Kevin Lamoureux

“Mr. Speaker, I rise today on behalf of the constituents and residents of Simcoe North to talk about some important issues facing the economy and the importance of promises. What is a promise if one has no intention of keeping their word? When a politician makes a promise, some people immediately think the politician has no intention of keeping their word. I think many politicians make promises they intend to keep. Should we not hold politicians accountable for the promises they make to Canadians, and for promises on subjects that go directly to the underlying credibility of the politician? What do I mean? The Prime Minister was elected, I think in part, on a record or a résumé that many Canadians felt was credible, especially in the areas of budgetary economics or fiscal discipline. The Prime Minister introduced a new fiscal anchor, which is really a fancy term for a fiscal target. It has only been one year since that target has been in place, and the Parliamentary Budget Officer recently indicated that the Prime Minister will blow through his own self-imposed fiscal target. I mean, this is barely a year since that target has been in place, and the Prime Minister has chosen, and I say “chosen” because it is a deliberate choice, to blow through the anchor. The Parliamentary Budget Officer also indicates that revenues are up and that if the government had not increased its spending, it could have met its own fiscal anchor or fiscal target. This is a deliberate choice by the Prime Minister to break a promise that he made to Canadians less than one year ago. Paul Martin, when he was finance minister, met every single deficit reduction target that was imposed. He met every single fiscal anchor that was imposed. There has not been a Liberal finance minister in 10 years who has met their own self-imposed fiscal targets. At the very first opportunity that the new Prime Minister and the new finance minister had to keep their fiscal promise to Canadians, they chose to break it. How is it possible that the fiscal genius who is the Prime Minister, as some people will say, is breaking a fiscal promise? He is supposed to be the one who was fiscally restrained and cared about the finances of the nation, yet he is showing himself to be about as reliable, or perhaps I should say as unreliable, as Prime Minister Trudeau in this department. This is an example of the Prime Minister undermining his own credibility on the fiscal finances of the nation by choice, less than a year after he made the promise. David Dodge, in 2023, wrote, “We have argued in the past that an interest cost/revenue ratio above 10% and a federal debt/GDP ratio that is not declining steadily from close to...where it currently stands signal risks of unsustainability.” He is talking about unsustainability of fiscal finances. I had a chance to ask Mr. Dodge, former central bank governor, about this point, and he responded: If you’re spending 10¢ out of every tax dollar that you collect on servicing past debts, that obviously leaves you with less to spend on providing current goods and services. The problem that we collectively face now and going forward is that we’re going to have growth of the economy or growth of the base revenues of government that will be equal to or perhaps even less than the interest rates. The burden of past debt will increase year after year rather than being eroded. That was in 2023. At that point in time, we were just about to approach spending 10¢ of every dollar of government revenue on interest on the debt. In just a few years, the Parliamentary Budget Officer projects, Canada will spend nearly 14¢ of every dollar it receives on interest on the debt. In fact, interest on the debt is the fastest-growing expense line item in the budget. It is growing faster than health care spending increases and faster than any other expenditure. I am asking myself how it is possible that the Prime Minister, who was elected in part because of his financial credentials, who is a two-time central banker, who is a very well-known economist, who was chair of the Financial Stability Board, who was a Goldman Sachs banker, who, to many people’s applauding, was successful as chair of Brookfield and who has fiscal credentials, is making a deliberate choice to break a promise he made to Canadians. He did not just make the promise to Canada in general. He made a promise to our young people that they would be able to inherit a government and fiscal finances that were not going to be eroded. He said he would spend less to invest more, yet we find out that the government is going to spend nearly 14¢ of every dollar paying interest on the debt. Those obligations will be passed to future generations, and they will have no choice but to meet those obligations. This means less money for social programs, less money to spend on the things Canadians want and a heck of a lot less money to provide significant tax relief to Canadians. In the face of all of this, the Prime Minister’s fiscal plan is actually to borrow record amounts of money in the bond markets. Next year, we will have to borrow almost $600 billion. The year after that, it will be $563 billion, and that is before the new borrowing we are going to see in the budget next week. The government believed interest rates were going to go down last year and into this year, but they have gone up. What is going to happen to debt service costs then? This is why the deficit target is even worse this year than it was last year. The deficit is at least $3 billion a year higher this year and every year going out. If there is continued trouble, or shocks in the bond markets, our debt service costs are going to increase substantially, and that 14¢ might become 15¢ or 16¢. Members might think I am making something up, but in the late 1970s, debt service costs were, I think, around 15¢. They then went up to 30¢. In fact, I think they peaked at 36¢. We are going in the wrong direction. This was a primary promise the Prime Minister made to the House, to Canadians and to the next generation, and he is breaking that promise. He should feel the need to answer not just to the House but to all Canadians.”