The Blueprint: Canada's Conservative Podcast - Fall Economic Statement

00:00:00.000 i'm your host jamie schmail member of parliament for halliburton for the likes brock thank you

00:00:08.900 once again for joining us we have new content today just as we do every tuesday at 1 30 p.m

00:00:14.940 eastern time we had it before the pandemic right through the pandemic and we're going to have new

00:00:20.580 content right through the holidays too so feel free please we do ask that you like comment

00:00:26.480 subscribe share this program help us push back against the ever-moving liberal agenda and if

00:00:31.600 you can't watch the program today on facebook you can download it and listen to it later on

00:00:37.200 platforms like cast box itunes google play spotify you name it it is out there and boy oh boy do we

00:00:43.740 ever have a great show for you today we have a good friend of the show he's been on many times before

00:00:49.360 pierre pauliev member of parliament for carlton he's also the shadow minister for finance thank

00:00:54.560 you so much for joining us today great to be with you well we have a lot to unpack here so let's get

00:01:00.700 right at it let's talk about the fiscal update and now we have a lot of buzzwords being bantered around

00:01:07.400 something you outlined in your op-ed today in the national post talking about it's time to move beyond

00:01:13.140 canada's credit card economy why don't you tell us a bit about that well yes christia freeland has a

00:01:19.220 new idea and it involves your bank account she's calling it a pre-loaded stimulus they always have 0.99

00:01:29.980 a buzzword whenever they come up with a big idea to spend your money and basically she's complaining

00:01:36.100 that canadians are saving too much money she's looked at the data and rightly found that a lot

00:01:40.840 of canadians are stashing their cash in their county accounts because they've learned the lesson that

00:01:46.000 do you always need a buffer a lesson the government would be well to learn itself but she would like

00:01:51.640 to quote unquote find ways for the government to unlock those savings and put them to work on her

00:01:58.740 stimulus her so-called stimulus programs and she believes that if we just turn taxpayers upside down

00:02:09.180 and shake them by the ankles enough money will come pouring out to stimulate the economy

00:02:14.580 uh this is kind of the opposite of what we need to be doing uh in fact savings are good

00:02:19.560 savings are not only good for the people who save them but also because banks relend that money to

00:02:27.420 small businesses who then pay them out in wages to workers who then save more money and thus a virtuous

00:02:34.160 cycle uh results uh furthermore uh savings don't just have to sit in a bank account they can move into

00:02:40.240 an rsp or tfsa where they're invested in directly in companies stocks and bonds and uh also uh grow the

00:02:49.480 economy they help fund the the construction of new factories warehouses pipelines mines softwares

00:02:56.120 all things that generate new income so that's what we should be doing more of and to sum it up

00:03:02.740 we need to put the credit card down and pick the paychecks up go from a credit card economy to a

00:03:10.200 paycheck economy but pierre if if if individuals are keeping more of the money they earn and are making

00:03:15.780 choices for themselves well how how does the government then not pick winners and losers in

00:03:21.700 the marketplace or then take money and like we've seen in ontario through the green energy program that

00:03:27.360 picked solar panels and windmills which turned out to be disastrous for anyone who owned a business or

00:03:33.280 trying to do a business or any piece of their life through the day when electricity prices are through

00:03:38.940 the roof well the liberal mentality today is that politicians can spend your better your money better

00:03:47.060 than you can uh so they they believe they have the right to take your cash and spend it how they want

00:03:53.080 because they're more they think they're more enlightened uh this enlightened paternalizing

00:03:58.080 uh uh socialist approach has been tried again and again throughout history it's always proven wrong

00:04:04.200 and we find the common sense of the common people is superior to any central planning that politicians

00:04:11.540 can uh carry out uh so um that's why conservatives believe in restoring free enterprise the free

00:04:18.720 enterprise system allows individual canadians to decide how to spend and invest their own

00:04:22.840 money uh that canada that a dollar in the hands of the person who earned it is always more

00:04:28.500 productive than in the hands of the politician who taxed it um thus uh we're not going to come after

00:04:33.940 people's savings the way christia freeland proposes uh we're going to empower people to make free

00:04:39.800 decisions for themselves so let's talk about the the government's fiscal update we're looking at a

00:04:46.440 381 billion dollar deficit and debt to gdp gdp ratio that's rising from 31 percent last year to 56 percent

00:04:56.340 we're coming up to that cliff we saw in the mid-1990s indeed um to put it in perspective the

00:05:04.000 the 381 billion dollar deficit which is on the low end of the projections is already seven times bigger than

00:05:10.860 the previous all-time record in nominal dollar values it is bigger as a share of our economy

00:05:17.280 than any time before or since the second world war and uh it the government is now spending more than

00:05:24.800 twice as much than it takes in borrowing of course to make up the difference this has taken our debt

00:05:31.020 to gdp ratio from the low levels that harper left it at of roughly 30 percent and raised it to 50 percent

00:05:39.800 within a few years it is projected to rise to about 56 percent to put it into perspective we hit uh the

00:05:48.700 debt cliff in the 1990s when our debt to gdp ratio was 66 percent so we're within a couple of years we'll

00:05:56.020 be within 10 percentage points of the cliff edge that caused a crisis in the mid-90s um now we don't

00:06:03.100 know exactly where the cliff is because times change interest rates and marketing conditions are different

00:06:08.320 however we do know we're running very quickly towards the cliff edge in a fog so we don't know where the

00:06:14.100 edge is but if you were running through a fog towards a cliff edge as fast as possible you would

00:06:21.160 probably say i should stop this now because at any moment i could fly off the edge and once you do

00:06:28.500 that it's too late so we're saying stop running towards the cliff avoid um sending our economy hurling

00:06:37.180 into the abyss but instead phase out the deficit stabilize the debt to gdp ratio and protect our

00:06:45.880 programs and our taxpayers so to to calm some of the our critics down uh the the money you're talking

00:06:53.940 about not all of it when you're talking about the 381 billion dollar deficit has been spent on relief

00:06:59.520 programs like the canadian emergency response benefit the rent subsidy you name it there there

00:07:04.740 there's only a very uh i would say relatively small portion of that that was actually support payments

00:07:10.600 for canadians yes of the 380 billion dollar deficit only about 175 billion is explained by the serb

00:07:18.760 the wage subsidy and the small business ciba loans the rest is either deficits that were already baked

00:07:27.520 into our annual uh finances uh from the previous year uh or uh spending on um god knows what um this

00:07:37.900 deficit is uh worth forty uh thousand dollars for every family of four i don't know a single family

00:07:45.960 of four that's got 40 grand in benefits from this government since march um there are some that have

00:07:51.560 had you know 10 or 20 if a couple of people have been on the serb for the full duration but no nobody

00:07:58.500 that i can find has had 40 and certainly that's not the average of uh benefit that the canadians have

00:08:04.520 received um so clearly what's happening is that the money is being gobbled up by middlemen we've seen

00:08:10.320 you know a casino company got 200 million dollars they tried to give half a billion to we they sent

00:08:17.220 serb checks to prisoners and told their bureaucrats to send out serb even when they suspected there was

00:08:23.760 fraud um there have been uh billions of dollars in serb benefits to people whose incomes are above

00:08:30.960 200 000 a year and they even sent uh wage subsidies to companies that then use the money for dividends

00:08:39.500 rather than for workers so a lot of the money is being gobbled up by very wealthy and well-connected

00:08:46.520 interests who are expert at enriching themselves off the state and uh a only a minority of the dollars

00:08:56.260 have reached uh grassroots canadians in need uh and so that's fundamentally the problem if you don't

00:09:02.680 want you don't believe that think of it this way we have by far the biggest deficit in the g20 as a

00:09:09.060 share of our gdp the vast majority of countries have deficits to gdp that are about half of ours and yet

00:09:14.820 they've had better results they've many of them have had lower covid mortality rates they many of the

00:09:20.520 and they had on almost all of them have lower unemployment rates so we've spent the most to get the

00:09:25.980 worst results if anyone was watching the committee of the whole performance where you went head to

00:09:31.800 head with the finance minister christia freeland um i i don't think anybody could actually walk away

00:09:37.120 from watching that and saying wow the the finance minister actually answered every single question i

00:09:43.240 don't think she actually answered any of your questions and one of which was was really sticking

00:09:49.340 out in my mind after watching that that when when when the liberals say we have our debt locked in at low

00:09:56.740 interest rates that is true to a point but it's very short term no it's not true at all actually

00:10:04.540 the um interest rates are highly variable um you know what they've suggested what they've told us is

00:10:10.340 that they're going to lock in our debt by selling 10 and 30 year bonds that would if they did that

00:10:16.240 that would freeze our interest rates at today's low levels for 10 or even 30 years so i thought well

00:10:23.320 that's an interesting idea are they actually doing it and sure enough they're not 85 percent of the new

00:10:30.120 debt issued since march is for terms of less than 10 years and 75 percent is for terms of less than

00:10:39.940 four years so get this let's get this straight for every dollar of new debt the government has issued

00:10:44.460 since march and it's a hell of a lot of new debt only one uh quarter is locked in for more than four

00:10:51.660 years the rest we'll we'll we'll have to come up for renewal in 90 days in one year in two years in

00:11:00.400 three years if interest rates rise then then the cost of servicing this new debt will rise quickly

00:11:07.940 so it's kind of like when you go get a mortgage if you if rates are at record lows you want to lock

00:11:12.880 in that rate with a five-year fixed you don't want to go with a variable because if rates rise then

00:11:19.320 you'll start paying those higher rates immediately well our government is going with variable effectively

00:11:25.460 a variable rate mortgage which makes us extremely susceptible to sudden and unexpected rises in

00:11:32.940 interest rates and before people say oh interest rates will never rise the governor of the bank of

00:11:37.780 canada has said so he's the governor not god the governor of bank of canada can influence rates

00:11:44.640 but there's a big misconception that he can control rates if rates start rising around the world as other

00:11:49.940 countries recover their economies more quickly than we do or if inflation rises more quickly than expected

00:11:56.040 rates will go up whether he wants them to or not he cannot force any private actor to lend money at

00:12:03.160 lower rates than that actor chooses so rates can rise even when bank governors don't want them to they

00:12:08.460 did in the late 70s under the previous trudeau from 1978 to 1980 interest rates rose from eight percent

00:12:17.120 to 22 percent just put that in perspective a 14 percentage point increase in just two years the rates

00:12:25.920 almost tripled and i can tell you no governor of any bank wanted that to happen it just did because

00:12:33.000 numbers rule the universe and when there's not enough lenders and there's too many borrowers when

00:12:40.200 inflation run runs wild rates will increase whether we want them to or not that could happen because our

00:12:48.000 government has not locked in low rates on our debt that will put our national finances in great peril

00:12:54.720 well the bank of canada according to your article and and the news released on their website is

00:12:59.580 showing that business events investment will grow just 0.8 percent over the next two years

00:13:06.000 looking probably 2023 or beyond until we we recover so government spending with consumption

00:13:14.020 it's it's going to represent about 80 percent of economic growth in the next two years while

00:13:20.040 investment and net export growth which actually produce wealth which we need to

00:13:24.260 fund many government programs and services will be less than zero that that's extremely concerning

00:13:29.900 yes so um to put it in perspective investment collapsed during covid investment which was already low

00:13:37.160 it was and has been flat since 2014 collapsed even further during covid the bank of canada says

00:13:45.660 it will be at least 2023 before we get back to 2019 levels but that's how bad it is um over the next two years

00:13:54.920 the investment that is to say the money that goes that we plow into new factories plants pipelines

00:14:02.900 software r&d that the amount we put into that will not recover to 2019 levels till at least 2023

00:14:11.860 it will only grow from our current extremely low levels by 0.8 percent over the next two years

00:14:18.560 which means next to nothing um and so what does this mean we'll get it means that almost all of our growth

00:14:25.760 will come from two things debt-fueled consumption and debt-fueled government spending

00:14:32.360 both of which drain our savings and add to our debt meanwhile the things that allow us to add

00:14:40.020 savings and pay off debt which are investment and net exports those two combined will actually drop

00:14:47.400 so we're going to add net exports which is to say the amount we sell versus the amount we buy

00:14:54.740 and investment are going to drop the things that generate wealth are going down the things that

00:15:01.560 consume and vaporize wealth are going up that means our economy will be more indebted

00:15:08.200 we'll have less savings and we'll be more dependent on the rest of the world for the goods and services

00:15:14.200 and services that we need for a good life pierre i know you have to go you have question period coming

00:15:20.260 up at 2 15 you have you have a few questions here let's close it out give us some final remarks it's

00:15:26.620 all yours well there's a better way we can go from the credit card economy to the paycheck economy and

00:15:34.000 here's how you could the government could fast track approval of natural resource projects there's a

00:15:39.140 14 billion dollar natural gas liquefaction project in quebec waiting approval they could approve the 20

00:15:47.720 billion dollar tech frontier mine in northern alberta that's two projects one in alberta one in

00:15:52.500 quebec 35 billion dollars of new economic activity there's about 6 billion more in smaller

00:15:58.540 tactical pipelines and other resource projects just waiting federal approval needing no tax dollars

00:16:04.780 to go ahead they could knock down inter-provincial trade barriers so we can buy from each other

00:16:09.260 rather than just importing cheap junk from abroad we could change our intellectual property rules to keep

00:16:15.820 more uh of the income generating uh patents that we we develop here in our country rather than

00:16:22.640 selling them to to foreigners we could uh pressure the provinces to get occupational licensing bodies 1.00

00:16:29.700 to fast track the recognition of credentials for new immigrants who come to canada with skills in the

00:16:38.020 trades or the professions so that their incomes can rocket as they go into their field of training

00:16:44.540 as doctors mechanics architecture architecture architects and more we could change the tax

00:16:50.780 and regulatory obstacles that block first nations communities from starting enterprises and developing

00:16:57.400 their resources we could reform our tax system to reward rather than punish work savings and investment all of

00:17:05.320 these things would unleash the mighty force of our 20 million canadian workers it means it's time to put

00:17:14.180 down the credit card and pick up the paycheck we have work to do i love your enthusiasm and i support

00:17:21.860 you 100 percent pierre thank you so much for joining us here on the show good luck in question period

00:17:26.420 you're you're a surgeon as always uh go get them excellent great to be with you thanks for your show

00:17:31.700 pierre paulia of the member of parliament for carlton he's also the shadow minister for finance for her

00:17:36.380 majesty's loyal opposition we appreciate his time and his words and also his path forward as we

00:17:42.420 look to form the next governments of canada whenever that next election will come up don't forget as i

00:17:48.480 mentioned right off the top we have new content every single tuesday 1 30 p.m eastern time if you

00:17:53.820 can't watch the whole program now you can download it listen to it on platforms like cast box itunes

00:17:59.300 google play spotify you name it it's out there pushing back against the ever-moving liberal agenda and

00:18:05.180 you can help us do it so once again thank you very much for joining us we'll see you next week

00:18:09.380 remember low taxes less government more freedom that's the blueprint

00:18:13.340 you

The Blueprint: Canada's Conservative Podcast - December 09, 2020

Fall Economic Statement

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