Fall Economic Statement
Hon. Claude Carignan (Leader of the Opposition): Honourable senators, my question is for the Leader of the Government in the Senate. Leader, my questions are about the economic statement given by the Minister of Finance yesterday.
My first question concerns the additional financing for infrastructure announced by Minister Morneau. On Monday, Bloomberg reported that of the 860 infrastructure projects approved since budget implementation bill No. 1 was passed on June 13, just one project is under construction according to Infrastructure Canada data. It is a disaster mitigation project in Whitecourt, Alberta.
One project out of 860 — only one.
If the government cannot get projects started with funds already earmarked, why would it think its new infrastructure plan will fare any better?
Hon. Peter Harder (Government Representative in the Senate): I thank the honourable senator for his question. I don't have the Bloomberg story in front of me, but I would be happy to speak on the specifics of the issue. I would re-emphasize to the Senate that matters of infrastructure require a broad level of cooperation at various levels of government to get the right projects done accordingly. The preoccupation of the government has been to invest in infrastructure, recognizing that the best projects require a broad level of cooperation across various jurisdictions.
Senator Carignan: Thank you, leader. Last week, the Parliamentary Budget Officer's report on the labour market indicated that over the course of the past year, job creation in Canada corresponded to:
. . . half the average rate of job creation of the previous five years.
The Parliamentary Budget Officer indicated that the jobs created were all part-time jobs. There were no new full-time jobs created by the current government. Not a single one.
What the government has done, however, is to increase spending and the national debt with no results. It has not created any jobs. In order to really increase employment and opportunities in Canada, will the government keep its promise to reduce the tax rate for small businesses so they can better play their important role of creating jobs across the country?
Senator Harder: I thank the honourable senator for his question. The view of the Government of Canada with respect to economic growth is to use the tools available to it, specifically infrastructure programs, to stimulate long-term investment in job creation that benefits for Canada's middle class, as infrastructure investment and development lead to a more efficient economy. Economists judge that this infrastructure investment will lead to a year-over-year 0.5 per cent growth in GDP, and it is that growth that will provide sustainable long-term jobs for Canadians.
Senator Carignan: The Prime Minister has said before that the budget will balance itself. At the time, we thought that was just a slip of the tongue. However, today, we know that he actually thinks that way. The economic statement shows a $31.8-billion increase in the deficit over five years and does not include a plan to balance the budget.
My question is relatively simple: how does the Liberal government intend to finance all of this spending? Does it intend to increase taxes or the GST?
Senator Harder: I think it's important for Canadians to understand, as the government has made clear, that the objective of this update, as in the previous budget, was to provide two things. One is a sustainable fiscal framework that sees Canada's debt-to-GDP ratio decline over the long term; the other is that this update is expected to see the debt-to-GDP ratio projected to decline to 31 per cent by 2021. That long-term decline of debt-to-GDP ratio is good for Canada, particularly at a time when the government is able to make investments in infrastructure and to use deficit financing prudently to stimulate economic growth, as so many economists have advised the government to do.
Senator Carignan: I have one last question about the creation of a Canada infrastructure bank. The government announced the creation of a fund or an infrastructure bank. It intends to put a certain amount of money into that bank in order to generate investments from private companies or funds, mainly pension funds, which will expect a return on their investment.
If the fund or bank invests in infrastructure and pension fund representatives expect a return on public infrastructure, does that mean that the government intends to impose tolls on the use of public infrastructure in order to ensure that institutional investors get a return on their investment?
Senator Harder: I thank the honourable senator for his question and would remind senators that certain infrastructure investments in Canada already have user-pay attached to them, particularly municipal transit, for example. I think it's important to recognize that this is not the only instrument available to the government for infrastructure expenditure or for investment of this kind, but it is a way of harnessing private sector resources for the broader infrastructure needs of Canada.
As the minister has made clear, the infrastructure bank itself will be led by a board of directors operating at arm's length from the government, but will remain accountable to Parliament, as many instruments of governance allow.
The minister will remain responsible for setting the overall policy direction and the high-level investment priorities for the bank in their portfolios, consistent with the government's commitments. The primary objective is to increase investment in infrastructure — not the selling of assets, but to align broad instruments of investment available to the government through a bank structure that allows the assurance of the private sector investors that this investment is both prudent and in their long- term interest. In this regard, I would simply point out that Canadian investment organizations, particularly our pension funds, are actively engaging in the investment of public sector infrastructure elsewhere. Why would we not want to give them the opportunity to do this in Canada?