FINA Committee Report

Conservative Pre-Budget Consultations Dissenting Report

Conservative members of the committee cannot support the pre-budget consultation report as it fails to address the inflation and cost-of-living crisis created by increasing tax hikes and out-of-control Liberal spending.  

Therefore, Conservative members recommend:

• Recommendation #1: Stop the taxes: No new taxes.

This includes canceling all planned and new tax hikes, such as the tripling of the carbon tax, the second carbon tax, the luxury tax, the escalator tax on alcohol, and the payroll tax increases.

• Recommendation #2: Stop the spending.

Any new spending by ministers must be matched by an equivalent saving. This policy, as proposed by the Leader of the Official Opposition, was endorsed by Minister Freeland in a letter to her own Ministers. [1]

This Liberal government must reign in their inflationary deficit spending and address their ballooning debt. The federal government cannot saddle future generations with borrowing for current spending and must work towards a balanced budget.

Background:

After eight years of this Prime Minister, Canadians are out of money and Liberals are out of touch. Inflation is at a generational high. Interest rates are the highest that they have been since the 2008 global recession. The cost of government is driving up the cost of living. 

This has been confirmed by both Bank of Canada Governor Tiff Macklem and his predecessor Mark Carney who confirmed that inflation is a domestic problem reflecting domestic factors such as the Liberal government’s spending. [2] Former Finance Minister Bill Morneau has admitted that this government probably spent too much during the COVID-19 pandemic. [3] Former Liberal Deputy Prime Minister and Finance Minister John Manley has also criticized the Prime Minister’s fiscal policy for making it harder to contain inflation. He warned that if the Liberals, “keep holding up the fire hose and spraying the money out just to keep everything going, then I think they’re going to fuel inflation rather than resist it.” [4]

Paycheques don't go as far as they used to. Canadians are cutting their diets as 11.4% yearly food inflation has left 20% of Canadians skipping meals, while half of Canadians are cutting back on groceries or choosing less nutritious options. [5] We learned that 1.5 million Canadians visited a food bank in a single month last year, with one third of them being children. [6]

Over 20% of Canadian homeowners have indicated that heating their homes this winter is a significant financial burden as the price of natural gas and home heating fuels continue to rise. [7]

Home prices and rent have doubled since 2015. The average rent for a two-bedroom apartment across Canada’s 10-biggest cities is now over $2,200 a month, compared to almost $1,200 a month in 2015. [8] The national average house price in Canada remains 30% higher than pre-pandemic prices which were already significantly higher than when this Liberal government took power.

Monthly payments on mortgages are rising even as house prices are dropping. Consumer debt has skyrocketed. Rising interest rates caused by inflationary deficits means that this debt costs even more for Canadians. In a recent survey, 45% of variable rate mortgage holders say they will have to sell or vacate their homes in less than nine months due to current interest rate levels. [9] 80% of variable rate mortgages have hit their trigger rate. [10]

This is the result of eight years of out-of-control Liberal spending and increasing tax hikes.

Of great concern to Conservative members is the fact that the pre-budget consultation process failed to prioritize the need to restore fiscal responsibility and affordability for Canadians. None of the recommendations in the report call on the government to reign in its inflationary deficit spending and address the massive federal debt.

There was no opportunity to have the Parliamentary Budget Officer cost the largest spending “asks”; nor was there a costing analysis for the dozens of spending requests that had no dollar amounts attached to them but that would almost certainly result in billions of dollars of additional pressure on Canada’s fiscal framework.

For all those reasons, Conservative members of the committee declined to participate in putting forward recommendations for the report, fully expecting that there would be no opportunity to deliver a consensus report on these consultations. 

Instead of continued inflationary deficit spending and tax hikes, a Conservative government will end the Liberal media handouts, including media support measures and taxpayer funding to the CBC/Radio-Canada. We will increase the supply of homes, food, and Canadian energy to reduce inflation. We will end the escalator tax on alcohol and the carbon taxes. We will address the issues with foreign credential recognition to respond to the increasing labour shortage in Canada. Conservatives will also end corporate welfare and the wasteful, $21.4 billion cushy government contracts for high-priced consultants and Liberal insiders. [11]

In conclusion, this pre-budget consultation report fails to address the inflation and cost- of-living crisis created by out-of-control Liberal spending and increasing tax hikes. For all these reasons, Conservatives cannot support the recommendations in the report.

Let's bring it home.