion in the market, and in 2027-28, we have to borrow $563 billion. We borrow mostly on the short end of the curve, so what happens is that this debt has to be rolled over every two or three years. That is like signing up for only a one- or two-year mortgage on a house. One would have to go to the bank, and guess what happens. Their interest rate gets reset every single time. When 40% of the government’s debt is purchased by non-bank financial actors, which are hedge funds and financial speculators, we are at serious risk if those hedge funds and purchasers cannot continue to purchase. In the face of all of this, the Prime Minister’s fiscal plan is to borrow more money, record amounts of money. If there is an economic event, a sovereign debt crisis or a war, something that happens totally outside of Canada, our debt service costs are going to explode. They are already going to be $80 billion in just a few years, and that is $80 billion that could not go to more productive uses. That $80 billion is a projection based on interest rates staying the same or going down. What if interest rates go up? The Prime Minister, who is a two-time central banker and chair of the Financial Stability Board, should know better than to increase the size of deficits and debt in this country and put us further at risk, and I am not the only one who thinks so. The Bank of Canada is warning that we will have potential problems. It is saying that higher stock market valuations, higher corporate debt and higher amounts of money borrowed by hedge funds to buy sovereign debt are vulnerabilities. “This has made it more likely that a new shock or a combination of shocks could cause several vulnerabilities to crystallize at once,” said the senior deputy governor, Carolyn Rogers. The Bank of Canada is warning the government that there could be economic instability, and we have a risk of who funds our government in purchasing our debt. That will put our AAA credit rating at risk. We can kiss the fiscal anchor goodbye. In fact, already the Parliamentary Budget Officer is saying that the government has a less than 1% chance of even keeping that anchor. The Prime Minister’s decisions are completely imprudent when it comes to fiscal responsibility, and it will result, and may result, in more pain later. Now, one of these events might not happen, but no one predicted the financial crisis in 2007 and 2008, or very few people did. However, it might happen, and with the fact that it might happen, and that the risks are growing, this Prime Minister’s decision to increase the size of the debt and the deficits can be called nothing short of reckless, because it will imperil the government’s ability to pay for social programs. The bankers and the bondholders get paid first, and our social programs will come second. As I said, one would think that the Prime Minister would be more attuned to some of these global risks and would be taking a much more fiscally responsible path with the government’s spending. As I might not get a chance to welcome everyone to Midland this weekend, it is Ontario’s Best Butter Tart Festival. Please come. I am super happy to plug that big event in my riding this weekend. I am also more than happy to answer any questions from any member in the House about my remarks.”