The Blueprint: Canada's Conservative Podcast - Freeland has Dropped the Ball!

00:00:00.000 Hello and welcome once again to The Blueprint. This is Canada's Conservative Podcast. I'm your

00:00:08.460 host, Jamie Schmael, Member of Parliament for Halliburton Corps at the Lake Sprock. On today's

00:00:12.440 show, we have an economic outlook that isn't looking too pretty. We're going to examine

00:00:17.020 Chrystia Freeland's comments and that much, much more. Please like, comment, share, subscribe to

00:00:21.920 this program because we have new content for you every single Tuesday, 1.30 p.m. Eastern Time.

00:00:26.080 Don't forget to tell your friends. They can download it and listen to it on platforms like

00:00:29.760 CastBox, iTunes, Google Play, Spotify, you name it. It is out there. So we're coming back on the show.

00:00:35.080 A good friend who hasn't been on in a while, that's my fault, not his, is Marty Morantz,

00:00:39.240 the Member of Parliament for Charleswood, St. James, Assiniboia, Headingley, or soon to be Winnipeg

00:00:45.320 West. Thanks for coming back on the show. Also a member of the Finance Committee.

00:00:49.060 Thank you, Jamie. It's a pleasure to be here.

00:00:50.760 And I got your writing right.

00:00:51.940 You did.

00:00:52.580 There we go.

00:00:53.000 Very good. I was impressed.

00:00:54.020 Little victories of the day.

00:00:55.100 But Winnipeg West, it will be soon.

00:00:56.460 So it will be soon.

00:00:57.920 All right. Well, that'll shorten things up a bit. All right. Fall economic statement came out

00:01:01.860 a little while ago. Chrystia Freeland's doing her media rounds. And I think what we really need to

00:01:07.860 look at when we look at this big picture and all these numbers, all these figures, all these charts

00:01:12.760 that the Finance Minister has thrown out in front of us is cause and effect, right? We have got to the

00:01:17.620 point where Canada is not looking so great balance sheet wise. We have some anchors in our economy

00:01:23.180 that aren't doing so great. And all of this combined gives us the picture we're looking

00:01:29.020 at now. So we got a few clips for you, too. But I just want to get your thoughts on kind

00:01:33.180 of the vision as a whole. Where do you think we are now? Because you're on the Finance Committee.

00:01:38.140 You've been looking at this for a while.

00:01:39.700 Sure. Well, I think it's important to understand, Jamie, how, and I thank you for the question,

00:01:43.780 how we got here, how we got into this high cost inflationary environment. You know, the government

00:01:49.780 would have us believe that, well, inflation just came to our shores. It's the war in Ukraine

00:01:54.260 or supply chains. But we know now that's simply not true. It's very clear that government spending

00:02:00.520 has fueled the inflationary fire. The bank started off with a program of quantitative easing that fueled

00:02:07.920 over $600 billion in government deficit financing. I don't need to remind you that in 2015, the entire

00:02:16.120 federal debt from 1867 was just over $600 billion. Today, the entire federal debt is over $1.2 trillion.

00:02:24.940 That takes a lot of effort to double the national debt in only eight years, Jamie. And so what that

00:02:31.640 did is it caused hundreds of billions of dollars in inflationary spending that fueled the fires of

00:02:38.420 inflation. When inflation goes up, the Bank of Canada really only has one tool. And it's a very blunt

00:02:45.420 instrument, Jamie. It's to raise interest rates on Canadians. And they have. They've raised them

00:02:50.120 dramatically from just 0.25 of a percentage point before the pandemic to 5% today. And people are

00:02:56.720 really, really struggling. So I lay the blame for inflation and high interest rates squarely at the

00:03:03.320 feet of Mr. Trudeau. He is simply not worth the cost, Jamie.

00:03:07.940 Well, to your first point, Parliamentary Budget Officer confirmed half of the money printed during

00:03:13.580 the COVID pandemic had nothing to do with COVID. It was basically spent on liberal pet projects and

00:03:19.740 slush fund funding. And had that been a smaller print, a smaller footprint in the monetary policy,

00:03:27.600 if you will, the inflation crisis that we've been dealing with for quite some time would not have been

00:03:33.660 as bad. The second is the carbon tax. Of course, through your committee work, we have found out

00:03:39.020 that the carbon tax contributes greatly to inflation. And it's driving up the cost of everything.

00:03:45.680 Yeah. Well, on those points, for example, before I get even to the carbon tax, the Bank of Nova Scotia

00:03:50.620 just issued a report saying that two full percentage points, 200 basis points of interest rates in place

00:03:58.140 today are because of government spending. In other words, if government spending had been more

00:04:04.420 reasonable or less inflationary in nature, the bank rate would only be roughly 3%, not 5%. And on top of

00:04:12.400 that, you correctly point out that the bank governor confirmed to us just a couple of weeks ago on

00:04:17.120 committee that the carbon tax itself accounts for 0.6 of one percentage point of inflation. So for example,

00:04:24.300 with inflation today at 3.1%, if the carbon tax didn't exist, inflation would only be 2.5%. And I'm

00:04:31.240 sure that would allow the bank to seriously consider to stop dropping interest rates. So again, I lay the

00:04:37.240 blame squarely at the feet of Mr. Trudeau, whose inflationary spending drove up and drove up inflation,

00:04:46.180 which caused the bank to drive up interest rates and compounded that with the inflationary carbon tax.

00:04:51.780 Well, let's get super producer Nick to cue up cut number two. I think we'll start there. This is you

00:04:56.480 in committee. So this is a very... I just want to say my name is not Philip Lawrence on there.

00:05:00.920 Well, yeah, that's right. You're better looking than Philip Lawrence. He was just on the show a couple

00:05:05.580 of weeks ago. I'll have to mention that too. That is the whole problem, right? When the government does

00:05:10.260 not have any restraint, any idea that their policies will cause this misery in the long term,

00:05:17.580 you get to the point that we're at right now. This could be, this could have been a lot better than

00:05:23.420 what it is right now. So let's get to the clip where you kind of cue it up. And we talked to Philip

00:05:29.560 Cross, a very well-known economist, columnist in the Financial Times, Financial Post, who basically

00:05:36.760 backs up what you just said. All right, play cut to. Sounds good.

00:05:40.320 We're two years into inflation. We're two years into a government that is willing to spend endlessly.

00:05:48.960 Double the national debts has added another $60 billion in spending over the next five years,

00:05:55.920 just over and above what they announced in November. And because of that, the governor of the Bank of

00:06:05.120 Canada has, despite saying interest rates will stay low for a long time, people shouldn't worry about

00:06:09.760 that, has now raised the bank rate to 4.5%. I know it seems self-evident, but I just want to get

00:06:18.880 confirmation from you on the record. Is there a direct correlation between inflation and the bank

00:06:26.960 increasing interest rates? Unquestionably. I mean, even the bank would say, of course,

00:06:32.560 that's why we're raising interest rates. So as John Manley said, the former Liberal Finance

00:06:37.280 Minister, foot on the gas, foot on the brake. Absolutely. This is what we're doing. Government

00:06:41.600 can't stop spending, can't get its balance sheet in check. So Bank of Canada has to throw on some

00:06:48.640 water and that's causing a lot of hurt right now. Absolutely. And government spending is now working

00:06:54.720 against everyday ordinary Canadians. It's causing prices to go up. It's causing interest rates to go

00:07:01.200 up. Every major economist who looks at this says that at this point, government spending and

00:07:09.200 fiscal policy, I should say, which is what government takes care of, and monetary policy

00:07:14.400 are working at cross purposes to each other, including the governor of the Bank of Canada,

00:07:18.320 who said just in our meeting a couple of weeks ago that government spending has been unhelpful.

00:07:24.240 And so now when I made that recording, the bank rate, I note, was only four and a half percent.

00:07:30.320 It went up another half a point since that time. So I asked that question because I want,

00:07:36.240 it's important for people watching to understand that there is a direct correlation between the

00:07:40.400 decisions this government has made with respect to how it's handled spending with the public purse,

00:07:47.520 by driving up inflation and interest rates. And that was really the point of my question to Mr. Cross.

00:07:55.360 And I can't stress it enough. I lay the blame for the economic predicament that we find ourselves in

00:08:01.680 solely at the feet of Mr. True. And I would add one other thing. That $600 billion I was talking about,

00:08:07.680 where they doubled the national debt, they call those things investments. Now, in my mind, when you make an

00:08:12.880 investment, you expect a return on that investment. But the reality is our economic growth has flatlined,

00:08:20.000 barely one percent. And even worse, our per capita GDP output is predicted by the OECD to be the lowest

00:08:29.440 in the OECD for the next 30 years. Not a pretty picture, or as the finance minister will say in a

00:08:35.840 moment, not a great result on her report card. All right, let's queue up cut three. We'll get to the

00:08:41.440 finance minister, and we have another clip for you. But same thing, it's cause and effect. I think

00:08:46.480 that's what you need to remember, cause and effect. We just didn't get here by magic. It wasn't some,

00:08:52.160 you know, far away event happening. It was directly attributed to this prime minister,

00:08:58.320 this finance minister, because there are countries that didn't fire up the printing presses like Canada

00:09:03.440 did, and they're doing fairly well. That's right. There are others that did fire up the printing

00:09:07.520 presses and borrowed and printed in tax that are doing worse. But at the same time, we're responsible

00:09:13.040 for the people within our borders, and our people are hurting right now. Citizens are hurting. Yeah.

00:09:18.320 So let's queue up cut three. This is, this is going to, oh, we're going to, we'll go to cut one now.

00:09:23.520 Okay, let's, super producer Nick has cut one. Let's go to cut one. We'll talk about that,

00:09:27.680 then get to finance minister. One last question in the 20 seconds I have left. Last week we had Robert

00:09:32.160 Aslan here, and he said something very interesting. He said that economic growth is so weak at sub one percent,

00:09:39.200 and that low growth in a high interest rate environment will make social programs unsustainable.

00:09:44.400 Do, do you think he's got a good point there?

00:09:48.880 Well, low, lower growth and higher interest rates will certainly impact on the government's budget. I,

00:09:55.440 you know, I, I don't think fiscal policy in Canada is in a situation where it's unsustainable,

00:10:04.800 but I do think protecting our very good fiscal position is important. It's important for social

00:10:12.960 programs. It's important for the prosperity. All right. That was Tiff Macklin, the governor

00:10:16.480 of the Bank of Canada. Basically saying what we have said for a while now, if you also want to lower

00:10:23.840 prices, you can add more supply, right? If we want to add and, and, and release the price hikes that

00:10:31.200 people are facing at the grocery store, we can add more food, but also at the same time, we can't also

00:10:36.080 punish our farmers with massive carbon tax, which increase the cost of production, which get passed

00:10:40.640 on to the consumers. If we want to add more energy, that will lower the price. But we have stifled

00:10:47.360 those industries and many, many more in this Canada, this country, where we aren't able to grow

00:10:52.160 those economies to add to the, the supply chain, to add to the economy, which would give some relief.

00:10:59.360 So we're being hit everywhere we look. And this is again, as you said, directly a result of bad

00:11:05.760 government policy by this prime minister. You're 100% correct, Jamie. And, and you saw what the bank

00:11:12.480 governor was talking about there, responding to my comments about Robert Asselin. For those watching,

00:11:17.760 Robert Asselin is a senior economist with the Business Council of Canada, who has come out and panned

00:11:23.600 the fall economic statement 100%, basically saying that it does nothing to help generate new economic

00:11:30.800 growth. And that's exactly the problem we have. The country is growing. We have more people than we've

00:11:37.920 had ever before. And so demand has increased. But at the same time, economic growth is so low that we

00:11:43.600 can't meet that demand. And so that's why you see prices going up the way they have. We have

00:11:49.680 among the most overheated housing markets in the world, by the way, the most more land than almost

00:11:56.240 every other country in the world, a population of just 40 million people. And yet we have housing prices

00:12:03.280 that are more expensive than places like New York or Singapore. That's, that's an island. So clearly,

00:12:10.000 there's pent up demand in our economy, but limited supply. And this, again, I lay the blame squarely

00:12:16.080 at the feet of this prime minister who got nothing for the $600 billion he spent to double our national

00:12:23.120 debt. Let's queue up cut three. This is the finance minister, Chris here, Freeland. We're, you know,

00:12:26.800 appearing at the, the weekend media tables. Now, this is, this is very interesting comments that she's

00:12:34.000 about to make. We have a few clips on this. She will never be affected by the misery being in

00:12:39.760 inflicted on regular ordinary Canadians. These hardworking Canadians. She will never feel that,

00:12:46.320 right? All she has to do is cancel her Netflix subscription apparently. No, Disney Plus or whatever

00:12:51.040 it was. And maybe take the subway, which she doesn't do because she likes to drive fast in Alberta. But 0.97

00:12:56.720 this will, I think this is one of three, but this will give you a good painting of, of where this

00:13:02.320 government's head at. Backs up with you, you're saying play cut three. So you have the capacity, let's say,

00:13:06.960 to sustain the programs that you have right now. My question is whether you will have the capacity

00:13:10.960 going forward now, having outlined these fiscal anchors. And I'm asking you because what I have

00:13:16.400 noticed in public opinion polling is that a lot of Canadians are saying, what's this government's

00:13:20.400 vision for the future? And so if you're going to present big transformational projects that do come

00:13:25.680 with a high price tag, I am wondering if this fall economic statement actually limits you from doing so,

00:13:31.040 or maybe you're not so wedded to those two promises. Actually, I really believe our fall economic

00:13:37.360 statement is about ensuring that we can continue to invest in Canadians. Because what I really believe

00:13:44.560 makes things like early learning and childcare possible is that they are built on a sustainable

00:13:50.800 fiscal foundation, because that means we can keep on doing it year after year after year.

00:13:56.240 In four short years or less, we will be spending the exact same amount on interest on the debt. So

00:14:05.600 just servicing the debt, not paying it off, as we do in transfers to the provinces for healthcare.

00:14:12.640 Well, you're absolutely right. We're in a situation now where the interest on the debt

00:14:17.280 is going to exceed what we spend, not only on healthcare, but on child care, on EI, on our armed

00:14:26.800 forces. All of these things could benefit, you could double healthcare spending if we did not have

00:14:33.600 to spend all this interest on our debt. And it didn't need to be this way. You know, as you pointed

00:14:39.520 out earlier, much of the spending during the pandemic had nothing to do with the pandemic.

00:14:43.760 Our debt could have been lower. That would have eased pressure on the bank to keep interest rates

00:14:47.680 lower. There's no free ride. You know, when the government spends all this money and says,

00:14:52.560 well, we're investing in Canadians, there's a bill to pay on the other end of that. And the bill that's

00:14:59.920 coming home to roost is in high inflation and high interest rates. And that's the legacy of Mr.

00:15:08.320 Trudeau and his finance minister. What's the old saying, when the government gives you something

00:15:12.160 with an open hand, there's a clenched fist behind its back. This is what we're getting now. Let's

00:15:16.880 let's queue up cut number four, I believe we're at now. Cut number four, the finance minister goes on.

00:15:22.000 We're still, you know, to Vashe's credit, she is pressing the finance minister, right? The finance

00:15:28.160 minister is saying, we have all, you know, things are great. We're doing well. But she's clearly pointing

00:15:34.080 out because she's looking at the chart saying things aren't so well. So how are you going to fund all

00:15:37.840 this stuff? All right, play cut five. And so am I to take from that, that you would characterize,

00:15:42.240 for example, this year's deficit at $40 billion or the next two years, which are about 10 to $12

00:15:46.720 billion higher than anticipated at budget as modest? And can you understand how Canadians might greet

00:15:52.320 that with some skepticism, given your government's track record hasn't always been restrained? And I'll

00:15:57.680 provide you with a few examples and offer you the opportunity to respond. $50 million on an app,

00:16:03.200 arrive can that never worked. The federal public services employment growth rate is three times

00:16:07.120 greater than the population growth rates. Spending on contracting has increased by more than a third

00:16:12.800 since just 2017. Yeah. Truly thank you for the question. Because I believe from all the conversations

00:16:24.560 I have across the country, that Canadians understand now is a time we need to invest. I find people are

00:16:32.240 particularly focused on investments in housing. I find certainly parents and grandparents very focused

00:16:39.680 on childcare. But that's different than the examples I laid out with respect. I'm going to get to those,

00:16:44.560 I promise. People are really aware that we need to invest in the industrial transformation of our

00:16:51.440 country. And I think people really want to know that we're doing it in a fiscally responsible way. I think

00:16:59.600 that's kind of the base setting of Canadians. And I agree with that. Okay. Fiscally responsible way?

00:17:07.600 Not even close. Now look, Jamie, you know, when this government came to power in 2015, they said they were going to

00:17:14.000 run a couple of small deficits around the $10 million range and that by 2019, the budget would be balanced.

00:17:20.720 That never happened. And the reality is that they were $100 billion in deficit before the pandemic

00:17:29.920 ever came. And so the finance minister to now claim that somehow they're being fiscally responsible is,

00:17:38.080 well, a nice word would be disingenuous. But the reality is, you know, that the fiscal responsibility

00:17:44.960 from a government perspective demands that the government adopt a serious fiscal anchor.

00:17:50.800 That's what Prime Minister Harper did. His fiscal anchor was very simple. It was,

00:17:55.040 we're going to get the budget balance. And he did. This government will claim a fiscal anchor.

00:18:01.120 And then as soon as it doesn't work out for them, they'll just abandon it like it didn't matter. For

00:18:04.960 example, just two years ago, the finance minister said, well, the debt to GDP ratio will be our fiscal

00:18:11.680 anchor. And, you know, it won't go up. It'll continue to go down. She said that is a line

00:18:16.560 we shall not cross. And yet it's going up again. It's gone up the last two years. It's going up in

00:18:21.360 the fall economic statement again. It's a line that they did cross. And it seems like they were

00:18:27.440 they were fine with crossing it. So you look at the projections in the fall economic statement,

00:18:32.720 they're completely unreliable. I'll just give you another example. One year ago today, they released

00:18:38.960 this month, I mean, they released the fall economic statement, which said that in 2028,

00:18:43.360 there would be a $4.5 billion surplus. One year later, in this fall economic statement,

00:18:48.800 it's a $28 billion deficit, $32 billion swing in one year. I don't know how we could ever trust

00:18:57.040 what this government says. But they can't control themselves. She also pointed out that now is the

00:19:02.080 time that Canadians expect us to invest. The Canadian government has never been more flush with cash

00:19:08.320 right now. But at the same time, things are getting worse. Delivery of service is getting worse.

00:19:15.280 The federal bureaucracy has never been as big. For the longest time, you couldn't get a passport,

00:19:20.480 despite all these these investments, so-called investments. So we have actually tried that,

00:19:26.960 and it's not going so well. This government is failing over again. She also said about the

00:19:32.800 industrial transformation. This isn't a market transformation she's talking about. It's a

00:19:38.160 government-led transformation with winners and losers in the marketplace based on what

00:19:46.400 money is given to companies that believe what the government believes. It's not driven by the

00:19:51.360 marketplace. You wouldn't need these investments. It was driven by the market.

00:19:54.960 No. Well, look, I keep getting back to, you know, she says it's time for government to invest in

00:20:02.000 transformation. You're absolutely right. It is government-led. And really, the best thing to do,

00:20:07.040 you know, I'm reminded of when you were speaking of my favorite Ronald Reagan joke, where he would say,

00:20:13.600 the nine most frightening words in the English language are, I'm from the government and I'm here

00:20:17.680 to help. That's what that reminds me of. I mean, I think what government needs to do is get out of the

00:20:22.240 way and let Canadian entrepreneurs do what they do best. But having said all that, I keep coming

00:20:27.840 back to the $600 billion. What a wasted opportunity to invest in economic growth. And so we got

00:20:34.240 absolutely nothing for it. And now the finance minister is talking about investing even more. I don't

00:20:41.120 think that she's a reliable partner, nor is this government, in promoting economic growth for Canada.

00:20:47.440 And that's why we need common sense conservatives to be in government so that we can get this

00:20:52.400 country's economy humming again. All right, we have one more clip of the finance minister, but we are

00:20:57.200 also running way late on time. I would hate to not go without, maybe what I'll do, we'll get the clip

00:21:04.480 and then we'll get your closing thoughts. How's that? Sure. Okay, play cut five. I get that you don't

00:21:09.600 want me to grade my own homework. And I get that hearing me say government is fiscally responsible,

00:21:15.600 you want some proof points. So I'll give you two quick proof points. The first one is Canada's debt

00:21:22.560 and Canada's deficit right now, today are the lowest in the G7. That is significant. Second thing,

00:21:30.480 and this speaks to, I don't believe we should grade our own homework. I don't expect you to want us to

00:21:37.840 grade our own homework. There is someone out there whose job it is to give us a grade. And that is

00:21:44.320 quite literally the ratings agencies. And the grade that the ratings agencies are giving Canada right

00:21:50.240 now, today is the highest grade possible, a triple A credit rating. And that is because I have a good

00:21:57.200 credit rating from my bank. Does that mean that I should increase the size of, you know, the staff

00:22:03.920 that I have at my workplace or, you know, at a pace faster than is needed, for example, in the public

00:22:09.440 service? I mean, you've admitted to that pace perhaps being too fast and that the cuts that you're

00:22:14.720 now looking to make over the next five years are all focused on that. The rating that the agencies

00:22:20.960 give us is based on where we are today. And it's based on what they think is sustainable going forward.

00:22:28.960 Most of them, I have no idea what she's talking about. It's a word salad, finance minister.

00:22:34.000 Do you want to address that in your closing comments? Sure. Well, I'll just say, look,

00:22:37.600 Canadians know that doubling your household debt is not being fiscally responsible.

00:22:42.400 That's what this government has done. They've doubled the debt of all Canadians. When she talks

00:22:47.840 about the report card from the rating agencies, there's other entities out there that report on

00:22:53.040 her performance as well. The Business Council of Canada has panned the fall economic statement.

00:22:58.160 C.D. Howe, William Robson has panned it. The BMO, Douglas Porter's economist, has panned it.

00:23:05.280 Jack Mintz, of course, has written extensively about it. So the report card is not all that good,

00:23:11.040 frankly. And what this government really needs to do is get their spending under control,

00:23:16.480 get inflation under control, so interest rates can come down. And if they can't do it,

00:23:21.680 common sense conservatives under Pierre Polyev as Prime Minister of Canada will get the job done.

00:23:26.240 This Prime Minister is just not worth the cost, Marty Morantz. All right, appreciate your time.

00:23:30.480 Marty Morantz, Member of Parliament for Charles Lewood, St. James, Assiniboia,

00:23:34.640 Headingley. We thank him for his time. We thank you for yours. Please remember new content for

00:23:39.120 you every single Tuesday, 1.30 p.m. Eastern Time. We ask that you like, comment, subscribe,

00:23:42.960 and share. Share, share, share this program. This is content you're probably not getting in

00:23:47.600 the mainstream media. And if you want Pierre Polyev to be the next Prime Minister,

00:23:51.120 this message needs to get out. Also, you can tell your friends. They can download it on platforms like

00:23:55.200 CastBox, iTunes, Google Play, and Spotify. Until next week, remember low taxes,

00:23:59.600 less government, more freedom. That's The Blueprint.

The Blueprint: Canada's Conservative Podcast - December 08, 2023

Freeland has Dropped the Ball!

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