Greg McLean

Mr. Speaker, Procedure · 44 wordsI would like to inform the House before I begin that I will be splitting my time today with my esteemed colleague from Vaughan—Woodbridge.¹ I am happy to share time with him. Today, we are going to talk about the Parliamentary Budget Officer’s report.Procedure Claims · 6 wordsI agree with parts of it. Procedure · 45 wordsThe House will hear my critiques of parts of it as well, because all of this is open to debate. I hope my colleagues across the way will listen to some of this debate on how we forge our direction in Canada economically going forward.Procedure Claims · 47 wordsI will quote from the report: PBO anticipates that federal borrowing will grow significantly faster than deficits, which are measured on an accrual basis. Over the next five years, cumulative deficits are projected to total $333.3 billion, ²whereas federal borrowing is projected to rise by $732.9 billion....³ Procedure · 12 wordsLet us look at the delta there, the change, if we can.Procedure Claims · 135 wordsThere is over $400 billion more in borrowing than deficits. This is a partial result of what the financial wizards on the other side of the House are bringing to Canadian federal government budgeting. It is a whole bunch of cash out the door that Canadians have to pay interest on without it looking like debt. This is the issue about investments versus spending. They have changed the way we look at debt and deficits in Canada and have categorized them differently. Nevertheless, the number Canadians need to worry about is the amount of interest they are paying on that debt. That number has gone from $24 billion a year in 2020, around when I first came to the House in 2019, up to $59 billion this year and $83 billion in four years’ time.⁴ Procedure · 8 wordsLet us think about that escalation of debt.Procedure Claims · 111 wordsThat escalation of debt is two things: It is more money we are paying interest on, but it is also a higher rate of interest. The Parliamentary Budget Officer illustrates clearly that the stress we have on the debt and the amount in bonds outstanding are going to cause Canada to start paying a higher interest rate. It is right in the report. We can talk about our AAA rating, but the fact is, because we are borrowing so much, we will have to start paying a higher rate of interest. It is not just more interest on more debt and more debt, but a higher rate of interest as well. Positioning · 7 wordsThis is what we call a waterfall.Positioning Claims · 54 wordsThis is going to continue to impact Canadians. It is $83 billion at the federal level alone. If we take a look at all the debt in Canada in U.S. dollars, we have about $4.6 trillion in debt across the nation.⁵ This puts us as one of the most indebted nations in the world. Reasoning · 4 wordsThis is a problem. Claims · 126 wordsIt is a combination of consumer debt, corporate debt and government debt. The government always tries to say that our debt-to-GDP ratio is only 40% plus, but let me say that that is an illusion, because government debt in this country is not just federal government debt; it is federal government debt plus provincial government debt. The amount of debt that provincial governments are in collectively across the country is about $1 trillion.⁶ If we add up the debt, not the amount outstanding, of $1.6 trillion at the federal level and $1 trillion at the provincial level, plus the massive amount of debt that consumers and corporations have outstanding, we have a massive wall of debt in Canada that is almost the worst in the world.⁷ Reasoning · 18 wordsThere comes a point in time when this becomes a problem and we have to start addressing it. Claims · 84 wordsThat time is right on our horizon, because interest rates are starting to rise. Not only are they going to rise for the federal government, making it pay more money, but they also going to rise for consumers, who are going to have to start paying more for their mortgages and more for their consumer debt. They are also going to start rising for corporations, which will have to cut back because they are paying more in interest and have less money to invest, Aside · 7 wordsas the Prime Minister likes to say.Aside Claims · 13 wordsLet us look at the $83 billion in debt interest, which is ridiculous. Promise · 21 wordsWhen Canadians ask why we cannot fix health care, I am going to bring them back to the Jean Chrétien years. Claims · 128 wordsI remember the Mulroney years when we talked about an operating balance. Brian Mulroney was a very good prime minister, in my opinion, and he got us to a point where we had an operating balance.⁸ We still had a huge amount of debt we were paying, but we had an operating balance. This is where the current government pretends it wants to go, although it is very selective about what it uses in the numbers in the operating balance. The Parliamentary Budget Officer’s job is to assess the government against its performance, but a lot of the numbers are now hidden. I am glad she points out the accrual basis and the extra $400 billion in borrowing under the government’s new way of accounting for these programs. Positioning · 4 wordsIt is a mirage.Positioning Promise · 7 wordsWe have to get ahead of this. Claims · 77 wordsThis $80 billion a year in debt interest payments is far too much for Canada. That is $2,000, give or take, per person in Canada, not per family. For a family of four, $8,000 goes out the door before they even see it. Most families in Canada are probably not paying $8,000 in taxes, but that is going out the door whether they like it or not. Everybody is behind, not counting their personal debt as well. Positioning · 8 wordsWhat effect does this have on the economy?Positioning Claims · 34 wordsIt causes inflation. If we look at what the Parliamentary Budget Officer says in this report, she talks about the reduction in real GDP growth, to 0.9% in this economy.⁹ The nominal is 5.4%.¹⁰ Procedure · 4 wordsWhat is the difference?Procedure Claims · 39 wordsIt is called the GDP gross domestic product deflator, which is 4.6%. If anybody tells us the interest is only 3% or 2.5% in Canada, then why is the GDP deflator, which is a proxy for inflation, at 4.6%? Reasoning · 33 wordsIf we measured these things, as they are real and affect people’s lives, we would understand the pain that Canadians are feeling right now, as opposed to hiding behind a bunch of numbers. Claims · 58 wordsLet me correct the Parliamentary Budget Officer, because she buys into this mirage of what net debt is. When the government describes its net debt, what it is doing is taking hundreds of billions of dollars of pensioners’ assets and saying that it is the government’s asset. It is not the government’s asset; it is the pensioners’ asset. The ask · 58 wordsThe government should tell Canadians directly that when things get rough, because things are going to get rough with our financial situation, it is going to reach in there, grab some of their pension earnings and put them on its balance sheet, because the bankers across the world we owe interest to are expecting us to do that. Claims · 191 wordsIf that is part of the arrangement, the government needs to make it clear to Canadians that their pensions, and Quebeckers’ pensions, which are not managed by the same management team, are on the table for the government to use. That is how it calculates its debt-to-GDP ratio. It is dishonest, unless the government has some arrangement with the Canada pension plan behind the scenes to make that happen. What makes this even more troubling is that Canadians were promised fiscal discipline by the very well-educated Prime Minister. We have to acknowledge that he is a well-trained economist. However, the results we are getting from this well-trained economist are anything but good. If he is hiding the numbers in different balance sheets and raising the debt that Canadians have to pay, he is not performing as expected. Canadians were promised fiscal anchors. There is not one fiscal anchor, in the seven years I have been here, that the government has stuck to. It keeps making things up as it goes along. Even the Parliamentary Budget Officer in her report has said that it is not going to meet its fiscal anchors.¹¹ Positioning · 15 wordsWhen are we going to say enough is enough? It has no fiscal discipline whatsoever.Positioning Claims · 156 wordsAn economist like the Prime Minister must understand our debt position in the world. He must understand that he is visiting inflation upon Canada. He must understand the cliff we are getting to as far as our outstanding debt in this country goes, including in the provinces. Commitments are made to balance the budget. Commitments are made to get back to fiscal discipline in this country. None of them have been met. If anybody has been watching over the last several months, even though the government set itself a $60-billion-plus deficit, it has continued to make announcement after announcement as if money is no object.¹² If money is no object to our Prime Minister and he thinks he can continue to keep spending, making announcements and blowing $40 billion here and $50 billion there without any consequences, then we have to go back to the drawing board and figure out what exactly is going to happen. Procedure · 15 wordsI will tell members what happened when Jean Chrétien had to deal with the debt.Procedure Claims · 87 wordsFormer prime minister Jean Chrétien had to cut payments to the provinces.¹³ The result of those cuts to the provinces is that they had to adjust their health care spending, and health care was cut across Canada. That was the result of a choice that that government had to make because it was fiscally off base. The debt had gotten too high in Canada. We are approaching that position again. When I ran for this position, a key consideration was to get this country back to balance. Promise · 7 wordsWe need to get back to balance. The question · 12 wordsWill the government commit to getting us there sooner rather than later?